Black Swans: Order and Disorder in the Global System
The clarity of the Cold War with its neat division between the communist and capitalist worlds, and not so neat addition of the non-aligned or third world is over. There will be no grand strategy that guides the behavior of the United States or any other great power. Different strategies will be followed across different issue areas. There may be a global disruption, but if it occurs it will not be because of structural factors, deep underlying causes that could not be managed. If disorder does occur it will be the result of a black swan, a concatenation of low probability events with high impact that could not be predicted in advance with any confidence.1.
The stability of the global order and the prosperity of its individual member states will be determined by how well three basic sets of issues are addressed: first, the changing power distribution in the international system; second, the provision of global governance; and third the ability of actors with limited underlying resources—malevolent states, states with limited governance capacity, and transnational terrorist organizations—to use weapons of mass destruction to threaten entities with much greater resources. The first issues, most clearly reflected in the rise of China, can be managed. The second can, in most instances, be addressed through a series of agreements among coalitions of the willing. The third poses the greatest risks to the stability of the international order. A black swan could appear out of the nexus of weapons of mass destruction and perverse or weak political systems.
The Rise of China
At some point in the not too distant future China’s GDP will rival or surpass that of the United States, even though its per capita income will remain far smaller. Power transitions can lead to military conflict if the rising power’s aspirations and interests cannot be accommodated within the existing system. Historically, there have been three causes of conflict: territory, spheres of influence, and international regimes. A rising power may move to redraw international boundaries and seek to redefine spheres of influence; or establish new international regimes by creating new principles, norms, rules and decision-making procedures.
The classic case of a disruptive power transition is the rise of Germany in the nineteenth and twentieth centuries. Germany was unified by Bismarck’s adept diplomacy and limited wars. Germany led Europe in the second industrial revolution defined by heavy industries such as steel and chemicals. It had an impressive civil service and a formidable military. But Germany was surrounded by powerful neighbors, France to the west and Russia to the east, and constrained by Britain’s powerful navy. Bismarck tried to stabilize Germany’s position in Europe by eschewing colonial expansion in Africa and by building an alliance structure with Russia and Austria-Hungary, the Dreikaiserbund, defined by a shared conservative ideology and monarchical political structure. This alliance ultimately failed not only because Bismarck’s successors were less clever but also because of the tension between ideology and political identity, which linked Germany with Russia and Austria-Hungary, and the pressures of realpolitik, which drove Russia to seek an alliance with France to lessen the threat presented by Germany. Germany’s defeat in the First World War did not fundamentally alter the basic structural problem of a Germany that was powerful enough to threaten its neighbors but not powerful enough to dominate them. In fact the Versailles settlement, by creating a string of relatively weak states along Germany’s eastern border made it even more tempting for Germany to resort to war. German power in Europe was contained after the Second World War by dividing Germany, by reducing its territory, and most important by the entry of the United States into the European balance of power.
The temptations that made Germany’s rise in Europe in the twentieth century so catastrophic are less compelling for China’s rise in the twenty-first century. China’s territorial ambitions are troubling but modest. As of 2008 China had been involved in 23 territorial disputes. It had used force in six of these, compromised on 17, and signed treaties for 15.2
There could, however, be open and significant conflict over territory. Different parties might misunderstand how the other side understands its vital interests. Emergency communications channels that could dampen a crisis have not been established, at least not to the same extent as those that existed between the Soviet Union and the United States. At least some Chinese military planners believe that nuclear weapons provide an umbrella beneath which conventional wars might take place.3.
Nationalist pressures might lead China’s leaders to engage in aggressive and risky activity that would be politically beneficial in the short term but could be costly in the longer term if economic ties within the region and with the United States deteriorated. A serious military clash over disputed islands would be the result of a black swan produced by some combination of popular demonstrations, bureaucratic clashes, accident like the Hainan Island incident, and nationalist reactions across the region.
With regard to spheres of influence, it would be in China’s interest to dislodge the United States from the eastern Pacific, to end the American security treaties with South Korea and Japan, and to eliminate or reduce the possibility of an American naval blockade that would impede China’s ability to import petroleum from the Middle East. This will not happen. South Korea and Japan will prefer the friendship of the United States to the close embrace of China. American material interests dictate that it maintain a strong military and economic commitment to South and East Asia.
China will be able to enhance its influence in Central Asia where the “stans” will want a balancer against Russia and an alternative outlet for their energy resources. The maritime powers—Japan, South Korea, the United States—will not be able to counter increasing Chinese influence on the Asian land mass. The Shanghai Cooperation Organization (SCO), even with its limited accomplishments, is one manifestation of China’s influence. Aside from Central Asia, however, there will not be opportunities for China to establish a clear sphere of influence even though its engagement in Africa, Latin America, and elsewhere will increase.
With regard to international regimes, the American policy of seeking to get China to embrace existing principles and norms and enmeshing China in existing rules has been more successful in the economic realm, less successful in security affairs, and unsuccessful with regard to democracy and human rights. Every American administration for the past 40 years has opted for integrating rather than excluding China from the existing international order. The United States will press China on trade, exchange rates, and cyber-security, continue the mostly cooperative relationship on financial sector reform initiated through the G-20, and fail to reach agreement on macro-economic management, which, for both countries, is too deeply enmeshed in domestic politics to allow for flexibility in international negotiations. Although China will not become a responsible stakeholder, bearing some of the burden for maintaining the contemporary regime structure, it will not articulate new principles and norms either. China will moderate its cyber activities only if the United States and others develop effective counter-measures or credibly threaten to increase costs by, for instance, denying student visas or blocking some Chinese products. China may elide, bend, or cheat on existing rules but it will not offer alternatives. Open trade is critical for China’s continued growth. Access to Western technology, both legal and illegal, facilitates development. A breakdown in cooperation would be more costly for China than it would be for the United States because the domestic legitimacy of the regime is so heavily dependent on economic performance.
Beyond the economic sphere international regimes are less developed to begin with and cooperation between China and the United States will be limited. On security issues China has cooperated on some issues but not others. It has participated in anti-piracy activities in the Indian Ocean but rejected the American interpretation of legitimate activities within the exclusive economic zone. China has sent forces to virtually every UN peace-keeping mission but never bought into the American led interventions in Iraq and Afghanistan. Chinese oil purchases from Iran have to some extent offset export restrictions imposed by Europe and the United States. American officials describe the re-balancing as a contribution to the stability of East Asia, even though it is most easily understood as balancing against China.
On issues of human rights and democratization Chinese and Western leaders have almost no shared interests, although even here Chinese officials have accepted the prevailing rhetorical frames. They have embraced at least the language of human rights and democracy and refrained from challenging extant principles and norms. They have characterized China as a democratic country pointing, for instance, to local government participation. China has signed several human rights conventions but it is not clear that these have had an impact on its behavior. The United States and China have carried on primarily ritualistic discussions of human rights, although the United States has succeeded in securing the release from prison of a few Chinese dissidents.
In sum, despite the power transition now taking place, China’s rise will probably not precipitate a clash with the United States. The greatest danger is a black swan event associated with territorial disputes about offshore islands or Taiwan. American engagement also makes it very difficult for China to alter spheres of influence except in Central Asia. China will not challenge the basic principles and norms of existing international economic regimes. Even in other issues areas, where China’s underlying interests diverge from those of the west, such as human rights and democracy, China will not offer an alternative set of principles and norms.
If a fundamental break between China and the West (including South Korea and Japan) does occur it will be because of domestic not international developments. Instability within China rather than China’s growing international power could precipitate military action against Taiwan or disputed offshore islands. The Chinese government might not be able to contain popular nationalist sentiments, which it has itself encouraged. The Party leadership might not be able to exercise effective authority over all the military and other state institutions.
In the contemporary period global governance will not be based on one single overarching set of principles and norms. For at least three reasons there will be nothing equivalent to the post-Second World War period of institution building. First, the contours of power are dynamic and uncertain. By any measure the United States is more powerful today than any country has been over the last several centuries, but China and India are growing quickly. Japan is stagnating but still has a formidably large economy. The future of the EU and its member states is uncertain. If the euro fails in part or completely Germany will be in a less advantageous competitive position.
Second, the ideological predispositions of the major powers do not divide along any clear lines. The United States remains committed to a Lockean vision of individual freedom, democracy, and market-based economies, and, commensurate with its power, is willing to use military force to secure both its material and ideological objectives. The major European powers share America’s commitment to democracy, but put more faith in international law and organizations, and are more reluctant to use force. Russia has no clear foreign policy vision other than exercising a sphere of influence in its near abroad. India, or at least some Indian leaders, articulate a global vision based on India’s unique culture and a division between global haves and have-nots; other Indian leaders embrace realpolitik. China, pursuing policies designed to maximize its short and medium term material interests, has shunned global responsibilities, and hardly shares European and American enthusiasms for democracy. Japan suffers not only from two decades of economic stagnation but also from being in a part of the world that has made it impossible to escape from heavy dependence on American tutelage.
Third, major powers do not have the same understanding of key challenges in the international environment. The major countries in East Asia are primarily concerned with economic growth and development. India is focused on not only development but also security threats from Pakistan. Western Europe is enmeshed in a crisis over the future of the European Union. The United States is more attentive than others to the possibilities of transnational terrorism. Climate change is viewed as an existential threat in some polities and an irritant in others. There is disagreement about the threat posed by the nexus of transnational terrorism and weapons of mass destruction.
While changing power configurations, different values, and disagreement about key challenges will preclude a new global order based on overarching principles that are supported by well-funded, legalized and institutionalized international organizations, this does not mean that we are entering a period of global disorder. Rather, global governance will be provided by coalitions of the willing. The WTO will continue but preferential trade agreements, bilateral and regional will become ever more consequential. There may be no agreement on climate change at all, but if there is agreement it will emerge not from a UN-type gathering like Copenhagen but rather from the Major Emitters Forum (MEF), whose 17 members account for 81 percent of hydrocarbon emissions.
The G-20 is an exemplar of a coalition of the willing. It was created because the G-8, which did not include the major developing economies, was too small, and a universal membership organization would have been too large. The G-20, however, is not based on any overarching and agreed upon set of principles and norms. There is no permanent secretariat with an accompanying building.
The G-20 has had four major agenda items: bank capitalization, IMF reform, macro-economic coordination, and the Doha round. It has succeeded on two of the four. The members facilitated the Basle III agreement, which helped to stabilize the international financial system after the 2008 crisis. They also negotiated a redistribution of voting rights in the IMF. On macro-economic policy they created the Mutual Assessment Process, but its impact has been limited. Macro-economic policy is constrained by domestic structures and by the preferences of citizens; these constraints have precluded coordination among the major economies. The Doha round has not been revived although a number of other trade agreements have been concluded over the last decade including, for the United States, recent bilateral agreements with South Korea, Panama, and Colombia.
The Proliferation Security Initiative (PSI) launched by the Bush administration in 2003 is another example of a coalition of the willing. The aim of the Initiative is to stop the movement of weapons of mass destruction and accompanying delivery systems. The initiative relies on existing national authorities. There is no new treaty creating new international law. There is no secretariat. Countries join the Initiative by signing the PSI Statement of Interdiction Principles, which obligates them to interdict WMD shipments to the extent of their own legal authorities, to strengthen these authorities, and to share information with others. More than one hundred countries have joined although some major countries, including China and Indonesia have not. Rather than trying to renegotiate the law of the seas, which guarantees free passage on open oceans, the United States created the PSI, which legitimates more aggressive interdiction of WMD and related material through national law and several UN resolutions. PSI is one example of a larger trend in which entities, in the case of PSI states, join international arrangements with no expectation of universality.
Another example, in a very different issue area is the Open Government Partnership. The Partnership was launched in 2011 by eight governments and nine civil society organizations. Fifty other governments have joined since. There is no treaty. Rather, the Partnership is a mechanism that allows individual member states, often in consultation with civil society, to make public commitments designed to improve governance through greater transparency, more civic participation, and the application of new technologies. States are only admitted as members if they have high enough scores on a set of third party measures of good governance, limiting the possibility that the Partnership will by used for window dressing.
The Extractive Industries Transparency Initiative (EITI) is another example of a multi-stakeholder initiative with voluntary membership that is designed to improve governance. The specific goal of EITI is to reduce corruption in extractive industries by having governments commit to making their revenues public. States, civil society organizations, investors, and corporations are members of the EITI. The EITI has specified validation criteria that countries must meet if they wish to be declared EITI compliant. The first two countries to meet the criteria were Azerbaijan and Nigeria. Eighteen other countries have now met the EITI validation criteria and have been designated as compliant. There are seventeen other candidate countries. As the validation of Azerbaijan and Nigeria suggest, the EITI is not a panacea. Both countries ranked 139 on the 2012 Transparency International Corruption Perception Index.4
The G-20, the PSI, the Open Governance Partnership, EITI are just a smattering of examples of new institutional initiatives that depart from the conventional model. (South Korea is a member of all except EITI.) The members of these initiatives are not necessarily only states. They are coalitions of the willing, not universal membership organizations. They do not necessarily create new international law. They may not have a formal organizational structure or a secretariat. But they are contributing to global order in a heterogeneous world characterized by uncertainty about power distributions, differences over principles and norms, and disagreements about core international challenges.
The Weak and the Restless
If a new period of disorder does emerge it is most likely to come not from the rise of China or from failures of global governance but rather from actors with limited resources but access to weapons of mass destruction. The spread of weapons of mass destruction, especially nuclear and biological, pose a historically unprecedented challenge. Actors with limited material capabilities, both states and transnational terrorist organizations, can threaten the security of states with much more substantial resources. Up until the present period there has always been a fairly close relationship between the ability to disrupt and kill, and the basic resources possessed by any actor. Although this relationship has been attenuated over time by the development of guns and explosives, the harm that an individual or weak state or organization could do was not that great. For all of human history up to the present, the state that could mobilize larger armies, more ships, and larger numbers of weapons usually won in war. Basic measures of resources such as population, urban population, iron and steel production, energy consumption, military personnel, and military expenditures (the measures in the Composite Index of National Capability (CINC) for the correlates of war data sets) have provided a good measure of potential national military power.
This is no longer the case. Nuclear and biological weapons can kill hundreds of thousands or even millions of people. Securing nuclear weapons is expensive and complicated but North Korea, whose per capita GDP of US$1800 (at PPP) places it near the bottom of all countries and whose estimated total GDP of US$40 billion ranks as 103rd in the world,5. has mastered the basic technology as have India and Pakistan, both states with substantial aggregate resources but low per capita GDP. Iran is putting itself in a position to quickly produce such weapons. Israel, whose GDP ranks around 40th in the world has a substantial stock of nuclear devices and the ability to deliver them thousands of miles away with fighter planes, submarines, or missiles. Nuclear weapons will not necessarily be limited to states. It takes almost no imagination at all to describe a scenario in which Pakistani nuclear weapons could fall into the hands of transnational jihadi organizations. A nuclear Iran, even with central state authorities firmly in control of any nuclear arsenal, could decide to provide weapons to Hezbollah or Hamas.
Nuclear deterrence, which worked so well in the Cold War, will not be as effective in what Paul Bracken has called the second nuclear age.6 Nationalist sentiments now run much higher than they did during the Cold War; neither Americans nor Russians wished for the annihilation of the other side. In contrast, the president of Iran has called for Israel to be wiped off the map and categorized Zionists as the most detested people in all humanity. North Korean children are subject to anti-American propaganda from kindergarten on. A recent DPRK propaganda video states “Words spoken by the United States, a country that uses the law of jungle as the law of survival for fitness, is meaningless.”7
Nuclear weapons systems are complicated and difficult to control. They are subject to what Charles Perrow has called normal accidents. Normal accidents cannot be avoided in systems that are complex (have many feedback loops) and tightly coupled. During the Cold War there were numerous examples of false positives for the United States, attacks from the Soviet Union that were not attacks. In 2007 six nuclear weapons were mistakenly loaded onto a B-52 bomber and flown over several American states. The United States and the Soviet Union embraced practices that made the accidental use of nuclear weapons less likely, especially second-strike capability and fail safe systems. It will be much more difficult for new nuclear armed states, with limited resources, to spend lavishly on safety and security.
The technology for producing biological weapons is widespread, available to private organizations, even individuals, not just states. There are about one million people that understand cloning. Information about viruses is now transmitted between African hospitals with limited technical capability and the American Center for Disease Control by sending the code of the virus, not the virus itself. Codes for many diseases are available in the scientific literature. Biological weapons involve dual use technology. Attribution will be difficult, perhaps impossible, if there is a release of a pathogen.
WMD attacks, especially biological attacks could come from anywhere, from inside a country as well as from without. For the international system, however, WMD in the hands of relatively weak states with malevolent intent, or states unable to effectively govern their own territory, pose the greatest threat. If there is a new period of global disorder, one that would be characterized by high numbers of violent deaths, a decline in world trade and economic prosperity, and the abandonment of extant principles and norms, it will be because of a Black Swan event emerging from the weak and malevolent.
There is no consensus on how these international threats might be contained, not even a well-developed debate. Unlike China, where the opportunities and threats are visible, or demands for global governance where the benefits and costs can be approximately calculated, the dangers posed by WMD attacks emanating from weak or malevolent countries (from either governments or transnational groups) involve uncertainty rather than risk. There is some probability that an attack will take place, but it is impossible assign a value to what that probability might be. Absent a value there is no straightforward way to understand what level of resources might be committed to mitigate that risk. Even if resources were not very constrained, there is limited consensus on how they might be deployed.
Most of the weak and the restless can best be understood as polities in which domestic power brokers, relatively unconstrained by laws or constitutional structures, compete for resources and control: the Muslim Brotherhood and the army in Egypt; various regional leaders or warlords in Afghanistan; the Sunni and various Shi‘a parties in Iraq; regional tribal groups in Libya; the Maronites, Druze, Sunni and Shi‘a (Hezbollah) in Lebanon; the military and diverse regional and ethnic groups in Pakistan; the military, Islamists, Tuaregs, and civilian politicians in Mali. From an American and even a more international perspective there is no grand strategy that can address the problem of the weak and the restless, but there is a best-case specific goal and a worst-case fallback that can be used to orient foreign policy. The best case is to support political actors who can sustain states that have good enough governance—namely, good enough to control transnational security threats and to offer some possibilities for economic growth. The worst-case fallback is to use economic or military coercion to degrade the capabilities or change the policies of specific groups within or without the state, but with no expectation of improving domestic governance.
External actors, if they are lucky, they may be able to identify a local baron whose preferences are compatible with their own. In Egypt President Morsi will not be sympathetic to American policies, but he may be able to govern effectively and he does have an interest in promoting the economic well-being of his own citizens. The criteria for evaluating leaders should not be the quality of elections, the treatment of women or the level of corruption, but rather their ability to maintain control of activities within their own boundaries and to open space for social and economic progress.
In some cases there may be no one to support. The reluctance of the Western powers to place large bets in Syria reflects not only an aversion to becoming involved in another armed conflict in the Islamic world but also an inability to identify a group on which a stake might be placed. The best possible outcome in Syria would be a Lebanon-like agreement, but such an agreement will be out of reach until the competing groups within the country share the same understanding about the internal distribution of power.
In Mali the United States did place a bet. The African Command trained the Malian army. Members of that army, after having been defeated in the northern part of the country overthrew the civilian democratically elected government. (Mali had hosted the Community of Democracies in 2007.) Military intervention led by a French force, then prevented the country from falling into the hands of Islamist radicals.
The options for dealing with malevolent states, regimes that do have effective control over their own territory but threaten their neighbors and other countries, are equally problematic. The two principal examples in the contemporary world are North Korea and Iran. The policies of both countries are the result of internal dynamics not international structures. A different regime in Iran or North Korea would result in very different policies. Both countries have been hostile to the United States. Both have an incentive to develop nuclear weapons, since the possession of these weapons makes it less likely that a military opponent, even one with much greater resources, would risk outright invasion. Non-military measures are not likely to be successful. While personalistic autocratic regimes are susceptible to economic pressure (they need resources to pay off supporters and fear turning to their own military which they do not control), military or party based autocratic regimes are not. Such regimes can pass the costs of sanctions on to those groups that do not support the regime.
For malevolent states, North Korea and Iran, the only option is buying time with the hope but not the promise that the regime will transform itself, which might happen in North Korea, or fail, which might happen in Iran.
There are three potential threats to world order: the rise of China, global governance, and weak and malevolent states armed with WMD. With regard to China, there is a clear strategy: integration into the existing international order. This strategy is likely to be successful especially given the American rebalancing toward Asia, which makes China’s peaceful rise the first best option for its leaders. If integration fails it will be because of a black swan resulting from some mix of domestic nationalism, popular disorder, bureaucratic in-fighting or economic crisis leading to outright conflict over Taiwan or offshore islands. Global governance, which during the Cold War, was focused around universal membership (or at least universal membership minus the Soviet bloc) international organizations, has now become more varied. The most interesting innovations have involved the creation of coalitions of the willing such as the G-20, PSI, Open Government Partnership, Major Emitters Forum, and Extractive Industries Transparency Initiative. These initiatives have been successful in some arenas but not others. There is no crisis in global governance, but there are sharp disagreements about interests in some issue areas. If there is a new world disorder, marked by international conflict, economic crises, threats to regime stability, and a wholesale revision of basic principles and norms, it will emerge as a the result of a black swan event emanating from the weak and the restless. A nuclear weapon (perhaps from Pakistan, or North Korea, or Iran) exploded by a transnational terrorist organization in a major city in Europe, America, or Asia would change the nature of international relations forever.
1. Naseem N., Taleb, The Black Swan: The Impact of the Highly Improbable (New York: Random House, 2010).
2. Taylor Fravel, Strong Borders, Secure Nation: Cooperation and Conflict in China’s Territorial Disputes (Princeton: Princeton University Press, 2008), 40-62.
3. Avery Goldstein, “First Things First: The Pressing Danger of Crisis Instability in U.S.-China Relations,” International Security 37, no. 4 (Spring 2013): 49–89.
5. “Korea, North,” CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/kn.htm.
6. Paul Bracken, The Second Nuclear Age (New York: New York Times Books, 2012).
7. “Obama and American Soldiers Ablaze in New North Korean Video,” NK News, http://www.nknews.org/2013/02/obama-and-american-soldiers-ablaze-in-new-north-korean-video/.