Winning is Back, With a Vengeance

FEATURES | October 13, 2010     

With classical state power plays clearly back en vogue, the collective responsibilities of the new century will be all the more dauntingWith classical state power plays clearly back en vogue, the collective responsibilities of the new century will be all the more daunting

 
Outside of the military context, where it is bread and butter, the concept of winning in international relations seems so passé these days. Faced with a series of apparently unwinnable – and essentially non-existential – wars (Afghanistan, the ‘Global War on Terror,’ the ‘war on drugs,’ the ‘war on poverty’) and a series of global collective action problems (ensuring energy security, fighting climate change, rebalancing the global economy) that require cooperation rather than competition, does the very idea of winning not rather miss the point? Have we not gotten beyond all that? Do we not know that, in an interdependent world, our long-term interests can only be advanced collectively?

Sadly, however, the idea of winning is still relevant, and getting more so. The narrow pursuit of national state advantage does not conform to some of our grander ideas of how global governance should work, but it is the reality of what most states do, most of the time, trying to seek to advance individual interests with little regard for the impacts that such behaviour might have on the global system as a whole – impacts that are often considered negligible, and therefore can be discounted.

This may not matter very much if the global system is, indeed, fundamentally sound and open, and if its stability is in effect guaranteed by a single state – say, the US – or a set of states. In that case, a selfish ‘winning’ policy conducted by a state or states is unlikely to undermine global order as a whole. There may be free-riders – there always will be – but they are not important enough to be spoilers.

But it matters a lot when, as now, there is ebbing confidence in the fundamentals of the global system – not least, an integrated and more or less even global market, broadly free from political interference – when its traditional guarantors are either weaker (the US) or in disagreement (the West), when free-riders have become far bigger players (China), or when some see a moment of flux as an opportunity to reshape the global system in their image (some of the BRIC countries – Brazil, Russia, India, China). And it matters a lot when so many of the key problems facing the world are inherently interconnected and interdependent: climate change, food scarcity, population and energy poverty.

Even as the world struggles to bridge the gap between the reality of interdependence and the lack of effective governance to manage it, winning may be making a dangerous comeback. A resource-constrained world, going through a period of economic turbulence, where the very structure of global order is increasingly up for grabs, provides the backdrop and temptation. Why rely on the market to provide essential goods, for example, when strategic sources can be ‘won’? Why invest in the compromises inherent to global order when domestic constituencies are hurting? Why prevent the state from getting involved in global business decisions when political alliances can help conquer markets?

Backsliding from interdependence and cooperation into beggar-thy-neighbour currency policies, protectionism and short-sighted efforts to ‘win’ access to resources – from food, to oil, to water, to land – is only a partial reality as it stands, but it is a real risk. Worse, once the backsliding has started, it may be hard to stop. Once the idea has taken hold that the global system has become a game of ‘I win, you lose,’ rather than ‘I win, you win’ – if only in the economic sphere – the spirit of trust and compromise, essential to a global system without a global government, is lost.

Policy-makers, particularly in the West, need to recognize that, sadly, they can no longer simply rely on liberal expectations that globalization will become ever more integrated, and that global markets will render the logic of winning inoperative. History has not ended. Globalization needs to be constantly defended, and made more resilient. There is no iron law that says integration is one-way or immutable. Pretending otherwise is not only risky, but is potentially counterproductive.

This implies a major test, particularly for the West. On the one hand, countries need to play smart on this newly-complex global playing field of economic and strategic competition. They cannot afford to be naïve. Being wary of allowing Chinese companies control over a significant part of your natural resources sector – in Australia or Canada, say – is not illiberal, or racist, or anti-Chinese. It just makes sense. Most business school graduates would be able to see the risk in terms of pricing power of having your biggest consumer also owning your inputs.

But, on the other hand, they need to keep the prize of a basically open and free global system in sight. They need to convince those who view the current system as unbalanced, and who doubt that it can secure their interests (viz. China) that, in fact, it is the best and only means of safeguarding their interests in the long-term. This means being clear about defence of the free market in the vast majority of cases, and avoiding the temptations of protectionism as a sop to domestic constituencies in difficult times. It also means constantly advocating reform of global economic institutions, and rebalancing within the global economy. In order for things to stay the same, things will have to change.

This is a delicate and hugely important balancing act to pull off. It requires clear-sightedness and diplomacy. A world where states come to view their role, as they did in the past, in terms of ‘winning’ – whether it is gaining direct control over strategic resources rather than relying on the open market, or securing intellectual property by copying it rather than by inventing it, or claiming ownership over territory rather than submitting to processes of law – is a world full of losers, and worse.

It is easy to forget, in our post-modern cooperative age, that for most of what we can reasonably call human history, winning has, crudely, been the essence of international relations. Back in the day, the terms of winning were simple enough: victory for one side necessitated loss for another. The winning party in any confrontation could be made clear by a transfer of territory or wealth – understood as more or less finite – from one side to the other. The world was zero-sum.

At first, in this zero-sum world, winning was about plunder. After the decline of the order provided by the Western Roman Empire, the dynamic barbarian proto-states that shaped Europe in the early Middle Ages were effectively giant Ponzi schemes of plunder, expanding rapidly through military conquest in order to satisfy the demands of the warrior-nobles on whom royal power ultimately depended, and then collapsing or fragmenting when their rate of plunder slowed. In this warrior world, authority lasted only as long as it conferred victory. To paraphrase a saying from the world of competitive sport: winning was not everything; it was the only thing.

Later, starting in the 15th century, plundering went into long-term decline in Europe. As permanent, territorially defined states began to replace marauding hordes as the chief political element in Europe, long-term conquest, control and exploitation took over from the cheap thrills of pillage. Europe was gentrified.

Wars and dynastic alliances still advanced the interests of one group over another, but winning now was less about getting hold of high-value moveable goods – as it had principally been for earlier, perfunctory barbarian incursions – and more about territory, population and, in the religious wars of the 16th and 17th centuries, about winning people’s souls. Plunder for resources continued, but it was now off-shored, in the rapid growth of European empires, starting with the Spanish and Portuguese in Latin America.

A still more substantial change in international relations came later, with two interrelated phenomena that fundamentally altered the basis of power and, inevitably, the purposes to which power would be turned: the rise of credit and, above all, the growth of trade. Both of these phenomena made territory, population and direct access to resources less crucial factors in establishing the ascendance of one state over another. Credit and trade allowed ostensibly weaker powers – weaker in terms of population, land and resources – to offset those weaknesses. The first means to do this was through greater financial resilience – essentially, the ability to borrow money. The second was through their ability to generate surplus income from trading with others, thus building up capital and, with that, influence and military strength.

If the origins of power had changed, this world was nevertheless viewed in zero-sum terms. Trade was still thought of in much the same way as territory or population – as a fixed quantity in which one state’s gain implied another state’s loss. To win, in these terms, meant to export more than one imported, thus wresting assets from others – a mercantilist perspective personified by the 17th century French finance minister, Jean-Baptiste Colbert. Alternatively, winning was about preventing others’ trade, as Britain did in the 1500s with a policy of state-sponsored piracy directed against Spain. Either way, trade directly implicated the state in considerations of power. Trade was war by other means.

The idea of trade as pointing the way to a non-zero-sum world – where everyone could win by sharing the gains derived from unlocking comparative advantage – came much, much later. It was only in the early 19th century that Adam Smith’s invisible hand was complemented by David Ricardo’s law of comparative advantage. Even then, trade was a battlefield onto which the state would frequently throw its military assets, in pursuit of resources or markets (or, in colonies, both). It was only after the first era of globalization had ground to a bloody halt in WW1 and WW2 (and the Depression that they bookended) that there was a real paradigm shift in international relations from ‘winning’ in its traditional sense to the idea of freely establishing collective economic and political order, and attempting to influence the terms of that order.

For most of the 20th century, the free, collective, liberal, open global order that we have now become used to was a fragile one – challenged first by fascism, and then by the alternative global order proposed by Communism. Eventually, however – and, with some irony, due to the existence of American military power – it became established.

In the late 20th and early 21st centuries, after the fall of Communism, the hope emerged that the emerging global commons – global markets, the Internet, the global environment – were now simply too collectively valuable to be fought over, except in a commercial sense. These global commons would inevitably drive states together. Eventually, perhaps, they might nudge states to one side. In its most extreme form, perhaps states would set the framework for global commercial competition and innovation, ensure its security, and then retire from the international scene – focussing only on making for the well-being of their citizens at home.

The idea of winning as an operative concept for states in international relations would have been invalidated; or, rather, it would have been dissipated in international law and in bodies such as the WTO. Humanity would have completed the evolution from the violent logic of prehistory, to the civilized, mutually beneficial cooperation of the liberal paradise. The world would have become flat.

It was not quite to be. The necessity of collective action to address collective problems, such as climate change, or management of the global economy, is no less great. Indeed, achieving global collective action in these and other areas is the greatest challenge to human political organization ever – one that becomes more pressing by the day. But, as the last few years have shown, necessity does not make effective collective action inevitable. Look at Copenhagen – so meagre in its results relative to what many had hoped (and relative to what may still, one hopes, be achieved).

States have resumed a role, not as high-minded guardians of the global market – if they ever were – but as active players in it, playing to win. The remarkable rise of sovereign wealth funds (in itself nothing to worry about, unless their power and scale are abused), the use of energy as a tool of strategy (Russia), the re-emergence of the idea of strategic industrial policy (in the US and Europe, as elsewhere), and the rise of an apparently successful economic model (China) in which business and the state are elided, are all taken as symptoms of this resumed ‘drive to win.’

More than this, it has become increasingly clear that, far from the global commons being a catalyst for the emergence of a community of global public interest, the global commons has in fact become increasingly contested, and occasionally fragmented. This is what is currently happening to what was once viewed as that most quintessentially global of commons, the herald of a new age, beyond the domain of any single state – the Internet. Different state regimes, initially caught unawares by the rapid rise of the Internet and its consequences, are now carefully proclaiming their sovereignty and regulations over it. The result is fragmentation, and the end of the Internet dream of the late 1990s. China is insisting that its security and other rules apply to the Internet accessed in China; the UAE, Saudi Arabia and India have been harassing Canada’s Research In Motion to allow their security services to access Blackberry communications; Iran is setting up, in effect, its own Internet. More than this, the Internet has become a ghostly battlefield for states, preparing themselves for cyber-war, and a tool for states and companies to gather sensitive technological and other information about their rivals. Winning has reasserted itself.

An area where the return of ‘winning’ strategies is genuinely dangerous is natural resources. In a sense, the inescapable inequality of distribution of natural resources is a perfect opportunity for the logic of global markets – as a mechanism through which scarce resources can be distributed most efficiently from suppliers to consumers – to come into play. The risk, increasingly, is that the market will be undermined by bilateral, so-called strategic arrangements that give one country prior access to what are increasingly recognized as finite resources.

There is a risk that, as the scarcity of some natural resources increases – partly because of rising demand from a growing, industrializing global population; partly because of physical scarcity, partly because of production bottle-necks; and partly because climate change will alter the distribution and total availability of some resources – more and more states will turn away from the market in an ultimately quixotic search for security. Instead of states adopting self-reinforcing liberal strategies – openness, transparency, acceptance of interdependence – they will begin to adopt self-reinforcing, short-term ‘winning’ strategies – bilateral relationships, closed deals, attempts to avoid interdependence.

If this does indeed happen – as the rising temperature of state-led resource competition (with China in the lead, but India catching up), coupled with some states’ recent attempts to buy up extraterritorial land rights, suggests is plausible – winning as the dominant mode of international relations will be well and truly back. The consequence would be a self-destructive, zero-sum world. In the short-term, the greatest losers from this would be the most interdependent economies and countries, such as the UK and Japan – countries that have long relied on global markets to satisfy demand for food, minerals and other resources, and that would see these markets cease to function in the same way.

In the long-term, however, losers would be everywhere. All other things being equal, larger markets are more stable and more flexible than smaller markets. Fragmentation of markets would result in more frequent crises – not less frequent crises. All of this has consequences for the nature and quality of global order.

As the (very imperfect) guardians of an open and liberal global order hitherto – and as their chief beneficiaries – the US and the West have a role to play here. They need to exert what influence they still have to reinforce the liberal, open, rules-based, market-based core of the global economic order. These principles are not, it should be recognized, a liberal fetish. They are the practical basis of a non-zero-sum world that provides prosperity and security for a rising global population at a time of resource stress and geopolitical flux. Nor is the maintenance of these principles the natural state of international relations. They have to be perpetually defended – particularly in times of stress, as at present. The really big win is at the level of the system, not the state: a world where winning is not the name of the game.

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Charles Emmerson is a former Associate Director of the World Economic Forum, and currently an independent adviser on geopolitics, living in London. He is the author of  The Future History of the Arctic (Random House/Public Affairs, 2010).

(Illustration: Brad Yeo)

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3 Responses to “Winning is Back, With a Vengeance”

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