6 June 2015

The Role of Inertia in Geopolitics

June 3, 2015

Geopolitics, at least in the sense that we practice, is neither deterministic in its approach to understanding nations and their interactions nor simply synonymous with current events or international relations. At its most basic, geopolitics as a discipline seeks to explain the intersection between place and people, or more specifically between place and the nation, and the impact they have on one another. Practitioners assess geography, politics, economics, security, history and society inclusively to build a deeper understanding of nations, sub-nations, regions and the world.

Constraints, Compulsions and Circumstances

Geopolitics teaches us how to identify and assess the compulsions and constraints on nations and their principal actors - the driving forces and limiters that shape the behavior and direction of nations and their interactions. The balance between "compulsions" (what must be done) and "constraints" (what cannot be done) - a tension that induces or restricts certain behaviors, actions and directions - changes with differing "circumstances," or the current state of being domestically, regionally or internationally at a given moment in time. Thus, some compulsions may exist for years or decades, but only in a very special set of circumstances do they really induce action.

By identifying these constraints and compulsions, the limitations on options become more apparent, allowing predictions of patterns and actions. If history explains the past with an eye on the present, geopolitics explains the present with an eye on the future. The purpose is not only understanding the pressures on nations, but also predicting future responses - and thus providing time to prepare for, dissuade or counter the actions of others.

At a certain level, geopolitics eliminates the impact of the individual human element: Each individual is diluted in the totality, subsumed in some sense by the forces at work, namely, the broader constraints and compulsions that compel and limit options and decisions. Individuals by their very nature are highly variable, being affected by numerous unseen elements at any given moment. Consider, for example, John Lewis Gaddis' musing in The Landscape of History on the potential that an unrecorded flea may have given Napoleon itchy underwear, leading to his loss at Waterloo. While individuals are relatively unpredictable on a short timeframe, their collective behavior, their decisions as they shape the directions of nations, are less variable and more compelled or constrained. Thus, in rising above the individual, geopolitics presents a framework for forecasting and a method that can be taught and tested.

The relationship between the constraints and the compulsions is in a constant state of flux and influenced by circumstances. Assessing these three factors presents a picture of fairly limited options and, in reducing possibilities, leaves a very small number of likely directions for future action. This allows geopolitics to serve as the starting point for forecasting. Frequently, however, a directional pattern that appears obvious from a geopolitical assessment and forecast will not come to pass within the expected timeframe, or a dynamic that may appear highly constrained will suddenly break forth far ahead of the forecast.

Three Case Studies

As a case in point, let's look at the current European crisis. Nearly from the beginning of our existence, Stratfor has clearly seen and identified the core constraints on European unity, and in particular on the creation of a common European currency. Our 1995-2005 Decade Forecast stated:

The European Union's enjoyment of this period will be limited somewhat by Germany's ongoing digestive problems - absorbing the old East Germany - and an inability to create a Monetary Union. On the one hand, the reluctance of major powers to abdicate sovereignty to Brussels makes negotiations difficult and subject to collapse and breakdown. On the other hand, the fact that the EU contains both net creditor and debtor nations makes the creation of a single, integrated fiscal policy - the precondition for monetary union - difficult to imagine. The idea that Greece or Portugal and Norway or the Netherlands will share fiscal strategies is a bit difficult to imagine. As the EMU frays, European integration in general will be questioned. The great reversal of 1997 will resonate through the next decade.

Our Fourth Quarter of 1998 forecast continued to expect the failure of the EMU:

We continue to believe that the EMU will be dead on arrival. The EMU is an economic colossus built on a base of political sand. Each European election now has the potential of undermining the entire edifice. Even if this German election doesn't, some election will. The EMU, like Russia and Asia, is going to meet the dark face of politics sooner rather than later. This last quarter of 1998 may destroy the EMU, postpone it, or most likely, allow it to go forward with political constraints that will guarantee its failure.

Applied geopolitics clearly showed that the EMU, and the euro, were inherently flawed. We assumed that if these flaws appeared obvious to us, they would be as obvious to the Europeans. We also believed the Europeans would be unable to bring the new currency to fruition even if they did not consciously recognize the same constraints we had identified. But not only did the euro move forward, for a time it was a very strong global currency. In our 1999 Annual Forecast, we admitted: "We were clearly wrong when we expected the euro to fail. The euro is here and seems likely to work in the short run."

Today, however, the European Union is hampered by many of the very constraints we recognized two decades ago. While an integrated fiscal policy may have worked relatively well during times of economic prosperity, in times of crisis, it stripped some countries of the tools they needed to respond - bringing increasing political strain within member countries and toward the entire European experiment. Put simply, the very different economic models of Northern and Southern Europe require more than a "one size fits all" set of economic tools. While geopolitics exposed those constraints, we missed something in initially predicting that they would block the formation of the EMU and the euro or give rise to a monetary union so politically constrained it would be destined to fail from the outset. The error was not one of failing to recognize constraints but rather of failing to understand how they applied and in what timeframe.

Now consider our long-standing forecast of an economic crisis in China as "the Chinese miracle" outlived its growing internal contradictions. For more than a decade, we identified the constraints that would bring an end to the miracle and lead to a political crisis as China sought to manage the social consequences of slowing growth. Many of the problems we identified are now generally accepted as obvious precursors to China's economic slowdown, which was finally set in motion by the European financial crisis. Though what is obvious now to many was obvious to us for a long time, we still failed to forecast the timing of the crisis.

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