Multipolarity: Episode 12

Special Edition: Listener Q&A 

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[00:02:00] Gavin Haynes: Welcome to Multipolarity. This may not be the voice you're expecting. I'm Gavin Haynes. I produce the show and the reason I produced the show is Philip Pilkington, that I met you at a party some three months ago. And you explained to me that you were doing a podcast, you explained to me that it was a, with a man from the internet called Andrew Collingwood.

[00:02:22] And I said, that sounds like a great idea. Why don't I produce a show? Is that your recollection of events? 

[00:02:28] Philip Pilkington: Yeah, I think there was some alcohol involved as well, but we probably won't talk about that. 

[00:02:33] Andrew Collingwood: And, and how would you say it's gone 

[00:02:34] Gavin Haynes: so 

[00:02:34] Andrew Collingwood: far? I 

[00:02:35] Philip Pilkington: think it's gone pretty well. I mean, hats off for trusting a random guy who walked up to at a party for a podcast with a random internet guy.

[00:02:43] But yeah, I think, I think given the, given how to shake it out, yeah, it's, it's going great. I'm, I'm very happy with it. Are you? I think 

[00:02:50] Gavin Haynes: so, yeah. I sort of work in pod. I work in big pod, but I was looking for something to do, which seemed like it. It might take me a bit more, not quite front of house, but less on the development side and more on the production side.

[00:03:05] And this Angel St. Strode into my life in the middle of the unheard cafe opening party, and said that he like geopolitics and economics too, and that this was a, this was actually a thing that was happening in the world and it seemed very timely and very timely. It has proved, this is not quite my world.

[00:03:24] I do have a vague background in this world, so it's been very interesting to me to kind of open the throttle. Geopolitics and this whole discourse that is becoming ever more salient by the day. It seems So, you know, your idea was 

[00:03:41] Philip Pilkington: right, wasn't it? Yeah. I think I've been vindicated. I think we've been vindicated because it wasn't just my idea.

[00:03:46] Andrew Kelly wouldn't. I were modern, modestly 

[00:03:49] Andrew Collingwood: speaking there. Yeah. 

[00:03:51] Gavin Haynes: Well I think we've sort talked a lot about my pie in this, but it does predate me. So Andrew Collingwood, you met Philip on the internet, a very modern relationship by a Twitter spaces. Yeah. That went viral and as it was sold to me, was picked up at a treasury select committee.

[00:04:13] Andrew Collingwood: That's right. I had been retweeting a lot of Phillips Sagelike and wise tweets and I had also at the time been doing semi-regular spaces on Saturday evenings, which I thought were great. And I still do actually. You get a really good audience participation on the spaces and. One thing I've always found with them is that the questions that listeners ask are far better than you might imagine it.

[00:04:39] It kind of restores your faith in the interested citizen, I would say. And I invited Phillip to one of the spaces to discuss economic matters, and we ended up just chatting for about two and a half hours on that space. And I think both of us could have gone for another couple of hours In addition to that, and we, I spoke about maybe making it a regular thing through a podcast, and then Philip brought you on board, which was a big bonus because God knows how unprofessional it would be without you to edit our ramblings into a coherent 45 minute or one hour podcast every week, Gavin.

[00:05:15] But yeah, I think it's gone well. I mean, the, the point of multipolarity is that, As the world shifts towards a multipolar world, the economic geopolitical consequences of that will become much more visceral and they'll start washing over the Western world, which for the last 30 years or so has been somewhat detached from geopolitics and has had a very specific.

[00:05:42] Economic model and these changes are going to be big and they're going to cause a great deal of issues. There'll be violence and wars as we're already seeing, but there'll also be a great deal of economic upheaval. And I think as this progresses multi polarities, a podcast will get more and more relevant.

[00:05:59] Gavin Haynes: We kind of have some plans somewhere in the background for, for future editions. I know when we first started talking, there was the idea that we would do some special eds on big topics, the schism between the Catholic and the Orthodox church was one, and how that rolls through history. We have a f a first guest interview coming up, which is with Sam Berger of Bismarck analysis.

[00:06:23] What other horizons do you think this show can touch, uh, as as it goes 

[00:06:27] Philip Pilkington: forward? Yeah, I think we should do these big topical episodes. I think they'd be very interesting. I think another one that we were thinking about was kind of, you know, demographics or, you know, we might do one on, on some of the more academic theories of international relations, geopolitics, that kind of thing.

[00:06:43] Maybe even something on, on academic economics. I think these kind of big topics would, would be really interesting and they kind of, you know, get us away from the new cycle a little bit and provide maybe some of the kind of conceptual framing. For what we're dealing with. So I, I'd be excited to do them at some point, maybe sooner rather than later.

[00:07:01] I think we're starting to get enough momentum now that we could, we could start considering doing them.

[00:07:08] Andrew Collingwood: Yeah, I agree. I think that, and now that we have a regular following, we're starting to really trend upwards on the listener scale, it seems to me a good time to start introducing the occasion. Special episode where we can really dive deeply into certain areas that we've perhaps touched on in previous podcasts.

[00:07:27] But to serve a much longer and more detailed hearing demographics is one. I think Philip's suggestion of the, the Orthodox Catholic schism is a fascinating one and would no doubt be hugely educational for me. But there are also other areas as well. We've spoken in the past about the changing face of logistics roots around the world and how that impacts culture and international relations and geostrategy of various nations.

[00:07:51] I think that would be a very interesting one. So in addition to the interviews, and I think we've also, in addition to Samo Bia, who is a, you know, very interesting guy and one of the preeminent thinkers I would say on this, on the areas that we cover. So I think this is all gonna be extremely interesting.

[00:08:10] And as I said before, as these issues become more and more prominent and become more and more difficult to avoid and the. The, the frequency at which they affect lives in the western world increase, then the podcast can become more and more relevant and we can move into an increasing number of interesting areas for listeners.

[00:08:34] Gavin Haynes: There was definitely a scheme at one point to create tea towels and merchandise around shipping choke points. Uh, I dunno, don't, we've don't tell, don't anybody the, that, that, that's an amazing 

[00:08:46] Andrew Collingwood: idea. Some, some entrepreneurial minded listener will steal it from us, but s definitely a great idea and I think we have an idea for merchandise.

[00:08:57] Once perhaps the podcast gets a little bit bigger that we can, that won't, I find with a lot of podcasts or a lot of YouTube channels, when they do merchandise, it's kind of like fan merchandise. Whereas I think that we, we have ideas for merchandise that would be cool for people who are interested in economics, that are interested in geostrategy and that are interested in the changing framework by which the, the, the changing world order, I should say.

[00:09:28] Um, so yeah, that is also something to look out for in the future. Perhaps when we get to podcast 40 or 50, we could launch some super cool merch. 

[00:09:42] Gavin Haynes: Yeah, I mean we're, we're 10 deep, it feels like a long journey, but actually it's still only the foothills of, of something. And I, as we, as we came to press, we were being retweeted by JD Vance no less and an iconoclastic hillbilly than actually 

[00:09:58] Andrew Collingwood: Gavin.

[00:09:59] If I may say, perhaps we could ask listeners for their reaction on another idea that we had. We were speaking last week about setting up a and on that we would provide maybe three times a week, something in that vicinity. Essentially a brief for riders, two hours that would. Give them a kind of digest of the sort of things that Philip and I read on the Multipolarity in within the Multipolarity sphere at the sort of news issues that are happening, interpretation and, and, and kind of brief analysis of the news.

[00:10:38] But I would in be interested to hear feedback from any listeners if they wanna put in the comment section of YouTube, if they're listening on YouTube or perhaps one of their own podcast apps or clients, or maybe even just write to us. Tag us on Twitter, I'd be delighted to hear whether they'd be interested in a a a that, as I say, would give them a kind of multipolarity brief.

[00:11:03] Obviously it would involve a fair bit of work, but if people are keen on it, I'd be very much willing 

[00:11:07] Gavin Haynes: to do it. I mean, you have a absolutely so dynamo work rate in terms of your, your press output, although I did, I picked up Born Broke magazine today while they sent it to me in the post now, and you didn't have anything in this month's edition.

[00:11:20] Andrew Collingwood: I have a very long article about the destruction of Nord Stream, actually, and it's, it's gonna top out at about 5,000 words and it, it basically gives a, a potted history of North Stream and looks at. Some of the press and media failings on their reporting are both reasons that it was planned and built, but more importantly, the failings of their reporting on its destruction and really given how important a a a, a free and investigative media is for a liberal democracy, because as much as a lot of people criticize the press, they do have an important role to play.

[00:12:06] I think it's, it's, it's important that we kind of pick them up on this sort of thing. Absolutely. 

[00:12:11] Gavin Haynes: Yeah. So one thing, given that this is a, a special edition, I always kind of clean up the endings of Multipolarity and, and ask the pair of you to stop begging our listeners to leave reviews and subscribe on TikTok, et cetera.

[00:12:26] But I think this is probably the moment where we. Collectively beg and you know, solicit our listeners to engage with us and leave some reviews in the iTunes store. That would actually be a great help. It seems like there are a lot of people out there through an informal network who enjoy the show.

[00:12:42] Could you help other people find 

[00:12:43] Andrew Collingwood: us? Yeah. I mean, it must be tempting, right, for your average listener to listen to Multipolarity and they're not. And they're not tell any anybody. However, we don't ask for money at multi polarity. We don't have a subscription fee yet anyway. And so what you can do to support the podcast, if you like listening to it, let people know about multipolarity, share the links, tag us in posts, retweet our tweets.

[00:13:10] You can subscribe to our or, or you can follow our Twitter account, which is at multipolar. So that's at Multipolar Pod. So follow that account and let people know. Share the, share the joy, share the links, press the like button, press the subscribe button and comment. Let us know what you think. And we have had a 

[00:13:34] Gavin Haynes: really curious and thoughtful post bag ever since we sent out our shout out for questions about 10 days ago.

[00:13:40] There were about eight questions I think that we have to get through now or from genuine listeners when you send something out to the like that it could very easily come back with, with nothing at all. But the rest of the episode is gonna be me reading out the questions to these two and coming up with answers on the fly.

[00:13:59] So the first question comes from no less a figure than the Eugene professor of computer Science at Princeton University, who is, uh, Bernard Chael. And he says, it's quite a long question. Dear Says, thank you for your podcast, which I enjoy greatly. It seems to me a major element in the future conflict between China and the US would be the political capacity of absorbing heavy casualties.

[00:14:25] As we're seeing now in Ukraine, China would regard a war over Taiwan as existential, so it's casualty tolerance would be essentially unbounded. But how would a US president justify to its citizens the loss of say, 50,000 sailors in two weeks for a fight over a place most Americans can't locate on a map?

[00:14:45] The US hasn't fought a heavy casualty war since World War ii. Would it be able to do so in order to save not its existence, but its hegemonic status? I wonder if that wouldn't be the decisive factor in determining the outcome of a China US conflict. I'd love to hear your views on the issue. Mr.

[00:15:05] Collingwood, I think you are the best place to answer this question. 

[00:15:09] Andrew Collingwood: Well, I think 50,000 sailors is probably a little bit too high. The US aircraft carrier has about 5,000 sailors on it, and it's unlikely that the US would lose all 10 of its aircraft carriers, but I could well imagine a conflict with China very quickly leading to tens of thousands of deaths.

[00:15:30] So, and I, I, I think the two week time period for that isn't beyond the bounds of reason in the event that the US and China get involved in a direct war, a full-blown war with each other. I think though that while the prospect of such casualties would create, at the very least, caution within whichever US presidential administration was in charge when deciding whether to go to war with China or not, once the shooting starts, Generally the trend in war is that high losses rather than sickening a population and pushing them towards surrender has the opposite effect, and in fact, they tend to lead to even greater and more expanded war aims.

[00:16:31] I think that. You know, it's quite possible to imagine the US losing 10,000 men in a day or two given the, given the numbers of Chinese missiles, given the range of targets they could attack. I mean, Okinawa house, goodness host knows how many US Marines in airmen. Guam would no doubt come under attack bases in the Philippines with no outcome under attack, as well as US Navy surface and submarine assets.

[00:16:58] So it's really within the realms of possibility that the US could have a shocking death toll after a RICO two. I think though that that would tend to lead more. Uh, I wouldn't say enthusiasm for the war, but more determination to win it because there would be very much an idea that, you know, we can't retreat now that we've suffered so many losses that can't be for nothing.

[00:17:21] And patriotism and patriotic feeling would very much come to the fore in, in circumstances where the whole nation was sharing in grief. I 

[00:17:31] Philip Pilkington: think I'm a little bit more skeptical of this than Andrew. I know that Andrew, as a, as a matter of course, tries to avoid American politics. It's a written rule for him as far as I understand it.

[00:17:43] I, I am pretty plugged in on the American politics stuff, and I think the country would have a very, very hard time with this. The country has changed a lot since the Cold War. I mean, famously, John F. Kennedy said, ask not what your country can do for you, but what you can do for your country. I, I don't get the sense that that sentiment rides very high in America anymore.

[00:18:06] I don't mean that as a moral judgment, I just mean it as, as a fact, it's a very consumerist society, more so than Western Europe. More so than Britain, and people really are focused on their day-to-day. It's also a, a place that's very insulated from the rest of the world. I, I think it, it had some outward looking tendencies during the Cold War, but I think those have kind of retreated since then.

[00:18:29] Most people in America who are politically interested, genuinely politically interested, people who watch the news every day or the cable news channels or whatever, they don't think about foreign policy that much. They don't care about it that much. It doesn't show up very high on polls, and it, it mainly seems to be seen as an irritation these days, and I just think it will be borderline impossible to sell those losses to the American people, especially for something that they don't really understand.

[00:18:57] I think it would also quickly result in, in a protest movement, forming, I think what, what listeners. Aren't as familiar with American politics need to understand is that everything in America is partisan now because it's become such a divided society. And the war in Ukraine has been sold to the public because basically because Russia, that any sort of, not pro-Russian, but any sort of Russian tolerance has long been associated with the political right, especially with the figure of Donald Trump.

[00:19:29] Well, China tolerance as it were, has long been associated with the Democratic Party and the Democratic Party and the kind of liberal view of the world is how most people see themselves in America, at least. Most people in the elite. So selling the Ukraine war Ha had as one component that you were attack.

[00:19:48] Russia, which was associated with the political right, and with these election interference to get Donald Trump elected and so on. And also it doesn't cost any direct American lives, at least nobody officially in uniform selling, selling the, the China a war with China where there are people in uniform, and the people that you're, the people that you're trying to convince at that point, to my mind, seem like Democrats.

[00:20:11] You're, you're the, the, the average Democrat is a lot less scared or skeptical of China than they are of Russia. Yeah, and this will be the, these will be the kind of groups that we'll be able to put together the sort of protest movement that you saw on the, in, in the wake of the invasion of Iraq. 

[00:20:27] Gavin Haynes: Okay.

[00:20:27] Well, thank you very much for that. And thank you, Bernard, for your question. Let's move on from that extraordinary, uh, death toll in the tens of thousands and on to a figure called Diplomatico number two. Whose tweets under ha guru? Uh, is that Dutch? I love the podcast. What do you think the new multipolar world means for living standards in Europe slash usa?

[00:20:50] Or in other words, what will it mean for Westerners across their lives when the rubber hits the road on the shift by which he means the shift to Multipolarity? Philip, you are generally known as a captain. Optimist. Do you have anything to, to add on this one? 

[00:21:09] Andrew Collingwood: Yeah, I mean, yeah, come on. Talk to, let's hear some, the first thing.

[00:21:14] Philip Pilkington: Okay. You're not gonna get any sunshine outta me. Not today, but no, I, I'll, I, I think, I think you can give a fairly balanced answer to this. First of all, the West will definitely lose in relative terms, living standards, but that's more so a reflection that the developing world is and will continue to catch up to the West.

[00:21:35] That is a certainty that is not going to change. Now, in absolute terms, w could living standards fall for the West? Yes, they could, but they will only fall if this transition is mismanaged. The problem is that I think, and I think we think on the podcast, that there is a lot of evidence that the transition is being mismanaged, and if it is mismanaged, it means that we will start to, you know, engage in trade wars and so on without fully understanding that we are far more dependent.

[00:22:09] On the countries that we launched the trade wars against, then they are on us. They send us the stuff, we send them paper money effectively. That's not really worth anything. Now that's good for their economic growth, it's good for their export industry, but ultimately we're just giving them paper money, and it's not even paper at this stage.

[00:22:28] At this stage, it's little entries on a balance sheet at the central bank. It's just electrons. That's all we're sending. I'm not, I'm not saying we don't send them anything that we, we don't trade with them at all, but on, on a round of trade balance terms, that's what we're doing. We're also heavily in debt to these countries, so, If we try and pick a fight with them, my fear is that our absolute living standards will fall.

[00:22:52] And what that will look like is quite simply a long period of either an inflationary recession or if things got really bad in inflationary depression, and that would be one in which nominal wages were either fixed or they were even falling slightly, and inflation was eroding living standards. Now, if that sounds familiar, It might because we're halfway there.

[00:23:15] If anyone's noticed, there's no economic growth. We're facing down a recession and inflation's still riding high. And even if inflation comes down from where it is currently, if we get a recession with inflation still chugging along at 4%, that's, that's gonna eat away at living standards. So this is already kind of happening, but it's up to us.

[00:23:35] It's up to our leaders to decide, do we really want to try and dig in here and launch trade wars all over the place and have more geopolitical disruptions? If we do want to do that, then our absolute living standards will fall. If we become more flexible and pragmatic in the way that we approach the world, we should be able to maintain and even grow our absolute living standards while losing our relative superiority to the rest of the world.

[00:24:04] But ultimately, the average Joe doesn't care about the relative picture only. Only our leaders care about that because they fret about. A loss of power in the world, but that's an inevitability. So it's really up in the air. It's, it's, it's what we choose to do from here on in, just to 

[00:24:20] Gavin Haynes: sort of frame pil Canton economics, it seems to me that's a, a big bone of what you talk about, think about, right about is this idea that, that we have misunderstood our relative position to other parts of the world and that we, you know, there is this managed transition coming, but you seem to be almost poking towards a note of optimism there in that there is a, there is a pathway to a soft landing.

[00:24:48] And, and by your view, that pathway comes through fully recognizing what it is 

[00:24:54] Philip Pilkington: we're engaged with. Yeah, so I mean, obviously the point here is to put the Multipolarity podcast firmly at the center of the discussion. If everybody listens to multipolarity and buys our arguments and stops. Acting silly in the way that they make their geo strategy and economic policy, then we'll all be prosperous.

[00:25:14] So really it's all about how many subscribers Multipolarity podcast gets. If we get more subscribers, our living status is full. If we, if we don't, if we don't get the subscribers, then everyone's gonna be poor. It's, that's pretty much it. 

[00:25:27] Andrew Collingwood: Well, I just, I'd like to add a geopolitical edge to this, that at the moment the West enjoys a certain advantage in that most of the trading rules, most of the international institutions and great many longstanding bilateral and multilateral, uh, trade agreements have been dictated by the west.

[00:25:51] They've been arranged by the west and they've been arranged for its benefit. If the West mismanages the transition to a multipolar world, if effort attempts in an effort to. Prevent the transition from a mul, a unipolar to a multipolar world. If in that effort it tries to draw matters to a point and it then loses that conflict, then what very quickly you'll find by process of diplomatic two to force is probably China, but perhaps other countries as well start either completely rewriting or current diplomatic and, and, and multilateral rules or starting up their own more powerful institutions and.

[00:26:47] You know, because China would be then in control of a much larger portion, or, or or dominant over a much larger portion of the global economy than the US countries would naturally gravitate toward that. They would set up their trading arrangements unless their economies to deal with China over the US and Europe, and by making a mess of the geopolitics.

[00:27:09] In the end, the US and Europe would no longer be term setters. There would be terms takers and obviously those terms would be set up more to the advantage of other nations. That doesn't mean that China rules the world. That doesn't mean that China use serves the US entirely. Obviously the United States, even if it was thrust out entirely of Western Pacific or Eastern Asia, whichever way you want to talk about it, it would still be a massively powerful nation.

[00:27:38] Europe would be of extremely large economy with a a, a big population. It would just mean that there wouldn't. Be able to dictate terms in the way that they had and when it, when they've been able to dictate terms, they've been able to set up those terms, both in terms of trade, in terms of defense cooperation, in terms of diplomatic relations to their own advantage.

[00:28:01] And that would no longer necessarily be the case. There would be a, you know, there would be alternatives and perhaps quite hostile, uh, polls within the world. So if it fails to manage this process and it tries to bring matters to a head and then it loses that conflict, then again the, the, there would be a geopolitical impetus towards squeezing relative living standards compared to what they could have been.

[00:28:27] Well, 

[00:28:27] it's 

[00:28:27] Gavin Haynes: nice to know that there is some world in which the west can just, you know, go about our, our hobbit lives and mainly butt out of the, of the rise of China. And, you know, perhaps, Yeah, come away with, 

[00:28:43] Andrew Collingwood: I dunno, even shock horror, 

[00:28:45] Gavin Haynes: better video projectors without having to, you know, sacrifice 10,000 US Marine lives 

[00:28:52] Andrew Collingwood: in the morning.

[00:28:52] Yeah, of course. I mean, we could profit from the rise of China, but not only that, we could compete with them. We could focus on our own research and development, our own industry. You know, we could do all of these things to address some of the, some of the problems of the last 20 years, some of the problems created by the kind of neoliberal framework for globalism.

[00:29:12] We can address some of those problems and by doing that, we can profit from the competition. We can profit from trade, trade with China and trade with Indonesia, Andre, with India. And we can do that in a way that benefits the whole population rather than a tiny sliver. So there is a very positive way of looking at this.

[00:29:33] Gavin Haynes: Yeah, I'm, I'm always slightly in intrigued as to what multi polarities position is on, on free trade. You know, it seems that at, at once, we're very aware of how trade raises all, all boats, and if you don't trade, you lose. But also, you know, that, that it seems that there's been a lot of foolish neoliberalism done in the last 20 years and concentrating on our, on our specialisms, I guess is Ricardian comparative advantage.

[00:30:06] Is there anything that we need to do beyond that? I do think 

[00:30:09] Andrew Collingwood: that the West has gone about globalism in a. I would say they've been indifferent to the nature of the competition they faced. They've been indifferent to ensuring that national and and local industries have a degree of protection. They've been indifferent to a fostering competitiveness.

[00:30:32] Okay. The Asian countries that have been extremely successful and made great hay out of globalization have had governments which are very focused on creating competitiveness. So it's ricardian a comparative advantage, but it's what we could have. Ricardian comparative advantage in South Korea didn't have a comparative advantage in making cars.

[00:31:01] When the, you know, at the beginning of GA when it first signed up for gat, right? It didn't have a comparative advantage of making flat screen monitors and televisions. No, it's built, it's really focused on those sort of things in terms of research and development, in terms of the education system, in terms of the way it's set up its industry.

[00:31:23] And by doing that, they've been tremendously successful in the West. We've been indifferent to that. So while, yes, we should perhaps trade, you know, we should also look at the way that we trade. I think it's the framework of globalization that's perhaps gone wrong. 

[00:31:37] Gavin Haynes: One of the joys of Twitter is that you have to entertain questions from people like eat my shorts, who tweets at Cocoa Lober e m s Eat my shorts, says, what's the bull case for China if they're Belt and Road materializes into lots of underperforming loans.

[00:31:57] It's a pretty straightforward question. Philip, do you have any, any thoughts on that? 

[00:32:02] Philip Pilkington: Yeah, I can't really see why they'd care. Belton Road is basically, you know, I suppose it's an investment initiative, but it's as much an aid initiative that's, I assume, how the Chinese view it. Also, if there's a country in the world that doesn't care about racing ahead with investment and then letting the loans go sour, it's China.

[00:32:23] I mean, it's how their entire investment structure works. They invest in whatever the loans go bad. The ones that, that don't work out go bad, and then they shake them into what are called asset management companies, uh, which means something different there then it means here, and they're buried. They're, they're, they're, they're sealed up in a barrel and buried at the bottom of the ocean, except the ocean in this case is, is a strange financial vehicle that's hidden at the bottom of the central bank basement or something like that.

[00:32:51] So I think China's, they don't care. They, they, they, they view loans and money as a means to an end. It's a partial command economy. It's all factored in. I don't think they're in belt and route to try and make huge financial profits. I don't think they think about that. 

[00:33:05] Gavin Haynes: Does that differ from what the West does with those kinds of aid loans?

[00:33:09] I guess the West just doesn't do it at at 

[00:33:11] Philip Pilkington: scale. Yeah. I mean, no, it's pretty much exactly the same thing. But you're right. They, they don't, they don't, I mean, as, as China's gone belt and road, but the hallowed halls of Western power have been discussing microfinance, which is you give little loans to like farmers or something.

[00:33:29] It's, yeah, they do macrofinance. We do microfinance. But these days, sadly, we should do more macrofinance. Yeah. 

[00:33:35] Andrew Collingwood: And the bottom line is that, uh, well, I mean, first of all, China's always shown a fair bit of willingness to restructure these loans, to increase the terms to, to lengthen the repayment terms, for example, what, uh, outright write down some of these loans.

[00:33:50] But in addition to that, the point is the infrastructure's still going to be there and the influence is still going to be there. I mean, if the loans go bad, it doesn't mean that the rail line that the loans built has disappeared. That's still going to be there, and that's still useful for China from a strategic point of view, if that's what the Belt and Road was for.

[00:34:09] So, you know, ultimately the, the theory is, I, I, I don't know enough about internal Chinese politics to say if this is true, but the theory is that as Chinese leaders are a keen student of history, they looked at the 1930s US oil blockade on Japan. Which threatened to bring the Japanese to their knees and precipitated the attacks on Pearl Harbor and Singapore and the Philippines to capture the natural resources that the US had blocked the Chinese wanting to avoid that kind of devil's alternative, going to war with the United States or being brought to its knees, has attempted to create the Belt and Road initiative, which primarily is involved Inland's logistics roots, uh, roots across the Eurasian land, mass towards, its a key markets in Europe as well as a string of pearls, a string of ports across the Indian Ocean as far as the Middle East for its oil.

[00:35:11] And if all of those loans go bad, then that logistics stuff is still there and available for the Chinese to, to, to use. Right. So I'm, I'm not all together certain that the whole. Belton Road. Bad loan stories are, are particularly important or big one. I think it's often used by a western media to kind of paint China as a kind of a loan shark who deliberately gets third world countries into debts that they can't afford to pay back.

[00:35:40] But I'm not sure it's a big deal. Moving 

[00:35:43] Gavin Haynes: back into the Western Hemisphere, we've had several questions this week from Risa Kovac, which is, is Poland on the path of becoming the undisputed heavyweight in the Eastern European Union? Philip, you caused a stir online. Some would say, others would say you were set upon by angry polls because you, I guess, made an intervention about the Polish budget and whether their levels of defense spending were were sustainable in the long term.

[00:36:12] Do you still think that's the case? Do you think Poland. Can be a regional hemon. Do you think the Eastern European Union will ever have a dominant state in 

[00:36:23] Philip Pilkington: terms of the military spending? It is quite high. I mean, I can understand why the polls want to do it. Obviously there's some rather bad blood there with the Russia has been for a long time and you know, the Ukraine war is probably scary to Poland given that it's on their border, although it's only sort of on their border because it hasn't really spread into the west.

[00:36:41] So I don't really envy them the, the desire to bulk up their military. But the, the question is whether going really all in on this and, you know, spending with this view to be the kind of key regional player. A lot of talk about expanding the inter marriam and stuff like that, whether this is, I guess prudent wise, call it whatever you.

[00:37:02] I personally think it's putting a lot of eggs in one basket. The spending levels are very high. Poland is not a particularly rich country. There is already inflationary pressures there. There is still an energy crisis in Poland as there is in the rest of Europe, but ramping up military spending in the face of those things can be kind of dangerous.

[00:37:22] Also, you know, right now Poland's getting a lot of wind in its sails because America's very interested in the region due to Ukraine. But frankly, after the war, I think it's expected that the US will become less interested in the region and it'll become less interested in Europe as it pivots toward Asia-Pacific region.

[00:37:41] So, you know, Poland have put all their eggs in the BA in one basket here, and I will be a little bit concerned that the basket falls on the ground and a few eggs break in terms of it becoming a regional power. I can't really see it. I mean, it's not a very wealthy country. It's diplomatic ties with Europe have always been a little bit haphazard.

[00:38:03] There used to be very strong ties. Well, I suppose there still are very strong ties in the viscera group, which is dominated by Poland and Hungary, but Poland and Hungary have taken polar opposite sides on the war question. And although, you know, they still have good relations, I think probably it, it hasn't been great for relations, you know, in general between the two countries.

[00:38:25] So I, I just can't really see why a relatively, you know, not very wealthy country that doesn't have any special industry or anything like that can suddenly become a regional power. 

[00:38:39] Andrew Collingwood: I'm a little bit more sang green than Philip on Poland's chances. First thing to understand is that Poland is, In a very dangerous part of the world and is not blessed by geography.

[00:38:54] It's surrounded or it's sandwiched between the two traditional and ancient 800 pound gorillas of the western end of the Eurasian land mass. A Germany and Russia. It is situated on flatland. It doesn't have a alpine mountain range or a sea, or an ocean, or a desert or jungle. It's a block invaders. And for this reason, not once, but twice in the last few hundred years, it's been wiped off the map entirely.

[00:39:23] Uh, first of all through the Russo Prussian of Poland, which the Austro-Hungarian Empire in births a laterally through the, a Soviet Empire, where became essentially a, a satellite state of the Soviet Union and had its borders shifted quite away west. I think Poland almost has to go, has to try to expand its power, has to try to build up its military for the same reason.

[00:39:49] It really, after the fall of the Soviet Union, after the collapse of the Soviet Empire, had to join a NATO and the European Union. I think now it has to really try to expand its power through diplomatic ties, through becoming the, the major military power within the region. And I think there are fairly good opportunities for Poland to achieve that.

[00:40:10] Philip is of course, right, that the financial things. Side of things are quite precarious, but as the United States retreats from Europe as ultimately it probably will eventually the, you know, the realities of the American situation its need to balance against China will trump the ideology of the neocons who are really fixated on Russia and Europe.

[00:40:33] I as America withdraws. What it'll try to do, I believe, is replace physical troops and material with support, financial support, and probably technology transfer support for key allies within the region. And what it'll do is it'll select those key allies. Based on their existing capacity. And I think really there's only one game in town for that.

[00:41:00] And, and that's Poland. So I think in a way, what Poland can do is it can import arms and technology and it can export geostrategic usefulness. That's going to be the deal from here. And, and, and it can kind of cover the gap in its financing and perhaps its current account with its such usefulness to, to outside powers.

[00:41:23] And, you know, in terms of expanding through Vira or the inter Marion, which is a kind of, uh, re-imagination of a classic Polish idea to create a block between the, the Baltic and the Black Seas and the, the Baltic, the Black and the Adriatic seas. To, to that, that would be able to counter the size and the scale of Germany and Russia.

[00:41:46] A as for that, You know, we have to remember that this is a relative game. You know, Poland might not be a particularly rich or large company country, but it's recently had a large influence of Ukrainian refugees who are culturally and linguistically reasonably similar to Poland. And in addition to that, it's relatively much stronger than most of the countries to south.

[00:42:08] So most of the countries in, in central and, and, and southern, eastern Europe, it is much stronger than those countries. And it would be natural that, you know, it's never gonna create an actual empire in the old fashioned sense of the word, but it would be natural that such a block could be led by Poland and, and, and with a little bit of give and take, Poland could be the leading power in such a block and benefit from that.

[00:42:34] So I'm a little bit more sang green than Philip, but of course, These things are very fraught, as Poland has shown multiple times in the past. 

[00:42:42] Gavin Haynes: Yes, it tends to come and go Poland. The next question comes from Francisco 40 23, 1 on Twitter. Francisco says, how likely is it that the US is headed towards an impossible situation regarding interest rates?

[00:42:58] If rates go up, everything starts to break, as seems to be starting to happen. If rates go down, inflation starts to accelerate. 

[00:43:08] Philip Pilkington: Yeah, I'd, I'd say we're already in the impossible situation. I think I wrote something about this for Newsweek. Geez, it must be 18 months ago, or something like that. Zero interest rate policies are like a, you know, crack habit or something like, The whole economy's addicted to them.

[00:43:23] They probably were never wise to begin with. Did they even promote that much growth? I don't really think so. I don't think dropping the interest rate any lower, lower, pumping, all this money did actually that much for growth. So the whole economy got addicted to these things. And I think the assumption from the policymakers in the central bank was we'd never see inflation again.

[00:43:44] And what we've learned is never say never, because now we've seen inflation again and, and so yeah, monetary policy in the in the west is clearly stock, not really clear what the outcome of that's going to be. They may just have to kind of, You know, rip the plaster off, trash the whole financial system, generate a recession and try and get the, the financial system back to back to normal and, and being capable of dealing with, you know, a normal plus three plus 4% rate of interest.

[00:44:14] But yeah, we're already in the impossible situation. 

[00:44:16] Andrew Collingwood: Yeah, that much is apparent. The inflation is still quite high in the US There's still plenty of liquidity, it seems sloshing around the money markets and yeah, we're already seeing the banks going to the wall and, uh, the financial sector in general squealing with pain.

[00:44:32] The other question, of course, is that the e ECB is still raising interest rate as well, and Ian Banks, as is well known, are far from safe and secure. So that might be another shoe to drop. I agree a hundred percent with Philip, it's an extremely awkward situation. Will they go the Paul Volker direction and just in the words of Paul Krugman increase interest rates until vulgar decided that the economy had had enough?

[00:45:01] Or will they accept a reasonable, a reasonable amount of a fairly high level of inflation to save the financial sector? Who knows? But this is really in devil's alternative territory now, I would say 

[00:45:14] Gavin Haynes: we have a question from longtime friend of the pod, regular commenter, Roger Hesketh, who I believe is something to do with the S SDP that you are a part of, Andrew.

[00:45:27] Anyway. Roger says, do you think this was, this question was written slightly before the events of March 20th when Xi Jinping and Vladimir Huon met in Moscow. He says, do you think Xi Jinping will bring an oven ready peace deal to Moscow next week? Do you think President's Putin and Zelensky would be agreeable to entertaining the notion and do you think the latter would be allowed to, but what it's worth, I think any text will have had prior Moscow approval.

[00:45:58] And the latest, as, as I understand it, is that, uh, Xi Jinping did come with something that, that was oven, Andre and Andrew, perhaps you know more about the status of that and you know what, where it sits on the diplomatic chess board. Well, the 

[00:46:13] Andrew Collingwood: simple answer to this is, and we can be very brief about this, it doesn't matter what is in the peace deal, the United States has al already said that it's going to reject that peace deal.

[00:46:24] The senior members of the Biden administration have said that any peace deal proposed by China is unacceptable. And that's that. And this would be the second time. Now, I guess if Russia is very keen on this, it would be the second time that the US had ged, a peace deal at a, you know, various stages of negotiation.

[00:46:46] It did so, uh, in spring last year as well. And here we are again. The bottom line is that. The war will only end when the US says the war is going to end. And that's really that. So it doesn't really matter what's in the peace deal, but that's the bottom line. And I'm afraid sad to say that Mr. Zelensky and his fellow travelers in bank don't really seem to have much say in the matter.

[00:47:14] Yeah, 

[00:47:15] Philip Pilkington: I push back on that very slightly. The game of diplomatic and international relations is a reflexive game, always is. So even rejecting things has consequences. And in this situation, the rejection has enormous consequences because the official position of the United States up until a few days ago was that a peace deal will happen when the Ukrainians want a peace deal.

[00:47:39] America coming out and saying, we will not accept a peace deal put on the table by China. Moves the chess board, it moves the pieces around the board. In, in insofar as the United States position has changed, officially, it has changed. And at the same time when this, I, I dunno if, if the Ukrainian government has reacted to the, this peace deal this time, but when it was initially floated by the Chinese Zelensky said he was open to looking at it.

[00:48:07] And while it's probably true that at the end of the day the State Department makes a call on this, these kind of reflexive moves around the board can have a pressure of their own. So I, I wouldn't completely dismiss what's happened in the past few days. The, the final thing to say is that, is that the world is watching and China's putting a piece deal on the table and America is now explicitly at rejecting that, that takes a lot of rhetoric.

[00:48:31] Ammo out of the, out of, out of America's toolbox. Terrible mixed metaphor. Probably ammunition belt would be the correct, I follow on metaphor, but so, so, so even the fact that this probably won't go anywhere in the near term is having an impact of its own. And I don't think we should dismiss that. We have a 

[00:48:49] Gavin Haynes: question from swamp, ghost Swamp, ghost 32 on Twitter, who actually asked a multi-part question.

[00:48:56] But for concision sake, we are going to take the first part of that question, which is bullet pointed one situation in Mexico, particularly given the past week of headlines, I know nothing about the situation in Mexico except that it is hotter and pleasant. And what are the past week of headlines? Is this, is this something I should be concerned about, Andrew Cullingwood?

[00:49:18] Andrew Collingwood: Well, what basically happened was a group of American lawmakers, a formerly general, got together. And essentially announced that they were most unhappy with the way that the Mexican government has been dealing with the drug issue. Of course, vast quantity of drugs, especially really a prominent ones like fentanyl, are smuggled across the Mexican border, into the us, across the Rio Grande, and caused untold problems in the United States.

[00:49:49] So these lawmakers had basically severely criticized the Mexican government for that. They had spoken about bringing legislation forwards to label the Mexican drug cartels, just organizations. They'd called for the greater use of American force and basically demanded that the Mexican government came to heal.

[00:50:10] Now, the first thing to say about this, it seems a little bit strange given that the Mexican government in the US already cooperate quite strongly on the drug issue. But secondly, I suspect it might have more to do with the fact that. The A M L O government, which is short for the president's name. Has undertaken a series of steps recently that perhaps haven't gone down well with American corporates who obviously through NAFTA are quite heavily invested in Mexico.

[00:50:41] So things like increasing the minimum wage, enforcing food, labeling laws, um, Prohibiting the outsourcing of labor. At a third parties, they've looked to strengthen energy independence. They have put restrictions on the agribusiness, especially with relation to genetically modified crops. And they've even nationalized a lithium deposits, which was a subject we spoke about in a previous episode of Multipolarity, that lithium is going to be a very important commodity in the coming decades.

[00:51:13] So all of those things have probably displeased the American government and low, they are worried about the, uh, suddenly worried about the drug issue. I would say this though, ultimately probably Mexico and the US will come to an agreement. The US is so much more powerful than Mexico. That, and you know, Mexico has no outside help.

[00:51:33] It doesn't have a kind of China or Russia at its back or something like that. So ultimately, Probably has to come to an agreement with America and therefore probably will come to an agreement with America. One thing I would say about this is a word of warning for this kind of high-handed behavior. You know, we just had four years of Trump who used some pretty nasty oish language about Mexico.

[00:51:57] Now we have I, the, the, the Biden administration, but a whole bunch of lawmakers. The, the usual suspects like Lindsay Graham and Ted Cruz and Marco Rubio using, again, pretty unpleasant language, one of them called Mexico and Narco State. The reason why the US is so powerful in the world isn't just that it has a giants economy and a great strategic depth of natural resources and human resources and the manufacturing and industry.

[00:52:23] It's also because, It is surrounded in by two oceans, which really give it a lot of protection. And it's only two neighbors. Canada and the Mexico are much smaller, and actually for various reasons, quite Pacific, that they're not militaristic. They have fairly good relations with the United States. Now, if at some stage the US really had a falling out with Mexico, especially given the large number, the, the, the huge diaspora of Mexicans within the United States, that would start to create an issue for the US where in its region it wasn't a hundred percent dominant and things weren't smooth sailing.

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