Aspenia international 2-2023 – Editorial

Yuval Noah Harari, one of Israel’s great thinkers, formulated a very simple concept to explain how, having been dealt a blow to the heart with indescribable brutality by Hamas, Israel cannot respond in a purely rational manner. You cannot be rational when your soul is so profoundly stricken – and, we would add, when a moribund Netanyahu government is still in power. Joe Biden and numerous others have made it abundantly clear that a rational response in Gaza must imply both fewer civilian Palestinian victims and a post-war peace plan. But this is not an easy proposition: differences between Netanyahu and Biden on the future governance of Gaza, resistance from Arab states to playing a meaningful role in a future interim international force, the Palestinian Authority’s weaknesses, and Europe’s substantial irrelevance are all fully on display. And yet one common interest remains: to prevent a larger Middle Eastern conflict.

Europe, at this point, is surrounded by an arc of fire – from East to South. And, as this issue of Aspenia underlines, the Old World is living through its own “poli-crises”. The problem is that the European Union is quickly losing competitiveness; and this internal vulnerability does not help the EU to effectively meet new geopolitical challenges.

 

 

There is an inescapable reason behind the change in global balances – a reason with a longer timeline than current conflicts. By the end of this century, the world’s population is going to shrink rather than grow for the first time since the devastating plague in the mid-fourteenth century. The cause this time is not the number of deaths; it is due, rather, to a drop in the number of births – especially in industrially-advanced countries, with a rapidly ageing Europe heading the list. In European countries, plus Asian democracies, we have gone from “baby boom” to “baby bust”. Even the United States’ demographic advantage – an integral part of its construction as a superpower – is starting to diminish to some extent. A full-fledged demographic winter has now taken hold not only in such traditional places as Italy and Japan but also in China (replaced by India as the world’s most heavily populated country), and in Russia, where the decline in human resources is widening the gap between the stark reality of numbers and Vladimir Putin’s imperial delusions.

Over time, the new demographic geography is going to have a serious impact on global economic balances, on countries’ relative clout, on migrant flows and on welfare systems’ sustainability. A major question that remains unresolved, even as the world population approaches the eight billion mark, is the following: are there already too many of us (given the planet’s resources and the urgency of environmental issues) or are there not enough of us (in consideration of how mankind’s development has depended on a growing population down the centuries)? If this century is strongly impacted by a dual revolution – demographic and technological – those countries that prove capable of generating, educating, or attracting the best human resources are going to dominate. That vision, however, becomes excessively deterministic (the Malthusian trap) unless it is linked to certain crucial social and economic variables.

It is clear that demography and democracy share a part of their root: demos, the people. But the two terms actually share far more than that. In both fields the counting process (in other words, the quantification of people as citizens), is of the essence: in demography, we count so that we can know the numbers and plan accordingly; in democracy, we count so that we can gauge the degree of political consensus and build majorities. Opinion polls and statistical analyses of an electorate’s make-up are precisely where the right to vote, representative institutions and a stringent study of the population converge.

Another factor that demography and democracy share may be less intuitive, but it is just as important. The two words describe dynamic phenomena and constantly evolving processes. The democratic mechanism would be pointless if it merely captured a permanent majority and a permanent minority and froze it in time. By the same token, demography reflects and incorporates intergenerational relations – in other words, a ceaseless turnover. This dynamic aspect is frequently underestimated when we speak of countries, nations, and communities of one kind or another within or across administrative boundaries.

If we think of a triangle whose three sides are the state, the market and the population, we essentially encapsulate most of our community life. The triangle’s sides are mutually interrelated, generating choices and producing effects in the political, economic, social and cultural spheres. To achieve a more realistic and more complete picture, however, we need to build in another crucial variable in today’s (and, to some extent, also in yesterday’s) world: the global level. This level is at once international, intergovernmental and cross-border. If we do that, we can see that “traditional” demography – the demography portrayed and quantified in a census – encounters global phenomena to become even more dynamic, incorporating migrant flows but also the indirect impact of labor markets and of manufacturing chains in physically distant locations. In other words, local demographic trends need to be built into macroregional, continental and global trends because major – or even minor – imbalances in population, birth, ageing, and migrations translate into different forms of power, trade, competition, and cooperation.

To lend concrete substance to these general considerations, we have but to think of how China is ageing before it has overcome the “middle income trap”; of how Europe is ageing and shrinking but cannot decide how to manage immigration; of how an expanding young Africa is pressing on the Old World; of how demographic growth is slowing in the United States and how the country is afraid of losing control over its border with Mexico; or of how Russia is looking on as hundreds of thousands of its younger citizens leave the country, fleeing a war triggered by their own leader.

The demographic outlook is clearly interwoven with all human relationships, yet we must also avoid giving in to the temptation of using it as our only lens or as a deterministic factor. On the contrary, the articles in this issue of Aspenia illustrate the need to simultaneously look at the various and occasionally mutually conflicting thrusts generated by demographic trends. Population growth, for example, is often seen as the mark of a vibrant society, but it still needs to be measured against the economic growth rate – otherwise it can spell a drop in the community’s overall prosperity. Demographic decline or limited growth, on the other hand, has occasionally been considered desirable; indeed, it has sometimes been actively encouraged by the authorities, in an effort to curb the use of limited resources and to fuel a rise in a community’s average income.

 

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In terms of power politics, it is natural to consider bigger countries (those with more substantial populations) as at an advantage, but it is also obvious that per capita income has a decisive impact on a country’s status. This is particularly true with regard to the technological level of a country’s armed forces and thus on their effectiveness and efficiency. Military might offers a standpoint from which to assess the dynamic between China – the demographic giant of the past few decades – and India – the demographic giant of the next few decades. As Pramit Pal Chaudhuri explains, the most important numbers are those that map out the economic curve (not just the demographic curve) and, at a pinch, the institutional curve (the rule-of-law state as the key to truly sustainable development). There really are no demographic formulas that apply in every instance, in every season, in every place. A great deal depends on the economic and institutional context.

The most obvious indicator of the difficulty involved in devising convincing solutions for Europe’s demographic winter is the gap that has now come into being – in a large part of the EU, and in Italy particularly – between children wanted and children actually born. As Alessandro Rosina points out, the younger generations in many European countries have not stopped wanting children, but they also feel free not to have any and they often put off the decision on account of the prevailing climate of uncertainty. The trouble is that postponing such a decision often ends up meaning giving up on the whole idea for good. This generates the “reproductive deficit” that explains Europe’s demographic decline, potentially foreshadowing its gradual loss of economic competitiveness.

The current fertility rate in the EU stands at just over 1.5, with none of the member states reaching the replacement threshold (roughly two children per woman). While the theoretical solution to the reproductive deficit obviously lies in building an ecosystem favorable to young families, in practice it is not clear which policies work. The countries closest to achieving the demographic balance threshold are France and Sweden. By different means, they have both achieved results in combining natality and jobs for women. Filling the gap between children wanted and children actually born is one of the most important challenges facing society today. It would be helpful if procreation were seen as a collective investment rather than solely an individual choice, with its inherent private costs.

 

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As mentioned above, we live today in an era of poli-crises. In addition to those discussed so far and to the many that cannot be covered in a single issue of Aspenia, there is the technological war between the United States and China, which is tied to a radically changing geoeconomy. The European Union needs to formulate a more effective response to the major challenges facing all the member states: security, energy, migration, tax policy, strategic capability.

The impression one gets is that the war in Ukraine is basically forcing us to contain our differences without truly eliminating them. Once the war ends, the north-south clash over fiscal policy (which has already resurfaced in the debate on the European Central Bank’s decisions and on Stability Pact revisions) and the east-west clash over foreign policy and the rule-of-law state will return to the surface, sharper than ever.

Italy has the most important “sovereignist” government in the EU today, but in actual fact that government is asking for “more Europe”, not less (in the sense described by Mario Sechi). Nationalism is not much use for governing in an era of multi-crises. It is useful for winning elections, of course, but not for managing the rough waters in which we are sailing: when there are two wars at our borders, when illegal migrants flood in, when inflation is not so easy to keep at bay and there is a creeping recession, when you depend on China for your environmental transition technology and on the United States for security, you need to “share” your sovereignty. This does not mean that EU members should hand sovereignty over to Brussels; it means that sovereignty should be shared by the nation states, thanks to the common institutions they founded for this purpose. For a union of nation states to work properly, it requires major concerted effort and major common investment. Internal competition will continue, regardless, but in a cooperative context that is at least partly integrated.

So here we are. Flat markets have come to an end, geopolitical rivalry is impacting the way the economy is managed, energy costs are much higher, multilateralism is not working, and the technological competition between the United States and China is forcing us to redraw global value chains. Many of the premises in which Europe believed – starting with the virtues of interdependence – have collapsed. And the international system, which is breaking apart, is increasingly distant from the Europeans’ old Kantian ideal.

As security and economic considerations cross-contaminate one another, Europe is finding it lacks the tools with which to play the game. Where security is concerned, the war in Ukraine has decreed the further Americanization of the Old World: NATO, which appeared doomed just a few years ago, is back as a key player. Where technology is concerned, Europe is lagging dramatically behind. The Green New Deal may be a good idea in theory, but unless we understand and calculate its costs and its repercussions, it will simply be a shortcut towards political and social protest against the governments in office. The single market is still the EU’s major comparative strength, but if emergence from stagnation is largely dependent on a relaxation of the rules governing state aids, then the internal market is also at risk of fragmentation.

Europe’s relationship with the United States is a lifebuoy, but the Atlantic alliance will not survive unless security agreements are matched by a solid economic accord (discussed by Eric Jones in this issue). And in the coming years, the EU is going to have to address a dual challenge: how to enlarge further without disintegrating (which is going to require substantive internal and budget reforms, as Ivan Vejvoda explains) and how to handle the challenges from the south rather than just those from the east.

Geopolitics is back, according to half the world’s media. To us, it is not clear when it ever went away, despite the “end of history” rhetoric in the wake of the collapse of the USSR. Indeed, a large part of Europe’s problems can be traced back to that period. Russia has never accepted losing the Cold War and the United States has managed the post-1989 era like a victory (which, of course, it was). In truth, the Cold War has never really ended. Putin is trying to get his own back in Ukraine at the cost of tragic loss and destruction. Whatever the final outcome on the ground there, it must be said that he has already lost on the political level. And it is now clear that he is fighting a battle on two fronts: the external and the economic one.

 

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The debate on Europe, in the run-up to the crucial June 2024 elections, is taking place in an international environment in which the old Western-led world order is being disputed by a declining power such as Russia, by a great revisionist power such as China (whose growth model is, however, teetering) and by what is becoming known as the Global South.

Major regional players are playing their cards at several gaming tables at once. They are the middle powers in an “à la carte world” (as the “Financial Times” put it, more creatively perhaps than Ian Bremmer, with his G-Zero). They are countries such as Brazil (which, with Lula, has once again adopted a position midway between non-alignment, pro-Putin leanings and interest in relations with the United States, as explained here by Michele Valensise), and such as South Africa (the former model country on the African continent now in the grip of inequality, corruption and inefficiency, as Danilo Taino explains in this issue).

The Indian foreign minister talks about regional players embracing multi-alignment rather than traditional non-alignment. The BRICS and the group’s six new and disparate members (Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates) are countries that do not feel obligated to choose sides in the contest between the United States and China or between the West and Russia. They consider themselves free to move at will in the existing spaces.

For Westerners, one consequence of this altered state is that the “freedom” of these middle powers has limited the impact of sanctions against Russia. For now, the sanctions have not proved sufficient to reduce Moscow’s ability to carry on the war, as Antonella Scott and Carolina de Stefano explain for Aspenia.

All the governments in the developing world are more or less convinced of the shortcomings of the institutions – shaped by the West – that influence international balances (see Paolo Guerrieri on debt in lower income countries). But that does not mean that the “Global South” is going to succeed in spawning an alternative to the current world order, where the dollar’s financial strength and the United States’ military supremacy continue unabated. If anything, we have entered a kind of global “non-order”. The Asian countries are strengthening their security ties with the United States and their economic ties with China, and they are making their strength felt: their demographic strength (with a plummeting birth rate almost everywhere except in sub-Saharan Africa); their technological strength (with the impact of artificial intelligence and the fragmentation of the internet); and their energy/climate strength (with its impact on the economy and on migrant flows). The overall result is not going to be a decoupling among the world’s major economies (that would be too costly for all the players involved). But it will mean partial “de-linking” and fragmentation into different regulatory environments and areas of influence, with growing protectionism and an increase in Western sanctions.

Therefore, the concept of a “Global South” pitted against a “Global West” really does not suffice to explain the complexity of a changing picture. To put it succinctly: national security considerations are now grafted onto the comparative cost theory that dominated a bygone golden age of globalization.

The war between Israel and Hamas, with its possible regional ramifications, confirms all that: the inescapable role of the US in military terms and, at the same time, the increasing importance of “middle powers” like Saudi Arabia or Turkey – with their own distinct agendas. Russia is trying to exploit the new salience of the southern front to divert attention from Ukraine – and waiting for the 2024 presidential elections in the United States; China is an opportunistic power, aiming at reaching a managed competition with Washington in a period of internal economic troubles. Both – China and Russia – are aiming to revise the old American-led liberal international order. But they are not able to offer an alternative. We are thus entering a difficult transition period: and, as we have often seen in history, transitions can be very violent. Europe must become much more aware of this reality.

We cannot conceive of the EU as another swinging power, we need to position Europe squarely in the Euro-Atlantic world, and leave behind the many ambiguities on “strategic autonomy”. Strengthening Europe as a meaningful Euro-Atlantic actor is the only contribution we can give to avoiding a new isolationist cycle in the United States.

 

 


*This article has been published on Aspenia 2-2023

 

 

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