The Ten Commandments of Political Risk

Disturb us, Lord, when we are too well pleased with ourselves

When are dreams have come true because we have dreamed too little

When we arrive safely because we sailed too close to the shore.

 

Disturb us, Lord, to dare more boldly, to venture on wider seas

Where storms will show your mastery

Where losing sight of land, we shall find the stars.

–Excerpts from Sir Francis Drake’s prayer, 1577 (apocryphal)

 

The great goal, the Everest of my book, has been to identify the historical elements that comprise the rules of the road for mastering political risk analysis and to holistically put our ten commandments to use in explaining the baffling world we presently live in. Having discovered these commandments—and illuminated them through the use of historical story-telling, deriving them from real-world policy situations throughout the ages—we can get to the Holy Grail of actual understanding.

Here at the end of our story, through the use of this unique heuristic method, we have delineated the long and neglected history of political risk analysis, linking this important tale to the broader efforts of both business and political leaders to master risk in general. Confident in what geopolitical risk analysis has been, is, and can be, it is clear that the Delphic dream of soothsaying—in a limited way, over limited issues, for a limited period of time—can be partially fulfilled.

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1) “We are the risk.” As the history surrounding Sejanus and the decline and fall of the Roman Empire makes clear (alongside the corroborating tale of present-day Europe’s decadent decline), geopolitical analysts have a terrible time looking in the mirror and seeing that the society they are part of can itself be the major geopolitical risk problem.

2) Gaming out “lunatics.” Far too often geopolitical risk analysts let those with very different belief systems off the hook by lazily assuming that they must be crazy, rather than looking for the method to their madness. As the story of “The Old Man of the Mountain” and the Third Crusade (with inter-chapters on both Charles Manson and ISIS) makes clear, there is almost always an internal logic to any seemingly mad geopolitical interlocutor that can be followed and assessed.

 3) Gaming out “chess players.” Amidst the daily tumult of a constant barrage of information, it is easy to lose sight of the intellectual needle in the haystack: the assessment of “chess players,” those geopolitical decision-makers who have stable, rational, coherent, long-term strategies in place to further their geopolitical goals. As reviewing the history of Niccolo Machiavelli and Pope Julius II (with an inter-chapter on George Washington and Alexander Hamilton) illuminates, finding these rare geostrategic birds is well worth the effort, as once they are identified (which is difficult), their future actions can rather easily be predicted.

 4) Recognising game changers. As the stirring story of John Adams in the sultry summer of 1776 makes clear, seeing the bigger picture—discerning how specific contemporaneous events fit into the larger historical pattern—is a mighty tool in political risk analysis. Separating the wheat from the chaff and intellectually drilling down on what really matters and its historical meaning (as we see both Adams and inter-chapter hero Winston Churchill doing in very different historical contexts) allows the political risk analyst as well as the foreign policy practitioner to see the world as it actually is.

 5) Balance is the key to foreign policy. Having discovered the secrets of one major driver of geopolitics—be it macroeconomics, geopolitics, or cultural power—far too often analysts quickly forget that there are others and that it is the mix that explains everything. The twin stories of a beleaguered Venetian Republic and a seemingly all-conquering Napoleon in 1797 allow a dual critique of both an economics-only and overly militaristic policies and the doom to which both one-sided initiatives inevitably lead.

 6) If you are digging yourself an intellectual hole in foreign policy analysis—stop. The “losing gambler in Vegas” syndrome affects both policy-makers and analysts. As the legendary Robert E. Lee found to his supreme peril at Gettysburg (and also “the best and the brightest” of the Kennedy and Johnson administrations as they met their nemesis in Indochina), pushing ahead with an already failed policy in a desperate effort to recoup past losses leads to calamity.

 7) Know your country’s place in the world. The singular case of the late Victorian titan Lord Salisbury—who bravely and correctly righted Britain’s foreign policy to fit the paradox of its relatively declining but still dominant place in the world of the 1890s—highlights this vital requirement for both policy-makers and analysts alike. Only by fearlessly and correctly assessing your country’s true place in the world (as the inter-chapter on the Genro of Japan makes clear happened across the globe from Salisbury a generation earlier) can you pursue successful political risk analysis.

 8) Do not put all your eggs in one strategic basket. Distantly related to the “losing gambler in Vegas” syndrome, the “promised land fallacy” besets decision-makers and analysts who ruinously rely on one overall strategy to magically attempt to alter their country’s overall geopolitical position in the world. In the case of Wilhelmine Germany, Admiral Von Tirpitz’s disastrous plan to challenge British naval might (echoing the inter-chapter on Soviet leader Nikita Khrushchev’s equally ruinous “Wars of National Liberation” gambit) helped lead to the Great War and Germany’s destruction.

 9) Know the nature of the world you are living in. The trials and tribulations of Beatle George Harrison (with the inter-chapter focusing on the diametrically opposed case of the fall of Brian Jones and the rise of the Rolling Stones) and the stunning, lightning-quick dismemberment of his band dramatically underline that successful systems can collapse in the blink of an eye if their underlying power realities change, failing to any longer reflect the systemic power facts on the ground that created such a system in the first place. Policy-makers as well as political risk analysts must know both the nature of the global system they are living in (is it characterized by one great power, two, or many?) as well as if that system is durable, fragile, or evolving.

 10)Prepare for the “butterfly effect.” The telling present-day case of Deng Xiaoping and the colossal success he made of both Chinese foreign and economic policy must not obscure the reality that East Asia today sits on a powder keg, a single random event away from 1914; just one drunken Chinese sea captain could quite plausibly upset the strategic equilibrium in Asia. The best policy-makers and political risk analysts (as the inter-chapter example of Harold Macmillan also makes clear) see the weaknesses in even the most successful foreign policies, having resilient initiatives at the ready to stave off seemingly unexpected disasters.

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In traveling far from home, as Sir Francis Drake bid us to do in the swashbuckling, mesmerising prayer that opens this article and To Dare More Boldly, our journey through history has been bountifully rewarded. For yes, within limits, the future can be foretold through the use of political risk analysis. Truly venturing far from our intellectual shore, in daring more boldly, we have come to see the stars.

Published by Princeton University Press, April 24, 2018.

Dr. John C. Hulsman is the President and Co-Founder of John C. Hulsman Enterprises (www.john-hulsman.com), a prominent global political risk consulting firm. For three years, Hulsman was the Senior Columnist for City AM, the newspaper of the city of London. Hulsman is a Life Member of the Council on Foreign Relations, the pre-eminent foreign policy organisation. The author of all or part of 14 books, Hulsman has given over 1520 interviews, written over 650 articles, prepared over 1290 briefings, and delivered more than 510 speeches on foreign policy around the world. His most recent work, To Dare More Boldly; The Audacious Story of Political Risk, was published by Princeton University Press in April 2018 and is available for order on Amazon.