Globalism 2.0: The Underwriting Era Is Over

Empires rarely collapse with fanfare. Apathy and lack of maintenance of institutions, especially when they require pruning, ultimately allow quiet deaths. In order to survive, the United States must reprioritize its position. While the end of history is a romantic idea, it was only ever possible due to American hegemonic power. Now is the time for change.

For eighty years, the United States underwrote the global order - securing sea lanes, suppressing great-power wars, opening trade, and absorbing exports. We built institutions that made global commerce feel frictionless.

Germany rebuilt. Japan reindustrialized. South Korea scaled. China became the world’s factory.

The dollar became the bloodstream of trade. The U.S. Navy became the invisible insurance policy behind oil tankers and container ships. Efficiency became the organizing principle of the global economy.

That was Globalism 1.0. An American guarantee in exchange for underwriting the first world’s security policy. And it worked beautifully.

Yet all good things come to an end and the end is nigh. Even if the U.S. wanted a different outcome, circumstances have changed and require adaptation.

The Assumption That Failed

Globalism 1.0 ran on a simple belief:

Trade creates alignment. It’s a simple idea, one based in neoliberal ideology yet the prime example and beneficiary of the system - China - disproved the notion that economic development leads to political liberalization.

Integration didn’t dissolve competition. It masked it behind a veneer of comfortability. Supply chains flowed east. Capital accumulated. Leverage consolidated. Yet political convergence never arrived. America took advantage of a geopolitical split between Sinos and Soviets, yet we let in a Trojan horse. We made a similar mistake when we allowed Russia in this world order as well.

The idea was a new age where economics drove decisions, but national interests always have priority. No nation would willingly succumb to stagnation for the greater good. The first world project and the American generosity that fueled it was a bribe, even if it had noble intentions. The idea was to stand against the second world and then the second world effectively disappeared. In its wake, we incorporated hostile powers into international frameworks, which undermined their legitimacy and effectiveness.

At the same time, demographics turned hostile. Europe aged, Japan stagnated, and China’s workforce peaked. Europe following its integration expanded entitlements, which skyrocketed national debt at the expense of economic growth and national defense.

In a world of growth, demographic and otherwise, this system seemingly would have expanded in perpetuity. However, we are entering a new age of contraction and scarcity. The jungle always was on the outskirts, but when the system always on autopilot and the institutions were decaying, the wolves aren’t going to be held at bay by ideals.

The Strategy Shift Wasn’t Subtle

To say that Trump shook up the geopolitical order is an understatement. The 2017 National Security Strategy named China a competitor. With the November 2025 National Security Strategy, America made the pivot institutional. America identified its interests around the world, with harsh criticism of its NATO allies and renewed focus on its own hemisphere. While it’s easy to lay the move entirely at the Donald’s doorstep, this was a long undue change. The speed and intensity exceed what anyone expected. We always feel we have more time, but the extent that the world - particularly Europe - was caught flat footed in quite frankly astonishing.

The tone shifted from managing a universal order to defending core national interests. Industrial capacity is an inherent national security and supply chains are strategic terrain. Energy independence is leverage. Allies must carry measurable weight.

Most importantly, the United States no longer presents itself as the automatic guarantor of a frictionless global system.

That era is over.

Not only that, this shift survived administrations. Biden continued much of Trump’s tariff policies. That tells you this isn’t politics. It’s a permanent posture move. It’s recalibration to a new order.

What Globalism 2.0 Actually Is

While it is easy to accuse the United States of isolationism or going alone, the new order will be a consolidation of its pseudo-empire, not an abandonment of it.

Instead of underwriting everyone, the U.S. is prioritizing core spheres: the Western Hemisphere and the Indo-Pacific. Instead of optimizing for lowest-cost production globally, policy now prioritizes resilient production among aligned partners.

Access has become conditional, transactional even. Technology access. Capital access. Security guarantees. Market participation. Trade is an obvious focus, but so is military spending and burden sharing. This new system is not economics first, it requires alignment and support from its participants. And ultimately, it identifies China but other adversaries as priority. America cannot subsidize non-critical geographies.

This is most evident with Greenland. The U.S. has long coveted the island territory. Denmark has been a strong ally, but the control creates uncertainty. America nakedly fears its allies commitment when it needs more than words. In all of the uncertainty, you have countries like Canada and Europe running to China seeking deals and compromises. Allies that align with your adversaries when push comes to shove - even as brash and harsh as the Trump Administration has approached this situation, are hardly allies at all.

Europe’s Structural Reality

Europe’s challenge isn’t cultural. It’s arithmetic.

The median European is roughly 45 years old.  Fertility rates across much of the continent sit between 1.3 and 1.5 children per woman — well below the 2.1 required for replacement.

That means a shrinking workforce supporting a growing retiree population.

Economic growth reflects it. Europe has averaged roughly 1–1.5% GDP growth in recent years, materially below the United States. Slower growth means less fiscal flexibility. Less fiscal flexibility means sharper tradeoffs. And Europe remains structurally dependent on imported energy, previously Russian oil and gas.

An aging population, modest growth, and external energy reliance are manageable in a low-friction world.

They are far more difficult in a security-first one. And more important, require outsourcing expenses to America.

Europe is still importing, indirectly, Russian crude from India. Russia uses these fund in its war with Ukraine, effectively subsidizing a war against itself. Not only that, the U.S. warned them with Nord Stream 2 that it was a national security liability. America demanded a modest 2% of GDP spent on defense. Europe funded its entitlement programs instead. Germany closes its nuclear energy facilities increasing reliance. The UK is divesting one of its greatest geopolitical bases at Chagos Islands, home to the critical U.S. base at Diego Garcia for seemingly no reason at all.

You may think these are policy disagreements, but why bite the hand that feeds you? You don’t get both unilateral control over geopolitical decision making and limitless military support. And most critically, the immigration decisions Europe as a whole has made in recent years are going to demographically change the continent and further shift not only the geopolitical rift between our regions, but add in a cultural rift as well.

The Immigration Bet — And the Political Strain

To offset demographic decline, Europe leaned heavily on immigration.

In theory, immigration can replenish labor supply and stabilize entitlement systems.

In practice, outcomes depend on productivity, integration policy, and labor market absorption capacity.

When large inflows occur rapidly — particularly of lower-skilled migrants — integration systems can become strained. Fiscal pressures rise and labor markets adjust unevenly. Cultural and political tensions intensify.

That strain is now visible in the rise of populist and nationalist movements across Europe.

Establishment parties often refuse to govern alongside those movements, even when they command substantial electoral support. The result is fragile coalitions built from ideologically divergent parties whose primary unity is opposition to the right.

Such coalitions can survive short cycles, but they rarely produce durable strategic coherence.

Energy policy becomes compromise. Migration policy becomes paralysis. Defense spending becomes negotiation.

Security requires clarity.

Coalition gridlock produces hesitation.

And hesitation is expensive in Globalism 2.0.

The United States faces its own demographic pressures — aging, below-replacement fertility, and rising entitlement burdens. The median age is around 39,  with fertility around 1.6 births per woman in recent years.  Rapid migration surges in recent years have further intensified partisan divisions and turned border policy into a defining political fracture.

In a security-first era, domestic cohesion matters. And the U.S. has decided to face this challenge head on, as demonstrated with remigration and the crackdown on illegal immigration. But this further divides polities to focus domestic than internationally. Internal fragmentation constrains external resolve.

The “Two-Speed Europe” Illusion

Some argue Europe can manage these tensions through a “two-speed” model — deeper integration among core states, looser alignment among others.

It sounds pragmatic, but it is structurally unstable. Who determines which groups participate in discussions? At what point do you ask the second class nations to exit the room? What are the limits of these different speeds and how are they enforced? It’s not that these questions can’t be answered, it’s that they have to be answered in the first place.

You cannot run defense at one speed, fiscal policy at another, energy strategy at a third, and migration governance at a fourth.

Security alignment requires synchronized commitment. Power does not operate on a variable clock. Two-speed Europe may work for regulatory harmonization, but it does not work for existential security architecture.

And here is the hard truth:

You cannot run a security-first system on demographic decline and coalition paralysis. Strategic autonomy, or virtually any policies ideas from Macron, are doomed to fail.

Energy, Technology, and Repricing

Energy is strategy.

The United States is a net energy exporter. Europe is not. China depends on vulnerable maritime chokepoints. Energy determines industrial durability. Industrial durability determines military credibility. More important, it determines strategic maneuverability.

Technology is no longer trade — it is terrain. AI is the new frontier. Semiconductor controls are containment policy, AI is strategic infrastructure, and compute is power. Europe has no major tech companies, particularly in the military space. Their military industrial complex is lacking and already fully integrated with the U.S.

Europe’s dependence is the real challenge. They went all in on an American support strategy, while opening challenging it with things like the Euro. The dollar remains dominant, but the hedging not only with our allies but through BRICS is concerning. Bilateral settlement agreements continue increase. This likely won’t end dollar primacy, but it will increase friction. Friction means cost. Cost means repricing.

The resulting change is a focus on hard power. This is seen with American involvement in Venezuela, its oil embargo and blockade of Cuba, its support of Iranian protestors. America must divert its resources to implement its national security and more important - Europe is minimal involved in these situations.

The Implications

When national strategy shifts, resources and priorities realign.

Domestic manufacturing becomes leverage. Energy infrastructure becomes geopolitical ballast.Defense technology becomes durable necessity. Regionalized supply chains turn local assets into strategic nodes. Western Hemisphere integration becomes structurally advantaged.

I’ve highlighted Europe’s challenges in particular in this piece, primarily because this is the biggest change in U.S. posture. America sees a great power conflict with China over the horizon. It’s systematically targeting Chinese and other adversaries’ proxies. Syria is a prime example, where Iran lost Assad despite Russian support. But America has limited resources and Europe, while a close ally historically, has become an economic liability.

And ultimately, I hope that Europe can better align with the new posture of the United States. Whether they federalize or decouple, they have a hard choice to make about whether they will be a co-equal or subservient force in the new world order.

Despite its narrower focus, Globalism 2.0 will not eliminate complexity. There is a concentration of risk. America is going to be forced to make harder choices with limited resources.

Over the next decade, expect:

Western Hemisphere consolidation. Selective decoupling in advanced technologies. Persistent defense industrial expansion. Higher structural energy investment. Conditional trade over universal openness.

More bloc alignment. More strategic friction. More security premium embedded in global affairs.

The underwriting era of universal coverage is over.

Globalism 1.0 said everyone gets access.

Globalism 2.0 says access is conditional.

The world is not collapsing.It is repricing risk.

The key question is how nations and alliances adapt to this shift.

Efficiency built the last era.

Security will define the next one.

Security isn’t as cheap, but it tends to last longer.