Multipolarity: Episode 9

An OPEC for Lithium, World War Three, The Goulash Archipelago

 

[00:02:00] Andrew Collingwood: Coming up this week. Lithium is a metal that will define the 21st century and as rumors of an opex style cartel start to swirl. We're trying to find out which country is the next Saudi Arabia. America 

[00:02:12] Philip Pilkington: seems to have been blown out of the bathtub in war games model against.

[00:02:17] Is the next generation of dominant weapons actually on Ali Express. 

[00:02:20] Andrew Collingwood: Finally, Hungarians have kept warm this winter by keeping on the right side of Putin. Has this EU member gone rogue, or is it just the first country to master multipolar thinking, but first, Heavy 

[00:02:33] Philip Pilkington: metals, 

[00:02:35] Andrew Collingwood: as listeners will know, western governments and even to a certain degree, governments in places like China and the developing world are really making a lot of effort to push economies, to make a green energy transformation.

[00:02:48] They want a. All of our energy and all of our transport to come from green renewable sources in actually quite a short period of time. Now, one of the crucial elements of that, one of the crucial natural resources will be lithium, which is the metal that's used that comprises the majority of all lithium ion batteries, which are used in everything from mobile phones and computers, right up to the Tesla cars that are supposedly the wave of the.

[00:03:18] Lithium is going to be one of those resources where increasingly governments are going to be, or, or nations and countries or companies are going to be searching out lithium and scrambling to secure lithium in order for their economies to be able to run efficiently if they're going to make this green transformation.

[00:03:36] Now, two things have happened this week that are very interesting in the lithium market. First, The price has plunged. Lithium is actually traded in Chinese Yuan. That's where most lithium is are traded, so that's the currency it's traded in. So after hitting an all-time high of almost 600,000 Yuan per ton last November, it's actually now sunk by almost half to 362,000 Yuan per ton.

[00:04:06] And this has been driven apparently by two forces. First of all, the drop. In the growth rate of electric vehicle purchases, but also an influx of new lithium supply from places like China and Australia. The second thing that's happened, which I think is very interesting, is countries that at present account for over 60%, or actually almost two thirds of the current global lithium supply, so four countries from South America who.

[00:04:36] Currently account for almost two thirds of the global lithium supply, which is Argentina, Chile, Bolivia, and Brazil are talking about gathering their forces and creating a, a lithium equivalent of opec, which I suppose would seek to increase or decrease the supply of lithium on the global market to tightly control the.

[00:05:02] So I think this is very interesting because we're starting to see now both with the accelerated pace that new lithium supply is coming onto the market, but also efforts from current suppliers of Lithium to perhaps Carly the supply with a view to controlling the price a little bit more effectively.

[00:05:22] We're starting to see the formation of what looks very much like it's going to be a crucial natural resource for the future. I don't wanna say it's going to be like oil was because that really in the 20th and, and, and, and even now that the 21st century is, is a paramount of cardinal importance to the global economy.

[00:05:41] But certainly we're starting to see the hints. Of something that is going to be a, an extremely important for the future, and we're starting to see hints of how that's going to play out economically and geo strategically. Uh, 

[00:05:56] Philip Pilkington: I think it's, as you alluded to, lithium will probably end up being a very.

[00:06:00] Important resource, whether or not the electric vehicle revolution and the greenification of everything happens, I think we're probably slightly less bullish on average than most people on that on the podcast will be fair to say, or at least I am anyway. But it doesn't really matter because lithium is extremely important and battery production.

[00:06:21] And batteries just keep proliferating everywhere. As you said, from your mobile phone to your laptop computer, it's almost certain that, you know, smaller battery units will eventually come so that people can store solar power that they can generate on their route and stuff. I mean, this stuff all seems fairly realistic whether we get to the situation where self-driving electric vehicles are everywhere is a different.

[00:06:42] It certainly is becoming a, an increasingly important metal. I think the other thing that's really interesting is at the same time as we're breaking apart the world into, you know, regional blocks and, and, and engaging in sanctions here and there and everywhere, we're also in a world where I suppose, due to globalization and due to new technology, we're becoming increasingly dependent.

[00:07:06] On these unusual things that happen to be tied to the geographies that they happen to be in. You know that they're sort of manna from heaven sprinkled around the earth and we, we, you can't really innovate to get access to them. And I thought the other story that was very interesting this week in relation to Lithium is that Iran is now claiming that they've discovered what could be.

[00:07:27] The world's second largest single lithium deposit and the Iranian Ministry of Industry mines and Trade believes that the deposit that they found holds about 8.5 million tons of lithium. Just to give some sense of that, the third largest lit lithium producer in the world is Chile. And Chile is thought to have about 9 million tons.

[00:07:51] So it's pretty much in comparison to Chile. The fourth largest producer is the United, or the fourth largest reserves are thought to be in the United States, 6.8 million tons. So Iran is going to be fourth. Now, if these, if these deposits turn out to be correct and it's going to have more lithium reserves, then America, well, what does that do?

[00:08:11] If we believe what we've just said, that lithium is going to be an extremely important metal. And resource moving forward. It greatly elevates Iran's importance on the global stage. And I think again, we can take a little bit of a victory lap here on Multipolarity cuz often I think the response, um, Maybe, maybe not.

[00:08:32] You've received. I've certainly received on Twitter when we talk about the formation, especially in the expansion of the BRICS Plus, that some players that are joining them are irrelevant. So Iran, for example, is only regionally relevant. It's, it's highly relevant. Some people argue to the Middle East, but it's not really, doesn't really matter that me on a global level.

[00:08:53] I, if Iran, which they have signal that they want to join the BRICS, it doesn't actually make that much of a difference because you know, Iran, while it may be very important with respect to the se, the security interest of Israel, Saudi Arabia and so on, it doesn't really matter. On the ground scale of things to the United States, to Europe, to China.

[00:09:14] Well, not really anymore. So we've been thinking about the world for the past 30 years or 40 years in a globalization framework that barriers and so on don't really matter. Now we've switched to a, a mode of thinking where we think we can erect barriers very easily, sanctions, trade barriers, and so on.

[00:09:32] Yet at the same time, Stuff like lithium is cropping up and stuff like Iranian, lithium is cropping up and suddenly that all becomes very, very difficult to think through. 

[00:09:43] Andrew Collingwood: The first thing to say is that you're a hundred percent right to say that even if you are. Quite skeptical about the ability of Western nations to follow through on their professed green economy I ideals.

[00:09:58] Even if you don't think they're going to achieve those goals, even if you don't believe that it's going to be possible, well, the consumption of lithium is still increasing at a fair clip, so, 2021, the consumption increased 33%. So in 2020, 70,000 tons we used, and in 20 21, 90 3000 tons were used. So already it's increasing at a feral rate, and that's before electric cars or any of the things that governments are talking about really come in at a, you know, at a rapid pace.

[00:10:35] 2021 was, of course a, a pandemic recovery. As well. So it's, it's something that is increasing already and will continue to do so. I happen to think though that whether it happens sooner or later, you, you know, you might not think that the European Union or, or, or Democrats in the United States or, or, or Britain or are going reach their green energy targets.

[00:11:02] When they say they are, but the point is that they've already put in place policies and in some cases, legislation to move in that direction, so they might miss the targets. But you tend to find with bureaucracies like the European Union, once they start moving down a certain course, It's incredibly difficult to actually shift them away from that.

[00:11:25] And in the United Kingdom, the Conservative Party, which is the right wing party, which is the party that you would expect to be least interested in, green Matters, is fully on board. A hundred percent on board. So I think certainly in Europe and probably in the United States as well, the need for lithium is going to go up as we move toward more distributed and renewable energy, and we need storage and local storage.

[00:11:53] Grid scale storage probably won't use lithium. It'll use other energy storage methods, but certainly local storage, which we'll still need a lot of or storage for short periods of time, three or four hours. We'll need lithium ion batteries if we move to electric cars. If, if Elon Musk is proven correct and everybody starts driving electric cars, whether they're self-driving or not, that's.

[00:12:20] Also going to, you know, require a huge amount of extra lithium. And as you say, the batteries themselves are just proliferating for non-green related to my mobile phone isn't so green, but that's gotta fairly big old lithium ion battery in it. That can power, power a big screen for a long period of time.

[00:12:40] So, This is all gonna happen. The second thing that you, that you mentioned is that you're right, this, as this develops, it is going to change trade links and these trade links are going to be required. And one of the signs of that is you look at the places that are really investing heavily in bringing lithium.

[00:13:03] Deposits online. One of the reasons that the price has fallen so much is that China is investing very heavily in expanding its lithium mining and refining capacity. Now, that's clearly an effort by China to become self-dependent in something that it thinks will be an important natural resource of the future.

[00:13:25] You know, it obviously is, and as, as the need increases, you might get a a, a large number of deposits coming on stream, but it seems to me that the, the global requirements are gonna increase a huge amount. I think you shared on Twitter, actually, Philip, I'm not sure if you remember this, but I think you shared on Twitter that if we're going to meet the green energy, And transportation targets that have been set by various governments by the middle of the next, the middle of, or the early part of the next decade.

[00:13:55] Then we're going to have to mine and refine more lithium in the next 10 years than we have done. The entirety of human civilization. So that tells you something about the, the growth of this. And I think you are absolutely right in terms of how that's going to affect trading systems, how it's going to affect efforts to move towards more protectionism as we're seeing in the United States.

[00:14:23] And, uh, certainly it's going to affect the geopolitics of the world in the same way that any other natural resource that's important to economies. Like oil being the most famous example, but also things like copper from places like Chile, which has had an effect on geopolitics in the past, you know, as they do 

[00:14:42] Philip Pilkington: World War 

[00:14:43] Andrew Collingwood: ii.

[00:14:44] But one of the things that we're talking about in the move to Multipolarity in and China seeking to gain a certain degree of self-reliance in at least one important natural resource, but I'm sure others too, is. Recently in the kind of the, the geopolitical side of Twitter and also the kind of the, the intellectual and policy side of social media and the opinion columns of newspapers in general.

[00:15:11] There's been a lot of talk about the emerging. Great power conflict between the United States and China, and certainly this is a subject that we and Multipolarity have talked about a huge amount. Philip, it, it, it's been one of the, the most, uh, commonplace and the repeated topics of discussion for you and I, sir.

[00:15:30] And. This week there has been an extremely interesting and very long article or essay, I would say in the Wall Street Journal, one of America's premier and most influential broadsheets. Arguing that in fact, the United States is simply not ready for a great power conflict, and by conflict it means military conflict with China.

[00:15:56] At the moment, it argues that the United States has spent far too long fighting counterinsurgency wars, which are. Completely different type of war to the, the sort of wars that you get into with a peer competitor. It argues that it's distracted with its involvement in Ukraine. It argues that procurement has not been good in recent years.

[00:16:20] And overall, the thinking, the planning, the training, and the equipping of the United States military simply isn't up to a gray power conflict with China at the. I 

[00:16:31] Philip Pilkington: read this article with some interest. As you say, it's not, it's not incredibly new. There's, uh, plenty of people talking about this on Twitter.

[00:16:39] It's been a longstanding lamentation in certain quarters that the, that the United States became too bogged down in the war on terror. After 2001 and into that kind of counterinsurgency thinking, the article notes this actually, it discusses, it gives some interesting historical context on that about how prior to, to, to, to the attack on the World Trade Center, that there, there was actually a, a thought about pivoting to gray power conflict and that was all buried by the War on Terror.

[00:17:08] That said, I. I don't think I was fully convinced by the article in a lot of ways. I, I know it says it's part of a series, so we'll see. I mean, maybe the, the subsequent chapters are a little bit better. I mean, a few things stood out to me. I mean, the first was the, the recognition of the reality of new missile technology, the recognition that it actually might slightly change.

[00:17:31] The game on how war is fought, especially the type of war that the United States might be looking at. In the state China Sea, they quote an Air Force officer who simulated a Chinese push to take control of the state China Sea. And, um, uh, he said that, uh, very quickly during the war game, China's well-stocked missile forests had rained down on the basis and ports the US relied on in the region turning American combat, combat aircraft am.

[00:18:02] Into smoldering ruins in a matter of days. The officer's response was, holy crap, we are going to lose if we fight like this. And interestingly, He went on to say that I was struck how quickly China had advanced and how our long held doctrines about warfare were becoming obsolete. And I thought that was a very honest assessment of.

[00:18:28] My understanding anyway, of what this new missile technology can do. It, it, it basically means that if, if you're in a region where you don't have immediate, you know, supply lines and so on, and you're relying on things like, uh, ships, you're very vulnerable. But I think the issue with the, with the article is it didn't really talk about that.

[00:18:49] I didn't see a single mention of carrier battle groups in the article. My understanding is that the, the missile technology is mostly, at least in a Taiwan situation, would be mostly a threat against carrier battle groups. But no, no. Mention about that. A bit of a dog that didn't bark. Maybe they'll talk about it later, but even he was quoted as talking about the destruction of munitions piles and aircraft.

[00:19:14] What, what about the aircraft carriers was a little strange. And the other thing I noted, Solutions weren't really stated. There was a lot of talk about developing hypersonics, the US developing hypersonics, and they are trying to do this, but developing hypersonics doesn't render. For example, your carrier battle groups resistant to hypersonics, developing hypersonics.

[00:19:36] I understanding is people have been pushing for the development of hypersonics by the US as a nuclear deterrence to make sure that their nuclear deterrence is on par with Russia and China's, and that makes a lot of sense to. But how exactly does making an offensive hypersonic missile if the US made it prove a solution to the problem highlighted, which is your stuff, whether it be aircraft munitions, or a carrier battle group getting hit by the hypersonic missiles.

[00:20:03] What you need is hypersonic missile defense. But of course they won't write about that because. It's not clear that that's even possible. So I, I I just thought it was a little, it was great that, that the discussion is moving on a little bit, but I think it was kind of underplaying the nature of the problems, which may not actually be technological.

[00:20:23] They, well, they are partly technological due to the development of these new technologies, but they may actually be a lot more fundamental than they're letting on. They may not actually have a counter technological solution. That was my feeling anyway. Well, I think 

[00:20:37] Andrew Collingwood: it might be useful to, for listeners to kind of explain at a basic level what some of the military issues are at play here.

[00:20:45] The first military issue is to explain why fighting, for example, in Afghanistan and Iraq for the United States, might not have prepared them for fighting against China or even Russia for that matter. And the reason is that both Iraq and Afghanistan. The wars in places like Libya and the US involvement in Syria.

[00:21:06] And you know, also as we discussed last week in Sub-Saharan Africa, they're all what's called counterinsurgency wars, and they tend to be fought against lightly armed insurgents or militias or terrorists even, who do not themselves have. Things like tanks and artillery and missiles and air forces and all of these things that modern Western armies have.

[00:21:30] These people rely on either the terrain. So in Vietnam, it was in the 1960s, seventies, it was jungle. In Afghanistan, it was the mountains In Iraq, it was the urban environments, and also their ability to blend in with the popul. This sort of fighting is incredibly difficult, but as, as difficult as it is and, and, and as many issues as it brings up, for instance, winning the hearts and minds of the community become important.

[00:21:57] It's nowhere near, nowhere near as difficult or as destructive or as. Intellectually taxing as fighting. Combined arms warfare with a peer competitor who does have missiles, who does have satellites, who does have effective electronic warfare capacity, who does have an air force, who do have submarines and aircraft carriers.

[00:22:21] This sort of war chews up men. And machinery at prodigious rates. It is incredibly complicated to combine forces towards points of attack and to avoid enemy attacks all at the same time, across a range of different spheres. And it is really a, an incredibly unique form of war. Now, the United States and na.

[00:22:50] Fought that sort of war in between 1939 and 1945, and then after that it spent another 50 years pro. Planning, training, procuring and, and practicing fighting exactly that sort of wall against the Soviet Union and the Red Army, and the Red Army Navy. However, however, now it's had all of this time. Planning and training to fight counterinsurgency, warfares, which tends to be about, you know, individual missile attacks.

[00:23:21] And it tends to be about light, light infantry who are, you know, individually very well trained. And it's, it, it's lost a lot of its capacity. It's lost a lot of its muscle memories. It. Hasn't really bought the gear and equipment to the same level that it would have been doing if it had been planning for a peer competition.

[00:23:40] So in that sense it, you know, it's in a little bit of trouble. The other issue is that, The United States has the advantage because what China would be doing in the event of a war would be invading Taiwan. Now, maritime invasions are very difficult. Everybody probably will have seen saving private Ryan.

[00:24:01] They all know how difficult it was on Utah Beach on D-Day, but that was. Against a enemy who was unprepared for that because of the efforts, the, the, the Allied and British efforts to fool the Nazis about where the invasion was going to come. Taiwan will be prepared, even if it's military is only a tiny proportion, so it's gonna be very difficult for the Chinese.

[00:24:23] Of course, it's also gonna be difficult for the Americans because the Chinese are. Fighting a hundred miles or so off their shores. The Americans, on the other hand, are gonna be fighting several thousand, you know, the thick end of 10,000 miles away from their shores. So they're gonna have a lot of logistics and power projection issues.

[00:24:42] The final thing, I think the final basic thing I think we should explain to listeners is the. Traditional way that the US is sought to fight and wind wars as opposed to the traditional way. Some of its opponents have, uh, have thought about dealing with that. So the United States is always sought to gain control of the sea lanes, to gain air supremacy.

[00:25:09] It's sought to, to control these things in order to facilit. Land victories and to build the, the sorts of weapons platforms that allow them to control that. So highly technologically sophisticated air superiority fighter jets. The F 22 came online. More than a decade ago, I think almost two decades ago even.

[00:25:35] And it's still the finest fighter aircraft in the world today because the US invests in that sort of platform aircraft carriers, because we all know now that battleships are obsolete because against air power, they're useless. So the aircraft carrier is in theory what you need to dominate the oceans and to dominate sea lanes.

[00:25:54] Okay, its opponents traditionally have understood that they could never keep up with us spending in this area. So what they've tended to do is go for denial platforms so that they've sort of deny the US the ability to gain air supremacy. They've sort of deny the, the US the ability to gain naval supremacy or control of the sea lanes.

[00:26:21] In the Cold War, that meant that the Soviets invested very heavily in air defenses. And we see even the results of that today with the S 400, which is widely considered to be the finest anti air system in the world. And during the Cold War, what the Soviets also did, when Admiral Gorshkov started building out the Soviet Navy to try to compete with the US Navy, he didn't try to build 11 aircraft carrier strike groups.

[00:26:47] He invested very heavily in submarines. And he invested very, he heavily in air aviation flying from Mumas because these were the sort of things that could destroy aircraft carrier strike groups and would also prevent the US from gaining, you know, control of those sea lanes. And it's interesting that the Chinese have sought to do something similar.

[00:27:08] I think that might be changing now, but they've sought to do something similar, the first step of their build out of their military, which I, I, I think we could perhaps trace back to the period in the late nineties when Bill Clinton SA sailed an aircraft carrier strike group. Through the Taiwan Straits to make a point to the Chinese about their influence in Taiwan, and there was nothing the Chinese could do about it.

[00:27:33] So what they've done since then is they have constructed the most formidable area access, air denial system in the world. It's a bubble that comprises. Tens of thousands of missiles and anti-air systems and anti naval systems that basically seek to prevent anybody from being able to access the space within that bubble.

[00:28:01] And it extends out hundreds of miles away from the Chinese coast. So that fits in with the usual dynamic of us versus challenger nations. But I think recently that started to change with the Chinese, and I think this article was a recognition of that, that the Chinese are now, of course, they have invested very heavily in missiles, which.

[00:28:24] Will undoubtedly cause all sorts of difficulties for us planning, especially with their naval assets because naval assets are big and expensive and they're aren't limitless in supplies. So you really have to protect them, especially things like, you know, Nimitz and Ford class aircraft carriers, which just themselves cost like 5 billion to produce, plus all of the equipment and training and material that go on them.

[00:28:45] But the Chinese are also investing in things like high rent fighter jets. Now they're building out their navy. At a far greater rate than the US is building new ships, they're improving less submarine fleet, they're really starting to build up full spectrum capabilities, and I think that's really starting to worry a lot of the brass and the political leadership in the U, in the us.

[00:29:07] So I thought that kind of overview would be useful and you might be right. I, I think this sort of peer competition is extremely difficult to understand. The one thing I would say though about this is that first of all, the Chinese have built a lot of new capacities recently, but as I mentioned earlier on, combining them together, coherently is extremely difficult.

[00:29:30] Like combined arms is the most diff, it's almost like a game of. Paper, scissors, rock. You know, like, you know, my rock covers your stones. It's kind of like my anti-tank weapons kill your tank, but your infantry suppress my anti-tank weapon and your tank kills my infantry. This is the kind of the difficulties that commanders face to, to, to put this all together in a fluid environment and managing all of these new capabilities and, and managing to marshal them and master them might take.

[00:30:02] Than we expect for the show. It's all well and good. Having the platforms, being able to actually use them highly effectively is another matter. The second thing I would say though is that, and the article did mention that it would be the 2030s before the new American weapons platforms that they would need to fight such a war came online.

[00:30:20] And one thing I would say is that to me sounds very much like the 1970s when the United States was bogged down in a a counterinsurgency. War in Southeast Asia and Vietnam in jungle warfare, and it was really having difficulties there. It, it, it exited that humiliated to a certain degree and militarily it was, you know, really in a bad way.

[00:30:46] But then quite swiftly, you had all of these new weapons platforms. You had the F 16, the F 18, the F 15 coming in high numbers, giving them ex, you know, fourth generation fighter jets, the best in the world. You had the M one Abrams tank a little bit earlier. You had the a 10 tank buster. You also had a whole range of anti tank missiles coming online.

[00:31:05] You had new classes of, uh, ships and aircraft carriers and, and, and, and suddenly by. The mid eighties, the United States was probably the most effective land force in the world. So it, it, it sounds to me a little bit like that changeover period. 

[00:31:20] Philip Pilkington: Yeah, I mean, I think, I think if few, it's a very good overview and I think a few things though should be clarified the articles correct.

[00:31:29] That there was this shift from the Cold War posture over to the counterinsurgency posture. And the article was very heavy on that. But again, i, I, I think it's worth going back to the quote from the Air Force officer at the beginning where he said, I did not have any idea how to resolve these issues by which he meant the missile attack that was simulated.

[00:31:57] Our long held doctrines about warfare were becoming obsolete, long held doctrines. He does not mean the counterinsurgency, he means the Cold War. Esque, great powers conflict, and he means that they're becoming obsolete because of the missile technology. So there's no possibility to just go back to a Cold War mindset and recreate what was there.

[00:32:24] I think that's really, really worth clarifying here, that this is a new problem and for that reason it could. Potentially be an insurmountable problem. Now, I'm not saying it is, although I see I don't see many. I see a lot of arguments in favor that it could be. I think the other thing to clarify is, Everything.

[00:32:42] Everything it seems around China these days is premised on the notion that they will definitely invade Taiwan. Well, okay, so first of all, let's actually think through just very slightly and very briefly, one of the things you mentioned. Respect to the difficulty of that. You were, you, you were giving the example of storming Aha Beach and so on, and people are pretty familiar with what that looked like because there have been lots of films about it.

[00:33:07] As you say, it was basically a surprise stack and it was still very difficult. But I'm not sure if, if that would be the same today. Just, just to be clear, because Taiwan is a hundred miles from the Chinese mainland, and as you say, they have a pretty much unlimited supply of missiles. Omaha Beach would look very different.

[00:33:27] With an unlimited supply of missiles within a hundred miles radius. That would be my feeling on it because any of those pill boxes or defenses or anything can just be smashed on. Those missiles shouldn't be particularly hard. They can fly a lot further than a hundred miles, and there's a lot of them. So that, and, and there's no air defense that can, that can deal with them, it seems, or at least not at any, you know, 90% rate or anything like that.

[00:33:51] So first of all, it's just a different proposition. Second of all, I. Are the Chinese really gonna invade Taiwan? I, I've always been skeptical of this. I'm still skeptical of this. There's, there's, there's a lot of, you know, speculation about it, but I don't think there's a great deal of evidence. It doesn't seem to me to be in the Chinese interest, broadly speaking.

[00:34:11] But one thing as well, to raise, it's, it's another thing that happened this week. It, it seems kind of minor, but I thought it kind of highlighted another angle to this Taiwan situation. There was a discussion on Twitter. Between Elbridge Colby, who is kind of the ultimate China Hawk in a sense, and, uh, the economist Noah Smith, who isn't really into the geopolitics stuff, but he kind of comments on a lot of different things and he challenged Colby.

[00:34:39] On the moral case about Taiwan. Now look, I think broadly speaking, the Multipolarity podcast is a, is a pretty realist podcast. I don't think we are as concerned about moral cases, but the fact of the matter is most of the educated American public and possibly most of the educated British public, are very swayed by moral cases, the moral cases for war, and the reason, for example, that so many.

[00:35:06] Got on board with backing Ukraine was because they saw an aggressor move in, in, in an invasion stance. And no Smith made the point to Colby that, that Colby was complaining that Taiwan weren't beefing up their military support, that they're dragging their feet, that the Americans were saying, you need to do this.

[00:35:26] You need to install all this stuff on there, and, but you also need to do it domestically. You need to conscript people into your. Et cetera, et cetera. And Colby was complaining that they wouldn't do this because obviously the opinion on this is very divided in Taiwan. Smith made the point that they have no obligation to do so, that they are not a D, they are not, uh, a 51st state of America.

[00:35:48] In fact, they are officially recognized as being part of China in terms of, you know, the official recognition. Of America. They have the, that policy has been in place since the 1970s, so he's making the case that America has no moral right to force Taiwan to do anything in this regard. They only have the moral right to arm and help train the Taiwanese if there is a strong domestic impulse to do so on the part of the Taiwanese.

[00:36:15] Again, this isn't something that I thought about that much. I mean, I, I see, I see Taiwan as, as a question of American influence in the. Asia Pacific Region. Region. I think you do too, but I, I think we shouldn't underestimate that. That's how most Americans view it. And actually, the more I thought about it, I really had to think about it afterwards and I said, you know, it's actually gonna be very, very difficult to sell the Americans on this program unless there's a massive sea change of opinion in Taiwan.

[00:36:45] I just thought that was very interesting and it, and, and it's worth kind of folding into a discussion about. 

[00:36:51] Andrew Collingwood: Yes, I do think that. I do think that is interesting, but I also think that Colby is right in that really, it doesn't matter what the people of Taiwan want, actually, the point is that there are two powers here competing against a, one of the most important.

[00:37:09] Bits of strategic real estate in the world and what the people of Taiwan want, what the government of Taiwan want, probably won't come into it a great deal. And I know that sounds horrible and I'm not passing moral judgment on that. You know, I think. Really, it should be up to the people of Taiwan. We believe in things like self-determination and kind of instinctively believe in these things, but I, I, I think it's irrelevant.

[00:37:34] The United States will keep pushing to keep Taiwan on its side of the ledger. And by the way, one thing that a lot of people don't realize is that the United States through its official. One China policy officially recognizes Taiwan as part of China. Okay, so, but I, as I say, the United States will try to keep Taiwan on its side of the ledger, and China will try very hard to move Taiwan to its side of the ledger.

[00:38:07] Now, I think what the Chinese would like, and I think you agree with this actually, I think what the Chinese would like is to allow China's economic, And therefore the increased trade with Taiwan and the increased importance of China to the Taiwanese economy and also within that cross straits as of workers and, and, and populations to.

[00:38:33] Generally take its course and gradually move Taiwan into closer and closer contact and union with China and reunify with Taiwan as the Chinese would put it in that kind of way. And I think you agree with that. The difference between your view and my view is I think that. The United States will fight very hard not to let nature take its course.

[00:38:58] And if they feel that nature is taking its course and that Taiwan is, you know, not necessarily lurching towards China, but even just taking gradual steps that given current trends are not going to stop, then the United States will work very hard to cut those trends and move Taiwan back over and they have a whole suite.

[00:39:22] Ways to do that. We all know those suites of ways to do that and they, in such a circumstance, would attempt to put China in a position where it's faced with a choice of a military option or losing Taiwan perhaps wherever. So that's how I see it. As for the military side of things, you're right, we can't go back to the cold.

[00:39:44] We had the beginnings of increased electronic warfare of precision guided missiles and precision in general, even with bombs and artillery shells as we see now of stealth of networks, weapons platforms, you know, networks, planes, individual soldiers on the ground tanks, artillery platforms, the ships. All working together, all aware of what the other one's doing.

[00:40:09] We had this revolution in the late seventies, a transferred warfare to a certain degree, which we saw in the Gulf War in the late eighties, early nineties for the very first time. And the, the coalition force in the Gulf War where it was still combined arms warfare as recognizable to somebody who would've fought in World War ii, but it was much faster and more destructive and required fewer pure munitions and platforms to actually do the same.

[00:40:35] And it, and it did it quicker as well. What I would see is now we're going towards combined arms warfare that really takes that to the next level. And, and, and really the, the, the logical conclusion of that type of warfare might be that surfer ships like big, expensive surfer ships, like certainly aircraft carriers.

[00:40:56] But even destroyers, which are really the backbone of the US Navy are kind of obsolete because they're just too vulnerable and that, you know, they're just too expensive. A some waltz class destroyers hugely expensive. That's why there are only a few of them. So it, it, it might be that those are simply.

[00:41:13] Indefensible in the missile age. It, it, it really might be it, it might be that fixed defenses are indefensible in the drone and missile age, or it might be that there are ways around that we don't know, but it's clear that the Pentagon is. Probably only just starting to think about this in the last three, four years or, or think about it very seriously.

[00:41:34] They're still struggling with, you know, the procurement issues that they've had. The journal I recommend anybody read the journalist Matt Staler on this. He's got a subset called big. He's talked quite extensively about the way that arms manufacturers in the United States have. Merged and merged and merged over the years.

[00:41:51] So there's now only five of them. And that gives the Pentagon very little options. It, it doesn't create competition in the marketplace, and you tend to get all of these bloated, ineffective procurement platforms. The Zumwald class, which I mentioned, the lateral combat ship, the F 35 was a great example.

[00:42:08] And to go back to one of the issues that you had about Ms. Isles, Philip Wilington, I sort of. Which is a think tank in America. That is a lot of military stuff. It's a very influential think tank. I saw Rand paper years ago about a Taiwan versus Taiwan war between the US and China, where basically the US sent all of its F 35, so all of the ones that could muster in theater.

[00:42:32] Towards Taiwan to comp, to, to, to attack the Chinese Air Force and the F 35 s could only carry four missiles while in stealth mode. So they fired all of their four missiles. A large proportion of them hit the, the People's Liberation Army Air Force Fighters, but there were so many Chinese fighters left that they just came in and mopped up the F 30 fives that were left because the US was so much smaller in terms of numbers.

[00:43:03] So these are the sort of questions that I guess the US are, are starting to grapple with. They're starting to develop longer-range, heavier fighters for this sort of thing. They're starting to look at all kinds of high-tech platforms and. They are very much playing catch up to maintain dominance in that area.

[00:43:18] And I think a lot of people fear the kind of costs, even in a winning battle over fighting 

[00:43:23] Philip Pilkington: Taiwan. I wonder if we couldn't be a little bit more radical about that. Again, you don't wanna make completely grandiose statements given the technology can move ahead. There's a lot of uncertainty here, but. You can at least flow to hypothesis that is quite extreme.

[00:43:37] And it might be that there's been a fundamental change due to technology in Waka and Waka. Before, after the development of nuclear weapons, it was clear that the, the global battlefield became a lot more limited due to nuclear deterrence. And that's the li the world we've lived in for nearly a century now with the development of these new precision strike, high speed missile.

[00:44:00] It could also be the case that wars can only be really fought in geographically close proximity to one another. And if, if, if you, if you're trying to project power over on the other side of the world or thousands of miles away, you might not be able to do it unless you have kind of a firm ally on the ground with the capability of.

[00:44:20] Bulking up, its military forces and so on. I think there's even, there's even been difficulties financing, funding and, and sending armaments to Ukraine, which is, is right there on the side of Europe. I know some of that's due to the fact that we, we haven't got good industrial capacity to build the weapons and so on, but it, it still raises some of these difficult questions.

[00:44:40] It, it, it could be the case that we're moving into a. Where Wars will have to be extremely regional. I'm not saying that is the case or it isn't, but I'm just saying it's worth thinking about because no one's really 

[00:44:51] Andrew Collingwood: talking about it. I think that's a very good point. It could be simply that sea lanes are no longer demandable.

[00:44:58] You're not going to be able to control them a hundred percent as you might like. It might be that you're never going to be able to get. Superiority, let alone air supremacy. So these are all very important. Or maybe you're not gonna be able to get it on expense, a cheap enough cost because you know, the, the, the weapons platforms that you need to command the sea lanes and to gain air, air supremacy are really expensive.

[00:45:24] You know, like an F 35 is not cheap. The 

[00:45:27] Philip Pilkington: goulash archipelago 

[00:45:29] Andrew Collingwood: hungry. Is assessing its own position and thinking about its own position as the world shifts from a unipolar to a multipolar world order. And it's actually had some very interesting things to say about that. And I'm interested as well, because whether you like the domestic policies of Victor Orban or dislike them, I think it's undeniable that Victor Orban, certainly in the last year or so, has.

[00:46:00] Shown himself to be one of the most interesting strategic thinkers. And when I say strategic, I don't mean, again, Embodi does domestically. I mean in terms of how he sees the world and how he sees Hungary's position in the world. He's actually quite a sophisticated thinker on that view. So I'd be interesting to hear what.

[00:46:19] Hungary has in mind for this, this period of transfer from Unipolarity to Multipolarity. 

[00:46:26] Philip Pilkington: Yeah, so this came out of an article by Bala Orban, who's the Victor Hoban's political Director. It's published in the European Council on Foreign Relations. So you know, this will be read by people and it will be discussed.

[00:46:38] No doubt. I mean, I'd say that this article is the first instance of a senior government official trying to articulate. A strategy for a multipolar world. I'm not saying that other political leaders in countries aren't doing this. They are there. There's plenty of evidence to suggest that many countries are now trying to figure out how to deal with this new reality.

[00:47:00] But it's the first time that it's been articulated now. It's articulated and Hungary for very specific reasons and the reasons that Bala Orban lays out in the piece. He, he reminds, he reminds people of the history of Hungary. He, he, he reminds people that the, that Hungary has had a, a very bad experience time and again with block formation due to the, due to the location of Hungary.

[00:47:25] He says that Hungary found itself as a battleground historically between the Christian and Islamic world. Um, and was, uh, was actually occupied by Turkey, the, the Habsburg Empire. It became part of the Habsburg Empire. It later, it was kind of a subordinate partner and its economic interests were subordinated to the industrialized more Germanic regions of the Austral Hungarian Empire.

[00:47:45] And, uh, and then of course it was integrated into the Soviet Union and became effectively stock in the eastern block and was never very comfortable there. It even had its own model of socialism after 1956. They used to be joking, jokingly referred to as goulash, socialism, and actually a friend of mine went to Hungary under goulash socialism in the, in the 1980s and said it didn't actually really look like a, a communist country.

[00:48:09] It was, it was more like, it was more like a halfway house, like Yugo, Yugoslavia, and that's actually not widely known today. So it's worth, worth mentioning. So, so Hungary has this historical perspective that perhaps others don't, but I don't think that fully explains the fact that. Managing to articulate almost kind of a framework for how to deal with this multicolor world.

[00:48:31] Well, the, the, the, the, the. The model that they're putting forward. They're calling it connectivity model, which I think is kind of a, an interesting, an interesting metaphor. And the idea is aided that Hungary recognize that what you might call neoliberalism or globalization has been very good for countries like Hungary because it's opened up trade for them.

[00:48:55] It's allowed them to, to form into one block. In a supply chain in Hungary's case that happens to be a very manufacturing based supply chain. They, they manufacture an awful lot of automotive parts for German manufacturing industry. Um, but they do other things too. A lot of manufacturing though. And so that's, that's been a real boon to countries.

[00:49:16] Like Hungary and, and to other smaller or mid-sized countries at the same time, the Orban government has never really been what you describe as neoliberalism. It, it, it seems to aspire to a form of state capitalism. So basically what they seem to want to do is, is keep the, the connectivity, as they call it, leftover.

[00:49:35] From the neoliberal globalization period and marry it with a form of self-interest, state capitalism. And so I guess he doesn't, BJ Orban here is more so talking about the the economic angle of it, but you can imagine how that transfer is into how you deal with diplomacy. And so on. It, it, it would be, it would be maybe an opportunistic, self-interested mode of being in the world, I suppose, where you, you try and get the relationships that you can and, and you manage, you manage them in that way, but there's no overarching ideology to it.

[00:50:09] It's not all globalization, but at the same time, it's not all protectionism either. And I think it's a very interesting first attempt to kind of actually think through and articulate what this could mean and the fact that it's. In the, uh, in the European Council and foreign relations, I'll bet that an awful lot of other European countries are reading this in private, because obviously Hungary is not the most popular kid on the block.

[00:50:32] But I'd say they're reading this in private and thinking about it an 

[00:50:36] Andrew Collingwood: awful lot. That's extremely interesting and I think that it's a, what it is, it's a. A creative and a penetrating attempt to solve some of Hungary's natural issues, which really can't be overcome. The first, of course, is that it's a, it's, it's a, these days at least a relatively small.

[00:50:59] Landlocked Nation doesn't have free access to the sea. A relatively small, landlocked nation in a very dangerous neighborhood. As you mentioned, it has in the past been controlled and conquered by the, by the Turks, by the Habsburgs, eventually by the Russians through the Soviet Empire, and of course now dominated by the.

[00:51:21] Itself, and I guess to a certain degree by perhaps an overweening, the United States as the kind of unipolar power, which has long seen the European Union in NATO as its bridgehead. Onto the western edge of the Eurasian land mass. And so I think it's very much in Hungary's interest to not to, to, to, to not join one block clearly in a world in which we see a multipolar world order developing.

[00:51:54] Because if they join, say the European or the American block, well, they're pretty close, right on top of Russia. Pretty close, right on top of Turkey, two nations, which have dominated Hungary in the past. They also need free access to the, to, to, to the sea as well. But if they went the other way, they went the eastern route.

[00:52:13] Well, of course Germany's there. The United States is there, and, and, and, and that's not something that they want, that's not a fight they want to get into either. So I think in an ideal world for Mr. Orban and, and, and, and Hungary in general, what they would be interested in, Is keeping relations as open as possible, allowing them to balance between various powers and maintain relations with them, with them all, and gain security by that means economically as well.

[00:52:44] You know, you were mentioning that from a self-interested view. I think, uh, I'm right in saying that you said that they wanted to keep the connections of global. But make up for some of the, some of the failures, if you like, or the weaknesses of the neoliberal system that globalism has tended to involve.

[00:53:03] Philip Pilkington: Is that right Philip? It's a, it's obviously a quite a right wing government, but it is not, and never has been a neoliberal government. It's. It's often known in the west as, as for its anti neoliberalism, they usually phrase it as anti-liberal or illiberalism, but it's not often. So, so. So I think people in the West have a sense that it's a very kind of state controlled economy.

[00:53:25] On the model of, of maybe China or Russia or something like that. I think that's slightly misleading. I, my impression of the Hungarian economy is it's actually very open to trade and there's a lot of international trade, a lot of foreign multinationals and so on. And what the Hungarian State tries to do is it tries to manage that in Hungary's interest.

[00:53:45] To make sure that it doesn't become dominated by the foreign forces of capital industry and so on. So it's actually probably a more modest intervention in neoliberalism than I think, you know, the popular imagination would have you 

[00:54:00] Andrew Collingwood: believe. Right. So that's the impression that I've got that that I've had as well, that if you look at some of the ideas that come out of Hungary through places like the Dan Ube Institute, they are very in favor of things.

[00:54:11] Economic freedom and capitalism as a means of generating wealth and all of the things that post eighties conservatives, certainly in the Anglo-Saxon world would adhere to. And I, you know, I think even in the Christian Democratic, right, Europe as well. But I think it's very interesting that here we have a government who's actually thought about the consequences of the shift to a multipolar world, have thought about it strategically.

[00:54:38] They've thought about it diplomatically. They've thought about it economically that they, they want to maintain the connections so that they can take advantage of trade while at the same time mitigating some of the weaknesses of the neoliberal system that does that. It sounds to me whether that they have perhaps in mind or, or.

[00:54:56] Maybe not fully, so I'm, I'm not sure a European country could fully do this, but perhaps they've been influenced to a certain degree by the, the Asian Tiger economic miracles, the what happens to Japan, to South Korea, to Taiwan, and now is happening in China as well, where they're really sought to take advantage of globalization to, to, to, to believe in free markets and to believe in capitalism, but really get the state involved.

[00:55:22] In building some competitive advantages so that they could pay their way in the world and export themselves 

[00:55:28] Philip Pilkington: to wealth. I think this is probably the way smart governments will go in the future, recognizing the realities of what's emerging and rather than being, uh, strictly ideological about them adapting and, and trying to maintain their own self-interest in a changing world.

[00:55:47] Andrew Collingwood: You've been listening to Multipolarity Subscriber Follow for Fresh episodes every week.

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