Iran's game of thrones | Ian Bremmer's big tech future

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Good morning!

Summer has finally arrived (at least in London and Denver). Vaccinations in the UK continue apace and there is a genuine sense of optimism and gratitude that some sort of European summer soirée might be possible.

And folks want to make sure they're in prime condition just in case: 

Are we witnessing the birth of the gesture-based fitness industry? "Get in shape for Australia with your thumbs-up free weights", or "prepare for your Swiss Alps holiday with the Emotional Expression Remover 3000". If it means the pandemic is over, we'll take it.

This week:

  1. 👑 Iran's upcoming elections: who will claim the Iran throne? (John insisted this dreadful pun remain in).

  2. 🔎 Analysing an analyst: Ian Bremmer and our big tech future

NB: we promised we’d give you the results of last week’s prediction game. We’re breaking that promise and delaying the results for a week. Over 50 of you have answered already, but we think we can get a few more. You can still ⚡ make your prediction here! ⚡.


👑 An Iranian Game of Thrones

By Helen

Global affairs can be deeply, darkly funny. Take for example the various ways 'elected leaders' try with straight faces to avoid being 'unelected':

  • The "vote for me or win a lifetime trip to the Gulags" model

    Reigning world champion: North Korean leader Kim Jung-Un who ‘won’ 100% of the votes in 2014, surpassing his dad who only got 99.9% of the votes.

  • The "you can't lose an election that never happens" model

    One of many world champions: Palestinian Authority leader Mahmoud Abbas who promised to hold elections in 2006 but as of writing, still hasn't found quite the right time.

  • The "let's divide the map into impossibly complex shapes" model

    Reigning world champion: United States’ politicians, whose mastery of gerrymandering means they get to pick their voters, rather than voters picking them.

  • The "anyone can be president but not you, or you, and definitely not you" model

    Reigning world champion: Iran's mysterious 12-person ‘Guardian Council’ which can veto anyone deemed ‘unfit’ for presidency.

Or you could go an entirely different route like Australia, which lures citizens to vote with the promise of a free sausage sandwich on election day. We've lovingly dubbed these ‘democracy sausages’. 🐨

And then there were seven

Sorry, I buried the lede: Iran’s presidential election will be held on 18 June. Experts are predicting a lower-than-usual voter turnout due Covid-19 and voter apathy.

As noted above, Iranian presidential candidates are chosen by the Guardian Council, a 12-person body of jurists and clerics themselves chosen by the country’s Supreme Leader Ali Khamenei. It’s a little like the early stages of a talent show - everyone can apply but not everyone has what it takes to make it.

So last week, the Iranian government announced that a field of ~600 presidential contenders has been whittled down to just seven who will progress to the final round of this season of ‘So You Want to be the President of Iran’:

That field does not contain last season’s winner President Hassan Rouhani (known to be a ‘moderate’ in Iranian politics), because he has been president for two consecutive terms, and is constitutionally not allowed to run for a third.

Though the Guardian Council says it doesn’t play favourites, Ebhrahim Raisi (Iran’s top judge and a ‘hardliner’) is now the frontrunner. His chances of winning are almost 💯, especially after the Council arbitrarily disqualified all but two of his ‘moderate’ competitors.

A primer on Iranian politics

To understand why the probable election of a hardliner Iranian President matters, here’s a quick backgrounder on Iranian politics:

  • After the Iranian Revolution in 1979 (backdrop of Ben Affleck’s escapades in Argo), Iran rebranded as the Islamic Republic of Iran, led by Grand Ayatollah Ruhollah Khomeini.

  • The Supreme Leader of Iran (currently Ali Khamenei) is the real source of power, particularly on matters of the judiciary, national security, and foreign affairs. Iran does have an 'elected' president and parliament, who administer domestic affairs and engage with their international counterparts.

  • There’s long been a tussle for power between Iran’s ‘moderates/reformers’ and ‘hardliners’. The moderates/reformers want to open up the country and improve relations with the West, while hardliners want Iran to remain an isolationist, pious theocracy.

  • Iran’s hardliner camp has generally succeeded in stamping out the moderates’ influence within the Iranian political system - despite the fact that moderates usually win elections when actually allowed to run.

Zoom out: key takeaways

‘The heart of elections is competition. If you take that away it becomes a corpse.’

- Iranian President Rouhani, 26 May 2021

Quite so, Mr. President.

I think the upcoming election in Iran will have long-lasting impact:

  • It's likely that hardliners will successfully muzzle Iran’s moderates, who were at least allowed stronger candidates in previous elections. The country’s hardliners are determined to crack down on the slightest whiff of reform - even Ali Larijani, a ‘pragmatic’ conservative focused on Iran’s economic recovery, was disqualified.

  • Hardliners will continue blaming the country’s sharp economic decline on President Rouhani and his camp’s embrace of the West (while consolidating their own power). In reality, former US President Trump’s withdrawal from the Iran Nuclear Deal and resulting sanctions dealt a huge economic blow to Iran (inflation is at ~30%). 

  • A hardliner Iranian president will embolden Iran’s radical political factions who seek to punish engagement with the West. It will also bolster the Iranian Revolutionary Guard Corps’ (essentially Iran's political military force) presence across the Middle East and intensify Iran’s many proxy wars in the region.

  • Iran’s hardliners are likely to spy an opportunity as the US scales back its military presence in the Middle East. It remains to be seen who will fill the vacuum left by the US. In a region as combustible as the Middle East, offense is often the best defence.

Some seasoned Iran watchers say the difference between Iran’s moderate and hardliner camps is not as wide as many think. In fact, the two camps often agree more than they disagree, particularly on key issues like human rights and the military.

Iranians are not a monolith - many of them sympathise with moderate candidates. So it seems unwise for Iran’s hardliners to have so completely silenced dissent. The leaders of Iran should know better than most what happens when a regime doesn't provide a credible outlet for dissenting voices.

🔎 Analysing an analyst: Ian Bremmer and our big tech future

By John

Due to popular demand, our ‘analysing an analyst’ column is back! Ian Bremmer is the president and founder of Eurasia Group, a large political risk research and consulting firm. The following summary has been distilled from Bremmer’s recent speeches, TV and podcast appearances, and articles.

The overall theme

If you read the news, it’s hard to miss the emerging narrative that ‘the world has arrived at a turning point’. Comparisons to the pre-war 1930s, or the Cold War 1960s, suggest that we should sense that we are living through something monumental.

And perhaps we are - but the more interesting question is: what next?

Bremmer thinks that in the medium term, governments and big tech will be the two main sources of real power. So how will they coexist? Will they work together to achieve shared goals, or will they compete for primacy?

He lays out three possible future ‘world orders’ and which big tech companies we can expect to dominate in each scenario.

💡 Key takeaway: We think of governments and cultures as having ideologies. So if we accept that tech giants are emerging as a new source of power, then understanding their various ideologies can help us understand where the world might be going.

A global order is coming that doesn’t just involve states; tech companies are increasingly setting the rules for our digital space. Given that our national security is as much in the digital space as the physical space, the big tech companies that are sovereign in that digital space increasingly wield real geopolitical power.

- Ian Bremmer

Bremmer’s three futures

1. 🥇 The ‘national champions’ future

In this future, the world is dominated by enormous conglomerates that see governments as their principal partners. There is no bright line between the public and private sectors, and Adam Smith spins in his Edinburgh grave.

Of course, national champions have existed since the British East India company was founded in 1600; for more contemporary examples, think about General Electric in the US or the chaebol companies in Korea like Samsung, LG, and Hyundai.

In this future world order, Bremmer thinks that Amazon and Microsoft are most likely to emerge as the US’ national champions. He thinks that Amazon is in the best position to provide domestic services and security, while Microsoft is best placed to take on the role of international security.

This future is relatively easy, if unpleasant, to imagine - Amazon and Microsoft simply become the Lockheed Martin and Raytheon of our digital-first future.

2. 🌎 The globalist future

The second possible future is actually more of a ‘long now’ or ‘endless present’. The same dynamics we currently see in the world - slowly eroding democracies, the outsourcing and automation of jobs, and rising inequality - will continue to simmer.

Here Bremmer suggests that Apple and Google will dominate because their business models focus on serving consumers and avoiding governments. Apple’s privacy-centric business model will entrench the company as the conglomerate of choice for the global elite.

In contrast, Google’s control of information and data will see it become the panopticon of surveillance capitalism.

After all, there’s a reason ‘Hey Google’ returns precisely the answer you need and only when asked, while Siri regularly interrupts your conversations to declare that on the morning before the battle of Waterloo in 1815, it was partly cloudy with a high of 23 degrees.

This future only works if conflicts stay low-grade. If a new cold war truly breaks out, pressure to be patriotic will significantly constrain these firms’ trajectories.

- Ian Bremmer

3. 🦄 The techno-utopian future

The last path is a silicon-valley-tech-bro-wet-dream future, aka Elon’s World™:

This vision of the world could go in many directions, but writ large it is a decentralised world dominated by tech, the uber rich, crypto, and of course, memes. Cloud countries are just one example of a possible techno-utopian future.

Bremmer thinks that if the speed of digital transformation ultimately erodes government control of society, Elon Musk and Mark Zuckerberg are the most likely to profit. 

Where Musk might control future infrastructure (space, transport, energy), Zuckerberg’s Facebook empire will be able to predict and shape the behaviour of digital citizens, and set the rules for our digital societies.

Elon Musk is in the strongest position to control 21st century security and infrastructure. But he also has the highest potential to be seen as a direct threat to the US government.

- Ian Bremmer

The summary of the summary

If an ~800 word summary is still too long for you:

  • Governments and big tech will be the two sources of global power in the medium term; how they interact will define our long term future.

  • If they stay out of each other’s way, Apple and Google will be best placed to take advantage.

  • If we are heading into a ‘Cold war 2.0’, then expect to see Amazon and Microsoft operate closely with the US government to pursue US national interests.

  • But if everything goes pear-shaped (or fantastically well, depending on your view), expect tech ‘visionaries’ like Elon Musk and Mark Zuckerberg to reign as digital pseudo-monarchs.

My take

The ‘national champions’ future is the most likely. The value of Bremmer’s simplified models of the future isn't necessarily to predict the future, but to understand the range of possible futures. For example:

  • If a company understands that in the ‘national champions’ future it will need to align closely with government to win lucrative contracts, it could start building a strong public policy team before its competitors do, and gain an advantage.

  • If an investor understands that in a techno-utopian future governments might not be able to provide security and stability, then that investor can better price the risk of investments in volatile geographies or industries ahead of the market.

Whichever future eventuates, the key to identifying opportunities and mitigating risk will be considering all three of these possibilities when making policy or business decisions. Just please don’t let it be Elon’s World™.

➕ Extra intrigue

🔎 Intriguing recommendations

💁🏻‍♀️ Helen: My dog @wyowayne turned one recently. He’s pretty cute, but definitely not the sharpest tool in the shed. Certainly not as smart as this talking pup, Bunny, who commands a 92-word vocabulary, including asking to go outside for walks and telling annoying people to ‘shut up’ (what a handy little party trick)!

👴  JohnEverything beyond our cosmological horizon is travelling faster than the speed of light. So everything that moves past that horizon is forever out of reach to us. 94% of the galaxies we can see today have already passed that horizon and are lost to us forever…. just watch this mind-bending 10 minute video. I love space 🤯

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