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Hot and Cold

Summary:
To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. Your email will not be shared with anyone. Ever. We are in a cold war with China. That is, as we say, not a prediction. It is an observation. Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do. In any case, what I mean by the term isn’t complicated. Two political belligerents are now engaged in a foreign policy whose objective is to thwart through all means short of firing weapons the expansion of influence, the establishment of additional international military infrastructure and the expression of

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Hot and Cold

We are in a cold war with China.

That is, as we say, not a prediction. It is an observation.

Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do.

In any case, what I mean by the term isn’t complicated. Two political belligerents are now engaged in a foreign policy whose objective is to thwart through all means short of firing weapons the expansion of influence, the establishment of additional international military infrastructure and the expression of territorial control over contested lands, sea lanes or airspace by the other.

I suspect that you might have read the below piece (or one like it) reporting on the statement and sanctions from the EU and US concerning China’s treatment of Uyghur Muslims in its western reaches. If you asked yourself, as we often counsel, “Why am I reading this now?”, it was not because western politicians only just discovered to their collective horror the depth of what is happening in Xinjiang.

About a week before you read that, perhaps you read coverage of the Quad Summit. It was a highly public meeting among its members – India, Australia, Japan and the United States – to begin the process of contesting the scope of the CCP’s sphere of influence within east and southeast Asia.

A couple weeks before that, it might be that you read about the USS John McCain steaming through the Taiwan Strait for the first time during the Biden presidency (as an aside, I’m not sure which style guide encourages the use of the verb “rule” for what it is that American presidents do, but nuts to that).

Maybe you have read weeks of coverage of the Anchorage meetings, or Secretary of State Antony Blinken’s reference to Taiwan as a “country”, or explicit multi-lateral expressions of commitment to the defense of Taiwanese sovereignty.

This is certainly not surprising to those who already knew that Taiwan is now Arrakis.

Yet while the emerging geopolitical struggle is not being called a cold war just yet, it is being called everything that a cold war is. It is only a matter of time before an influential politician, writer, journalist, executive or publication begins issuing missionary statements framing and phrasing it as a new cold war. Then some U.S. State Department official will say very officially that it is not a new cold war, at which point everyone will know that everyone knows it is a cold war and throw away all pretense.

And that’s when the narrative war will get hot.

The last time we went down this road, the Soviet Union had a lot of propaganda notes they could play domestically. There were, however, only a relative few they could play to any real effect abroad. What we today call whataboutism is in part referential to the art form it became under Soviet propagandists. In short, they discovered that they had a ready response to any criticism of their brutal and arbitrary system of justice, policing and treatment of political prisoners: “Sure, but what about racism in America?”

If that makes you nod your head a little bit, well, that is the point. The most effective propaganda doesn’t lie. It tells a truth and insists that all facts must be framed around that truth. If you aren’t willing to buy into that framing, well, then clearly you just aren’t honest enough to believe the truth they told you.

That is why the narrative war in this case will operate on another level. The CCP – and yes, our own government – doesn’t just have a few of these notes to play. They have the whole damn piano.

The China dispute is embedded in our most highly charged political narratives. This cold war will be fought in the hot war of narratives about ‘China flu’ and the ‘Wuhan coronavirus.’ It will be fought in the narrative of those terms as inherently racist. It will be fought in narratives about the ‘Biden’s family’s corruption by the CCP’ and ‘the crusade by the political right to create a corruption narrative.’ It will be fought in narratives about a news media that downplayed the betrayals of the world by the WHO and CCP in order to pin COVID-19 squarely on the Trump administration. It will be fought in narratives about a political movement that tried to distract from its own policy failures to pin COVID-19 squarely on Beijing. It will be fought in narratives of de-globalization, reshoring and ‘proximity sourcing.’ It will be fought in narratives of Chinese dominance over Bitcoin mining and whether that jeopardizes narratives of decentralization.

If you’re like me or most Americans, you will probably think somewhere between half and all of those narratives are nonsense. It doesn’t matter. In narrative world, any one of those narratives can be weaponized into targeted and divisive propaganda.

The China dispute is embedded in our most highly charged cultural narratives. This cold war will be fought in the hot war of narratives about how ‘the NBA showed in the Daryl Morey situation that all they care about is sales in China’, and about how ‘the backlash against LeBron James’s support of Beijing over Morey is another sign of American casual stay-in-your-lane racism.’ It will be fought in narratives about American board rooms, C-Suites and ESG offices that couldn’t care less about profiting from the CCP’s abuses of Uyghur Muslims as long as companies say Correct Things about the social and environmental causes that really matter. It will be fought in narratives about companies that don’t care about those causes so long as they say Correct Things about the patriotic implications of opposing CCP influence.

If you’re like me or most Americans, you will probably think those narratives are even more nonsensical than the political versions. It doesn’t matter. In narrative world, any one of those narratives can be weaponized into targeted and divisive propaganda.

The China dispute is embedded in our most highly charged social narratives. We are only days removed from the brutal murder of eight spa workers, most of whom were Asian-American women. We are in a period in which Asian-Americans of various national origins are experiencing an increase in targeted acts of violence and aggression. In just the past week, a Vietnamese-American friend of mine in Brooklyn was followed for several blocks in his own neighborhood by someone shouting racial slurs at him (incorrect racial slurs, too, which I suppose makes it racist in several ways at once). Do you think this very real thing that is happening isn’t going to be pulled into the hot war of narratives? Do you think that the prevailing counternarrative – that the US media went out of its way to frame this emerging racism exclusively as part of Trumpian White Supremacy while ignoring its unnerving prevalence in several other communities – is not going to be pulled into the narrative war, too?

So yes, lots of adjacent narratives out there, ready to be directed toward whatever purpose. What’s the point?

The point is that most of us are under the impression that a protracted conflict with China – even a cold war-style geopolitical struggle – will increase national unity. This is the old saw about politicians looking for an external enemy to unite around, and it is usually true, even if we usually mean it cynically.

Not this time.

Our conflict with China is deeply embedded in every fault line of our existing internal divisions. I fear that a cold war with China will lead to a hot war in narrative world that makes the widening gyre of our politics veer further away from a center that can hold. I think that’s true in financial, economic, political, social and cultural markets alike.

We can’t do much to stop it. We CAN prepare how we will identify and respond to it in our consumption of news and social media, and more importantly, in our relationships and interactions with others.

Clear Eyes. Full Hearts.



Rusty Guinn
Executive Vice President of Asset Management, Salient. Rusty Guinn is the executive vice president of asset management at Salient. He oversees Salient’s retail and institutional asset management business, including investment teams, products, and strategy. Rusty shares his perspective and experience as an investor on the Epsilon Theory website.

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