Geopolitics – the falcon and the falconer

Mark Carney, Prime Minister of Canada and a former Governor of the Bank of England has described our current geopolitical situation as “a rupture in the world order, the end of a pleasant fiction and the beginning of a harsh reality.” (Davos 2026).

The international rules-based order that emerged under US leadership after the Second World War is, it seems, over. Hard power is back - military might and mercantilism, not la diplomatie douce et laissez-faire.

We can certainly thank Carney for his stark view of the international outlook – if only as a check to ensure that we do not cling to fossilised ideas.

But is it really tin-hat time? History offers some clues.

In a lecture delivered in Dublin in 1933*, the British economist J.M. Keynes put it this way:

“Words ought to be a little wild, for they are the assaults of thought on the unthinking.”  

He said this after a ‘rupture’ in Anglo-Irish relations, and deep international economic strains following the onset of the Great Depression.

Specifically, Keynes sought to balance the case for and against free trade given the geopolitical and economic realities of the day. He may have been a little wild in his rhetoric, but he tempered it with cool political logic. He concluded:

“Ideas, knowledge, science, hospitality, travel, these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”

Why did Keynes reach the conclusion, against his earlier convictions, that the economic advantages of free trade and the international division of labour that form part of Economics 101 might not always be the whole story for growth, liberty and peace?

Part of his reasoning was that footloose flows of domestic savings to distant international projects did not guarantee the productive use of scarce capital. Their effects can be akin to those associated with absent landlords. Savings might be better deployed at home, a view that today finds its voice in those who argue for a greater allocation of domestic British pension fund savings to local industry.

Yet there was another, more intriguing, angle to Keynes’ argument. He suspected that, contrary to prevailing orthodoxy, “a greater measure of national self-sufficiency and economic isolation between countries, than existed in 1914, may tend to serve the cause of peace rather than otherwise.”

Safeguarding peace by a degree of separation, not untrammelled integration may sound counterintuitive.

Keynes’ own wild words might help to clarify. Speaking to an Irish audience, he made the uncomfortable point that historic economic and financial integration between Britain and Ireland had hardly underwritten a peaceful coexistence. He then made the point that the internationalisation of the late nineteenth century had not been successful in avoiding war either.

So, perhaps the direction of travel of geopolitics today (Carney’s “harsh reality”)  - a move away from full global integration - need not mean Armageddon, whatever the media hyperbole.

How might we move forward in a fracturing world?

Keynes himself argued that, faced with great uncertainties, policy mistakes are inevitable. Hence, we should proceed cautiously, “not tearing up roots but slowly training a plant to grow in a different direction.”

For him, the way forward was not to carelessly abandon our past. Encouraging trade with like-minded partners could still be a win for all. But trade policy needed to be mindful of context and its own costs.

This resonates today in Carney’s proposal for intermediate powers like Canada to create:

 “a variable geometry - in other words different coalitions for different issues based on common values and interests.”

In a phrase – political pragmatism – a hard-headed alternative to tin hats.

Coalitions of the willing cannot be a goal in themselves, but they can buy us time to diversify and experiment, rediscovering values beyond the pure calculus of utilitarianism in economic development. In Keynes’ words:

“The same rule of self-destructive financial calculation governs every walk of life. We destroy the beauty of the countryside because the unappropriated splendours of nature have no economic value.”

What might be a useful guiding principle to help us progress through difficult tradeoffs between, say, economic efficiency and environmental sustainability? These can often appear to be on divergent paths.

Nature holds important clues.

The Irish poet, W.B. Yeats, famously described the changing geopolitics after the First World War in terms of a world spiralling towards anarchy:

“Turning and turning in the widening gyre,

The falcon cannot hear the falconer.”

Falcons can be wild, like words themselves. They are best not pursued directly when they escape. The principle for recovery lies in persuasion between the handler and the bird – the ‘lure’, not the attempt to control.

In short, mutual understanding, patience, and building trust.

As in falconry, so too in geopolitics.

Further Reading:

* J.M. Keynes: National Self Sufficiency and the Architecture of the Post-War Economic Order. Lecture at University College Dublin, April 1933.

M. Carney: Values (s) – building a better world for all. William Collins. 2022