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A New Cold War?

Are the clouds of a new “Cold War” gathering over Russia and the US? A member of the Russian Duma has declared as much, and it’s resonating through the world for one simple reason – it sure seems right. Sanctions are starting to bite hard throughout Europe as the ties that were formed since the last Cold War ended 25 years ago slowly meandered towards integration.

But was the integration of Russia, and for that matter China, really such a good thing in the first place? Many nations around the world don’t share the same values as the West and stand in competition to what we value as an open society. Clouds of war challenge not just our relations, but the very soul of what we as a people value most dearly. And we value it because it makes us who we are.

It’s called “Social Capital”. It is the fruits of an open society. The parts of the world that aren’t ready for it will always be in conflict with us over it, and we are at our best when we don’t forget it.

You're not as clever as you think, Vlad.

You’re not as clever as you think, Vlad.

The process of the world coming together in a Great Convergence has been the story of our time since even before the Berlin Wall fell. It was only natural for us to embrace newly “free” people even if they weren’t quite free. Engaging in commerce should only enhance their desire for more freedom (while Western capitalists made a bunch of money exploiting what they could, of course).

It’s been working pretty well until now. A great conflict is being engaged and the starkness of the situation cannot be ignored. Perhaps it is a new Cold War.

The problem is that Russia is not an open society in any way that we would recognize one. Propaganda on Ukraine is fed in a steady stream to the people who have limited access to anything else. As Ukraine struggles to free itself from that influence, part of it wants to stay behind – and the conflicts, along ancient lines, are only logical.

What are we to do? The short answer is that we have to let it go, let them find their own path any way we can.

China is another nation that is hardly open in any sense we would recognize. Their efficiency at marshaling resources and transforming their nation has produced amazing growth, 7-8% per year in GDP over more than 20 years. But they have hit the wall in many respects, standing now as the most highly leveraged banking system in the world. A collapse is very likely.

Many hands make the work lighter.  Connections make things happen.

Many hands make the work lighter. Connections make things happen.

The answer? Social Capital, or the ability of a free people to associate and develop entrepreneurship, is what will take them to the next level. The great success of the last generation is about to be what holds them back, if they can’t find a way to let it go.

In the end, there is never any substitute for a genuinely free society. Supporters of Edward Snowden will point out that in our desire to confront those who don’t see things our way in this ever closer world we have sacrificed an awful lot of the freedom that made us great. It’s a damned good point, and one that we can’t ignore. We can’t become like our competition, our new friends, if we are to thrive. They are going to have to become more like us. It will happen in their own way in their own time, but it has to happen.

Workers of the World, Unite!

Workers of the World, Unite!

There is simply no replacement for Social Capital. It’s been estimated that 80% of the increase in productivity that we see in the US, both in improved production and in new products, comes from innovation. The greatest asset of this or any other nation is her people and their minds. Freeing them to engage in the way they see fit is the only way to continue the improvements we see. That includes new things as well as efficient, clean ways of doing what we already know.

Is there a new Cold War? If there is to be one, it will be different from the last one. It’s also entirely natural. No matter how the world converges there is still a great difference between nations that are run from the top down and the great traditions that made the West what it is. A barrier between us may be completely necessary until the Great Convergence produces more than wealth, but a convergence of ideas.

A convergence of freedom is what we need, and a convergence in the Social Capital that comes from that. Let the barriers rise until we share values as much as wealth. They are more precious no matter what.

9 thoughts on “A New Cold War?

  1. Totally agree. If Russia can’t play by the rules we should send them to their own corner to play their own game. On a side note I would love to hear more about social capital.

  2. What does Russia have that we can’t live without them? I can’t think of anything. It’s been one big disaster since the iron curtain fell. It’s not worth it if this is what they do.

    • I can’t think of anything, either. But to Europe this is a bigger deal, especially Germany. There is a market for German stuff over there that they have been developing. I say let the EU lead on this as they are the ones that have to deal with all the consequences of both action and inaction.

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