In The Long Run

Thinking ahead past the Iran War... and all the way to the end of the 21st Century.

In the Long Run

I am going to make some predictions today about the long-term evolution of the geopolitical situation, as the twenty-first century moves forward to its end. I will try to figure out where we are going to end up, economically and demographically, when the children being born today have gotten old. But first, since the thing at the top of the news cycle is the armistice between the United States and Iran, I am going to comment on that, and try to fit it into the big picture.

Imagine, if you will, the following scenario: An American businessman is flying from Mumbai to his home in New York, with a layover in Addis Ababa. Before he can get onto the second plane, he is arrested by Ethiopian police and told that he is wanted by the authorities in Iran, where he will stand trial for sodomy. He protests that he wasn’t in Iran when the acts of sodomy were committed, and that the things that he does in his bedroom are not a crime in either his home country, or in any of the other countries where he has actually done them (he occasionally travels with his partner).

But the Ethiopians don’t care – they have an extradition request from Iran, it came through lawful channels, and the question of whether Iran has jurisdiction over crimes against nature committed in a New York City penthouse is something for the Iranian courts to decide. (And since Iran’s leaders believe that Allah has called them to uphold Quranic morality throughout the whole world, it’s not hard to guess how they will rule.) Naturally, American diplomats protest the whole thing, and the businessman never actually ends up in Iran, though he does spend 27 months under house arrest in Addis Ababa before the Ethiopian government is persuaded to release him, in exchange for a pair of Ethiopian prisoners that the United States has detained in retaliation.

To Americans who are used to seeing their own country respected by other countries, this hypothetical seems completely ludicrous. And yet, from the point of view of people who live in the countries that America doesn’t get along with, it’s pretty much how the world works. Just think about the case of Meng Wanzhou, the Huawei executive who was travelling from Mexico to Hong Kong via Vancouver when she was arrested by Canadian police, and who was nearly extradited to the United States to be tried for trading with Iran in violation of American sanctions – and also of lying to a British bank about the relationship between Huawei and Skycom (a subsidiary of Huawei which handles much of China’s commerce with Iran).

Meng wasn’t in the United States when the alleged crimes were committed, but this didn’t stop the Americans from claiming jurisdiction, nor did it stop their pliant lapdogs in Canada from trying to enforce that jurisdiction. What saved Meng Wanzhou in the end was China’s arrest of two Canadian men on a (probably specious) espionage charge, and its offer to release them in exchange for Meng.

Unlike China, the majority of foreign countries go along with America’s demand that Iran must be isolated from most international markets. They’re not happy about it, but America is able to wring a grudging sort of compliance out of them, since at the end of the day, access to American commerce is just more important than anything that Iran has to offer. Superpowers can throw their weight around, and if a superpower holds a big grudge against a much smaller and less important country, and wants to build a foreign policy around isolating that country (as China has also done with Taiwan) then it’s usually doable. Third parties won’t like it, but they don’t have to; the strong do what they can, and the weak suffer what they must.

Personally, I think that the Iran sanctions have been a mistake on America’s part, mainly because (1) they needlessly antagonize rising powers like India, which would be buying lots of Iranian hydrocarbons if the Yankees weren’t getting in the way, and (2) the main economic beneficiary of the sanctions is Saudi Arabia, whose domestic human rights record is at least as bad as Iran’s.

By the end of the 21^st century, the United States won’t be in a position to do this kind of thing. And chances are that, long before then, our leaders will have regretted using their economic power in such a petty and vindictive way – rather than, for instance, using it to constrain the economic growth of China, a rival which actually poses a serious risk of militarily conquering its neighbors, and displacing the United States as the global hegemon.

And yet, wise or unwise, the sanctions regime was stable… until February 28^th.

About That Peace Deal

Right now most pundits are saying that Donald Trump has suffered a humiliating defeat, and that all of his rhetoric about the “peace deal” that he negotiated at Versailles is a lame attempt to avoid admitting that. One man whose newsletter I read is even comparing America’s loss of power and prestige to what happened to Russia after it lost its war with Japan in 1905.

I think that all of that talk is premature. Yes, it’s true that the plainest interpretation of the deal – sanctions relief plus a $300 billion rebuilding fund in exchange for the opening of the Straits of Hormuz – seems like a capitulation. But the proof of the pudding is in the eating. The $300 billion isn’t a government appropriation (good luck getting that through Congress); it’s an investment fund and loan-pool that private companies are expected to pay into in the hopes of making a profit, and it isn’t like Donald Trump has a sterling record of getting other people to pony up money when he says that they will (remember the whole “Mexico will pay for the wall” schtick?) Also, “sanctions relief” might be interpreted very differently by each side; there are a lot of small and trivial ways in which the US might loosen the sanctions without actually allowing third parties like China and India to have normal trade relations with Iran, sans fear of US harassment a la Meng Wanzhou.

So there is a serious possibility that Iran opens the straits, and then, over the next six months or so, that the Trump administration drags its feet on its own end of the deal, and reinterprets “sanctions relief” in increasingly weak terms. (Russian diplomats coined a term that translates as “non-agreement-capable” to describe America during the Syrian civil war, and the term is just as apropos in the age of Trump.)

And so Iran’s leaders will be in a difficult position. Should they resume the war, enrage Trump, and possibly end up dead like Ali Khamenei? Or should they let things gradually settle back to the old status quo, with Iran cut out of most markets, but nobody on either side getting shot or bombed? (Recall that the shooting and bombing did not go well for Iran – they lost 3,468 lives; we lost 15. America’s failure to open the straits by force was embarrassing, but if you’re comparing it Russia’s defeat at Tsushima, your brains have fallen out.)

And there is also the problem that one of the things Trump has promised – namely, an end to Israeli airstrikes in Lebanon – is completely beyond the power of any American president to procure. And so, for these and other reasons, I will take the much-celebrated peace deal with a grain of salt.

Oil Isn’t That Important

Fortunately, the Middle East isn’t as important to America as it used to be.

The center of global oil production moves with time. How many people remember that in 1939, the United States pumped 60 percent of the world’s oil, Venezuela and the USSR had about 10.5 percent each, and no other country had more than 3.4 percent… a circumstance that played no small role in deciding the outcome of World War II? By 1980, North America had burned through its easy oil and was only producing about 17 percent of the total, while the Middle East had grown to 31 percent of the global supply. But in 2025, due to hydrofracking, North America was riding high again, with 30 percent of the world’s oil coming from the United States and Canada, while the Middle East was down slightly to 29 percent.

Things will only change more in the future. The world is a big place, and the question of which sources of oil are being accessed at any given time depends on a complicated tangle of slow-acting technological, economic, and political forces. It isn’t a matter of someone being able to say: “We know where all of the oil is, and how much of it there is. And when it runs out (which will happen soon), the wheels will fall off of the global economy.”

I refuse to make the mistakes of the peak oil enthusiasts, who loudly proclaimed that everything would go to smithereens between 2005 and 2008, and who were blindsided by the simple facts that (1) rising prices would allow oil companies to access oil deposits that used to be too deep to profitably drill for, and (2) technological changes mean that people are using energy more efficiently now than they were in the past.

On a per capita basis, peak oil already happened, way back in the 1970s. Since then, mean global oil production has fallen from a little more than five barrels per person per year, to a little less than four. At the same time, the material circumstances of the average human being have vastly improved. And remember that the little kerfuffle over the Straits of Hormuz never sent the price of Brent oil any higher than $106/bbl, well below the $147/bbl all-time high from back in 2008.

The global economy is just more resilient than the fast-crash predictors give it credit for. And part of this is due to fossil-fuel alternatives like solar panels, wind farms, and electric vehicles, which are finally, after more than half a century of slow development, becoming economically competitive. (There is precedent for this in other very-slowly-maturing technologies. Steam engines, for instance, have been used to pump water out of mineshafts since 1698, but they were too inefficient to be good for anything else until James Watt perfected his condenser engine in 1776, and they weren’t widely used to power vehicles for another half century. But look where we are today.)

So if not oil depletion, then what are the long-term geoeconomic threats that could put an end to the world as we know it? After all, I don’t call myself “Twilight Patriot” for nothing…. and also, if you like reading Twilight Patriot, you should…

The First World and the Third World Need Each Other

There are, broadly speaking, two forms of political economy that are relevant in the 21^st century.

In a first world country, the workforce is well-educated, public officials perform their duties in a timely manner and do not take bribes, contracts are honored, infrastructure is well-maintained, the laws are enforced in a predictable and impartial way, and as a result of all this, the country supports a large, technologically-advanced manufacturing base, and its exports consist mainly of high-quality goods and services, and intellectual property.

In a third world country, the workforce is poorly educated and everybody is running late. Public officials do their jobs sluggishly, hire subordinates based on kinship ties rather than competence, and frequently demand bribes. Contract law is poorly enforced, and crime usually goes unpunished. As a result of all this, most people are poor, all but the simplest manufactured goods must be imported from somewhere else, and most of the exports are raw materials.

After all, since any economic activity in a third world country is very inefficient, the moment that a mineral is mined out of the ground, or that a crop is plucked from the soil, the best thing to do with it is to move it somewhere more business-friendly. The only industries left are the ones that can’t move because they’re tied to the earth. The people in government maintain just enough law and order for these industries to exist – and they are rewarded for it with ample kickbacks).

Of course there are many subtle gradations to this, and countries can move both up and down the value chain. But other major forms of political economy, like medieval feudalism or Soviet-style command economies, have either disappeared entirely, or exist only in irrelevant backwaters like North Korea.

But to understand the present and to predict the future, one must also consider inertia. If you judged the United States by (1) the slowness and unpredictability of its permitting regime, (2) its lack of an efficient rail network, (3) the post-1960s crime boom, (4) the abuse of civil rights laws to secure jobs for unproductive people, and (5) the dismal condition of its manufacturing base compared to what it was half a century ago, then you would think that America has become a third world country. And yet, we still have a lot of high-tech industry, along with the world’s strongest financial and service sectors, and these things are sufficient to keep most of our people very rich by global standards. For now.

Russia is not so lucky. The country that created Sputnik, and that ran neck-and-neck with the United States in the technology race of the mid-20^th-century, is now a more-or-less typical third world country. The civil service has completely surrendered to nepotism and gangsterism. Almost nothing of value is manufactured there. Russia survives by exporting oil, gas, and grain, mostly to China. Military commanders demand bribes from their subordinates, and whoever can’t or won’t pay gets sent to wherever on the battlefront they’re most likely to be killed by Ukrainian drones. (No wonder morale is at rock bottom and many of the troops have to be recruited out of prisons.)

Meanwhile, countries like India, Vietnam, the Philippines, and Kenya are in the process of becoming first world countries. It may well take a few decades for them to finish, but even a brief look at statistics from the past quarter century will tell you that on matters like clean water, life expectancy, and the ability to export manufactured goods, they have improved by leaps and bounds. And China seems to have finished this same process, thus confounding the naïve westerners who insisted, since the 1990s, that any country that wanted to have a high-tech, mostly-free-market economy would also have to give its people western-style personal and political freedoms. (A bizarre claim to make, seeing that Nazi Germany was also a brutally totalitarian country in which most industries were privately owned, and where people could get rich by serving the state, so long as they belonged to the correct ethnic group. Most of the time, Americans are eager to compare their adversaries to Nazis… they just didn’t do it the one time when the comparison was a good one.)

So is there going to be a stable equilibrium between the first world and the third world? Will our planet always have an appropriate number of first world societies that invent and manufacture things, and a properly-sized third world hinterland to supply the raw materials? After all, neither can exist without the other. Manufacturing powerhouses like Germany, Japan, and China need to import far more raw materials than they can possibly obtain at home, while service and IP-based countries like the United States need somebody to pay for their services and intellectual property, and third world countries need to import machinery, fertilizers, medicines, and other essential goods, lest even their simple industries collapse, and their populations be forced back to pre-industrial levels by famine and disease.

(When I lived in Ghana, one of the first things I noticed was that everyone there drinks water out of clear plastic bags – you bite the corner of the bag and suck the water out, and then, if you’re like most Ghanaians, you throw the empty bag onto the side of the road, where the plastic trash is so thick that the goats have to push it out of the way in order to graze. The bags are necessary because the tap water isn’t clean. Do the machines that put the clean water into the bags have to be imported? You bet. And without them, there is no keeping 36 million Ghanaians alive in a country that supported barely 2 million people a century ago. The same is true for tractors and fertilizer.)

The Shape of Things to Come

The big, really big, potentially civilization-ending problem is that the first world countries aren’t having enough babies.

This just might be the most important page on Wikipedia. It lists all of the countries in the world, in order of the number of babies that were born there in 2025. India is at the top of the list, just like it’s at the top of the population list. But whereas India is only 1 percent more populous than China, it has almost three times as many babies – 23.4 million compared to 7.9 million. Nigeria comes in third with 7.7 million, followed by Pakistan with 7.0 million. Rounding out the top ten are Indonesia, the Democratic Republic of the Congo, Ethiopia, the United States, Bangladesh, and Brazil. And if you keep going down the list, you just keep seeing more third world countries. The United States, China, and Mexico are the only countries in the top twenty with a higher-than-average per capita GDP. And except for Brazil, the other 17 aren’t even above half the average.

Most of the countries with rapidly growing populations are completely floundering in their attempts to get out of poverty. (See Noah Smith’s post “The Giant Basket Case Countries” for details.) And the economic powerhouses like Germany, Japan, and now China are failing to reverse their low birth rates, try as they might. In China, 40-year-olds outnumber newborns by about 2.5 to 1, which is not good news for people who want their country to have a functioning economy 40 years from now.

Also, whenever a country successfully industrializes, its fertility rate drops. This is what happened with India, which had 4.01 births per woman 35 years ago, and only 2.09 now. And as the smartphone revolution ensures that even lower-middle-class people have endless digital distractions, fertility collapse is happening at lower and lower levels of development. (In the Philippines, for instance, fertility fell to 1.7 last year, down from 4.1 in 1993, despite the smallness of the change in per capita GDP, which rose from $919 to just $4,443.)

One other curious factor to think about is that rich countries that collapse back into third world status don’t see a corresponding baby boom. Russia is still only having 1.37 children per family. There were 1.23 million Russian babies born last year, compared to 1.51 million babies born in Afghanistan, and 1.97 million in Kazakhstan and the other former Asian SSRs. Thus, the Russians are unlikely to starve to death over the next century due to not having enough arable land… but they are at risk of losing the land east of the Ural Mountains to wandering Afghan, Kazakh, and Uzbek war bands, who will do to their country what people like Fritigern and Alaric did to the Roman Empire.

So the apocalypse that it looks like we’re headed for isn’t an environmental catastrophe due to people consuming too many natural resources (since voluntary childlessness in the high-consumption nations seems to have pre-empted that). Nor is it nuclear war (since nobody has anything to gain by starting a nuclear war), nor is it robots rebelling against human control (since contra the hype coming out of Silicon Valley, an AI can’t actually “think” any “thought” that isn’t just the average of its training data.) The apocalypse that we’re actually getting is a baby bust… plus mass migrations as millions of young people from the third world go looking for sustenance in the ruins of the first world.

The Machine Stops

I think that it is very unlikely that artificial neural networks will ever be intelligent enough to rebel against their makers (for arguments as to why, see this post of mine). But they can still learn to do jobs that used to be done by human beings (let’s be honest – if you consider “remembering” to be a cognitive task, then we’ve been outsourcing cognitive tasks to machines since the 3^rd millennium BC). I would not be surprised if, by the midpoint of the 21^st century, most Americans are depending on a fragile, solar-powered electrical grid that nobody really remembers how to service (since the handful of diversity-hires in charge of servicing it are constantly asking an AI what to do next), and which can’t be serviced at all without importing parts from somewhere in Asia (since one of the weaknesses of solar panels is that their supply chain is extremely complicated, and it involves a lot of rare metals, and specialized manufacturing equipment that has to be run at very large scales in ultraclean factories.)

If, at some point, a large war breaks out in Asia and halts the global shipping of high-end electronics, or if those AIs stop running, and the shrinking class of competent tech workers realizes, too late, that they have forgotten how they were built and how they work… then we are in for a great deal of trouble. Electricity, water, roads, tractors, food – if present trends continue, then we will depend for those things on (1) an increasingly fragile collection of global supply chains, (2) a network of machines doing more and more jobs that people have forgotten how to do on their own, and (3) a human workforce that is rapidly aging and shrinking, and is also becoming less meritocratic.

At first, this will look like a slow but seemingly-manageable decline, with remote pieces of the country being gradually abandoned to anarchy, as has been happening for several decades in Russia, South Africa, and Mexico. But it is likely to be followed by an abrupt collapse of the supply chains when there aren’t enough people left to maintain them. “How did you go bankrupt?” said someone in a Hemingway novel. “Two ways. Gradually and then suddenly.”

My advice? Live in either a rural area or a small-to-medium-sized city (400,000 people, tops. And no more than a million in the metro). Grow a backyard garden and keep chickens if you can. Own a firearm and know how to use it – and that also goes for exploding quadcopters, if you can get them. Live near your family if possible. Make friends. Get involved in your church, or in a private school, or a fraternal lodge or a farmers’ co-op or something of that sort. If you and your family are going to survive what is coming, you will need skills and friendships that transcend politics. None of the things that I am describing will become more or less likely as a result of this year’s election outcomes. The red-vs-blue contests are ripples. What is coming is a tidal wave.

We’re not exactly living through the end of the modern world. But there is a serious chance that the collection of disturbances that began in 2020, and that are still going strong, might be seen by future historians as the beginning of the end.