The desynchronization of the international system raises questions about what globalization means, and whether it has any meaning at all. But a major crisis is occurring in economic theory. The forecasts made by many leading economists in the wake of 2008 have not come to pass. Just as Milton Friedman replaced John Maynard Keynes as the defining theorist, we are awaiting a new comprehensive explanation for how the economic world is working today, since neither Keynes nor Friedman seem sufficient any longer. A crisis in economic theory is not merely an academic affair. Investment decisions, career choices and savings plans all pivot on how we understand the economic world. At the moment, the only thing that can be said is that the world is filled with things that need explaining.
4: The Disintegration of the Sykes-Picot World
Sir Mark Sykes and Francois Georges-Picot were British and French diplomats who redrew the map of the region between the Mediterranean Sea and Persia after World War I. They invented countries like Lebanon, Jordan, Syria and Iraq. Some of these nation-states are in turmoil. The events in Syria and Iraq resemble the events in Lebanon a generation ago: The central government collapses, and warlords representing various groups take control of fragments of the countries, with conflicts flowing across international boundaries. Thus the Iraqi crisis and the Syrian crisis have become hard to distinguish, and all of this is affecting internal Lebanese factions.
This is important in itself. The question is how far the collapse of the post-World War I system will go. Will the national governments reassert themselves in a decisive way, or will the fragmentation continue? Will this process of disintegration spread to other heirs of Sykes and Picot? This question is more important than the emergence of the Islamic State. Radical Islamism is a factor in the region, and it will assert itself in various organizational forms. What is significant is that while a force, the Islamic State is in no position to overwhelm other factions, just as they cannot overwhelm it. Thus it is not the Islamic State, but the fragmentation and the crippling of national governments, that matters. Syrian President Bashar al Assad is just a warlord now, and the government in Baghdad is struggling to be more than just another faction.
Were the dynamics of the oil markets today the same as they were in 1973, this would rank higher. But the decline in consumption by China and the rise of massive new sources of oil reduce the importance of what happens in this region. It still matters, but not nearly as much as it did. What is perhaps the most important question is whether this presages the rise of Turkey, which is the only force historically capable of stabilizing the region. I expect that to happen in due course. But it is not clear that Turkey can take this role yet, even if it wished to.
5: The Births of Asher and Mira
I was given two new grandchildren this year. For me, this must be listed as one of the five major events of 2014. I am aware that it is less significant to others, but I not only want to announce them, I also want to point out an important truth. The tree of life continues to grow new branches inexorably, even in the face of history, adversity and suffering. The broad forces of history and geopolitics shape our lives, but we live our lives in the small things. As much as I care about the other four matters - and I do - I care much more for the birth and lives of Asher and Mira and my other grandchild, Ari.
Life is experience in the context of history. It is lived in intimate contact with things that history would not notice and that geopolitics would not see as significant. "There are more things ... than are dreamt of in your philosophy," Hamlet said to his friend Horatio. Indeed, and their names are Asher, Mira and Ari. This must not be forgotten.
Have a happy New Year's, and may God grant you peace and joy in your lives, in spite of the hand of history and geopolitics.