Winston Churchill famously said America ultimately does the right thing after exhausting all other options. In a way, noted political scientist George Friedman is channeling his inner Churchill when he suggests that America’s true superpower is its ability to find solutions to significant societal and economic cycles or crises by constantly reinventing itself.
America, the world’s economic and military superpower, will likely need to rely on those qualities as it contends with current geopolitical turmoil such as wars in the Middle East and Eastern Europe and the demographic crisis here in the U.S., suggested Friedman in a recent talk at John Mauldin’s virtual Strategic Investment Conference and in a follow-up interview with Financial Advisor magazine. Friedman is an author and the founder of the firm Geopolitical Futures.
America’s flexibility at coping with change and crisis is unique among nations, notably its European cousins. “Europeans are not flexible,” he said. “They move in a certain direction.” He’s optimistic the country will cope again, especially in tackling the aging of the population amid declining birth rates, although it won’t be without cost and political unrest.
“The United States has a remarkable ability to correct itself,” he said in a Q&A session with John Mauldin on Monday. “When we think of ourselves as constantly reinventing ourselves, then a lot of this [upheaval] is not scary and it’s not catastrophic,” he explained. “So I see the United States, at least as frequently, rectifying unexpected problems.”
Friedman told Financial Advisor he expects the U.S. to play a significant role in ending two of the biggest “problems” roiling the globe right now. He predicted the Ukraine-Russia war will have “an informal ending within a few months,” and that Egypt and Saudi Arabia will help devise some agreement to end the conflict in the Middle East. He doesn’t see the U.S. involving its troops in either conflict.
Institutional and Socioeconomic Cycles Converge
In his 2020 book, The Storm Before the Calm, Friedman details how countries are shaped by patterns and outlines his belief that the U.S., given its origins, is unique among nations.
He’s identified two repeating patterns in American history: First is an institutional cycle, one that occurs every 80 years and which pertains to the way countries govern themselves. The other is the 50-year socioeconomic cycle, which, he explained, is “catastrophic at all times.”
Each cycle peaks at a defining crisis, and for the first time in history, these cycles are converging, he said, though that won’t necessarily lead to devastation.
“When I talk about cycles and climaxes, I’m not meaning the regime is about to collapse,” he said at the conference. “I’m meaning we are fundamentally changing the way we do things … on a regular basis.”
He spoke about a transition away from experts to generalists when it comes to the government, saying the U.S. won World War II because of the experts who built bombs, ships and other military equipment. That period, when combined with the Great Depression, created an institutional crisis—redefining, among other things, the role of the federal government in the economy.
He compares that to a new cycle coming about after the government’s Covid-19 response. Doctors, mainly Anthony Fauci, who headed the effort as the president’s chief medical advisor, were focused on looking for cures to the virus but knew little about, for example, childcare and the importance of children playing and learning together. Hence their move to shut down schools for an extended time was faulty, Friedman said.
“There was no one to understand the consequences of what the doctors did from a social point of view. They didn’t understand that you can’t close the schools for an extended period of time and have normal citizens.”
Rise of the Generalists?
Solutions to the demographic crisis, he said, will also likely require the skills of generalists, those who know much about many things. In this period, more people are getting older, but there’ll be fewer younger workers to pay for their care.
Tackling this crisis “can only be done by people who know things—but know more than one thing—because this is going to be a very complex process,” said Friedman.
However, he sees the country’s distaste for “complex solutions” leading to a political crisis.
The last peak of the socioeconomic cycle occurred around the 1970s, when a bad economy and soaring interest rates and unemployment put the country on the brink. “Everything was going wrong,” he said. “The President of the United States was, you won’t believe this, a criminal who might go to jail, Richard Nixon.”
Today the country faces a new round of cultural and political uncertainty. The Supreme Court’s reversal of the 50-year-old Roe v. Wade ruling, notably, has sparked deep societal and political divisions.
Presidents As Benchmarks
He doesn’t think it matters much who occupies the White House, since the president’s influence is restrained by Congress and the Supreme Court. In fact, he regards U.S. presidents more as “benchmarks” of certain periods than as “doers.”
Friedman has made no secret of his dislike for former president Donald Trump, who’s embroiled in legal and financial troubles as he makes his second run for the presidency.
“I really don’t like Trump,” Friedman declared to Financial Advisor. “But on the other hand, he won’t destroy the republic.” He noted that much of what Trump did during his first term was “actually very conventional.”
Friedman called the war with Ukraine a “disaster for the Russians,” who entered the war through “an intelligence failure of enormous proportions,” which included underestimating the Ukrainians’ will to fight.
“Ukraine can’t win. Russia is not winning. We have to have a negotiation,” he said at the Mauldin conference.
Israel was also drawn into its conflict with Hamas last October after a “massive intelligence failure,” said Friedman. Israel, which he regards as a “nice little superpower,” is failing to pound the group into submission. “So you have two incompetent forces [fighting that] have no idea what to do now.”
Given other countries’ reticence, it will likely be that it’s “American’s job … to create an end of the war that neither side wins,” he said.
The wars might last longer than expected, but Friedman doesn’t see any negative impact on the U.S. economy. In fact, he noted wars tend to stimulate the global economy and spur technological advances.
In the ’70s it appeared the country was finished, Friedman said. But it survived and will likely endure these current crises in good shape as well, perhaps emerging stronger. It’s in the country’s DNA to look for new ways to perfect its republic.
Said Friedman: “We have a society that can live with shifting [change] and expects it and doesn’t expect the next 20 years to basically look like the last 20 and carry on.”