© picture alliance/ZUMAPRESS.com/Idrees Abbas

On June 15 of this year, the armies of India and China clashed in the Galwan valley region of the Himalayas, resulting in the death of 20 Indian soldiers. While India and China share a long and contentious border, this clash was of vital importance for a number of reasons.

First, this was the first time in decades that the India-China border has seen this level of violence, as well as an increase in the buildup of Chinese troop numbers at multiple points along the border. Second, the clash shattered trust between India and China built carefully over years through agreements dating back to 1993, confining “the entire border architecture to the heap of history.” Third, while India continues to be a secondary concern in China, public opinion in India has decisively shifted to viewing China as a major security threat. Many in New Delhi believe this crisis reflects an inflection point that will fundamentally change the trajectory of India-China relations.

A Pattern of Border Tensions

India and China share an extremely long border running more than 3,000 kilometers, which is divided into sectors—western, middle, and eastern. After the last major boundary war between India and China in 1962 this border wasn’t clearly defined but a Line of Actual Control (LAC) was established. There are several disagreements and the LAC is vague, but both India and China agreed to not alter or re-define it unilaterally.

It was in the western sector in the remote mountainous region of Ladakh that Chinese and Indian soldiers clashed in the Galwan river valley on June 15^th. This violent attack was unprecedented, even on this contested border, representing the first violent deaths on the border since 1975 and the most fatalities in the region since 1967.

This begs the question why now and why this area? This region is strategically important to both countries. As Dhruva Jaishankar of the Observer Research Foundation (ORF) notes, in the 1950s China constructed a vital highway through the region claimed by India to connect to the critical regions of Xinjiang and Tibet. For India this region is important for supplying Indian forces along the disputed border with Pakistan, thus making the area critical for Indian security and “the geopolitical balance of power across a large part of Asia.”

Over time both sides have been building critical infrastructure including roads and airfields in the region, which have led to an increasing number of incidences—at the Depsang plains in 2013, then again in 2014 when Chinese troops crossed the border at Chumar coinciding with President Xi Jinping’s visit to India, and finally in 2017 at Doklam where Chinese troops entered a region they had “only patrolled sporadically before.” Galwan differs from these incidents not only because of the scale of the violence, but because this time Chinese troops “came in larger numbers, amassed troops and artillery ranged all along the boundary in Ladakh.” While both sides have blamed each other for sparking the incident most analysts conclude that China unilaterally altered the status-quo on the border by stationing a large number of its troops in the region.

The implications of this incident are bound to be significant. First, whatever the motives, it is evident that China is making more aggressive territorial claims in the region. Second, trust between India and China is at an all-time low. Since 1993, India and China had negotiated a series of agreements and operational procedures to prevent such skirmishes, known as the Border Peace and Tranquility Agreement but that has now essentially been voided. Most observers in India believe this was a pre-meditated and well-thought-out action on China’s part, making it very difficult to rebuild trust between the two countries and definitively turning the tide of public opinion against China.

An Inflection Point

While in the short-term, India’s priority will be the restoration of the status quo at the border, in the long term a rethink of India’s China policy seems imminent. Former National Security Advisor Shivshankar Menon argues that “the reset of India-China relations is now inevitable and necessary,” while C. Raja Mohan, director of the Institute of South Asian Studies, National University of Singapore, writes that any illusions Indian policy makers might have had about Asian and anti-Western solidarity with China have now been crushed.

This shift has certainly been accelerated by the border crisis, but it has been a long time in the making. As India and China grow in economic size and geopolitical ambition, a clash in policy between the two was in some ways inevitable. For example, Menon notes that freedom of navigation in the South China Sea has become an important issue for India just as China started doubling down on its claims in the region. Tanvi Madan, senior fellow at the Brookings Institution, points to other long standing problems in India-China relations—the widening trade deficit, limited market access for India, the growing proximity between China and Pakistan, China’s increasing activities in India’s neighborhood, and Beijing working against India at international forums such as the Nuclear Suppliers Group (NSG) and United Nations Security Council (UNSC).

While a reset is certainly being called for, realistically in the short-term India’s relationship with China will take three parallel tracks—cautious engagement, internal strengthening, and external balancing. India’s engagement with China will continue but with some clear differences. Military balance on the border will be a crucial factor in determining how India-China relations evolve. But as both countries continue to build border infrastructure and roads, such clashes are bound to increase. In economic terms, there are growing calls for India to “decouple” from China. This would be difficult to implement since China is currently India’s largest trading partner, and second only to the US once services are added. Chinese economic investments in crucial sectors like start-ups and fintech in India are estimated to be around $26 billion.

While decoupling is not an option, India will limit Chinese investment in critical infrastructure particularly 5G, telecom, power grids etc. Huawei being included in India’s 5G infrastructure is now certainly out of the question. India recently also banned 59 Chinese apps stating security concerns. The more difficult task is for India to build its domestic capacities and resilience, which would need sweeping policy reform, something that is often difficult to implement in an electoral democracy. For example, to strengthen its economy India needs to be better aligned with the global economy. However, protectionist tendencies run deep, and the Modi government has not delivered on promises of economic reform despite having a clear majority in the Parliament. Similarly, India’s defense sector is in desperate need of reform, but progress has been slow so far.

Diversifying Partnerships

As India aims to bridge its massive economic and military asymmetries with China, it will continue to follow a policy of external balancing by building “issue-based coalitions” with a number of partners. Stronger US-India ties are a prime example. In this crisis the US provided India with “rhetorical support, diplomatic cooperation, the use of military equipment acquired from the US and, reportedly, intelligence sharing.” While India is wary of becoming a pawn in US-China competition, aiming to forge closer ties with the US is part of a broader policy of diversifying its partnerships. It is important to note that over the last few years India’s relationships with Japan and Australia have strengthened tremendously—two partners who have also followed a policy of cautious engagement with China. As part of its broader Indo-Pacific policy, India has also increased security and economic engagement with Vietnam, Singapore, Indonesia and other ASEAN countries. In this new constellation of partnerships while India-Russia ties might seem to have taken a backseat, they are still important as most of India’s major weapons platforms are Russian, and that is unlikely to change in the short term. As part of this logic, India’s approach towards Europe has also shifted, though India-France ties have been the biggest beneficiaries. It is important to note that the China question also figured prominently in the recent EU-India summit which took place in July 2020 and instituted dialogues on 5G, connectivity, maritime security, and on deepening the Europe-India trade relationship.

Lessons for Europe and Germany

The Galwan valley border crisis didn’t make headlines in Europe, partly because of the confusing topography and history of the LAC but also because the conflict is essentially seen as far away. However, this isn’t one isolated incident. Over the last few months, coinciding with the coronavirus crisis, China has engaged in military intimidation towards several countries in the South China Sea, Taiwan, and Japan. It introduced the national security legislation in Hong Kong. It has issued threats of economic retaliation in response to domestic debates in Australia and New Zealand. These moves are important to note as they give an indication of what kind of international actor a rising China wishes to be.

Europe is in the middle of a debate on its new China strategy. Under the German Presidency of the EU Council, Germany’s Foreign Minister Heiko Maas has called for a unified European approach to China. A new approach and strategic assessment of China will not be complete and effective if it doesn’t take into account how China behaves outside of European borders and with Europe’s partners. Especially because, while Europe doesn’t face a territorial threat from China, on a number of questions of economic security and political interference the dilemmas faced by Europe are the same as many countries in the Indo-Pacific. India, Japan, and Australia are all reconsidering their dependence on China in strategic sectors, in many ways mirroring the debate in Europe.

Second, while the conflict might seem far away, Europe has a stake in the security of the Indo-Pacific. The EU is the largest trade and investment partner of many countries in the region including India. The dynamic economies of the Indo-Pacific will continue to be extremely important for export-focused countries like Germany. In the wake of coronavirus crisis as Europe looks to diversify supply chains, this region will be central. Hence keeping an eye on the security dynamics in the region, which could quickly disrupt supply chains and have an impact on European economies and security, is crucial. And finally, as Europe is diversifying its partnerships beyond China, and strengthening relations with India, Japan etc. it cannot forever stay on the sidelines of these conflicts and developments, refusing to take positions. Political agnosticism has its costs too.

In the past, border crisis between India and China have had two kinds of outcomes. They have either derailed the relationship significantly, as seen in the aftermath of the 1962 war. Or they have served as an opportunity to reset and revitalize the relationship. The latter looks increasingly unlikely especially since altering and questioning territorial status-quo seems locked into Chinese foreign policy choices—whether in the South China Sea or the Himalayas.

Given the geostrategic importance of this region, border tensions are not going to go away. Recent reports show the conflict is still very much active and de-escalation hasn’t taken place. This crisis also comes at a time when India is already struggling to grapple with another external shock—that of the coronavirus pandemic. In a speech last year, India’s External Affairs Minister Subrahmanyam Jaishankar noted that these disruptions in the past have led to a rethink and start of new phases in Indian foreign policy and that India has advanced its interests most “when it made hard-headed assessments of contemporary geopolitics.”

By all current assessments, unless Chinese behavior changes or there is a framework for de-escalation agreed upon, the path of engagement seems more constrained and India will focus on making issue-based coalitions and diversifying its partnerships to strengthen its internal and external position vis-à-vis China. These tensions will remain and external players like Europe will no longer be able to ignore these in their foreign policy calculus.

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© REUTERS/Annegret Hilse

In many places, left-wing parties and especially those on the center-left are struggling for their survival. The technical term for this phenomenon is “Pasokification.” The formula refers to the long-standing Greek social democratic party, the Panhellenic Socialist Movement or PASOK, which was thrown out of government in 2013 after barely achieving a vote share in the double digits. It has since served as a warning sign for the unstoppable decline of former major parties.

Observers spoke at that time of a unique shock, but Pasokification is by now (almost) everywhere. Sure, historically the center-left has always had to accept painful losses of votes. In recent years, however, the decline of the left no longer seems to be reliably followed by phases of recovery. PASOK, for example, received just 8.1 percent of the vote in last year’s elections—and that was in an alliance with several smaller left-wing parties.

But it shares this fate with many socialist and social democratic parties, some of which have shaped the fate of their societies for decades: the Labour Party in Israel, the Social Democrats in Austria, the Labour Party in the United Kingdom, and other center-left parties in Ireland, Spain, Italy, Australia, and of course Germany, where the country’s oldest party, the SPD, now seems stuck with a support of 15 percent. In all these countries, center-left parties have long been political fixtures, and yet today they face existential challenges.

A cartography of left-wing governmental responsibility leads to a world map with only a few red spots: In Portugal and Spain, in Sweden, Denmark and Finland, social democrats or socialists lead governments, and beyond Europe they also rule in Mexico and New Zealand. Otherwise the map looks conservative or liberal, if not populist-autocratic.

Victims of Fragmentation

So, what is going wrong? The analysis is complicated not only by ideological differences, but also by the fact that analytically it is almost impossible to separate the shock of the left from the more general crisis of those parties that traditionally had broad appeal to many parts of the electorate.

Yes, left-wing parties are losing not only elections but also members, and with few exceptions, worldwide. But in times of individualization this is true for conservative parties and ultimately for mass organizations as a whole: trade unions, churches, associations. One consequence is a political fragmentation, which is not least supported by the desire for ideological clarity. “I want to be part of a youth movement,” sang the Hamburg band Tocotronic many years ago. But who today longs to be part of a big political party?

The center is shrinking, the number of parties in the parliaments is increasing, and the ideological span is growing. For years, the vanguard of this development was the Netherlands, which currently has 13 parliamentary parties. But the trend can now be observed in every advanced Western democracy, with the exception of those with strong winner-takes-all voting systems, such as the UK or the United States.

So, is the crisis of the left merely part of a general malaise of the parties? The empirical evidence suggests otherwise. In fact, embedded in the distress of the parties, left-wing politics is experiencing a crisis within a crisis. Many formerly decidedly “left” parties have recently renamed themselves “progressive” or “progressive” movements. The Socialist International (SI) has been supplemented and partly replaced by a Progressive Alliance. Programmatically, the Swiss Social Democrats currently describe themselves as “the most important force for progress.” The Parti Socialiste in France also promotes “human progress,” while comrades in Austria place themselves “at the forefront of progress.” But what if progress causes concern rather than confidence? Opinion polls in the EU and the US show time and again that less than 30 percent of people are optimistic about the future. For parties that see themselves as parties of the future, this is not an optimal starting position.

Seen globally, optimism has long since migrated to the global South—despite having objectively limited life chances. In Western democracies, on the other hand, optimism about progress has found new homes: in liberal alternatives—in France, for example, with the particularly pro-European Emmanuel Macron—but also in parts of the Green movements, which have largely abandoned the culturally pessimistic criticism of progress of their founding years. Ecological movements are still a phenomenon of developed industrialized countries—in all 54 sovereign African states taken together, for example, there are only a handful of Green members of parliament. But in many OECD countries, public interest in the issue of climate protection has proven to be a powerful driver for Green parties.

The parallel success of right-wing populist forces can be seen as a significant counterbalance to this approach and is also reflected in the demographic composition of the electorate.

Even before the left started to melt, this polarization was supported by the prominence of issues that seem unfavorable for center-left parties. The eurocrisis, refugees and migration, climate protection: in none of these fields have center-left parties in European democracies traditionally shown any special competence. But can thematic trends alone explain long-term crises?

“The End of the Social Democratic Age”

It is characteristic of the current crisis of the left that the discussion of causes precedes the actual manifestation of symptoms by years, in some cases decades. As early as 1983 Ralf Dahrendorf proclaimed “the end of the social democratic age” and predicted the current crisis of the left, seeing it as a consequence of its success. In Western industrialized countries in particular, he said, distribution conflicts had been so completely resolved by the work of social democracy that the healing of society made it possible to stop taking medication. “In the end,” Dahrendorf stated, “we almost all became social democrats.” The diagnosis applies today to numerous Western societies and has serious consequences for the differentiation of social democratic policies.

It is difficult to contradict the broad strokes of Dahrendorf’s thesis, but there are real questions about the details. Certainly, one can hardly deny that there has been socio-political and economic progress. But the diagnosis of social saturation seems to depend heavily on one’s own perspective. For years, surveys have shown that majorities worldwide perceive the prevailing economic system as highly unjust. In addition, rising rents, insecure employment and extremely unequal opportunities in life remain such a massive problem in many places that the goal of social justice can hardly be seriously considered to have been reached.

A completely different, yet also influential approach to explaining the current crisis of the left also refers to successes, but—apparently paradoxically—to the electoral successes of left-wing parties themselves. These are the ideological reforms of left-wing parties using key phrases such as “New Labour”, “Third Way” and “Neue Mitte.” Based on the successes of Tony Blair and Bill Clinton, numerous center-left parties attempted to reinvent themselves as a force of the center in the 1990s. From the Netherlands, Finland, and Germany to New Zealand, Israel, and Brazil, party leaders relied on a credo that, according to the Schröder-Blair paper, “Europe: The Third Way/Die Neue Mitte,” “the essential function of markets must be complemented and improved by political action, not hampered by it.”

At the ballot box, this break with tradition initially proved to be a recipe for success. However, privatization, liberalization, supply-side policies and often significant cuts to state welfare services made left-wing parties attractive to the middle of the political spectrum only to the extent that they appeared to be increasingly unattractive to those further to the left. Looking back, it is hardly surprising that this economic middle course strengthened alternative offers from the far left and from a social-chauvinist new right, not only in Germany but also in Greece, France and Italy. This ideological break came in combination with political flexibility, which resulted in numerous coalition formations with center-right parties.

Neither “Neue Mitte” Nor Radical Left

Comprehensive criticism of the aberration of the “Neue Mitte” has recently almost developed into a basic consensus of left-wing Social Democrats. It is not only the leader of youth wing of the SPD, Kevin Kühnert, who calls the Schröder-Blair years a “original sin.” At party congresses in Austria, too, the social reforms of the “Third Way” have been comprehensively, ritually exorcised as a neoliberal “demon”—not to mention Great Britain and Italy, where clearly left-wing party leaders Jeremy Corbyn and Nicola Zingaretti took over the party leadership from Third Way supporters.

In this widespread, more economic reading of the crisis, center-left parties are and will remain called upon to rediscover classic redistribution positions and to bring about a renaissance not only of their own values but also of the conflict over economics as the decisive playing field for elections. In political reality, however, turns to left-wing economic purity have rarely proved successful in the long term. Lost trust is difficult to win back—especially for a left-wing party that wants to continue to participate in government. Only in crisis-ridden Portugal does a center-left party seem to have succeeded so far in assuming lasting government responsibility by adopting a decidedly leftist course. Elsewhere, clearly leftist parties seem to be fading after a brief surge.

The short-term successes of more radical left-wing hopefuls such as Alexis Tsipras in Greece, Jean-Luc Mélenchon in France, Pablo Iglesias in Spain and not least Bernie Sanders in the US appear to have evaporated, at least for the time being. Even the “Jeremy Corbyn Blueprint,” which the US magazine Jacobin still saw as a signpost “for the coming years” in 2017, seemed to have faded, at least until the outbreak of the coronavirus pandemic. One reason is probably that the forces driving anti-elitist left-wing populism are difficult to translate into sustained political support. The question is: if the key to rescuing the center-left is really turning toward the more radical left, why do the more radical alternatives that already exist fail at the ballot box—or like Bernie Sanders fail to be nominated?

New Dividing Lines?

Starting from this question, another school of thought has established itself in recent years. This line of thinking sees the current crisis as being rooted in a combination of economic blunders and cultural errors, which together led to a loss of traditional voter milieus. The British journalist David Goodhart has proven to be influential in the Anglo-Saxon discourse here, noting a division of Western societies into globalization-friendly “anywheres” and more traditionalist, more nationally oriented “somewhere.” For Goodhart, this dividing line represents a new social divide that runs through the traditional core electorate of center-left parties. In the German-speaking world, this analysis corresponds to the contrast between communitarians and cosmopolitans described in particular by the political scientist Wolfgang Merkel.

Attempts by center-left parties to compensate for the economic course of the “Third Way” through progressive flagship projects in the field of identity politics or with regard to an open attitude to immigration issues are not only unsuitable for returning alienated voters to the parties. In fact, they exacerbate the problem. Precisely because compromises are more difficult to reach in identity politics than in economics, this new line of conflict undermines the traditional voter coalition of center-left parties. In this context, my colleague at the Friedrich Ebert Foundation Ernst Hillebrand speaks convincingly of a center-left “that stands with one leg each on two ice floes that are slowly but inexorably drifting apart.” The parties are forced to decide to which segment of society they will make urgent political offers. However, since any shift in emphasis on the cultural conflict axis is likely to face considerable resistance from the remaining electorate, a shift in direction would only be possible at the price of an initial worsening of the crisis.

Perhaps because of its far-reaching implications, this interpretation has so far met with little response in progressive parties themselves. Critics of this view not only reject on moral grounds any suggestions of adapting to political opponents; they also fear that progressive parties could lose the last shred of credibility if they appear to be trying to ingratiate themselves with supporters of conservative positions. After all, in the end people will likely still choose “the original.” The question remains, however, as to how these critics explain the success of parties that are economically left wing, but more conservative in terms of identity politics. The SPÖ in the Burgenland region of Austria, the Social Democratic Party of Denmark or the Scottish National Party, ultimately achieve not only respectable successes with this orientation, but comprehensive election victories.

They thus prove that a combination of left-wing economics and rather conservative values on the cultural conflict axis can certainly attract non-voters and keep the growth of right-wing populist movements in check. It is important to note that adopting conservative values should not be misunderstood as a reactionary backlash, but rather as the preservation of progressive achievements such as equality, secularism, and sexual self-determination.

The Return of the Strong State

Will the COVID-19 pandemic now bring about party-political shifts that affect this crisis? In principle, the way Western societies are dealing with the coronavirus and the varying performances of ultimately competing systems in international comparison should strengthen left-wing political agendas in the short term. While the decisive role that nation states have played in the first phase of the virus control seems at first to run counter to multilateral convictions, it also reinforces the center-left narrative of a strong state capable of action and the primacy of politics.

This applies not only to concrete policy areas, but also, at least possibly in the short term, to a reassessment of traditionally defined work.

In this regard, the Overton window, the window of acceptable policy proposals, has rapidly shifted toward progressive policies during the pandemic. Demands that seemed controversial just months ago have become commonplace almost overnight: massive state investments, proposals for a significant deepening of European integration, an increase in the minimum wage, better pay for “systemically important professions,” growing support even for an unconditional basic income. The left, it seems, is taking to heart the advice of Barack Obama’s advisor Rahm Emanuel to “never let a serious crisis go to waste.”

Certainly, the crisis is evidence of humanitarian commitment, solidarity, and a rediscovery of community. But it gets tricky when one looks at a longer time period. Empirically, there is little evidence so far that economic crises contribute directly to long-term gains in solidarity and to the strengthening of the left.

The 1918 flu epidemic, for example—as American sociologist Lane Kenworthy points out—put an end to two decades of progressive reform in the United States, while the crises of the 1970s and 1980s did not result in the triumph of the left, but in the presidency of Ronald Reagan. Not to mention the consequences of the 1929 Great Depression: at least in large parts of Europe, Black Friday was not followed by Red Saturday but by the disastrous triumph of Brown ideologies. And the economic and financial crisis of 2008 not only allowed neoliberalism to survive but also resulted in a worldwide wave of populism.

The US political scientist Ronald Inglehart has made a significant contribution to understanding the underlying causes of these developments. Based on decades of opinion research in more than a hundred countries, his studies show that the development of progressive values has historically always depended on the perception of economic security. “Reduced job security and rising inequality encourage authoritarian reactions.” A high level of existential security, however, strengthens “openness to change, diversity, and new ideas.”

Not All Will Prosper

In view of the economic consequences of the pandemic, it can therefore be assumed that conflicts over redistribution are likely to experience an exceptional renaissance—and will compete with climate policy concepts for attention. However, in line with the historical experience of the New Deal and the development of the Swedish welfare state, known as the Folkhemmet or People’s Home, for example, left-wing parties are likely to benefit from this trend only where they see themselves in a position to play a decisive role in shaping political developments in the direction of safety nets.

Conversely, however, left-wing forces can hardly rely on an automatic impact of post-pandemic solidarity. On the contrary, there is much to be said for a feedback loop in which strong left-wing forces will tend to be further strengthened, while weak left-wing forces will tend to be further weakened. The “opportunities of the crisis,” which Dahrendorf spoke of in the context of the liberal movement, actually exist for the political left in the age of the coronavirus. It will not be strong enough everywhere to take advantage of these opportunities.

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© REUTERS/Aly Song

Capitalism has come to end. They’re saying it on TV, on Facebook, all over social media. It’s all going down the tubes, the whole thing’s a write-off. It’s all over now, obviously. So they say.

The same judgments, all over again. The same three-ring circus. But these misdiagnoses also form part of our Western cultural canon. These endlessly recurring critiques of capitalism are vague, so vague that they say more about the critics than the subject  that has them so concerned.

Are humanities and social science elites insulted that filthy lucre rules the world, rather than their own utopias and visions? Do the critics really know what they are criticizing? Can they say what kind of economy should take the place of capitalism? Can they put something forward capable of achieving anything like the prosperity enjoyed now in the West, in China, or in India?

Do they really have alternatives capable of providing the “greatest happiness to the greatest number,” as  John Stuart Mill put it? Or is their passionate negation meant to cover up their failure to develop sustainable alternatives?

These are not rhetorical questions, especially not now, in an epoch of pandemic and recession, which forms the background to the transformation from an industrial society to a knowledge society. Anyone who puts the question: “Is old-style capitalism still fit for purpose?” (meaning, of course, the market economies of the industrial nations) must be able to supply something better than what they so glibly criticize. But the same is true for die-hard defenders of the status quo. Pro-capitalist and anti-capitalist positions have become institutionalized and self-referential. What we need is something else: accessible capitalism. This type of capitalism must find its own way forward, businesslike but putting trust in people.

This is what I want to write about here, a third way, a market economy, capitalism for a self-conscious and self-confident civil society. Civil capitalism, which can pave the way for an open knowledge-based society.

But before getting into that, we should analyze relations as they currently are, figure out what we have at our disposal. Another capitalism is possible, but only if we are clear what we are talking about.

Self Determination

We owe John Maynard Keynes the insight: “the difficulty lies not in the new ideas, but in escaping from the old ones.” Old thinking now is industrial culture and the economy of hard work. The word industry, coined from the Latin industria, underlies that economy, which brought us everything we came to regard as normal, including mass production and the society belonging to it. Over the course of two hundred years, things have gotten so mixed together that it is hard to see the wood for the trees. But as Peter Drucker, visionary thinker of the knowledge economy, would put it, this state of affairs is actually a precondition for productive knowledge; it shapes the capacity of knowledge to “recognize connections.”

In other words, it is about understanding complexity, rather than reducing it to nothing. Digitization is nothing less than the continuation of automation processes which, to all intents and purposes, have gotten rid of routine work. Just as machines are replacing human power, network and algorithms are turning on their own inventors. If you only see a dystopian future, you don’t have enough imagination: what remains specific to human beings, something of which they have an infinite supply: individual work deriving from their personality and their own talents. No longer will we do the work ordered by others, “personally dependent” and “in service to another,” as German law on employees (in German, the word translates as “work-taker,” a telling phrase) would have it. Instead, they sing “intellectually and emotionally, we will work on our own account.”

None of this is entirely new. If we think of industrialization as a family, the most successful siblings have been automation and the division of labor. The latter always means specialization. The more you know, the more independently you can work. This is why knowledge is power, more than ever now, when it is combined with personality, individual know-how, and expertise. This development will advance all the more quickly if others can also have access to the benefits of specialization, as far as possible without barriers.

When ability creates a context, a market arises. The market economy is simply successful communication between those who have an ability and those who need that ability to fulfill their own needs. The knowledge economy cannot exist without participation and cooperation; for its part, this kind of participation requires self-confident, self-conscious agents at every level. This is something rather different to the “iron cage” described by Max Weber, with its older forms of dependency.

Reason versus Passion

Capitalism is not what has created bottlenecks within industrial societies. On the contrary, capitalisms are tools for openness and flexibility—so flexible that even using “capitalism” can sometimes be misleading. For this reason, social scientists tend to suggest that capitalism is an “essentially contested concept,” i.e. one that is constantly under challenge. The concept and its meaning are fought over in terms of people’s deepest worldview. But the “market economy,” a more concrete term for what we are talking about, is an event, a process in motion.

If something like this runs up against passionate republicanism, things can get problematic. Anti-capitalism is pure republicanism in the French Revolutionary spirit, in other words Enlightenment turned back on itself. The Revolution wants to create equality and pluralism, in others words, it wants to tap into complexity. But this quickly gets out of control, with the emergence of a politics of feeling, which tip over into simple patterns and explanations.

The current transformation makes this more visible than ever. What is at stake here are solutions for a mass society, simple collective answers. It is not capitalism in the dock, but rather the political simplifications, the reducers of complexity, the equalizers, the levelers-down. Our culture is on their side, let’s not kid ourselves.

For most people, pluralism and its systems are regarded as a threat. But the knowledge economy, like its civil society, functions according to other patterns. It is about grasping complexity, not reducing it any further. Less-is-more, the battle cry of the present day, is pure nonsense.

Even in a place where the boss—this is a good thing—puts more store on quality and the satisfying of personal requirements, instead of pure quantitative growth, as in industrial and consumer society, that is not something “less” in the sense of a new “overall view,” instead, these movements are on to something more, as prosperity leads one to want more than just more of the same.

In 1941, Abraham Maslow developed his pyramid of human needs. It is composed of five principal levels: existential needs, security needs, social needs, individual needs, and, finally, self-fulfillment. Our ancestors had their work cut out to meet the first three levels of needs. But human beings are more sated now, and better off. They want to be seen, they demand the fulfillment of their own personal needs.

We see this every day: everywhere, respect and recognition as a person, as a gendered person, as a colleague, is becoming ever more important. At the top of the pyramid stands Maslow’s self-actualization, which means optimally unfolding one’s own talents, including for the well-being of others.

Abundant mass production and automated routines are no longer enough to assuage needs at this level. As with industrial capitalism, they are at best a foundation. Quantity gives way to quality. The market economy is a pluralistic system, which can only be created with cooperation, differentiation, and joy in innovation. It is the operating system of an open society. Totalitarians, dictators, distant elites—they get on just fine without capitalism. But everyone else who wants their share of prosperity, the chance to make a go of things. It is not about the abolition of the system, it is about reinterpreting it. And making use of it.

Ruses

In his brilliant The Dynamic of Capitalism, French historian Fernand Braudel gave us perhaps the best definition of “the system,” which he called the “sum of ruses, processes, habits, and efficiencies.” This is not a doctrine of stasis at all. It is not the theory that anti-capitalists and method-obsessed economists are so eagerly seeking. Anyone who has tried to precisely describe the essence of capitalism has proven little more than that it cannot be done.

Max Weber sought the essence of capitalism in religion, in other words, in culture. This was also Braudel’s path. But this trail is only approximate, it only works in combination with one’s own experiences in dealing with behavior in the market economy. The tool assimilates to cultures, it coalesces with them. There is no one capitalism, there are hundreds of them. One study, which economic historian Werner Abelshauser is fond of quoting, identifies more than 750 varieties, all substantially different. Culture and social customs determine the economic toolbox. All capitalisms are the image of the cultures in which they operate. Globalism, in which cultural differences allegedly no longer exist, only seems strong if you don’t look too closely. Everywhere, cultures are the real rulers, the interpreters of market-economic methods and their ruses lead to highly variable results. Unification attempts regularly fail.

Japan’s form of capitalism, for example, is strongly focused on the state, incorporating the traditionally strong relation between citizens and the government. American variants are happier with risk, they take their lead from the individualist pioneer. China’s capitalism established the state as its own enabler, which attempts to achieve prosperity goals with the help of a highly dynamic (and often brutal) industrial capitalism. “Rheinisch Capitalism,” a variant closely associated with the history of the Federal Republic of Germany, is the social market economy which demands participation: “Welfare for all,” as Ludwig Erhard defined it.

This core is lost because of struggles over capitalism, which are basically culture wars, religious wars in a way. Neoliberalism is turned into a perfidious conjuring trick of the economy; in fact, the term refers to the “social liberalism” described by the German economists Walter Eucken and Wilhelm Röpke. The aim of social liberalism was to put the tools of the market in the hands of as many people as possible, in order to achieve more self-actualization, more self-determination, and more freedom. Systematic criticism of and opposition to market economies are fed by the primacy of the state and its institutions, over and above the free market. This leads to the opposite of what many critics intend: an expansion of the rights of the free individual.

Even today, many people live in a world of the oikos, the household economy, whereby a strict but fair father hands out whatever is available. Since ancient times, this has been the favored concept for thinking about economics. The claim it makes is as follows: there can be no more than this. The cake can only be divided up once, and we should do so as fairly as possible. “Fixed pie” is what economic psychologists call it: the belief of all those who never learned to bake.

Moreover, this belief is ahistorical. Human cultural development has always built on our capacity to use thought, renewal, transformation, and development to make more out of less. As a species Homo Faber has been successful, but it not very self-confident. Uncertain people cling to power, which promises security. There oikos is recommended, because power must be distributed. Shouldn’t enlightened people take it over themselves, instead of subjecting themselves to structures which are so hostile to innovation and emancipation?

In 1848, the Communist Manifesto by Karl Marx and Friedrich Engels conjured up the spirit of the bourgeoisie and its economic tools, through which man is “at last compelled to face with sober senses his real conditions of life.” Marxism, says the Manifesto itself, is “sweeping away all long-standing fixed things.” In other words, it helped to get rid of the Ancien Régime. That spirit consists of reason, sobriety, pragmatism—the whole Enlightenment schtick, in other words. Thinking for oneself, Kant’s goal for the Enlightenment, is not an end in itself. It should constantly critique, challenge, and test reality anew.

A civil society worthy of the name knows how to help itself: it designs. Almost all conspiracy theories, on the extremist wings of both left and right, are based on economic illiteracy. Marx and Engels were not the first and will not be the last who knew that there is no freedom without economic self-determination. Successful emancipation always means one thing: to free oneself of outside control and dependencies. Self-determination cannot be delegated to authority or ideology. Whoever wants freedom must understand economics, and know how to apply it. That is the spirit of civil society, of civil capitalism.

The Industrial Comedy

In this way, the theater of Western anti-capitalism, so often filled with boos, in fact presents a comedy of mistaken identity. If people knew what the market economy, in other words: capitalism, actually is—a system leading to the acceptance of the individual and of pluralism—maybe they would applaud, who knows? But they perceive something else, and in fact this other thing, which has disguised itself as the market economy, is not something we can use as an operating system. It is industrialism, also called industrial capitalism: the figure who stands between us and a successful transformation of the economy.

Industrialism does not need people to think for themselves. It needs a norm-bound, regulated society, collectives with interchangeable individuals. It needs command and control structures, and it needs a strict state to regulate, to create the famous/infamous conditions for “investment security,” the thing endlessly demanded by business associations and lobby groups. In this variant of industrialization, the primacy of politics is never questioned. If sales don’t take off, they demand subsidies and purchase bonuses. Education purely services production and its subordinate areas. It is not a question of learning to learn, in other words, of thinking in new and innovative ways. The focus, in fact, is on educational collectivism, or, fulfilling the plan.

Industrialism has no interest in emancipating human beings, although this is a delicate paradox as it does make a contribution to it. In other words, it first creates the material basis necessary for its own super-secession. This, as Maslow would regard it, takes us from the first three secure levels of his hierarchy up to the upper two levels, where human beings can be what they are meant to be: self-determining.

Nothing less than this is at stake. We are lacking advocates of civil society—who should always also be civil capitalists—to take economic fate into their own hands. In this way, hundreds of millions of people have escaped poverty in recent decades. It was not passion and not ideology which made such a fundamental change to circumstances in China and India. It was the sober gaze of the market, here so misunderstood and unrecognized.

“The unified world has become a real thing,” wrote Joschka Fischer in his foreword to Jagdish Bhagwati’s In Defense of Globalization. A clever, hopeful book, which soberly collates evidence for the successes of the “system,” despised by so many in Germany, because they do not understand how much their own lives are dependent on this system for the continued existence and functioning of what they criticize. The alternatives to constitutive capitalism are always close at hand. They include violence, poverty, hunger, and dictatorship. Let us look soberly at these facts and at our social relations. We do not need to force ourselves to do so. Reason is enough. Let’s make sure this resource does not run out. Let us increase and multiply it.

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© REUTERS/Willy Kurniawan

It began with a patient in Jakarta. In April 2035 the man was admitted to hospital in the Indonesian capital with flu symptoms. Within a few weeks, the novel pathogen, which the World Health Organization named Flu-35, spread first to other parts of Asia and then to Europe, Africa, and North and South America.

Led by the WHO, the international community responded quickly with countermeasures. The disease brought back memories of the COVID-19 pandemic of 2020/21. After successively controlling that virus with a vaccine from fall 2021, extensive reforms were introduced and massive investments were made in prevention, early detection, and crisis response. At the heart of the reforms was the transformation of the WHO into a more powerful and independent global public health organization.

The international community has now been able to benefit from the lessons of the COVID-19 pandemic and was thus able to rapidly contain Flu-35—without the outbreak developing into a global crisis. The fact that the end of the crisis was declared after only 10 months shows what great progress has been made since 2020 in combating pandemics.

Containment Thanks to Early Detection

So, how exactly was it contained? After a series of clusters of the novel flu epidemic occurred in Jakarta in April 2035, the local health authorities quickly reported the incidents to the WHO. Within days, it sent a team of virologists, doctors, and epidemiologists to Indonesia to work with the local authorities to gather and evaluate initial evidence of the novel influenza virus and recommend action for all WHO member states.

In the past, there had often been attempts by local authorities or national governments to cover up disease outbreaks, partly because the affected countries feared the economic damage that travel and trade restrictions would impose. However, the earlier outbreaks are detected and reported, the greater the chance of avoiding serious health crises. This is why the international community has been working hard to improve early warning systems.

On the one hand, after the COVID-19 pandemic, incentives for the rapid notification of outbreaks and improved cooperation with the WHO were created. For example, a massive fund is now available from which affected countries can quickly and easily obtain funding to combat the disease if they report outbreaks. The WHO has also increased the number of emergency teams available to help countries cope with the disease.

In addition to these incentives for the early notification of outbreaks, the international community created mechanisms to reveal cover-up attempts and demand accountability from governments. Fears of massive reputational damage drove up the cost of cover-up attempts.

In addition, existing early warning systems were significantly improved. Firstly, by stepping up the monitoring of pathogens in animals in “disease hotspots”: virologists and experts can thus learn more about which pathogens are spreading in the animal kingdom and could possibly jump to humans and trigger the next epidemic.

Secondly, after the COVID-19 crisis, considerable resources had been invested in the assessment of the epidemiological situation and risk. The WHO expanded the Epidemic Intelligence from Open Sources (EIOS) initiative and optimized the methods of collecting information on outbreaks and the risk assessment of disease incidents. Here, data from informal sources—such as social networks and media—are also evaluated and assessed. This also increases the willingness to report outbreaks quickly, as countries fear that outbreaks will be discovered and made public by other means.

An Independent and Effective WHO

An effective and strong WHO has been at the heart of the successful response to Flu-35. Its recommendations are quickly implemented by its members and not—as in previous cases—ridiculed and disregarded.

The coronavirus crisis had shown that the world needs a stronger WHO to better face pandemics. Although many experts believed that the organization had done a good job in 2020/21, its capacity as a secretariat of 194 member states, without any authority to issue directives and with an insufficient budget, was severely limited.

As was the case after the SARS epidemic in 2002/03, a reform of the International Health Regulations—the central, legally binding instrument of the WHO in outbreak control—was therefore initiated in 2022. This was completed in 2025 and significantly strengthened the WHO’s mandate. The WHO was now able to publicly demand accountability from member states for non-compliance with its recommendations and refusal to cooperate, rather than, as in the past, only standing idly by when countries ignored the organization. It could also impose sanctions, such as fines or temporary loss of voting rights in the UN institutions.

The WHO was also able to act effectively because its dramatic underfunding came to an end after the COVID-19 pandemic. It was indeed a severe blow when the largest donor, the United States, left the organization in 2020. However, a broad coalition of mid-sized powers and private donors led by the EU was able to make up for the resulting financing gap. In addition, the member states agreed to significantly increase the compulsory contributions. This made it possible to build up and expand operational forces and improve early warning and prevention. As a result, the WHO was in a position to act much more independently of the individual interests of its members or private actors.

Pandemic Playbook

When the WHO Director-General warned about the new influenza virus in spring 2035, governments around the world were able to make use of their national Pandemic Playbooks. Under the guidance of WHO, the Pandemic Playbook initiative was launched in 2022, with all member states evaluating and revising their national pandemic plans, some of which had become very outdated. A regular adaptation of these plans was scheduled for every three years, and pandemic management exercises were also held regularly at both a national and international level.

Pandemic Playbooks cover the health sector, civil protection and large parts of the private sector—especially the companies involved in maintaining supplies. In addition to setting up structures and measures to prevent diseases, the plans contain extensive instructions for concrete pandemic management, which are tailored to the respective conditions in the individual countries.

During the Flu-35 pandemic, countries around the world quickly began to ramp up their testing capacities, monitor airport arrivals and departures more closely, and track passengers, as envisaged in the pandemic plans. As past health crises had taught us that travel and trade restrictions were not very effective in containing the pandemic, there was an increased focus on tracing infected people and their contacts and on quarantine measures. The time advantage allowed the health sectors to increase their capacity to cope with a possible influx of infected persons.

The stockpiling of large quantities of PPE and antiviral drugs, which was regularly checked by the WHO, effectively protected hospital and medical practice staff from Flu-35 and ensured better treatment for the sick. The Playbooks also provided guidance to decision-makers in prescribing quarantine and protective measures such as closing kindergartens and schools and shutting down economic activity.

The Pandemic Playbook initiative was supported by substantial funding from the WHO, private foundations, donors, and individual member states. After COVID-19 there was a recognition that investment in prevention and pandemic management is more cost-effective than repairing the enormous damage caused by a pandemic, which led to increased investment. In particular, poorer, unstable, or war- and conflict-ridden regions, which are not in a position to prepare for disease outbreaks, are thus supported in building structures and capacities.

This is one of the reasons why Flu-35 could not develop into a serious global crisis—even regions of the world that had been virtually defenseless during previous outbreaks were able to take action.

“The international response to Flu-35 has shown that pandemics can be successfully controlled,” said the WHO Director-General in her statement at the end of the crisis in February 2036. Since 2020, enormous progress has been made in outbreak control, including the expansion of early detection, the strengthening of WHO and the improvement of national pandemic plans. Flu-35 has not plunged the world into a severe crisis with long-term and severe socio-economic consequences. The long-term goal must be to detect and control pathogens early enough to prevent major outbreaks from occurring in the first place.

But in a hyper-networked world with a growing world population, an increase in megacities and advancing environmental destruction, epidemics remain a realistic scenario that must be prepared for. Even in 2036 and beyond.

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© REUTERS/Aly Song

The coronavirus pandemic is a prime example of what former UN Secretary-General Kofi Annan described as “problems without passports.” Highly infectious diseases do not care much about national border guards holding up stop signs. To fight their spread and their effects, we depend on the cooperation of all states, no matter which political differences otherwise separate them. To this end, China is of central importance. This also applies to other global public goods, most prominently controlling the climate crisis: without China—which represents one-fifth of the world’s population and already has higher CO2 emissions than Europe and the US combined—there is no solution.

We must step up cooperation with China on global public goods. That does not mean, however, that we have to curry favor with Beijing to do so. China has a strong interest of its own in cooperating on global challenges, as it is also heavily affected by pandemics and the effects of the climate crisis. We therefore can and should vigorously defend our interests in what is a competition of systems with authoritarian state capitalism, while at the same time intensifying cooperation on global challenges. With regard to COVID-19, this means: we can take a strong stand against anti-Chinese racism, recognize the suffering and achievements of Chinese citizens in the fight against the coronavirus, and promote cooperation between government agencies and experts without making ourselves the mouthpiece of the Communist Party of China (CPC) narrative.

A Disinformation Campaign

The official Chinese narrative is clear. For the Chinese newspaper People’s Daily, the fight against the virus highlights “the obvious superiority of the leadership of the Communist Party and the system of socialism with Chinese characteristics.” The Central Propaganda Department recently published a hagiographic book entitled A Battle Against Epidemic: China Combatting Covid-19 in 2020. According to an announcement by the Xinhua News Agency, the book—which is to be published in English and other foreign language editions—shows how President Xi Jinping has demonstrated “his commitment to the people, his far-reaching strategic vision. and outstanding leadership as the leader of a major power” in the fight against the virus.

Internationally, Beijing is conducting an aggressive campaign against all those who have criticized the lack of transparency in the actions of the Chinese government. In Nepal, for example, the Chinese ambassador attacked a newspaper for publishing a critical guest commentary on the lack of openness and trust in the Chinese government at the beginning of the epidemic. Beijing aggressively went after Nobel Prize laureate Mario Vargas Llosa and also expelled three Wall Street Journal journalists from the country because the newspaper published a commentary with the historically charged title “China as the True Sick Man of Asia.”

The Chinese government also ensured that Taiwan was not allowed to sit at the table at World Health Organization (WHO) crisis meetings. Senior Chinese diplomats have pursued a disinformation campaign spreading conspiracy theories about the US military as the source of the new coronavirus. Against this backdrop, the way WHO Director-General Tedros Adhanom Ghebreyesus is attempting to curry favor with Beijing is fundamentally misguided. The WHO chief is on record saying that “China is setting a new standard for the response to an outbreak;” he has also praised the government for its “transparency.” Ghebreyesus’ adviser Bruce Aylward, who led a WHO delegation to the Hubei crisis province, is also heaping praise, particularly with regard to China’s use of technology. In a recent interview, he refused to answer a question on Taiwan’s corona response, instead insinuating that Taiwan is just a province of China. There should not be any place for sycophancy when dealing with Beijing when it comes to how to respond to pandemics.

The same principle should apply to climate protection: we should seek cooperation with China without shying away from confrontation on other issues—be they technology, security, trade practices, or human rights. But that is exactly what some voices on both sides of the Atlantic suggest. Stephen Wertheim, one of the prominent left-wing foreign policy experts in the United States and co-founder of the new think tank, the Quincy Institute, said in regard to competition between the US and China: “The American people can live with an authoritarian China. They cannot live on an uninhabitable earth.” This suggests that the advancement of CPC-style authoritarianism should not be taken too seriously in the face of the climate crisis.

Self-Interest in Climate Policy

And with regard to criticism of China, BASF CEO Martin Brudermüller warned at the end of last year that there should be “a real, honest, social discussion about all the consequences,” making reference to the fact that many jobs in Germany depend on China. And he brought the climate crisis into play: “If China does not cooperate on climate protection, it will not work. In that case, they will continue to build coal-fired power plants.” This suggests that China will build coal-fired power plants out of spite when political relations become strained in other areas. But when it comes to climate protection, the CPC leadership acts out of self-interest, not because we in the West are tame and servile. The CPC elite is convinced that China will be hit hard by the effects of the climate crisis. In addition, there is pressure from the population that wants to see a reduction in air pollution (e.g., from old coal-fired power stations).

To be sure, security considerations do play a role in China’s climate policies. The fact that China is not giving up coal also has to do with energy security. Coal is readily available in China and therefore security of supply is less at risk. And anyone talking about decoupling China from the Western economy should be aware that this could be bad news for the production of low-carbon technologies, as researchers John Helveston and Jonas Nahm have shown. China currently produces two thirds of all solar cell panels, one third of all wind turbines and three quarters of all lithium-ion batteries. This dominant market position is also the result of violations of intellectual property rights and fair trade practices. Nevertheless, we should not completely forego China’s cost advantages in the production of these technologies—the cheaper the price at which these technologies are available in large numbers, the faster they will be deployed globally.

At the same time, Germany and Europe should not have any illusions about the hurdles for cooperation with Beijing on the climate crisis. A joint European-Chinese “Green New Deal” is not only a long way off because it is unclear whether Europe is serious about it but also because Beijing currently makes for a very questionable partner. At present, China is the largest exporter and financier of coal-fired power plants—often with outdated and thus particularly harmful technology. China’s gigantic Belt and Road Initiative has a very poor climate balance, and a merger of China’s and Europe’s emissions trading systems, as called for by climate researcher Ottmar Edenhofer, raises fundamental questions about how a market economy system could possibly merge with a state-capitalist instrument without ensuring the necessary transparency and trust.

Playing the Victim

Yes, we should try to intensify cooperation with China in tackling the climate crisis. But China will not export fewer coal power plants simply because we choose not to react if it violates our interests in other areas. We can and must do both: strongly defend our interests vis-à-vis China and lay the foundations for robust cooperation to tackle common problems.

That should also be the maxim in the arena of multilateralism. When accepting the Kissinger Prize at the American Academy in Berlin in January, German Chancellor Angela Merkel warned that “we should not fall into a new bipolarity, but rather try to include a country like China and treat it at least equally, based on our results and experiences with multilateralism.” China Daily widely distributed the video clip of Merkel’s speech on social media. It is easy to understand why the CPC organ was so enthusiastic about Merkel’s statement: it reinforces China’s victim narrative that others are treating the country unfairly in the global arena.

In her statement, Merkel insinuates that China is not involved in multilateralism and is not treated equally. Neither is true. China is a permanent member of the United Nations Security Council and is prominently represented in many UN special organizations with top personnel (no other country had more citizens as heads of UN agencies). Yes, China should have more weight in the IMF, but apart from that it is not treated unequally. Equal treatment doesn’t mean looking the other way but calling China out where necessary like we do with other countries. If China violates human rights, there is no reason not to say so.  Indeed, it tries hard to undermine the universal validity of human rights in UN bodies. And if China systematically violates the spirit of the WTO agreements through state-capitalist practices, then ignoring this doesn’t help multilateralism.

Meanwhile, Beijing has self-confidently established its own multilateral organizations, like the Asian Infrastructure Development Bank (AIIB). Signature initiatives such as the Belt and Road Initiative are essential bilateral dressed up in a multilateral guise by bringing together all participating states at an annual forum in Beijing. During the current coronavirus crisis, China is delivering assistance to countries (also in Europe) with great fanfare. In a call with Italian Prime Minister Guiseppe Conte, Xi Jinping spoke of a “health silk road” China was seeking to build. This again is a purely bilateral initiative seeking to maximize Beijing’s PR gains.

China has so far refused to contribute to genuinely multilateral efforts such as the Coalition for Epidemic Preparedness Innovations (CEPI) that is developing a coronavirus vaccine. Germany, Norway, and the United Kingdom have all generously contributed to this multilateral effort while Beijing (like US President Donald Trump) puts a premium on its own national efforts to develop a vaccine. China does all these things not because it has been excluded by the West, but because it is a status-conscious country, with the Communist Party’s unconditional claim to power as the central organizing principle.

Interdependence by Design

This insight must guide how we shape cooperation with what the European Commission last year in a strategy paper called a “systemic rival.” The current corona pandemic has reminded us of interdependence with China. But it’s crucial to realize that not all interdependencies are alike. With regard to diseases or climate, we deal with interdependence by nature. But the majority of cases are those of interdependence by design. Interdependence with regard to supply chains or technologies are the result of conscious decisions. Only now is it becoming clear to a larger public that we strongly rely on China for the production of active ingredients for medicines or protective gear.

This should give us reason to pause, because major powers like to use interdependence as a means of exerting pressure. The US political scientists Abraham Newman and Henry Farrell call this phenomenon “weaponized interdependence.” Germany and the EU would therefore do well to examine where dependencies and vulnerabilities toward China should be reduced. This is what a sound understanding of economic security demands. This means, for example, that we should not become dependent on Chinese technology for critical infrastructure such as the 5G mobile network. This does not have to be detrimental to cooperation with China in other areas, such as climate protection. Dependencies in sensitive areas only fuel distrust, which does not make cooperation in other sectors any easier.

Cooperation with Beijing on global public goods inevitably takes place against the backdrop of a competition of systems. Policymakers in Germany and Europe should invest in cooperation with Beijing on global public goods. But they should do so without any illusions that this will be easy and without any hesitations to vigorously defend German and European interests against Beijing’s authoritarian state capitalism.

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© REUTERS/ Pool

The German government has just decided not to back a US-led mission to protect the shipping lanes in the Persian Gulf. It will now find it harder to work for its interests in the region.

To be sure, de-escalating the conflict between the United States and Iran is the key to lowering risks in the Gulf. But it would help to have an international mission in place that could keep Iran from meddling with the shipping in the Gulf, reliably monitor the movements in the Gulf, offer dispute settlement, and work toward regional stability.

Yet Germany, which is critical of the Trump administration’s strategy of “maximum pressure” on Iran, has opted to withhold support from a Washington-led naval mission in Persian Gulf. Although this dissatisfaction with the US Iran strategy is widely shared in Europe, refusing to participate will weaken Germany’s position vis-à-vis Tehran and Washington, thus playing into the hands of both. Therefore, it is now crucial for Europe to engage in a way that is complementary and not in competition with the US-led effort.

Competing Plans among Allies

A fifth of all oil shipments worldwide—an average of 14 tankers per day—run through the Strait of Hormuz. The escalation of the US-Iran conflict has put free passage through the Strait in jeopardy. Shipping companies run the risk that Iran or Iranian-backed groups will attack or seize their vessels, as happened twice in July. Germany has an interest in upholding free passage through the Strait of Hormuz for reasons of global economic stability and of regional order, including the protection of Israel.

There have been intense debates about the character of a potential maritime mission in the Strait, with questions about its optimal size or duration. European navies have experience with anti-piracy missions, but this time the mission would have to deter attacks from a state actor equipped not only with speedboats but also helicopters, drones, and air defense. To what extent should the mission rely on coercion and deterrence? Participants would also have to credibly threaten retaliation against targets in Iran. What legal basis would the mission have?

By the end of July, two competing initiatives were on the table. The US government circulated a proposal, first in NATO, for participating nations to provide joint surveillance and protect ships running under their own flag. The Americans did not get more than lukewarm support for the initiative. Their allies in Europe and Asia feared being dragged into escalation, in line with Trump’s “maximum pressure” strategy.

After the seizure of a British tanker by Iranian forces on July 20, the outgoing British Foreign Minister Jeremy Hunt proposed a European naval mission, detached from America’s disruptive strategy, with the objective of lowering tensions. There was some support in France and Germany for such a format, but the change of the British government changed the tone as well. The new foreign minister, Dominic Raab, made clear that the mission should not take place without US support. On July 31, US and UK representatives met at a Gulf Maritime Security Conference in Bahrain to sound out the options.

Three Dilemmas for Berlin

It was then that Germany announced that it would not to take part in a US-led mission. The US had made its request for support public, and the German reflexes were not surprising. “Out of the question,” said Nils Schmid, foreign policy spokesperson of the Social Democrats in the Bundestag—the frail SPD, junior partner in Angela Merkel’s governing coalition, does not want to alienate its peace-oriented electoral base.

But this question is not dividing the government. While Merkel’s CDU/CSU had promised to look into the US request, it was never inclined to follow America’s lead into escalation either. The German position remains to opt for strategies of diplomacy and de-escalation, albeit without specifying how that should work and without testing the theory that an international presence on the Gulf might help make these viable. Germany is not alone; other Europeans, notably the French, hold this view as well. But the seemingly reasonable “no” creates unintended consequences that Germany should avoid.

That is dilemma number one: The Europeans cannot cooperate with their strongest ally in a crisis situation that is very relevant for Europe. They do not trust the US government to not escalate tensions—and not utilize the international support for the mission in order to coerce Iran militarily. Europe and the US have been at odds over the right Iran strategy ever since the Americans withdrew from the nuclear agreement in May 2018 and heightened economic pressure against Iran. This division will be present for quite a while, and it will get even deeper now that most Europeans are staying out of the naval mission.

Dilemma number two is that the transatlantic struggle makes Iran happy. It is hard to judge whether Tehran is applying these needling tactics to raise attention, to get compensation for the tougher sanctions, or to deter the US from further escalating the conflict. The attacks could be an indication of a helpless government under pressure, with an economy in free fall. In any case, it will serve the Iranians if the rift between the transatlantic rift becomes deeper. The US president has forgotten this, but it was Western unity that brought Iran to the negotiation table.

What’s more, Germany’s “no” does not punish the US, rather the opposite, which forms dilemma number three. The Trump administration believes it has time on its side to force Iran to the negotiation table, without being drawn into a war. If tensions increase, the US can act without the Europeans.

In fact, Trump wins whether the Europeans participate or not. If international support comes together, it adds legitimacy and lowers the financial burden. If not, America can still protect her own ships. Yes, many will complain about the erosion of American benevolent hegemony, but helping others for free is not part of Trump’s electoral appeal. If Europe abstains from the mission, it will be easier for Trump to snub allies who fail to stand up for their own interests and pressure them to increase defense spending in accordance with their obligations in NATO. Germany will now find it harder to work around the Trump administration when negotiating with Washington about burden-sharing.

Few Good Outcomes for Germany

At the moment, the possible outcomes of the Gulf crisis do not look desirable for Germany. If the US patrols alone or with the British, this might induce Iran to test the mission’s vigilance. Provocations and misunderstandings could lead to military exchanges—with German ships unprotected. In assessing what has happened in crisis situations, Germany would have to rely on the reporting of others. And uncontrolled escalation and use of force would affect German interests, but there would be few ways it could involve itself in conflict management.

Even if the mission and the sanctions successfully force Iran to the negotiation table, Germany and the EU might no longer be the players they were when the nuclear agreement was crafted back in 2015. It will look bad that Germany opted out and let others do the job.

Instead of giving a flat “no,” Germany should lead the debate about how the Europeans could stage their own mission with a friendlier face and more elements than patrolling. Admittedly, such duplication might require a lot of energy for coordination and add the burden of sorting out who does what and when. Running two separate missions would also deprive European navies of the support they could receive when cooperating with the Americans, such as in reconnaissance or re-fueling. Nevertheless, a European mission to secure the Persian Gulf could bring in elements that are complementary to the US-UK mission. Germany should work in this direction.

Monitoring will be key, to make sure that Iranian activities against German ships cannot go undetected. Germany, France, the UK, and Belgium could bring the question of an international monitoring mission to the UN Security Council. Even without producing a UN mandate for a EU mission, such a debate might pave the way for a wider internationalization of crisis management.

Moreover, Berlin could turn to the EU to set up a framework in which the regional partners and Iran as well as the UK and the US would be tied in. Consultation among the littoral states of the Persian Gulf already exists, but a new format could accompany the growing international presence there. Its objective should be to design confidence-building measures, such as consultation and clearing mechanisms, and produce schedules for on-site visits or overflights. This would make a mission conducive to the goal of de-escalation. The EU has hosted negotiations about the nuclear agreement, so it is a natural player here. If the UK and the EU can be tied into that mission package, it will also show how close London and the continent still are.

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© REUTERS/Ronen Zvulun

The annual Eurovision Song Contest is chiefly known for its flamboyant costumes and glittering stage sets. But this month the show has been at the center of a very different kind of discussion—its role in the timing and implications of rocket attacks from Gaza.

Each year the contest, which has been musically pitting European countries against each other for over 60 years, is hosted by the winner of the previous year. And when Israeli Netta’s female empowerment pop hit “Toy” won for Israel last year in Portugal, the discussion immediately turned to the political implications.

Netta’s cry of “Next year in Jerusalem!” upon receiving the contest’s trophy didn’t help with the apprehension over the 2019 hosting. Her remark came just a few days before Donald Trump moved the US embassy from Tel Aviv to Jerusalem—a move that was met with protests and violence. Though Netta may have merely been availing of the traditional phrase used at the end of Jewish Passover Seders, her smiling appearance shortly afterwards with controversial Israeli Prime Minister Benjamin Netanyahu didn’t help to depoliticize her win.

In the end, Israel’s public broadcaster was able to resist Netanyahu’s pressure to stage the contest in Jerusalem—by asking the Geneva-based European Broadcasting Union, which organizes the show, to take the unprecedented move of deciding the location itself. Even with the contest being held in Tel Aviv, there were still calls to boycott this year’s contest as part of the BDS movement. BDS campaigners tried to put pressure on national broadcasters to not take part in this year’s contest. But though there were briefly rumors that Ireland’s broadcaster might give in to the pressure, in the end no country pulled out.

Madonna, who is slated to perform as the interval act while votes are being counted on Saturday night, was also subject to boycott pressure. But yesterday she confirmed in a statement that she will perform, saying, “I’ll never stop playing music to suit someone’s political agenda nor will I stop speaking out against violations of human rights wherever in the world they may be.”

Despite her insistence, the organizers say that she has not contacted them and has not signed any contract—leaving open the possibility that she may be a no-show on Saturday.

Gaza Attack

As preparations for the show steeped up a gear this month, violence broke out in Gaza. The worst nightmare of the organizers seemed to be coming true—the idea that the show could suddenly be interrupted by anti-rocket sirens.

As contestants arrived in Tel Aviv to start rehearsals two weeks ago, Hamas militants in Gaza launched a barrage of rockets into southern Israeli towns. Israel then retaliated by bombing sites in Gaza. The battle lasted three days, killing 23 people in Gaza and four in Israel.

It was among the worst flare-ups in violence in recent years. But unlike other recent incidents, it ended very suddenly with a ceasefire. The Israeli response was uncharacteristically restrained, and some attributed this to government fears of disrupting the contest. In turn, analysts suspect that the Hamas militants chose to launch their attack so close to the contest because they knew the Israeli response would be limited.

Michael Oren, Israel’s deputy prime minister, added to that impression when he tweeted that Hamas would be dealt with after Eurovision.

It’s a reflection of the significance of this annual event, which is now the most-watched live television event in the world other than the soccer World Cup final, which takes place every four years. Attracting around 200 million pairs of eyes, it has more viewers each year than the American Super Bowl, the Oscars, and the State of the Union speech combined.

Security Alert

On Monday, the US embassy in Israel issued a security alert for the contest, urging all Americans in Israel to exercise caution—noting that this year’s contest is coinciding with the one-year anniversary of the embassy’s move to Jerusalem.

“Terrorist groups may choose the anniversary, which coincides with the Eurovision Song Contest in Tel Aviv and Nakba Day, to conduct violent protests or an attack,” said the statement posted on the embassy’s website. Nakba Day is the commemoration by Palestinians of their displacement following the establishment of the state of Israel in 1948.

This year’s contest has been accompanied by the biggest security operation in Eurovision history, with thousands of police deployed. Around 300,000 tourists are expected to come to Tel Aviv this week for the contest, though this number may be far lower than in previous years as prospective visitors have balked at the far-higher-than-normal ticket costs, something the Israelis say has been necessary to pay for all the security.

So far, Eurovision week has progressed without a hitch. Tuesday night’s semi-final, which saw ten countries qualify for Saturday’s final, went relatively smoothly. However, an Israeli webcast of the show was hacked with animated explosions superimposed on the host city.

Why Is Israel in the Eurovision?

Aside from all the geopolitics and controversy, many viewers may have a far more basic question. Given that it’s a country in the Middle East, why is Israel in Eurovision at all?

The reality is that this isn’t necessarily a “European” singing contest but actually a contest for members of the European Broadcasting Union—which is made up of state broadcasters from across Europe, North Africa, and the Middle East. But Israel is the only participant from outside of Europe because its Muslim neighbors in the other two groups have refused to share a stage with it. Morocco has only competed once—in 1980, a year Israel wasn’t participating. (Australia is the only non-EBU-member to participate in the contest, which it has done as a guest since 2015.)

This isn’t the first time Israel has hosted the contest. Netta’s win last year was the fourth time Israel has won the contest. It hosted in 1979 and 1999—both times in Jerusalem. In 1979 it even won while it was hosting, though it declined to host the following year’s contest in 1980, or participate at all, because of budgetary and security concerns.

Both of those previous times the contest passed without incident. Organizers are hoping that this year will be the same.

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© REUTERS/Murad Sezer

The brutal murder of dissident Saudi journalist Jamal Khashoggi in the Istanbul consulate has prompted swift condemnation around the world, but the West’s political response has been mixed so far. For example, German Chancellor Angela Merkel has suspended arms exports to Saudi Arabia, while French President Emmanuel Macron has remained non-committal and has decried immediate arms embargoes as “demagoguery.” US President Donald Trump, meanwhile, has been taking a “wait and see” approach, and that has frustrated many in the United States, including Republican senators.

Despite the polarized political atmosphere in the run-up to the midterm elections, there has been surprisingly strong bipartisan agreement that Washington should take a tough stance on Riyadh. And expectations are that Congress will continue to put pressure on the Trump administration. Indeed, if congressional leaders decided to block American weapons sales and military aid to Riyadh, this could fundamentally alter the US-Saudi relationship.

In the past weeks, President Trump has been reluctant to come down hard on the Saudis. Early on, it became clear that his main concern is preserving “his” $110 billion arms deal (in fact, negotiations started under President Barack Obama), arguing that halting the deal could risk other Saudi non-military investments in the US worth $450 billion and endanger a million American jobs (the numbers are exaggerated).

Trump’s advisers have pointed out that the US-Saudi relationship is too important, both commercially and strategically, to be damaged because of the death of a journalist. Indeed, the Trump administration considers Saudi Arabia–next to Israel–its key ally in the Middle East and an important partner to curb Iran’s influence in the region. However, Trump made a drastic shift last week when he said that “the cover-up [of Khashoggi’s murder] was the worst in the history of cover-ups.” It’s questionable, however, whether the White House is willing to take rigorous measures to punish Saudi Arabia’s leadership.

Senators on both sides of the aisle, however, don’t want to sit on their hands. They were suspicious of the Saudi explanations for Khashoggi’s disappearance from the start. One of the most vocal Republican senators has been Lindsey Graham, a Trump ally, who urged the administration to “sanction the hell” out of Saudi Arabia. Republican Senator Rand Paul, who has supported Trump on many issues, even argued in favor of cancelling the arms deal. To urge Trump to take the allegations against Riyadh seriously, 22 senators from both parties wrote a letter calling upon the administration to launch a government investigation into the Khashoggi murder, which could trigger US sanctions against Saudi individuals.

Congress Is Watching

There are several reasons for the senators’ strong reaction. First, the fact that Khashoggi was a US resident and a contributor to The Washington Post certainly helped to bring his murder to congressional attention–in contrast to the many other human rights violations occurring in Saudi Arabia. Second, the case enabled senators to demonstrate that Congress is an independent branch of government that has the power to challenge Trump’s positions. Senators feared that the Trump administration might get “back to business” with Riyadh once the case had dropped off the political agenda. The senators wanted to show that Congress will speak out against human rights violations even when the administration is unwilling to do so. Third, most of the Republican senators who signed the request do not seek re-election in the upcoming midterms and are thus under no pressure to align with Trump’s position. Finally, some lawmakers may well fear a debate about Saudi influence campaigns in Washington that also addressed congressmen–a debate that has started already.

When it became clear last week that the Trump administration had to more resolutely condemn the murder, Secretary of State Mike Pompeo announced sanctions on those individuals found responsible. But Pompeo also stressed that America’s “shared strategic interest with Saudi Arabia will remain.” Therefore, it seems unlikely that the administration will take more drastic steps, such as cutting US military aid. Still, on Wednesday Pompeo called on the Saudi leadership to negotiate a ceasefire in war-torn Yemen.

If the Democrats win back the House of Representatives (not an unlikely scenario), they will likely push the administration to harden their line further still and may even derail Trump’s Middle East policy. For example, the House Foreign Affairs Committee has the power to stop foreign arms sales. However, congressmen from both parties will also fear repercussions for the US defense industry, which maintains a strong lobby on Capitol Hill and employs many Americans. A complete overhaul of US-Saudi defense cooperation is therefore unrealistic, and expectations that the Khashoggi murder will fundamentally alter US-Saudi relations premature at best.

Meanwhile, European governments and lawmakers will pay close attention to the US response. The situation in Europe is similar: while members of the European Parliament and national parliamentarians have requested a Europe-wide arms embargo against Saudi Arabia, several heads of government are reluctant to take such a fundamental step, including Macron. If the Trump administration ends up letting off Riyadh lightly, some European governments might follow suit.

But Europe should be brave. Taking a principled stand in response to the Khashoggi murder is a chance to show that–in contrast to Donald Trump’s foreign policy–the Europeans are willing to speak out clearly against human rights violations and take rigorous measures, even at the expense of economic benefits.

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© REUTERS/Ammar Abdullah

In April, the United States, the United Kingdom, and France hit Syria to punish Bashar al-Assad for what French President Emmanuel Macron called clear proof that the Syrian government had wielded chemical weapons in Douma, outside of Damascus.  

While the US-led coalition launched their strikes, German Chancellor Angela Merkel supported her allies but did not join the operation—a decision that reflected Germans’ deep-seated pacifism and aversion to military missions in the post-war era. Still, her decision to publicly support the mission, but not join it, made it look like Berlin did not have the stomach to engage militarily itself.

Since the Syrian conflict began more than seven years ago, Germany has been caught in a conundrum. It is struggling to support fleeing Syrians while navigating a complex political terrain at home. It’s a conflict that has had very real consequences for  Merkel, with some one million Syrian refugees seeking asylum in Germany. It was the chancellor’s open-door policy in the summer of 2015, accepting those refugees stuck on the Balkan route, that led to a significant shift in Germany’s political landscape, reviving the right-wing populist Alternative für Deutschland (AfD).

And the war is far from over. Assad’s regime has regained control of most of the country, displacing half of the population in the process. Now, another flare-up is looming in Idlib, one of the areas that remains out of the government’s grasp. Syria observers fear another catastrophe is imminent, one that would have further consequences for Berlin.

Opposition Stronghold

Idlib, in the north of the country, is one of the last remaining strongholds for opposition forces. It is home to 2.5 million Syrians. A serious attack on Idlib is a question of when, not if. The war is set to escalate in the province, and Germany may have more Syrians at its doorstep once Assad begins his quest to take it back. Among the thousands of Syrians who were displaced from Ghouta, many told me in phone conversations that they are already trying legal and illegal avenues to reach Germany.

It’s worth looking at the complex situation on the ground. Myriad groups are competing for control of Idlib. The Free Syrian Army, made up of several smaller alliances, is locked in a fierce battle for control with the Islamist extremist Hayat Tahrir al-Sham, or HTS, a group that was previously known as Jabhat al Nusra and was allied with Al Qaeda.

HTS dominates Idlib and has imposed a harsh social code on people living there; it poses a vital threat to civilians who moved there to escape Assad’s clutches and sought safety near Turkey. And Russia, Assad’s ally, will use the presence of HTS in the region, and the group’s former ties to Al Qaeda, to justify an eventual regime offensive in Idlib.

Germany’s Time to Step Up

If Chancellor Merkel does not want to put boots on the ground in Idlib or threaten Assad militarily, what can Germany do to avoid the devastation waiting to unfold in Idlib?

Germany can come in and play an active diplomatic role in encouraging Turkey to rein in the jihadis just across its border, either by using its existing channels of communication or military force. Ankara’s relationship with the jihadis is ambiguous; in the early stages of the Syrian war, Istanbul was accused of supporting the Islamists in Syria, but of late President Recep Tayyip Erdogan, who got reelected on Sunday, appears more willing to limit their influence. 

If Turkey fails to reach some sort of agreement with the Islamists, Ankara could opt for pushing the jihadis out with force. It might well have an interest in doing so. The proximity of Idlib to Kurdish-controlled areas on Turkey’s borders makes it an important location for Ankara’s strategic interests. Erdogan is in a position to better manage secessionist Kurds if the Free Syrian Army is in charge rather than the HTS. Without HTS in Idlib, the regime and the Russians wouldn’t have a pretext to bomb the region. Turkish forces are already in Idlib anyway, operating observation posts in rebel areas to assure a stake in region after the war ends.

There are other reasons why bold action might serve Turkish interests. Turkey, already home to three million Syrian refugees, has all but shut its doors to accepting more asylum seekers. In the event of a fresh offensive by Assad’s forces, millions of Syrians would be forced to knock on Turkish doors before they seek entry to Europe. In turn, Berlin can add its voice to calls from Washington and Istanbul to allow Free Syrian Army groups to take control of the province.

Even so, these measures might not be enough to stop Assad. He is quite likely to go ahead with the attack on Idlib in the name of Syrian sovereignty. One man who can stop him is Russian President Vladimir Putin. And the Russians might have a stake in containing Syria’s Islamist forces as well. Moscow believes hundreds of Russians joined ISIS and HTS and fear their return may present dangers back home.

A Constructive Role

What’s more, Berlin has professed its willingness to play a constructive role in the Syrian crisis. Idlib can be a test case for German diplomacy. If the Germans won’t talk to Assad they must talk to Putin. German-Russian relations have been strained by Moscow’s annexation of Crimea and cyber attacks linked to Russian hackers, but Merkel is the Western leader that always kept communications open with the Kremlin and knows Putin best. She should make the case to Russia that Idlib is crucially important as a safe zone for Syrians escaping regime-held areas.

Germany can attempt to save millions by exercising its leverage through tactful foreign policy. In my conversations with Syrians and senior Syrian government officials, Berlin has emerged as a fair player for both pro-regime and anti-regime camps. The rebels have told me they are grateful for the welcome many refugees have received in Germany, while pro-regime Syrians say Berlin has remained a moderate voice in criticizing Assad’s government, at least compared to Paris, London, and Washington.

So far, however, it seems Germany will take a back seat and watch as the regime attacks Idlib. But, with its stature on the international stage, Germany should step up and use its diplomatic might to resolve the crisis. Merkel must move beyond empty statements that do little else than express a desire for peace.

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© REUTERS/Gali Tibbon/Pool

The Israeli legislature’s vote on February 6 to legitimize, post factum, pure land grabbing is a disgrace on many levels. Land grabs are nothing new in the West Bank, but the sanctioning of the theft of private land from Palestinians, only a few days after the evacuation of the illegal settlement at Amona (as if there were “legal” settlements…), shows new chutzpah from those right-wing extremist politicians who believe that anything is possible with Donald Trump in the White House.

Since Trump has taken office, Israel has announced plans to build more than 2,500 new housing units. The most right-wing government in Israeli history is no longer even subtle about pursuing the plans of settler party leader Naftali Bennett, who wants to annex Area C, including 60 percent of the West Bank. With that step, the two-state-solution would go down the drain.

But there’s more: Last week’s vote showed frightening weakness from Prime Minister Benjamin Netanyahu. He wasn’t a fan of this new law – not out of ethical conviction, but rather because of a deeper understanding of the consequences this law could entail. Palestinians would have a good case to bring Israel to trial at the International Criminal Court (ICC). The fact that Bibi hopes for the Israeli Supreme Court to annul this law is yet more proof that the prime minister can no longer contain his coalition himself. And it’s not even his coalition partners that are the problem; members of his own party voted in favor of the bill. It is already well known that Bibi is a “leftist” within Likud, but up until now he has known how to tame “his” extremists. This no longer seems to be the case.

The White House, meanwhile, has decided not to comment on the new law, but rather wait for the outcome of the appeal at the Supreme Court. This is, indeed, a mixed message. A few days ago, Trump, to Netanyahu’s surprise, criticized Israel’s intense expansion plans. Now, it seems the US is against the latest settlement enterprise, but waiting for Israel’s “checks and balances” to resolve the problem, as if this would lead Israel to make a U-turn in its settlement policy in its entirety.

In a way, Netanyahu needs some kind of opposition from the White House. The advantage with Obama was that Israel’s strong man could always counter his coalition partners by saying, “We can’t do that, Obama won’t accept it,” thus reining in the most extreme plans of his political “friends.” Now everything is in limbo. What will Trump finally tolerate, and what not? Where will he set the borders for Bibi? And will they be enough to stop Israel’s extremists from going off the leash completely?

At some point, Netanyahu will have to decide whether he will follow his heart and ideology, or at least try to keep Israel somewhat sane, without relying on direction from the White House. In any case, the Trump administration may prove to be Bibi’s greatest test case ever.

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