Geopolitics at the End of the End of History

Lee Jones recently spoke to a conference of logistics professionals about the rapid changes in global politics. He argued that the current chaos is the result of the continuing decay of the old neoliberal order, and that this is leading to the militarisation of international relations, regionalisation of the world economy, and the redundancy of the existing political methods of the business class. Here is an edited version of his talk.

What I would like to do tonight is briefly to offer a way of thinking about our present global disorder. And there is, clearly, a great deal of disorder right now. Just take President Trump’s global trade war: a set of tariffs, apparently designed by ChatGPT, imposed on all major trading partners, only to be wound back or, in the case of China, escalated then wound back, with the potential for further escalation.

That obviously has huge implications for your industry. Shipping bookings went up by a third the day after the US reduced its China tariffs. But many ships had already repositioned away from China and must now be re-routed. US ports and trucking will be overwhelmed as American firms try to stockpile ahead of big consumer events and a possible re-escalation. Costs and prices will undoubtedly rise. Trade and supply chains are already being re-routed through Southeast Asia.

These are unsettling times not least because the analysts and experts that we might expect to help us understand what is happening often struggle to do so. Many prominent commentators merely argue that Trump is erratic, stupid or insane. Analysts who do try to explain what he is doing in rational terms are accused of ‘sane-washing’.

But tonight, I want to suggest that this chaos in logistics – and in the wider world – is part of a wider transition: what I will call ‘the end of the End of History’. 

The US-led neoliberal order, established after 1989, is over – it is collapsing under the weight of its own internal contradictions. 

But History with a capital ‘H’—by which I mean history in the form of new ideological projects capable of creating a new, stable order— has not restarted. Instead, we are experiencing the advanced decay of the liberal, globalist order, with many ‘morbid symptoms’ as one order dies and a new one struggles to be born.

Among these morbid symptoms is the so-called ‘New Cold War’ between the US (and the wider West), on the one hand, and Russia and especially China, on the other. This is an attempt to create a new world order. It is unlikely to succeed. But it is accelerating the decay of the liberal order, with significant implications for all of us – including, of course, the logistics industry.

The end of the End of History

So, what do I mean by the ‘end of the End of History’? The American political thinker Francis Fukuyama famously declared the ‘End of History’ in 1989. By ‘History’, Fukuyama meant the struggle between rival ideological visions of social, economic and political order, which he saw as the motor force of human development. In the 20^th century, that meant Liberalism versus Fascism and Communism. Liberalism defeated Fascism in 1945, and Communism in 1989. Liberalism was left as the only game in town: free markets and the liberal state as the final destination of mankind’s evolution. 

Now, Fukuyama was partially right. For over 20 years, free markets and liberal democracy appeared hegemonic. Left-wing parties abandoned their commitments to socialism and adopted neoliberal platforms. The ideological differences between parties narrowed to a sliver. Politics became boring. Political questions turned into technical issues, to be managed by experts, often outside of democratic politics, and even outside of the nation-state, through intergovernmental organisations like the EU.

But Fukuyama was also profoundly wrong to think that this situation would or could last forever. Every social, political and economic order has internal contradictions that create movement, rather than stasis. That is particularly true under capitalism, which is always prone to crisis. 

In the years since the 2008 financial crisis, the material conditions that sustained the End of History have vanished. 

• Economic growth and improvements in living standards – always uneven, with many areas left behind – have faltered. The era of cheap credit, which temporarily filled in some cracks, is now over.
• US-led globalisation peaked around 2018 and has stagnated since.
• The liberal parties and technocrats who claimed to be able to manage social and economic life are now widely challenged, even despised. 2016 was a key turning point, as populist ructions moved from the peripheries – places like Spain and Greece – to the heartlands of the neoliberal order: Brexit Britain and the United States. 

And yet we do not see the replacement of Liberalism by a clear, decisive alternative. We are not at the rebirth of History, simply the end of the End of History.

The most important political dynamic today is therefore decay, not renewal.

Why did this happen?

Western liberals have been slow to understand, explain or accept these developments. There has been a tendency to blame either voters for being stupid, racist, sexist, and so on; or ‘revisionist’ powers like China and Russia, whose electoral interference has been blamed for everything from Brexit to Trump and beyond – as we saw most recently in Romania.

It is truer to say that the liberal world order is collapsing under the weight of its own internal contradictions. Three stand out for me.

First was the unfettered hubris of liberal states. Unchecked by any powerful external rivals, the US and its allies profoundly undermined key aspects of international order, especially respect for sovereignty and the non-use of force. Armed interventions or invasions in the name of human rights and democracy unleashed chaos in the Middle East and provided a script that Russia could cynically use to justify its own invasions of Georgia and Ukraine. The rest of the world, looking on, sees both sides as equally hypocritical.

Second, globalisation has profoundly changed the global balance of power. European and American businesses industrialised China, while hollowing-out their domestic industrial bases. Thanks to aggressive industrial and trade policies, China is now a manufacturing powerhouse at the leading edge of several key technologies, while rapidly catching up in others.

Third, and most importantly, neoliberalism has not just hollowed-out Western societies economically, it has also led to the profound decay of representative democracy. 

As political parties converged on a free-market agenda, they steadily abandoned their traditional social constituencies. 

• Conservative parties abandoned social traditionalists and small businesses, favouring unfettered markets that destroyed social bonds while benefiting large, internationally-oriented (and often foreign) companies. 
• Social democrats abandoned organised labour and the working class, often weakening the postwar welfare state in ways that conservatives could only dream of.

Meanwhile, ordinary citizens retreated into private life. The institutions through which they had participated in and shaped public life – political parties, trade unions, churches, civic associations – have all shrivelled.

A great void opened up between rulers and ruled. Economic pain has mounted, especially in the ‘left behind’ rural areas, small towns and post-industrial cities. Political pain has also mounted, as people feel increasingly powerless, ruled by those who do not listen to them or sympathise with them. At the last British general election, fully 60 percent of voters said that no political party represented them. 

In this void, populist challengers flourish, rightly highlighting established elites’ failure to serve their constituents. The mainstream parties are so moribund, so incapable of self-renewal, that populists are now either in government, or constitute the main opposition force, in most ‘advanced’ democracies. 

But populists are themselves a symptom of the void, repeatedly proving themselves incapable of closing it. Their negative, anti-systemic politics fails to generate meaningful plans for renewal. 

Right-wing populists especially fail to understand that the discontent fuelling their success is a discontent with neoliberal policies. They cling to these policies as if they are the cure, not the disease. Lacking any alternative economic model, populists mostly end up engaged in pointless culture wars that fail to renew representative democracy or revitalise economic life.

People get frustrated, the technocrats retake power, and the cycle continues.

This internal democratic decay means that the core states of the liberal order are no longer able or willing to support it – and, in the case of the US, are now actively attacking key aspects of the world that they previously created. 

Consequently, we are living through a change in world order comparable to 1945 or 1989. But, unlike then, we do not see a clear, new order being established. Today, we instead see the pillars of the US-led neoliberal order being pulled down from the inside, leaving nothing in its place.

The New Cold War

True, there is an attempt in many Western capitals to impose a new order amid the chaos – what is often called the ‘New Cold War’. Since 2017, liberal states have declared that geopolitical competition is back. Trump initiated a trade war with China, and a wider geopolitical confrontation with Beijing. Biden intensified this policy, and added a proxy war with Russia after its invasion of Ukraine. 

While European leaders are generally warier of confronting China, they regularly proclaim that we are in a ‘pre-war’ situation with Russia, cutting welfare to increase defence spending and threatening to reintroduce conscription. Trump is less interested in hammering Russia but, despite talk of a prospective ‘deal’ with China, his administration – and the American political class on both sides – seems committed to confronting Beijing.

Now, Russia and China are not innocent victims here. Their actions – some of which are appalling – have obviously provoked Western reactions. 

At the same time, the enthusiasm of many Western elites for a ‘New Cold War’ – despite its obvious dangers, including the risks of nuclear war – invites critical scrutiny.

A ‘New Cold War’ has many appeals for a struggling Western leader. 

• In place of confusion and disorder, it creates a comforting, predictable order – a familiar, bipolar vision of the world. 
• It externalises responsibility for the chaotic state of world affairs – ‘it is the fault of those “revisionist” powers, nothing we did’. 
• And it re-moralises world politics, with the West cast as the ‘goodies’ against the autocratic ‘baddies’, giving a sense of purpose and ethos to liberal leaders who are often domestically unpopular and directionless. 

But this attempt to reimpose order is unlikely to work. 

• Domestic publics do not buy into this vision. Conscription, for example, is profoundly unpopular. In Britain, a large majority opposes it, and in one poll 30 percent said they would refuse to fight even if the country was on the verge of invasion. That is how alienated they are from states and political leaders that they no longer see as representing them. 
• Industrial hollowing-out also means that Western states are poorly placed to compete with China or even militarily with Russia. The US experiment with industrial policy under Biden is now being reversed by Trump, while European versions remain exceedingly weak. China’s gleaming infrastructure contrasts sharply with the West’s post-industrial decay. 
• The rest of the world is also deeply sceptical of a ‘New Cold War’. Most countries steadfastly refuse to choose sides, preferring to remain ‘polyaligned’: connected with, and benefiting from, ties to all major economies. This also reflects the inadequacy of China and Russia as alternative ‘poles’ capable of attracting the exclusive loyalty of other states. 

We are left, then, with the advanced decay of US unipolarity – certainly accelerated by Trump – rather than the emergence of a decisive new order, whether bipolar or multipolar in nature.

Geo-economic patterns and implications for logistics

Where does this geopolitical decay leave economic globalisation, and with what implications for your industry?

Despite much talk of ‘de-globalisation’, I think it may be more accurate to speak of ‘Globalisation 2.0’, or ‘re-globalisation’. 

True, if we look at metrics like the quantity of global trade as a share of world economic output, globalisation moved to a plateau after 2008. New regulations that inhibit trade now vastly outnumber those that liberalise it. The American leadership that drove globalisation in the 1990s is unimaginable today under either political party.

However, beneath these headlines, there remains considerable support for international trade. Coupled with a lack of alternative political visions, this means that wholesale reversal – ‘de-globalisation’ – seems unlikely.

• Europe, China and many other states have cooperated to create a parallel dispute settlement mechanism at the World Trade Organisation, to substitute for the formal process sabotaged by the US since 2019.
• The development strategies of China and other developing countries remain dependent on foreign trade. 
• Most Western businesses are largely uninterested in ‘reshoring’ production, and are afraid of ‘decoupling’ from China – witness their hostile reaction to Trump’s tariffs.
• And even Trump himself is not anti-trade. He simply wants trade relations reconfigured to benefit the US. His Treasury Secretary openly muses about reorganising the world into three ‘buckets’ defined by their subservience to US demands, with a ‘green’ zone enjoying easy US market access, a ‘red’ zone of recalcitrant enemy states, and an intermediate ‘yellow’ zone facing higher tariffs.

All of this points to the fracturing of the global economy – possibly towards more regionalised patterns of investment, production and trade – which are, in any case, the bulk of transactions under so-called ‘globalisation’. But they do not point simply to an ‘end’ to these international processes. 

Indeed, what we have seen since the onset of the ‘New Cold War’ – and what will likely continue – is the reconfiguration of these activities around – but also to some extent through – geopolitical fault-lines.

• We have seen ‘China+1’ strategies – where firms partially move production out of China to other countries, to avoid trade barriers – and this is now intensifying. Many companies may end up running different production facilities in different countries to service different end markets.
• The ‘stretching’ of supply chains will also likely continue. Chinese firms have themselves evaded US tariffs by relocating to ‘connector’ countries, like Mexico and Vietnam, which trade heavily with both the US and China. These countries will forcefully resist choosing sides, because their prosperity depends on their not doing so. If they are compelled to choose, firms will find new ‘connector countries’, and the US will be playing a constant game of ‘whack-a-mole’.
• Ad hoc ‘shocks’ will continue to stress supply chains, requiring frequent adjustments. The COVID-19 lockdowns, the Ukraine war, and Trump’s tariffs have all been followed by wrenching adjustments and, in some cases, new logistical connections.
• In short, the old fantasy of a continuous, smooth flow of objects around the world has been shattered. Emphasising ‘resilience’ and ‘viability’ as core concepts, strategists now rightly argue that supply chains should be designed to adapt to severe disruptions of business, society, economies and nature. 

And, if my analysis is correct, we should expect these disruptions to continue and possibly worsen. This is not a problem of one erratic president. The decay of the liberal order will continue for the foreseeable future, with no stable replacement in sight.

What is to be done?

Now, you may well ask, at the end of this gloomy prognosis, what is to be done?

You will know far better than me how to adapt your own businesses, to try to build in ‘resilience’ to your operations and move from ‘just-in-time’ to ‘just-in-case’ approaches, though the challenge is no doubt immense.

But the harder task may be to adapt business’s political behaviour. And this brings us back to the domestic impact of the decay of neoliberal order.

The cautionary tale here comes from the US, where – despite seemingly all-powerful – business has clearly lost control of its traditional political representative: the Republican Party. Like its counterparts elsewhere, the Republican Party was hollowed-out through the neoliberal years, leaving it prone to a populist takeover by a leader who does not share the free-market proclivities of big business.

There is a parallel process in the UK. Here, the Conservatives are the traditional party of business. But, in his determination to ‘get Brexit done’, Boris Johnson famously declared ‘f—- business’. Liz Truss enacted a ‘pro-business’ agenda that markets hated so much, we are yet to recover from the consequences. 

Nor has business-as-usual been restored under a deeply technocratic Labour government, as some hoped. Because of the ‘voiding’ of political representation, no party can develop or enact a meaningful vision for government. This is why a government with an enormous parliamentary majority has been adrift practically since day one.

Under these conditions, traditional business lobbying is becoming less effective. Lobbying treats government as if it is an efficient problem-solving machine – handing it, for example, a list of potholes, traffic bottlenecks and dysfunctional ports to be fixed. But that machine is largely broken. The task of fixing problems is apt to be bounced back to the private sector, which is even less willing or able than the government to take responsibility for the parlous state of the country’s infrastructure.

What is missing from the business community – and indeed many other communities – is serious political thinking and organisation. Rather than lobbying in a fragmented, sectoral way for tweaks to regulations or taxes, business needs to consider collectively what sort of political, social and economic arrangements are needed to secure the long-term health of capitalist democracy. 

That needs to include a consideration of what business is willing to sacrifice to those devastated by globalisation in order to stabilise society and rebuild a viable form of representative politics. 

Many politicians know that the current economic and political model is broken. But their constant refrain that ‘there is no money’ betrays their overwhelming fear that trying anything different risks decapitation by the bond markets. This neutralises any effort to experiment with new approaches before they have even begun, and keeps us stuck in an endless doom-loop.

These are dangerous times. No one expects the logistics sector to save the day, single handed. But if we are to navigate and ultimately escape the cycle of decay I have laid out, we all have our parts to play.