Striding into a new age of radical uncertainty

For editors, one of the most tempting headlines to write when devastating or shocking events happen—such as Russia’s invasion of Ukraine—is to say that the world has changed. Generally this has the merit of some truth. What is harder to say is how that will happen, or where the changes might lead. That is especially so now, when Russia’s new imperialism has followed a series of similarly world-changing shocks.

At such times, the right conclusion is not that a new or well-defined world order is being created as many predicted. A new Cold War or a bipolar world divided into two clear camps has not materialised. Rather, the new shock has broken old assumptions and widened the range of possible paths that the world might take.

Instead of grasping for new certainties, we need to accept that we are in an age of quite radical uncertainty, one in which the ability to learn and adapt nimbly to unexpected events is far more valuable than either predictions or overly specific preparations. We can isolate some things we know, or think we know, from the many things we don’t know. But that is all.

After all, in just the past five years, there have been three major events that have shattered the assumptions many of us were making about the direction of world affairs.

First, the trade war that began in 2018. This was not just between the world’s two economic and political superpowers, the United States and China; it also brought trade skirmishes or battles between the US and its allies in Europe and Japan. This event was important, because it upended expectations about America’s role in the world and about the future of institutions of global governance.

Second, of course, is the global coronavirus pandemic. The virus has over the past two and a half years caused, at the latest estimate, more than six million officially recognised deaths—but in reality over 20m excess deaths compared with what would have been expected on normal trends.

And third, there is Russia’s invasion of Ukraine, the current phase of which began on 24th February. This is shocking—and in fact shatters assumptions—because it is a war chosen by a military superpower with the aim of changing borders by force, an act that was supposed to be ruled out by the United Nations Charter of 1945.

The invasion has raised the possibility that the great taboo on the use of nuclear weapons, which has prevailed ever since the terrible events in Hiroshima and Nagasaki on 6th and 9th August 1945, could soon be broken.

We don’t know whether that will happen. But we do know that Russia has threatened to use such terrible weapons in order to influence and deter its adversaries. This again breaks a longstanding assumption about how the original nuclear superpowers would behave.

The five assumptions

Going back a decade or so, I think that five main assumptions had become well established.

One, that we faced a new era of great-power competition with the rise of China, but one with other rising powers such as India, Brazil and Russia acting as balancers or diffusers. This allowed us to expect that power would be distributed broadly during the 21st century, rather than concentrated in a small number of countries.

Two, that increasingly inclusive global institutions would be crucial to managing that rise of distributed power. They would evolve from the institutions and rules set up in the postwar decades. Examples include the G20, the World Trade Organisation (WTO) and the World Health Organisation (WHO). The growing need to confront the climate crisis would, some of us further thought, provide a strong incentive for collaboration, even between the great powers. Such institutions would evolve away from being western-led, and China would inevitably play a major role in their future development.

Three, we assumed that as a consequence the United States’s acceptance of and support for global institutions would rise as its hegemonic power weakened, at the same time as it came to recognise the need for a wider set of partners to achieve its goals. This would also be a logical way for the US to manage the impact of China’s rise.

Four, despite China’s rise and Russia’s move back towards autocracy, we nevertheless assumed that democracies would prove more resilient than autocracies, thanks to superior accountability and free information. This did not mean we believed in Francis Fukuyama’s notion of “the end of history.” But we did think that our political system would gradually prove more popular as the middle classes grew in many countries, including China, and demanded that their interests and rights be defended.

Five, we assumed that the globalisation of trade, technology and ideas that facilitated this rise of new powers and spread of wealth would continue, and would help to discourage conflict and equalise progress. Technology lies at the heart of the process of globalisation, but its development is also accelerated by that same globalisation.

Some of those assumptions had been given a severe test by the 2008 global financial crisis. But in the first instance the democracies of Europe and the US proved resilient. The US elected its first African-American president. Banking systems were saved, through massive but skilful intervention by central banks. The euro sovereign debt crisis was dangerous, but it was kept under control. Global institutions appeared to be strengthened, given the creation of the more inclusive G20, and we saw China take a stronger position within them. The US embraced and even encouraged those self-same institutions.

Major tensions were also being avoided. China was playing a growing role as a lender to and investor in poor countries all around the world, mostly making a constructive contribution to the reduction of poverty, even if the west continued to worry about the country’s growing political influence.

The three game-changers

Then came the three major, game-changing or perhaps assumption-shattering events: trade war, pandemic and war in Ukraine. These events revealed that our assumptions had been incorrect or over-optimistic.

To some people, the trade war launched by Donald Trump’s administration in 2018 might have seemed quite technical in nature. The fact that the US imposed tariffs of up to 25 per cent on billions of dollars of imports from China looks quite dramatic to economists, although in principle it is just like adjusting tax rates. But it was a much bigger development than that.

For a start, it signalled not the embrace, but the rejection by the US of the use of global institutions to manage great-power competition. In fact, it signalled a belief among powerful factions of the American population that those institutions are an enemy of American interests and must be destroyed.

The birth of the WTO in 1995 was supposed to make trade wars a thing of the past. Disputes would in future be resolved there, and countries would never again use tariffs and other trade barriers as weapons of economic or political competition.

Trump had evidently not read the memo. Ignoring the US’s WTO obligations and progressively weakening the WTO’s dispute-settlement function by refusing to allow new judges to be appointed, Trump declared trade war principally against China. But he also imposed trade penalties on Japan and Europe for aluminium and steel, supposedly on national security grounds.

Western democracies actually proved quite effective at managing the economic, social and political impacts of the pandemic

This declaration of trade war reflected two big things. One was the delayed but serious damage that had been done to American democracy and social stability by the aftermath of the 2008 financial crisis, as grievances about inequality and other social ills culminated in the surprise election of Trump as president in 2016. As in previous American economic crises, including in the 1980s, those grievances produced a strong backlash against trade and globalisation.

But the second big thing was what this signalled about the intensification of US-China competition. In Trump’s mind, one measure of that competition was the US trade deficit with China. But for a much wider part of the US political and business elite, a far more important measure was technological competition, along with a growing fear that China might soon take the lead.

During the 1960s and the Cold War between the Soviet Union and the US, such technological fears centred on space. This led to the US’s successful programme to put a man on the moon, demonstrating by 1970 the country’s clear technological superiority in many fields of military application.

In today’s competition with China, that technological fear is more diffuse. It extends across semiconductors, 5G and 6G telecoms, artificial intelligence—and space too. That fear began to be reflected in tough US measures against Chinese tech firms, introduced in part to stop intellectual property theft, but also extended into more direct efforts to disable or obstruct Chinese technological development.

Support for such measures spans both the major US political parties, because America is afraid of falling behind. China now fears becoming deprived of crucial components and technologies.

My former colleagues at the Economist described the economic result not as globalisation, but “slowbalisation.” Yet the political implications were arguably more serious than the direct economic ones.

Thus it was that in 2020 we entered the second major event, the pandemic, with relations between the two superpowers already in a tense condition—even one of conflict, but gladly not in a military sense. The technological competition was a sort of proxy war.

Lessons from the virus

The coronavirus pandemic has been, and still is, a terrible event in terms of human suffering, which has taught us many specific lessons about health, social policy and the power of science. But the pandemic has also taught us some important lessons about world affairs:

• • It showed us that great-power relations have become so tense that even when confronted by an undoubtedly common enemy, like a new virus, the US and China have moved further apart, not closer together. During the past two and a half years China and the west have run completely separate policy responses against this global health threat, using different vaccines and control methods.
  • It showed that global institutions such as the WHO had already become weakened by lack of financing. Although the WHO did well in terms of providing information to the world, it has been unable to play much of an operational role during this crisis. Any proposals for new operational roles to prevent future pandemics are therefore doomed to fail, under current conditions.
  • It showed that disruptions such as a pandemic can cause major supply-chain problems in our global trading system, which in combination with other factors can bring significant economic consequences, including inflation.
  • It showed that although the world’s richest countries—the west—had the financial tools to support their own economies and health systems in these extraordinary times, they had neither the willingness nor, probably, the resources to provide major support to the poorer countries of the world. Donations were made to support the distribution of vaccines in Africa, for example, and efforts were made to soften the impact of sovereign debt crises. But they were woefully inadequate.

There remains, in 2022, a huge gap in rates of vaccination between Africa and the rest of the world. African countries may not directly resent this lack of support, but they have noted that the west cannot be relied upon in such an emergency. (Nor in fact can China, but that is another story.)

On the positive side, however, the pandemic arguably offered some support to two of my five assumptions. Most significant is the fact that, in 2021 and 2022, the pandemic has been brought under some sort of control, chiefly thanks to the continued and powerful globalisation of technology, manufacturing and trade.

A small handful of researchers and pharmaceutical companies based in the US, UK, Germany and (in a different way) China developed vaccines against Covid-19 in record time, going on to produce more than 11bn doses in just one year at factories all over the globe. Some of them used new and highly innovative technologies. Personally, I have now been vaccinated in four inoculations using three of these vaccines—AstraZeneca, Pfizer/BioNTech and Moderna. So I am a walking example of bioscience globalisation.

Moreover, this vaccine success demonstrated the continued superiority of bioscience in Europe and the US compared with China. The mRNA vaccines developed in Germany and the US, and the adenovirus vaccine developed in the UK, have had far superior results compared with the two more old-fashioned Chinese vaccines.

Thanks to that superiority, a fear that developed last year has proven to be unfounded. This was the fear that China’s vaccine diplomacy, exporting the Sinovac and Sinopharm vaccines to poorer countries, would give Beijing a lasting advantage in world affairs by creating new friends and dependencies. But it has not. As a result of their lower efficacy and western firms’ success in overcoming production difficulties, western vaccines have become dominant everywhere except China (albeit by purchase, not donation).

Although the European and American democracies proved bad at managing the health impact of the pandemic, especially during 2020, they actually proved quite effective at managing the economic, social and political impacts over the medium term, showing great resilience and capacity for adaptation.

Right now, the world’s democracies look in better post-Covid shape than China does, and in much better shape than Russia, which was hit hard by the pandemic and failed to produce a vaccine that convinced its own people, let alone export markets. That failure and weakness is probably an important background to the current war.

World at war

And then came the war in Ukraine. The daily news from the war is what rightly holds our attention today. But we can also recognise some fundamental points arising from it that have implications for the future.

The first is that, on 4th February, as the Winter Olympics were opening in Beijing, Vladimir Putin and Xi Jinping signed and published a lengthy joint declaration about how Russia and China had now entered a strategic partnership that would “know no limits.”

In their joint statement, these two superpowers declared that they now have a working relationship that they will use to oppose and weaken the west—just as 50 years ago Richard Nixon used his opening to China in order to weaken the Soviet Union. They said that they want to see some significant changes in the way the world’s security, political and economic system is governed, which would amount to an end to any remaining domination by the west. They claim that they want to increase the role of multilateral institutions in global governance. But their words and Russia’s subsequent actions showed that they believe world superpowers—like themselves, plus presumably the United States—can operate according to different rules. Or rather without any rules at all.

Twenty days later, having waited until the closing ceremony of the Winter Olympics was complete, Putin ordered his forces to invade Ukraine, displaying that superpower contempt for the rules in a dramatic way. This brought a major war to the continent of Europe for the first time since 1945, a war coming right up to the borders of the European Union.

The important point here is that the war began with clear support from China, and signalled that the Russia-China working relationship extends far beyond trade. Since then, China has maintained its diplomatic support for Russia, even as it has kept its distance militarily.

The second point to underline about this war is that Russia’s objectives, as laid out in speeches and articles by Putin over many months and years, extend to the complete reconquest of Ukraine as well as other countries that were formerly part of the Russian Empire in the 19th century and the Soviet Union in the 20th.

We know that the range of possible futures for humanity is wider than we thought

Those declared objectives are therefore imperial and territorial in nature, rather than concerning political systems or values. The Russian invasion, if it were to be successful, would open up the possibility of a new era of imperialism and of using control over territory as a strategic weapon.

The third point returns to the question of nuclear weapons. This is the first conflict since the early 1960s in which a nuclear superpower has actively and publicly discussed using nuclear weapons.

We don’t know how seriously this course of action has really been entertained by Putin or the military leadership. But we do know that the general threat of using such weapons has formed part of speeches both by Putin and by his foreign minister, Sergei Lavrov. And we can see that the use of nuclear weapons is openly being discussed on Russian state television, in a quite deliberately shocking way.

This may have been intended to make Russians feel that their military is truly powerful, even while its failures in Ukraine have made it look weak and incompetent. But we know that there is also a military logic that follows from this: that Russian failure, or simply weakness, in Ukraine could lead Putin to use a nuclear weapon as a desperate display of power, to force Ukraine to surrender.

We can certainly hope, with some justification, that the Russian leadership would not use nuclear weapons, because they know very well what would be the consequences—not just for their enemies but for themselves. But the crucial point is that, for the first time in many decades, we cannot be sure.

That is also why the western response to Russia’s invasion—led by the US and strongly followed by European countries and Japan—has been very careful, unified and sustained.

The response has been careful, to reduce the chance of triggering a Third World War by entering into direct military conflict with a nuclear superpower. It has been unified, because all these rich allies share the view that this is a conflict not of local but more global and fundamental importance. And it has been sustained so far because of the realisation that only well-maintained economic and military pressure can prevent Putin from achieving his aims.

The conflict, and the western response through unprecedentedly tough economic sanctions, is having a considerable effect on world economic trends. By disrupting supplies of energy and other raw materials it is provoking inflation and causing a reshaping of globalisation. But we cannot know at this stage what the outcome will be, either militarily or economically, nor what kind of consequences will flow from that outcome. What we do know is that the range of possible outcomes is sadly quite wide.

Radical uncertainty

So where is all this taking us? The basic truth is that we don’t know, because we can’t know. As such we need to be careful to delineate those few things we do know from the many things we do not know.

The three major events I have described—trade war, pandemic and war in Ukraine—were all predictable, in the strict sense that there were plenty of influential people who said that these things could happen. But they were completely unpredictable, in the sense that we had no way of knowing whether they would actually happen, and certainly no idea of when they would happen.

Similar points can be made about major earlier events that rocked the world: the 9/11 attacks, for example, as well as the financial crash. The size, complexity and connectedness of our contemporary global system means that such events can have far bigger impacts than might have been the case in the past. This is a price, if you like, of our human success.

What this amounts to is the need to understand that we are living in a world of radical uncertainty. The concept is one that John Maynard Keynes helped to popularise during the 1930s.

Keynes’s point—emphasised again in a fine recent book by former Bank of England governor Mervyn King and leading  economist John Kay, using that phrase as its title—was that it is important when thinking about possible future events to distinguish between risk and true uncertainty.

Risks are things we can calculate. We can say that the return from a particular investment or activity must be greater than the calculated risk. True uncertainty is something we cannot calculate at all. There was no way to assign a probability to the likelihood of a global pandemic that could kill over 20m people.

In such conditions of radical uncertainty it makes little sense to make plans for all sorts of unknowable potential events. That is why most plans for the pandemic proved useless. Instead, what we need is to create an ability to learn, and build adaptability into our systems. That way, we may be more ready to respond if the unknowable happens.

In practice, the great triumph of the pandemic came from learning, incredibly rapidly, how to make new vaccines. We also adapted, again very rapidly, to new ways of working and living.

Given the existence of radical uncertainty, what else do we know? I would cite five big things, beyond the value of humility and learning from our failed predictions:

• • We know that the range of possible futures for humanity is wider than we thought.        
  • We know that unless the Russian regime itself changes as a result of this war, Russia will be substantially isolated from the west for a considerable period of time. But we also know that this new “cold war” will be partial, for most countries in the world will not be joining in.
  • We know that, for the time being, the world is not dividing into two rival blocs—the west, or democracies, versus autocracies—as many countries in Asia, Africa and Latin America are avoiding getting involved. They know that in a world in which power is broadly distributed and no one can really be depended upon, it makes no sense for them to join any single camp. The world is complicated, not simple and binary.   
  • We also know that while China and Russia have set up their strategic partnership, they have not begun to make it an operational, working relationship—one with firm obligations or commitments to one another. Indeed, China keeps stressing that it is a partnership, not an alliance.   
  • Finally, we know that globalisation, for good or for ill, is not dead—it can bring viruses, terrorism and nuclear fallout, but also vaccines, amazing digital technology and the rapid exchange of ideas. We also know that the factors that globalisation depends upon are overwhelmingly political.

This brings us to the list of important things we do not know:

• • We do not know whether nuclear weapons will be used in, or in connection with, the war with Ukraine, even if we feel that the chances of nuclear arms being used there or in future conflicts may be rising.
  • We do not know whether or not the future course of politics, notably in the superpowers, will include a sustained assault on globalisation—by re-building high walls against economic and intellectual interchange.
  • We do not know whether China will choose to reinforce or make its relationship with Russia operational, or leave it loose and non-military as it is today.
  • We do not know whether, in this era of great-power competition, the US and China are destined to collaborate, to compete or even to fight. There are ample reasons to speculate about any of these directions of movement. All are possible.
  • In particular, we do not know whether China will seek to conquer Taiwan by force and bring what it sees as the final victory in China’s unfinished civil war, risking a conflict with the US and others, or whether it will be willing to accept the status quo indefinitely.
  • This in turn means that we do not know whether what we like to call the “rules-based order” can now be rescued, resurrected or newly built. Global institutions feel more needed than ever, but are in severe disrepair. For new or reinforced global institutions are critically dependent on agreement between superpowers.

We are in an age of radical uncertainty.