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This is the seminal long-tweet, where AW formulated the thesis that The Davos Regime does not deal with other power centers as peers, but with rebels and criminals, and what the first corollaries of it are. Without further ado:

I posted the other day that the story of the colossal sanctions failure and backfire against Russia is a case study in the benefits of forced reshoring. Russia is not some rentier petrostate that needs foreign contractors to keep its lights on, it is a developed country with a highly educated population and vast latent productive capacity. With Western-facing trade largely cut off except for some high-demand commodities, and domestic demand for goods and services higher than ever thanks to the war, those jobs in productive industries that were brain-drained out of Russia to the West in the 1990s simply returned home. People fled the service industries for higher-paying factory work, and rising wages have fueled an economic boom.

The thing is that this domestic growth model, although excellent for the ordinary man on the street, is anathematic to oligarchs. It's inefficient - one of the first economic theories they teach you is how free trade creates greater net prosperity because of the efficiencies of specialization. Of course they leave a couple things out in Economics 101: (1) sufficiently large countries can actually be "good at everything" and have no real need for foreign trade as all efficient specialization can occur between internal trade nodes; and (2) the real world is not an economic supply-demand chart, the benefits from this complex arrangement will be engineered to flow primarily to the people managing it. Paying for Chinese goods with American banking-sector money is very efficient but only economically benefits a small group of transnational elites. Ergo the "Davos Regime" - this highly rarified group of people meet up every year for the World Economic Forum in the city of Davos, Switzerland.

So where does the Rules-Based International Order enter into it? Well it's quite simple - you can't have an economic bloc without some level of shared governance to enforce the bloc rules, and these governance structures tend to grow with time. It's why the European Coal and Steel Community* dictates the policy of most ostensibly sovereign European countries now. And with the emergence of a planetary economic bloc after the Cold War - generating astronomical wealth to be creamed off by a new generation of oligarchs sophisticated enough to manage its incredible complexity - a putative world government was going to emerge almost as though by the laws of geopolitical gravity.

* now known as the European Union

The "Rules-Based Order" is thus simply the domestic policy of the Davos Regime - an entity that has no foreign policy because it purports to govern mankind and has arrogated to itself a monopoly of legitimate force worldwide. The Davos Regime conducts no real diplomacy and recognizes no other sovereigns, only rebels against its rule.

This monopoly on violence and diplomatic atrophy, by the way, precisely explains the behavior of Western leaders of late. Brutalizing protesters against their rule at home - or bombing their enemies abroad - is legitimate because they are representatives of a global sovereign with a monopoly on legitimate force. Lesser entities not part of the Davos Regime have no such rights, and any use of force on their part is presumed to be criminal in nature and to be punished severely. Similarly, the institutional collapse of Western diplomacy is easily explained by the fact that these diplomats do not view themselves as dealing with coequal sovereigns but rather with lesser, subject entities to be dictated to, and to whom they lack any real reciprocal obligations.

You can see immediately why Russia would drive the Davos Regime absolutely up the wall.

I posted about the lessons from the forced re-shoring previously, so this topic is congenial for me.

Posted by: Pete Zaitcev at 05:34 PM | No Comments | Add Comment
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