Category Archives: Emerging Markets

Gaming out chess players: The Italian Renaissance and Vladimir Putin

Gaming out chess players: The Italian Renaissance and Vladimir Putin

 If learning the precious truth that we can be the danger (see my Gibbon column of last week) is the first commandment of political risk analysis, gaming out chess players is surely another. Chess players—foreign policy actors playing the long game, possessing fixed, long-term strategic goals even as they use whatever tactical means come to hand to achieve them—are rare birds indeed. Patient, low-key, but implacable, chess players do that rarest of things: they actually think ahead and are not prisoners of short-term day-to-day events, instead conditioning all that they do in furtherance of their long-term strategy.

Chess players manage to cloak their dogged, disciplined strategies, hiding them in plan sight of our frenetic 24-hour news cycle, from a world that does not generally follow such fixed principles and cannot really conceive of how others might be able to hold to a clear strategic line. In a world of tacticians, it is easy for a strategist to conceal themselves.

Pope Julius II as the true hero of The Prince

Following on from the Crusades, the western world entered a period of cultural and political regeneration we now call the Renaissance. As is true for most eras, it was more politically chaotic, brutal, and bloody than it seems in retrospect. In the confusing, uncertain milieu of early-sixteenth century Italy, a man arose who fit the tenor of his times.

Pope Julius II has been shamefully underrated by history, as his contemporary Niccolo Machiavelli–the author of The Prince, the bible of modern realpolitik—instead lionised failed Bond villain Cesare Borgia rather than the more successful pope. However, we have five centuries of distance from the swirling events of the Renaissance, allowing us to take up the more dispassionate, chess-playing view that Machiavelli urges on us. So let us here re-write the ending of The Prince, this time using Julius II as the proper analytical hero of the piece.

Julius was born Giuliano Della Rovere around 1443. Like Cesare Borgia, his path to power was speeded along by close familial contacts to the papacy. Della Rovere was the much-loved nephew of Pope Sixtus IV, becoming his uncle’s de facto prime minister. Following on from the death of Sixtus, Della Rovere assumed that he would succeed him. However, he was beaten out by Cardinal Rodrigo Borgia, Cesare’s father, who assumed the title of Pope Alexander VI. So Della Rovere, in good chess player fashion, tried to undercut Alexander, knowing his time was coming.

When Alexander VI died in 1503 (and with the lightning quick demise of his successor, Pope Pius III, in just 26 days) Della Rovere at last made his long-considered move. He deceived the supposedly worldly Cesare and ran rings around him diplomatically, securing the papal throne by means of bribery, both in terms of money and future promises. With Cesare throwing the powerful Borgia family’s crucial support behind him, the new papal conclave was one of the shortest in history, with Della Rovere winning on only the second ballot, taking all but two cardinals’ votes. He ascended to the papal throne at the end of 1503.

Now that Cesare had outlived his usefulness, Julius withdrew his promised political support from him in true Machiavellian fashion, seeing to it that the Borgias found it impossible to retain their political control over the papal states of central Italy. Julius rightly reasoned that to fail to eradicate the Borgia principality would have left the Vatican surrounded by Borgia possessions and at Cesare’s very limited mercy.

Without papal support Cesare’s rule on his own—without the critical backing his father Alexander VI had provided—lasted merely a matter of months, with his lands reverting to Julius and the papacy itself. Julius had run rings around Machiavelli’s hero, fulfilling the chess-playing maxim that securing one’s political position leads to political stability and long-term rule. That, Niccolo, is what a real chess player looks like.

Making sense of Putin

 However, chess players are not just relic of the byzantine Renaissance age. Russian President Vladimir Putin is a perfect modern-day example of a chess player, as all the many devious tactics he pursues ultimately amount to a very single-minded effort to restore Russian greatness, often by blunting the west’s drives into what he sees as Russia’s traditional sphere of influence in the countries surrounding it. In other words, the Russian strong man resembles another chess player, former French President Charles De Gaulle, in his single-minded efforts to restore pride and great power status to his humiliated country.

As such, Putin’s many gambits: theatrically opposing the US despite having a puny, corrupt economy the size of Texas; pursuing an aggressive adventurist policy against the pro-western government in Ukraine; intervening to decisive effect in the horrendous Syrian war; all serve one overarching strategic goal. They are designed to make the world (and even more the Russian people) change their perceptions about Russia as a declining, corrupt, demographically challenged former superpower (which it is), and instead see it as a rejuvenated global great power, one that is back at the geostrategic top table.

Despite all facts to the contrary (and in the end, as was true for De Gaulle’s France, the facts just don’t bear out the incorrect perception that Russia will again be a superpower), Putin has been very successful in (wrongly) changing global perceptions of Russia’s place in the world. It is also the reason the current tsar has an 80% approval rating in his own country, as he has restored pride to his formerly humiliated countrymen. By knowing what ultimately motivates the chess-playing Putin, we in the west can do a far better job in assessing the entirely explicable tactical gambits emanating from the Kremlin.

The rewards for spotting the rare chess player

 Despite the difficulty in spotting them, it is well worth the time trying to game out chess players, perhaps the rarest of creatures in global politics. For once they are analytically brought to ground, the fixed, rational, patterns that chess players live by means a true analytical understanding of them is possible, as well as a far better understanding of the world in which they live.

Published by Princeton University Press, March 13, 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, will be published by Princeton University Press in April 2018 and is available to be ordered on Amazon.

 

 

 

Corbyn’s beloved Venezuela is sinking further into the socialist abyss

The definition of a fanatic is someone who doesn’t let the facts get in the way of their theories. By this standard, hapless, gormless Jeremy Corbyn is truly (if serenely) living in another galaxy.

 Heroes are important and Corbyn is crystal clear that Hugo Chavez and his charismatic, populist, socialist Bolivarian movement—long in charge of resource rich Venezuela–is a model he is just itching to emulate. Let us take him at his word and look at the prototype of the socialist paradise Corbyn dreams of.

 With any sort of remotely competent leadership, Venezuela ought to be one of the wealthiest countries in the world, as it possesses the planet’s largest known oil reserves. So economic illiterates Chavez and his even more clueless successor as President Nicolas Maduro have form, as wrecking such a paradise has taken real talent. When Chavez and his Bolivarian revolution took power in 1998, Venezuela was one of the richest countries in Latin America; now it is one of the poorest.

 What does this mean practically? Presently there are shortages of medicine and food staples, a direct result of government policies. The inflation rate in 2016 has been estimated a stratospheric 800%, with output falling by a precipitous 18.6% last year, after a mere 180% rate of inflation and 5.7 percent contraction in 2015. Simply put, due to economic negligence, the place is falling apart at the seams.

 Under its socialist champions and despite the incredible bounty of its oil reserves, Venezuela is desperately, irredeemably poor, and there is no sight whatever of even the smallest effort on the part of the gormless Maduro government to even attempt to right the ship, as to do so would be to abandon the socialist snake oil that they and Corbyn so enjoy peddling.

 Venezuela’s problem is structural, and simply isn’t going away. With the global price of energy halving (and with the American shale revolution now functioning as a permanent ceiling on global oil prices), the latest socialist fantasy is fast approaching its sell-by date.

 It is the easiest political risk call in the world to note (as almost everyone has) that the Bolivarian revolution is on its last legs. But tragically, it is unlikely the fetid, discredited regime will go without a fight.

 Maduro is Chavez without the charisma, meaning he is nothing. With his popularity rating plummeting to near Hollande-like levels of 24% in February 2017, the thuggish President has done about everything he can to change the subject from his obvious and glaring incompetence.

 Maduro has blamed the US (somehow its Washington’s fault as it would surely be for Corbyn) for his self-inflicted wounds. He charges the opposition are fascists and in the pocket of Donald Trump, rather than being a disparate, desperate group of Venezuelans trying to stave off economic disaster, and save what’s left of their country. Having lost December 2015 parliamentary elections to his foes, Maduro, rather than change course and tack towards sanity, has set about organising a takeover of the Venezuelan political system.

 He cajoled the pro-government Supreme Court to recently announce its assumption of legislative powers, in lieu of the opposition-controlled congress. Having extra-legally quashed the opposition’s effort to recall him (which given Maduro’s great unpopularity was sure to have succeeded), the Venezuelan President is not intent on re-writing the Constitution presumably to see that his political opponents, are never, ever in a position to threaten him again.

 Predictably, the opposition are in the streets this spring, leading ever larger demonstrations that have already resulted in the deaths of at least 36 people. Venezuela is a hair’s breath from revolution.

 Maduro will talk about anything, anything other than the undeniable economic mess he and his mentor Chavez have driven his country into. But in the end, the laws of political risk analysis—as is true for the laws of physics—cannot be indefinitely ignored. The disastrous socialist Bolivarian revolution that the Labour leader so admires is not long for the earth. Thank God, as the poverty-stricken people of Maduro’s country deserve far better.

 It is my strong bet that the people of Britain do not need this political risk lesson as to why a vote for Corbyn is a vote for economic suicide (beyond the Shadow Home Secretary’s disastrous inability to do simple maths).

 However, alternate realties and alternate paths not taken are an important comparison metric voters can use to gauge what taking a chance on a radical candidate would look like.

 In the case of Corbyn, one has only to look at the death throes of the economically-challenged Maduro regime to get a sense of what his government would deliver. To look, and then to shudder.

 Published in City AM London, May 9, 2017.

 

 

The America First insurgents couldn’t withstand contact with the real world

“If something cannot go on forever, it will stop.”

–Herbert Stein, Chairman of the US Council of Economic Advisers under Nixon and Ford

As has been true for most administrations over the past century, the new Trump regime came to Washington promising to change everything about the way the place worked and the policy outputs it produced. Over the past 100 years, only FDR and Reagan truly managed to do this. As such, it should come as little surprise that, with Trump’s slew of foreign policy about-turns on China, Nato, Russia, and Syria, the amateurish America Firsters’ reign at the top of US foreign policy lasted mere weeks, as its naïve view of the world could not withstand real world contact either with the Washington establishment or the verities of what is actually happening in the world.

Like many insurgencies, the America Firsters–epitomised by campaign svengali Steve Bannon and erstwhile National Security Adviser General Michael Flynn–have a good story to tell. Years of a gormless, utterly unaware American elite—the people I meet at swish conferences who are breathtakingly, wilfully unaware of the true damage they have done both in the sands of Iraq and to the global economy post-Lehman, and still think they are somehow entitled to run the world—running down the American lower middle class has given them a huge political opening. But if their narrative of elite incompetence is unerringly on the money, their practical policy alternatives have always amounted to little more than dangerous pixie dust.

For the American Firsters are, despite their conservative cloaking, genuine revolutionaries. They do not want to reform an establishment desperately in need of it, but rather throw the baby out with the bathwater and over-turn a global system which has safeguarded American dominance for the past 70 years and managed (just, thanks to JFK’s adroitness) to see off the cataclysm of another World War.

But here is where the real world kicks in. Gravity cannot be wished away, any more than the objective power realities of the present multipolar system. And, just as with gravity comes the affirmation of certain physical laws, so with the multipolarity of today comes political realities which just this past week reasserted themselves in terms of overall American foreign policy.

Not seeing that the perils of radical Islam—upsetting as they surely are—amount to a second order global problem that was under-studied before 9/11 and is over-studied now, the Bannonites have made its destruction the centrepiece of their foreign policy thinking, which inevitably leads to disastrous geostrategic results.

Much like the anarchist movement of the late nineteenth century—so wonderfully dissected in Joseph Conrad’s The Secret Agent—radical Islam can kill and maim and even (in the case of the anarchists) bump off the odd Russian Tsar (Alexander II), American President (William McKinley), or Austrian Empress (Sisi). But it has nowhere near the power either to change the overall nature of the global system, or to replace the United States as the dominant power on earth. It is a real, vexing, terrible problem but not what geostrategists should be concentrating on.

From this mistake about the true nature of the world, all other America First strategies amount to being fruit from this poisoned analytical tree. Russia is not worth cosying up to for a whole host of reasons (Assad, Ukraine, meddling in western elections) as the aid it gives the West in fighting a soon-to-be extinct ISIS isn’t remotely worth the price. Russia is a weak, declining power, an aging gas station with nuclear weapons, but it is a far cry from being America’s new joint partner in combatting radical Islam.

Likewise, China—which along with rising democratic powers such as India is where American strategic attention absolutely ought to be—is not the villain of the piece. Instead, with the help of the only power which in a generation might emerge as a peer competitor to America, the Trump White House can master the hornet’s nest of the nuclear ambitions of ‘the crazy fat kid’ in North Korea (as Senator McCain has so memorably dubbed him), keep the global economic system on the road, and sooth tensions in the South China and East China Seas, preserving stability in the undoubted global engine for future economic growth.

In other words, in the world we actually live in (as opposed to the alternative reality populated by Flynn and Bannon and their henchmen), China is worth engaging, Russia is worth opposing, and radical Islam (while important) is worth taking a deep breath over.

All of this happened this past memorable week as gravity returned to international relations, and the Trump administration pivoted back to reality. Thank God.

Published in City AM London, April 18, 2107.