The Stability of Nations and the Next World Order

Founder and CEO of AlphaGeo Parag Khanna discusses the rapidly evolving geopolitical system, how to comprehensively compare countries according to metrics that matter, and how ranking the stability of nations can be used to better understand the world order that is forming.

AlphaGeo's Periodic Table of States represents a holistic typology of geopolitical units across the diplomatic, economic, military, technological, cultural and other domains, as well as an effort to capture their complex interrelationships.

ZERDEN: Good evening, everyone, and thank you all for coming to the Council on Foreign Relations term member discussion on “The Stability of Nations and the New World Order.”

I’m Alex Zerden, and I run Capitol Peak Strategies, LLC. I’ll be presiding over today’s discussion with founder and CEO of AlphaGeo Parag Khanna.

Please note that our discussion this evening is on the record and the audio and video will be posted soon to CFR.org, which is slightly different than some other conversations.

But, Parag, I want to welcome you, and start your presentation.

KHANNA: Wonderful. Well, thank you so much. Good evening, everyone. Thank you for coming. Thank you, Alex, for hosting me. I can’t neglect to preface with some personal reflections, because CFR is very much home to me. This is a homecoming kind of evening. My first job out of college was as an RA at the Council in the New York office, which you might say is the old Council and this very much has a new Council vibe. So it’s extremely nostalgic. It was twenty-six years ago, I would—yeah, if you’re counting. (Laughs.) So more than half my life ago that I had that job.

But if you go up—if you pop up to New York for an event, and if you happen to peek into Mike Froman’s office, when you enter the door on the right-hand side you will see four maps arranged in a rectangle on his wall. And all four of them are mine. I gifted them to him just a couple months ago. And just kind was a very wholesome moment, my sort of tribute back to the Council, which has been such a—contributed so much to my life and career. So it’s a pleasure to be here. It’s the first time I’ve actually been in this office of the Council. And I see it’s got a very different vibe. But it’s amazing to hear that the majority—or half, or more of all the term members nationwide are right here in D.C. And judging from your bios, this is a very star-studded group. So I’m really looking forward to the conversation.

So I don’t want to be overly sort of, you know, pedantic this evening. We’ve chosen a very heavy topic to speak on. And it would merit either 450 PowerPoint slides—(laughter)—which I do have at my disposal—but we decided to have just three or four. Consider these party favors and just—(laughter)—you know, things to mull over at any point in the future. And I won’t get too technical into them. But it struck me that this is the kind of moment where, since we’re going back to first principles—everyone’s favorite term in engineering and now in politics—if you really want to go to first principles, we’re at a moment, an inflection point you might say, where we’re redesigning what the American state is.

And we may not all agree on what terms to even use to describe it right now. I’ve been in meetings in the last forty-eight hours here where some people say we have ceased to be a constitutional republic. And they take that for granted. And when I think about it historically, and I would periodize to some degree—irrespective of what precise narrative you’re going to accept—but the democratic republic era of the United States, that began with our founding up until, let’s say, the point at which America became a global empire, you would say there was a sweet spot period where America managed to be both a democracy and an empire simultaneously, which, as you may know, is a very difficult paradox to sustain.

And now a lot of people see an effort to dismantle, willfully, proactively, the imperial side of America, though that isn’t necessarily the case, but while not returning to the notion of a democratic republic with separation of powers and so on. And that’s the open question is literally what kind of state, you know, is America becoming? And that is obviously daunting, intimidating, scary for a lot of people. But if you at least take it, you know, for what it is, it’s nothing if not exciting—(laughs)—to sort of trying to put a positive spin on the situation. But it does require then that we think deeply about what kind of state we want it to be.

And this is where I come in, in a sense, both as an academic and a practitioner, I’ve been thinking about what is a state for a very, very long time, kind of ever since I arrived in this town as a freshman at Georgetown thirty years ago. Been thinking about, you know, this deeper-order question of not just what is a particular arrangement of institutions, but rather what is the design of the state? What kind of state does America want to be in? It’s the same question that I ask and help other countries answer, that have a more proactive—active, evolutionary kind of approach to their own governance, where they’re constantly redesigning institutions and playing on with org charts.

So now, having been an expat for quite a long time, actually, I spend a lot of my time with governments around the world that are, of course, smaller countries, younger countries, more agile, more technocratic. And help them to just do that org chart. The amazing thing about smaller states, which, of course, is a smaller—littler league than America—is that you can have a good idea and propose it in the morning, and it gets implemented by dinner, right? That’s not the situation here, for better or worse. But I simply am urging that everyone take that big step back when you have the luxury of doing so here, in a place like the Council, and maybe form your own opinions about not just what law here and what amendment there and what process here, but what is the future design, a better design, a more optimal design of the American state?

The theory that I’m putting forward in an essay that I’m writing right now is what I call the technocratic republican empire, which is like an awful mouthful. I need to find a, you know, sort of more accessible term for it. But I do mean it quite literally, and I spend a lot of time on each of these terms and concepts. Technocracy, which I wrote a whole book about a few years ago and tried to defend the term. It doesn’t actually have a very positive reputation at the moment, Republic, I think we’re all OK with that. And then empire, which is a de facto condition. And then there are pros and cons to what kind of empire, in its terms of America’s world role, it should play.

So I’ll just say a couple of words about some of the things that are in here that get to this concept of what is the state. I’ll make just two or three points. I won’t dwell on each one. But the periodic table of states is something that I worked on for about a year with my team. And it was trying to get at this question of what is the—how do you measure the stability of a state, and isolate this notion of stateness. And stateness is a concept that’s often been neglected in political science and held to be synonymous with—simply with democracy, right, or with strength. And it’s neither of those things, necessarily. And that’s something that we set out to prove with our data, and to identify what sets of factors really determine the stateness of a state. And that state capacity is one aspect of it. And so that’s some of the datasets and variables that we put in here.

And then we created a very, obviously, cute, quasi-scientific heuristic, you know, periodic table. And you have attributes of strength, attributes of stateness. And you get this resultant of stability. And the U.S. ranks, you know, perfectly fine in the top tier, but it’s important to draw a few lessons from the overall dataset, which shows that there’s large and small countries. You know, the sort of largest countries don’t always rank at the top. The number-one performer in our index was actually Switzerland, for a wide range of reasons. And that big countries can learn certain things from small countries, when you focus less on size—less on form and more on function, right? What are the things that states with a high degree of state capacity do well, that any state could do irrespective of their size?

And one of the other sets of findings, of course, is that countries like China, or Singapore, or others, that are not democracies in our understanding of the term, or in some cases not at all, what is it that they do well that earns them a place here? And not that we want to shed any more of our democratic characteristics than we already are, but what can we learn from the effectiveness of those states that would make sense for our system? So it was more, like, an open learning exercise. But one of the things you find—and this is tragically disappointing—is that the majority of the states in the world that have been around since 1945 are basically—I mean, we live in a world, on a planet subdivided into these political units known as states—most of which are small, are poor, are weak, and are democratic, at least nominally. And they haven’t gotten very far in terms of stateness, right? The thing that you would actually want to see them achieve most. The stability factor, in the end. The stability output that we are measuring, most countries still rank very, very low in.

And if we were to survey the people of the world and say, what kind of state do you want to live in, they may not all agree that they want to live in a democratic state, or nondemocratic state, or state with, you know, Western values, or other sets of values. But I think we would all agree that everyone would say they want to live in a stable—in a stable state, right? Stability. And that stability is not there in most of the world. And that’s one of the things that you see here in some of the charts and tables. So it was a really interesting exercise.

Now, I’ll just close the opening comments by just making a couple of points on the foreign policy side. Because one of the things that’s always difficult to do is to infer or predict foreign policy behavior from domestic characteristics. We’ve all, you know, studied a little bit of this in college and grad school. And it’s generally inconclusive. And so one of the things that you’ll see here is that we at least try to look at some of the aspects of state—attributes of a given state or government, in terms of their policies. Like, and this would actually—you would love this—resonates with your work, right? The composition of foreign exchange reserves and their trade balances and trade partnerships, and what does that tell us about what international organizations they’ll join? Are they more likely to try and de-dollarize or join the BRICS or the Shanghai Cooperation Organization?

So there are some very useful, simple Venn diagrams in here that capture some of these correlations between domestic characteristics and international behavior. And it’s somewhat tentative, but the goal there, even leaving aside any notion of causality, is, at the very least, to try and get people to think about how the international environment is being reshaped, based upon these kinds of, you know, measurements of what matters to any given country, right? And the financial characteristics are obviously central to that. And the one of the final slides gets at this notion of what I call the geopolitical marketplace. And I’ll close on that, because it’s a term that I coined, I think, when I was sitting in the New York Council office many years ago. And it wound up being the operating principle of my first book.

And I would say now more than ever, we live in this geopolitical marketplace in which you really have to—it’s a race to the top, right, to compete and to be a trusted service provider in this marketplace of services. That not only the United States but many countries can provide and offer what we would traditionally think of as global public goods, and America is the foremost provider of them—whether it is the role of U.S. dollar, or security and protection of the sea lanes. But instead, you find there’s many different categories of public goods. And there is a very active, robust competition to provide them.

And whether it is trade benefits, or financial instruments, or commodities, or technology, and so forth, again, it’s a richly competitive area. And I conclude, in the end, that America is—whether or not it wants to be an empire, in order to be a successful and influential state in the world, is going to have to step up very actively and engage in what I call this sort of tug of war in the paradigm of competitive connectivity, in order to remain influential. And that is—that’s the sort of geopolitical race to the top. So the next world order, ultimately, is one in which it is multipolar, it is multiregional. It is very distributed, almost entropic.

There are multiple great powers and superpowers, even within that. It’s a—that is a secular and robust pattern where no one power is going to succumb to the others at any time soon. And so that is the enduring condition that I think is going to characterize the global landscape for all of our lifetimes. Do not count on Europe falling off the map the way people say. China is obviously not going to be contained or brought down. Nor are we, very importantly, I believe, going anywhere either. So, you know, declinism is much overstated.

And I’ll just—final anecdote. I was at the Hill and Valley Forum, as we were just talking about a minute ago, yesterday. I don’t know if any of you were there. But you know what I’m talking about though, right? The Hill and—so that was an incredibly positive vibe, right? I’m a completely nonpartisan person. You know, I’ve served and had various roles over various times in various administrations. And now I’m an expat, so I’m definitely off the radar. (Laughs.) But I will say, as someone who spends 360 days a year, you know, in other countries, I’m barely ever even here at home, you’d never get a vibe like that anywhere else in the world. Like even in Singapore, where I live, where you have a reason to be optimistic and bullish about the future, not in Abu Dhabi, not in Berlin, or Brussels, or London.

Nowhere do you get that kind of energy that I witnessed for a few hours yesterday here. And, of course, it was a partisan crowd, and probably not the crowd that many of you roll with. (Laughs.) Which is perfectly fine. But the energy that we can harness in America is pretty astoundingly spectacular. So, you know, I’m not—I may have some cynical or pessimistic meetings too while I’m still in town, but I have to say that there’s still, you know, a very uniquely American energy that I hope that we can channel to prevail in this new world order. Thank you.

ZERDEN: Thank you so much. And so I’m going to take the moderator’s prerogative to ask a few questions, and then we’ll open it up in a few minutes. But really, really appreciate the framing on it. I guess one question that I had, you know, I think you’ve been doing this for about two decades now, at least, about providing some order to chaos and giving systems of framing, systems of heuristics to understand what is going on in the world. And I think that’s something that both is human nature, but also really hard to do. And so you’ve done this in successive waves. I was just wondering if you could kind of unpack a little bit more about how you’re thinking about this framework, and then specifically with an eye to outliers. Like, what doesn’t fit in? How do you reconcile things that aren’t—that may not fit in? Or, you know, how you developed this—the different metrics to get the periodic table.

KHANNA: You know, in complex systems there’s so much multicausality. There’s a lot of noise and signals, both. But you always start with a very broad data capture to try and think of everything that could play a role in a system, because you’re looking for emergence, right? You’re looking for faint signals, things that aren’t yet necessarily mainstream. So I’ll give you an example. And part of what motivated this was a frustration with sovereign ratings. So sovereign risk, sovereign credit ratings, put out by S&P, Fitch, Moody’s, and so on. And you look at their criteria. And it’s obviously incredibly narrow. And it’s meant to be. It’s focused ultimately on, you know, targeting one thing, which is the capacity of a government to maintain its debt obligations. So it’s not meant to be the ultimate barometer of the stability of a state, but very often it’s been taken as that. And it’s not S&P’s fault, but we lack something better.

And it was frustration out of seeing this synonymity of a very narrow set of variables with the state capacity, the overall quality, credibility of a state. And investors probably could have made a lot of money in these emerging markets that were not deemed to be DMs, not deemed to be developed markets and stable investment grade. Although, in all—for all intents and purposes, they were, right? So for ten or fifteen years, by using the wrong, limited metrics to judge—to pre-judge countries, we ignored their potential. And so what I sought to do instead is say, well, let’s have a much broader qualitative assessment of the quality of a state, the stateness of a state, the stability of a state, because that ultimately is the most important thing that should guide your capital allocation over the long term.

And so things like—so we obviously went way beyond anything that a sovereign ratings agency would use. And I was pleased that when this came out one of the first calls I got was from S&P saying, well, let’s talk about this. You know, could—the thing is that they don’t have an incentive to modify their criteria because trillions of dollars of asset allocation is indexed automatically to the rating system. So it’s, like, you know, every pension is going to have to rethink—but that’s what I want to see eventually, right? Inertia is not a—intellectual inertia is a crime in my book. So I want to see people, either individually or individual institutions, think really broadly.

So, you know, to directly answer your question, but without going into all twenty-six variables, right, I mean, for strength it’s the kinds of typical stuff that we—you know, that geopolitical scholars have used for decades—size, natural resource endowment, population, industrial capacity, and yadda yadda. It’s all listed on the website. For stateness, right, that’s where you get more into the political science-y kind of stuff around public service delivery, state capacity, government efficiency, quality of infrastructure, income levels, inequality, and so on and so forth. Which, again, matter, right? They tell you a lot about the character of the state. And, again, stability being the sum of those scores. We had a very, very simple arithmetic equation so that people didn’t get, you know, kind of—didn’t get confused by it.

But we brought in some new things that I think really matter. And I just want to—I think a lot of you hopefully have kind of diverse backgrounds beyond just the traditional. And we brought in relatively new data sets, so new that I haven’t—actually can’t build a time series out of this. So 2024 will have to be year one. You know, kind of the T equals zero. Because we brought in things like food security and the energy trilemma. If you’re not familiar with this, there’s a couple of new index products out there that have done a really good job of looking at, again, things that fundamentally matter to the stability of a nation—food, security, energy. You would think that these things would have been measured all along, and they weren’t.

The energy trilemma index has only existed since 2023. They’ve only had one edition. What it does is score countries according to the stability of their energy sourcing for their economy, the share of renewable energy, and access to energy per capita. And this is a very good way, you know, of looking at that issue, as our ways of looking at food security and so on. So in other words, non-traditional criteria were also brought in to measure state capacity and stateness. So I’m glad that we did. So, again, it’s a holistic approach. And that’s what it takes when you’re evaluating states in a complex system.

ZERDEN: And was there anything that surprised you from your data? Like anything that kind of stood out?

KHANNA: I didn’t think that small countries would manage to hold their own, right? Because, again, what—another one of the motivations for doing this, maybe I should have said it out front, was not only the frustration with sovereign ratings schemes, but knowing that when we rank countries today, and we’re always ranking countries all the time for something or the other, you know, big countries always win, right, when it comes to strength. And when it comes to quality of governance, by which we have tended to mean democracy, you know, small European countries always win—surprise, surprise. And I just got bored with it all.

So I said, well, what happens when you combine and mash up all these variables of strength and stateness together? Who would come out on top? And so for Switzerland to hold its own, and for countries like Sweden and Singapore, like, small countries to still rank really high, must mean that they’re phenomenally good governments, right—(laughs)—for one thing, because they rank very low when it comes to the size of a country, right? Note, Singapore and Switzerland are really small, very small populations. So they’re heavily penalized in the—in the index for these factors that they can’t actually control.

But since most states can’t control most of those factors, why do we bother to put out rankings that perpetually penalize them, right—(laughs)—rather than, again, looking holistically at what makes this country good or stable, despite the things that it can’t control. Which is, again, another reason to do this in the first place. So, yeah, the fact that small countries did so well despite the inherent penalty of size was a positive surprise.

ZERDEN: OK. No, thank you. And how does—so talked about the U.S. a bit. Has anything over the past month, over the past three months—kind of, can you, yeah, get us up to speed right now? Because I think there was some—you know, the state of the world, and we’re talking about stability right now, you know, the U.S. doesn’t feel—I appreciate your optimism. I’m glad you had a great meeting yesterday at Hill and Valley. But I don’t think that’s the base—you know, the base case here in D.C., or other parts of the country right now, in other parts of the world, especially.

KHANNA: Yeah. So, but this is a—you’re actually hinting at a very, very deep question, which is the relationship between the word “stability” and the term “resilience,” and “continuity,” and “inertia.” Change from the present isn’t necessarily bad, right? Even whatever modifications may be going on in our political system aren’t—don’t necessarily make us unstable. And, you know, sort of judgment by anecdote, not that you’re doing it but I hear it all the time, sort of, you know, is not—does not, in itself, constitute a quantitative variable to penalize a country.

Germany came out ranking number two, for example. And up until their election a couple months ago, you know, people were like, oh my God. How could—well, the initial data came out last fall that we had done. And people—and even I was like, uh oh. Germany came out number two? Germany’s, like, you know, thinks of itself as a basket case. So people are going to find this, you know, lacking in credibility. But then, lo and behold, one election happens, and Germany is, you know, sort of suddenly the phoenix, right? And it’s the anchor of Europe again. And they’ve, you know, passed this fiscal bazooka of a trillion euro. And so suddenly in everyone’s minds, yeah, there is Germany. It’s back. But maybe it’s not that Germany is back. Germany was and continues to be.

In fact, the CDU party’s mantra was, “returned to stability.” Literally the word “stability,” which is the target variable here in this index. So I use that as an example to point out that whatever you’re feeling emotionally on any given day is not the barometer of whether or not a country is stable, because that’s the wrong way in which we have been passing judgment in indices like this. Like, you know, Oxford Economics and a group of, you know, academics sitting around get to determine the stability score of a country, because they say so, right? That’s everything that I’m railing against.

So when it comes to the United States, I want to let the data do the talking. One of the indicators here is the Worldwide Governance Indicators. And you may be familiar with it. It wasn’t actually produced here at the World Bank, although they oversee it. There’s been some controversy about it, but they have six pillars of sub-metrics in the in the Worldwide Governance Indicators. One is voice and accountability, rule of law, and all of these kinds of things. So as and when that sub-metric score is modified as a result of what they see happening in the United States, the United States will then be penalized in that sub-score, and that change will pass through in our metrics, and will absorb that. And if the U.S. score goes down, then so be it.

But I’m not going to let it be a matter of opinion, right? I’m going to take a very holistic view in which whatever problems we’re encountering right now matter to the extent that they matter. Which is that they do not overwhelm the totality of what is America. In the same way that, you know, the fact that roads are not—and trains are not as efficient in Germany as they were ten years ago does not overwhelm the fact that Germany is a deeply functional state. And, anyway, the sort of consolation I give to Germans when they were so despondent about it was, like, you know, if you think it’s bad here, just look at—and you scored second—think about how bad it must be everywhere else. (Laughter.)

ZERDEN: Very fair. And just one more kind of overarching question I think I wanted to ask. Like, you’ve been working in the political risk space—I mean, I think a lot of us work in some variation or derivation of political risk, of making predictions about the future. I do it mostly in private so I don’t have to be accountable for—you know, and try to be accountable for it, but, you know, am not held to public scrutiny and criticism and feedback for it. How have you thought about that? Just at a very—you know, you’ve written a number of books, you’ve set up multiple companies, you’ve been an entrepreneur in this space. And you’ve received some really tough criticism as well over time. So when do you make calls? How do you set this up? Like, what keeps you going? Was there ever a time you said, I want to get out of this, or, you know, this is—I want to get this, you know, figured out. Like, how do you—how do you approach this? And how have you approached this over your—over your career?

KHANNA: That’s a great question. I mean, I have not had a master plan. My—(laughs)—career has definitely been emergent, going back to my opening reflections. A lot of things were—in my career were born at CFR. (Laughs.) And just sort of, you know, one accident after the other. I guess the story I didn’t tell is that in 1999 when I started at the Council I was a research assistant for the Army—visiting Army fellow at the time. And, as you may know, at any given year there’ll be several visiting military fellows. And this gentleman happened to be Colonel Stanley McChrystal. And so probably the rest becomes history to some degree. But he wasn’t known to anyone at the time, nor is any Army fellow when they come in as a mere colonel. But then, of course, that changed my life when, a few years later, he invited me to join him and deploy with Joint Special Operations Command.

And so things like this have just sort of come up accidentally. But when it comes to things like writing books, I think part of it is just being an academic and always wanting to engage with ideas and issues, and, you know, pursue curiosity. And then that becomes something greater, becomes a formal project when you either have this itch to scratch—and part of that may be motivated by seeing gaps in the literature in the same way that when you’re writing a Ph.D. you have to identify a gap in the literature. But in the trade domain, it becomes every—sort of everything I’m reading is wrong kind of vibe. Where you say, I need to respond actively, vocally to misperceptions, or to, you know, conventional wisdom that you feel is wrong.

And so whenever those factors sort of, you know, come together, that—or converge, that’s when I decide it’s time to put pen to paper, you know, and write a book. But I don’t really ever care about—I don’t even necessarily write for, like, the public, even though all my books have been, sort of, trade books with trade publishers. But I’m doing it to scratch that itch, right? I’m doing it because I have the—you know, I can sit and focus and write. And lots of people, you know, sort of can’t, or don’t know what to do. But I just take the time to do it. No one makes me do it ever. No one’s ever made me do it. So I do it because I want to. And so in the end, it’s actually for me.

And it’s also—at the end of the day, all I care about, to be honest, is seeing how it plays out. And if I’m right or wrong, it’s—I don’t really sort of function in my own mental world in this realm of opinion, he said/she said, criticism/not criticism. Was it right or not right? Did it play out or not play out? You know, predictions, forecasts, arguments, logic—that’s literally all I care about.

ZERDEN: OK. No, very fair. No, I appreciate that.

With that, I want to open up to questions. So just as a reminder, we are on the record. So if you please, just open—flip your table tent if you have a question. And we’ll kick it off. All right, Margaret. Thank you.

Q: All right. Thank you so much. Margaret Jackson.

I’m looking at your current map that’s up there. I focus a lot on climate policy. And I guess what I’m thinking about is Pacific islands. You see some of them have declared they are going to maintain sovereignty even if they don’t have land. I don’t want to go too far down maybe sensitive topics, but I’m curious about—we look at what’s happening in terms of immigration in our country, it’s happening in Europe, it’s happening around the world. But we’re also seeing climate migration taking off. How do you think about these issues? And what can we be doing now to start to better get ahead of these kinds of monumental changes that we’re going to see across the world?

KHANNA: Great question. And there’s a lot to be said on that. That that motivated my entire last book, MOVE, you know, was about human geography. And a big part of it was climate migration.

Q: Which I will read. I did not read yet. (Laughs.)

KHANNA: Climate migration was a big driver. I mean, there were several drivers that I wanted to sort of draw together, from geopolitics, to demographic imbalances, to technological disruptions, and climate. And all taken together as they play out in each geography in the world, what would it mean for migration patterns? So really, a bottom-up reconstruction and forecast of the movement of people over the next ten, twenty, thirty, forty years.

And to your specific, you know, question or anecdote about specific island states, not them in particular though they’re a subset of what I called in the book vacant states, states that will actually cease to meet the definition of statehood—which is that they have to have a fixed, you know, permanent population—permanent resident population and recognized borders. So if a Pacific island is vacated, or if, you know, Yemen, or Bolivia, or Eritrea are vacated in the future, they will be vacant states. They will be unprecedented in international law in that they’re not really states anymore. They will wind up being places—and this will happen in our lifetime. It is happening in certain territories within states. But it could happen to entire states in our lifetimes, for sure. So we’ll—it’ll be a novel legal situation. They will basically belong to whatever kind of, you know, multilateral protection, or administration, or just the global commercial supply chains that will exploit whatever resources are present there. And that’s a slow-moving, you know, reality, as is climate migration, obviously.

The United States, by the way, is the largest recipient of climate migrants in the world, year on year. We don’t call them climate migrants, but by far the United States—and is therefore also the most generous country when it comes to climate migration, which, again, is not the term that we use. Therefore, we don’t give ourselves the credit for it, nor does anyone else give America the credit for it. But when you’re simply counting up the number of humans who have arrived in another country as a result of climate phenomenon, the United States is far and away number one. As it is with migration in general, notwithstanding whatever’s happening this year.

So the thing is, though, and the final part—the answer to your question, you used the word “we.” When it comes to migration, one of the conclusions I came to, there is no “we.” There just is no one—the one issue that will never have a global, coordinated, multilateral solution—supranational or multilateral—is migration, because the most—I guess, once all else, when it comes to sovereignty, you know, has been eroded, right, the one thing—the one vestige of sovereignty that states will cling to is the right to seal their borders, right, and control their borders against the movement of people, as we’re seeing right here.

So when you say “we,” if you don’t—if you—unless you mean only the United States. But if you mean globally, you know, it’s very hard to get two countries, right, to coordinate migration policy. Even in the Schengen area it’s incredibly tense, right? And right now already, again, in Western European countries they talk all the time about closing their borders, if they—within legal bounds. So I really don’t think there’ll ever be a top-down solution to global migration. In fact, I’m quite certain that many, many, many other things that seem far more difficult, may be coordinated that relate to outer space or, you know, disarmament, but never, ever migration. And so it’s the one thing where you just can’t use the word “we,” unless you mean only America. And even there, the pendulum swings every, every few months on what our policy is. So that’s the tough answer.

So it’s going to be a regional thing and a bilateral thing forever. And so the answer becomes, well, what is—you know, what is Europe doing, or what is Southern Europe doing versus Northern Europe? And what is America doing versus what Canada is doing? And so on and so on. And that’s ultimately what’s going to dictate these human flows that, therefore, wind up being not simply unidirectional. And I concluded at the end of the book MOVE, that I should have called it “moving,” because it isn’t really about a one-way ticket, right? It’s people kind of always being more nomadic, voluntarily or involuntarily.

ZERDEN: Thank you.

Ali. And if you don’t mind providing your affiliation as well.

Q: Thank you so much for this. Ali Rogin with the PBS NewsHour.

And I take your point about stability and resilience sometimes masquerading as inertia, or vice versa. But of course, especially, like, people like myself in the media right now, we’re focusing very much on all of the massive disruptions that are happening in this country and that give—you know, that challenge the notion that the United States is so fixed in its inertia that the structures that exist will remain there and lead to continued stability.

So my question is, do you think what we’re seeing in terms of this rethinking of what government does for its people in the United States, there’s—you know, this administration is really challenging preexisting notions that have really been the bedrock of American life in modern times. Do you think that’s going to change elements of, you know, your stateness ratings? To what extent do you think those are going to change? And how rapidly—I know I’m asking you to predict the future. But based on the criteria that you’ve laid out, how quickly do you think those ratings might evolve?

KHANNA: Right. So leaving aside the ratings, in the sense that when you construct an index with lagging data that’s annualized, right, ultimately your results are only going to show up later on. So in that sense, I’ll concede that we should be having this conversation in real time. And you can imagine that if you looked at the specific components of the index, like whether it’s Worldwide Governance Indicators and things like press freedom, you know, we can—we can pretty quickly, you know, infer what direction it’s going to go in, right, without having to wait a year or two for the data to show up. Kind of like, you know, people know we’re in a recession before it gets formally announced, right? (Laughs.) So that is a point taken.

When it comes to specific things about where America stands on these scores, to be clear, America ranks in the top—you know, ranks number six, you know, in this index. But clearly it’s held there by its strength score, which is biased towards the size of the country, the population size, the military strength, and so on. Whereas it scores really quite poorly compared to its peers in areas like income inequality and, you know, again, public service delivery, and these kinds of things. So the scores weren’t good to begin with in this area, right, compared to, say, a Japan, or a Germany, or a Korea, and so on. So if the question is, is, you know, the quality of life in America going to deteriorate further for those people who are dependent on what was already a system that was underserving them, probably yes. You know, we see the fragility. We know—we don’t need my index to tell you that life is very fragile for many people in America.

So how quickly the changes are enacted, you know, in a manner—or the—or the economy turns around and people are absorbed, and other sorts of factors that relate to quality of life—whether it be crime or cost of living—are brought under control in such a way that people can bootstrap and elevate, I don’t know if things are going to play out in such a perfect, poetic way, you know, the way that Trump and Howard Lutnick seem to think it ought to. They’ve gotten a lot backwards in terms of how you ought to sequence policy—(laughs)—moves, in order to engineer the outcome that they had hoped to. It’s something I was upbraiding a bunch of folks today—I won’t say which agency they were from—about, you know, policy sequencing.

Because, again, some of the things that—well, obviously, I’m sure everyone in this room would agree, we wouldn’t have done tariffs at all—(laughs)—at least not in this way. But if you were going to do them, you wouldn’t do them first, among other things. So I worry that there isn’t, again, a happy ending, right, to this story, because we’re not a utilitarian, you know, sort of government or society, right? It’s taking an ever more libertarian turn, which means that you let the chips fall where they may for a great many people.

And so that’s not a new realization, right, that we do not have a social democracy, in the European sense. We don’t have a welfare state, in the European sense. We don’t have, again, that utilitarian philosophical orientation in a utilitarian sense. We literally never had those things. There’s a confluence—there was a period of time where you had—obviously, the sort of Cold War period, whether it’s, you know, sort of New Deal through Great Society and so on, where you had a confluence of growth and democratically embedded capitalism, and so on and so forth. And you had a tide lifting all boats. But you would think of that more as a coincidence, because you didn’t really have universal safety nets in the way that you have them in Europe.

So I would not be sanguine on this issue at all. And when you ask, you know, how fast could things go south? My answer is things haven’t been great to begin with. My first book, twenty years ago at this point, ended with a whole screed about how America was becoming what I called a second-world country. And by which I meant first world and third world at the same time. And that was twenty years ago. So I’m on your side of this debate here.

Q: And I’m not taking a side. I’m just asking a question.

KHANNA: Yeah, but—

ZERDEN: No, just a quick—I mean, so what was the optimism you saw yesterday? You know, that isn’t a sense I think many of us see every day. So just curious. And if there’s signal from that.

KHANNA: Well, I think this is a great question. Well, and there’s a—this actually ties to grand strategy, in a way. You know, so Hill and Valley, right, you know, for a generation—and really, for the generation that Silicon Valley has been a force, has been estranged from, or not necessarily collaborative with, Washington, right? It’s been a set of firms that I—many of which I call stateless superpowers, right? And China doesn’t do things that way, right? China has its various elements of national power, as you might say, or whole-of-society, in wonk speak, you know, all tugging on the same rope in the tug of war, right? You’ve got the private sector, the government, the military, civic institutions, and so forth all working as a team. Heave-ho.

In America, it hasn’t been that way, right? Free market-oriented culture. Companies do what they want. Academia does what it wants. Government does its thing. Even within government, you have contradictions. (Laughs.) So what I saw yesterday was, you know, with Hill and Valley coming together you have two very powerful elements. You’ve got the federal government, and you have our innovative technology sector agreeing to be on the same team, right, and to act and pull in concert in that rope—on that rope, in the geopolitical tug of war. So that is inherently positive, if you’re thinking about it from a grand strategy standpoint, having those elements aligned.

And there’s so much that can be done domestically and internationally when those forces align domestically. It’s the reindustrialization paradigm, the new industrial renaissance, whatever people want to call it, around critical minerals, around energy, around, obviously, AI, compute, and productivity, and so forth. And those things are eminently achievable, from what I know already and from what I heard yesterday, you know, whether it’s rare earth mineral processing, or deploying, you know, nuclear power, all that stuff. So that’s a good thing. And then what it can mean internationally in terms of coalitions of countries that form secure supply chains, that have very reliable networks for trade and finance and so forth, that’s also inherently a good thing.

And they didn’t talk too much about the foreign policy side yesterday. I mean, China was just the bogeyman from morning till night. And I don’t necessarily agree with that framing. But that said, in terms of working with partner countries in an open, trusted way, totally fine. So that’s where that comes from. And that’s, again, just two pillars of national power—two of the most important ones, arguably the most important ones, never having really coordinated well until the last couple of years. As you know very well, having been a live player in this yourself.

This does—this is not a partisan thing. It actually isn’t a Trump thing. Arguably Trump one witnessed some of this, but even earlier, really, with—you could even go back to the shale energy revolution, which isn’t, you know, dated to an administration, per se. But we’ve got about ten or fifteen years of this slow dance going on. And I think it’s finally crystallizing. And it’s better that it happen than it not happen. And so that’s why I was positively, you know, taken with what I saw yesterday.

ZERDEN: Good. Thank you. M.J., please.

Q: Thank you. I have two questions. First, I want to—

ZERDEN: Can you introduce yourself? Sorry. Yeah.

Q: Yes. M.J. Crawford at State Department.

Two questions. First, related to climate migration. Every time I go back home to Flint, Michigan, which is actually a lovely place to live, I meet people who have moved there simply because whatever state they were coming from was just too hot. Very educated people. Remote jobs. Come to Flint. Love the climate in the summer. Beautiful homes. Low cost of living. Maybe it’s not simply climate for the reasons they moved, but I wanted to know if you or your company has been working on any kind of initiatives with states like in the Rust Belt to kind of attract people to their states, simply because the climate is better than California, or some parts of California, especially over the long run, for example. And if there’s any ideas that you have for how, yeah, states can basically just attract younger, educated people.

And, second, you mentioned that you have worked in some countries where you could have an idea in the morning and by evening it was implemented. Could you talk a bit more about which countries these are?

KHANNA: Sure. (Laughter.) You may want to move to them rather than Michigan. (Laughter.) Well, so it’s—the first article I wrote on climate migration was actually in 2010. And it was titled, Where Will you Live in 2050? And the conclusion was, we’ll all move to Michigan. (Laughter.) So it was, like, a decade later that I turned that into an entire book. And that also is the title to chapter one of the MOVE book. It concludes that we’ll all—that the Great Lakes is kind of the perfect place on earth to live. So maybe some of your climate refugees that, you know, maybe I can—I should take cut their real estate or transactions. (Laughter.) And I have spent more time in Michigan than I ever thought I would in the last couple of years. You know, speaking with municipal leaders and others about their plans.

But it’s a double-edged sword. I don’t go around playing, you know, place branding agent. I mean, there are—there are countries that ask us to do that, but because the recipient societies and locations, like Michigan, may or may not be adequately prepared for that. And then you wind up with these climate gentrification effects. And you don’t want that—you know, that’s—I mean, you want places that are inherently resilient, as Michigan is, or relatively resilient compared to others, to recognize that and to prepare accordingly for that in-migration. Which primarily means infrastructure and affordable housing and other kinds of things. But if they don’t yet have the resources to do so because they’re still suffering from the effects of the financial crisis and deindustrialization, how are they going to do that? Because in a market environment or dynamic like America, you don’t prebuild the supply, right? We’re demand driven, not supply driven.

Supply-led growth—this is actually a perfect segue to the second question—supply-led growth is a kind of political economy paradigm that other countries—a lot of smart, emerging markets pursue. But it’s not our style, right? So that’s what you get in, you know, sort of China in the ’90s, right? It’s what you get in the United Arab Emirates, you know, today, where they simply—they know. They literally know that people are coming. They know which industries they want to pursue. They know what industrial investments they want to make. They know what foreign investment they want to recruit. And therefore, because they’re going to have a long-term policy commitment to that, and they recognize reality, they say: We will build now. We will prebuild, right?

The entire abundance, like, meme, which has taken this country by storm in the last, like, month, is nothing but an expression or a recognition that supply-led growth would be a good thing, right? (Laughs.) But we don’t actually do that, as the book points out. But other countries do. So when I’m working in governments like that, it’s very easy because they say, let’s make a ten-year plan. And, guess what? In ten years we’ll achieve that plan. Whereas here we, like, half-build roads. So pretty much every country—I mean, I think it’s probably on my website somewhere—but I’ve done this kind of thing in twenty, thirty, forty countries. You know, so take your pick. And, you know, we can go through case studies, but I just want to emphasize that it’s not a big state/small state thing. It’s a willpower, and a competence, and a vision, and a sort of technocratic thing. And we can do that too. We’ve done it in generations past. I’ve documented that in books that I’ve written.

So it’s really about political will. And I hope that it just is not a partisan thing. The minute you can get beyond partisanship—and this is why some of the wonkier stuff I’ve written is about what are called parastatal organizations, right? What are the things that should be sufficiently apolitical that you create something like a central bank, or whatever the case may be, to administer those? Like, it could be infrastructure, right? It could be health care. Or it could be a sovereign wealth fund, right, as many countries do. And I’ve worked with a lot of countries that have set up development funds, wealth funds, and those kinds of things to depoliticize and put off to the side under independent management—can have some government oversight. That’s the way a lot of sovereign wealth funds work, parliamentary oversight but independent management.

So we can do this right? (Laughs.) This is not extraconstitutional, not extralegal, special economic zones, these kinds of things. This country has had dozens of them over the decades. I’ve made maps of America’s historical special economic zones. So we can do these things. But you just have to have just a sufficient consensus whether—and these things, as you can tell in today’s environment, don’t have to be congressionally mandated. It could be a president who simply says, I want to do this on a ten-year vision, right? So in those countries, when I work in places like that, what’s, I guess, just gratifying is that I haven’t yet encountered a case where over a five-year, ten-year period, when a country really—and, again, almost every other country in the world, to be clear, has much less margin for error than America, right? We can absorb so many failures and stumbling and screwing up, as we seem to be doing all the time—(laughs)—and still be America. Other countries are like—

ZERDEN: Sorry, oh yeah, just with moderator’s prerogative, I want to be mindful of time. So I think, yeah, if we can follow up offline. But, yeah, I want to start with Max, and then we’ll go up the line to finish out. So thank you.

Q: Thank you. Thank you, Parag. Thank you for being here. I’m Max. I’m with Meridian International Center.

My question ties a bit with M.J.’s, just to push you a bit further on this question of is the national level still the relevant level to think about the issues you talk about—you know, stability, mobility, climate? And it’s still a bit of a frustrating concept at the national level, which is only an average for—again, for stability, for equity, for economic growth. And that when we look at even the U.S. today, or California saying we’re now the fourth economy in the world, Governor Newsom saying we’re going to have our own trade deals. You see, you know, politically great divergence within a country. You know, mayor of Istanbul saying they’re going to their own compared to what Erdogan is doing.

ZERDEN: So, yeah, so question?

Q: So how do you—how do you factor in to actually geography and the local level in your analysis?

KHANNA: So that doesn’t play a role here in this index, but in my work a very prominent role. You know, I mean, I’m a political geographer by training. So for me, devolution is one of the most important concepts that I look at. So I look at spatial inequality. I look at the provincial and municipal level. A ton of my writing has been about urbanization and reorganizing a mental map of the world around urban nodes. And that, to me, is extraordinarily important. To me, this is a formal, if not the subtitle, but the animating principle of one of my books, called Connectography, was saying that we are a global urban network civilization. The world is much more accurately described as people in cities and those cities connected to each other, more so than nominally sovereign states, which matters only when it matters but not all the time.

So I’m with you 1,000 percent. And the more the world urbanizes, and the more you have this enormous inequality—I call it the third inequality. So inequality number one is between North and South. Inequality number two is within countries, right? Rich and poor. And inequality number three is just between urban and non-urban people. So, yes, it matters immensely. And I would redo this whole index if the data were available at the level of the city and subnational units. And so, whereas we have nominally 200 independent sovereign states in the world, to me—and there’s a lot of datasets around this broader issue of administrative zones and regions—the world is more, like, usefully described as 600 administrative zones. Not they’re independent, but when you think in a devolutionary standpoint it’s in very interesting look at the world in these 600 units rather than 200 states.

ZERDEN: Thank you.

Nick. Nicholas.

Q: Thank you.

Q: Nick Calvos (sp), State Department.

So I noticed on your scatter plot here that three of the four countries up and to the right are, you know, strong U.S. allies. They all have a U.S. troop presence, you know, strong diplomatic presence. And it’s been, you know, famously maligned recently that this is extractive from the U.S., but kind of how would you characterize the stability influence of the U.S. on those countries, and vice versa? And how would you quantify that, I guess?

KHANNA: So specifically Germany, Japan, Korea?

Q: Right.

KHANNA: Yeah. I mean—so, I mean, those countries have economically, in terms of their own provision of their own welfare—not security, but welfare—obviously come out of the American shadow. They’re their own self-standing, highly innovative, educated, industrial economies with global trade relationships, including with us. So I think that one would have to sort of disentangle the economic dimensions of their relations with us and the strategic relations, you know, component of their relations with us. So I don’t think that today one would attribute—and then one could do the math on this, and I’d be happy to do that at some point. So, you know, what—to what extent do you—can one attribute today’s German economy, you know, or Japanese, to its relationship with us, and break that down into security-related components and just economic, technological components?

But these are not countries that are America’s vassals, you know, per se. And they—let me just—I know we don’t have much time—but, like, one of the most important things, questions that we can ask and answer when it comes to those countries is what is their own vision for their own security? And this is the fundamental issue in transatlantic relations today. You know, Europe is about to spend a lot of money on defense, right? They may even get to 2 percent, in some countries higher, when it comes to that. But what they choose to spend on is going to be quite different from what we would spend on. Our definition and conception and resource allocation towards what we define as security is very, very different from the European. And so—and as we watch Europe and Japan in their own rearmament plans, and defense spending plans, and national security strategies at home, they’re not going to look like us, right? And I think it’s very important to take an inside-out view of issues like that.

ZERDEN: Anna (sp).

Q: Thanks so much. I’m actually from the Georgetown Institute for Women, Peace, and Security. So I was so happy to hear you’re a SFS grad.

So we actually run our WPS index on our own. I would encourage you to look into it as well. And one of the things I noticed at the—in this new geopolitical marketplace you’re describing, it’s quite transactional. And I’m looking at security infrastructure, climate finance, governance. What do you think is the role of human rights? And what is the future of rules- and values-based international world order, in this new reshaping global world? And, for example, is there a place for the U.N. or other multilaterals in this new world order? Thank you so much.

KHANNA: So I’ll take second part of that question first. I mean, the notion of a global rules-based international order is kind of more myth than reality. You know, it has been for a very long time. So I don’t attribute it’s collapsed any one president or administration. I attribute it to a disconnect, the evolve—the sort of emergent disconnect between the underlying power structure of the world and the capacity of multilateral architecture to shape that world, which it has no such capacity to do. So it was just an organic, you know, kind of reality at this point. And so that gets to, I guess, two things tying together. One is that human rights aren’t going to be, you know, sort of dictated, you know, from outside in or from top down. And it’s going to be, obviously, much more a function of each society and how they define, you know, their own sets of values to pursue.

And I don’t view that as a prediction. I view that as an observation, right, of the world today. And the future will just be more of that. Part of it has a lot to do, again, with the first point, which is the rising confidence of other states in a multipolar system. I focused a lot in my work on Asia, obviously, and when you study Asian regimes and Asian values, and what I call the new Asian values, it’s not that human rights don’t have a place in that but the conception of human rights as, you know, superficially, you know, is much more around, you know, sort of communitarian outcomes and economic rights as much as civil rights, and so on and so forth. And so I view that as a very diverse landscape, you know, in which it’s not particularly helpful to, you know, attach conditionalities to.

One of the things—one of the almost iron laws in political science or international political economy is that you don’t have an influence—you don’t have a lot of influence over states merely by trading with them, certainly not by just having joint, shared membership in an organization with them. It’s only by investing directly in countries, literally physical capital investment, or, you know, people-to-people exchanges, that you actually ultimately can have any impact on the characteristics of society. And that actually holds really important lessons for how we engage with countries, because we currently over administrations have chosen sanctions and isolation. All that doesn’t really work.

And this I can also relate to just from personal experience, traveling to all the places that we define as “rogue states,” you know, are kind of places I hang out. (Laughter.) And I’ve argued as passionately as I can argue about anything that we should actually focus a lot more on exchanges with those societies and penetrating those societies. And we’ll wind up having more impact than the current policies have had.

ZERDEN: Well, thank you so much, Parag. Thank you so much for coming today. This concludes tonight’s roundtable. Again, this has been on the record. And we’re grateful to have you. Welcome back, again, to the Council.

KHANNA: Thank you. Appreciate it. Thank you.

ZERDEN: And look forward to this being posted next week. Thank you. (Applause.)

(END)

This is an uncorrected transcrip