PREVIEW： Realpolitik #31 ｜ The Age of Empires
Episode Stats
Summary
As Mike Carney admitted in Davos, the world order as we know it is dead, it was always a fiction, but now the death of it is official, and we are seeing the United States behaving in a much more openly imperialistic way. And I thought we should discuss this new age of empires and what it actually means, not vampires, but empires.
Transcript
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Hello, and welcome to another episode of RealPolitik. I am your host, Firas Modad.
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Today we're going to be talking about the new age of empires, which is now upon us.
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As you probably have assumed, this has been our view consistently, the world order as we know it
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is completely dead. It's buried, doesn't exist anymore. As Mike Carney ended up admitting in
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Davos, it was always a fiction, but now the death of it is official. And we're seeing the United
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States behaving in a much more openly imperialistic way. And I thought we should discuss this new age
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of empires and what it actually means, not vampires, empires, and what it actually means and how the
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different empires are positioned to be able to compete with one another. To be able to be
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sovereign, which is the first step towards being an empire, you need four things. You need an
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independent currency, and therefore the ability to trade with the world freely on your own terms
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when you want to. Indeed, this is the whole point of BRICS. BRICS is there mainly to make sure that
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countries like Brazil or India or South Africa can trade with Russia or China or Iran on their own
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terms without the intervention of the Americans or the Europeans. So it's mainly a sovereignty play.
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And that sovereignty play is absolutely necessary for you to be in any way recognized as a real power,
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because that defines whether or not you can trade, and that's a fundamentally sovereign decision.
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The second thing that you need is energy independence. If you're going to play at being an imperial power,
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you need to have sufficient reserves of energy that you can access when you want to. Otherwise,
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you can't really be independent because any military rival can cut off your energy supplies and that
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becomes a problem. Now, the Japanese famously did not have independent energy supplies and they went
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around conquering Asia with the objective of developing these supplies. So it's not a totally
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deterministic thing. An empire or an aspiring empire can acquire territory in order to provide itself with
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energy security. But when push comes to shove and the fighting starts, if you don't have an
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independent supply of energy that you can control securely, then all of your military efforts can fall
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apart, especially in the modern era. The third thing that you need is food security. And again, we've seen
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places like Japan, which can be low on food security, going around acquiring assets overseas in order to
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provide themselves with that food security. The whole plan for the Germans in that notorious period was to go
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into Russia and acquire energy and food resources, energy from the Caucasus and Azerbaijan and food resources
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from Ukraine so that they would be independent in both and be able to pursue their imperial ambitions.
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But this is a prerequisite for you to be able to fight. And the fourth thing that you need is a competent
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military. And that comes with technological innovation and that comes with your people's will to fight.
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And that comes with having a large enough population that could sustain casualties.
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All of these things factor into your ability to be a genuinely sovereign state that can pursue its national
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interests independently of other players. The fifth factor that plays a role is having imperial provinces,
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having peoples that you lead, having boundary areas around you that you consolidate under your leadership,
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and that then fuel your imperial expansion. And we saw the Romans do that perfectly. Rome was a city
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state. It expanded to capture Italy. From Italy it went on to Spain and to Eastern Mediterranean. Julius
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Caesar famously went to Gaul. And afterwards, Rome transitioned from being a republic to being
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officially an empire. So these are the factors that go into play in being an empire. And four of them
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are have sovereignty as a main requirement. And to recap, these four are an ability to trade freely,
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meaning an independent currency, energy, food, and a competent military. You need all of these things.
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Right now, today, there are four entities that are worthy of being called empires or aspiring empires,
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because I'm going to include Turkey in those, and that's clearly an aspiring imperial power.
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And maybe we can start with Turkey. In terms of an independent currency, they've been busting sanctions
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forever. They trade with Russia in violation of American sanctions. They trade with Iran, with Venezuela,
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with pretty much anyone that they want to. And part of their ability to do that comes from the fact that
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their debt to GDP is quite low for a country of that size. They have a 25 to 35 percent debt to GDP.
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It fluctuates by year and by crisis. Most of it is domestic. They are in a pretty strong position
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that they are not that heavily dependent on international financial markets. But that has
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come at a price, and the price has been very high levels of inflation. They are close to acquiring
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energy independence. As we've discussed previously on this show, with the collapse of Syria and the
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possibility of Iraq falling apart, the Turks are going to gain the energy resources of both Iraq and Syria,
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northern Iraq at least, and northern Syria. Most of Syria hasn't been explored for oil,
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so they could find a hell of a lot there. In Iraq, in Kirkuk, that's one of the richest oil regions in the world,
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very much untapped. They stand to make a lot of gains by controlling northern Iraq.
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And what we're seeing in Iraq is that the Americans have moved or are in the process of moving
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Islamic State prisoners from Syria into Iraq. These guys have a habit of breaking out of Iraqi prisons.
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The political condition of Iraq is terrible. The economic condition of Iraq is terrible.
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With oil prices being as low as they are, you can easily foresee a crisis there. And then the Turks
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would be in a position to step in as the protectors of the Sunni Arabs, but also, ironically enough,
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the Kurds, or at least part of the Kurds. And that would give them a huge amount of energy wealth,
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and that would solve the fundamental problem of the Turkish economy, which is that it has to import a
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lot of energy, and that leads to a current account deficit, that leads to inflation, etc., etc. You know
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the story. Plus, they have an incredible agricultural capability throughout Turkey. And with the areas
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around the Tigris and the Euphrates in the north of Syria and the north of Iraq,
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that can expand even further. And they can develop their food supply even more effectively. And with
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those populations that are highly fertile and that produce a lot of children, they have additional
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forces that they can add to the Turkish military, which is already the second biggest military in NATO.
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So Turkey has all of the constituents there. And they are in the process of working with the Saudis in
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order to contain Israel, because Israel did something incredibly stupid and recognized Somaliland.
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That led the Saudis to panic because they were afraid that the Israelis are trying to control both
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entrances of the Red Sea and so threatened Saudi Arabia. The Saudis have a pact with Pakistan now,
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following the airstrikes on Qatar. And that pact places the Saudis under the Pakistani nuclear umbrella.
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And you can easily envision a scenario in which the Pakistanis extend the same courtesy to the Turks,
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with whom they are already very strong strategic military partners, to the extent that Turkey sent an
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anti-submarine ship to Pakistan in April of last year when the Pakistanis and Indians were having a bit of a tiff.
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And so you can see that the Turks have a clear pathway towards acquiring nuclear weapons.
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And ideologies on their side. The Muslim world is more militant than ever, except in the Arab states of the Gulf.
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They have an army in Europe through the migrants. That gives them enormous capability.
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And we've seen Turkey building up its capital base very significantly over the last few decades,
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with the amount of capital formation as a percentage of GDP growing quite rapidly,
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from around 20% in 2000 to 30% now. And that is obviously cumulative. So every year the Turks are
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adding more and more capital. And that has led to Turkey turning from a country that exports
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20-something percent of GDP. In 2011 it was a lot lower than that. It was around 10-15, yeah,
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20-15% in 2011, up to 28% in 2024. And so they've become a country with significant amounts of capital,
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with a lot more military technology. The Bayraktar drone was really a game changer in cheap drone
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manufacturing. They are quite capable militarily. They have the right ideology and they have enough
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resources to feed, clothe and equip an army when they choose to do so. And with the Middle East falling
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apart, with the Turks becoming much more influential in energy-rich countries like Libya, they are very
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much on their way towards becoming a major player. China is obviously the main rival empire to the West.
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This is an empire that is largely built on a commercial basis. So unlike the Americans who are constantly
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trying to change your values and are trying to tell you about the importance of tolerating homosexuality
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and all of that kind of stuff, the Chinese don't give a damn. This is mainly a commercial empire. Its focus
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is very strategic. They don't extract tribute from you in the normal way where they just tax you into
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giving them money. What they do is that they manufacture a lot of things that you need. They sell you these
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goods. You end up transferring profits and resources to China. And in exchange for these goods, they might
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take your natural resources, if you're an African country that can't produce very much. And you get this
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deal where China gets economic influence, which can translate into political and military influence. You
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get the Chinese building infrastructure for you. You get cultural exchanges with China where they show you
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the superiority of their civilization compared to your primitive ways. And China gets to feed its
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manufacturing sector with an endless amount of natural resources coming from third world countries that act
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essentially as markets. They give the Chinese resources, timber, minerals, energy, you name it. And the Chinese
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get wealth and they export their goods and benefit from these markets. Now China has obviously become the
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world's only manufacturing superpower. They control around 35% of gross manufacturing production and 29% of value
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add when it comes to manufacturing. The rest of the world can't really compete. The U.S.
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is around about half their size in some areas, less in gross production, a third of their size in gross
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production. Japan shows up, Germany shows up as an important player, but really China is by far the most
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dominant manufacturer of the world. And this model of non-intervention politically paired with gaining
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political influence, economic leverage, perhaps in the future access to military bases, and so on and so
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forth works very well for them. But China has massive vulnerabilities. The vulnerabilities of China come from the
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sheer size of the Chinese population. And China's resources cannot supply the requisite amounts of food and energy
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to keep this technology to keep this thing going. And so what do the Chinese do? They invest in places
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throughout ASEAN, in Myanmar, in Thailand, in Laos. So they're working on linking up Laos and Thailand
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into Yunnan province in China so that they have a new alternative route through Thailand. They are investing heavily
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in Myanmar in Myanmar in Burma in order again to get another route that can feed their manufacturing sector
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while bypassing their vulnerability here in the Strait of Malacca. But the reality is that so long as
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Taiwan is out of their hands, their ports can be besieged. And they don't really have alternatives to their ports
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for the import of natural resources and for the export of manufactured goods. This can't be done
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by land. They're investing a huge amount in land bridges, trying to connect themselves through the
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Belt and Road Initiative all the way to Hungary, going through Russia, going through Belarus and Poland, and ending up
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in Hungary and in Poland and in Germany. So they're making that investment. But transport by rail is not yet
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as efficient as transport by ship. And so this massive naval vulnerability remains.
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This is one of the many reasons that makes Western policy towards Russia so stupid. Because if there is a
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country that can supply China with all of its energy needs and all of its food needs, it's really Russia.
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Especially Russia in control of Ukraine. Ukraine is one of the world's largest exporters of wheat.
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As is Russia. It has enormous agricultural potential. It has some energy potential, but nowhere near as
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much as Russia. And so what the West has been doing is pushing the Chinese empire and the Russian empire
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into one another's arms. And they've been doing that by constantly expanding NATO, as we've discussed in
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previous episodes, NATO expansion took mainly two big phases. In the first phase, NATO expanded to
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Central Europe and took over Poland, Czechoslovakia and Hungary. And so that was Central Europe in the
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hands of NATO. And the second round of expansion was Romania, Bulgaria and the Baltic states, meaning that
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Russia was threatened on the Black Sea and Russia was threatened on the Baltic Sea.
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And then the Ukraine war started. And the obvious conclusion of the Ukraine war was that a country
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like Russia, which can trade independently with anyone that it wants, as we've seen them evading pretty much
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all of the sanctions that the West has imposed, which has very significant military capability,
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not enough to beat NATO arming Ukraine, but still substantial capability with the world's largest
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nuclear arsenal, which has not just energy and food independence, but abundance and the ability to export
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those. It's been pushed into a position where it can't sell its abundant natural resource exports anywhere
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except to China, because it's the only client that's big enough to take these resources with the West having
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imposed sanctions. And so what the Chinese get is massively discounted Russian energy, Russian food, Russian
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natural resources that kind of really help solve the biggest problem that they have to become an empire,
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which is food security and energy security. And you can easily imagine a situation where Central Asia,
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which also has significant potential in agriculture and energy and significant resources in those,
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can be taken over by the Chinese militarily if they have to. I think I looked into it and the total
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population of Kazakhstan, Uzbekistan, Kyrgyzstan and Turkmenistan was maybe 40 million, 80 million,
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something like that. And the Chinese have one and a half billion people sitting around. So while these
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are vast countries, the Chinese have the resources to throw at them and they have the industrial
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capability to just go in there and develop these countries' resources a lot more and solve the problem
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that they have with energy and with food. Not to mention that China is engaged in a historic, massive
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military buildup enabled by their industrial supremacy. And so China becomes one of the most capable empires
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that we're going to be dealing with in the future. There are arguments that have been made by people that are
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smarter than I am that China tends to fall apart after a certain period due to internal dissent. And with Xi Jinping
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constantly firing his top generals, which we saw again this week, the chief of the armed forces was fired,
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although don't believe the stories in the Wall Street Journal about him having been a spy for the United States.
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That's highly questionable in my view. But there is this view that China tends to fall apart after a certain
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period. And you certainly see significant internal conflict in China, which we as outsiders don't have
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a lot of visibility on. But somehow I'm not sure that this is real. I think what they're doing is trying
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to develop all of the areas around them and to go deeper and deeper into Russia to take over the
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natural resources that exist in the Russian Far East. And slowly they will become stronger. They have a
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demographic time bomb, of course, and that affects their ability to field the military. But when your
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starting point is one and a half billion people, that gives you a bit of runway.
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The big disadvantage that the Chinese have is their neighbors and their neighborhood.
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They have India with a huge interest in containing them. They have a kind of competition with Turkey
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over Central Asia, but that hasn't started yet. They definitely have a competition with Russia over
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Central Asia. And they have to worry about Japan, obviously, as we've discussed in the past.
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But having said this, a China-Russia combine is really unstoppable because they get to dominate all of
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Central Asia and all of the resources that come from that. And China's industrial machine becomes very
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well supplied. They still have a vulnerability with shipping, but they have built the world's largest navy by ship count,
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although it's still half the size of the American navy by tonnage.
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And that could be a bit misleading because tonnage isn't everything.
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If you have a lot of assets that you can disperse, you can lose a lot more assets and you can attack from a lot more places.
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Now, I want to talk a little bit about the Thailand-Cambodia conflict because I haven't seen anybody talk about it too sensibly.
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