Meet the Author - Hugh White

Well, thank you very much for having me here tonight. Um I had a chat to Hugh a couple of days ago and I asked how much of it is going to be asking you to exposition versus interrogation and he's opted mainly for interrogation. So, that's the the basis on which I'm going to approach this tonight assuming many of you are pretty familiar with his work. I think I'd like to start with a question which is about um un you know, none of us are certain and I think you highlight this in the book. None of us are certain about how the world will evolve. Um And I want to understand from your point of view under what evolutions are you wrong and are the prescriptions that you put forward here wrong? What sort of what what world evolutions are where you're really wrong? >> Yeah, [snorts] that's a That's a really good way to start. But no But actually, let me start by first of all saying thank you so much Allegra for for doing this. I really appreciate you being here. It's a real honor. Um particularly with the role you're playing in politics at the moment. It's a it's a really good thing. And coming all the way down from Sydney to Canberra, you'll probably see more of it than you want to. And thanks of course to Colin and the whole institution that makes MTA what a great uh uh institution of Canberra it is and for you all for coming. It's um nice to see so many people here. So, what under what circumstances am I wrong? Well, I mean this you know, that that the thesis at the heart of the book is that we are living through a fundamental shift in the distribution of wealth and power uh globally and especially in Asia. And so, with that situation in which the the most obvious situation in which I'm wrong is in which that distribution doesn't happen stalls or No, I wouldn't say stalls cuz even if it stalls now, it's already proceeded far enough to support that the argument I'm making. But but if it goes into reverse and people do talk for example about peak China, about a China that stalls. And a lot of people have a very deep visceral um almost hormonal faith that somehow America must always be almost by definition the world's most powerful country. And so I'm wrong if China does go into reverse or if America somehow finds it within itself to power itself forward and remain the strongest power in the world. And not just the strongest power in the world, but it's but a power with a margin of strength that's big enough to allow it not just to dominate its own hemisphere cuz whatever happens it'll dominate the Western Hemisphere, but to dominate East Asia and Europe as well. And you know, never say never, so that's possible. But it would seem to me to require something really remarkable. Just to put it in a kind of rather crude arithmetic way. You know, that national power is a very complex thing which can reflect can be can be expressed in lots of different ways. But in the end I think rough approximation it has one fundamental source and that is the size of your economy. And and the size of your economy is subject to a very simple piece of arithmetic. How much uh value is produced per worker times how many workers. And so demographics really matters. Now America has been the world's most uh powerful country for a long time because it's had the world's biggest GDP for a long time because it's had the biggest workforce of any of the high productivity countries. And and you might say the story of our time and I that sounds melodramatic, but I really think that's this is the way people will see our future the the future of this era. Story of our time is that the two only two countries in the world with bigger populations than the United States have moved from being low productivity company countries to being high productivity countries. So, for America's so you know, China's population roughly speaking is four times America's four times America's. But when America's per capita productivity was 10 times China's actually it was 20 times China's. It was probably in 1980 50 times China's. But but America only retains its position as a bigger economy uh if if um if China's per capita GDP is less than a quarter of America's. And that's you know, that's just not that's not going to happen. >> I guess I've got the counter though, which is what if you one of the premises one of the premises I of the book I see is that that China's not expansionary and that there is a counter long-term countervailing powers through India, Indonesia, Russia and so you and the EU. So that is that is kind of one of the thesis. And so I guess is there an alternate vision which is not about America getting stronger, it's actually about China being much stronger than we think or others weaker. And under those circumstances, what does what does it matter what do we think about what we should be doing? >> Oh yes, okay. So we can go wrong the other way. >> Yeah. >> Not that China's that that that the power shift happens. And then the question is what does China do with that power? Well, one possibility um is that China ends up ruling the world. Um there's a bloke sold something like half a million copies back in the 2000s. A bloke called something like two half a million copies of a book called When China Rules the World. And it was based on the hypothesis that China would do what America's been trying to do. Um now, I've I've never bought that argument because I do think China is going to be a very strong country. I think it's going to be the world's strongest country. I I think in in broad terms, it's already the world's strongest country. It's got the the biggest GDP by by purchasing power parity terms, which is the more relevant measure in my line of work. Um uh by 25% over the United States. Um uh but I don't think it's going to be strong enough to rule the world for the same reason that America hasn't been strong enough to rule the world, and that is because a whole lot of other centers of power out there. Now, um it's possible that um you know, China if India completely fizzles, and uh which I think is unlikely. I mean, India's trajectory is uncertain. Um its path to high productivity is different from those taken by any other countries as they've gone through their industrial revolutions over the centuries, but I I my my working hypothesis it'll get there in its own way. Um so, it it I think that China's chances even of dominating Asia as a whole are quite low. But then, if we ask does it go on to dominate Eurasia, it's still got to get round Russia. Now, people have always you know, the old Churchill line about Russia being a mystery wrapped wrapped in a middle riddle wrapped in an enigma. I think I got them in the right order. Um it is right. Russia's very mysterious place, and people keep on underestimating it. Um and I and it's a it's easy to list reasons to underestimate Russia at the moment. Um but quite apart from anything else, it still has um what is it? 1,600 nuclear weapons on active service, and another 6,000 back in the warehouse. Um And one of the stories I'm telling in the book is that is that the little holiday we feel we've all had from nuclear weapons since the end of the Cold War is over and nuclear weapons are back. I think China's even if it economy grows even faster than I expected will is not going to be strong enough to dominate a Russia which has the immense inherent strength of its territory and all those nuclear weapons. So, I think the chances of China being able to rule the world are actually pretty low. That doesn't rule out the possibility that China in the part of the world that I think it can dominate which is East Asia and the Western Pacific turns out to be a nastier hegemon than I'm expecting. I mean even expecting is too strong. I think it's best just to approach the challenge of what kind of China we will see in the next few decades how it will exercise its primary position in East Asia and the Western Pacific. I think we do have to be very conscious of how unsure we are of that. Um but part of being unsure of that is not necessarily assuming the worst. The strong working hypothesis I in a lot of commentary in Australia and elsewhere at least elsewhere and I might say the Anglo-Saxon world not elsewhere in Asia is that China as it becomes the primary power in our part of the world behaves very badly indeed. It's it's like you know Joe Stalin in Eastern Europe in the late 1940s or you might say Imperial Japan in the 1940s and so on. And that's possible and I don't think we can rule that out and I think we need to keep that possibility in mind but I think it's more likely that China will end up being a different kind of hegemon, a hegemon that looks more like the way the United States exercises hegemony or primacy in the Western Hemisphere which is still you know ask the Mexicans or the or the Canadians as as Colin you know it should be a pretty rough sort of a neighbor but it's not it's not Stalinist Soviet Union, for example. Now, why do I think it's on balance more likely that China will be towards that end of the spectrum? Um my reasoning is because it works better. And and I and I think China can achieve what it wants to achieve more economically, um more more cost-effectively by being a a less intrusive kind of hegemon. >> I I think um one question uh I guess that I have is, you know, your love the thesis is that um you know, the US is is you know, is withdrawing effectively um whether admitted or not um from Asia as a as a major power. And I guess one question is it's but you're you observe very rightly that you know, Australia has flourished under the US you know, hegemon or the US you know, the sort of US imposed kind of order was one that they've certainly um driven. So, therefore, isn't Australia's role at this point to um you know, to preserve that as long as we possibly can and take the actions that we can to preserve that um and be aware of actions that may precipitate um a shift from you know, the world order that has served us so well to this world order we are not so certain what would look like. >> Yeah, no, a really really good question because you know, I a significant slice of what you might call Australian national debate on these questions. Um and particularly by people who who so to speak Well, I'm going to say like me, I don't really mean that. A lot of people who think that the end of Australia's strategic dependence on the United States would be a good thing in itself because I think that America's a bad country or they think dependence is a bad thing. I I think either of those things. I think America's got a bad government at the moment, but I don't think it's a bad country. And I don't think dependence on a great and powerful friend is a bad idea if it works. And if I was and you know, I've been I've been in this business for a while now and I've spent a lot of that time um actively engaged in you know, in the little way that that a an official does, sort of tending tending the the the the the alliance um you know, like a careful gardener. Um but so if I thought that it would keep working for us, if I thought that we that Australia could continue to rely on the United States to play the kind of role it's been playing in Asia if for many decades now and to play the kind of role that it's played in Australia's security uh well, since your grandfather negotiated a treaty. Um >> [laughter] >> Yes. Um Then then I'd be all in favor of it. I would like nothing better than for Australia to be able to continue to rely on the United States cuz I think that's really worked for us. But the reason why that's worked for us is because the United States has seen its interests strongly served by maintaining a dominant position in these Asia and seen its alliance with Australia as a as a useful not vital really, but as a useful component of that. Um actually, that's what your grandfather persuaded Dallas of. You know what I mean? That was the whole argument that he conducted with him. We are going to be useful to you in what you're trying to do. Now, America had very good reasons in the 1940s and 1950s and indeed right through to the 1980s to want to sustain a strong position in East Asia and the Western Pacific. The heart of my argument is that in an era in which China is strong enough to raise the cost and risk to the United States of preserving that that leadership position in East Asia to a very high level, a level comparable with the costs and risks it had to pay during the Cold War to contain the Soviet Union, but which the fact that China is not going to like the Soviet Union is not going to pose a risk of becoming a a a superpower rival global hegemon that could dominate Eurasia by itself, which the Soviet Union could do, but which China I don't think can do because of the new distribution of wealth and power in this new in this new era, then the rationale for the United States to to maintain its position position in East Asia, the balance between the costs and risks of doing so and the imperatives to do so has shifted to the point where I don't think the United States is going to stick around. And if it's not going to stick around in East Asia, if it doesn't need a strong strategic position in East Asia, it doesn't need Australia. And I my I one of my arguments is that that proposition that the United States doesn't have the imperative to stick around in Asia, pay the costs and risks that would be needed to resist China's challenge. I I my one of my part of my argument is that that's not just a a future prediction, but that's what's happening. When you actually look back over, for example, the 15 years since Barack Obama came to Canberra and announced the pivot, which was the first point at which the United States, so to speak, officially acknowledged that it had a you know, that China was there and was trying to push it out of the region. If you look at the 15 years of American policy since then, and not just under Trump, but under Obama and Biden, what we've seen is the United States failing to respond to China's challenge. Now, we know what a strong power confronted with a rising rival looks like. It for example, in the first decade of the 20th century, and for that matter, the last decade of the 19th century, when Britain faced Germany's rising power and particularly Germany's emergence to major naval power, um what did the British do? They started building ships. And they they built a lot of ships. And you know, there was a great battlefield race, the battleship race. Um now, what you would have expected to see with an America that really did feel that its strategic imperatives required it to maintain a strong position in East Asia in the face of China's challenge, is that it would have seen its military capability in the Western Pacific going up like that. As China's military capability in the Western Pacific went up like that. But in fact, what happened is that America's military position in the Western Pacific has gone like that. And China's has gone like that. Now, if America had gone like that, too, I'd say, "Oh, okay. They're serious. We can continue to rely on them." But you know, that you doesn't want to pay attention to what people say in this business. You want to pay attention to what they do. And that to me is very compelling evidence that the United States simply doesn't hasn't in the end felt the imperative to do what would be necessary to maintain the position in East Asia in the Western Pacific, which we which which it must continue to maintain if it's going to continue to play the role of ally that we look to it. So, yes, it would make lots of sense if we if we thought the United States was serious, it would make lots of sense for us to do whatever we can to support it. But if the United States is not doing what it's required to support it, then it's not it's dumb for us to pin our hopes and to frame our policies around the assumption that we can if we help United States maintain the position that it used to have. And that's, for example, what AUKUS does. >> I guess what, you know, there's that old saying, you know, the Americans will do um the right thing when all the other, you know, when all the other exam uh opportun- sorry, the options have been exhausted. I guess one question is and and I I would talk about Taiwan for a moment because you know, that is you could you can argue to say, well, you know, very much America hasn't invested to the extent that we would like to see in in this area over this period of time. But, um I think the realization, I think of Taiwan's role, particularly from a technology point of view, it's critical. Um we see that, you know, literally the sort of of the AI race is absolutely critical and therefore, you know, in does that actually change the game in terms of um the importance and therefore the energy that America will put in this place. And, you know, certainly one of the counters I've had to your argument is to say, well, look, you know, Trump is actually an interventionist president. He's, you know, if you look at Venezuela, if you look at Iran, if you look at what he'd like to do in Greenland. So, you know, it's so maybe there's actually more appetite for intervention than than sort of this kind of retreat of the US um you know, which is which is at least of the argument, I think, that that we're sort of looking at. >> Yeah. No, really really good. Well, two two good two two two two two two good questions. Look, obviously, and you know, Taiwan is central to this because Taiwan turns out to be as an accident of history um you know, the point at which America's resolve to preserve its position as a leading country in East or at least as a leading country in East Asia or the Western Pacific and China's determination to push it out and which is I'm I'm sure for what it's worth, I'm sure that's what China's trying to do. Um Taiwan has by an by an accident of history turns out to be the place where that's most likely to be tested. And I think it's tested there whether or not there's actually a war. Um and the the you know, the heart of my argument is that what's really important about Taiwan is precisely that it has that symbolic significance. But, there's also an argument that Taiwan is very important in itself, and some people argue that it's important because of its actual kind of operational location and so on. But a really important a part of the argument is that that's where all the chips come from. And where the best, you know, the the smartest chips come from. And that is obviously extremely important. Really important. But but I still don't think it's what will drive the United States to defend Taiwan. And the reason for that is that important are the chips are, it's important to recognize what a conflict over Taiwan would be like. It would be the first great power war since the Second World War. It will be the first war between nuclear powers, give or take a couple of things on the India-Pakistan border, but the first serious war between between nuclear armed states since, well, ever. Um And and it would be by far the biggest war we've seen, and the and the most intense war we've seen since the Second World War. And it would almost certainly be a nuclear war. And I say that because I think it's very unlikely that either side can win a decisive victory at conventional level. And it's very likely that both sides would take very serious casualties very quickly, within a few weeks. Um and therefore both sides would would face a situation where they suffered enormous uh costs and damage, had no way of achieving anything that looked remotely like a win. Both have nuclear weapons available. Both would fear that the other side would start to use nuclear weapons. Both would fear that the other side would make the calculation I'm about to describe. That is, they say, "Well, if we can't win with conventionals, we either step back, which would seem by that stage unthinkable, or step forward to a nuclear exchange." Uh you know, back in the Cold War, we all used to be terribly conscious of how likely it was that any superpower confrontation between the US and the Soviet Union would go nuclear within hours. Well, I'm I continue to be surprised by how complacent people are about the likelihood the same thing would happen between the US and China. So, that being so, yes, it would be a really terrible thing for the United States to lose access and for the for that matter for the United States to see China gain access to the fabs of TMS TSMC in Taiwan. But not worse than a nuclear war. Not not, you know, you've when when it's got a Most of us, I think, are of an age we've we've we've got to remember what nuclear war means, and it is almost unimaginable. It's it's it's hundreds of millions of casualties. And and and TSMC's a very valuable company, not that valuable. >> No, I guess I I I mean, I I think the the the argument you make that in the, you know, in the sort of sort of Kennedy Kennedy and others, you had were credible in the sense that they said, you know, we are willing to lose an American city uh to protect um to protect Europe. That was I mean, I find that really hard to It's genuinely hard to sort of almost believe that any president or any any world any sort of national leader would be willing to lose, >> Yeah. >> you know, its own a city of their own people for another country. So, I guess my question is, was that Was it Was that Was that commitment that credible? Um and are we just, when it comes to the nuclear war, just recognizing that no country, you know, will push that trigger genuinely because because every, you know, if you look at China, the incentives for either of them to do it are so terrible, even if they do believe the other one's going to do it. That means tens of millions of their own people will die, and they both have such extensive um weapons sort of caches that, you know, then it's there is going to be second strike, third strike, you know, there's no one's going to get away from retaliation. Therefore, who would actually press the button? >> Yeah. No, it's I mean, it remains a deep mystery about the Cold War whether either side would actually have done what they said they'd do. But, I think it's a uh well, there's a couple of points to make. The first is that um I think it's very clear that no country would ever do it unless they genuine and no leader would ever do it unless they genuinely believe that the survival of their own country was at stake. Um so, you know, the credibility of the of the US extended deterrence to its NATO allies depended on a very strong conviction in Washington one might say in Moscow and also in Europe that for the United States they a Soviet um invasion successful Soviet invasion of Western Europe would threaten the United States directly. Uh Thomas Schelling, the the you know, one of the great strategists of the nuclear age uh the way he expressed this was we you know, the the the the other guy, the adversary, has to be that the country you're pretending you're protecting is California. You know, that's And and so and one is one of the reasons why I'm pretty confident about my argument when we're touching on before about why I don't think the United States the imperative for the United States to to maintain its position in the Western Pacific is no longer strong enough to justify the cost and risks, including the risk of nuclear war involved is that during the Cold and for that matter during the Second World War and even in in a way in the First World War what was at stake for the United States was the was the danger that one single country would come to dominate the whole of Eurasia and only a country that dominated the whole of Eurasia would be strong enough to challenge the United States at home in the Western Hemisphere cuz the Western Hemisphere is inherently a very secure place because of what Donald Trump calls those big beautiful oceans on either side. Um so, you know, why how how was it credible that the United States would have fought a nuclear war over Berlin, for example, as it very strongly threatened to do. Kennedy threatened to do in 1961. Well, it was because everyone, people in Washington, people in Moscow, people in Berlin for that were born and were convinced that um that uh the loss of Berlin would lead to the loss of Europe, would lead to the Soviet hegemony over the whole of Eurasia, would would would develop into it and and a substantial threat to the United States. Now, if you thought that China was if that that if China took took Taiwan it would dominate East Asia and the Western Pacific and then go on to dominate the whole of Eurasia. In other words, if Russia and India and Europe weren't there then that would be um that would be a situation in which the United States could could credibly threaten to fight a nuclear war because the risk of China dominating the whole of Eurasia would be quite high. But the that risk is much lower now than it was in relation to the Soviet Union, for example, in the early 1950s because in the early 1950s if you think of what else was happening in Eurasia there was Russia, the Soviet Union >> Mhm. >> world's strongest army, by 1950 already with nuclear weapons. Europe was flat on its back. Well, half of Europe was already under Soviet control. The rest of Europe was flat on its back. Uh China was had just become a communist country and was a Soviet asset already. Japan was recovering from the war and was flat on its back. India was just post-colonial, was flat on its back, and had a very strong indigenous communist movement, particularly in Bengal. Southeast Asia was all in pieces all over the workshop floor. Um you know, the Soviet Union then was not as strong as China is now, but it was much stronger relative to its neighbors than China is. What was distinctive about the Soviet Union and what required the United States to do what it did, and what made US nuclear deterrence credible, was was that uh it it Russia, so to speak, stood alone in Eurasia. Today, China is a very powerful country, but it's surrounded by other very powerful countries. >> Yeah. We haven't talked much about AUKUS, um and I know a lot of people are interested in in that question in particular. I mean, I know there's a thesis of are we ever going to get the ships, and do we want them, which I'm I'm you're very clear, I think, um um on on both of on both of those. I think I guess the question is, you know, how important is AUKUS actually? Because I think, you know, there's we can we can, you know, you're very clear on sort of your views on it, but I think one of the questions is, you know, we're [snorts] obsessing over the these, particularly the submarine aspect of them. Um but there are many other, you know, sort of levers we have in in defense. You know, the government is, you know, busy sort of creating partnerships with Canada and Japan and many sort of Pacific nations. So, you know, this is, you know, you could argue this is a hedging move, sort of hedge still with AUKUS with the US, um but also build, you know, multilateral relationships in in significant ways in other areas. Yeah, well, I mean, I guess what do you see the greatest risks that uh AUKUS poses to this country? >> Okay. >> [gasps] >> Big subject. Um >> And we're going to have to move to audience questions in a few minutes. I've got one more before we finish. >> All right. I'll be >> [laughter and gasps] >> I'll I'll be I'll be quick. >> or less. >> AUKUS is two things. One is it's a submarine acquisition program. And you know, just to put it in a nutshell, I've only got two problems with it. The first is we don't need nuclear-powered submarines, and the second is we're not going to get them. Um >> [laughter] >> And otherwise, it you know, it's it's it's it's it's great. Don't get me started. But the other thing is is and and you know, don't just ask what can how Canberra sees AUKUS, ask how Washington sees AUKUS. From Washington's point of view, it is all about a very clear statement by Australia that it is going to do whatever is necessary to support the United States to maintain its position as the strongest power in East Asia in the Western Pacific. Even though the United States is itself not actually serious about that. In fact, you know, why was AUKUS look attractive to the Biden administration? Because it was a way of looking like they were being serious about responding to China without doing anything. And in particular, without paying anything. Um you know, it was it's the very emptiness of the gesture, which to me is so telling about it. Um So and so let me just focus on that second one. You know, I I think um uh I I think the way in which AUKUS expresses to the world and to ourselves and for that matter the United States that we are that we see uh that our strategic future necessarily tied up with preserving America's position [clears throat] as leading power in East Asia as a big mistake because I don't think it's going to work for all of the reasons that we talked about. And it gets its in gets in the way of us doing those other things, what you described as the hedging. Cuz what we need to do is to think to ourselves not how do we try and preserve a US leading position in East Asia, which we're not going to succeed in doing. But how do we adapt and learn to make our way in an Asia in which the United States is no longer playing a significant role? Uh which is a big deal because Colin alluded to in his kind introduction, you know, we've never been here before. You know, since 1788, either Britain or America has been the dominant power in East Asia, except for a few months between the 7th or 8th of December 19 41, depending on which side of the date line you're on that morning, and the 4th of June 1942, the Battle of Midway. So, um you know, where this this is a big new challenge for us. Now, my reservation about the way we've gone about, including the present government, has gone about trying to build, rebuild, expand relations and strategic interactions with our neighbors, is that we continue to do it on the basis that our primary objective is to find a way to preserve American leadership. And so, you go to Jakarta, for example, and you you know, sign a defense treaty with Indonesia. Um from Australia's perspective, the purpose of that is to try and encourage Indonesia to support the United States as the United States tries to push back against China. It's trying to trying to get Indonesia to take sides. Well, Indonesia's not going to take sides. Neither's anybody else in Southeast Asia, possible exception of the Philippines, but the Philippines is not a model of strategic constancy. Um No No is South Korea. The only country that might is Japan. Well, maybe. I mean, the Japan-American relationship is of a depth and complexity that we that we don't understand, including the fact that it originated in defeat and nuclear bombing. >> Um I'm going to my last question was um you know, is is question about politics because you are pretty critical of politicians. Um you know, which >> Some politicians. >> [laughter] >> Um and I think, you know, in your you contrast, I think, our current sort of effective crop of politics versus historical. And I guess I'm I want to ask you, why is this why do you think this has happened, and what will make a difference to the quality of debate that you think we need we do need to have? >> Yeah. >> Um, because I think, you know, AUKUS is an example where there has not been, and this is probably my my starting beef with AUKUS is that this isn't had a a proper interrogation in the public domain. And I think that is one of the biggest concerns, I think, many people have about it is, you know, we don't understand it, and we're not really sure if we do need it or not, or if it's a good thing. But that's that's a pub that's a that's a question of sort of government uh property and process is is a is a starting point on that. >> Yeah. Okay, now, really good really really good question. >> And then, audience questions, so get ready. >> So, look, um, you know, I I do think we are facing one of the biggest moments in Australian history. It is, as I said, it's the biggest transformation of our strategic circumstances since European settlement. It's not the only transformation of our strategic circumstances since European settlement. At the end of the 19th century, the early 20th century, Australians understood that British power was fading, and they thought to themselves, how can we improve our capacity to make our way in a world in which Britain is no longer the dominant power it had been in 1788. And they did a whole lot of quite exciting things, including federation. Federation was lots of things, but more than anything else was an act of strategic policy. In at the end of the Second World War, we faced a collapse of the old European empires, the emergence of a completely new range of independent states in a you know, a new a new Asia. Uh we saw the very significant erosion of British capacity. What did we do? We set out and we built a set of relationships. We engaged in the emergence of post-colonial Asia. And we built an alliance with the United States and the Colombo Plan and, you know, our grandfather again. Um Uh but but, you know, I mean, looking back at it, they and it was a bipartisan thing cuz, you know, it Chif- Chifley and Evatt in their weird ways Well, Chifley in his normal way, Evatt in his weird way. But but but, you know, and Casey, I mean, you know, there was a whole lot of people who really got the fact that we had to rethink Australia's place in the world because the world had changed around us. And then at the end of the '60s and early '70s as as Vietnam came came apart in our hands as forward defense lost credibility. Um you know, Australian political leaders again on both sides of politics, you know, Gorton on the one side, Whitlam on the other, um is re- redefined Australia's place in the world again uh with the opening to China, with the emergence of self-reliance as the foundation of our defense policy. So, you know, successfully Australians have seen shift big changes. I think this one's the biggest one. But the difference is that this time we're pretending it's our political leaders are pretending it's not happening. You know, Penny Wong continues to to describe America as indispensable. It's not indispensable. I mean, we'll we'll go on without it. It's not going to be easy, but we're going to go on without it. So, what strikes me is that this time round our political leadership, or rather I'm going to allow ourselves to say our our two major political parties have found themselves unable to recognize and respond to this fundamental shift in our strategic circumstances the way their predecessors did. Why is this happening? I think it's primarily a failure of the of the political parties themselves to attract and promote and develop people who've got really strong interests in these things. Um You know, where to put it this way, where where are the Gareth Evanses of the present Labor Party, not to put too fine a point on it. Um and you know, where where are the where are the Malcolm Frasers of the present Liberal Party? I mean, you know, Malcolm Fraser was a strange guy, but he really thought about this stuff. Um And so on. And so on. I mean, you know, there's a there's a there's a galaxy of quite impressive people, um starting with Alfred Deakin, on both sides of politics, who's thought about these things. And And they're just not there today. Now, partly, I think it's a generational thing. Today's political leaders came of age in the 1990s. And the 1990s was a magical decade because it really did seem that America was going to rule the world. And going back to where we started, that's a world I'll sign up to. And I can see why any Australian political leader would think, "Yeah, that's the world I want." But they just haven't noticed that whilst we're exporting 2 million tons of iron ore to China a day, uh China's actually grown strong enough to overturn that model of the of the global and for that matter the regional order. And as I said, you know, that's you know, I do think our political parties are failing to produce the people that we need to conduct a national debate required to see our way through this. >> Right. Audience questions. >> [snorts] >> Surely we've got some people who Oh, excellent. >> Rod Holsgrove here. We have met. I I haven't read your book. I look forward to it. I think you do touch on it, but I've got a fundamental question in terms of looking at our global situation, the number of existential risk you've referred to, uh nuclear war, AI, climate change. How do we get back up? I mean, I was involved with environmental major environmental conferences in the 1990s and so world summits and all this sort of stuff. How do we Is it Have Have we lost the plot in globally now to We really need to work together to save the world, really, don't we? Fundamentally and I don't see any chance of that now. >> No, look, it's a really important It's a really important question because Uh one one of the consequences of the failure of uh the United States and for that matter the United States and its allies to respond effectively to the fundamental shift in the distribution of wealth and power from which flows a fundamental shift in the global order has been our inability to create the institutions or at least to make the institutions we've got work well enough to deal with a whole lot of other issues. So, one of the problems is that it does for example, increase the risk of nuclear war. I mean, I think the risk of nuclear war is higher now than most people recognize because nuclear power great nuclear armed great powers are in active strategic competition. Um Now, you know, the good news is uh I don't think the United States is really serious about um sustaining its position in East Asia and therefore is perhaps not as likely to go to war with China. The bad news is it can still make a terrible mistake at 3:00 in the morning particularly when the people in the situation at 3:00 in the morning are going to be Donald Trump, J.D. Vance, and they've had Hixath. I mean, really. But But beyond that, um you know, things like how we manage AI, about which I have no idea, or how we respond to climate change, um you know, these are things which require global action. Now, the fact is you can get global institutions to work effectively to do this. That's actually in its own daggy way that's what the UN has done for us. But in order to make the UN work, what we have to do and other institutions is what we have to do is that we live in a multipolar world with a number of very powerful states whose interests are going to need to be respected. We may not like that, but that's that's the way the world works. Now, in fact, multipolar systems can work quite effectively both to keep the peace and to cooperate on all sorts of things. And the the example is the 19th century. You know, the 19th century, coming out of the Napoleonic Wars, and the 19th century was a century in which almost all the powers concentrated in Europe, and what mattered globally was how the European powers dealt with one another. But what you have was five European great powers, very different in ideologies and outlooks, you know, from sort of weird absolutist Russia on the one hand to Republican France to um you know, constitutional monarchy Britain, a very different perspectives and ideologies, but they managed to work together to keep the peace between themselves and to do all sorts of things, build all all sorts of international global institutions. You know, the international postal union, for example, which you know, is the first of them. Um but which you know, which is now a bit of a bit of a joke, but actually it was terribly important. You know, these things can be made to work. Now, you know, the world can work together, but in order to do so, it has to start with a realistic understanding of the fundamental mentals of relationships between the stronger states. And that means recognizing that not to put too fine a point on it, America is not going to rule the world. It you know, in the 1990s, it looked like it might, and I would have loved that, but that's not the world we live in. So, in order to Now, in a sense, the good news is the UN was actually, as it existed at the moment, was designed in a multipolar world. That's why there are five permanent members of the Security Council. That's what that is. Um Uh but uh but we have to work a lot harder to rebuild that sense. And also, you know, I don't think Australia's helping. >> Hi. Thank Thank you. Terrific presentation, as always. Um can you update us on how we should defend ourselves? Um and you you've you've written about that quite extensively, as as many will be aware. Uh you know, the the proliferation of drones, the likelihood of nuclear proliferation. >> Yeah. Yeah. >> What does that mean for us in defending ourselves? >> Uh thanks, David. Just settle in for a an hour or two. >> [laughter] >> But no, but seriously, look, a very important part of our thinking about how we respond to the kind of world I'm depicting here is a question of how we think about our defense in the military sense. Uh if we're living in an East Asia in which China is the leading power, if we're living in an Asia in which India is also a great power, and probably a great power that's difficult to deal with, and in which Indonesia, as it will be, is the fourth biggest economy in the world, and has the power that goes with that, then I I don't think it's I I don't think it's inevitable that Australia ends up facing a great power military threat, but I certainly think it's a possibility that Australian policy makers need to take very seriously, and we need to take very seriously the fact that we'll approach that for the first time in our history without a great and powerful friend. So, the question is, can Australia defend itself independently from the forces that a major Asian power could project towards us? And uh you know, my very brief version of the answer to your question is that I think we probably can because we have such inherent strategic assets, including the scale of our island, and the fact that it is an island and the scale the the length of its maritime approaches because projecting military power over sea is remains very hard work and it's and technology is on our side and it making easier to find for us to find and to hit platforms, ships, aircraft, missiles that are being thrown at us against those long maritime approaches. And that's those are very deep technological trends that go all the way back to the late 19th century but they're accelerating pretty fast uh as and this is one of the things we're seeing in the emergence of of of drones. Um uh in in an era in which it's much easier to to to find things. Sensing has improved, you know, changed exponentially in the last few decades and much easier to guide weapons to towards something it found. That's really what the drone story is all about. And so um I you know, I I do think Australia is inherently quite a defensible place. Um uh but we'd have to build a defense force very specifically around the most important tasks which is denying air and maritime approaches to hostile forces. And we'd have to focus very strongly on doing that in the most cost-effective way and that involves us to be a lot more disciplined about how we design our force structure than we've been in the past and it would for example amongst other things suggest that spending 368 billion dollars on eight nuclear-powered submarines is not the way to do it. Um then there's the question of nuclear weapons. And there is a this this is gets very dark. There is a question whether the the nuclear weapons era that we've lived in since the mid-1960s in which the confidence that a whole lot of countries have had that they would could rely on a a nuclear armed power or other to provide extended nuclear deterrence for them, going back to what we're talking about before, meant that a whole lot of countries who could have built nuclear weapons didn't. Now, one of the arguments I make in the book is that Ukraine has been very sobering in this regard. Um it seemed to me that it there's always been a very low chance that Ukraine could reclaim the territory it's lost to Russia. Because any decisive Ukrainian breakthrough in the land war would run a very high risk that the that the Russians would threaten to use nuclear weapons to stop them. As they did uh in the the the moment where the Ukrainians were closest to that objective in the counteroffensives uh at the end of 2022. And and and that that kind of nuclear blackmail the Russians don't have to use a nuclear weapon, they just have to credibly threaten to use a nuclear weapon. And that raises the question whether any middle power non-nuclear armed can win a conventional war against a nuclear armed great power. And that means [clears throat] that for Australia to think about its defenses in that in the kind of Asia that I'm talking about, we would have to have a national debate about whether we should whether we need to acquire nuclear weapons. Uh and the alternative of course is to decide well, we're actually not going to bother trying to defend ourselves. Now, most people in Australia, if you say that, look at you as if you're mad, but actually no, it's a choice countries can make. Um you know, it most countries in the world are small powers who have no real capacity to defend themselves if attacked by great power. And they make their way in the world. It's not comfortable, but you know, they get there. Um and I think that's the kind of choice that Australia might face. Are we going to serious about being a middle power? Or are we content to be a small power? And I think that's a really big kind of you know, fundamental identity question for Australia to contemplate. And I think we'd be very optimistic if we think that we can work through that issue uh if we can avoid working through that issue on the one hand deciding whether we spend the money required to achieve the conventional defense that I sketched a minute ago. Call it 3% of GDP. And then on top of that not as an alternative to it whether we felt we needed to take the nuclear route. Call that another 1% of GDP or maybe even 1.5% in the early decades. You know, this is a pretty dark picture. But that's why the book's called Hard New World. >> Hugh, um >> Sorry, this is the last question. >> Thank you. Very quick question. Um Australian foreign policy regards the United States. It seems to be that Australia's the government is trying to play a a very small target, to play along very nicely and in the hope that there will be a a change of uh government over there in the not too distant future. Uh do you think that's a a reasonable hypothesis as to what's currently going on? And uh if so, what are the risks in playing along in that uh space? >> Yeah. No, really really good question. Yeah, sometimes um the Albanese government dealing with the Trump administration looks like a very frightened child patting it ahead with a very big and angry-looking dog. Um and uh look, I think I I I of course, you know, it always makes sense to try and you know keep out of harm's way as much as possible. I don't in a sense criticize the Albanese government at the tactical day-to-day level for sort of trying to, you know, pat the dog on the head and then get out of the room. But at But at the But at the broader level, I think it's a mistaken approach for two reasons. The first is because I don't think Trump is an aberration. Well, at least he is an aberration, but he's as, you know, one of the chapters in the book is I think we called it the you know, the American Revolution. Um something really big has happened in American domestic politics. Now, that's in a sense separate from the big questions we're asking about what's happening to America's role in Asia and globally, because I think that was happening with or without Trump. But Trump himself is very important, and just to put it in a nutshell, um you know, for for for this extraordinary man You know, one of the problems with Trump is that we sort of get used to him. But it's extraordinary that this person with his character and his attributes and his colleagues, I might say, should be governing the United States. I mean, you know, really? Think back Think back to the the the the election of Barack Obama. And think, really? And they went to this guy? Now, there's all sorts of deep explanations for that, but I think one way of focusing on that is to think, how feeble have America's great political parties been? I mean, the Republican Party, confronted with this guy, just fell apart. And the Democrats, confronted with this guy, have got no idea what to do. Now, in the end, I mean, it goes back to the thing we touched on before. Political parties really matter to make democracies work. And I think the failure of both the Republican and the Democratic parties to respond effectively to Trump shows there's something really deep wrong with American politics. And so, when Trump goes, and this is what I think about, what's going to happen in 2028? Kamala Harris versus J.D. Vance. I mean, really. We we we we you know, we we quite apart from the fundamental grand strategic arguments that I make about why I don't think America's going to stay engaged nationally, which I think would be true whatever whoever it was in the White House. I I do think we have to lay on top of that a whole separate layer. And that is that you know, American political leadership is likely to be very spotty for a very long time to come.