Category Archives: A Piece of My Mind

The Return of the Feudal World?

In today’s post-industrial economy, it is evident that world politics is under radical restructuring. More precisely, as the authors argue, the model of nation-state has come under attack from below – in the form of a deteriorating level of trust by the people towards their elected or unelected representatives – as well as from above, by failing to provide appropriate answers to an ever more globalised world. With the nation-states’ apparent inability to withstand 21st century challenges, how then can our modern world move forward?

“The life of the nation is secure only when the nation is honest, truthful, and virtuous.” – Frederick Douglass, Speech given on the 23rd anniversary of the Emancipation Proclamation, 1885

In the spirit of the words of the great American abolitionist, we aim to be ruthlessly honest and truthful, even if this journey leads us directly to the great conundrum of our multipolar age: The nation-state simply isn’t working very well anymore — especially in terms of delivering effective policy governance, even as its staying power seems beyond dispute.

It is this paradox that explains much of what ails our present world, why “nothing seems to be working”. And indeed, the present record of the nation-state, undoubtedly the dominant present vehicle for global governance, seems to have missed the mark at every turn. Recently, there has been a collapse of nation-states in the developing world, creating governance black holes that have led to catastrophe in places like Somalia, Iraq, Syria, and the Democratic Republic of the Congo (DROC).

These nation-states have failed in their basic function of being able to keep internal order, largely because politically their governance structures are not a representation of the political realities on the ground in each country, meaning they have come to be little more than geographical expressions, not nation-states imbued with the political power to effectively promote internal stability.

However, it is also in the supposedly well-governed developed world that the nation-state has showed its recent glaring inadequacies. Be it the Lehman Brothers Crisis (which unleashed the global Great Recession), the endless, endemic euro crisis of the European Mediterranean countries, or the calamity of America’s adventurism in Iraq – replete with botched intelligence and botched post-war planning – the nation-state seems to be showing its age, not delivering on its grandiose claims to facilitate both global governance and political and economic stability for its people.

We shall argue that the model of the nation-state has come under attack from below – in the form of a deteriorating level of trust by the people towards their elected or unelected representatives – as well as from above, by failing to provide appropriate answers to an ever more globalised world.

But if the nation-state does seem to have flatly failed lately at every turn, nor is it about to be replaced. Contrary to the fevered imaginings of European Federalists, the nation-state cannot simply be wished away as an annoying anachronism of a bygone age.

Rather, the dirty little secret at the heart of our new era is that all the rising powers — be they China, India, South Africa, Indonesia, or Brazil — are more sovereigntist, more nationalistic, more wedded to jealously preserving their national prerogatives than is even the United States, long the bane of post-national dreamers. Instead, it is the supposedly modern, post-nationalist European experiment that seems to be in terminal decline. Both intellectual defenders of the nation- state and its critics seem to be largely wrong at present. For as of now, we live in a bewildering world, where the nation-state is both not working very well and isn’t about to be replaced.

The Thirty Years’ War and the Crucible of the Peace of Westphalia

Historians and Political Scientists have long agreed that the Thirty Year’s war – ending in 1648 with the Peace of Westphalia – was the pivotal moment when the modern nation-state was born. The religious struggles of the previous 100 years or so – following the Reformation – were largely fuelled by the attempt of feudal Catholic Europe, with its religious world view, to adapt to the multiple challenges posed by the Renaissance.

The concept that “Man is the Measure of all things” was new, revolutionary thinking that manifested itself in the arts, politics, science and education. Despite attempts by the church and the political elite to retain its dominance in the feudal religious world through force, violence, and reconciliation culminating in the charnel house of the Thirty Years’ War – the end result was instead a new world order whereby human international interactions became governed no longer by the Church but increasingly by the Nation-State.

Before this development, the Western feudal world lacked the technology, communications, and structure to allow the implementation and projection of power and state control much beyond the immediate reach of the local nobleman, i.e a day’s travel on a horse was the limit for effective “state” control.

The population lived locally with the church being the only supra-national institution to deal with the few supra-national topics of its age. Yet the Renaissance and the resulting advances in technology and organisations allowed for state control to be expanded far beyond a day’s travel. Times had changed and the old structure of the Western world had come under pressure.

This dramatic change evolved out of the desperate attempt of the Peace of Westphalia to see to it that nothing like the Thirty Years’ War was ever to happen again. It is hard to adequately describe what a calamity the war was for the people of Central Europe, and especially Germans nestled in the Holy Roman Empire. It amounts to one of the bloodiest conflicts in all of human history, with an estimated eight million casualties of its ceaseless slaughter.

Overall, depletion of the local German populations typically ranged from a decrease of 25–40%, underscoring what a staggering calamity the war amounted to. Given the many great powers that joined the fray as the war proceeded (Sweden, Spain, France, Austria), in many ways the Thirty Years’ War amounts to the first true world war of the modern era. And just as was true following the carnage in 1918 and 1945, in 1648 diplomats assembled, determined to prevent such a disaster from happening again.

The war’s genesis began as the staunchly Catholic Ferdinand II, the newly crowned Holy Roman Emperor, tried to impose Catholic conformity on his largely Protestant northern German princes, who had long enjoyed the freedom to govern their own territories based on their different religious views. This attempt to re-assert religious conformity was ultimately quashed.

The Peace of Westphalia recognised this cardinal error. It changed the basic relationship between rulers and subjects. Up until now in the feudal world, people tended to have overlapping (and often competing) political and religious allegiances and loyalties.

The basic European feudal structure saw supra- national problems dominated by (and managed by) the Church. Its other salient feature was the great relative power of local princes, who in this fragmented age were largely left to their own devices by any nominal king above them. Think of the powerful, largely autonomous Dukes of Normandy (such as William the Conqueror) and their relationship with their only nominal overlords, the Kings of France, and you will get the point.

However, changes in technology and human philosophy made the alterations to the nation- state system in the Western world not only possible, but necessary. After the acceptance of Westphalia, this system dramatically changed, as far more local uniformity (compared to any over-arching power in Rome) became the norm, as the local princes decided on the religious and political tenor of those they governed. Protestant princes in the Holy Roman Empire came over time to exercise primary control over their charges, and to set the religious and political tone for their fiefdoms (not the Holy Roman Emperor).

If the Princes were Protestant, their states were thought by all to be so as well (and vice versa for Catholics). Other Catholic and Protestant princes never again to such a large extent attempted to interfere with the domestic internal workings of another state, in an effort to avoid a further cataclysmic war; the concept of state sovereignty had been born. Allegiances in the Holy Roman Empire were no longer decided by a mix of the supra-national centre in Rome, and by the many local German traditions of the empire either, as had been the case up until 1618.

Instead, while there was less uniformity at the supranational level, as the success of Protestantism led to the diminution in the power of the Vatican, there was far more uniformity at the local level. Nationalism emerged with the victory of the regional princes, just as supranationalism and localism waned. Our modern state system had been born, with the nation-state in the driver’s seat.

Countries and the relationship among them governed the world in the next 350 years. The world started to increasingly function along national borders with national taxes, national laws, national conscriptions, national education, languages following along largely national geographies, national governments, national elections, and national representations in multi-national organisations. Colonisation and imperialism ensured that by the early 19th century pretty much every inhabitable spot on the Earth and every human being belonged to a nation and frequently identified with it.

People were born with a national passport, attended national education that formed their opinion, engaged in national military service where they fought other nations, attended nationally-funded Universities, paid nationally-imposed taxes and adhered to national laws until they passed away. Even in death, the nation-state was inescapable through the national process of death certification and taxes.

The institution of the nation-state served humanity well throughout these 350 years. The increasing living expectancy, the possibility by billions to enjoy leisure time instead of fear (due to increasing internal domestic political stability), the economic and population growth, the advancement of knowledge and science, and the incredible output of old and new forms of art all make a testimony to the strength of the world order birthed at Westphalia. Life was certainly no longer “solitary, poor, nasty, brutish or short”.

At the end of this period, following the triumph of nationalist America over the supranational Union of Soviet Socialist Republics (USSR), there was such confidence in the nation-state that it inspired utopian-based thinking that humanity might have reached the end of history – “the end point of mankind’s ideological evolution and the universalisation of Western liberal democracy as the final form of human government.”

The nation-state’s zenith has passed

However, mankind’s political, scientific or technological progress “operates on the principle of escalation. Technology solves problems but it also gives rise to new ones. The more technology we have at our disposal, the more technology we need to deal with the consequences. We invent ever more sophisticated techniques of food production, only to follow up with ways to contain overpopulation… Just as one can plot man’s scientific evolution as linear progress, one can explain it as a series of emergency measures to deal with the disastrous consequences of the previous big invention.”

The same thought applied here to science and technology can and should be applied more broadly. The success of the nation-state has given rise to new challenges for which the nation-state structure can no longer provide acceptable answers. As a result, we must conclude that “Modern history condemns us to a permanent rat race against the consequences of our own creativity. We progress but only toward an ever-larger need for progress. To stop that progress is ultimately to doom humanity.”

The thought, which the architect Reinier de Graaf so eloquently applied to technology, must equally apply to the international political sciences that govern our world order. The nation- state solved many problems that the old world order was incapable of dealing with — following the Thirty Years’ War there was never again a major religious war in Europe — but in doing so created new ones.

The success of the nation-state has inevitably led to supranational problems, which it is simply not very well equipped to solve. National conflicts that have become global world wars need to be governed by international alliances. Commerce creating incredible wealth for nations encompassing the entire globe have to be dealt with through trade agreements and world organisations composed by nations.

Unprecedented travel and migration have to be governed by international civil conventions and universal declarations made by nations. National economies allowing mass consumption is causing industrial pollution that threatens our global environment which in turn have to be dealt with through climate agreements negotiated and signed by representatives of nations. However, these global solutions based on nations’ interactions are increasingly hijacked by more myopic national state self-interests, thus failing to provide long-term sustainable solutions.

Challenges to the nation-state then, largely emanate from its own historical success. Advances in technology, made possible often by the nation-state itself, through the 20th century and into our present day through radio, television and later computer technology – and in particular the internet – has brought an unparalleled transparency.

For our discussion, the most important implications of this transparency are twofold. Firstly, transparency has made it clear to all the differing living standards of the world. Secondly, the human fallibility and foibles of our elected or unelected political elite are on display as never before.

The former has had and will continue to have wide ranging global implications. Specifically, this has already contributed to West’s victory in the Cold War (no one wanted to live in East Germany as opposed to Swinging London) three decades ago and is certainly a big factor behind the present immigration pressure which the U.S.A. as well as Europe and parts of Asia are experiencing. It is unsurprising that a newly-awakened rest of the world wants to personally share in the paradise that is the successful developed world.

The fact that people in Syria, Mexico, parts of China, and the rest of the underdeveloped world can obtain a direct glimpse of the consumer boom of the Western world or coastal China via the small screens of their internet-connected phones or simply via TV is no longer unknowable. Pandora’s box is open – for good and bad – and people in economically-challenged regions are longing to reach the Nirvana they observe on their little screens.

Modern transportation technology has basically removed the “literal” barrier of entry that geography once posed. Planes, cars, ships, etc. have made it theoretically affordable for even the poorest human being to emigrate. It is only the administrative, physical, and commercial barriers erected by the nation-state – frequently using geography in its defence (desert between Mexico and U.S.A.; the Mediterranean Sea between Europe and Africa) – that holds back this form of globalised immigration. Yet there is no solution or end in sight of the people from poor regions desiring a better life through immigration.

So the nation-state’s erected barriers will continue to come under real and philosophical pressure. The question has to be asked: “What right does one human or society have to block and hinder the free and peaceful movement of another through this world?” There only is an affirmative answer given the existence of the nation-state, which somehow has established this right through the creation of artificial borders based on historical events. Remove the nation-state from the equation and the answer becomes simple – “None”.

However, the transparency provided by technology has had equally far-reaching implications in the developed world going far deeper than just an issue of foreign immigration. With the use of radio by the political elite – politics became more accessible to the masses. The 1908 U.S. presidential race between Republican William Howard Taft and Democrat William Jennings Bryan marked the first time that recorded speeches were used to expand the speaker’s audience to those not in attendance. Woodrow Wilson was the first president who felt compelled to hold a presidential press conference in 1913.

President Warren Harding followed, becoming the first president to deliver a speech broad- cast by radio. FDR perfected the use of this medium during his 30 evening radio addresses between 1933 and 1944 which became know as the Fireside Chats, a great political achievement which welded the American people to his reform programmes, come thick and thin. After the war, Harry Truman delivered the first oval office TV address and President Eisenhower used the same format to inform the people about his decision to send troops to enforce school desegregation.

In 1960, CBS organised the first TV presidential election debate, which many credited as a turning point in favour of the young dashing looking John Kennedy against a tired-looking make-up-less Richard Nixon. Finally, the entertainment value of the Trump period in the White House would certainly be substantially diminished without his many “tweets” to the masses, even though the information value might be suspect. Through voice, picture, and later internet, the nation-state’s representatives appeared ever more accessible to the U.S. electorate.

The U.S.A. is perhaps the most prominent user of this medium of enhanced political communication but other countries saw similar developments. The BBC and its founding father – John Reith – finally convinced King George V in 1932 regarding the necessity to hold a Christmas message via radio to his subjects around the world. The use of this technology was certainly not limited to liberal free societies and so one of the most influential film directors and producers of history – Leni Riefenstahl – perfected the use of the visual documentary in her masterpieces for the Nazis, Triumph of the Will and Olympia.

All this meant that the average person felt closer to their leaders of the nation-state than ever before. They started to see them – warts and all – as more and more human. Their mistakes and errors became known, documented and stored for future use. Leaders of nation-states became first fallible in the eyes of their electorate than increasingly ridiculed. In those countries where the media was less under the influence of the political elite, it soon developed into a hunt for human “gossip” and less a technology used for political debate.

The paparazzi were let loose on the political elite in the name of the fourth estate. As the available media outlets multiplied and polarised alongside the prevailing views of their specific audience, they started to loose their journalistic objectivity and were increasingly driven towards a short-term sensationalism. Youtube uploads and their followers became so numerous that many adjusted their content, based on the populism of “likes,” catering for specific desires and views. It was only a matter of “Google-ing” and “following” them, and everyone could find proof and arguments backing their own view about the leaders of the nation-state.

Preconceived ideas where strengthened and backed-up not by objectivity and researched facts but by selective sourcing of interpretation and subjectivity – the birth of “fake news”. In democracies, subjects increasingly found the “facts” they wanted and projected these onto their leaders, which in turn fed their image, which they felt provided the strongest backing to achieve electoral victory in the next contest.

The resulting cynicism between the leaders of the nation-state and the population was inevitable and is perhaps best summarised by a number of recent quotes from the leaders of the European people:

“When it becomes serious, you have to lie.” – on Greece’s economic melt- down, 2011

“If it’s a Yes, we will say ‘on we go’, and if it’s a No, we will say ‘we continue.’”–on the French referendum over EU constitution

“We all know what to do, we just don’t know how to get re-elected after we’ve done it.” – On Eurozone economic policy and democracy

However, with every lie, with every cynical comment, as well as with every sexual affair and continuous degrading attitude towards the female electorate (who comprise more than 50% of the voting population), the people increasingly rejected their political establishment. The unthinkable started to happen in democracies of the West. A sexual predator and real estate tycoon won the U.S. presidency with a slogan you can fit on a hat, “America First”. A lesbian, Investment Banker became the leader of the opposition in the German Bundestag, representing a party that opposes same-sex marriages and argues for the protection of the national rights of the working class along lines reminiscent of German politics of the 1930s. The entire French political elite and establishment – not just the presidency – was wiped out in just under two years by a young investment banker with virtually no public office experience.

The contradictions are glaring and only imaginable in a world where “fake news” has replaced basic objectivity. In an ever-fragmenting European political environment, Spain and Italy fail to deliver again and again through elections the political stability that the nation-state would need to tackle its global challenges. These political changes are cataclysmic. The temporary democratic victors of this disillusionment of the people in its political elite – the populists –have one thing in common – they are not politicians but political outsiders and feed on this image.

Perhaps driven by economic slowdown and certainly fired on by a sensational press, the people are fed up with their traditional political leaders. The more these outsiders discredit the political institutions of the nation-state through which they obtained power by comments and outrageous behaviour and claims – the more sensational they become for the press as a precious tool for higher publicity and internet “hits”. A self- feeding frenzy between new political elite, media and the people has been initiated and is starting to devour the structure of the very nation-state to which the necessity of a free press was so necessary in the past.

Let us dispel all delusional hope that this new non-political elite is somehow better equipped to deal with the challenges to the nation- state or – even less so – our global threats, than the previous established elite. It is preposterous to imagine that investment bankers, traders and real estate tycoons, all political novices, are better suited for solving our problems than anybody else. The most likely outcome – which we can also see on the historic horizon of the future – is an even broader disillusionment by the electorate, followed by an even more radical replacement of the old and new political elite. More sensationalism, more outrageous claims, and more radicalisation made acceptable by fake news will drive the nation-state into the abyss.

The success of the Nation-State destroys itself

In the seed of the success of the nation-state lies the severest challenge to the very institution itself. The success story of the nation-state was to create a globalised world in which pros- perity for many improved dramatically. However, from at least the middle of the 19th century, nations created issues and challenges for humanity, which are no longer national but global. A look at today’s world reflects this. Those risks to humanity that are hardest to solve are no longer national but require global responses. Military conflicts are no longer clear-cut wars between countries trying to eliminate the enemies’ national armed forces and occupying the enemies’ territory and capital. Military wherewithal in the shape of nuclear weapons is no longer just a threat to the local population in war zones but is a threat to the survival of humanity itself.

Pollution is no longer just threatening national rivers or forests but is causing weather patterns to change and water levels to rise impacting emerging market economies based in the Middle of the Pacific and the Indian Ocean as well as in the rest of the world. Religious differences are no longer just impacting the border between two countries but are engulfing the entire world in a struggle for a different Weltanschauung. Diseases are no longer a local or even a national or regional threat but via world travel have become a global concern.

Any look at the major headlines in the past few years confirms this. For all its power to win the war in Iraq against Saddam Hussein largely on its own, the U.S. (by far the strongest nation in the world) failed miserably to win the peace without local Iraqi buy-in. The Lehman Brothers crisis painfully illustrated that national regulators were not up to understanding the global implications of those they regulated. The U.S. Federal Reserve is constituted to deal with American (that is, national) inflation and unemployment rates, even as the dollar’s supranational dominance makes their decisions possess a truly and unthought-of global significance. Increasingly the nation-state is coming to its limit to find adequate responses to these global challenges.

In fact, the very foundation of national currencies and payment methods is being called into question by globalised capital markets which suddenly – through the use of new technology – experiment with global non-national currencies in the form of Bitcoin and other encrypted electronic decentralised currencies. The cycle is always the same – the nation-states’ success in creating global trade leads to global capital flows, which in turn is leading towards global currencies undermining the function of the nation- state and its central banks to issue, control and regulate its finances in its nation-state’s currency.

Humanity is facing increasingly global challenges for which the concept of the nation-state is ill equipped to provide solutions even via existing multi-national institutions. These challenges are as broad as religious confrontation, global terrorism, the increasing number of countries with the nuclear capability to destroy humanity, global pollution, international immigration, financial inequality in the West caused by an increasingly global labour market, and global health threats. While facing this challenge from above, the nation-state is equally being threatened from within or from below with a rejection by its people of its political ruling class.

The real problem

But while the nation-state is being challenged in supra- national policy terms by these global threats, as a result of the inability to address these challenges, the frustrated population of the the West has chosen to increasingly reject multi-national institutions (see Brexit) and to slowly turn towards nationalism as it feels it has lost democratic control of the decision-making process. It is the worst of all worlds; as problems become more transnational in nature, unelected, supranational institutions are increasingly reviled as anti-democratic, arrogant, and wildly unsuccessful.

It is this nexus that further explains the rise of populism throughout Europe on the left and right (Golden Dawn in Greece, Podemos in Spain, Five Star Movement in Italy, The Front National in France, UKIP in the UK, and the AfD in Germany). It would seem that what is needed is nothing less than a new world system, supplanting the failing Westphalian order, that combines political legitimacy at the national and local levels, with the ability to master the many supranational problems of today. Only a new global order – and a new ideology supporting it – can help us find solutions for global challenges. This global order cannot be based on the discredited nation-state institutions, which the very populations are rejecting so forcefully.

Back to the future — The new feudalism

Ironically, the model to solve the many problems evident at the dawn of today’s multipolar age – to master the increasing limitations of the nation-state that have been so glaringly exposed – is to go back to the future, to revisit the very feudal age that pre-dated Westphalia.

For what is called for is more coherent and effective supranational structures at the top, in line with the old primacy of the feudal church. For example, in this case a more effective G20 is necessary to deal with the many trans-national aspects of the global financial and economic systems. A global but decentralised currency regulated outside the sphere of any particular nation-state is needed.

In Asia, the United States is no longer a sufficient force (for all its power) to manage and hedge against the rise of China. Instead, increasing the role and power to influence nation-states through the Quadrilateral grouping of the U.S., Australia, Japan, and India makes a great deal more sense. A Europe with a Euro-zone finance minister and a mutualisation of common debt (from now on, though not for what has been run up before) would tackle the ongoing challenges to the financial stability of the people of the continent. European nation states need to agree to follow the same (rather stringent) fiscal policies to turn the euro-zone core into a true supranational community. The nation-state has to give up sovereignty to deal with the success it has created.

As this shopping list for increasingly effective supranational structures makes clear we are agnostic about the ways to achieve this; in some cases it will be inter-governmental (between nation-states), in others like the euro-zone, the supranational institutions will take on a life of their own. For challenges that threaten the very survival of humanity and human civilisation – such as nuclear war, the environment as well as certain economic and trade aspects – the only way forward is for nation-states to give up control and pass sovereignty over these issues to global institutions that function above and beyond the nation-state. But in any event, the goal is to pragmatically go back to the pre-Westphalian era, where more unified and effective supra-national institutions existed to mange trans-national problems.

At the same time, even in this more feudal world, the nation-state is not going anywhere; for many people cleave to it precisely because they still feel strong allegiances to their countries, and crucially feel they have some democratic and practical control over their outcomes. Nation- states will continue to have a dominant military role, play a major role in macro-economics, and be the dominant force securing their own internal security. But over time, the nation-state will do less, but by concentrating on these key functions, it will also do it better.

Crucially at the bottom of the global governance tree, localism — as was true during the feudal area — will also come into its own again. In line with Thomas Jefferson’s brilliant insight, problems should always be solved at the lowest possible level, precisely because it is closest to the people itself, and means the political and democratic legitimacy of policy solutions can be secured. As American Jeffersonians so well understood, by diffusing power you paradoxically can magnify it and guarantee its legitimacy.

So everything from education issues, to policing, to infrastructure, should be primarily managed at this local level. Further, as the feudal world well knew, it is here that people feel most connected to decision-makers; we may not personally know the president but we do know the Head of the School Board and can heap all sorts of direct social pressure on him if he sends the kids to school in a blizzard. This accountability, which is exactly what populists are rightly bemoaning, has been lost in the world of the nation-state. A feudal emphasis on localism can be the well-spring for a more legitimate, more broadly acceptable system of government.

There is little doubt that after over 360 years, the old Westphalian system, dominated by the nation- state, is beginning to show its age. The irony is that the true antidote to what ails it – going back to the future and resurrecting feudal elements of the pre-Westphalian world by buttressing both supranational and local responses to today’s problems – can be the very ancient answer that moves the modern world forward.

Published in The World Financial Review, July/August 2018 

Dr John C. Hulsman is President and Managing Partner of John C. Hulsman Enterprises, a prominent global political-risk consulting firm. His new book, To Dare More Boldly: The Audacious Story of Political Risk, was published by Princeton University Press in April and is available on Amazon. He lives in Milan, Italy.

Dr Boris N. Liedtke is the Distinguished Executive Fellow at INSEAD Emerging Markets Institute and has over twenty years experience in the financial sector. He was the CEO of the largest bank by assets in Luxemburg and board member for Operations at the largest German fund manager. He is author of numerous articles on finance and trade as well as having received his PhD from the London School of Economics for the publication of Embracing a Dictatorship by MacMillan.

The North Korean Summit Hiccup Belies the Greater Problem of the White House’s Failure to ‘Game Out Lunatics’

Legend has it that at the height of the Third Crusade (1189-1192), Count Henry of Champagne spoke at length with the mysterious, charismatic “Old Man of the Mountain,” Rashid ad-Din Sinan. The story goes that the haughty Crusader claimed that he had the most powerful army in the Middle East, one that could at any moment defeat the Hashashin, the Old Man’s threadbare cohort of followers. Count Henry went on, pointing out that his force was at least ten times larger than that of Sinan’s.

Unimpressed, the Old Man calmly replied that the count was mistaken, and that it was his unremarkable-looking rabble which constituted the greatest army in the field. To prove his point, he beckoned one of his men over to him and casually told him to jump off the top of the Masyaf mountaintop fortress in which they were holed up. Without hesitating, the man did so.

Through the many centuries that separate us from Count Henry, the myriad twists and turns of Western politics, culture, and life that come between us, there is absolutely no doubt at all that westerners today would share his horrified reaction to what the Old Man of the Mountain had demonstrated to him.

“This guy is totally nuts.”

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This telling historical vignette was eerily re-enacted last week, in Donald Trump’s ‘break-up’ letter to Kim Jong-un, the far-out leader of seemingly indecipherable North Korea. Playing the part of Count Henry, the President not so subtlety hinted that America, as the greatest military force in the world, could wipe North Korea off the map at any moment it chose. Like Count Henry, Trump was making it clear to his rival that in essence their contest was so strategically lopsided that meek surrender—in this case with the policy end game of unilateral North Korean nuclear disarmament as the only possible outcome—really was the only possible option.

But as was true for Count Henry, that assumes your enemy is playing by the same rules that you are, and makes the same calculations. If, to our horror, we found that they do not, it is far too easy to simply say our enemies are ‘crazy,’ meaning their motives simply cannot be fathomed, letting us off the hook far too easily.

Throughout history, both decision-makers as well as geopolitical analysts have always had a very hard time getting past the wholly understandable first reaction that those with very different belief systems from ours are simply unknowable. In the Old Man in the Mountain’s case, given his effective strategy for engaging in strategic assassinations, westerners took to calling his followers Hashashin, or “users of hashish,” as drugs became the only possible (and incorrect) rationale the Crusaders could come up with to explain their intensity, morale, and absolute personal commitment to Sinan, rather than to the western value of the sanctity of human life. It has always been all too easy for decision-makers to write off ‘lunatics,’ lazily saying to themselves that the different and the strange simply cannot be understood.

There has been a lot of this misdiagnosis going on regarding Kim Jong-un’s totalitarian hermit kingdom; former National Security Adviser H.R. McMaster forthrightly said Kim Jong-un was ‘crazy,’ and is therefore unable to be deterred by the threat of a nuclear counter-strike, meaning that the nuclear deterrence which has kept the global peace for these past seventy-plus years does not apply to North Korea’s nuclear programme. But have Kim’s actions really proved so unknowable, just because North Korea’s politics and culture are so admittedly different from our own?

Far from it. While there is no doubt Kim Jong-un would serve as an excellent Bond villain—between very publicly poisoning his half-brother Kim Jong-nam with sarin and executing his pro-Chinese uncle and former mentor Jang Song-thaek by blowing him to pieces with artillery—there is surely method to his madness.

While the North Korean dictator is certainly odious, he seems to have a very well-defined and rational sense of self-preservation; in fact, he killed his uncle and his brother precisely because he feared they might emerge as threats to his continued rule and also to his life. In not allowing any alternate sources of leadership to emerge within the famously closed-off North Korean regime, Kim is clearly enhancing his chances of survival in the political shark tank he calls home.

Nor is Kim’s single-minded pursuit of an advanced nuclear weapons program capable of striking the US lunacy; rather the dictator has read some recent history, as the recent spat over the Libya model—a point which led to the temporary postponement of the summit—makes eminently clear. A North Korea in possession of such weapons has a ‘get out of jail free’ card, being able to ward off the oft-stated US desire for regime change in Pyongyang. Kim would be able to definitively avoid the recent fate of Libya’s Muammar Gaddafi and Iraq’s Saddam Hussein, who relinquished his nuclear programs, only to be overthrown and brutally killed.

For National Security Adviser John Bolton and Vice President Mike Pence to bring this up, illustrates that it is they and not the ruthless North Korean dictator who are living in an illogical fantasy world. For the Libya model, given the horrendous outcome for Libyan dictator Gaddafi, would obviously seem to be the last framework of choice for Kim Jong-un to embrace, given his rational desire for survival. As ever, American hawks overrate the objective global power position of the United States, as we live in a world where America, for all that it remains the most powerful nation on earth, is simply no longer the only game in town.

By understanding neither the basic structure of the world we live in—that it is comprised of many powers—nor that Kim Jong-un might be put out by the Gaddafi comparison, senior figures in the Trump White House seem to have forgotten that any negotiation short of unconditional surrender usually involves give and take by both sides, in this case over the terms, time frame, and pace of North Korea disarmament, as well as over the security guarantees that are necessary for a surprisingly rational Kim to be given, in securing both his position and his life.

The Old Man of the Mountain must never be forgotten by modern-day decision-makers, as in the end his seemingly unfathomable against-the-odds strategy was crowned with an improbable victory in the Third Crusade. His successful career underlines the vital need to game out ‘lunatics’ such as Kim Jong-un. For not only is there almost always method to their madness. Sometimes they actually win.

Published by Princeton University Press, May 30, 2018.

–Dr. John C. Hulsman is President and Managing Partner of John C. Hulsman Enterprises, a prominent global political-risk consulting firm. His new book, To Dare More Boldly: The Audacious Story of Political Risk, was published by Princeton University Press in April and is available on Amazon. He lives in Milan, Italy.

 

 

 

Delphic priestesses were the world’s first political risk consultants

In 480 BC, the citizens of Athens were in more trouble than it is possible for our modern minds to fathom. Xerxes, the seemingly omnipotent son of Darius the Great, had some unfinished business left to him by his father. A decade earlier, at the Battle of Marathon in August 490 BC, the miraculous had happened: the underrated Athenian army had seen off Darius and his mighty Persian horde, saving the threatened city-state from certain destruction. Now Xerxes had invaded Greece again, to finish the work his father had started.

Just to make sure that this time Athens did not escape the wrath of the Persian Empire, Xerxes assembled the largest invading force the world had ever seen. While the Greek historian Herodotus—typically exaggerating—put the Persian numbers at 5 million, modern-day historians still place them at an overwhelming 360,000, in addition to a gigantic armada of 750 ships in support of this vast host.

Confronted with almost certain destruction, what did the hard-pressed Athenian leadership do? What was their response to a problem that in terms of both its size and devastating impact seemed utterly insurmountable?

Simple. They requested the services of the world’s first political risk consultant.

The Pythia Invents the Political Risk Industry

 Already, by 480 BC, the Pythia of Delphi amounted to an ancient institution. Now commonly now known as the Oracle of Delphi (when in fact the oracles were the pronouncements the Pythia dispensed), the Pythia were the senior priestesses of the Temple of Apollo, the Greek God of Prophecy.

For over 1,100 years (until 390 AD), the Pythia was viewed as the most authoritative and important soothsayer in Greece. Pilgrims descended from all over the ancient world to the temple on the slope of Mount Parnassus to have their questions about the future answered. Sitting in a small, enclosed chamber at the base of the shrine, the Pythia (there were three priestesses on call at any time) delivered her oracles in a frenzied state, most probably imbibing the hallucinogenic vapours rising from the clefts in the rock of Mount Parnassus, which we now know sits atop the intersection of two tectonic plates.

The Pythia would be sitting in a perforated cauldron astride a tripod. It was reported by pilgrims (as well as the Greek historian Plutarch, who served for a time as high priest at Delphi, assisting the Pythia in her mission) that as she imbibed the vapours arising from the stone her hair would stand on end, her complexion altered, and she would often begin panting, with her voice assuming an otherworldly tone. In classical days, it was asserted that the Pythia spoke in rhyme, in pentameter or hexameter. To put it in modern terms, the Pythia was clearly as high as a kite. But let’s look at the Pythia afresh. For I think that the Temple at Delphi amounts to nothing less than the world’s first political risk consulting firm.

At least since the days when the Athenians consulted the Pythia at the height of the Persian Wars, political and business leaders have looked to outsiders blessed with seemingly magical knowledge to divine both the present and the future. While the tools of divination have changed through the centuries, the pressing need for establishing the rules of the road for managing risk in geopolitics have not. The question for political risk analysis remains the same as it was during the heyday of the Pythia: through superior knowledge (be it spiritual or intellectual in nature), can we reliably do this?

The Pythia’s prognosticating advantages curiously track with the qualities political risk firms look for in their best analysts today. First, in their isolation at Mount Parnassus, the Pythia were not in danger of elite capture (and the curse of analytical groupthink that so often follows) in terms of what they predicated. This is the very curse that doomed so many modern-day analysts to be so very wrong about the Brexit vote (they didn’t bother to look outside the hermetically-sealed elite shell of London) or the startling advent of Donald Trump (they never left the East Coast corridor). Physical, intellectual, and emotional distance, since the days of the ancients until today, has always had great analytical value.

Second, coupled with this distance, the Pythia (and today’s political risk analysts) at the same time had limited but regular contact with the elites of their day who make the arduous trek to visit them. This constant if limited (the Pythia only deigned to speak to pilgrims one day a month) contact meant that those at the Temple of Apollo came over time to understand what it is their elite clients wished to know, and how to provide them with exactly what they lacked; independent, outside, authoritative advice.

Finally, at least in the High Classical Age, the Pythia were chosen from a group of highly educated women, who already knew quite a lot about the world. It is this strange and unique mix of special knowledge, education, distance from the corruptions of power and yet proximity to it, that describes the ideal CV for political risk analysts today, just as it did of the ideal Pythia of yesterday.

The Pythia gave advice to shape future actions, practical counsel that was to be implemented by the questioner. This is exactly what political risk analysts still do today, though we’d use modern jargon and call it ‘policy’ in the public sphere and ‘corporate strategy’ in the business world. But what the Pythia was doing is recognisably the same thing my political risk firm does today.

Actually, it is quite amazing how good a political risk record the priestesses actually had. Between 535 and 615 of the oracles have survived to the present day, and well over half of them are said to be historically correct. In our own age of heightened political risk, I can name a goodly number of modern firms that would kill for that record. There has always been a market to answer basic political risk questions: Can the Persians be stopped, and if so how? Will the UK vote for Brexit? Will Donald Trump become President? Then as now, those with a reputation for getting basic political risk questions right were venerated, just as those who failed were over time were discredited.

Conclusion: The Pythia Masters the Persians

Crucially, over the biggest political risk question Delphi was ever presented with—the invasion of Xerxes—the Pythia came through with flying colours, outlining a policy that would provide the Athenians with a way to practically escape from their impending doom. The Pythia recounted that when Athena—the Greek Goddess of Wisdom and the patron of her namesake city—implored her father Zeus, the King of the Gods, to save Athens, he replied that he would grant them ‘a wall of wood that should be uncaptured, a boon to you and your children.’

Back in Athens, Themistocles, the paramount Greek leader in the fractious democracy, successfully argued that a wall of wood specifically referred to the Athenian navy, and he persuaded the rest of the city’s leaders to adopt a maritime-first strategy against the Persians. This policy—concocted by the Pythia and put into concrete action by the decision-maker Themistocles—led directly to the decisive naval Battle of Salamis, the turning point that brought to an end the Persian risk to Athens’s very survival. To put it mildly, the Pythia had proven to be well worth her political risk fee.

Published in Aeon, May 22, 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. His most recent work, To Dare More Boldly; The Audacious Story of Political Risk, was just published by Princeton University Press in April 2018 and is now available on Amazon.