Presidents And Powers. Back To The Drone Age. How Elon Musk Shanghai-ed Himself. And Language And Diplomacy. #236

Plus how the dollar became almighty.

Dec 05, 2024

Grüezi!

This edition?

⚖️ Power plays of the week: Biden pardons family, Musk mortgages his fortune to Beijing, and presidents everywhere keep testing those guardrails…

🌊 All roads lead to... ports? Why China’s silk roads are actually made of water, and what that means for global power

🎮 When video games meet warfare: How Syrian rebels are learning from Ukrainian drone tactics (minus the state backing)

🏦 Dollar dominance isn’t just about Uncle Sam – Wall Street’s been the real MVP since the 1920s.

🤔 What do dentists and democracy have in common? Both could use an upgrade from 18th-century tools...

1️⃣ The Problem With Presidential Powers

Sometimes people use them…

From the dreary disappointment of Joe Biden using his office to pardon his son, to the currency-crashing catastrophe of South Korea’s Yoon Suk Yeol declaring martial law, presidential powers have been ‘in the spotlight’ this week.

These are exactly the kind of constitutional crises and cronyism presidential systems are built to create.

One person with unilateral pardon power over relatives or co-conspirators, with zero checks. One person able to summon the military against his own political rivals.

The deeper structural problem? Presidential systems create impossible tradeoffs:

Impeachment is too partisan, yet no impeachment invites abuse.
Term limits prevent accountability, but no term limits enable authoritarianism.
Direct elections provide legitimacy, whilst enabling populist “strongmen.”

Consider the pattern:

Nearly half of South Korean presidents since 1948 have faced impeachment, imprisonment, exile, corruption investigations, or assassination;
US presidents increasingly using pardons for political allies;
From Peru to the Philippines and Brazil, presidential abuses have racked up.
Even without a president, Hungary’s experience shows how unchecked power can erode democracy.

What’s the answer? New research suggests “semi-parliamentary” systems might thread the needle. Separate powers while preventing the concentration of executive authority in a single personality. Think Australia (hollow laughs from Aussies, I know).

The truth is we’re not very good at process improvement when it comes to democracy. Americans would hardly take an appointment from a dentist using an 18C manual and surgical tools, but they still reverentially reference the Founders on all matters democratic.

The question isn’t really whether presidential systems are flawed. It’s whether we’ll reform them before the next constitutional crisis forces our hand.

What institutional guardrails could actually work? 🤔

#ConstitutionalReform #PresidentialPowers #PoliticalReform #Democracy

2️⃣ Ukraine’s Drone Revolution Heads East

The future of warfare arrives in Syria

The drone war revolution isn’t just confined to Ukraine. In Syria, rebel groups like HTS are showing off sophisticated drone capabilities. We’re seeing drone power develop in real time.

HTS is a re-branded al-Qaeda affiliate currently fighting the Assad regime.

It’s not just AK-47s and balaclavas. Instead, they’re:

Modifying commercial drone platforms;
3D-printing military drone parts;
Manufacturing in ‘safe’ houses;
Training operators on video game-based programmes;
‘Professional’ military training academies;

This mirrors Ukraine’s evolution but with a key difference – it’s happening without state resources.

𝗧𝗵𝗿𝗲𝗲 𝗘𝗺𝗲𝗿𝗴𝗶𝗻𝗴 𝗧𝗿𝗲𝗻𝗱𝘀:

‘Garage’ Manufacturing: 3D printing, commercial drones, and distributed manufacturing sites means ‘air power’ is now available to small groups.
Accelerated Training: Video games and simulators are dramatically reducing the time needed to develop skilled operators. Months are now weeks.
‘Asymmetric’ Impact: Big, cheap wins against conventional forces at a fraction of the cost, targeting high-value assets like senior commanders and armour.

𝗪𝗵𝗮𝘁’𝘀 𝗕𝗲𝗰𝗼𝗺𝗶𝗻𝗴 𝗢𝗯𝘀𝗼𝗹𝗲𝘁𝗲:

Centralised Command Posts: Sharpshooters used to aim for epaulettes, drone operators target satellite dishes on APCs.
Traditional Air Defences: Designed to take down high-altitude threats they struggle against low-flying, commercial drones.
Static Defences: Fixed positions, no matter how well fortified, can be persistently monitored and targeted.

𝗪𝗵𝗮𝘁’𝘀 𝗕𝗲𝗰𝗼𝗺𝗶𝗻𝗴 𝗖𝗿𝗶𝘁𝗶𝗰𝗮𝗹:

Distributed Operations: Mobile commands that can run battlefields while avoiding detection.
Counter-Drone Capabilities: Being able to detect and neutralise small drones is becoming as important as traditional air defence.
Rapid Adaptation: Organisations that can quickly evolve tactics and technologies will dominate.

The lessons from Ukraine and Syria suggest we’re moving to a new world of war where drones become the norm rather than the exception.

#DroneWarfare #MilitaryInnovation #Defence #Technology #Security #GlobalSecurity #ModernWarfare #MilitaryTech #ConflictInnovation #DefenceTechnology

3️⃣ Old Empire Lessons For NATO

History’s surprising guide to modern alliance management

One of my favourite books of the year was Peter H. Wilson’s Iron and Blood: A Military History of the German-Speaking Peoples since 1500.

Wilson spends a lot of time on something that modern historians have neglected – the Holy Roman Empire.* What came to my mind reading it? The parallels with NATO today.

The Holy Roman Empire’s diplomatic manoeuvring – cajoling and compromising with archdukes and imperial knights – mirrors NATO’s challenges in rallying support for initiatives and defence spending with everyone from nuclear powers and micro-states.

And what might appear as inefficiency in NATO’s consensus-based decision-making may actually be a source of resilience.

The Empire survived plagues, religious wars, and technological revolutions thanks to its capacity for reinvention. NATO has transformed from a Cold War bulwark to a counter-terrorism force, and now returning to focus on traditional state-based threats.

Four lessons for NATO’s future?

Beyond Military Might: The Empire demonstrated that military power alone doesn’t sustain alliances. NATO’s soft power – its ability to build consensus and shape international behaviour – is as crucial as its military capabilities.
Strategic Engagement: The Empire got by giving potential rivals a stake in the system. NATO needs creative approaches to partners who may not be natural allies.
The Long View: The Empire’s longevity came from its ability to play the long game while managing immediate crises. NATO faces a similar challenge in balancing rapid response capabilities with strategic patience.
Consultative Processes as Strength: While autocratic systems promise efficiency, NATO’s “messy” decision-making processes might be its greatest asset, enabling sustainable consensus-building and adaptation.

*The old historian’s joke? Not holy, not Roman, not an empire.

#InternationalRelations #StrategicStudies #MilitaryHistory #AlliancePolitics

4️⃣ China’s Soft Sea Underbelly

Trade motion by ocean is the secret vulnerability shaping global strategy

One critical vulnerability shapes China’s global strategy: 90% of its trade volume and 80% of its trade value moves by sea.

Almost all of this ships through the Malacca Strait – and that drives Beijing’s strategic initiatives in ways many Western analysts overlook.

China’s economic export miracle depends on ocean trade routes it doesn’t control. This vulnerability helps explain:

Naval Modernisation: China’s huge navy investment reflects not just military ambition but economic necessity. Protecting vital maritime trade routes has become a national security imperative.
Belt and Road Initiative: Developing overland trade routes is a strategic hedge against maritime vulnerability, explaining China’s massive infrastructure investments across Eurasia.
South China Sea Policy: China’s tough stance reflects its desire to secure key maritime approaches and establish strategic depth around its key ports.
Russia Relationship: Deepening ties provide China with both overland trade alternatives and a strategic resource partner to challenge US naval dominance.

This creates ripple effects throughout the global economy:

Supply chain managers need to factor in potential disruption scenarios;
Infrastructure investments follow alternative trade route development;
Shipping rates reflect geopolitical risk premiums;
Regional security arrangements influence investment decisions.

The implications extend far beyond China. As Beijing seeks to address this vulnerability, its actions are reshaping global trade patterns, military deployments, and diplomatic relationships across Asia and beyond.

#Diplomacy #Trade #MaritimeSecurity #GeopoliticalRisk #TradeRoutes #NavalStrategy

5️⃣ Elon Musk’s Tesla Trap

A case study in modern strategic risk

Tesla – owner, E. Musk esq. – and its experience in China represents one of the most fascinating case studies in modern business-geopolitical risk.

Its Shanghai factory has produced 3 million vehicles since it opened in 2019. It’s delivered 675,000 vehicles this year alone – representing over half of Tesla’s global output.

China’s commitment to Tesla has been … substantial:

15% corporate tax rate (versus standard 25%)
$521 million in low-interest loans
$82 million in grants
Fast-track approvals personally facilitated by Premier Li Qiang

Meanwhile, Tesla wants regulatory approval for its Full Self-Driving technology in China.

China’s considerable leverage over Tesla creates a situation where its global production capability could be significantly ‘impacted’ by Chinese decisions. And that would impact its stock which represents most of the wealth of one

The world’s richest man, with Pentagon contracts through SpaceX and a global satellite network with Starlink, finds his fortune effectively mortgaged to Beijing.

This is at a time when his relationship with Trump and his potential influence on US policy moves closer to the White House.

#Tesla #SpaceX #China #Musk #BusinessRisk #AutoIndustry #TechGeopolitics #GlobalTrade

6️⃣ Why Dollar Power Persists

The hidden engine of financial dominance

The persistence of dollar dominance in global finance offers some insights into how economic power operates in today’s world.

A recent book from my former colleague Mary Bridges – Dollars and Dominion –suggests its private sector innovation, rather than government policy, that kicked off the dollar’s centrality in global finance.

In the 1920s and 1930s, US banks weren’t passive beneficiaries of American power but active innovators who extended dollar influence even when government policy was uncertain or counterproductive.

Today’s financial landscape shows similar patterns:

Fintech innovations continue to expand dollar-based transaction networks
New clearing systems enhance the dollar’s utility in global trade
Private sector financial products maintain dollar attractiveness
Market-driven solutions often outpace government initiatives

History suggests that China’s challenge to dollar dominance faces more complicated hurdles than commonly recognised.

Rather than simply competing with American state power, China has to compete with a century of accumulated private-sector financial innovation and infrastructure.

#GlobalFinance #MonetaryPolicy #FinancialMarkets #EconomicHistory #Dollar

7️⃣ How To Win Friends And Influence People #AfricaEdition

Learn the language. Bring cash.

A nice example from the world of health on what matters in global relations.

TL;DR? Make an effort.

#Diplomacy #Language #Africa

Thanks for reading!

Adrian