The Age of Antagonism. You, Corrupt; Me, Facilitating Access. Bully – Or Bullies – For Billionaires. Plus More! #203

Grüezi!?I’m Adrian Monck – welcome!

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1???The Age of Antagonism

The US and China are Reshaping the World with Expediency

Two alliances give a glimpse into the way geopolitics is headed in the 21C: the US alliance with Israel; and China’s “no limits” partnership with Russia.

Each junior partner brings a war: Israel’s in Gaza, and Russia’s in Ukraine.

Each principal antagonist puts strategic gains ahead of norms that were supposed to hold back global instability.

For the US, Israel is:

• its foremost Middle Eastern ally,
• a major buyer of US arms,
• a domestic political asset among key groups.

For China, Russia is:

• a crucial energy supplier,
• a partner in countering Western influence,
• a supporter on issues like the South China Sea.

But all these advantages come with risks.

US shielding of Israel alienates global – especially Muslim – public opinion, strains ties with European allies and undermines its credibility as a defender of a rules-based order. ??????

China’s reluctance to condemn Russia’s illegal invasion of Ukraine risks tarnishing its image as a responsible global power, especially in Europe, and ties it to a volatile regime, which could disrupt its economic interests if the conflict escalates. ????????

Fundamentally, both the US and China are signalling that the rules apply selectively.

Political expediency erodes the legitimacy of the entire international system.

Time and neglect have led to a dangerous unraveling of the predictable framework that has – for all its faults – helped limit the worst excesses of raw power politics.

We risk a return to a more chaotic world where might makes right – a world of more frequent conflicts, fewer firm commitments, and less cooperation on shared challenges. ??

??What might a less expedient US foreign policy look like?

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2?? Coming Clean on Corruption

Are wealthy countries really cleaner than poorer ones?

Corruption rankings like Transparency International’s Corruption Perceptions Index (CPI) consistently paint poorer countries as hopelessly corrupt while portraying wealthy Western nations as bastions of integrity.

Yet Britain, ranked highly for financial wholesomeness, is described by the FT as the ‘dirty money capital of the world.’

Are rankings telling the whole story?

In poor nations corruption often takes the form of blatant bribery and embezzlement. In wealthy countries, corruption is frequently more subtle, institutionalized, and legally ambiguous.

Think lobbying, revolving doors between government and industry, and transnational networks of illicit finance.

This largely flies under the radar of indices like the CPI.

US professor Yuen Yuen Ang suggests a different set of measurements to enable more meaningful comparisons between countries.

Under her rankings, while the US appears less corrupt than China overall, both countries score highly on cash for access – with America’s institutional corruption through lobbying and regulatory capture edging out China’s more individual, relationship-based graft.

Time for a bit more humility and nuance when it comes to corruption.

??You can see Yuen Yuen Ang talking about her corruption index here.

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3?? Protectionism, Paranoia And The Dark Forest

Is the world becoming a more terrifying place?

Noah Smith thinks so. He writes this week about the “Second China Shock,” something we’ve talked about in this newsletter before.

2% of world GDP is now China’s manufacturing surplus. And all those goods have to ship somewhere. Smith thinks it’ll usher in a new era of protectionism.

But he volunteers another thought...

• “There’s one other possible buyer of last resort for Chinese manufactured goods, which is the Chinese government itself.
• “Recall that the US finally got out of the Great Depression when we turned all our productive power toward fighting WW2.
• “Some people think Xi Jinping is preparing something similar, and ramping up domestic manufacturing as a prelude to a world war.

“I don’t rule this out...”

Smith’s doomsday-ish speculation stopped me in my tracks. (If you need an antidote: “Why Noah Smith is clueless about China.”)

Two points explain it:

1. Opacity: No one knows the inner workings or long-term strategy of China’s leadership.
2. Paranoia: Uncertainty and the absence of information leads to a breakdown in trust.

My view? We can’t stop great power competition.

But we can at least create the conditions in which it might be conducted with more light than heat.

Those conditions? More well-mediated –?and reciprocal – interaction. Things like encouraging young Americans to study in China.

??China is making cautious moves to re-open. But reciprocity is key...

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4?? Bully For Billionaires!

What’s to stop the über-rich behaving badly?

Billionaire Nelson Peltz, 81, gave an interview to the FT this week. Besides telling the paper he was concerned about the frailty of 81-year-old Joe Biden, he also joked:

“What sense is being a billionaire if you’re not a bully?”

Behind every joke there is some truth.

So who protects us –?the non-billionaires – from bullies?

That would be the law.

No better example in the past seven days than billionaire Elon Musk responding to critics of X by taking them to court.

Musk was using the law to bully people. Luckily the judicial process is supposed to be insulated from influence – barring the odd vacation.

In this instance the judge threw Musk’s suit out of court saying:

“This case is about punishing the Defendants for their speech.”

We may grow weary of pointing out the hypocrisy of the powerful. But we shouldn’t become immune to it.

??How billionaires turn wealth into power.

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5?? A Great Psychologist on Humans

Daniel Kahneman died this week.

The video above is Kahneman talking about AIs and human intelligence. I got to meet him a few years back. He was an active, clever, curious human.

Here he is telling a story about his childhood in Nazi-occupied France:

• “The people my mother liked to talk about with her friends and with my father were fascinating in their complexity ... no one was simply bad.
• “In one experience I remember vividly, there was a rich range of shades... Jews were required to wear the Star of David and to obey a 6pm curfew.
• “I had gone to play with a Christian friend and stayed too late. I turned my brown sweater inside out to walk the few blocks home...
• “Walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform... the one worn by specially recruited SS soldiers.
• “As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me.
• “I was terrified that he would notice the star inside my sweater.
• “He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money.
• “I went home more certain than ever that my mother was right: people were endlessly complicated and interesting.”

??Kahneman’s “Thinking Fast, Thinking Slow” is a modern classic.

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6???Recycled Housing?

Concrete is the latest – and dirtiest – material to get recycled.

??You can read more about the project here.

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7?? Old Inspiration for AI Films

There’s something about balloons...

Made in 1956, The Red Balloon is an enduring movie classic. It is also surely the inspiration for Air Head, a new short film by Toronto studio Shy Kids and made using OpenAI’s Sora.

??‘Red Balloon’ director Albert Lamorisse also invented the game ‘Risk.’

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If you enjoy this newsletter – please recommend it!

Best,

Adrian