Source: Paul Bateman

As Mark Twain probably didn¡¯t say, history may not repeat itself, but it does sometimes rhyme.

Four years ago I published a book called 2014: How to Survive the Next World Crisis. It was an exercise as much in diagnosis as in prognosis, but I observed that the previous five centuries all hinged on events in the middle of their second decades: Martin Luther¡¯s nailing of his theses to the door of Wittenberg church in 1517, the start of the Thirty Years War in 1618, the European settlement and Hanoverian succession around 1714, the Congress of Vienna in 1815 and, of course, the start of the First World War in 1914. On that basis, I made a number of predictions about the years ahead ¨C some more serious than others.

So how do those predictions stand up now? Well, my most speculative idea ¨C that, like the period 1914-18, the period 2014-18 was likely to bring a major event or complex of events that would reveal the character of the century to come ¨C is still looking pretty healthy. For a quarter of a century, economic globalisation powered ahead while political and regulatory globalisation lagged behind. The reckoning came with the financial crisis of 2008, and the desperate measures taken to avoid a second Great Depression. It remains to be seen whether quantitative easing, ultra-low interest rates and China¡¯s colossal fiscal stimulus merely postponed the damage ¨C and, if they did, what political form the damage will take. Parties with wide support in Greece and France have overtly threatened a reversion to fascism, and, in the UK, both Alex Salmond and, more amateurishly, Nigel Farage have sought to combine nationalism and elements of socialism in a mix which has an unsavoury smell of the 1930s. The UK may yet break apart and, although the rest of the world could no doubt manage without it, its disappearance would be a geopolitical earthquake and a poor augury for the stability of the century to come.

I was correct that, with the crash of 2008, we were entering a period not just of economic but of political stress, in which the institutions regulating our global interdependence ¨C such as the World Trade Organization, the European Union or even the United Nations ¨C would be tested, possibly to destruction, but possibly also to a point of reinvigoration. Tony Blair¡¯s suggestion that the older political opposites, left and right, are not now as important as the distinction between open and closed societies seems to me absolutely correct. In the globalising years after the fall of the Berlin Wall in 1989, free trade and the free movement of capital and, to a significantly lesser extent, of labour, enriched a huge fraction of the world¡¯s poor and brought us much closer to achieving the UN¡¯s Millennium Development Goals than originally seemed possible.

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But since 2008 the temptation to close down those freedoms has been multiplied by the use of political ¨C which ultimately means military ¨C power. The development of the confrontation in Ukraine will show us whether, in the post-2008 world, economics are still more powerful than politics. Is the interdependence brought about by globalisation strong enough to resist a slide back into nationalism, protectionism and war? Will the sanctions imposed on Russia work? If they do, that will be a good sign for the rest of the century.

I was also right that the decline in the US¡¯ relative power would nevertheless leave it ¨C still unparalleled in its military resources ¨C as the arbiter of world events. In Ukraine, the Middle East or the western Pacific, it continues to be the US¡¯ decision whether a local crisis becomes global. Fortunately, the current US administration seems to be subordinating American exceptionalist thinking to the imperative of collaboration.

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But what will really determine the course of the coming century is the US¡¯ relationship with China, and this will plainly depend to a considerable extent on developments within China itself. As tensions have risen between the Middle Kingdom and all its neighbours, it is becoming ever clearer that any destabilisation of the Chinese Communist Party ¨C for example, by a mismanaged economic slowdown ¨C could have serious consequences for world peace. Conversely, a successful internationalisation of the renminbi may cement China¡¯s position in a new world order.

I was clearly wrong, though, to say that the Middle East would start to fade as a focus of world attention. That expectation was based on the belief that shrinking oil reserves would soon force a rebalancing of US energy policy away from fossil fuels, thus reducing the significance of this otherwise economically unproductive region. But the shale gas revolution ¨C almost unheard of in 2010 ¨C has changed that prospect entirely. It now seems that we shall continue to depend on fossil fuels for the rest of the century.

Finally, even though the supranational institutions of the EU represent the only way forward to a 21st century more peaceful than its predecessor, the future of the union is still regrettably uncertain. National governments are still bitterly defending the illusions that give them a raison d¡¯¨ºtre: for example, that global corporations can be taxed nationally rather than supranationally, or that international trade is possible without international regulation, or indeed international migration. A second euro crisis still seems quite possible, and a nationalistic exit by the UK or another member state may shake the EU to its core. It is still too early to call this one, but next year¡¯s general election in the UK could be a crucial moment.