prasanna's posterous

qotd - money vs status

From Unintended Consequences by Edward Conrad. It's a contrarian view on the US economy and it's sure be hated by many. An interesting quip about money vs status. 

Money doesn’t motivate us as much as status does. It’s primal. Skill doesn’t win sought-after mates; relative skill does, and then only if the differentiation is large enough to be recognized—even if only among one’s immediate peers. Look at the surprising number of people willing to face impossible odds in their desire to become a movie star or a professional athlete. In everyday life, people buy fancy cars, expensive suits, and homes with large entertainment spaces they rarely use in order to display their success. Men seek beautiful women—even unintelligent, unfriendly ones—for the recognizable status of having attracted a desirable mate. Academics seek recognition for their intellectual prowess. It’s all the same. Money is just a means to these ends.

qotd - what makes california special

From Consciousness by Cristof Koch. Especially true of northern california which is a very special place in the world.

And that is one reason why I live where I do and do what I do— Americans in general, and the self-selected group of immigrants to the West Coast in particular, believe that with enough desire, sweat, dedication, and the judicious application of technology, almost anything is possible. I share this can-do attitude. To fail when one has given everything one has is honorable; not to try because one is afraid of failure is a major character flaw.

qotd - rules of the road for looking at emerging markets

Some rules that Ruchir Sharma uses when he's analyzing emerging markets from Breakout Nations. It's always important to think that past performance is not always indicative of future performance. The future is never a given and some nations may not be growing in the right ways. Ruchir thinks the growth of brazil which he calls the un-China and Russia are two countries which may face problems growing going forward. All in all don't lump all emerging nations into one category even though their growth has been stellar for a while. 

watch the changes in the list of top billionaires, learn how they made their billions, and note how many billions they made. This information provides a quick bellwether for the balance of growth, across income classes and industries. If a country is generating too many billionaires relative to the size of its economy, it’s off balance. (Russia has one hundred billionaires, about as many as China in an economy one-fourth the size.) If a country’s average billionaire has amassed tens of billions, not merely billions, the lack of balance could lead to stagnation. (Russia, India, and Mexico are the only emerging markets where the average net worth of the top-ten billionaires is more than $ 10 billion.)

if the local prices in an emerging-market country feel expensive even to a visitor from a rich nation, that country is probably not a breakout nation.

strong companies and stock markets should— but do not necessarily— make for strong economies, so don’t confuse the two. The clearest examples are countries dominated by oligopolies, like Mexico, South Africa, and to some extent the Philippines. In these economies, if competition increases and undermines the abnormally high profit margins of the large companies, that could lower consumer prices, raise overall productivity, and boost the country’s growth potential.

be alert to the moment when rulers have outlived their usefulness. No matter what the system of government, it is a worrying sign when leaders try to extend their hold on power, as they tend to develop an authoritarian streak over time and their focus shifts to protecting vested interests or they simply run out of progressive ideas. In an established democracy, such leaders will be eased out by their own party, even if they were seen as dynamic forces of reform. Britain has done this twice in recent decades, to Margaret Thatcher on the right and Tony Blair on the left. The worst case of stale heads of state, however, is in the former Soviet republics, from Belarus to Turkmenistan and Kazakhstan, which are full of leaders who have abolished term limits or anointed themselves president for life. In recent years, the general success of emerging markets has helped convince many leaders in Africa and Latin America that they personally are the source of their nation’s success. From Cameroon and Nigeria to Bolivia and Venezuela, incompetent or corrupt leaders have fought successfully for the right to extend the deadline on their terms in power. A related dodge is stepping down in favor of your spouse. This is how Nestor and Cristina Kirchner extended their hold on Argentina, which has been so badly run it was demoted from the list of nations Wall Street tracks as “emerging markets” and into the lower class of “frontier markets,” where the rule of law is thin and enforcement of the existing rules even thinner.

watch for steady momentum behind economic and political reform, particularly in good times. Nations typically implement reforms only when their backs are against the wall. Even in China, which pushed reforms harder and longer than most, the kinds of changes that the leadership contemplates today are not the kinds of reforms that improve productivity and set economies free to grow without triggering inflation; they are the expensive quality-of-life reforms in which richer countries indulge, like extending the scope of the welfare state. The same shift is now taking place across many of the major emerging markets, including India and Brazil. Reform feeds growth that breeds complacency, and reduces the incentive to reform further. Poland and the Czech Republic are exceptions.

check the size and growth of the second city, compared to the first city. In any big country the second-largest city usually has a population that is at least one-third to one-half the population of the largest city. This ratio reflects regional balance in the economy, and it holds true for many of the nations that were breakout stories in recent decades: São Paulo and Rio de Janeiro in Brazil, Seoul and Busan in Korea, Moscow and St. Petersburg in Russia, as well as Taipei and Kaohsiung in Taiwan. It’s a red flag if a country is stuck in violation of this rule, but it’s a good sign if a capital-centric nation is moving toward greater balance. It’s even better if the country is producing new cities with populations of one million or more, which suggests that growth is lifting all regions— not favoring the elite in the capital city. Indonesia fits both criteria: the second city of Surabaya, with a population of 2.8 million, has roughly one-third the population of Jakarta, and there are four other cities with almost two million people or more, and eight with nearly one million or more.

watch the locals, they are always the first to know; they will be bringing money home to a breakout nation and fleeing one in trouble.

don’t get hung up on rules. In the past, when manufacturing accounted for 25 to 30 percent of GDP, the manufacturing story typically reached its natural limits and the economy started to shift focus to services. Normally this transformation comes relatively early in the growth game, at a per capita income as low as $ 10,000. This was the case in the United States, Japan, and even Germany, which is still a manufacturing powerhouse. South Korea is now fifteen years past the $ 10,000 income level, indeed it has more than doubled that level, and yet Korea’s manufacturing sector is still expanding steadily. So perhaps it is carving out a rare exception to the normal evolutionary path.

the sight of local companies “going global” is often celebrated in headlines as a national success, but the more accurate interpretation depends on the circumstances. Going global can be a sign of corporate strength or of national weakness. If more than 50 percent of a nation’s corporate earnings are coming from abroad, it could be reason for concern. In Singapore, where businesses can’t make all that much money at home because the population is so small, it is not alarming that more than 50 percent of earnings are made overseas. In nations with sizable domestic markets like Mexico and Russia, it can be read as a vote of no confidence in the local economy. South Africa is perhaps the leading example of this negative phenomenon.

qotd - the contrarian value of cover stories

From Breakout Nations by Ruchir Sharma. I really enjoyed the book and have tons of other things that I highlighted but I'll save those for later. 

Africa is a great case study in the contrarian value of cover stories. Front covers of popular publications often provide valuable insights— though many times not what they mean to. By the time a market trend becomes a screaming headline, it has likely matured and is fully factored into prices, setting the stage for a reversal. The Economist put Africa on its cover as the “Hopeless Continent” in 1999, the year when the income gap between the developed world and Africa was the widest in modern history. At the time the African continent’s per capita incomes were less than a tenth those of its developed-country peers. As the most successful weekly news magazine on the planet, The Economist has become a voice of the consensus, its cover a reflection of current popular opinion. In November 2009, The Economist put Brazil on the cover, with an illustration of Christ the Redeemer, the giant statue of Jesus that overlooks Rio, taking off like a rocket. Over the next two years, the Brazilian market fell by around 30 percent in dollar terms, 15 percentage points worse than the emerging-market average. Lately The Economist has been rather hot on “Africa Rising” as “the hopeful continent.” Let’s hope that will work out this time.

qotd - the true lessons of the recession

An excellent essay The True Lessons of the Recession by Raghuram Rajan. Easy credit while artificially stimulating some good has had some very nasty structural side effects that nations are only now figuring out they need to do something about. Time to leave the debt buffet table and bring some sanity to fiscal policy. 

In fact, today’s economic troubles are not simply the result of inadequate demand but the result, equally, of a distorted supply side. For decades before the financial crisis in 2008, advanced economies were losing their ability to grow by making useful things. But they needed to somehow replace the jobs that had been lost to technology and foreign competition and to pay for the pensions and health care of their aging populations. So in an effort to pump up growth, governments spent more than they could afford and promoted easy credit to get house- holds to do the same. The growth that these countries engineered, with its dependence on borrowing, proved unsustainable.

Rather than attempting to return to their artificially inflated gdp numbers from before the crisis, governments need to address the underlying flaws in their economies. In the United States, that means educating or retraining the workers who are falling behind, encouraging entrepreneurship and innovation, and harnessing the power of the financial sector to do good while preventing it from going oa track. In southern Europe, by contrast, it means removing the regulations that protect firms and workers from competition and shrinking the government’s presence in a number of areas, in the process eliminating unnecessary, unproductive jobs.

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In the years before the crisis, the everyday reality for middle-class Americans was a paycheck that refused to grow and a job that became less secure every year, even while the upper-middle class and the very rich got richer. Well-paying, low-skilled jobs with good benefits were becoming harder and harder to find, except perhaps in the government.

Rather than address the underlying reasons for this trend, American politicians opted for easy answers. Their response may be understandable; after all, it is not easy to upgrade workers’ skills quickly. But the resulting fixes did more damage than good. Politicians sought to boost consumption, hoping that if middle-class voters felt like they were keeping up with their richer neighbors—if they could afford a new car every few years and the occasional exotic holiday—they might pay less attention to the fact that their salaries weren’t growing. One easy way to do that was to enhance the public’s access to credit.

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The United States, for its part, can take some comfort in the powerful forces that should help create more productive jobs in the future: better information and communications technology, lower-cost clean energy, and sharply rising demand in emerging markets for higher- value-added goods. But it also needs to take decisive action now so that it can be ready to take advantage of these forces. The United States must improve the capabilities of its work force, preserve an environment for innovation, and regulate finance better so as to prevent excess.

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At the same time, since new business ventures are what will create the innovation that is necessary for growth, the United States has to preserve its entrepreneurial environment. Although the political right is probably alarmist about the downsides of somewhat higher income taxes, significantly higher taxes can reduce the returns for entrepreneurship and skill acquisition considerably—for the rich and the poor alike. Far better to reform the tax system, eliminating the loopholes and tax subsidies that accountants are so fond of find- ing in order to keep marginal income tax rates from rising too much.

Culture also matters. Although it is important to shine the spot- light on egregious unearned salaries, clubbing all high earners into an undiaerentiated mass—as the “one percent” label does—could denigrate the wealth creation that has served the country so well. The debate on inequality should focus on how the United States can level up rather than on how it should level down.

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The industrial countries have a choice. They can act as if all is well except that their consumers are in a funk and so what John Maynard Keynes called “animal spirits” must be revived through stimulus measures. Or they can treat the crisis as a wake-up call and move to fix all that has been papered over in the last few decades and thus put themselves in a better position to take advantage of coming opportunities. For better or worse, the narrative that persuades these countries’ governments and publics will determine their futures— and that of the global economy.

qotd - us power and priorities

From an article in Foreign Policy The New Math of Geopolitics. Can't wait to read the book which comes out tomorrow. I think people focus on rise and decline because they are intimately tied with emotion (see The Geopolitics of Emotion). Countries operate with some combination of hope, fear and humiliation. America has represented hope in the world ever since World War II. I tend to agree with Bremmer that we are asking the wrong question about whether or not America is in decline because the reality is the world is much more nuanced now. Not quite the clash of civilizations which the neocons would have you believe but have clouded the way America is perceived which is fear as it reacts to the world (you're with us or against us, often many countries just don't care). The middle east is a projection of humiliation , fear and small doses of hope (arab spring). The problem is when your primary drivers are humiliation and fear then the outcomes are often very negative (a hostile Iran, terrorist groups etc). Hope tends to reorient the way people perceive the world as they move from blaming an external party for their problems to changing their situation to better themselves.

I don't think this is about decline. I personally don't believe the United States is a "declining power." But I also think it's an irrelevant question. Whether or not you think the U.S. is in decline, the U.S. is not going to bail out Europe. Whether or not the U.S. is in decline, the U.S. is not going to forcibly remove Assad from power in Syria right now. Or take the lead on a global climate deal. Or, in my view, bomb Iran. This has less to do with America's ability to project power than it does with the prioritization of what's happening domestically in the United States coupled with what's changing around the rest of the world. American decline is a convenient, narcissistic formulation -- that it must all be about us. But in reality the G-Zero is much more complicated than that.
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It's possible that that's a world we are evolving toward, but we're not there now. What we're experiencing right now, and have been experiencing since 2008, is really the breaking of the old order. And the new order, whatever it might be -- and it might well be a flexible, regional order that you described -- hasn't manifested itself yet.

Right now the focus of key economies is overwhelmingly domestic. That is certainly true in Europe because of the profound and historic nature of the crisis they're presently experiencing. It has been true to a great degree for Japan, where they've had 17 prime ministers in 22 years. And it's clearly more true with the United States now than it has been at any point in the past several decades. It's also true for China. China wants to have veto power. They want to be able to say, "No, we don't like these rules or institutions or norms or policies that are being brought down by the Americans." But they also absolutely reject taking some of that responsibility and accountability themselves. That's why they're so opposed to the idea of a G-2. I agree that the Russians and Chinese and others can have influence on places like Iran, but at this point that influence is negative. It's not a proactive and a constructive influence. You really have to struggle to find constructive and proactive policies or institutions that are actually being built from the ground up by emerging-market states along with developed states.

I agree with you that G-Zero is not really sustainable. I don't believe that this is a lasting world order; something will replace it. So the question is, what is that something? I think that is still open for debate. There are two questions you need to answer to understand what the eventual world order will evolve into. One is, what's the relationship between the world's two most important economies, the U.S. and China? Is it relatively harmonious, or is it much more zero-sum and confrontational? And the second question is, how much do other countries matter? Will Europe be a meaningful player on the world stage, or will it absolutely not? And will India? Will other major players matter in the world?

As of right now, there's still a lot of uncertainty in those two fundamental questions, which means that geopolitics has become unmoored. There are a lot of countries in play. And it's not clear whether we'll end up with a bunch of different groupings for different sorts of issues or whether we'll move into an environment that's more of a G-2, where the United States and China will dominate agendas globally, with certain areas where they agree that will be the ones that we actually see movement and progress [on], and others where you'll just get absolutely nothing. Those are two very different sorts of environments.

qotd - from unrealpolitik to smart realpoltik

I highly enjoyed reading Hubert Verdine's History Strikes Back (it'll take a couple of hours to read). I ended up highlighting most of the book because I found his historical treatment of the way the West has perceived it's role in the world since the end of the cold war to be insightful. Unfortunately his prescriptions fall short of being interesting but I don't fault him for that. In the sort of world that is shaking out there is going to be a great deal of experimentation that will happen due to the changing balance of powers. It can be argued that China has had more success with pursuing soft power than the West has had with it's own nation building and shunning. It's high time the West adapted to the new game.

One major consequence of the West's feeling of superiority-and Manichaean worldview-was that foreign policy became superfluous. After all, since the West had won, why bother to negotiate with repugnant regimes? Why deal with despots? Why seek to compromise with dictators when Western values would be imposed on them whether they liked it or not, by choice or by force? All we had to do was threaten, lecture, and penalize the holdouts.
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In the name of some higher morality-a form of diplomatic puritanism-they would criticize states that were allegedly blinded by realpolitik or commercial interests. "How dare you speak to that dictator!?" "How can you possibly trust such a government!?" And, as if there were really a choice between the two, "How can you choose business deals over human rights!?"

Westerners today largely share the same beliefs in the universal values of democracy-or rather the same illusions about their ability to bring it about from the outside.
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But when we fight against the relativism of concepts like "Muslim values" or "Asian values," we fail to see that some of our principles are construed by many not as universal rights but as tools for extending Western supremacy. Many of those living in the developing world-what used to be called the "South"-have longer memories than we do, and they do not find all our recent and very convenient self-forgiveness (particularly among Europeans) very convincing. They remember that the West often violated its own principles and today abides by them only selectively. What were once double standards are now in many cases triple or even quadruple standards. Thus Westerners fail to understand why these rights, unquestionably universal in their eyes, are not yet universally perceived as such.

The dangerously naive concept of imposed democratization is a product of such parochialism. The triumphalism of the 1990s led many in the West to start believing in the process of democratization as an experience akin to that of Saint Paul: nonbelievers see the light (after a jarring fall) and are converted.
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Democracy would naturally follow tyranny, wouldn't it? But democracy has never taken hold instantly, or completely, in any Western country, not even in the United States. Have we forgotten the extermination of the Indians, slavery, the Civil War, and racial segregation, let alone current problems like high rates of voter abstention, the role of money in elections, lobbies, and the Hol- lywoodization of politics (admittedly less and less particular to the United States). And in Europe, what about the centuries of bloody revolutions and vicious repression? In France, have we forgotten the 150 years between the first elections in 1795 and the right to vote for women?

Democracy everywhere is the fruit of a complex process that moves at different speeds, sometimes forward, sometimes backward, with internal and external dynamics, but always essentially endogenously. When, during one of our long and friendly conversations, I said to Madeleine Albright that "democracy is not like instant coffee," I was unwittingly using a notion formulated by the Mexican writer Octavio Paz, who said that democracy was "not Nescafe." How could we confuse the reestablishment of democracy (after 1945 in Germany, Italy, Spain, Portugal, Greece, and some Latin American countries) with the effort to establish democracy in places where it had never taken root (in Iraq in 2003 and Afghanistan in 2002)? How could we compare homogeneous populations (like Japan's) with heterogeneous ones (like Iraq's or Nigeria's)? How could we not see the difference between easily exportable democratic techniques (such as monitored elections) and aspects of democratic culture (such as respect for minority and individual rights) that take years to take root? In short, how could we confuse autonomous democratization specific to each society and democratization imposed from the outside? The idea of imposing democracy from the outside is even more absurd when it's being done by former colonial powers or by an America that has lost legitimacy in the eyes of much of the world.
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Consider everything that Westerners-Americans and Europeans alike-have tried to do in the name of democratization in terms of declarations, speeches, sanctions, and conditionality toward the Russians, Chinese, Arabs, Africans, and others, and then measure the meager results. And further consider the fruits of such efforts implemented through war.
It's enough to make one think that seeking to export our democratic regimes at all costs almost inevitably produces the opposite of the desired goal. U
nless, of course, the real-and deeply cynical-goal is to stall the rise of emerging powers. But that's a different issue. And besides, the apostles of democratization are generally sincere.

In fact, neither American hubris (what's left of it after Iraq), nor European sincerity, nor French idealism and grandiloquence serve us well. Neither America's enormous power nor Europe's earnestness in seeking to strengthen international law and establish European norms is having the desired effect. Even worse, in our media-dominated societies, in which people spend on average three and one-half hours per day watching television, it is increasingly difficult to conduct a serious and coherent foreign policy focused on the long term. Our societies insist on "transparency" and "proximity" to power. People are constantly bombarded with new information and are skeptical of their leaders and the information they are given. Foreign policy suffers when it's based on superficial or unrealistic analysis and held hostage to domestic politics and constantly changing public opinion.

All this high-minded Western universalism is well-meaning, but it is also arrogant, unrealistic, and paternalistic. It is a new form of unrealpolitik that is now running up against the reality of seemingly intractable divisions.

In the Muslim world, the clash is between two opposing minorities, religious fundamentalists and moderate modernists, who are struggling to win over the much larger masses. Of course, the lack of education has a lot to do with it. But we've got to admit that this clash of ignorance, prejudice, misunderstanding, and mutual fear risks becoming a true Islamic-Western "clash of civilizations," an extension of the clash within the Islamic world between modernists and fundamentalists. 

For some time after its victory in the cold war, the West thought that it alone was in charge of world affairs, the sole arbiter of good and evil. Now, more than twenty years later, it must understand that it no longer has a monopoly on history or power. 
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Democracy and free-market economics will continue to spread but not necessarily under Western leadership or in a way that will guarantee Western supremacy.Neither competition nor politics nor history is over. On the contrary, the tectonic plates of geopolitics, geoeconomics, and geoecology have again begun to shift, and these enormous changes will not take place without significant disruption. We are entering an era of serious tensions. Westerners are going to lose, or perhaps have already lost, their monopoly. But they have not lost either their power or their influence, which could be considerable if put to use in the right way.
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In a post-American, or "nonpolar" world, the strategic choice the West must make is whether to share power with emerging states. The long-term future of Western values and interests (which go together, after all) will depend in large part on the way in which it handles this issue. One option would be to oppose as strongly as we can the emerging states' challenge to Western supremacy-to ostracize anyone who defies the West, talking only to those we like, categorizing everyone as good or evil, and using sanctions, boycotts, military force, or democratization to impose the will of the "international community." That option has been the approach of the Bush administration, which thought it could reshape the "greater Middle East." But it failed to do so and thus only accelerated the West's loss of legitimacy in the eyes of more than five billion non-Westerners, even if the United States continues to impress and attract because of its power and wealth. To reach its goals, the administration sought to maintain an atmosphere of permanent threat, vulnerability, and fear. It made the mistake of giving the terrorists the satisfaction of being named threat number one. It imposed a Manichaean view of the world by hammering home its simplistic vision. It sought to maintain total superiority in all aspects of political and military power. For a while, that approach worked all too well on American public opinion, while Europeans were always more skeptical. But that approach deprived the West of an extraordinary opportunity to spread its influence.

In a general sense, the United States must learn the lessons of the failure to impose democracy by force from the outside in countries where democracy has no roots and where relations with the West remain colored by colonialism. The idea of remaking the Middle East by promoting democracy was beautiful. It even seduced many Democrats to the point that some of them still today dream of creating a League of Democracies independent of the UN. But against whom and to do what? I'm afraid the West is going to have to accept that it can no longer impose the regimes it wants any more than it can artificially create nations from the outside. Does this mean just resigning ourselves to autocracies and burying our democratic aspirations? No. But the promotion of democracy needs to be put on a longer-term footing. Instead of simplistic and often brutal policies that are based on force and ignore local realities, we need a smarter policy that takes advantage of the potential for democracy in every society, even the most stagnant and archaic ones. Such a policy could take the form of a partnership for political and economic modernization with those in the region who are ready to move in that direction. There will be more of them than many realize, especially if an Israeli-Palestinian agreement is reached. What I'm proposing here is a turn away from ideology and a return to politics. Countries like France, Britain, and other European states have experience and ideas that could be put to good use in such a move.

qotd - no one's world

No One's World has been an interesting read so far and paints an interesting picture where the trend is towards a multi-polar world where no one country has primacy. It is exceedingly hard to predict if this version of the future is correct but the basic premise makes sense. The previous held views of Fukuyama et al about the world moving towards Western liberal democracy is not what's happening or if it is will be achieved at a very long time horizon. Looking out 40 years or so the power mix of the world will be much more lumpy. Autocracies such as China have proven you can divorce to some extent economic growth vs political liberalization. In fact as the Arab Spring swept through last year and the dust settles and is tossed up again we find those nations moving towards democracy will not necessarily even align nicely with the west (Islamic brotherhood in Egypt etc). It is all a matter of perspective of what is good for certain nations is not for others. Of course outlier events happen so we may well see another version of history develop but whether it is one of our liking or not is largely out of our control. We are in more interesting times than people want to imagine.

Some choice quotes from my reading so far:

The emergent international system will be populated by numerous power centers as well as multiple versions of modernity. For the first time in history, an interdependent world will be without a center of gravity or global guardian. A global order, if it emerges, will be an amalgam of diverse political cultures and competing conceptions of domestic and international order.

The world is barreling toward not just multipolarity, but also multiple versions of modernity—a politically diverse landscape in which the Western model will offer only one of many competing conceptions of domestic and international order. Not only will well-run autocracies hold their own against liberal democracies, but rising powers that are democratic will also regularly part company with the West. Perhaps the defining challenge for the West and the rising rest is managing this global turn and peacefully arriving at the next world by design. The alternative is a competitive anarchy arrived at by default as multiple centers of power and the differing conceptions of order they represent vie for primacy.

... democratization does not mean Westernization

In sum, during the early modern era, hierarchical states defended traditional institutions of authority and enjoyed relative autonomy in a global system that was not yet interdependent; change had to come from below, and Europe’s pluralism provided the opening. Today, not only are centralized states more responsive to their peoples than they once were, but they operate in a new global setting—one in which more state control is often an advantage in coping with a fast, interdependent, and porous world.

What likely lies ahead is an Islamic brand of modernity, not the secularization of Islam. As Tariq Ramadan, a devout Muslim intellectual based at Oxford University, has argued, this Muslim version of modernity will not converge with that of the West, meaning that the two must learn to coexist comfortably.

Western observers and policy makers had better stop operating under the illusion that the spread of democracy in the Middle East also means the spread of Western values. Moreover, the quest for dignity that is fueling the clamor for democracy is also likely to fuel a strident call to stand up to the United States, Europe, and Israel.

But just because capitalism has prevailed against socialism does not mean that the world is heading toward a homogeneous endpoint. For the foreseeable future, China’s brand of authoritarian capitalism may well outperform—or at least hold its own against—the democratic alternative. Strongmen in Africa are hardly producing impressive results on the economic front—but they will decisively shape the politics of the continent for decades to come. The same goes for populists in Latin America and theocrats in the Middle East. The bottom line is that states around the world are on very different political trajectories. The divergence is a function of profound variation on many dimensions, including political culture, path of socioeconomic development, and religion. Even among states that share a commitment to liberal democracy, competing interests and jockeying for position and status will stand in the way of international consensus. The next world will not march to the Washington Consensus, the Beijing Consensus, or the Brasilia Consensus. It will march to no consensus. Rather, the world is headed toward a global dissensus.