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07/12/2012

Book Review: Every Nation for Itself


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The daily headlines of financial stress and possible disaster in the eurozone are a graphic scene of a breakdown in the European countries' ability to come together in a solution. Some see the same type of political paralysis and institutional dysfunction in the failure of the US Congress to address our fiscal debt challenge. The full parameters and impact of this increasingly fragmented world is spelled out in Ian Bremmer's new book, Every Nation for Itself: Winners and Losers in a G-Zero World.

The "G-Zero World" that Bremmer describes is "a world order in which no single country or durable alliance of countries can meet the challenge of global leadership." The G7 and G20 groups are viewed as ineffective. We are in a period of uncertain transition, in which "for the first time in several decades, we live in a world without global leadership." The result is more volatility, uncertainty, turbulence, anxiety, and risk for investors.

Bremmer does a thorough job of analyzing each country's current position. The US' role as leader is being constrained by its fiscal debt. The most obvious challenge to America's role is China. However, China is absorbed with its internal challenges, and has little interest in seeking a dominant global leadership position. The countries most affected by the lack of global leadership are Japan and Israel. Countries with the ability to "pivot" to adapt include Brazil and Turkey.

A provocative conclusion is "Asian conflict will be the biggest global hazard in the years ahead." Asian countries look to China for markets and finance, and to the US for military security. This region includes three powerful countries— China, India, and Japan—which have independent agendas. Since many investors and companies look to Asia for growth, the possibility of regional political unrest is an added dimension to risk assessment.

In this world of increased risk, who will be the winners? Bremmer concludes they will be "well-well managed and well-positioned state-owned enterprises, politically loyal national champions, favored banks, and sovereign wealth funds." In the US this should be a big business boost for political lobbyists. For financial professionals, degrees and courses in international relations will be a career plus. Careers in the State Department and the intelligence agencies should be a good resume experience for the job hunter.

Bremmer describes his book as about "that historic shift and the tremendous challenges and opportunities it will create—for the global economy, for relations between the world’s most powerful governments, and for the world’s ability to cope with a variety of what we might call 'problems without borders.'" In forecasting the future, Bremmer presents a series of scenarios which shows the uncertainties for investors. However, this has always been the case in the financial business—only some will come out big winners. Ian Bremmer's Every Nation For Itself is a way to start to prepare to be one yourself.

–Bill Hayes

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