Civilisation matters

Faced with militant Islamism and an authoritarian China, the West must find the courage to believe in itself

Towering columns

In Compact Magazine, Michael Lind says redeveloping a domestic industrial base will be crucial to winning the new Cold War against China.

In the age of formal industrial imperialism and colonialism from the mercantilist era to the first half of the 20th century, coercive colonialism—in the form of formal annexation or bullying weak trading partners into submitting to “unequal treaties”—ensured that the consumers in the colonies would be allowed to purchase only the high-value-added manufactures of the metropole. Free trade makes sense for a modern industrial great power only as long as it has an unmatchable lead in high-value-added, dual-use manufacturing, like Britain after 1846 or the United States after 1945. Conversely, as other great military-industrial powers rise to challenge it, the liberal hegemon should abandon free trade and adopt strategic protectionism again, to hold its own in a multipolar world. Britain should have abandoned free trade for strategic trade by the 1890s, in the face of the rise of protectionist America and Germany. And the United States should have abandoned free trade for strategic trade in the 1970s, in the face of often-unfair competition from Japan, South Korea, Taiwan, and West Germany, even before the rise of neo-mercantilist China. In both Britain and America, the political influence of financial interests and overseas investors—the City of London, Wall Street—blocked measures to combat industrial decline.

Eras of relatively free trade have been brief blips in history, associated with the temporary hegemony of a manufacturing superpower like mid-19th-century Britain and the mid-20th-century United States. Most of the time, rising powers need to practice strategic import substitution to create their own industrial bases. Declining powers should return to strategic import substitution or adopt reciprocal trade policies to prevent their deindustrialization, whether by great power competitors or their own greedy and disloyal corporations and capitalists.

The more national and regional centers of manufacturing power that a great-power bloc or alliance contains, the more productive and secure it will be. In his 1967 memoirs, the celebrated American foreign-policy practitioner and strategist George Kennan argued that the purpose of the Cold War strategy of containment should be to exclude the Soviet Union from 4 of the 5 industrialized regions in which “the sinews of modern military strength could be produced in quantity”—the United States, Britain, the Franco-German Rhineland, and Japan. The goal of containment wasn’t merely to deny the Soviets access to German and Japanese industrial resources by deterring Soviet invasion and occupation. It was also to use a common allied embargo to prevent the Soviet Union from adding German and Japanese manufacturing capacity to its own through peaceful trade. The weapon that was most essential to the victory of America’s Cold War alliance system wasn’t the atomic bomb but the Coordinating Committee for Multilateral Export Controls, which starved the USSR of access to Western markets, technology, and investment. During the first Cold War, America fought proxy wars against the Soviet bloc in Korea and Vietnam, peripheral areas of no intrinsic strategic interest to the United States, in part to reassure Japan and West Germany of American credibility as a protector, to discourage them from drifting into neutrality between the blocs.

Also in Compact, Jonathan Rutherford says Brexit represented a call for a new socio-economic model reflecting a new centre ground.

In Europe as in America, a progressive liberal culture, laying claim to universality, facilitated the new model of a services-based digital capitalism. The 2009 Lisbon Treaty made the liberalization of the economy and society foundational to the European Union. The free movement of capital and labour and a cosmopolitan belief in humanity erased the particularity of cultures and local places. National histories with their tragedies were abandoned for a faith in a technologically enabled progressive future. In this ahistorical, transitory, and increasingly standardized world, the only source of meaning and authenticity left was the individual self.

Brexit was a vote against this progressive culture of capitalism, with its moral detachment and disrespect for the traditional and the parochial. The vote was captured by the right because Labour in its progressive liberal turn had lost the support of the working classes. And in embracing the progressive culture of universalism and cosmopolitanism, Labour lost the ability to speak of itself as part of a historical nation…

It was a vote for reconstituting the sovereignty of a democratic nation, to give voice to political conflict between different interests and thus bring about negotiation for the common good. It was for rebuilding a national economy that prioritizes work and wages for British citizens and for addressing regional inequalities. And it was a rejection of judicial activism and technocratic government that have bypassed the electorate, evaded cultural and political conflict, and accrued power in the hands of elites. Brexit was a once-in-decades mandate to look long and hard at the condition of our country. The governing class has failed to rise to the challenge. The Conservatives, the party of the rentier class, squandered their 2019 election victory. Labour, the party of the professional managerial class, can’t shake free of its liberal progressive culture and so struggles to build a national coalition beyond its metropolitan heartlands. Neither can yet move beyond the old liberal consensus. Today, they edge toward a centre ground that no longer exists.

In Foreign Policy, Ayan Hirsti Ali argued that violence is inherent to aspects of foundational Islamic theology.

As for the example of Mohammed, Sahih Muslim, one of the six major authoritative Hadith collections, claims the Prophet Mohammed undertook no fewer than 19 military expeditions, personally fighting in eight of them. In the aftermath of the 627 Battle of the Trench, “Mohammed felt free to deal harshly with the Banu Qurayza, executing their men and selling their women and children into slavery,” according to Yale Professor of Religious Studies Gerhard Bowering in his book Islamic Political Thought. As the Princeton scholar Michael Cook observed in his book Ancient Religions, Modern Politics, “the historical salience of warfare against unbelievers…was thus written into the foundational texts” of Islam.

There lies the duality within Islam. It’s possible to claim, following Mohammed’s example in Mecca, that Islam is a religion of peace. But it’s also possible to claim, as the Islamic State does, that a revelation was sent to Mohammed commanding Muslims to wage jihad until every human being on the planet accepts Islam or a state of subservience, on the basis of his legacy in Medina. The key question is not whether Islam is a religion of peace, but rather, whether Muslims follow the Mohammed of Medina, regardless of whether they are Sunni or Shiite…

The view that the ideology of radical Islam is rooted in Islamic scripture understands fully the cause of terrorism; it takes religious arguments seriously, and does not view them as a mere smokescreen for underlying “real” motivations, such as socio-economic grievances. This school of thought understands that the problem of radicalization begins long before a suicide bomber straps on his vest or a militant picks up his machine gun; it begins in mosques and schools where imams preach hate, intolerance, and adherence to Medina Islam. Western governments have tried to engage with “moderate Muslims”: imams and community leaders who denounce terrorist attacks and claim to represent the true, peaceful Islam. But this has not amounted to meaningful ideological engagement. These so-called moderate representatives of Islam insist that violence has nothing to do with Islam and as a result the intolerant and violent aspects of the Quran and the Hadith are never acknowledged or rejected. There is never any discussion about change within Islam to bring the morally outdated parts of the religion in line with modernity or genuine tolerance for those who believe differently.

In the New Statesman, John Gray challenges the narrative that the Palestinian cause can be described as a resistance to colonial settlement.

In the West, especially the Anglosphere, Hamas is increasingly seen through the lens of a progressive mindset in which it is a movement of resistance against a settler state. It is a distortion of history to equate the Palestinian cause with Hamas, which came to power in Gaza in 2007 after a campaign of violence against its rival Fatah, since which there have been no democratic elections. Western media nevertheless tend to give credence to Hamas’s account of events. Early reports by the BBC and the New York Times of an Israeli strike on al-Ahli Hospital in Gaza City on 17 October were at best premature, as there was no reliable evidence available at the time through which they could be verified. Subsequent analysis suggests the strike was more likely caused by a rocket fired from within Gaza, and the reports have been retracted or qualified. In the meantime indelible images of a bombed hospital headlined with seemingly factual statements about the source of the missiles have been implanted in the minds of millions of people. Whatever the truth, Hamas is winning the information war.

The longer the conflict goes on, the harder it will be for Western governments to maintain their support for Israel. Consider the quandary facing Keir Starmer. His drive against the anti-Semitism that festered in Labour’s upper levels under Jeremy Corbyn’s leadership was critical in making the party the unified government-in-waiting it is today. But many activists and Muslim voters reject Starmer’s pro-Israel stance, and the resignation of Muslim councillors in Leicester and Oxford puts that unity into serious question. For all the thunderous recent by-election victories, these are supporters Labour can ill ­afford to lose. Muslim voters will be important in some key seats, and an interview on LBC on 11 October in which the Labour leader said that Israel “has the right” to withhold power and water from Gaza has provoked particularly angry protests. It would be unfortunate for the party to go into an election it is set to win at war with itself…

Europe is unlikely to step into the breach. Its overriding concern over the coming decades will be with mass immigration, an issue on which far-right and adjacent parties are setting the agenda. In Poland, the liberal Donald Tusk is expected to come to power after echoing the anti-immigrant rhetoric of his nationalist rivals….

…The events of 7 October will be remembered as a day in which a new epoch of barbarism was born. In ethical terms, it will be a time when atrocities were accepted as legitimate weapons in human conflict. In its geopolitical dimension, it was the point at which the post-Cold War order finally ­fractured. We have entered a world of imperial rivalries like that before 1914, which ended in Europe’s suicide in the trenches. After the Second World War, the United States ascended to its global hegemony, which is now in turn coming to an end. The difference is that this time there is no successor on the horizon.

On his Substack, James Pethokoukis says Israel is richer than its Middle Eastern neighbours not due to colonialism but due to Western-style economic institutions and political practices.

There’s a deep question here that takes a step back from current events even as its answer should help inform analysis of them, a question that Rubin attempts to answer in his 2017 book, Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not Middle East Did Not. Unsurprisingly, perhaps, Rubin places religion as the heart of his explanation, but perhaps not in the way one might imagine. His analysis is more about interest group politics than religious doctrine. He argues that a key reason why the economic histories of Western Europe and the Middle East diverged, creating the massive modern gap, lies in the different roles religion played in the politics in the two regions.

In the Middle East, Islam was closely tied to empire and effective at legitimizing rulers, Rubin explains. This aided early development by facilitating trade networks and unified legal systems. But the dominance of Islam also meant religious authorities had significant political influence. As conditions changed, they resisted policies that would have furthered economic dynamism, like allowing printing presses or interest-bearing finance.

In contrast, according to Rubin, Christianity was less able to legitimate secular rule over the longer run. After the Reformation, Western European rulers relied more on parliaments and economic elites for legitimacy. These groups supported growth-enhancing policies like secure property rights and impartial legal systems because they served their economic interests. This partly explains why Protestant England and Holland industrialized first. Even Catholic countries like Spain fell behind their Protestant neighbors despite an earlier lead. The Middle East failed to industrialize because its rulers continued using religious legitimacy rather than relying on economic elites and excluded progressive voices from politics.

In Aporia Magazine, Russell T. Warne says falling birth rates in the West will lead to economic stagnation and dependency on mass migration.

[F]or most middle- and high-income countries, the problem is that birth rates are too low. A low birth rate has consequences that reverberate for generations. For example, social safety nets and entitlements become strained when a population skews older. In the United States, there were 5.1 workers for each recipient of Social Security benefits in 1960. By 2023, that ratio had fallen to 2.7, and the federal government expects it to be 2.3 in 2035. With a shrinking ratio of workers to recipients, the government has two main options, neither of which are politically palatable: cutting benefits to recipients or raising taxes on workers. A stagnant population also slows economic growth. Japan—where adult diapers outsell baby diapers and 10% of the population is over 80 years old—has not had a TFR above 2.1 since 1973. This fact meant that a declining number of people were entering the workforce precisely when the country was hit by a regional economic crisis in the late 1990s. This has made it hard for Japan to revive the portion of its economy based on consumer spending, thereby hobbling the country’s economic recovery for many years. China (TFR 1.16) is likely facing a similar economic stagnation in the future, and its declining and aging population will make overcoming future economic headwinds more difficult.

One popular method among economically developed nations of dealing with a low fertility rate is to import new people through immigration. This has been the strategy that the United States (TFR 1.66) has adopted. With the exception of two brief years (2006 and 2007), the TFR of the United States has been below 2.1 since 1971. Currently, over 75% of population growth in the United States is due to immigration. Because immigrants tend to be younger than the general population, this increases the worker-to-beneficiary ratio for Social Security and other entitlements. However, even the United States, which has experienced high levels of immigration for longer than any other country, has failed to import enough immigrants to compensate for a low birth rate. To bring its worker-to-beneficiary ratio for Social Security back up to 3:1, the United States would have to import nearly 20 million working immigrants who contribute as much in taxes to Social Security as current workers. If the immigrants are disproportionately low-skilled and/or low-earning, then even more would be required.

Beyond economic considerations, there are other downsides to a birth rate below replacement levels. One problem is that a society with few children is an older, less vibrant society. In the United States (and many other countries), older citizens are more likely to vote, and that can make necessary economic or political reforms more difficult because they tend to benefit from the status quo. Another problem is that creative productivity decreases with age after the early 40s, which means a society that does not produce enough children will have less creativity. That means fewer people to solve problems, make scientific discoveries, or advance the culture. Another consequence arises from the mass importation of immigrants to compensate for wealthy countries’ low birth rates. If countries do not assimilate their immigrants well, then this creates large, alienated subcultures. A native group’s decreasing share in the population under these circumstances means that there are fewer people in the future to preserve the native culture. That means that in future generations, a country’s culture, landmarks, and values may be neglected.

Wonky thinking

At the inaugural conference of the Alliance for Responsible Citizenship, Levelling Up Secretary Michael Gove made the case for a reformed, moral capitalism rooted in democratic accountability and the nation state.

Capitalism has been responsible for human abundance, creativity, the enrichment of all our lives like no other force. And the thing to remember about that force, about that change, is that as Paul [Marshall] reminded us, it was in the sixteenth and seventeenth centuries that mankind, after years of relatively stagnant growth - not just years, not just decades, but centuries of relatively stagnant growth - mankind, civilisation, experienced the most tremendous increase in wealth, in opportunity, in security. And the reason for that was not a technological breakthrough; it was a revolution in thought…

But if we are going to look at why capitalism is under threat and under challenge, why creativity, accountability, national resilience are challenged at the moment, then we need to recognise what those forces are that have worked against the growth and the creativity that we are all here to cherish. And I think it’s importance that there are at least two factors, at least two trends, that over the last few decades have worked against the success of capitalism, and against support for it, particularly amongst the young.

The first has been the behaviour of the privileged. And the second has been the success of our biggest growth industry in the world.

The behaviour of the privileged first. One of the things that we have seen…that was predicted by Joseph Schumpeter in the middle of the last century, is that we have seen a concentration of wealth, a tendency towards monopoly and oligopoly that has meant the gains of economic growth have become increasingly concentrated in the hands of a few: the behaviour of asset managers and the way in which they are looking always for a return on investment and not for proper stewardship of their assets; the way in which during the last ten years quantitative easing has seen those with assets see the value of those assets inflated, while others have endured inflation so the ordinary costs of living have only grown; the way in which those organisations, those corporates that have an interest in regulatory capture have used their size, their lobbying ability, and their closeness and proximity to power, to essentially rig markets in their favour and to block the insurgents from providing both the growth and the innovation that our economy needs.

On top of that, we have also seen globalisation. While it has brought huge gains in its first phase, in its latter phases has been experienced by so manner of our citizens as a reinforcement of inequality. As those with cognitive ability and connections benefit disproportionately, and the poorer in our society, particularly in concentrated communities, fall behind.

[W]e have also had a particular problem for those of us who are believers in the widespread ownership of capital we have had a particular problem in our housing market…[t]wo factors have been particularly at work. Financialisation in the housing market which has seen housing and property used increasingly as an asset against which banks are happy to lend, and which people are delighted to invest in because of the guaranteed return it brings, and housing rather than being seen principally as a means of providing people with shelter…is seen as a tradeable asset. And on top of that the way in which in particular communities the drawbridge has been pulled up, and those that already enjoy housing wealth have wanted to see that wealth preserved…by restricting new development.

…The most successful industry in the world is the resentment industry. What it does is manufacture grievance. And one of the things that Schumpeter predicted is that as we have seen societies become wealthier, we would see the growth of a class of individuals and institutions that resented the way in which capitalism operated and sought to corral and control it, and also to strike at the roots of its success.

And one of the particular challenges that those of us who believe in capitalism, free enterprise and economic growth face, is that we now face an effective coalition between the privileged and the resentment industry…You will find that there are major figures, major institutions within the corporate world who are well aware that the decisions they have taken that have enriched them, the way that asset managers operate, have meant that they have done incredibly well out of the division of spoils in our country. And they are also conscious that they need to insulate themselves from the envy, resentment and indeed sense of injustice that is out there. So what they’ve done is they’ve co-opted individuals from he resentment industry to be their advisers - on ESG, EDI, or whatever other acronymic shield they wish to put up.

…Sometimes there are performative exercises about boardroom composition that they go through, but what they rarely do is think hard about the impact on working people in industry who often find that their participation in the labour market, their sense of economic security, their sense of agency has been undermined and denied.

Globalisation, while it has brought many huge benefits, has also brought a sense of economic insecurity that we all have a responsibility to address if we are going to ensure that there is a democratic basis and popular support for a free enterprise system.

So what is the answer? What we need is both the Promethean spirit that grabs fire from the gods, and the Rabbinical sense of obligation to our culture, to our tradition and to our brothers and sisters.

…You need to take inequality seriously. Individual freedom is only meaningful in the context of relationships and communities. It is only in communion with others that we are made whole. It is only by knowing our history, our tradition and how we are situated within it, that our lives are given true meaning. And it is only through the exercise of compassion in everything that we do, that transcendent and enduring value is genuinely added.

…The accumulation of wealth for its own sake, the worship of gain, is empty plutocracy - vulgar and immoral. But the generation of wealth because you believe in providing employment, in generating abundance, you want to see philanthropy bloom, you want to see your country and your nation grow stronger - that is something worth celebrating, that is something worth applauding.

…We need political accountability as well. And that is why I think the importance of the nation state matters so much. Yoram Hazony has drawn the distinction which has existed between nations and empires. Empires have advantages…but what they lack is the link between those exercising power and those in whose name that power is exercised. The great thing about nation states is that they ensure not just that power is accountable but that we are prepared to make sacrifices for others. We are prepared to see our taxes spent, we are prepared to see our children wear uniforms, and to defend our values we are prepared to recognise that there is a community of interests larger than ourselves.

Book of the week

We recommend The New Leviathans: Thoughts After Liberalism by John Gray. The philosopher argues that history does not bend towards progress, and that the rise of Chinese state corporatism has exposed the inadequacy of laissez-faire doctrines.

If there is evolution in society it is like Darwin's wind. Natural selection of genes is a purposeless process that is going nowhere. Theories of social evolution, on the other hand, invariably come with a destination, which almost always embodies the values of the theorist. For the Victorian sage Herbert Spencer (1820-1903) - who coined the expression survival of the fittest - the destination was laissez-faire capitalism. For Marx, who disliked Darwin's theory but believed society does evolve, it was communism. For Fukuyama, it was democratic capitalism.

Which of these anyone prefers is not very important. None of them shows any sign of arriving. As Western societies have dismantled liberal freedoms, the destination towards which the world was supposedly evolving has disappeared in the societies where it originated. There is no arc of history, short or long. Once such fanciful notions are set aside, there is no reason to expect one mode of government to displace all others.

There will be monarchies and republics, nations and empires, tyrannies and theocracies, along with many mixed regimes and stateless zones where there is no government at all. The world of the future will be like that of the past, with disparate regimes interacting with one another in a condition of global anarchy. The seeming triumph of liberalism and the free market was not an evolutionary trend but a political experiment, which has run its course. The result has been to empower regimes in which market forces are instruments of the state.

Instead of China becoming more like the West, the West has become more like China. In both, the ruling economic system is a version of state capitalism. In each, wealth is heavily concentrated in small groups with powerful political leverage…

…In America, wealth buys power, while in China power creates and destroys wealth. In China, market forces serve the objectives of government, while Western states have ceded power to corporations that obey imperatives of profit. Both systems are variants of state capitalism, but the relations between capital and the state are reversed. For market ideologues, Chinese companies buying up Western assets mean China is joining a Western-led liberal order. For China, such acquisitions are means through which the West can be colonized. When enterprises controlled by the Chinese state invested in British nuclear power stations, they acquired an asset they could deploy in geopolitical conflict.

When companies like Apple and Tesla invest in China, they give hostages to a strategic rival. In its competition with China, Western capitalism is programmed to fail. Only if China's leaders make major mistakes can the West hope to prevail. If an evolutionary process is at work, there is no reason to think it favours the West. Evolution is natural selection among random mutations. The regimes that prevail will be those that best adapt to the random walk of history. Not the most productive societies but those that best exploit opportunities thrown up by chance are the fittest.

While history is not the unfolding of reason, there can be logic in particular situations. The contest between two kinds of state capitalism may be one such juncture. Systems in which market forces are directed by the state have an inherent advantage over ones in which government has been captured by corporate power. Western economists insist China's state capitalism is bound to lack innovation. Economic growth in China is slowing due to rising debt and environmental pollution. Demographic. imbalances resulting from the one-child policy mean the country is growing old faster than it is becoming richer. Xi's Zero Covid policy did incalculable damage. The days when the Chinese economy seemed an invincible juggernaut are over.

That does not mean China must lag in science and technology. It is outpacing the West in areas such as robotics, quantum computing, virtual reality and weapons systems. For many in Washington, derailing China's advance is the strategic imperative of the age. Blocking China's access to Western advanced microchip technology, Biden's Chip Act of August 2022 was effectively a declaration of economic war. The danger is that it will provoke pre-emptive military action, as America's oil blockade of Japan did at Pearl Harbour in December 1941. This time, America may not prevail.

A naval war in the Taiwan Straits might resemble the Battle of Tsushima in 1905, when the Japanese Imperial Navy sank almost the entire Russian Imperial Pacific fleet. Russia's defeat served as an early warning of the fragility of the tsarist empire. Defeat by China could have a similar impact on American power. In the event, the US - with its heavy reliance on China for medical supplies and financing the federal deficit, its off shoring of industrial production to the Chinese mainland and its introverted culture wars - may retreat from any military confrontation. That does not mean America will hand supremacy to China. India will not accept such an outcome; nor, probably, will Japan. The upshot of the struggle for hegemony will be a world with no hegemonic power.

Quick links

The Bank of England froze interest rates at 5.25%…

…but forecast flatlining growth throughout 2024.

2019 Conservative voters are more likely to have switched to Reform UK than to Labour.

A poll of Labour councillors found 43% were dissatisfied with the party’s stance on Israel.

Austria has announced it will adopt a Rwanda-style migration agreement.

Germany’s Chancellor, Olaf Scholz, said he intends to “deport on a grand scale”.

An imam at the Madina Mosque and Islamic Centre in Oldham called Hamas terrorists “freedom fighters”, referring to Jews as “monkeys” and “pigs”.

Germany may abandon is 100 million euro fighter jet deal with France in favour of a deal with Britain.

Dozens of Afghans who served in British special forces have been captured and tortured by the Taliban.

Covid had a disproportionate impact on working memory for over-50s.

American Bull-XLs have been added to the UK’s list of prohibited dangerous dogs.

It is 50 years since the first episode of seminal documentary The World At War.

A study found received pronunciation (RP) and cockney have declined, to be replaced by several modern English accents.

M&S released its seasonal advert, encouraging customers to “do only what you like” at Christmas.