Week signals: Republic or Empire?
Plus: watch points for Japan, Bulgaria, Uruguay, Britain, and New Caledonia.
This week:
IN REVIEW. Historic choices, dodgy analogies, and the problem with big ideas.
UP AHEAD. Elections in Japan, Bulgaria and Uruguay, budgets in Britain, and visits to New Caledonia.
The Week in Review: The Romans of the day
The week began with a close election in Moldova. It will end with no less than seven more, not counting Thursday and Friday’s votes in Montserrat and Kiribati. From Georgia, Lithuania and Uzbekistan, to Bulgaria, Uruguay and Liechtenstein, not all will make the front page. One that will, however, is Japan's. And we’ll discuss the reasons below.
Yet most of the week's focus wasn't on Tokyo, but again on Eastern Europe and the Middle East. In the former, besides Moldova, concerns are rising for how long Ukraine can hold – irrespective of North Korea’s involvement, which is more a piece of geopolitical theatre aimed as much at China as the US. In the latter, there were Israel’s strikes on Iran overnight, not to mention ongoing concerns for Israel's Iron Dome, as well as the civilian toll in Gaza and Lebanon.
The strikes appear limited. The IDF said they were in response to Iran's missile attack on 1 October and actions by its militant proxies (e.g. Hezbollah). A weapons depot and other military targets seem to have been struck in Tehran and to its west. Targets in Iraq and Syria also appear to have been hit. Some of the media has described the attack as an escalation, but I see it as de-escalatory. Oil facilities have been spared. Saudi Arabia is showing few signs of panic. Our thoughts can then turn to the other big issue: the US election, in barely a week and a half.
This week, Australia hosted King Charles. Another eminent Brit who came in his wake was historian Niall Ferguson. I was lucky to attend a dinner where – and I’ll try not to misquote – he likened the choice between Kamala Harris and Donald Trump to one between Republic and Empire. The analogy may be glib – and slightly declinist in its evocation of Rome’s turn from a weak democracy to a strong tyranny under Augustus in 27 BC – but it’s worth thinking about.
Harris is the candidate of the Republic and the institutional status quo. Trump is the candidate of Empire and a personalised state. One’s focus is on domestic renewal, the other on strength abroad. One would uphold American ideals. The other American power. In Machiavellian terms, one signifies authority through love, the other through fear.
But the analogy (and I don’t think he meant it to be complete) quickly breaks down. Many would argue (including Trump) that Harris is the candidate of imperial overreach, and that Trump just wants to make deals and put America first. They’d argue he wants to protect the constitution, while she wants to scrap the first and second amendments.
But what if it’s neither candidate, and the analogy (if there is one) isn’t of 27 BC but 476 AD, when the barbarians deposed Rome’s last emperor? After all, if this week’s frothing on the BRICS is to be believed, the Western imperium, and the US dollar, is over. Eurasia has returned and per Sparta vs Athens, land power, not sea power is rising.
But that’s also a load of crap. Economically, the US is still powering ahead. Yes, there’s lots of government debt and corporate valuations are rich, but the real cultural and technological innovation is in California and Manhattan, not Tatarstan or Hunan. The US southern border evinces America’s attractions, as much as its failings. The current opioid crisis is as much an opportunity for a blockbuster medical breakthrough as a permanent state of decline. The AI taking everyone’s jobs is at least made in the USA. Maybe.
Grand visions of the future and unified theories of historical determinism seldom age well. Realistically, whoever wins the election will represent a break from the past, but also a lot of continuity. The fate of the world won’t pivot on a single Tuesday in November. There’s frankly too much else going on for that to be possible. And while of course the US election is important, it’s not the only thing that matters. The world is made of many interacting parts, each responding to the others, but also to themselves. And of those other parts to consider, here’s five for the week ahead:
The Week Ahead
JAPAN. Watch for Ishiba unchained
Polls put Shigeru Ishiba’s Liberal Democrats on course for a minority government, relying on the support of coalition allies Komeito, and possible one other party. For Japan’s new prime minister, this will be portrayed as defeat and a sign the LDP’s funding scandal has not been forgiven. Yet for the maverick ex-defence minister, disliked by his party’s establishment, it could be a blessing. Dealing with a fractious crossbench will be easier for the political outsider than the faceless men of the party hierarchy. And Japan might finally be able to achieve long-promised strategic reforms.
BULGARIA. Watch for another hung parliament
Bulgarians vote for a seventh time Sunday after previous attempts failed to secure a stable majority. Polls suggest things won’t change, with party support tracking the outcome of June’s election apart from the centrist Movement for Rights and Freedoms (DPS), which last month split into two. The conservative GERB–SDS coalition is in front with around a quarter of polled support, but will need to align with the DPS and likely others to govern. Ideologically, the PP-DB coalition would be the obvious choice, but their failure to work with GERB in 2021-22 led to the current crisis.
URUGUAY. Watch for the radical centre
The left-wing Yamandú Orsi is widely assumed win Sunday's presidential election. He’ll almost certainly come first, but a late surge in popularity for the third-placed candidate, 40-year-old TV pundit Andrés Ojeda, could force a second round on 24 November that he may have time to build support for. Like Uruguay itself, Ojeda would sit between the extremes of Brazil and Argentina, led by a socialist and libertarian respectively. This may be no bad thing. Orsi's Broad Front is, as the name suggests, a big tent of divergent views that could risk Uruguay's stability and relative success.
BRITAIN. Watch for Reeves’ reversal
Chancellor Rachel Reeves will hand down the government's first budget on Wednesday. Having campaigned on competence but spending its first 100 days showing a singular lack of judgment, expectations are low. But the stakes are high. Reeves must fill a £40 billion fiscal hole without killing growth through higher taxes or breaking promises through service cuts. She'll likely opt for more debt, which could push yields up and impact confidence if not for the fact that everyone else is doing it. Stretched mortgagees may not be so forgiving, further eroding approval ratings.
NEW CALEDONIA. Watch for more post-colonial pressure
King Charles and Keir Starmer faced the heat at this week’s Commonwealth Heads of Government Meeting in Samoa, with climate change and slavery reparations in focus. The heat will be on the Pacific’s other key European power next week when the Pacific Islands Forum sends an overdue fact-finding mission to France’s territory of New Caledonia. Ahead of the visit, the UN has slammed the "alarming" death toll in the wake of anti-French riots this year, which Paris has blamed in part on Azerbaijan. Several cruise ships are due to return next month. Fresh unrest could change that.
Michael Feller is Chief Strategist at Geopolitical Strategy. LinkedIn.
(Please note none of this is investment advice).