Here is a well-balanced essay that balances realpolitik against idealism.
This is a long, insightful article. I will post only a few snips that impact Macroeconomics but it’s worth reading the whole thing.
Realpolitik requires that nations act in the international arena to further their strategic material interests, not for ideological or nation-building (unless the nation-building furthers U.S. safety and prosperity, as it did in Europe and Japan after World War 2).
What I like best about this article is that the author, a professor of international affairs at Georgetown University and a senior fellow at the Council on Foreign Relations, suggests fruitful areas of cooperation with our adversaries.
https://www.nytimes.com/2022/04/11/opinion/ukraine-war-reali…
**Putin’s War in Ukraine Is a Watershed. Time for America to Get Real.**
**By Charles A. Kupchan, The New York Times, April 11, 2022**
**...**
**NATO should extend security guarantees to countries that are of intrinsic strategic importance to the United States and its allies, but it should not make countries strategically important by extending them security guarantees. ...Strategic prudence requires distinguishing vital interests from lesser ones and conducting statecraft accordingly....**
**Russia’s relationship with the West is fast heading toward militarized rivalry. In light of the tight strategic partnership that has emerged between Moscow and Beijing — and China’s own geopolitical ambitions — the next Cold War may well pit the West against a Sino-Russian bloc stretching from the Western Pacific to Eastern Europe....**
**Strategic and economic expedience will at times push the United States to partner with repressive regimes; moderating oil prices, for example, may require collaboration with Iran, Saudi Arabia and Venezuela.... Areas of potential collaboration with Russia include furthering nuclear and conventional arms control, sharing best practices and technologies on alternatives to fossil fuels, and jointly developing rules of the road to govern military and economic activity in the Arctic.... Washington should keep an eye out for opportunities to work with Beijing in areas of common interest — trade, climate change, North Korea, digital governance, public health — to improve relations, tackle global problems and potentially weaken the bond between China and Russia....** [end quote]
Many of these areas have direct Macroeconomic impact.
Worsening relationships between Great Powers in a highly interconnected world economy is already causing the U.S. to talk about pulling back from international supply chains. The world may be entering a prolonged and costly era of deglobalization.
International supply chains, just-in-time shipping and maintaining lean inventories reduces manufacturing costs. Anything that reverses these will increase inflation.
Inflation is already being spiked by increases in energy and food prices that are directly related to Russia’s invasion of Ukraine.
2022 may turn out to be a trend-changing year.
Wendy