Social capital amid geopolitical rivalry

THE American mid-term elections have spoken. The Democrats won both the House and Senate in a sweeping rebuttal of President Donald Trump’s erratic management of American domestic and foreign affairs.

Despite this, the trajectory of United States-China geopolitical rivalry will remain unchanged for decades to come, with every chance of escalation.

The prestigious journal Foreign Affairs is introspectively re-examining “The Delusions of American Power” in its latest issue.

In the lead article, “Limits of American Power”, the author concluded that even with the strongest military, technological and financial prowess, American power will be limited by the will of its enemies, its hesitancy to put troops on the ground, time and the quality of its political and military leadership.

Will technology be the deciding factor? Empire historian Niall Ferguson and tech mogul Eric Schmidt argue in “Empires of AI” that “AI (artificial intelligence) is by its nature an imperial technology”, but “an empire is only as durable as its capacity to pay for itself”.

“AI is the most capital-intensive imperial project in history, undertaken by two superpowers that are already weighed down by debt.”

They think that conflict and decline are both already baked into the game.

I would argue that framing the Contest of the Century in terms of who will win or lose is too narrow a question because we are dealing with complex systems competing against each other within even more complex, multi-player systems, such as those involving climate warming and global demographics, in which random or unknown factors can affect the long-term outcome.

The question of which imperial system would emerge during the Industrial Revolution was first critically examined by Karl Marx and later by Lenin.

They broke with the 19th-century classical economists who framed wealth and power in terms of the factors of land, labour and capital.

In the feudal economy, the landed gentry controlled land and agriculture using serfs, whereas industrialists controlled wealth, capital and the working classes through energy and technology.

Capital was the embodiment of human knowledge and technology that enabled the urban industrial class to replace the feudal powers.

Agricultural capitalism evolved linearly into industrial capitalism, managerial capitalism, financial capitalism and, today, technology capitalism.

When Elon Musk can contribute nearly half a billion dollars to election funding, techno-oligarchy is on the rise.

Socialists differ from capitalists because they ideologically prefer the democratic rule of the many over the oligarchic rule of the few, engineering a more even distribution of income and wealth, know-how, finance and technology.

That requires the visible hand of the state, but Adam Smith preferred the invisible hand of the markets.

The collapse of the Soviet Union in 1989 convinced many that state intervention through bureaucratic centralised planning was inept and non-viable.

However, China learned how to adapt centralised planning to market forces, propelling the Chinese economy from being one of the poorest nations to becoming the second-largest economy in the world in just under 50 years.

So which forms of capital ultimately determine geopolitical power? Is it physical capital, natural capital, financial capital or social/human capital?

Geopolitical rivalry between competing powers is like war, which today is fought across many fronts: economic, technological, financial, cultural, energy, mineral, water and geographical (land, maritime and space).

The Ukraine and Iran conflicts, plus the arrival of cybercurrencies, confirmed that energy, food, water, technology, information and money are essentially different forms of power.

When even weaker nations can control chokepoints, asymmetric warfare can check even superpowers.

In short, physical, natural and financial capital do not determine their own use. Social capital – in the form of institutions, ownership and governing purpose – is the *agency* that directs them.

Thus, the core difference between the United States and China lies not in the quantity of capital, but in their different social architectures: who controls the social contract, towards what end, and with what relationship to technology, finance and the biophysical world.

The competition unfolding is fundamentally a contest between two distinct institutionalisations of capital – one oriented towards private but elitist financial engineering, the other towards state-coordinated strategic engineering using market forces – each with its own strengths, contradictions and relationship to the natural world.

This definition restores the historic insight of Marx and Lenin: capital is not a thing, but a social relation – a form of organised human agency operating upon the material world.

Chinese planner Chen Yun extended this by arguing that capital and markets are instrumental – neutral tools whose character and usage depend on the institutional framework within which they operate.

Social capital – in its deepest sense – is the collective human agency to choose *how* we deploy our physical, financial and natural endowments.

The question is not which system will win, but whether either or other systems can evolve or emerge to serve the purpose of the global common good, which is higher than capital accumulation itself.