Seven Glimpses of the Multipolar World

'Money, so they say, is the root of all evil today'

Mar 31, 2023

Each week in my weekly newsletter, I offer seven glimpses, for seven days, of the multipolar world. This week I share glimpses of how the multipolar world manages money, and whether it is the root of all evil today.

1. Gratitude

I am thankful to Pink Floyd. On YouTube, I stumbled on the 50th anniversary remastered edition of Pink Floyd, Dark Side of the Moon. It was beautiful, evocative and eerily relevant to the crisis of our own times.

2. What I am reading

I finished reading Vladislav Zubok, Collapse: The Fall of the Soviet Union (2022). This book brilliantly challenges orthodoxies and American myths about the how the Soviet Union collapsed. It changed my mind on many parts of the narrative, and is written with a deep sense of drama. Zubok orchestrates the many voices and scenes of the five years from 1986 to 1991. It is a brilliant, enthralling read that is also quite moving. I was moved to tears several times.

Its concluding paragraph speaks to its importance to today’s crises,

“The ghost of the disappeared Soviet Union does not stalk Europe, Asia, and the world. Yet the puzzle of its sudden disappearance still haunts the imagination of contemporaries, particularly as they see the certainties of the previously triumphant Western liberal order shaking and eroding under their feet. The end of the Soviet Union was a human drama of historic magnitude and epic uncertainty… This amazing story teaches us not to trust in the seeming certainty of continuity and should help us prepare for sudden shocks in the future.”1

It is also a tragedy and a deeply realist book. It provides a glimpse into the aborted birth of a mulitpolar world in 1990. It provides many insights into the current conflict in Ukraine. It reflects deeply on how history is driven on by institutional forces, individual agency and misperceptions of reality. And how misunderstandings about money were perhaps at the root of the collapse of the USSR, and America’s failure to help post-Soviet democracy.

I will do a video review of this book on my YouTube channel in the next week or so. I might even reach out to Prof Zubok for an interview. Do check it out.

3. Governing the unruly multipolar world

‘Money/, So they say,’ sing Pink Floyd in Dark Side of the Moon, ‘Is the root of all evil today.’ And money makes the roots of the multipolar world, the power of great states, and the grand illusions of Western dominance in the world.

It was to the challenges of governing money that I turned in my podcast this week. I talked about the banking collapses in America (Silicon Valley Bank, Signature Bank) and Europe (Credit Suisse), and more broadly how financial collapses present challenges for governing the multipolar world and making sense of history. Without succumbing to panic!

In the podcast, I reflected on my own experiences working in government during financial collapses. I articulated three central dilemmas for government decision-makers in responding to financial crises:

How to make prudent decisions on who pays for their losses, and mitigate impact on government debt?
How to prevent banking system contagion for both business, government and consumers/depositors?
How to avoid grievances about money, including bailouts, spilling over to a political crisis?

There are two larger dilemmas related to the multipolar world, both of which Adam Tooze, a leading economic historian and commentator, helped me understand better.

Firstly, how do decision makers bridge the gap between the modern financial economy and the fictional universe of economic statistics about national economies? Our national systems of economic bookkeeping have evolved as islands of GDP, trade and other attributes of money. The real transactions of the modern financialised economy are different to these fictions. Yet political leaders are oriented to obtaining a ‘beautiful set of numbers’ in the fictional universe, while being a hostage to fortunes made and lost by AI generated trading. Adam Tooze explains in Crashed,

“What drives global trade are not the relationships between national economies but multinational corporations coordinating far-flung “value-chains”. The same is true for the global business of money. To understand the tensions within the global financial system that exploded in 2008 we have to move beyond Keynsian macroeconomics and its familiar apparatus of national econnomic statistics.”2

Second, how do decision-makers make sense of the connections between geo-political and financial crises, between multiple economic crises over time, and between economic crisis and the crisis in democracy. Tooze makes a compelling case that the 2008 crisis did not end in 2008, but mutated and migrated around the world. He shows how geopolitical crises and financial crises are interlinked; the 2014 Ukraine/Crimea crisis receives a whole chapter in Tooze’s book. And he shows how doubts about democracy are fuelled by the decisions of governments on winners and losers, on steering financial systems that have escaped their understanding, on controlling events that may be beyond control. Financial crises and systems have dramatic consequences for democratic politics.

Tooze wrote towards the end of Crashed,

“Since 2007 the scale of the financial crisis has placed that relationship between democratic politics and the demands of capitalist governance under immense strain. Above all, this strain has manifested itself not in a crisis of popular participation, or the ultimate control of policy by elected leaders, but in a crisis in the political paties that have historically mediated the two. It has tested their programs, their coherence and their ability to mobilize support, and they have been found wanting.”3

I would go further, and argue the strains have revealed a much deeper, broader crisis in how we are governed. That is the issue I will be addressing in my book, Life After Western Democracy, but that argument will have to wait to another day.

4. Using history to live mindfully in the present.

In any case, if you want to use history to live mindfully through the latest financial crisis, I would recommend that you read Adam Tooze’s books, and follow him on his podcast, Ones and Tooze (which is associated with the Foreign Policy magazine), social media and even on his Substack!

Tooze has written three important books to understand how these financial crises fit into changes that have not been seen in the world for 100 years, as Xi JinPing remarked to Vladimir Putin recently.

Crashed: How a Decade of Financial Crises Changed the World (2018)
Shutdown: How COVID Shook the World Economy (2021)
The Deluge: The Great War and th Remaking of Global Order (2014)

He is insightful, and not locked into the predictable, complacent Atlantacist viewpoint. He is better I think than Niall Ferguson. If you read his book you will understand more clearly the multipolar world there was, the unipolar world America dreamt into being, and the still conflict-ridden multipolar world, that rough beast, slouching towards Bethlehem today.

Also useful and referred to in my podcast are:

In Focus by The Hindu Podcast March 17, 2023
Niall Fergusson and Moritz Schularick, ‘Life’s Certainties: Death, Taxes and Bailouts’, Wall Street Journal 21 March 2023

5. Fragments from the Burning Archive

My podcast referred to my memories of reading ‘Dr Doom’, Nouriel Roubini in the early 2000s, as I realised the world of economics and finance had escaped my understanding. But I think this week in the newsletter I will offer this fragment from the Burning Arcive that I found as an epigram on Tooze’s, The Deluge: The Great War and th Remaking of Global Order.

It is an observation of John Maynard Keynes on the history of World War One written by Winston Churchill. Keynes, of course, had long and direct experience of Churchill. Keynes participated in the Versailles Peace Conference. While Churchill sent British soldiers to fight in the Russian Civil War (1918-22) and to sanction the Amritsar massacre in India, Keynes wrote the Economic Consequences of the Peace, which forewarned the world of the political ramifications of an unjust peace and punitive economic sanctions. In his book review of Churchill’s final volume, The Aftermath, of his long history of the war, his grand justification and long defence of the British Empire’s fight against Germany, continental rivals and the Soviet Union, Keynes wrote:

“The chronicle is finished. With what feelings does one lay down Mr Churchill’s two-thousandth page? Gratitude… Admiration… A little envy, perhaps, for his undoubting conviction that frontiers, races, patriotisms, even wars if need be, are ultimate verities for mankind, which lends for him a kind of dignity and even nobility to events, which for others are only a nightmare interlude, something to be permanently avoided.”4

Alas, Churchill still today inspires too many leaders of the Anglo-American ascendancy.

6. What surprised me most this week.

I have been surprised by the number of announcements of countries agreeing to settle international commodity exchanges in Yuan and other national currencies. Could de-dollarisation come faster than anyone anticipated? Will that be the economic consequence of the USA’s and NATO’s neglect of peace, their miscalculations in the war against Russia and China?

7. Works-in-progress and published content

My second paid-subscribers-only post was released on Monday 27 March. It explored the idea that Australia could pivot its foreign policy from Washington to Delhi. Please consider upgrading to a paid subscription to read the full piece.

This week my works-in-progress and published content were:

on the podcast I published Episode 94. Bank Collapse, Political Crisis, and Contagion
On the YouTube Channel I published videos:
- "The Earth Transformed" by Peter Frankopan: The Best History Book on Climate Change - My Review and
- The Health of Western Democracy Through the Eyes of China. The Burning Archive Podcast Episode 93.
I developed further materials for both my online courses on history.
I am close to finishing editing Thirteen Ways of Looking at a Bureaucrat, and will be writing some new essays for this collection over the next few weeks reflecting on my life as a bureaucrat.
I outlined Life After Western Democracy, and began drafting chapter one!
I edited more transcripts of my podcasts on the Russia-Ukraine-NATO War, and did some research for the concluding essay for this collection
I laid off Twitter a bit this week and mainly promoted my YouTube review of Frankopan, Earth Transformed.

Let me know if there are issues or topics you would like me to talk about on the podcast or the YouTube channel or even on the Sub-Stack.

Burning Archive