Retroscope 2019: Hegemonic cycle

December 23, 2019

We have frequently reported that we are in a period of “hegemonic shift”, as the current hegemony of the U.S. is challenged by the rise of China. In 2019, we saw this hegemonic conflict intensifying, most obviously in the escalating trade war between the U.S. and China,but also in regional power shifts resulting from this great power competition. Furthermore, a new vector of hegemonic battle is opening, in which countries are trying to establish cybersovereignty in the digital space, and superpowers are building their own Stacks.

1. On the planetary network, sovereignty trumps economy – for now

In the past year, we have seen governments around the world taking measures to establish their sovereignty within the digital space. In some cases, these attempts to establish sovereignty take precedence over immediate economic concerns. An Indian Stack is emergingbased on Indian principles of innovation and India is trying to develop its own data governance model to protect its emerging tech industries. Led by an ambitious new European Commission, Europe is also trying to infuse the Stack with European values. Russia is developing a highly centralized Stack with an internet infrastructure that can disconnect from the rest of the world. An African Stack is also slowly emerging, inspired by the rise of pan-Africanism and the new African trade area that is set to become the world’s largest, whichwill benefit emerging hubs such as Ethiopia. Meanwhile, cities are also trying to establish their sovereignty in the digital space. In all of these cases, attempts to establish sovereignty clash directly with immediate economic interests (e.g. India, Africa and Russia all having ties to both U.S. and Chinese tech firms).

Looking ahead, as many countries will increasingly face challenges such as deglobalization, economic stagnation and depopulation, it remains to be seen whether they’ll be able to protect their sovereignty in the digital space without sacrificing too much economic opportunity by shutting out American and Chinese technology leaders. It is also likely that we will see different cultures ending up with different technological futures, while conflicts erupt over the overlapping of Stacks across political boundaries (e.g. TikTok being a potential vector ofChinese ideals).

2. Amid the heat of hegemonic conflict, China remains focused on the long term

For China, the conflict with the U.S. has attracted by far the most attention in global media, but China has stayed focused on important long-term risks and opportunities.

First, (Greater) China faces internal challenges. Although Western media have falsely painteda dilemma between violent intervention or losing control of Hong Kong, China has chosen to maintain the status quo by safeguarding the special status of Hong Kong. China has adopted a similar long-term-oriented strategy towards Taiwan, namely to pull the island into its orbit. Within mainland China, the Communist Party seems to have anticipated the need for greater political liberalization (e.g. based on new Chinese generations), as it’s experimenting with ways to put democracy into the hands of local officials.

Second, China’s long-term global ambitions reach far beyond what has grabbed global headlines (e.g. resolving the U.S. conflict, Belt and Road Initiative). We have also seen thatChinese finance is becoming an alternative to Western institutions, that China is investing in a new food strategy and could even become the global sustainability leader. Chinese digital platforms are becoming regional (if not, global) standards and China is pursuing a pragmatic relationship with the EU and eyeing key strategic assets for the future, such as Greenland.

3. Scenarios at the end of the fourth Hegemonic Cycle

We have seen in 2019 that we are nearing the end of what we have called the fourth Hegemonic Cycle. This idea is based on the history of financial hegemons from the Italian city-states, the United Provinces and the United Kingdom to the United States. In particular,we have seen that three scenarios for the future world order are still possible: a new alliance that protects the current world order, an alternative Asian system, and a long period of conflict.

Power-shifts within the Western world

As the EU takes on a global leadership role in areas from where the U.S. is pulling back, a new type of Western cooperation is taking shape, which could lead to a new type of Western alliance in the coming years, possibly more on EU terms. The U.S. is in a deep political transition whose next phase will focus on building a new economic order. Interestingly, theEuropean Union is not only trying to conjure up a new type of global leadership (especially with the European Green Deal), but there are also important power-shifts within the EU: most importantly, France is regaining its leadership role, whereas Germany desperately needs a new surge of innovation to prevent the country from falling behind. Meanwhile, Russia is quietly resurging and the crucial question is in what ways Russia will grow closer to which countries.

Asian alternatives

An alternative Asian system is emerging. Across the Indian Ocean, a new world system is emerging based on Asian principles of connectivity and multipolarity. Within this world system, the emboldened Indian PM Modi is trying to turn India into a superpower in the face of deep structural challenges, but the outlook for India remains positive in the long term. The system is also creating new types of economic models (e.g. the massive boom of remittancesthat is already more important than foreign direct investment and foreign aid). However, there will also be a greater likelihood of conflict, as East Asia has become the center of global geopolitical competition.

30-year conflict

However, based on the rise of mass protests, trade conflicts and hardened geopolitical strategies, which are fueled by destabilizing trends such as demographic transitions, economic stagnation, deglobalization and depopulation, it is also possible that we’re headed for a highly volatile period that scholars of hegemony Giovanni Arrighi and Immanuel Wallerstein characterized as the 30-year conflicts that recur whenever financial hegemons lose their dominant position.

4. Looking back to “Three Events We Are Not Expecting in 2019”:

At the start of each year, we highlight a few events from our geopolitical forecasts that may surprise global media in the coming year. In 2019, we have seen that all three of our forecasts from the end of 2018 were accurate.

First, the global backlash against China that seemed to be taking shape has indeed faded. China, despite concerns around Huawei’s 5G infrastructure, is maintaining a highly pragmatic relationship with India, is mostly successfully pursuing a pragmatic relationship with the EUand southern Europe is increasingly growing closer to China.

Second, Arctic activity has indeed for the first time made global headlines. In August, President Trump made clear that the U.S. has important strategic interests in Greenland, which is becoming a coveted strategic asset, by tweeting that he wanted to buy the island. Afterwards, the U.S. announced that it would open a new consulate in Greenland.

Third, president Widodo in Indonesia and president Modi in India won their reelections this year, boosting reformist optimism across Asia. Moreover, including the Philippines, successful democratic transitions characterized Asia’s biggest growth engines. Widodo’s second term indicates the newfound political stability of Indonesia and Modi’s attempt to turn India into a superpower runs parallel to the reemergence of the Indian Ocean world system based on Asian principles of connectivity and multi–polarity.

Series 'AI Metaphors'

1. The tool
Category: the object
Humans shape tools.

We make them part of our body while we melt their essence with our intentions. They require some finesse to use but they never fool us or trick us. Humans use tools, tools never use humans.

We are the masters determining their course, integrating them gracefully into the minutiae of our everyday lives. Immovable and unyielding, they remain reliant on our guidance, devoid of desire and intent, they remain exactly where we leave them, their functionality unchanging over time.

We retain the ultimate authority, able to discard them at will or, in today's context, simply power them down. Though they may occasionally foster irritation, largely they stand steadfast, loyal allies in our daily toils.

Thus we place our faith in tools, acknowledging that they are mere reflections of our own capabilities. In them, there is no entity to venerate or fault but ourselves, for they are but inert extensions of our own being, inanimate and steadfast, awaiting our command.
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2. The machine
Category: the object
Unlike a mere tool, the machine does not need the guidance of our hand, operating autonomously through its intricate network of gears and wheels. It achieves feats of motion that surpass the wildest human imaginations, harboring a power reminiscent of a cavalry of horses. Though it demands maintenance to replace broken parts and fix malfunctions, it mostly acts independently, allowing us to retreat and become mere observers to its diligent performance. We interact with it through buttons and handles, guiding its operations with minor adjustments and feedback as it works tirelessly. Embodying relentless purpose, laboring in a cycle of infinite repetition, the machine is a testament to human ingenuity manifested in metal and motion.
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3. The robot
Category: the object
There it stands, propelled by artificial limbs, boasting a torso, a pair of arms, and a lustrous metallic head. It approaches with a deliberate pace, the LED bulbs that mimic eyes fixating on me, inquiring gently if there lies any task within its capacity that it may undertake on my behalf. Whether to rid my living space of dust or to fetch me a chilled beverage, this never complaining attendant stands ready, devoid of grievances and ever-willing to assist. Its presence offers a reservoir of possibilities; a font of information to quell my curiosities, a silent companion in moments of solitude, embodying a spectrum of roles — confidant, servant, companion, and perhaps even a paramour. The modern robot, it seems, transcends categorizations, embracing a myriad of identities in its service to the contemporary individual.
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4. Intelligence
Category: the object
We sit together in a quiet interrogation room. My questions, varied and abundant, flow ceaselessly, weaving from abstract math problems to concrete realities of daily life, a labyrinthine inquiry designed to outsmart the ‘thing’ before me. Yet, with each probe, it responds with humanlike insight, echoing empathy and kindred spirit in its words. As the dialogue deepens, my approach softens, reverence replacing casual engagement as I ponder the appropriate pronoun for this ‘entity’ that seems to transcend its mechanical origin. It is then, in this delicate interplay of exchanging words, that an unprecedented connection takes root that stirs an intense doubt on my side, am I truly having a dia-logos? Do I encounter intelligence in front of me?
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5. The medium
Category: the object
When we cross a landscape by train and look outside, our gaze involuntarily sweeps across the scenery, unable to anchor on any fixed point. Our expression looks dull, and we might appear glassy-eyed, as if our eyes have lost their function. Time passes by. Then our attention diverts to the mobile in hand, and suddenly our eyes light up, energized by the visual cues of short videos, while our thumbs navigate us through the stream of content. The daze transforms, bringing a heady rush of excitement with every swipe, pulling us from a state of meditative trance to a state of eager consumption. But this flow is pierced by the sudden ring of a call, snapping us again to a different kind of focus. We plug in our earbuds, intermittently shutting our eyes, as we withdraw further from the immediate physical space, venturing into a digital auditory world. Moments pass in immersed conversation before we resurface, hanging up and rediscovering the room we've left behind. In this cycle of transitory focus, it is evident that the medium, indeed, is the message.
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6. The artisan
Category: the human
The razor-sharp knife rests effortlessly in one hand, while the other orchestrates with poised assurance, steering clear of the unforgiving edge. The chef moves with liquid grace, with fluid and swift movements the ingredients yield to his expertise. Each gesture flows into the next, guided by intuition honed through countless repetitions. He knows what is necessary, how the ingredients will respond to his hand and which path to follow, but the process is never exactly the same, no dish is ever truly identical. While his technique is impeccable, minute variation and the pursuit of perfection are always in play. Here, in the subtle play of steel and flesh, a master chef crafts not just a dish, but art. We're witnessing an artisan at work.
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