x Abu Dhabi, UAEFriday 21 July 2017

The chosen few?

Two books that explore where the new balance of power in today's ever increasingly interconnected world lies.

Wal-Mart proudly presents...: David Rothkopf argues that corporate rather than political power is the driving force in global change.
Wal-Mart proudly presents...: David Rothkopf argues that corporate rather than political power is the driving force in global change.

Two books explore the new balance of power in an increasingly interconnected world. But as Afshin Molavi writes, the nation-state still reigns supreme.

The Second World: Empires and In?uence in the New Global Order
Parag Khanna
Random House
Dh146

Superclass: The Global Power Elite and the World They Are Making
David Rothkopf
Little Brown
Dh183

The journey of a thousand miles, the old Chinese adage goes, requires the first steps. In 1979, Deng Xiaoping gingerly took those first steps ­towards market-orientated economic reforms in China. Declaring that "socialism does not mean shared poverty," Deng's policy shift - radical by the standards of his time and place, modest by today's measure - instigated a tsunami of economic development that has washed over much of China's failed 20th century past. Thirty years ­later, China has lifted some 300 million people out of poverty, created a growing and robust middle class and emerged once again at the centre of the geopolitical map.

China's position as a global power was neither preordained nor inevitable. It was a direct result of the policy choices made by a new generation of Chinese leaders, whose predecessors only a few years earlier enacted disastrous policies such as the Great Leap Forward, which led to famine and the deaths of some 30 million people. This was followed by a Cultural Revolution that produced persecution, fear, and paranoia with the same kind of unremitting efficiency that today's China produces toys and trainers.

Some will argue that China's rise was simply the re-emergence of a civilisational power to its rightful place in the company of nations. In this rendering of things, countries like the United States are "new kids on the block", mere blips in the long history of the world, a history filled with Chinese accomplishments (by this measurement, Greece has been in a 2,000-year deep sleep and Iran in a 30-year nap).

Chou En-Lai, then the Chinese premier, intimated such a long view of history when he was asked by Henry Kissinger in 1971 to assess the affects of the 1789 French Revolution on the world. His response: "It's still too early to tell." But China's rise had little to do with its ancient civilisation. It's actually much simpler than that; Chinese leaders made pragmatic choices that successfully exploited changes in the global economy and capitalised on a massive labour force to create an export-driven machine that is now the second largest economy in the world. China's resurgence had little to do with Confucius, ancient Chinese medicine, or even nuclear power. It began when it mastered the assembly line. Today China is no longer a revolutionary state looking to upend the world order or challenge the American superpower, but a world power in its own right, hosting the Olympics and millions of tourists.

When the history of the 20th century is written, a basic, unalterable truth will emerge: Mao's policy choices killed people, strangulated the economy and devastated the poor; Deng's policy choices unleashed the latent potential of the Chinese economy, uplifted millions and dramatically strengthened the influence of Beijing. A look at the two Koreas reveals the potentially devastating - or empowering - effects of policy choices that leaders make. A child born in Pyongyang - indistinguishable at birth from his counterpart in Seoul - might as well live on a different planet. Whereas South Korea has created an economic success story alongside a democracy that has afforded its citizens a measure of prosperity, freedom and dignity, North Korea has given its citizens a nightmare of isolation, deprivation and degradation. The border between the two states is like a carnival mirror, where a normal image is transformed into a deformed anomaly. The major difference between the two Koreas is political leadership, not culture or civilisation.

The majority of governments are neither entirely incompetent and predatory nor entirely visionary and efficient. In fact, most combine all four characteristics at once. How a nation chooses to organise itself politically and economically will determine its future. Nations that exploit their comparative advantages in a world of global markets - like Singapore, Ireland, the United States, Hong Kong, Canada, Switzerland - also happen to be among the most economically successful.

Globalisation has produced a "world is flat" narrative highlighting the diffuse nature of power. All of this is partially true, but despite the broadening of power, there is no entity more powerful or influential than the nation-state. It might be considered an antiquated notion in a world of blurred borders and rapid technological advancement, but these developments have neither diminished the power of the state nor subsumed it.

The architecture of this world - and the shifting role of states and elites - is at the heart of David Rothkopf's clever and skillfully told portrait of the Superclass and Parag Khanna's wide-ranging and finely wrought geopolitical tour d'horizon The Second World. As Khanna notes: "Globalisation has ebbed and flowed throughout history, but today it is wider and deeper than ever." Rothkopf takes us inside the power elite, the men and women (though overwhelmingly they are men) who are the all-stars of this new world order. These 6,000 individuals - Rothkopf's "superclass" — affect the lives of the other six billion humans on the planet in ways both subtle and overt. To be a member of this superclass, wealth is not enough (though most are rich), and political office is not enough (though many are heads of state). What's needed is the "ability to regularly influence the lives of millions of people in countries worldwide".

Rothkopf understands political power, but he seems more ­enamoured with corporate power - especially as represented by CEOs. These men (again, most are men), run companies with sales exceeding the GDPs of most nations, fly on Gulfstream jets and meet regularly at superclass hangouts like Davos in Switzerland; they also hold the fate of hundreds of thousands of jobs and billions of dollars in shareholder equity in their hands.

In one of the dozens of revealing statistics in the book, Rothkopf points out that of the 166 entities with sales or GDP in excess of $50 billion, 106 of them are companies. These firms influence the choices consumers make, the politicians who lead us and the economic conditions that define our lives. In this world, "General Motors tops Thailand," "Wal-Mart ranks between Indonesia and Poland" and "ExxonMobil is bigger than Saudi Arabia."

But a more revealing question might be: who is more influential, King Abdullah of Saudi Arabia, or Rex Tillerson, the CEO of Exxon Mobil? My vote goes to the King. As custodian of the two Holy Mosques, leader of a population of some 25 million and de facto "central banker of oil", King Abdullah's vision, policies and thinking have the ability to affect all of humanity. But perhaps more importantly, leaders of influential countries - especially non-democratic ones - have something that most CEOs lack: enormous unchecked power over a long period of time.

Consider the case of Libya, an oil-rich state with a small population on the shores of the Mediterranean within a stone's throw of European markets. Few could have mapped out a better geographical starting point for a nation. And yet, Muammar al Qaddafi - through vanity and myopia and venality - has wasted his country's enormous potential, stifling the lives of millions, as the world passed it by. In Zimbabwe, Robert Mugabe has transformed the breadbasket of Africa into the continent's basket case.

Closer to home, Egypt and Turkey have learned some of the lessons of this new world: economic reform can promote sustained growth and "superclass" interest; they've also learned that economic growth does not eradicate poverty overnight and may create inequities that cause short-term problems. Parag Khanna understands the importance of governance as only a frequent traveller can. He has visited more than 100 countries and conducted most of the research for his book by car on the shoddy back roads of the second world, those countries suspended between the first world and the third world, like Turkey, Brazil, Kazakhstan, Saudi Arabia and Ukraine. It takes a traveller with a rucksack full of books and a worn passport to see the decrepitude of nations beyond the major cities where tourists flock, while at the same time perceiving the potential, contradictions and energy in those places.

Khanna, an ardent student of history, does not hesitate to use constructs that polite intellectual company usually shies away from. He argues that three empires are shaping our world today - the United States, China and the European Union. "Everywhere, one can feel a planet that is simultaneously being Americanised, Europeanised and Sinicised," he writes. "In the geopolitical marketplace, consumer countries choose which superpower will be their patron; some choose more than one," Khanna writes. The second world through which Khanna has travelled so extensively is the key arena of influence.

Today's empires, however, do not employ guns and cannons. They seek to enmesh their "colonies" in webs of influence. Alliance with the United States during the Cold War did not necessarily mean greater prosperity or power; it meant short-term security gains. Today's superpower alliances offer much more than that. Khanna, in perhaps the truest line of both books, writes, "the world's most compelling ideology is neither democracy nor capitalism nor any other ism, but success." As Adam Smith defined it: "bettering our condition."

The most effective way for a nation to "better its condition", however, is not necessarily through geopolitical alliances. Sometimes it's just pragmatic men eschewing ideology and making the right decisions at the right time. When Deng Xiaoping was asked if his policies veered toward capitalism, he simply said: "It matters not what you call the cat, as long as it catches mice."

Afshin Molavi is a senior fellow at the New America Foundation, a non-partisan Washington-based think tank devoted to pragmatic solutions to global problems.