Three Things

Since setting up T Reilly Geopolitical, my focus has been on how to ensure I have enough money to pay the rent. The intervening months have brought home a sad realisation that I am never going to reach Musk-like levels of wealth. However, some semblance of financial stability has now been achieved, which means I can now spend more time reflecting. And since reflecting on one’s own is rather dull, I thought I would inflict some of my thinking on you – hence this note.

In keeping with the best traditions of the Civil Service, my thoughts fall broadly into three buckets – domestic (UK politics); international (geopolitics); and political trends (horizon-scanning).

Domestically

Labour won the UK’s election in July by a landslide. A victory based on a decision – at once tactical and strategic - to focus its campaigning firepower on marginal, rather than safe, seats. As a result, Labour’s overwhelming Parliamentary majority is not reflected in similarly overwhelming popular support. Given that the lifespan of a Parliament is five years and that we are still in the foothills of this one, Labour’s strategists could be excused for arguing that the current absence of popular public support does not matter hugely: Labour has time on its side; investment in public services together with (generally) falling inflation will mean that by the next General Election, the public will feel better off and will be benefitting from a rise in the standard and quality of public services. Maybe.

Social media worked itself into a frenzy over a recent ‘Call a new General Election’ Petition. Even allowing for Elon Musk’s unashamed interference and a large number of dubious ‘overseas’ signatories (many with IP addresses in Russia and China), there is a level of annoyance at the freebies scandal, winter fuel allowance changes, power-squabbles in No.10, or budget tax rises. But opposition to governments is the very nature of a democracy. And governments do not tend to change course in response to Petitions (over 10 million people signed two Petitions calling for a rethink of the UK’s departure from the EU, without anyone seriously suggesting the Government change its course).

The Petition is just froth, but it is also symptomatic of the fact that the Labour government has not started well. Nature abhors a vacuum, but the media loathes them even more. Labour’s wholly unnecessary delay of four months between Election and Budget brought what could have been a productive and dynamic honeymoon period to a screeching halt before it had even started: the absence of policy announcements opened an abyss into which invective and irritation were poured and the result has scarred perceptions: less than 25% of the public think Labour is managing the economy well; 50% think the Budget was unfair; 54% object to the increase in IHT for farmers; and 57% think the NIC changes are wrong. CBI figures show a decline in business confidence. Only 47% of the public think Reeves is doing a good job (down from 47% in October). Support for Starmer (at 27%) is only 5% ahead of Badenoch.

And so, a mere five months into its term in office, Labour is offering a Policy Relaunch. With targets. To make its Missions more tangible. But the real, long-term threat to Labour may not come not from its inability to articulate a compelling message. The real threat may come from Reform. Given the Party only won five seats, that may seem odd. But Labour strategists’ concern at the threat to its ‘Decade of National Renewal’ bears closer examination. Reform came second in 98 seats at the election. From an almost standing start, the Party took nearly 15% of the vote – more than any other Opposition Party except the Conservatives (who were only 9% ahead). Like other populist parties, Reform’s discourse of nostalgia and grievance offers no sustainable solutions, but instead feeds a sense of national drift and frustration. If Elon Musk’s $100 million donation to Nigel Farage materialises, it will not only ensure a sustained national campaign, but it may frighten the Conservatives sufficiently for them to suggest an alliance (much as the rise of the Rassemblement National in France persuaded the Republican Party Leader Eric Ciotti to throw in his lot with them before the last set of Legislative Elections).

Labour still has time to turn the Ship of State around. But if Labour’s Relaunch does not bear fruit quickly, with the public feeling and seeing a difference, by this time next year, it may already be too late to win back an increasingly fickle, impatient and unforgiving electorate.

Geopolitics

Back in May, I wrote a blog about a growing (and, in my view, welcome) trend of developing nations forcing their way up the value chain. Last week I was in Morocco and saw this precept in action.

Morocco’s economy is forging ahead with bold plans for expansion of the railway network, banking and education reform, construction and general infrastructure development. The objective of this dynamism is to force the economy to work for everyone – not just the wealthy (it is perhaps also a tacit recognition that if it doesn’t, a gulf in social inequality may create societal tensions which could become unmanageable). It did not surprise me to find that Morocco’ breakneck development has its own unique pattern: progress will not be achieved at the expense of its past. Not for Morocco the razing of its architectural and cultural heritage to make way for modern sky-scrapers: ancient and the modern will prosper side-by-side. Rather I was agreeably surprised at the sharp determination to force Morocco up the value chain by growing its domestic capacity to build. Everyone we spoke to was focused not on today. But on the watchwords of tomorrow: ‘training’, ‘development’, ‘investment’, ‘centres of excellence’, ‘creation of export potential’. Perhaps the emergence of the concepts of ‘friend’ and ‘near-shoring’ has given Moroccan economic growth additional impetus (and its geographical location in proximity to one of the world’s largest markets certainly helps). But whatever the cause, it is clear that now is the moment to invest. Morocco will move forward with whichever partner is prepared to climb on board and ride in partnership on its Progress Express. If countries (such as the UK) do not see, understand or value the opportunity, Morocco will not wait for them to decide.

I applaud the fierceness of the vision and the single-mindedness of the approach to sustainable economic development, but cannot help but be concerned about the longer-term geopolitical implications of significant Chinese and Russian investment in a key N African country. In this context, whilst France’s renewed commitment to political and economic partnership with Morocco and consequent re-balancing of the geopolitical scales is very welcome, further investment from European companies, would not only help Morocco’s economic development (and hence political stability) but would provide further geopolitical equilibrium in such an important part of the world.

Trump’s election may force more countries tom take protectionist stances with regards to international trade. That is not a good trend as it embeds economic inefficiencies and slows down international trade and exchange, which is the life-blood of efficient economies and global development. But if it enables developing countries to extract more value from their natural resources (whether that is encouraging multinational companies to domestically locate processing plants for rare earths minerals and metals; training and developing local human capital; or using beneficial geographical location to create sustainable business partnerships), then it may be a welcome change which could accelerate more even and equitable global economic development. But it also brings a risk that a failure or refusal by Western companies and governments to recognise and support the altered focus could create a worrying imbalance of geopolitical influence in developing nations at a crucial moment in the post-war global order.

Political Trends

All of this musing leads to a couple of interlinked observations. Firstly, that the World Order is changing fast. And secondly that populist politics are on an apparently inexorable rise.

The response from leaders as diverse as Putin, Orban and Milei to Trump’s election victory suggests it is likely to lend succour to right-wing populists around the world – even if France’s Marine Le Pen has been more reticent in her support. The US election, though, also demonstrated that belittling the voters who supported Trump’s populism misses the point.

Those of us in the Liberal Elite (as we have been disdainfully described) may find it difficult, distasteful even, to try and empathise with those who supported Trump (or Brexit, come to that). But populism is mining a deep vein of social discontent which we cannot deny exists. Globalism has been extraordinary in lifting millions out of poverty. But there is a social cost to that success.

Listen to Trump’s last election speech ‘your paycheques will be higher. Your streets will be safer and cleaner. And your future will be brighter than ever before. This will be the Golden Age of America.’ What is not to like in that vision? Trump is offering a radical alternative for those whom the current system has failed. He is the Great Disruptor who will pull down the status quo. He is the Great Protector of those society has left behind, promising to the Marginalised, the Patronised, The Ignored, Those Who Feel They Are Strangers In Their Own Land that, once the status quo has been destroyed, they will be the beneficiaries of this New America. Speaking to friends who voted for Javier Milei in Argentina, I heard the same story ‘Peron promised us the world. We voted for Carlos Menem. For De le Rua. We supported Kirchner, Macri. We got nothing. Milei is offering a radical alternative. We have nothing left to lose. We will give him a go’. For millions of Americans, Trump’s words (like those of other populists around the world) offer a promise of a light of hope in the darkness of despair.

So how should those of us arguing in favour of immigration, not deportation; globalised trading, not protectionism; internationalism, not isolationism; the green deal, not ‘Drill baby Drill’ respond? We are too easily dismissed as wanting to protect either the status quo ante or only those changes which are to our benefit. We may (with good cause) view the populist discourse now so prevalent in the UK, EU and US as empty promises, vacuous words which cynically exploit misery, poverty and missed opportunity. But we should not dismiss it. Nor can we deny that a system which has so clearly benefited parts of society has equally left large sections of our communities struggling in the wake.

Populism is rising everywhere as the lessons of the 1930s and ’40s recede into half-forgotten memory. I conclude this musing with an observation that, if we want to retain the benefits the post-Second World War political and economic order has so efficiently delivered, we need to do more than angrily disagree with Trump and his populist cohorts. We must not only expose the empty fallacies of their discourse. We must hone our narrative and patiently and sensitively make the case for why improving our existing way of life is the preferable alternative to ripping it all down. But, just as with Labour’s struggles against Reform in the UK, none of this will make any difference if we do not have courageous and visionary policies delivering concrete benefits for all of society.

The challenges facing our modern world – from AI, to war to climate change – will be solved most effectively if we approach them in a spirit of collaboration. History teaches us that right wing populism does the exact opposite: nationalism encourages nationalist sentiment, fanning the racist flames of distrust. Isolationism and protectionism lend succour to that distrust, dividing where we should unite and creating suspicion where we need cooperation. If we do not win the argument, we risk a historic failure for which future generations will hold us responsible.