Today, I’m reflecting on our fragmented world, why it’s a problem for US tech companies, and (maybe) an opportunity for European ones. Last week my colleague Pietro Invernizzi and I had dinner with Tina Asgari and Erik Torenberg in London. Tina is a seasoned product manager, while Erik hosts a superb podcast, Venture Stories, for his VC firm Village Global. You should definitely check it out if you’re interested in radical thinking (disclaimer: I was once a guest on the show). Like anyone active in the podcast space, Erik reads a lot. You need to read books if you want to identify inspiring guests! So we discussed several notable works, and Erik mentioned Peter Zeihan’s The Accidental Superpower, a book about geopolitics, the coming global disorder, and how the US is bound to renounce free trade altogether and then retreat into itself—both resulting in and a result of a more fragmented world. Needless to say, I immediately rushed to buy the book from Amazon. And I must say, Zeihan’s thinking leaves me with more questions than answers. That leads to a problem, in that Zeihan is already a best-selling author and thus quite out of reach: it’s not necessarily easy to just send him an email and initiate a conversation. On the other hand, he’s not that big of a star, either (yet?), which means that other prominent thinkers have yet to react to his ideas and potentially push back against some of them. Since there are not yet any public controversies about Zeihan’s work, let me simply lay out a few objections that came to my mind:
- I would pay a lot to hear a discussion between Zeihan and Joe Studwell, author of How Asia Works. Clearly Studwell is not a fan of the idea that a nation’s destiny is determined by its geography, with his many East Asian case studies ready to strengthen his point.
- Likewise, I would love to confront Zeihan’s ideas with those of Lynda Gratton regarding the future of work. As written by my wife Laetitia Vitaud, demographics have a very different impact on projected economic growth once you realize our lifespan will soon reach 100 years in a world of ever accelerating technological change.
- Finally, Zeihan’s book doesn’t mention the US’s pursuit of free trade before WWII. Not one single line about FDR or the New Deal! Yet that was when the US embraced free trade. And they didn’t do it for the sake of global security, but rather to serve powerful domestic interests—those of capital-intensive industries (think: General Electric, IBM, Pan Am) and the financial sector (Wall Street).
- You can make the case that free trade benefits the common man. As Cordell Hull, FDR’s Secretary of State, declared in 1934, high trade barriers “shifted the burden of financing government from the rich to the poor; concentrated wealth in the hands of industrialists influential enough to win favorable treatment for their products; and worked not as an effective source of revenue,” but, “by reducing trade, actually lowered revenue” (as quoted in Ira Katznelson’s Fear Itself).
- Free trade is also a way to divide and weaken the business world and thus facilitate pro-worker reforms. Capital-intensive industries want free trade because they need to reach the largest scale possible to maximize returns on invested capital. At the same time, they don’t care about pro-labor reforms because they don’t employ that many workers. So any progressive administration can easily win them over so as to thwart opposition from labor-intensive industries.