From choke points to tipping points
Building more slack into our global systems
A choke point, as the blocking of the Strait of Hormuz has taught us, is a dependence on a source whose disruption causes serious consequences for industries and countries. A tipping point is the result of disruptions that are significant enough to drive permanent change - be that across societies, industries or both. Choke off enough points, and policies, industries and people will tip and then settle into new behaviours.
While deglobalisation has been much discussed in recent years, we’re reminded on an almost daily basis how integrated the world continues to be. The Strait of Hormuz is just one example of how many countries have come to rely on oil, gas, fertiliser and other semi-processed goods from a select number of Middle Eastern countries. There are many more choke points like these, in energy, food, and other industries. In an interdependent world, the Trump 2.0 foreign policy theory of change is that if you don’t leverage those choke points, you’re a chump. This leveraging - by unceremoniously dropping trade tariffs, elite forces or missiles onto other countries and seeing how they respond - provides an equally sobering and intoxicating insight into the collective fragility of our international systems. I say ‘collective’ because, mighty as the American economy is, it depends on imports, exports, global finance and trade just as much as any other country - more so in many respects.
Though it might not seem this way at first glance, most countries, and the majority of the world’s population, are in a better place to weather these geopolitical choke points now than in the previous century. During most of the 20th century the ‘centre’ (richer) countries were better able to dictate terms to the ‘periphery’ (low and middle income) countries whose poverty was reflected in lower economic development. Today almost all countries have improved their human capital, infrastructure, and other resources. Just as importantly, they are more connected within and across regions and wider global systems. Zooming out, this spider’s web of connections now have many more nodes across the so-called global north and south.
Being connected is a good thing. The fragility in these systems doesn’t come from the scale of connections; it comes from how tightly coupled those connections are. Efficiency has a positive connotation, redundancy less so.
But efficiency can become rigidity while redundancy increases resilience. Furthermore, for businesses and countries, the answer to over-dependence and uncertainty are respectively, diversification and insurance. But if everyone diversifies to the same places, and all the insurance agencies get reinsurance at the same agencies, the system doesn’t redistribute risk but magnifies it. A tightrope walker traverses a slack line more easily than a taut one. Our global systems are now very taut.
So what does this tell us? Choke points can lead to tipping points, but one tipping point means we fall off the rope while another means we rebalance. If necessity is the mother of invention, then more choke points should equal more innovation. And if innovation is disseminated through combinations of policy, technology and society that interact to support one another, we slacken the rope. We learn to build redundancy back in.
So today’s choke points can be seen as risks, but also opportunities; more presciently, they can be seen as harbingers of greater challenges ahead that we need to get better at avoiding, mitigating or absorbing. Today’s chokepoints should drive us towards tipping points that shape the change in geopolitics we need for collective resilience rather than simply stumbling from one crisis to another.