Recently my friend Tom gave me a book by Peter Zeihan entitled “The end of the world is just beginning.” It’s a great read — a provocative title with even more provocative conclusions. What motivated Tom to give it to me was Zeihan’s comments and predictions about China, North America, and specifically Mexico as the “end of the world begins.”
As the subtitle says, the book is about “mapping the collapse of globalization” and makes a very compelling case for which countries will be the winners and losers if the reversal of globalization does become a full-fledged reality. In Zeihan’s analysis of the data, the reversal is already undeniably underway and accelerating. Most of us in one way or another are already starting to feel this shift in globalization trends, with words like nearshoring, friend-shoring, localization, and deglobalization increasingly creeping into our vocabularies. But we struggle to understand what exactly does it all mean? Who will be impacted and how? And how quickly will the changes and impacts happen?
Zeihan, in careful detail, describes what key trends to pay attention to and what impact they might have on the future of the world. Although I cannot do justice to the 498 pages of analysis he does in his book in a short column, there are some key takeaways that I think are especially relevant for those of us with an eye on North America. Among the many indicators he researches, demographics, energy production, and food production are near the top of an exhaustive list and stood out to me.
For his analysis of demographics, Zeihan focuses on the birth rate, net migration rate, and average age of the population in each nation. Many countries, including Japan, China, Russia, most of Europe, and parts of southeast Asia have increasingly aging populations (meaning less consumption), with below-replacement birth rates, and low migration levels. This will result in a rapidly declining domestic market, and ultimately declining standards of living for its residents as more people receive government resources than pay into the system.
Much has been written recently about how China’s population is now hitting a troubling negative inflection point. In other countries around the world, leaders are increasingly highlighting the risks and significant negative impacts of such low birth rates and rapidly aging populations on their economies. North America, relatively speaking, is in much better shape than most of the rest of the world in all of these key aspects of demographics.
With respect to both energy and food production, Zeihan focuses his analysis on which countries are net importers versus net exporters as well as the source of the imports. In other words, which countries are more “self-reliant” and which ones depend more on other countries to provide for their food and/or energy.
In his research, countries like China, much of Europe, and parts of Asia are exceptionally reliant (and thus much more vulnerable in a deglobalizing world) on food and energy supplies from other nations. In a hyper-globalized world in which everyone was connected and cooperating, this served these countries well. Going forward, Zeihan is not so convinced, and foresees significant potential disruption and issues.
North America, on the other hand, is extremely self-reliant in both areas and as a result, is relatively at far less risk.
The book goes on to make the argument that the combination of relatively high birth rates, a relatively young population, net positive migration, and food and energy self-reliance position North America to be a huge beneficiary of the impending collapse of globalization. The large population of the region (with still significant room and resources to accommodate many more people), the abundant natural resources, and the in-region lower cost labor of Mexican workers even further bolster Zeihan’s argument that North America will be the undisputed winner as the collapse of globalization accelerates in the years to come.
I was so intrigued by his analysis and the potential for what it could all mean for Mexico that I reached out to Zeihan directly to discuss further.
We talked for nearly an hour and conducted a “deep dive on the collapse of globalization from a Mexico point of view.” Specifically, what does this all mean for Mexico? How real is this opportunity? What does Mexico need to do to capitalize on it? What must Mexico prioritize?
I will share those comments from Peter, along with my thoughts in next week’s column. Stay tuned!
Travis Bembenek is the CEO of Mexico News Daily and has been living, working or playing in Mexico for over 27 years.
What a proactive approach to your review of the book. Really much looking forward to read more about the comments from Peter in your next week’s column 👍
Delighted with your review and look forward to the next installment.
All of this is taking place because Zi decided to close the city of Shanghai during the covid pandemic rather than buy the Western made vaccines which were effective versus the Chinese vaccines which were not effective. In the process of closing the factories of Shanghai, he destroyed the concept of “just in time” , a central element of global trade. Using Western vaccinations was a obvious symbol(and reality) of Chinese inferiority in science. Zi chose what he wanted and was familiar with, “authoritarianism” which locked people in their homes and apartments, shut the factoies, closed the ports and were enforced by state police powers. Some national economies depending on China went into recession. In that one year period he forced manufactures to look elsewhere to get the parts they needed to complete conplex manufactured produces. For the powerful North American economies, international companies choose Mexico which was more convenient because it was part of the North American Free Trade Treaty and the cost of transporting these parts was much lower from Mexico than China.
Jim
Great review Travis. 495 page is quite a tome. Would you please give us a definition of globalization?
This gives such a positive outlook on the future of North America after what’s been happening for the last several years. Thanks Travis, I look forward to the next column!
In populations like Japan, with an increasingly large divergence between the ballooning number of elderly versus those younger, will mean less care for the many are supported by tax dollars from the relatively few. If governments fail to step up their efforts to focus on prevention, ie a model for prevention and wellness versus sick care, the future for seniors will be far more challenging than it is today.
I don’t see his reasoning on the birth rate, young population, food and energy self sufficient, etc, especially in USA and Canada. None of these apply to the USA. Maybe Mexico. I think his thinking is partial. USA will not survive what’s to come. My humble opinion!
Zeihan is a hack, he is seriously uninformed.
I would be careful when evaluating anything Zeihan has to say. Most of his theories are based on demographics His overall mantra “demography is destiny” is just one part of the larger long-term story of nations. The destiny of nations involves the effects of war, self-destruction by civil strife, environmental catastrophes, populist and nationalist trends, and bad leadership, amongst many other factors. I’ve watched Zeihan over the years and he exhibits all the characteristics of a simple social media influencer looking to increase his audience by using big and controversial statements. He is convinced by his own arguments (dangerous), and I have never seen him involved in dialogue with experts.
Z bases his script on demographics and that’s a potent explanatory variable in predicting future social and economic changes, ceteris parabis. But he skips over potentially greater factors such as social and climate upheaval. He falls short on imagination in the mechanical application of the data. If North America retreats into a single economic and social union, with permitted deviations such as people not profits mattering more in Canada and Mexico, so much the better, especially if it means the US stops messing up the rest of the world.
The big winner in deglobalization is…. Mexico. It has a very large and growing young population ready willing and able to work. The wages are lower then China and therefore both China and the US are bringing their manufacturing plants to Mexico. At the same time, under AMLO, the country is on its way to becoming energy self-reliant. The US does not like this and is doing all it can to support right wing parties (PAN-PRI-PRD) and go back to the neoliberal policies of privatización to maintain its control over the Mexican governmant as in the recent past. Mexico will be ruled by the MORENA party and will become even stronger and soverign. Mexico in 10 years will step into 1st Nation status. This is my prediction. The second part of the analysis I’m sure will support my prediction!
Z bases his script on demographics and that’s a potent explanatory variable in predicting future social and economic changes, ceteris parabis. But he skips over potentially greater factors such as social and climate upheaval. He falls short on imagination in the mechanical application of the data. If North America retreats into a single economic and social union, with permitted deviations such as people not profits mattering more in Canada and Mexico, so much the better, especially if it means the US stops messing up the rest of the world.