‘We Are in a World of Permanent Crisis’ (Uncut) 02-06-2025

Is This the New Normal? ‘We Are in a World of Permanent Crisis’ | Robert Kaplan

Welcome back to Kiko News. I’m Jeremy Safran. We got lots to get into.

The world is shifting fast, markets are on edge, gold is hitting new record highs, and geopolitical tensions are redefining the balance of power. The U.S. has imposed 10% tariffs on China, sparking retaliation, while Canada and Mexico have secured last-minute deals. But at what cost? Meanwhile, Beijing is hoarding gold and tightening its control over key commodities and strategic metals.

Robert D. Kaplan, one of the most influential geopolitical thinkers of our time, writes in his book, Wasteland, A World in Permanent Crisis, that we’re no longer in an era of temporary downturns. He argues that we’re living in a world of permanent crisis, a state where instability is not just the exception, but the rule. Weimar Germany was a period marked by hyperinflation, political extremism, and economic collapse, and it’s become his central historical analogy.

He writes, quote, Weimar is now a permanent condition for us, as we’re connected enough by technology to affect each other intimately without having the possibility of true global governance. So is today’s world truly on a Weimar-like trajectory? And if so, where does it lead? Robert Kaplan joins us now. Nice to see you, Robert.

Thank you so much for making the time for us today. It’s my pleasure to be here with you. Well, we have so much to pack into here and to unpack for the audience.

I mean, the book was fascinating. And let’s jump into this whole aspect about Weimar Germany, because it’s often remembered as a warning, I mean, a fragile democracy that gave way to a dictatorship. And you argue that today’s world mirrors that instability, but on a much bigger global scale.

So break this down for us in the audience. I mean, what are the strongest historical parallels that stand out to you right now? Right. Yes.

First of all, thanks for having me. And in terms of Weimar, Weimar lasted from 1919 to 1933. And when they drew up the Weimar Constitution, the German legislators and lawyers wanted to prevent the rise of another autocratic ruler like Kaiser Wilhelm or a strong autocrat like Otto von Bismarck.

So they overlearned the lesson, which we all do from time to time. They learned the lesson too much. And they created a system that nobody could rule, that was so weakly governed that it had many different parts to it.

It was, you know, it had differences of power, of separation of power, but much, much greater and more complex than the US or the Canadian constitutions or whatever. And the result was a permanent crisis. So Weimar had a lot of flowering, a lot of hope, a lot of great culture, but it led to Hitler.

And one thing I’m arguing in this book is that is not our destiny. I’m not saying that the world is headed for Hitler or anything close to that. I’m just saying that we’ve reached the point of global integration because technology has shrunk geography so that a crisis in one part of the world can ricochet around the earth and ignite a crisis in another part of the world like never before.

So while we do not have global governance, we do have kind of a global system. And that system replicates the instability and the permanent crisis of Weimar. So I raise Weimar at the beginning of the book as a caution, you know, because again, Weimar could have gone in many different directions.

It didn’t have to end up the way it did. It was undone by a great high inflation and then a great depression. Without those two elements, Weimar might have had a good ending.

But I raise Weimar as a warning, as a caution, because we are now in a world, I don’t say permanent chaos, I don’t use the word chaos or anarchy, but a permanent crisis. If it’s not one thing, it’s another that we can all talk about, argue about in common. Yeah.

I mean, you mentioned that, you know, Weimar obviously led to that catastrophe, too. But why do you think this time will be different? I think it’ll be different because the earth is still too big to fall under the rule of one person. So it has to have a different result.

Also, there will be many different results. Just look at sub-Saharan Africa. You have failed states, you have tottering states, and you also have modestly successful states.

And they’re all, you know, and they will all have different destinies. And that’s just one continent south of the Sahara. So the world is very varied.

All I’m saying is that the interconnections between the parts produce one crisis after another and that we will have to get used to. Yeah. Yeah.

It’s been fascinating to watch. And as you mentioned, you know, lots of things happening geopolitically as well. I mean, you also write that democracy has worked in the West and a few other places for several hundred years, whereas, you know, the moral example of kings and queens has stabilized vast portions of the earth for millennia.

Are we witnessing a shift where authoritarianism starts to outperform democracy? Well, I don’t think authoritarianism outperforms democracy. Both have their problems. And authoritarianism has worse problems.

I would much rather have the problems of the United States than the problems of China or Russia, for example. And I make that clear in the book. But mass democracy is not necessarily the last word in human political development.

There will be developments beyond democracy. Mass democracy can lead to tyranny of the majority. For instance, look at the United States now.

You’ve had several close elections where each candidate on both sides gets almost 50% of the vote and an election is decided by 51% or 52% of the vote the victor gets. And that victor gets to do almost everything he wants. You know, that’s where you get tyranny of the majority.

And you’ve seen that really viciously in the Balkans and Central Europe in the early part of the 20th century, where they had weak, tottering democracies and one side got power and oppressed the other side. And this was worse than the basically benign example of the previous kings and queens in the region. Yeah.

Let’s continue on American influence here, because in your book, you discuss the decline of that influence in the Asian Pacific region and then the Middle East, of course, as well as the rise of China as a global power. Are we seeing the consequences of a world where the U.S. no longer acts as a global stabilizer? What are your thoughts here? Well, the U.S., China and Russia are all in decline, I argue. But a decline itself can be overrated.

Decline can take decades and centuries. And decline is relative to the rise or decline of competing great powers. It’s my feeling that the United States is in a gradual decline, whereas China and especially Russia are declining at faster rates.

China is a Leninist autocracy. So a lot of its problems are hidden. You don’t see them.

The United States is a democracy, so its problems are just out in the open. Everyone can see them. And while Russia could be at the moment winning the war with Ukraine, the war itself going on almost three years now is weakening the Russian Empire from the Caucasus all the way to the Far East.

So America’s prospects are better, but we can talk about them because I think that while President Trump declares a new golden age, he is actually an instrument of a slow, gradual decline in America. Right. That’s interesting because, I mean, as you mentioned, you argue that China and Russia are even in a deeper and steeper decline than the U.S. So break this open a little bit.

I mean, if all great powers are weakening at the same time, I mean, what does that mean? All right. Let me just go back a moment when I said decline can be gradual and overrated. Remember that the British Royal Navy started to decline in the 1890s, and that was basically the measurement of British power, the power of the Royal Navy.

That did not prevent Britain from saving the world 50 years later when it was in the midpoint of that decline in the 1940s. You only really saw British decline after World War II in the decades afterwards when it just ran out of money to run the empire anymore. But it took 60 years from the 1890s.

Yeah. Well, I’m curious, you know, when you talk about the instability, I mean, throughout history, we’ve seen periods of multipolarity where no one nation dominates, right? Oh, yeah. Yeah.

Yeah. I don’t think, you know, everyone says, well, if the United States is declining, China is rising, you know, or America is doing great because its economy grew by 2.5% last year. That’s nonsense.

First of all, if all three powers are in decline, maybe nobody is coming up to replace them. Maybe you’ll just see more instability, more of this permanent crisis in a more anarchic world. That’s one thing.

Secondly, the U.S. GDP growth is great news. But keep in mind, at the end of World War II, the United States accounted for half of all global manufacturing capacity. Now it accounts for about 16%.

The United States has a deficit of, what, $35 trillion. It spends more money paying interest on that deficit than the yearly budget of the Pentagon. So already, the deficit, you know, the deficit interest payments over 12 months is greater than the 12-month budget of the Pentagon.

So it’s those kinds of things looked at historically, where you see how empires and great powers have declined over the course of history. Yeah. Let’s continue on that theme of instability because the U.S. just imposed 10% tariffs on China.

Mexico and Canada got a last minute deal to delay the tariffs, but only after major concessions. I mean, are we witnessing the breakdown of globalization? Unpack that for us a little bit. Well, globalization began as we understand the word, actually began at the end of the Cold War.

Remember, when the Berlin Wall fell, nobody had email addresses. There was no internet. There were no smartphones.

All of that came in the first round of globalization that I call in the book, globalization 1.0, where you got, you know, a burst of technological development. You had a spreading of mass democracy. You had the growth and creation of middle classes in many parts of the world that didn’t have it.

And you had, very importantly, you had free trade. All the great powers subscribed to free trade. Remember, free trade helps keep the world at peace.

A tariff regime helps move the world towards conflict and war. That’s been the record of history. Now, globalization 1.0, as I call it, was about largely free trade and the creation and enlargement of middle classes.

Globalization 2.0, which began around the time of the coronavirus, was about, it was not such a 100% positive, happy story. It was about the re-rise of autocracies, about populism, about tariffs, you know, about people questioning free trade, and things like that. And about, you know, and really about conflict, the re-rise of Russian imperialism, China going from a risk-averse, collegial, benevolent autocracy under Deng Xiaoping, Jiang Zemin, and Hu Jintao, and then going over to a really hardcore Leninist totalitarian state under Xi Jinping.

So that’s globalization 2.0. It’s a very, it’s a mixed story. But I believe that, you know, this tariff regime, which could lead to a trade war, it seems to be leading to a trade war of sorts, is altogether bad news. Because it only makes the world more unstable.

It always brings, it can bring China and the United States into greater conflict. And remember, North American free trade, United States, Canada, and Mexican economies were together, was creating a kind of a regional trading block that influenced, that helped everyone. Divisions, you know, tariff-led divisions between the United States and Canada, the United States and Mexico, will only benefit China.

Because China can help fill the gap in Canada and in Mexico. And I believe that that so far, there’s a very important point I want to make here. Over the last few decades, we’ve had incredible wars in the Middle East.

We’ve had like a World War II style conflict in Ukraine. And yet financial markets have not been affected that much. They’ve impressively priced in those wars.

When people look at their bank statements, their retirement accounts, they don’t see much of a difference because of those wars. But if there was ever a conflict, a military conflict between the United States and China, that could have a really destabilizing effect on financial markets that everyone would feel. People would look at their retirement savings and see substantial drops.

If there were a high-end military conflict over Taiwan or the South China Sea, you know, between the United States and China, maybe bringing in Japan, the world’s third largest economy in the East China Sea, etc. So I believe financial markets can more or less survive a lot of the geopolitical stress that I write about in Wasteland, except for a possible military conflict between the US and China. And a tariff regime that leads to a trade war only makes that more likely.

Yeah. Let’s go back to that a second, because obviously, you know, Trump’s in here for the second time. We call him Trump 2.0, and he’s learned some things, it would seem, from the first time he served in the administration.

What does Trump 2.0 mean for global order? I mean, how do you see this going down? Well, Trump is, you know, it’s sort of a strange thing to say, but America has had presidents, Clinton, Obama, Biden, that we all know and remember, because we happen to be alive at the time they’ve been president. But they’re ultimately forgettable presidents. You know, it’s like elites talking about Rutherford B. Hayes and Benjamin Harrison, who were American presidents in the 1890s.

Clinton, Obama, and Biden will not be remembered very much. Two presidents will be remembered very much. George W. Bush, in a bad way, because of the multiple mistakes of the Iraq War.

He’ll be remembered as a bad president. And Trump, even more so, is a world historical figure. He doesn’t, that doesn’t mean he knows about history, or he reads history.

It means he affects history, often unknowingly. And he will be remembered for decades to come, both for his first term, and more likely for this second term, which has just begun. He doesn’t mean to disorder the world, but that could be the effect of what he’s starting to do.

Yeah, yeah, well said. I mean, I want to flip over to China here, Robert, because, I mean, you’ve written that China’s in trouble, an economic slowdown, capital flight, and obviously we have that aging population. But does this make Beijing more likely to escalate a confrontation over Taiwan? Or do you see them playing the long game here? I see Beijing playing the long game.

Remember what I said before, that a military conflict could really destabilize financial markets, supply chains, etc. Well, I know, I’m not the only one who knows that. And people in Washington aren’t the only ones who know that.

The Chinese know that. You know, they’re very much aware of this. They’re very much aware how disastrous a war over Taiwan could be for their own economy, because they have to sell goods to America.

So they have a stake in the financial health of the American worker and the American economy. So it’s ironically this fear that I mentioned of a real financial catastrophe that keeps the peace. What kept the peace during the Cold War in Europe was the fear of hydrogen bombs.

That was the fear that nobody spoke about, but everyone had. And in fact, after the Cuban Missile Crisis, when there almost was a nuclear war, both parties then made attempts to negotiate. You had the nuclear test ban treaty, strategic arms limitation talks.

Eventually, you had detente. The Cold War got a lot less dangerous after the Cuban Missile Crisis. The Chinese are very much aware of this history.

And so I think they’re afraid of a war too. So I think that’s what’s keeping the peace. That’s what’s ultimately stabilizing the geopolitical financial world, is the fact that the Chinese at least, they talk big, but I have to believe that they want to avoid a conflict with the United States over Taiwan.

Yeah. Another thing that China’s doing is obviously buying and holding a lot of gold. I mean, gold is obviously hitting new record highs almost on a daily basis right now.

As I mentioned, those central banks continuing to buy. Does this signal that global investors are preparing for a deeper financial instability? It might be. It may be a lot of things.

It may be that they’re preparing for more capital flight, more money leaving China. They may be preparing for a real crisis with the United States, not necessarily a military one, but a deepening economic political crisis. And also, so hoarding gold often means you’re being pessimistic about the near and middle term future.

So that could be a danger signal. In other words, gold has traditionally been something you hold against catastrophe, against weakening major currencies. Yeah.

Do you think that the gold moves have been, you know, we’ve been watching these all new record highs all last year before this book came out. Do you see that going anywhere, this trend? I think if Trump keeps making the world nervous through tariff threats and again, we have to see what will happen in the Middle East and what will happen in Ukraine. It could continue.

At some point, of course, there’ll be a plateau. Yeah. Well, I want to bring that plateau because obviously there’s been a lot about currency debasement this year too.

Some even argue that gold is outdated, that the U.S. still dominates finance through the dollar, treasuries, you know, the tech markets, big powers like China, Russia, we see that they’re turning towards gold. What would have to change for gold to truly challenge the dollar’s dominance? Well, I don’t fully understand all the interconnections of that. I’m not an economist.

I’m not a financier. I’m not sure that gold can challenge the dollar’s dominance because it’s not a currency. It’s, you know, it’s not easily tradable on a minute by minute basis outside of markets, outside of financial markets.

I think the only thing that can threaten the dollar’s dominance is if there’s another country or basket of another currency or another or a basket of currencies that are more desirable. And I don’t see that because I don’t see Europe is any more secure than the United States. In many ways, we can argue that Europe is more unstable than the United States.

So I don’t see the euro as that. You know, the BRICS, you know, could begin trading more in the Chinese currency and all of that. But the BRICS don’t have a coherent geopolitical strategy at all.

They pull in different directions. You have like the United Arab Emirates, which unofficially at least is very pro-Israel. You have South Africa, which officially at least is very anti-Israel.

There’s no coherence there. They don’t represent a real strong point of view. So I’m not sure what the only thing they seem to represent is perhaps weakening the dollar’s hold on world currency markets.

Right. Yeah. And I mean, I know that you’ve talked a little bit about weaponization of the dollar.

I mean, we have sanctions, swift exclusions, trade restrictions. But now China and Russia are actively working around the U.S. financial system. So, you know, could this backfire or alternatively, could it accelerate the decline of the U.S. financial dominance that we have? The Chinese have to worry.

They need a relatively healthy U.S. in order to sell goods to. Remember, this is the first time in history where we’ve had two great powers in a rivalry, the U.S. and China, where they’re also so economically interconnected. You know, that’s not occurred before.

The old Cold War, the Soviets didn’t have an economy. You know, they had oil, gold, you know, minerals, but that was it. They didn’t manufacture much outside of, you know, for going into space and weaponry.

The Chinese economy depends heavily on manufacturing high end goods that are sold to the American market and sold to the European market. So we’re too entangled, actually. You know, this is what this actually helps stabilize the U.S.-Chinese relationship.

Yeah, it’s been fascinating to watch that relationship because another rivalry of 2025 between those two countries has been AI. I mean, you’ve warned that AI-driven surveillance is enabling new forms of authoritarian control, with China exporting AI-driven censorship to dozens of regimes. Are we seeing a shift where technology solidifies authoritarian power over democracy here? We certainly could be.

One of the things I worry about heavily in the book is the loss of individuality. You know, we all think we have our own ideas, but in many cases, our ideas are created for us by others. You know, a tweet that goes viral, you know, a movie or a record that everyone goes to see, that’s a form of group behavior that doesn’t really empower the individual to make up his own mind, his or her own mind.

It’s, you know, our ideas are being prepared for us by others. And AI, of course, and even Google algorithms, which is a very primitive form of AI, threaten this very phenomena that I’m describing. Okay.

Well, let’s unpack a little bit about this because, you know, some believe AI can enhance democracy. I mean, look what’s happening with Doge and Elon Musk right now, you know, trying to make governance more data-driven or they argue transparent, even more efficient. Could AI actually strengthen free societies rather than weaken them? I’m not sure.

You know, I’m just not sure. I can see a lot of ways that AI could become, as they say, Orwellian. You know, it’s like Big Brother, a kind of, you know, a driven dictatorship.

You will think like this, you will like this, you will dislike that. And it will have more power, precisely more persuasive power, precisely because it’s created by artificial intelligence. I’m very skeptical about Elon Musk’s efforts to streamline the government.

You don’t stream, let’s just take the U.S. Agency for International Development as an example, USAID, which has been a part of the post-war, post-Cold War order of United States aid to developing countries in many forms. Whereas NATO was the hard power aspect of it, USAID was the soft power aspect of it. USAID may have a lot of problems, bureaucratically, et cetera, but you don’t destroy it in order to fix it.

What you do, and what previous business minded, efficiency oriented, Republican presidents did, was they appointed someone from the private sector to run USAID. They didn’t take someone to destroy it. Okay.

Go back to this AI theme, because I’m curious, you know, AI tech and this threat, I know it’s hypothetical, but what’s the worst case scenario here? What do you see this as going dangerously bad in that front? I can’t speculate. You know, I just can’t, we, you know, AI could actually, you know, in a really negative scenario, do worse damage than a nuclear bomb, you know, in ways that we can’t even imagine. I really can’t speculate.

I just hope that human beings win the battle against AI, because there are a lot of dangers in artificial intelligence. It’s a great, it’s a great thing. It’s out of the box.

It’s going to happen. It is happening, but we, you know, we have to be able to control it. Yeah.

Robert, looking ahead, because I know none of us have a crystal ball here, but what’s the geopolitical risk that markets and governments are underestimating right now? What they’re underestimating. I think that they’ve, as I said, they’ve priced in Middle East turmoil. They’ve priced in Ukraine.

A war in the Pacific is impossible to price in because it could occur in so many different forms. I think that we’re seeing it in a way in the upsurge in gold buying, because it isn’t just the Chinese who are buying gold. The price of gold has been going up.

That’s a sign that markets are trying to hedge against geopolitical risk. In the next few years, we may see, I believe we will see, the collapse of the regime in Iran, because it’s a narrowly based clique of people who have destroyed their country’s middle class, destroyed their country’s economy, who are universally hated throughout Iran. I would say it’s 80% of the Iranian population hates the regime.

Now, the collapse of that regime could have a lot of positive effects. It also could have some negative effects. It depends how it happens.

And you have this whole question of Iran as a threshold nuclear power. And then you put that together with a possible collapse of a regime, you get all different kinds of scenarios. And I think that is going to be the big news of the Middle East over the next four years of Trump’s second presidency.

Wow. Four years. I know you’ve been discussing this possibility a long time.

You think we’re closer now than ever since you’ve been talking about it. Well, yes, because the Iranian regime had this basic strategy of developing proxies, anti-Israel proxies, Hezbollah in Lebanon, the Houthis in Yemen, Hamas in Gaza, as a way to keep a war with Israel going, but without endangering the Iranian homeland. Because the proxies were fighting far away from Iran itself.

The Israelis have methodically destroyed the proxy in Gaza. They’ve destroyed the proxy in Lebanon. Not completely, but 80% in each case.

And the Houthis are in the process of being destroyed. So that brings the war closer to Iran itself. And also the collapse of the regime in Syria, which had quite a bit to do with Israel’s war against Hezbollah.

I mean, without Israel’s successful war against Hezbollah, the Assad regime would probably still be in power in Syria. So you have a new regime in Syria, which ultimately will be anti-Iranian. So I think Iran is in a much, the regime in Iran is in a much more precarious state now than it’s ever been in its 40, what is it, a 46 year history since 1979.

Yeah. Fascinating. I mean, Robert, your book suggests instability is the new normal, but in history, obviously it shows societies have broken out of these cycles in crisis before.

Is there any real path forward here? I mean, are we in an era of endless volatility? Yeah. At the end of the book, I say the thing we have to remember and discover is old fashioned liberalism. I don’t mean left liberalism.

I mean liberalism in terms of respect and dedication to the individual, to the individual mind. As long as we can hold fast to individualism and the rights of the individual to think, to have his or her own ideas, we can maneuver through this period. The thing is not to buy into ideologies at all, not to buy into populism or communism in the case of China or anything like that, or any kind of extreme form of thinking, but to rediscover old fashioned liberalism.

Yeah. Fascinating. Before I let you go, I know you’re a busy man, but if the right leadership emerges, I mean, do you see a path for stability? Break down this leadership that you’re talking about and how you really need to focus.

Yeah. I write in the book that I think we’re in the midst of what I call Shakespearean decline. And Shakespearean decline goes back to Shakespeare.

Shakespeare was concerned with individuals and what made them tick and their passions and hopes and dreams and all of that. And when I look at leaders around the world, when I see Trump, when I see Xi Jinping, the Leninist in power in China, when I see Vladimir Putin, what I see is a decline in leadership. And that’s, but the right leaders can certainly change things and get a hold on things, get a hold on things.

What about the people that say maybe Trump’s making some changes here? Maybe the right leader, do you see this next four years going smoother or do you see it more volatile? I see it as very volatile. I don’t discount the possibility that good things, ironically, could come out of the Trump presidency. We might see peace in the Middle East.

We might see the collapse of the regime in Iran that has a good result rather than a mixed or a bad result. So I don’t discount that wholly, but I think Trump will lead to more tumultuousness in the world. Yeah.

What an interesting year shaping up to be. Robert D. Kaplan is the author of the new book, Wasteland, A World in Permanent Crisis. Can’t recommend the book highly enough.

Thanks for your time today, Robert. Really appreciate it. Thank you.

Thank you. And are we truly in an era of permanent crisis or is there a way out? Drop your thoughts in the comments section. Don’t forget to hit the subscribe so you don’t miss out on what’s coming up next on Kitco News.

I’m Jeremy Sappett. For all of us here, we’ll see you next time.