The Agenda with Steve Paikin (Audio) - Parag Khanna: What's Wrong with the Current World Order?

Episode Date: May 16, 2024

In his new essay, "The Coming Entropy of Our World Order," futurist and founder of AlphaGeo Parag Khanna looks at the volatile state of geopolitics, and where he thinks the world is headed.See omnystudio.com/listener for privacy information.

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He's the founder and CEO of Alpha Geo, and he joins us now from Singapore via Zoom. Parag, it's great to have you on our program again, I guess, except for the coming entropy of our world order. How are you doing otherwise? Other than that, how was the play? Yes, exactly. It's great to see you again, Steve. Pleasure to have you back. Let me start with a quote from your article. And here we go. The most accurate description of today's world is high entropy, you write, in which energy is dissipating rapidly and even chaotically through the global system. OK, let's pick that apart. What is high entropy?

By that, of course, we mean an increasing state of disorder, dissipation of power, decay, you might say, a diffusion of energy within the system, and that all of which is to say devolution in political terms. In other words, a state of concentration to one of deconcentration, a system in which you have a higher order imposition of rules through hegemony, for example, or unipolarity under the American world order to one in which you have multiple contesting units of authority, whether it's regional, other superpowers like China, and so forth. So I look at this devolution, not just at the state level, actually, but at many levels in terms of the systems change that's underway, in which you not only have multiple rivals of centers of geographical power, but even transnational actors too. So overall, again, it's, you could call it decay, devolution, degeneration, a disorder, they all happen to begin with D, all of those things that people are saying one by one in bits as they grope for terms to describe the world. All of that effectively adds up to this

notion of an entropic kind of system. Is that to say you expect a world with a lot more anarchy? Well, anarchy is slightly different, right? Anarchy connotes that the units, the participants, obey no authority, there are no principles, perhaps even no governing rules. But in the system I'm describing, there are very clearly self-interested agents, right? And all of them are operating according to their own logic, or maybe even similar kinds of motivations but always attaching kneeling aligning in different combinations in a way that may seem chaotic may seem anarchic but isn't necessarily again it's a world where you've just taken the lid off of the controlling mechanism. And instead, you have everyone really acting according to their own volition.

And so in that sense, it isn't really anarchy. It's much more a state, again, of disorder in the sense of a lack of a higher order. But you clearly have principles at work without one single overarching principle. principles at work without one single overarching principle. Give us a few things that you would point to that have made you conclude that this is the apt way to describe what you are seeing in the world today and going forward. Well, for one thing, it's the shift to multipolarity. Now, the simple way to characterize the shift from a unipolar world to a multipolar world is to simply say you once had you had one superpower in the United States and now you have at least two superpowers in China. But that would

be very neat, simple, rigid, insufficient and inaccurate to describe the system as a whole. I would say more accurately, it's not only multipolar with multiple systemically relevant great powers or superpowers like the United States, China, the European Union, and so forth. But it's also multi-regional. And even within a big region like Asia, you have multiple great powers within that. So it's a multipolar, multi-civilizational, multi-regional system. That's a much richer characterization that defies a simple symmetrical hierarchical logic. Instead, again, just within Asia alone, which you might even characterize as a world unto itself, you have China, Japan, India, Australia, and so forth, all operating, again, according to various logics and principles and rules that may be different from the rules that

other regions operate by. So it's that complexity, that depth, that layering in which you don't have one global, again, order or approach. That's a very good piece of evidence in this direction. And we really haven't lived in an order like that for many, many centuries. Let's pluck another quote from your essay here, The Coming Entropy of Our World Order. And this one focuses on American exceptionalism or not, as you suggest. Here we go. That America has lost its exceptionalism in the world's eyes is a far more significant fact than whether America still believes itself to be exceptional or if it ever really was. OK, let's pull that apart here. Whether America ever really was exceptional in the first place. You're questioning that. How come? Well, there's two meanings of the word in

this context. One is analytical and the other is sort of normative or ideational. In the ideational sense, any power, any superpower, any empire, the apex of its power is going to hold itself to be exceptional. And that's almost a law of history throughout history, whether it is ancient Rome or the Ottomans or the Mongols view themselves as to be supreme, divine, fill in the blank, European colonial powers, obviously, as well. But whether it only works if it's relational, you know, bidirectional, has to be accepted for it to be valid. Or it has to be analytically true in the sense that everyone is obeying that power. Now, none of those things are true at this point, right? Americans have a great deal of self-doubt as to whether or not they are still exceptional. Secondly, it certainly isn't recognized as true anymore by other powers in the system. And of course, on a relative basis, it's moving in the direction where others are also seeing themselves as increasingly exceptional. So if exceptional is held to be unique, singular, then there can only

be one exceptional power in the system, if any, at any given time. And if it isn't recognized that America is that one power, then again, you know, by definition, you wind up in the situation that we're actually in, which is one that is, again, a multipolar world, a competitive landscape, numerous powers that either think of themselves as exceptional or don't care whether or not there is one exceptional power. They simply want to assert their interests. They're certainly not recognizing America as that sole exceptional power anymore. I guess one of the best examples of that going today is America's effort to get much of the world to follow it in terms of sanctioning Russia for its conduct. it in terms of sanctioning Russia for its conduct, its appalling conduct in the war in Ukraine. And yet the attempts to isolate Russia have really fallen flat with an exception of a very few countries. Why do you think that is? Correct. And again, it was a very severe

misdiagnosis of the way in which particularly Asian countries relate to Russia. You know, you can see the map behind me, perhaps this is Asia, and there's a giant landmass or country at the top of this map, and it is Russia. Now, for a geographer, and from a geographical perspective, Russia, the territory, which is indeed the other largest country in the world next to Canada, I should point out, is basically North Asia. But of course, we, you know, as citizens of Western countries or Western analysts tend to look at Russia through a diplomatic prism. We see it as a country, we categorize it as Eastern Europe.

We think of it as culturally European or Eastern European. And we think of it as having once aspired to be part or join Western organizations, you know, in FIFA or the World Bank or the United Nations, you know, it's clustered as a European or Eastern Western organizations. You know, in FIFA or the World Bank or the United Nations, you know, it's clustered as a European or Eastern European country. But in reality, of course, it is North Asia, right? That is literally what Russia, by and large, is geographically, North Asia. And so it was a misdiagnosis because, of course, Asian countries,

whether it is democracies or non-democracies, whether it's China or India or others, have fairly intense economic ties with Russia. They depend on Russia and benefit from its their import prices and therefore their trade deficits or burnt account deficits spike as a result of sanctions on Russia. And so they have not played along at all. And part of that is certainly resulted in or that is partially resulted in Russia being able to continue in terms of its economic longevity despite the pressures that Western sanctions have imposed. So again, you can't isolate Russia. You can't isolate any country in the world if you don't have a single Asian power on board with your sanctions regime.

And that's basically what has happened. Well, let me follow up on that, because if we were to change our orientation of how we think about Russia, not as sort of Moscow and West, but rather as North Asia. How how should that change the way we relate to that country? How we relate to Russia? Well, it's interesting, you know, it is increasingly an anchor of an Asian system. And this Asian system is increasingly economically interdependent. And of course, with Russia, its largest trade partners, investment partners now are literally all Asian. And that's likely to remain the case for a long time. So I would say one has to obviously continue to defend one's Western

borders, because just because Russia is increasingly acting like and aligning with Asian powers doesn't mean it isn't still very relevant in the West. It's fighting a war right now with ourselves as Western powers and nations and states and NATO countries. So that doesn't change the fact that it needs to be, if you will, pushed back, repelled, and prevented from remaining belligerent, hostile, and annexing any more territory of Western or Western-leaning countries like Ukraine. So in that sense, the calculation doesn't change. But the diplomatic isolation or that aspect of the strategy is clearly not going to work. We love to think that the future of humanity is in the West,

with Western values projected across the world. But if I read you right, you think the future of humanity lies in Asia. How come? Well, I mean, there's, again, a literal answer and maybe an intellectual answer. The literal answer to what or who is the future of humanity is Asians, because the majority of the human population is Asians who live in Asia, about 5 billion of them. And the further you look in the future, Steve, as you know, the world population is Asians who live in Asia, about five billion of them. And the further you look in the future, Steve, as you know, the world population is peaking and actually going to decline relatively

soon. So the share of the human population that is Asians in Asia grows, does not recede. So we can be philosophical, and I enjoy that very much. However, the literal answer to the question, who is the future of humanity, is Asians and Asian youth in particular, because there are more young people in Asia also than the entire rest of the world combined. Now, if we can get into the intellectual part, and you could almost say ideological or ideational sort of question about where the future lies in terms of the vision for the future, the self, the world view of different regions. Asians do not wake up in the morning and allow me, please, to speak on behalf of my five billion neighbors here in Asia. I actually dedicated my book on Asia to my five billion neighbors. And now that I live here in the region and get to feel that energy

of being surrounded by five billion people, it's quite an awakening and enlightening experience. And I will say, again, on behalf of those neighbors, I don't know a single human being in the entire radius, again, in this vast landmass that you see behind me on this map, these 5 billion people, not one of them. And I think it's just so important, Steve, for me to say it really bluntly, you know, in that American-ish way that I can. Not a single one of the five billion people that lives on this map behind me wakes up in the morning saying, hmm, I wish my country were more like, you know, Britain or America or something like that. Right. Not a single one. So let's just disabuse ourselves of this notion of an intellectual teleology or even a political teleology that leads people in Asia to want to be like us, like Western countries. They want no such thing. Every society that I've traveled in,

all 160 of them really just want to be better versions of themselves. And they're shopping in a marketplace of ideas and policies and history and administrative regimes and picking and choosing what role models they want to have based on what problem they're trying to solve. They're going to learn about public housing from Singapore. They're going to learn about national service from Finland. They're going to look at environmental conservation policies, maybe from a European country. They're going to get their solar panels, electric cars from China, and so on and so forth. There is no single Western country that serves as an off-the-shelf model for any country in Asia. And again, by literal definition, most people in the world live in Asian countries, democracies

and non-democracies. They all just want to be their best selves. They want to achieve the next best thing that they can achieve the next day and the next day and the next day. And I think that's a very good thing, quite frankly. And it forces us to have to compete in that marketplace of ideas and say, if my ideas are better, will they work for you? And how can I help you become a better what you want to be through my ideas? And if you can't demonstrate that, you're not in the game here in Asia.

Well, OK, I hear what you're saying. Maybe a bit of a strange follow up here. But I think you're probably the ideal person to ask this question to, given that you were born in India, but educated in, I guess, Britain and the United States. I guess, Britain and the United States. So you're at kind of the crossroads of these two massive cultural institutions, value propositions and so on. Would you prefer a world that projected more Western values or more Asian values? Well, I'm for syncretism, you know, and I've written several books about this, as you know, where I kind of look at not an either or dynamic, books about this as you know where i kind of look at not either or dynamic but at both ends right you know what what can we learn from each other what is it about western conceptions of universal uh human rights in the sense of individual uh freedom uh and eastern values if you want to call them that uh that you could describe as a communitarian or um or collectivist whatever the

case may be. And I think there's virtues in both sides. And I think, again, the winning societies of the future are ones that balance those virtues and don't label them Eastern or Western, but rather think about how do you achieve certain utilitarian outcomes in a society, irrespective of what its cultural background is. Again, to remind everyone, more people live in democracies in Asia than live in democracies in the entire rest of the world. And that's even with a giant non-democratic country called China occupying a big chunk of Asia. That's how many people there are in Asia. That's how many democracies there are in Asia.

One can't look at Asia and hold it synonymous with the East and look at the East and hold it synonymous with China. That's not the way it works. We're talking about 5 billion people who mostly live in some type of a democratic and aspirationally liberal, quite frankly, set of countries. But how that's going to look in the end state is not going to look like Britain or America. Perhaps it could look like a mishmash of models. But then those outcomes, those regime types that we'll see evolve here in Asia, you know, are not going to necessarily adopt Western values or strategies because they're Western. It's going to be things that are universal first and happen to work for them in that context.

be things that are universal first and happen to work for them in that context. Understood. Okay, let's change focus here for a second. And as I indicated in our introduction to start this conversation, you are the founder of something called AlphaGeo. And I guess we need to know what exactly does that do? Well, AlphaGeo is a data science company, a geospatial data science company. And what we do is to, we're on a quest to achieve geographical omniscience, you might even say. We're putting as much data as you can on every geo-coordinate of the map as you possibly can attempt to pack into it. And what that means is we're collecting climate data, demographic data, market data, socioeconomic data, everything from air quality and pollution and groundwater levels to future climate scenarios to geopolitical risk, population density, and packing it all into these latitude and longitude coordinates for the

entire surface of the earth. And then we run simulations and models on that to predict the future performance of geographies so that whether it's public sector needs to understand how to invest better to offset certain climate risks or the private or private sector investors are looking at the best places to invest their capital to do a new factory or to build housing, those kinds of things. Okay. Having said that, are you tracking Canada? And if so, what does your tracker show you? It would be a glaring absence to not cover Canada, wouldn't it? So we cover the entire planet. As I mentioned, literally every terrestrial coordinate, we have an awful lot of data on. Canada certainly falls in that

category in fact we started out with very north american roots and focus and so canada you know perhaps needless to say is on a relative basis a far more resilient country from a climate change perspective and from the standpoint of political stability than almost any other place in the entire world so you might genuinely say it's blessed. But as we like to point out, and as Darwin would have said as well, it's not just the survival of the fittest is defined by your capacity for adaptation at the end of the day. So every country is affected by geopolitical risk, by economic risk, by climate volatility. The question is, to what extent do you

adapt? To what extent do you build the necessary infrastructures, enact the policies that are going to help you to offset those risks that are sort of coming down the pike in the future or evident today? As you know, I'm very bullish on Canada. I have been for a very long time, generally for analytical reasons, right? I see it, you see it doing the right things in terms of coping. But I should add, with the climate focus that we do have as a company, this is an area where it is effectively objective. It's the hand that nature has dealt you. And in that sense, you've been dealt a very, very good hand

compared to a country, say, like India, which tragically is the most populous country in the entire world and one of those that's most affected by the accelerating um you know onset of climate change well you kind of anticipated my next question because i wanted to ask you about something you said last time you were on this program for something you had written in our national newspaper, The Globe and Mail, in which you said the Canadian dream is reliable both today and tomorrow. A burden 21st century Canadians should bear with pride. And I wonder whether three years after having written that, you still feel as bullish about Canada as you did then.

Well, you know, I always say people vote with their feet. And, you know, if you could distill the complexity of the world and you have to decipher these unfolding trends that are always cross-cutting and contradictory, whether it is where geopolitics is pushing and where climate is pushing and demographics and labor markets and investment and all of these things, and you were to pick winners and losers in the 21st century, I still believe you could actually boil it down to one simple metric. If a country is absorbing young people, if it is welcoming young people, inviting young people, if young people are voluntarily going to that country, it's doing more right than it is wrong, that's for sure. And one could heap a lot more praise on Canada than just that default statement.

Then at the other end of the spectrum, you have those countries that are losing young people. That's not a place you want to be in, in a world where fertility has dropped, plummeted, in fact, and where the world population is going to very soon again, peak and decline. You'd much rather be a place that's welcoming young people. And Canada is doing that. So if the young generations, millennials, Gen Z, Gen Alpha, are voting with their feet and choosing Canada by the hundreds of thousands a year, that to me is the single most important metric by which you can measure a country and predict perhaps its future success. predict perhaps its future success. So that alone, in addition to we can leave aside discussions about, you know, what is right and wrong about Canadian politics and the Canadian public policy and the direction of the government right now, we could leave, we could, you know, point to flaws and, you know, things that are being being corrected or otherwise, but even all else equal, if you are attracting young people, chances are you're a place that's going to sort your problems out and have the entrepreneurs, the labor force, the tax base, the homeowners, the teachers, the garbage collectors, whatever the case may be, that you need to function effectively

as a society in the future. And if anyone who's in Canada is down on Canada, just look at the places like Russia, like Italy, you know, where populations are declining, where people are leaving, where they're never going to go back, where, you know, asset values are declining, depreciating and so forth. OK, well, that's a fascinating answer, because, in fact, the government of Canada not too long ago made a decision to cut back dramatically the numbers of young foreign

students who can come to Canada. Ostensibly, they said, because we've got no place to put them. It's not a matter of xenophobia. It's a matter of we don't have the housing for them. I don't mean to embroil you in domestic Canadian politics, but do you have a view about that? Oh, no, I'm always happy to wade into other countries' domestic politics. And this is an area about which I have strong opinions because you are, on the one hand, this is the innocent phrasing, is you're a victim of your own success, right? Canada is so popular, so desirable that you now are overwhelmed and have insufficient housing. But I obviously want to scold the government because having such a praiseworthy

liberal immigration policy on the one hand and having had it for years and then not realizing that that means that you need to build more affordable housing, public housing and so forth is obviously a huge miss, a big wasted opportunity. And now for whatever the next one year, two years, you're going to have fewer students

and less revenue on the back of those students or otherwise in general immigrants who would have come into the country. So, you know, in this sense, having or not having enough of a farsighted policy to match infrastructure investment and housing policy with the growing population, you know, is an error that you can fortunately rectify. And, you know, to the government's credit and their defense, this is something that's being talked about as we speak, of course, is significantly increasing public expenditure in Canada, raising taxes to fund it as well on housing and other essentials. So I think that you will self-correct, which is, of course, very important for any society to be able to do.

So I still really do not only have high hopes, I have high hopes for, but quite frankly, a lot of faith in Canada. We're seeing this correction play out. Parag, thank you so much for that. Be well. Enjoy the rest of your day or night, as I should say, over there. Likewise. Thank you so much. Thank you. Likewise. Thank you so much. Thank you.