The triumph of geopolitics, part 2
In part 2 of this series we look to recent advances in military technology and how these have shifted the relative balance of power between land, sea and the world's most critical littorals.
Military innovation and the “strategy of denial”
Notwithstanding the spectacular US stealth bombing of Iranian nuclear technology sites last month, it is in military affairs where the US has recently been exposed as lacking the power it once had. During the past two years, even the combined naval might of the US and Royal Navies has been insufficient to maintain full freedom of navigation in critical littoral waters.
It is a basic principle of military power that it is easier to deny an enemy access to a territory than to occupy it yourself. Think “no man’s land” in WWI between the trenches, for example, where neither side had safe access.
When it comes to freedom of navigation, denial can be far more asymmetric. Land powers don’t necessarily require navigation at all. Sea powers do.
Think of the strategy of denial as the ultimate “passive-aggressive” foreign policy. Rather than resolve an issue diplomatically, or declare war to resolve whatever dispute directly through force, you simply deny your rival access to something they desire or perhaps desperately need.
This is what the Houthis were doing in the Red Sea following the Israeli invasion of Gaza. One of the world’s most important navigations had been rendered effectively unusable by several plucky tribes ensconced high in the mountains of Yemen. (The US eventually made a deal with the Houthis to re-open the Red Sea, the details of which have not been formally disclosed as yet.)
The Houthis, presumably with Iranian support, squared off against the most powerful naval force in the world and their strategy of denial prevailed. The Red Sea and Suez Canal were effectively closed to US-UK and allied shipping. Multiple ships were damaged by Houthi attacks. Insurance companies ceased providing coverage.
The US Navy was so afraid of the Houthis they refused to commit a meaningful naval force to the area. President Trump decided to try and bomb them into submission instead. When that failed, lacking any military options other than invasion, Trump threw in the towel and negotiated a cease-fire.
More recently, Iran rained missiles down on Israel, degrading and depleting their anti-missile defence capabilities. Rather than allow that to continue, Israel reached out to the US to broker a cease-fire, which appears to be holding for the time being.
So, who is wearing the trousers now?
The Houthis’ and Iranians’ successes were made possible by advances in military technology, in particular missiles and drones. While these cannot be used to seize and hold territory, they can deny territory – or shipping lanes – to an enemy.
Missile and drone technology is so accurate, long-range and difficult to defend against today that surface warships have become sitting ducks. The war in Ukraine has demonstrated that tanks and other land vehicles are also vulnerable, if less so.
The invisible menace beneath the waves
Beneath the waves also lies danger. The Nord Stream gas pipelines were destroyed in 2022. There are several other such pipelines under the Baltic and North Seas.
Undersea cables carry power from France to the UK. They also carry information. The modern internet on which we all now depend so thoroughly makes extensive use of the world’s undersea cable networks.
Among others, the Belgians have expressed concern of late that Russian marine vessels may be involved in undersea cable sabotage. As reported by EU Today:
Over the past six months, at least five non-military vessels have sailed through the Belgian North Sea, suspected by Belgian security services of being involved in maritime espionage activities.
Belgian Maritime Security Unit also considers it plausible that a large Russian fishing vessel may have been involved in a recent sabotage incident of an underwater cable off the coast of Finland.
As further reported in the article, the risks of undersea espionage and sabotage spread far and wide:
Dealing with espionage beyond territorial waters is not straightforward because there is no international regulation for it. Outside 12 nautical miles from the coast, the freedom of navigation applies.
“There are various EU and national rules prescribing measures to protect infrastructure against espionage,” say security services. “We try to identify as many spy ships as possible in advance. Our ports are also protected against possible espionage.”
This week, NATO expressed its concern about the increasing hybrid warfare coming from Russia.
It is not the first time suspicions have arisen about espionage from Russian quarters. There have been repeated indications recently that Russian ships have quietly lingered near infrastructure in the North Sea, possibly for espionage purposes.
Recently, six North Sea countries, including Belgium, decided to collaborate more closely to better secure the energy and telecommunications infrastructure in our waters.
It is traditionally assumed that, as a large island, Great Britain has an advantageous strategic position in Europe. During WWII, the US military command regarded it as a large and “unsinkable” aircraft carrier, as well as an ideal staging ground for an invasion of Normandy.
But in an age of global interconnectedness and undersea dependency, islands such as Great Britain could find themselves at a disadvantage if undersea access is compromised or denied.
Large land powers such as Russia or China have challenges of their own, to be certain, but they are far less dependent on undersea access for critical supplies or communications.
Spykman and the strategic importance of the littorals
There is a long-running geopolitical debate regarding the relative advantages and disadvantages of sea and land power. Alfred Thayer Mahan believed in the supremacy of sea power; Halford Mackinder in land power.
But another geopolitical theorist, Nicholas Spykman, believed both were wrong; that what really mattered was control of the world’s critical littorals.
Littoral waters, where land- and sea-power meet, are the most critical for maintaining freedom of navigation. It matters little whether the open oceans are accessible if you can’t access major ports. Deny littoral access entirely and sea power becomes worthless.
This can work both ways, of course. Land power without littoral access is hardly ideal. But note the asymmetry here: Great land powers can exist if not necessarily thrive without access to the seas. Sea power, by contrast, is non-existent without port access.
What the Houthis have demonstrated with such success on a relatively small scale could become a much larger threat in future if major land powers also get in on the game of denying access to critical littoral waters.
Consider Russia and Ukraine. Both depend on access to the Black Sea. But this dependency is asymmetric. Russia is the far larger country with access to far greater land resources. If both are denied access, Ukraine has more to lose.
Turning to the Baltic, Russia would also have much to lose if it became closed to navigation. But what about Poland? The Baltic States? Finland and Sweden? As with the Black Sea, denial of Baltic access would disproportionately harm these smaller, more maritime-dependent countries.
Turning to Asia, the situation becomes even more asymmetric. Japan is in a similar situation to the UK but with more islands stretched out over longer distances, making it relatively more dependent on the seas.
Taiwan, the Philippines and other nominal US and UK allies would suffer disproportionately were freedom of navigation in the far east compromised in some way. Oil might not flow from the Persian Gulf and Africa if the Straits of Malacca, Formosa or other critical waterways were rendered unsafe due to the threat of possible missile attacks.
The Persian Gulf itself, as we know, is a critical littoral region. The Straits of Hormuz have remained open through decades of occasionally high tensions in and around the Gulf but they have never been closed. (It was rumoured during the 12-Day War that Iran was preparing to do so.)
The disruption that could cause to the world at large cannot be overstated. And while it would affect practically every country in the world, sea-dependent powers would ultimately suffer disproportionately more than resource-rich land powers such as Russia.
Modern China, however, is heavily dependent on overseas imports, including Iranian oil. This is probably one reason why, following decades of suspicious and cool relations with Russia, China has grown closer to its erstwhile Eurasian rival power. The same is true of India.
While these three are not necessarily friends – recall there are no permanent friends – they all share a common interest in avoiding further negative power projection by the United States.
The challenges of multipolarity
With the decline of Anglo-American power comes the rise of modern multipolarity. There is no longer going to be one dominant force in the world. Countries are going to need to find ways to either work together, or not, without the US intervening to solve whatever disputes arise.
This could get messy. History suggests that major global power shifts result in major wars. We are seeing one of those already in Ukraine. Others may be brewing.
But as all human endeavour is conscious choice, today’s power shifts and associated disputes need not be resolved through force. Indeed, were a direct US-Russia dispute to escalate to a full-blown military conflict, the global damage could dwarf that of WWII.
No one wants to go there. But will the US be willing to relinquish its previously enviable, dominant position without a major fight?
It will, but it will need to see multipolarity as a potential opportunity, rather than all downside. Fortunately, this is indeed the case.
Consider the rise of the British Empire. It had to successfully fight the Spanish, Dutch and French to achieve Pax Britannia over the waves. However, Britain wisely never attempted to conquer continental Europe. Rather, it acted as an “offshore-balancer”, cleverly aligning itself with whatever country or group of countries would prevent a single power dominating the continent.
This is how Britain dealt with Imperial Spain, Napoleonic France and, in the 20th century, with Germany. In the latter case, it needed also to enlist support from the US. But Britain remained on the winning side and retained its disproportionate global influence for well over a century.
Yet Britain was never going to remain a global naval hegemon forever and certainly was never going to conquer all of Eurasia. It did however occupy a strategically advantageous position to act as an offshore-balancer. And it played its hand very well.
Arguably, Britain also managed its imperial decline with a certain degree of skill. Suez was a mistake but, when seen as such, quickly abandoned. No such mistake was ever made again.
There are clear strategic lessons for the US here. China, Russia and India are not natural allies. Far from it. That they are banding together is due to the US exercising an excessive degree of negative economic and military power in order to force them to behave against their national interests.
Nowhere is this clearer than in the war in Ukraine. For many years Russia made clear to the world that it would not tolerate Ukraine falling into the US-NATO sphere of influence. The US called their bluff. And so the war came.
That China and to a lesser extent India and other members of the Global South have generally chosen to side with Russia in this tragic conflict is an important signpost for future historians: that the transition away from Pax Americana to a multipolar world has well and truly begun.
Four years ago the US withdrew from Afghanistan, and chaotically. It was a clear loss of imperial face.
Just over a century ago, in 1919, the Third Anglo-Afghan War ended in something of a stalemate. It was not such a clear loss of imperial face. Indeed, it was presented to the British public as a way to help stabilise their control over India.
Some 30 years later, that control was lost for good.
It is often said that, through their empire, the British provided an example to the world. Indeed they did. And in more ways than one, including how to wind one down relatively peacefully.
Si vis pacem, para bellum
The above translates from the Latin as “If you desire peace, prepare for war”. It is attributed to Roman author and amateur military historian Publius Flavius Vegetius Renatus, but some argue he borrowed and adapted it from Plato.
In any case, it is a famous adage which explains that having a strong defence capability is a crucial ingredient in maintaining peace with your neighbours. It takes a more modern form in the poetry of famous US poet Robert Frost: “Good fences make good neighbours”.
In the transition from Pax Americana to a multipolar world, with the US no longer able (or possibly not even willing) to play the role of world policeman, there is going to be a need for more fences.
Many countries are going to feel a need to rearm. Not to be aggressive necessarily, or at least one would hope. But not only will new fences need to be built. Old, decaying fences are going to need to be repaired, perhaps reinforced, perhaps made higher.
From the perspective of an investor, this implies you want to own fencebuilders: or defence companies if you prefer. Defence stocks have been on a tear the past few years, rising to high valuations.
Sadly, those valuations are entirely justified. Defence has become and will remain, for the foreseeable future, a “must-invest” sector. This is all the more so given that it is also not a cyclical sector subject to underperformance during a period of weak global economic growth, or possibly even outright recession this year and next.