GeoTech Wars - Vacation from History Is Over with Matthew Turpin

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In this episode of GeoTech Wars, Kirti and Andrew discuss how the international economic system is adapting to the emerging “cold war” between the United States and China. They are joined by Matthew Turpin, who is a senior advisor at Palantir Technologies and a visiting fellow at the Hoover Institution specializing in U.S. policy towards China, economic statecraft, and technology innovation. Matt has significant experience in both U.S. national security and China, serving as the U.S. National Security Council’s Director for China, the Senior Advisor on China to the Secretary of Commerce, and as an advisor on the People’s Republic of China to the Chairman of the Joint Chiefs of Staff.

In the 1992 political philosophy book “The End of History and the Last Man,” author Francis Fukuyama argues that Western liberal democracy has emerged as the final form of human government. Humanity, he asserts, is not just in a post-war period, but in a post-history period where democracy will become increasingly dominant. Despite how alluring this may sound, however, it is now apparent that the fall of the Soviet Union did not represent the end of history; it was merely a brief interruption. Geopolitics remains as critical as ever, and the vacation from history is over.

Democracy is diminishing worldwide and, per Matthew, while the United States may not want it to be true, the nation is engaged in a cold war with China. The post-World War Two rules-based global system was designed to advantage open societies and undermine authoritarian regimes. In response, authoritarian regimes are attacking this system, recognizing that it represents an existential threat to their form of government. China, an authoritarian state and the second-largest economy in the world, increasingly asserts itself in international governance institutions and wields its economic influence to undermine global norms which run counter to its national interests. Thus, China is now a rival and competitor to the United States in all domains, from military, to economics, to technology.

Accordingly, the current landscape of globalization and the international system developed following World War Two are undergoing a significant reimagining. In the aftermath of the first Cold War, businesses believed that governments were no longer important and that a new borderless system had emerged where profits superseded politics and capital, labor, and goods could flow unrestricted. Today, however, businesses are recognizing that this logic is flawed. Geopolitics drives business models, not the other way around.

There is an inherent tension in the ongoing shift as, unlike the Cold War between the United States and the Soviet Union, the United States and China are highly economically interdependent. China is simultaneously the U.S.’ primary competitor and among its largest trading partners. For instance, one-third of U.S. semiconductor revenue is generated from sales to China, while several prominent U.S. semiconductor firms rely on China for up to 70 percent of their revenue.

Nevertheless, as Matt argues, economic interdependence will not stop the upcoming shift of the international system. Governments are playing an increasingly important role in international business, and there will be a period of significant disruption for incumbents who fail to adapt. While this transition will be costly for some, it also presents tremendous opportunity for both businesses and nations that adapt. Change is certain, but it is not necessarily negative. The United States and its allies have the opportunity and ability to create a new international system that incorporates the liberal values of openness and transparency in its foundation.

This piece summarizes the discussion in the episode of GeoTech Wars, “Vacation from History is Over.” It does not represent the opinions of the hosts.

Kirti Gupta
Senior Adviser (Non-resident), Renewing American Innovation Project
Program Manager and Associate Fellow, Geoeconomics Center