Underground Empire: Henry Farrell and Abraham Newman's must-read account of "How America Weaponized the World Economy."
I'm coming to Minneapolis! Oct 15: Presenting The Internet Con at Moon Palace Books. Oct 16: Keynoting the 26th ACM Conference On Computer-Supported Cooperative Work and Social Computing.
At the end of Henry Farrell and Abraham Newman's new book Underground Empire, they cite the work of John Lewis Gaddis, "preeminent historian of the Cold War," who dubbed that perilous period "The Long Peace":
Despite several harrowing near-misses, neither of the two hair-trigger, nuclear-tipped arsenals were ever loosed. When the Cold War ended, the world breathed a sigh of relief and set about refashioning itself, braiding together economic and social interdependencies that were supposed to make future war unthinkable. Nations that depend on one another couldn't afford to go to war, because they couldn't hurt the other without hurting themselves.
The standard account of the Cold War's "Long Peace" is that the game theorists who invented Mutually Assured Destruction set up a game where "the only way to win was not to play" (to quote the Matthew Broderick documentary War Games). The interdependency strategy of the post-Cold War, neoliberal, "flat" world was built on the same fundamentals: make war more costly than peace, victory worse than the status quo, and war would be over β if we wanted it.
But Gaddis has a different idea. Any effect Mutually Assured Destruction had on keeping fingers from pushing the buttons was downstream of a much more important factor: independence. For the most part, the US and the USSR had nonintersecting spheres of influence. Each of these spheres was self-sufficient. That meant that they didn't compete with one another for the use of the same resource or territory, and neither could put the other in check by seizing some asset they both relied on. The exceptions to this β proxy wars in Latin America and Southeast Asia β were the disastrous exceptions that proved the rule.
But the past forty years rejected this theory. From Thomas Friedman's "World Is Flat" to Fukyama's "End of History," the modern road to peace is paved with networks whose nodes can be found in every country. These networks β shipping routes, money-clearing systems, supply chains, the internet itself β weave together nearly every nation on Earth into a single web of interdependencies that make war impossible.
War, you may have noticed, has become very, very possible. Even countries with their own McDonald's franchises are willing to take up arms against one another.
That's where Farrell and Newman's book comes in. The two political scientists tell the story of how these global networks were built through accidents of history, mostly by American corporations and/or the American state. The web was built by accident, but the spider at its center was always the USA.
At various junctures since the Cold War, American presidents, spies and military leaders have noticed this web and tugged at it. A tariff here, a sanction there, then an embargo. The NSA turns the internet into a surveillance grid and a weapon of war. The SWIFT system is turned into a way to project American political goals around the world β first by blocking transactions for things the US government disfavors, then to cut off access for people who do business with people who do things that the US wants stopped.
Networks tend to centralization, to hubs. These central points are efficient, but (as we learned during the covid lockdown) brittle. One factory fails and an entire category of goods can no longer be made β anywhere. When it comes to global resiliency, these bottlenecks are are a bug; but when it comes to US foreign policy, these chokepoints are a feature.
Farrell and Newman skillfully weave a tale of individuals, powers, circumstances and forces, showing how the rise and rise of world-is-flat rah-rah globalism created a series of irresistable opportunities for "weaponized interdependence." Some players of the game wield these weapons like a scalpel; others (like Trump) use them like a club.
This is a chronicle of the dawning realization β among US power-players and their foreign adversaries, particularly in China β that the US lured its trading partners into entrusting it with financial clearing, IP enforcement, fiber landings, and other chokepoints, on the grounds that American wouldn't risk the wealth these systems generated by turning them into engines of coercion.
But then, of course, that's exactly what America did, from the War on Terror to economic sanctions on Iran, from seizing Argentinian reserves to freezing Russia's cash. Sometimes, the US did this for reasons that I sympathize with, other times, for reasons I am aghast at. But they did it, and did it, and did it.
America's adversaries (and frenemies, like the EU) have tried to build alternative "underground empires" to offset the risk of having their interdependencies weaponized (or to escape from an ongoing situation). But therein lies a conundrum: world-is-flat-ism has ended the age of indepedence. Countries really do need each other β for energy, materials, and finished goods. Independence is a long way off.
To create new interdependency networks, it's not enough for countries to agree that they don't trust America as neutral maintainer of their strategic chokepoints. They also have to agree to trust one of their own to operate those chokepoints. Lots of countries have come to mistrust US dollar-clearing and the SWIFT system β but few are willing to allow, say, China to run an alternative system that carries out settlements in Renminbi. The EU might be able to suck in some "friendly" countries for a Euro-clearing system, but would China trust them? How about Iran?
Farrell and Newman make a good case that US's position at the center of the web is a historical accident, and possibly a one-off, contingent on the ascendant post-Cold War ideology that said that markets and the interdependencies they create would neutralize the threat of handing a rival nation that much power.
Which leaves us in a world of interdependency in conflict. If Gaddis is right and the Long Peace was the result of independence, then this bodes very ill. The only thing worse than a world where no one can depend on anyone is a world where we must depend on entities that are hostile to us, and vice-versa. That way lies a widening gyre of conflict that felt eerily palpable as world events unfolded while I read this excellent, incisive book.
Political science, done right, has the power to reframe your whole understanding of events around you. Farrell and Newman set out a compelling thesis, defend it well, and tell a fascinating tale. And when they finish, they leave you with a way to make sense of things that seem senseless and terrible. This may not make those things less terrible, but at least they're comprehensible.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
My next novel is The Lost Cause, a hopeful novel of the climate emergency. Amazon won't sell the audiobook, so I made my own and I'm pre-selling it on Kickstarter!
