A frightening future awaits for much of the world.
That's the prediction of Peter Zeihan, a graduate of Otago University who has become a best selling author on geopolitics and international relations.
His book The End of the World is Just the Beginning was a New York Times best seller in 2022.
Guyon Espiner asked Peter Zeihan, two years on, with the possible return of Donald Trump to the White House, how does he see global tensions playing out and what might this mean for New Zealand?
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Your book came out in 2022. Have you cheered up at all since then?
“No, because since the book came out, the Ukraine war has gotten hot and heavy, and we're seeing the beginnings of a very, very probably end of days-style trade dispute between the entire world and the Chinese.
“There are definitely some specifics here and there that have been a little bit more optimistic than I thought, but the bare bones, the idea that the structures that brought us everything in the last 75 years, that they're dying, unfortunately, that's pretty baked in at this point.”
One of the key planks that you write about is the end of globalisation. Why will that happen?
“At the end of World War 2, the Americans found themselves looking across the plains of Europe at the red armies and realising this was not a fight we could win, we needed millions of people to not just stand up, but to stand between the US and the Soviet army.
“And since the Europeans had just been through the most horrific war in human history, getting them to sign up for an open-ended conflict was going to require some severe inducement.
“Globalisation was [the United States’] answer.
“We would send our Navy out - the only Navy to survive the war - and patrol the open ocean so that anyone could send any cargo anywhere, import anything from anywhere, access any market anywhere, if in exchange, you would sign up for the Cold War.
“And that gave us the world that we know.
“But never ever, ever forget that it was always a byproduct of an American security plan that honestly has now been outdated for 30 years.
"[In addition,] as we all globalised, we also industrialised and urbanised.
"When you live on a farm, kids are free labour, but when you move into a condo in a city, kids are an expense.
"And so we went from having four to five, to six [children] on average, to now less than one and-a-half in most parts of the advanced world.
“You play that forward for 75 years and in most countries there's not even a theoretical possibility of repopulation.”
If America does withdraw and becomes more isolationist, you write about the days of long-haul shipping being largely over. Are you seriously predicting a world where pirates roam the seas?
“I would argue that we're, to a certain degree, already there, with what's going on in the horn of Africa and with the Houthis in Arabia. We've also seen more [piracy] activity in Southeast Asia as well.
“We're not to the point yet where a specific government is doing it.
"But keep in mind, if you want the United States to control the global oceans, we need about 800 [Navy] Destroyers.
“We only have about 60 now. We've retooled our Navy. We can't keep the seas open any longer. No one can.”
How much of this will depend on the Trump-Biden contest?
“I'd argue that it's two sides of the same coin. I don't mean to suggest that the two leaders are the same on foreign policy, they're not. But on foreign economic policy, Biden's actually the more isolationist of the two.
“In essence, we had four years of Donald Trump tweeting out a lot of things, but then never really putting his back into making policy, much less making it stick.
“Biden is much more comfortable working with the tools of power and with the tools of the bureaucracy.
“And when it comes to economic policy - trade barriers, tariffs, state policy, industrialisation policy, national economic restrictions - he's been an order of magnitude more involved, and he's ensured that his policy set will outlive him.
“And what we're seeing in the United States right now is an open, direct confrontation between the left and the right about who can be more aggressive against trade, and especially against China.
“This isn't a contest between open and closed [foreign policy.] This is a contest between two different versions of it.”
Do you believe it is in the national interest of America to withdraw and become more isolationist?
“Well, let me start by saying that the United States is the world's premier power not because of globalisation.
“If you remove the NAFTA [North American Free Trade Agreement] states from the equation, we trade for about 3, maybe 3-and-a-half percent of our GDP.
“We are a continental economy, and that doesn't mean there are no links, but an order of magnitude below that of places like Germany or Russia or China.
“Second, what I would like to see is largely not relevant because I'm an internationalist. People who believe my way have lost each and every one of the last 7 elections.
“Well, I guess until the last one, when we didn't even have a standard bearer in the race, [but] Americans have consistently gone with the more inwardly focused candidate, and that includes the transition from Trump to Biden.”
Who's going to win?
“Oh, Biden in a landslide.”
That's what we were told in 2016. Why are you so confident that Trump will lose 2024?
“Well, I'd start by saying never look at American political polls until after the conventions, because until that point, the independents aren't answering the phone. We're not there yet, but there's three big things going on.
“First, there are fewer Republicans than Democrats, and the Republican strength at the national level has always been about unity.
“Trump broke that, so he isn't even going to have all the traditional people on the right showing up.
“Second, we've got this little issue with a challenging guy from the outside - Robert Kennedy Junior, who is - how should I say this most discreetly? - he's challenging Trump for the batshit crazy vote that Trump thought he had cornered, and now it’s split.
“And third - and in my opinion, most importantly - people have just forgotten what happened two years ago in our midterms. Donald Trump told independent voters that their vote doesn't matter, that it should all be resolved at the primaries, which is where he rules.
“And their collective response was, ‘hold my beer.’ And for most of the candidates that he put his finger on to support, independents voted against the Trump candidates 4-1.
"We have never had a national election in the United States, where the Republicans won, in which the Republicans didn't capture two thirds of the independents.
“So, we are looking at the 2nd or the 3rd greatest election wipe out in American history for Trump and his allies.
“And that's before you consider that Trump is now a convicted felon. There's not a lot of math here for him.”
Let's just entertain the idea that you're wrong and that Trump does win. What would you see as the biggest risks internationally, geopolitically, from a second Trump presidency?
“You'd have two risks that I would see that would boil up within the first year.
“Number one is most likely an American withdrawal of support for Ukraine.
“And then, not too long thereafter, we get one of two things: a massive rearmament of Europe, which I find a little spooky, or a Russian surge throughout Ukraine that comes up against the European border, and then pushes beyond, which is equally spooky.
“Neither of those are good for American strategic interests in the long run.
“The second issue is, [the US] would probably take this relatively targeted but very robust approach that the Biden administration has taken against the Chinese economy and replace it with something much more broad-spectrum, and we would probably see a collapse of the Chinese-American trading relationship, before the United States had built out a sufficient industrial plant to get on without a China.”
In terms of world population, you're saying that a demographic inversion is going to lead to economic freefall, that we're not having the numbers to replace ourselves. How will this have an impact?
“It's not a problem to have a low fertility rate - it's a problem to have a low fertility rate for decades.
“In the case of countries like Italy and Germany, they aged past the theoretical point where they could recover back in the 1980s. And this is the decade when those two, plus the Koreans and probably - although maybe not - the Japanese, basically age into a degree of obsolescence where they just won't have enough people to pay taxes.
“They won't have enough people to consume goods; they won't have enough people to produce the goods in the first place. So, we're looking at a radically different economic model for all of these countries, and more, to survive.
“But no one is in a worse position than the Chinese.
“According to the data that the Chinese have updated in just the last year, they're now claiming they've got a fertility rate that is one quarter, or below, replacement levels in all of their major cities, and they're now saying they've been below the American birth rate in excess of 45 years.
”If you listen to some of their own internal government statisticians, they're now estimating that they've actually overcounted their population by over 100 million people, and most independent demographers say it's probably closer to a shortfall of 250 million.
“So we're looking at the demographic collapse of the Chinese state within 10 years, and that assumes nothing else goes wrong - no trade war with the United States, no government breakdown because of the cult of personality that has arisen around Chairman Xi, no conflict, nothing.
“There's a lot of other stuff going on right now that suggests they're doing their best to speed up their own demise.”
Why will this be so catastrophic for the world? Because a lot of people would look at it and say, maybe it would be better to have fewer than 8 billion people on the planet for the sake of the environment.
“If you breakdown international trade systems, people forget that oil and natural gas are the low carbon fuels that happen to be internationally transported.
“If people are forced to rely on what they have locally, you're talking about a lot more wood and a lot more coal. So, we can have massive multi continental economic dislocation, and skid right past 5°C this century. Those two things can go hand-in-hand very easily.
“China has used a lot of practices, most of which are unfair, to build up the world's largest industrial base for manufacturing. However, if it were to go away before the rest of the world could adapt, then we're in a world where there is no one doing the manufacturing.
“So, I'm in this weird spot in US politics, like ‘please, please, please don't let the Chinese collapse any sooner than they have to,’ because every day they continue to exist is a day that we have to build up our own industrial plan to prepare for the eventual fall.
“And when I hear countries like New Zealand trying to keep a foot in both worlds, I'm like, that's not going to work.
"Right now, I'd argue New Zealand has a foreign policy towards China very, very similar to what the Germans had towards the Russians just before the war.
"They thought that you could have your security from one side and your economics from another side; you can deal with the genocidal government on one side and still trade with them.
“It's all alright until one day it very clearly isn't, and the Germans are paying for that oversight with their economic model.”
Geopolitics expert Peter Zeihan talks in studio with RNZ's Guyon Espiner. Photo: RNZ
In terms of New Zealand’s dependence on China, it's our biggest trading partner. We are massively reliant on them. Do you think that we have put too many eggs in one basket there?
“Absolutely. But I think for you, it's a lot more adjustable than it is for the Germans. The Germans built an industrial model that was based on global access. That requires globalisation. That was a flaw [because] it's based on American oversight. [The US is] getting out of that business.
“It was based on bottomless demand out of China - I would argue we haven't gotten to that floor yet - and it was based on endless supplies of cheap energy out of Russia.
“So I would argue from the German point of view, three of the four pillars have already collapsed and the fourth one is in the process of it.
“New Zealand - because you're not known as a manufacturing partner, you're a high value agricultural exporter with some very high manufacturing stuff on the top end - that can shift, just like the Australians.
"There are other markets out there that need what you do and so I would anticipate, with not too much of an adjustment, you'll be able to shift [trade] to Southeast Asia. Not too hard.
“And you might even be able to pick up a little bit of the slack in Latin America as those economies grow.
“What I would just caution about, is believing that this two-pillar system that you have right now [with China] is a good idea, because it doesn't serve your economic interest. It definitely doesn't serve your cultural, or your strategic interests.”
Over the next few years, New Zealand will consider joining what they're calling Pillar 2 of AUKUS, which is a military technology sharing arrangement, but it's a bit opaque as to what it’s really about.
“That’s because [the US] is making up [AUKUS Pillar 2] as we go.
“AUKUS is primarily designed to anchor American, and to a lesser degree, English power in Australia. So, anything that is hung on the side, I'm not saying it can't succeed, but that was not the original intent.
“So, if there is an extension of AUKUS to involve New Zealand, or more likely Japan, it is going to look very, very different.
“In the original deal, from my point of view, it's not so much the format of the deal that New Zealand does, or does not, decide to do. To negotiate with the United States, it's more about the tone and the scale.
“Let me give you an example, because I think this is probably going to be the best path forward for you. The Japanese realised that from an economic demographic and strategic point of view, their capacity to function as an independent power has gone.
“The birth rates have been too low, for too long, China is too up-front-and-centre, and the Americans, through the 80s, the 90s and to a lesser degree the 2000s, basically decided that Japan can't be part of the American economic family because it was simply too predatory.
“So, under the previous government of Shinzo Abe, we basically had the Japanese come to the United States, say flat out, ‘[we] can't go it alone,’ and came up with an absolutely humiliating trade deal that gave in to Washington on each and everything that had ever been an irritant in the relationship.
“All of them resolved, not just by the American point of view, but from the Trump point of view.
“It worked. And Japan is now part of the American inner circle of allies. And probably if they get their cyber-defence back up, is going to be joining something like the Five Eyes in the not-too-distant future. The Japanese are the only people who have seen what's coming and gotten ahead of it.
“New Zealand, if they want to be part of this network, is going to have to do something similar.
"Now, you have the advantage of not being a frontline state - you don't need the long-range air-launched cruise missiles that the Australians were so desperately after. You certainly don't need a nuclear submarine.
"So, for you, the barrier to entry is lower, but it's going to be no less comprehensive.
“And so, you're going to have to look through your entire economic structure about what really, truly, deeply matters to you that the United States doesn’t like, and then decide if that's a price you’re willing to pay.”
China has said it doesn’t want New Zealand to join AUKUS. If you were advising the New Zealand Government as a geopolitical strategist, what would your advice be?
“The Australians provided a template for you of what it looks like to say no to China.
“You’ll face a short to mid-term trade blockade on things that you really would like to have, but ultimately China is a hungry country that is not very productive in the things that you do. So, I think the damage to the kiwi economy would be relatively limited.
“And at the end of the day, let's be honest here, you have to walk away from all of this anyway, not because of policy decisions, but because China's failing.
“[There’s a big argument for thinking:] ‘If you're going to have an accident, keep it early and keep it small.’
“Kiwi diplomats have proven particularly effective over the last 40 years of carving out deals with countries that don't think they have anything to do with you, up to and including the European Union. So, I have no doubt of New Zealand's ability to find new markets.
“But your economic complexion will evolve as part of this transition. The Aussies have the advantage of being a larger system, and so, the things China went after were smaller as a percentage of the whole.
“I can guarantee you that if you pick a fight with China, from their point of view they're going to come after dairy, and there's no way that won't resonate."
In your book you say that China faces de-industrialisation on a scale that is nothing less than mythic; it almost certainly faces political disintegration and even decimalization. Why?
“Everything that China needs to be the China that it is today is imported, and everything that pays for those imports is an export. China is arguably the country in the world that is most dependent not just on globalisation in general, but on the US Navy in specific.
“That was always a bad plan, and now [they're] facing depopulation.
“One of the reasons that there's this giant trade war now between the Europeans, the Americans and the Chinese - and now increasingly drawing in other countries: just yesterday, the Brazilians and the Turks threw tariffs on the Chinese as well - is because the Chinese don't have enough people under the age of 45 to buy what they produce, and this decade they're going to lose enough people under age 55 to produce the stuff in the first place.
“How do you have an economic structure if it's not based on consumption or production? Because we're almost there in the case of China.”
What are New Zealand's prospects in this world of deglobalization and demographic collapse, and people fending for themselves?
“Whenever I'm evaluating a country [or] a sector, I always look at the broader picture, especially what the competitors look like. So yes, I say that we're going to lose China as an end market. That's something that a lot of my clients here in the United States are struggling with right now; some of them are absorbing that information a little bit more friendly than others.
“But in the case of New Zealand, your primary competitors are ones that are just absolutely screwed.
“The European Union is the world's largest collective dairy exporter, but it's dependent upon the Germans being able to hold the thing together. They're in a demographic situation that's only marginally better than China, so that whole block goes away in terms of agriculture at large.
“Brazil is probably the biggest player that's come up in the last 80 years, but they're completely dependent on China as an end market, and Russia for the raw materials that allow them to grow the food in the first place.
“New Zealand is nearly unique in the world and the products you've chosen to specialise in are the products that you have the lowest input costs for. And since, in the case of dairy, for example, you don't have a hard winter, you don't have a hard summer and you have sufficient rain that most of your dairy doesn't have to be fed fodder, I mean, that will work no matter what the world looks like.
“We're all going to have to adjust a lot. And for countries that are major food importers, some of these adjustments are going to be incredibly painful. But that's not you.
“You've got all the pieces in place that can survive the globalisation collapse.
“Your biggest concern is going to be access to manufacturing goods in a post-China world, but we’ll all have to wrestle with that.”
Geopolitics expert Peter Zeihan talks in studio with RNZ's Guyon Espiner. Photo: RNZ
You talk about the return of large-scale famine because of this deindustrialisation. Do you still think that that is a realistic scenario?
“I think it's actually shaping up to be more of a mid-case or a low-case scenario.
“The five things that you really need in order to grow mass amounts of foods [are], you need capital to pay for the entire production cycle; you need phosphates; nitrogen and potash to fertilise the crops.
“Those only come from a few places. And you need a huge amount of petroleum for the fuel, and to bulwark the other additives, things like pesticides. You know, you break up something simple, like Russia, and all of a sudden you've lost upwards of 40% of all of those things.
“Let's say you have a conflict in the Middle East, where the United States is no longer available to intervene; now you have a nitrogen and a fuel problem at the same time, and as the whole world ages into mass retirement, the capital that's necessary to do the lending that allows agriculturalists to survive from season to season, that seizes up.
“Most of the new producers that we've seen in the Brazils of the world have been brought in because under globalisation, those five inputs have been easy to source. If you make them even just moderately more difficult, then a lot of these producers fall out of the equation.”
What part will climate change play in how the world functions in the coming decades? Are you optimistic about green tech in its current form?
“It's a material science issue - some of the technologies that underlie green tech do work, but none of them work everywhere.
“So, for example, I live at about 2300 metres, in Colorado; I have solar panels on my house. There's 10% humidity on average; there's not a lot between the sun and me, so my panels make perfect sense.
“If I were to pick up those panels and move them over to upstate New York, I'd get a quarter of the electricity back; if I was put in Toronto, I'd get one sixth of the electricity back; if I was put in Northern Germany, I'd get one eighth of the electricity back - and then we're talking about proportions where I've actually put more carbon into the system by putting up panels than I will ever get back from the electricity that is generated.
“And we have fetishised this technology, assuming that more is better everywhere, so we're wasting our last kind of moment of having relatively cheap capital and relatively cheap labour, and relatively connected infrastructure, to build out a technology at a scale that just doesn't work for most of us.
“You put the right tech in the right place, it's brilliant, but there aren't a lot of right places. And it's too complicated from a supply chain point of view.
“Breakdown globalisation and we're not going to be able to produce a lot of this stuff in the way that we have - again, there are many exceptions, but those exceptions collectively only cover about one-fifth of the human population.”
If you were to be tapped on the shoulder by a New Zealand government representative, what would you be telling them to prepare for?
“The single biggest issue is the end of China. I would argue that New Zealand needs to spend its diplomatic heft preparing for that.
“Not because you have to make this false choice between American-led security and the Chinese-led economic system, because the Chinese-led economic system is going away, and you need to prepare for a world where that's simply not an option at all.
“Now there's a wealth of opportunities there, especially for a low-cost producer, New Zealand, who does not face many security concerns even in a post-globalised world.
“But getting the attention of the United States can be difficult, and if you want to do it in a positive way then being part of the solution from the American point of view is the lowest hanging fruit in terms of strategic achievements for the future.
“And it's far, far smarter to start that process before the old system has collapsed, because then it looks like a choice, because when it isn't a choice, the price would be much higher.”
How, in your view, would New Zealand be part of the solution in terms of US thinking?
“I think the single simplest way to proceed would be to seek a direct free trade agreement with the United States.”
We've been trying for that for many years.
“But you've done it on the assumption that they're equal partners.
“The only reason that there's an equal partner trade deal between Australia and the United States is the Aussies did almost everything that we told them to do for 70 years. That's not an option for you.
“Every other trade deal the United States has is with someone who realised they needed a broader relationship with the United States, they had to get part of the inner circle. And that meant they had to sacrifice something.
“You can't replicate what the Aussies did because you can't go back in time and replicate what the Aussies did.
“You have to look at this more from a Japanese point of view, and that means you're going to have to sacrifice a few things.”
