TheMarketForIdeas

Perhaps one of the mistakes of the past few decades was not that we believed too much in globalization, but that we spent too much time looking at the glass as half full. And we had good reasons to do so. Trade created prosperity, investment crossed borders, and global production chains connected economies that once had little reason to depend on one another. We thus arrived at a seductive conclusion: the more we stood to gain together, the more we stood to lose apart. Interdependence was supposed to make rivalry too costly to remain rational.

But what if we have been asking the wrong question?

What if the issue is not how much two states gain from a relationship, but what happens to each of them when that relationship stops working? A cheap import means efficiency until it can no longer be replaced. An energy source represents a competitive advantage until the supplier discovers that you need to buy it more than they need to sell it to you. A semiconductor is a product in a global value chain until access to it begins to determine who can develop the technologies of the next generation. At that point, economics does not cease to be economics. But it also becomes power. Perhaps this is precisely where realism becomes interesting again. Not the caricatured realism in which every relationship conceals an adversary and every decision is a move in some grand, invisible plan. The world is far too disorderly for that much order. Rather, a pragmatic realism that reminds us that intentions change faster than interests, and rhetoric faster than constraints.                                                              
We tend to see international politics through the people who represent it because they are its most visible part. Governments change; leaders arrive with different priorities, different words and different promises. Politics can even rename gulfs, lakes and, why not, parks. But it cannot rename geography until geography ceases to matter. A president can be replaced on election night; a state’s geographical position cannot. Nor can its energy infrastructure, industrial capacity, access to resources, technological advantages or dependencies built over decades. International politics has a longer memory than electoral politics. This raises a question more interesting than who will win the next election in a major power: why do different administrations, sometimes elected precisely on the promise of being different, end up identifying the same strategic vulnerabilities?

Perhaps because leaders do not merely shape the system. They are, in turn, constrained by it.

This is also why the old image of the world as a chessboard is no longer enough. There are too many players, and the pieces do not always belong to the one who appears to be moving them. States remain essential, but a company may control a technology without which an entire industry cannot function. A market may be too large to ignore. A currency may turn access to the financial system into an instrument of pressure. An institution may set a standard that companies thousands of kilometres away ultimately have to follow.

Sometimes, the most important position on the board is not even a piece. It is the part of the board without which the others can no longer play.

That also changes the way we think about power.

We have grown accustomed to measuring it by what an actor possesses: territory, population, GDP, military power or resources.

Yet in a world built on networks and dependencies, power increasingly also lies in what others cannot afford to lose from their relationship with you. Seen this way, interdependence is not the opposite of realism. It is one of the spaces in which realism manifests itself most clearly today. And this is where pragmatism may prove more useful than trying to decide whether liberalism or realism was ultimately right. Interdependence has created prosperity. The realist has no reason to deny that. But it has also created dependencies. The liberal can no longer afford to ignore that. Pragmatism begins precisely between the two.

The European Union is perhaps the most interesting paradox of this transformation. It is one of the most ambitious political projects built on the idea that interdependence can tame power. Markets, rules and institutions have succeeded in turning rivalry into cooperation and openness into a distinct form of influence. And yet it is precisely this Europe that now speaks of de-risking, economic security, investment screening, diversification and strategic autonomy.

I do not think this means that the liberal project has failed. But it raises an uncomfortable question: what happens when a power built through openness discovers that openness itself can create vulnerability? The instinctive response is protection: fewer dependencies, more alternatives, more control. Yet here, once again, we risk looking at only half the glass.

Becoming harder to coerce does not automatically mean becoming more influential.

Europe can reduce a vulnerability without creating something that others need. It can become safer and, at the same time, less relevant. And in a world of interdependence, power comes not only from being able to say, “I do not need you,” but also from making the other side recognize that you cannot easily be replaced. The question, then, is how we remain connected without confusing connectedness with security. Which dependencies are we willing to accept, which should we diversify, and in which areas should we ourselves become difficult to replace?

All of this seems abstract until suddenly it is not. A decision about energy ends up on a utility bill. A blocked trade route becomes a higher price. A technological restriction reaches the factory floor. Grand strategies have the unfortunate habit of becoming very concrete for people who never took part in designing them.

I do not believe, therefore, that we are simply witnessing the end of globalization. That would be too convenient an explanation. Nor are we witnessing merely the “return of geopolitics,” because geopolitics never went anywhere. Something more difficult to define is taking place. The world remains deeply connected, but it is beginning to rediscover the power hidden within its own connections. And that leaves us in an uncomfortable position. Interdependence has made us more prosperous, but it has also made us vulnerable. Reducing it may make us safer, but it may also make us poorer or less relevant. Neither absolute openness nor absolute autonomy offers a satisfactory answer.

Perhaps the next ten years will be shaped precisely in the space between these two extremes.

I do not think the question will be who manages to escape interdependence. Probably no one will, and perhaps no one should. The question is what happens when the great powers simultaneously begin to see the same connections not only as sources of prosperity, but also as instruments of security, influence and power.

…If independence is no longer possible, and dependence can no longer be innocent, who will manage to turn interdependence into power without turning cooperation into confrontation?

Photo source: PxHere.com.

Recommended readings:

Bradford, A. (2020). The Brussels effect: How the European Union rules the world. Oxford University Press.

Farrell, H., & Newman, A. L. (2019). Weaponized interdependence: How global economic networks shape state coercion. International Security, 44(1), 42–79. https://doi.org/10.1162/isec_a_00351

Farrell, H., & Newman, A. L. (2023). Underground empire: How America weaponized the world economy. Henry Holt and Company.

Gopinath, G., Gourinchas, P.-O., Presbitero, A. F., & Topalova, P. (2024). Changing global linkages: A new Cold War? (IMF Working Paper No. 2024/076). International Monetary Fund. https://doi.org/10.5089/9798400272745.001