Weaponized Interdependence Fractures Global Order Beyond Hegemony

The "Rupture" in Global Order: Beyond American Hegemony

The world is not transitioning; it is experiencing a rupture. This conversation with Henry Farrell, co-author of Underground Empire: How America Weaponized the World Economy, reveals the profound shift occurring in global power dynamics. The long-held assumptions of a stable, values-based international order are crumbling, replaced by a stark reality where economic interdependence is wielded as a weapon. This analysis unpacks the hidden consequences of this "weaponized interdependence," exposing how decades of U.S.-led globalization have created vulnerabilities that are now being exploited, forcing allies to re-evaluate their reliance on American power. Those who grasp these systemic shifts will gain a critical advantage in navigating the emerging landscape, understanding that traditional notions of security and prosperity are no longer guaranteed. This is essential reading for policymakers, strategists, and business leaders seeking to understand the tectonic plates shifting beneath the global economy.

The Unraveling of the "Rules-Based Order"

The comfortable narrative of a liberal international order, built on shared rules and American leadership, is no longer tenable. Prime Minister Mark Carney’s declaration of a “rupture, not a transition” at Davos signals a seismic shift, a public acknowledgment of what many have privately understood: the system is fundamentally broken. Henry Farrell elaborates on this, explaining that the very mechanisms designed to integrate the world--global supply chains, financial systems, and technological platforms--are now being turned into instruments of coercion.

This isn't a sudden development. Post-9/11, the U.S. began to leverage its control over the dollar-clearing system to target banks associated with rogue states. This quiet, often technocratic application of financial power demonstrated the potential to isolate entire nations from the global economy. As Farrell notes, this power was honed and passed down through administrations, becoming a sophisticated tool for geopolitical leverage.

"So this then means that you are in a world, as the United States discovers, where it is possible for the United States to effectively declare that a bank or another institution is a pariah, that nobody should have anything to do with it. Any bank which wants to maintain access to the US dollar, which means most banks in the world, is going to respect that demand from the United States. So suddenly the United States is able to turn the entire global banking system into a means of power projection."

-- Henry Farrell

The "shittification" of American power, a term borrowed from Cory Doctorow, describes this phenomenon. Initially, platforms and systems provided immense value to users. However, as users became locked in, the focus shifted from adding user value to extracting value for advertisers and the platform owners. This mirrors how U.S. hegemony, once a source of global public goods, is increasingly being monetized and weaponized, creating a system where allies feel exploited rather than supported. The targeting of International Criminal Court officials by the Trump administration, cutting them off from credit cards and Google, is a stark example of how deeply embedded and easily weaponized these seemingly mundane infrastructures are.

The Fiction of American Hegemony and the Rise of "Neo-Royalism"

Carney’s speech directly confronts the hypocrisy inherent in the "rules-based order." While the U.S. provided public goods like open sea lanes and a stable financial system, it always retained an "opt-out" option, prioritizing national interests when convenient. This has led to a growing realization among allies that American hegemony is not a benevolent guarantee but a transactional arrangement, prone to arbitrary shifts.

"We knew the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically, and we knew that international law applied with varying rigor depending on the identity of the accused or the victim. This fiction was useful, and American hegemony in particular helped provide public goods: open sea lanes, a stable financial system, collective security, and support for frameworks for resolving disputes."

-- Mark Carney

This transactionalism, particularly under the Trump administration, is pushing allies to seek alternatives. Canada's move to lower tariffs on Chinese electric vehicles, despite U.S. objections, exemplifies this hedging strategy. Farrell suggests that this dynamic forces middle powers to either diversify their alliances, build independent capabilities, or develop counter-threats to deter overreach. The danger, however, is that this push toward multipolarity, driven by American unreliability, may inadvertently strengthen China’s geopolitical position.

The concept of "neo-royalism," as described by Farrell and Abraham Newman, offers a disturbing glimpse into a potential future. This framework suggests a shift away from state-based legitimacy towards a system centered on personal loyalties and clan-like structures, reminiscent of pre-modern power dynamics. This "dark Davos" would prioritize individual power and dynastic connections over established international norms, creating a deeply unstable and unpredictable global order.

The Power of the Powerless in a Fractured World

The Václav Havel anecdote, "The Power of the Powerless," provides a crucial lens through which to understand the current moment. Havel’s greengrocer, placing a false slogan in his window to avoid trouble, illustrates how systems can persist not through genuine belief but through widespread, albeit private, non-compliance. Farrell connects this to the current global landscape, where many are calculating their best move is to placate rather than challenge perceived power, creating a collective action problem that props up unsustainable systems.

"It's possible to live without access to these systems, as these judges and other officials who have been targeted have discovered, but it is a real pain."

-- Henry Farrell

The "rupture" Carney describes is also a rupture in collective understanding. The shock of Trump's rhetoric and actions at Davos, particularly the demand for Greenland, has forced a confrontation with the inconvenient truth about the declining reliability of American leadership. This moment, while uncertain, offers the potential for a new collective consensus to emerge, one that acknowledges the failures of the past and seeks to build a more resilient future. The challenge lies in translating this shared recognition into concrete action, a process that Havel himself demonstrated can be long and arduous.

The Thucydides Trap, often invoked to suggest the inevitability of conflict between rising and established powers, is reframed by Farrell not as a deterministic law but as a cautionary tale of hubris. Athens’s downfall, he argues, stemmed from its overconfidence and willingness to exploit its power without restraint, ultimately leading to its own collapse. This serves as a stark warning to any hegemon that believes it can indefinitely monetize its relationships without consequence. The current global situation, marked by transactionalism and the erosion of trust, is a direct consequence of this hubristic approach, creating a world where allies are forced to diversify and build their own resilience, often at significant cost.

Key Action Items:

• Diversify Financial and Technological Dependencies: Over the next 1-2 years, actively explore and invest in alternative financial clearing systems and technological platforms to reduce reliance on single points of failure, particularly those controlled by potentially unreliable hegemons.
• Develop Sovereign Capabilities: Within 18-24 months, prioritize building independent national or regional capabilities in critical sectors like AI, semiconductors, and energy infrastructure to hedge against future geopolitical disruptions and weaponized interdependence.
• Strengthen Mid-Power Alliances: Immediately begin fostering deeper, more robust collaborations with like-minded middle powers (e.g., Canada, EU nations, Japan) to create collective security and economic frameworks that offer alternatives to U.S.-centric arrangements. This pays off in 2-3 years.
• Cultivate Strategic Ambiguity with Rising Powers: While acknowledging the risks, cautiously engage with rising powers like China to explore limited areas of cooperation, not as a replacement for existing alliances, but as a strategic maneuver to increase leverage and diversify options. This is a continuous investment.
• Invest in Resilient Supply Chains: Over the next 12-18 months, re-evaluate and reconfigure supply chains to prioritize resilience and redundancy over pure cost efficiency, even if it means higher immediate operational costs.
• Foster Public Recognition of Systemic Risks: Initiate internal and external dialogues to build a shared understanding of "weaponized interdependence" and the systemic risks it poses, creating the societal consensus needed for difficult long-term adjustments. This is an ongoing effort, with initial payoffs in 6-12 months.
• Embrace "Difficult" Long-Term Strategies: Prioritize initiatives that offer delayed but substantial payoffs, even if they require upfront discomfort or investment, recognizing that short-term gains derived from transactionalism are unsustainable and ultimately erode power. This requires a mindset shift now for benefits in 3-5 years.