Since the Russian aggression on Ukraine in February 2022 (and with additional acceleration after Hamas’s terrorist attack on October 7 last year), in practically all forums and international discussions about the world’s conditions, one can hear how the world order has collapsed, how the United Nations (UN) and the Security Council (SC) are completely paralyzed and disabled, and how the number of wars and military conflicts has increased in recent years (currently 55). In addition, there is a feeling of helplessness as no solution is in sight; many debaters merely desperately repeat that we need more international cooperation and that peace is a universal value.
This is, of course, true, but none of this offers a solution; it is just a convenient escape into wishes, similar to those from a beauty competititons. Nowadays, few dare to speak aloud about solutions, as this almost certainly means talking about the need for tectonic changes in the global political order established after World War II. Here, I’m certainly not talking about Trump’s “solutions” to the war in Ukraine, like “stop supplying Ukraine with weapons, and the war will end.” Of course, the war will end because Ukraine will capitulate, and the Russian army, in its imperialistic delirium, will get even closer to our borders. Therefore, this is not a “solution” or a path to peace but just an additional international security challenge for all of Europe, not to mention Ukraine.
The Predictability of Oligopolies …
Therefore, it’s worth taking a few steps back and looking at the world political order after World War II through the lens of economic market theory, particularly the specifics of so-called oligopolistic markets. Contrary to intuition, in economic theory (and proven in practice), a monopoly position in the market is not the most stable. Such a position allows the monopolist to achieve higher rents than in the case of greater competition, consequently “attracting” more and more new players to the market; if this doesn’t happen, sooner or later, the state intervenes (in liberal market economies, of course). On the other hand, a completely competitive market (with many providers) is not the most stable form either, as the competition for market shares can lead to price wars, so-called dumping, which is unsustainable in the long run, and constant competition for a bigger piece of the market pie. Thus, we arrive at the (theoretically) most stable model, the oligopoly.
Situations where a few players control a significant market share (well over 50 percent) and can dictate market conditions and maintain high margins. In such a position, individual players are not interested in price wars as they can mean their own loss, whether of market share, margin, or profits. Therefore, they have an interest in cooperating, even if covertly and unofficially; they don’t engage in price wars, hostile takeovers, etc., but rather jointly control market conditions, prices, dynamics, and thus also prevent new players from gradually occupying their positions.
Can the characteristics of oligopolistic markets, translated into geopolitical language and international political reality, tell us something new about where to look for a solution to the new global (dis)order?
… and Bloc Divisions
Although during the period of bloc division, the latent threat of nuclear destruction loomed over the world population, today we see that, probably except for a short period during the Cuban Missile Crisis in the 60s, the world – realistically speaking – never came close to the point of nuclear destruction or the start of World War III. Unlike today, when nuclear power Russia constantly threatens the western world that it could use (tactical) nuclear weapons to win in Ukraine – and it is also relocating these weapons to the territory of the neighboring country (Belarus), where the friendly party madman Lukashenko rules.
In addition, researchers of international relations agree that the conditions of bloc division during the Cold War were significantly more stable in terms of the predictability of actors’ (i.e., states’) actions than in the period before that. There were few choices, countries had to align with blocs, and the only alternative was the non-aligned movement, for which many in Slovenia still yearn today, as it provides the (apparent) alternative of ensuring one’s own security in neutrality. But conditions today are significantly different.
The End of the World or a New Order?
After the end of the Cold War, many thought that the period of so-called multipolarity had begun, where multilateralism has significantly more weight than bloc alignments or strategic alliances between countries. The world order was supposed to be based on the rule of law, prevailing over the partial interests of players. In economic terms: we were supposed to live in an era of perfect market competition, where more players (countries) compete, but according to known and accepted rules. But former Soviet foreign minister Shevardnadze said: “We wanted to do the best, but it turned out as usual.”
Instead of real multipolarity, in the early 90s after the bloc division collapsed, we got a monopoly on the world chessboard; the US took the position. At that time, there was no BRICS, nor were China and India as strong as they are today (not only in terms of world population share but also in their share of global GDP, more on that later). The US enjoyed the position of a monopolist in global financial markets, global trade, and, not least, in defense and security. However, mainly with globalization in trade relations, from which all parties benefited, significant changes in power relations have occurred over the last 20 years: mainly China has become an economic superpower, around which an increasing number of countries of the underdeveloped south gravitate. Whether we (in the West) like it or not.
The breakdown of global GDP confirms this clearly: the group of the most developed Western countries, the G7, today contributes just over 40 percent of global GDP (which is significantly less than at the end of the 20th century), while the BRICS countries already contribute nearly 30 percent, not primarily due to Russia, but mainly due to China and India. When we adjust the data and consider purchasing power parity (i.e., adjusted GDP based on the purchasing power in each country), the BRICS countries already surpassed the G7 group in 2021. They thus represent not just a larger portion of the world population but also a significant chunk of the world economy. The findings of most Western political leaders that a larger part of this world does not reflect and live the same liberal-democratic values as Western countries is, of course, correct, but unfortunately, it does not help much in finding the urgently needed solutions in the changed circumstances.
Global Chaos
Given that the central global decision-making centers are created based on post-World War II conditions, today we can hardly expect them (cf. UN) to effectively perform their tasks in the way they were conceived. Such international political organizations merely reflect the balance of roles and power; when or if these change, they almost automatically cannot function effectively without first adequately adapting to the new power relations. This gap between the existing state of roles and conditions and new circumstances is seen as a non-functional system. When the problem is not only that the members of the UN Security Council cannot agree on the text of a resolution for a temporary (!) ceasefire and deliberate extermination in Palestine for several months, but even more that when they manage to reach a common consensus, they cannot (or do not want to) implement it on the ground. We already have more than enough toothless resolutions on paper today.
A similar bitter realization follows the understanding of why extensive economic sanctions imposed by G7 countries have not brought the Russian economy to its knees. Today, we clearly see that sanctions will not bring the desired effect until they significantly reduce the oil dollars flowing into Russia. And these still (fairly smoothly) flow today, as some large economies (China, India) do not follow the sanctions but rather exploit them to achieve their own geostrategic goals.
We, unfortunately, have many similar examples of the world order derailed from its course. At times, the situation resembles a game of everyone against everyone, as even long-standing strategic alliances (e.g., between Armenia and Russia) suddenly no longer work in changed circumstances. Therefore, the magnitude of the world disorder is even greater. How long will it last? Probably until the changed geopolitical and economic conditions are adequately (what is adequate?) reflected in the international order; until this moment, those world challengers whose interests are (rightly or not) largely unheard will try to do practically everything to be heard. There are, of course, more questions than answers. Among other things, how far are they prepared to go?
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I would venture to say that the world-renowned Japanese writer Haruki Murakami does not have much in common with the Hungarian Prime Minister Viktor Orban. But while Murakami writes about two moons creating the parallel reality of the central character in his novel 1Q84, Viktor Orban talks about how there is no longer just one sun (the US) in the world, but two suns (the US and China). Is this a parallel reality or a path to a more predictable oligopoly?
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