Editor’s Notes: In this insightful discussion, Professor Jiang Xueqin joins Glenn Diesen to analyze the profound geopolitical shifts resulting from the conflict with Iran, which he predicts will ultimately signal the end of the U.S. empire. Using historical patterns and game theory, Professor Jiang critiques the lack of a clear U.S. strategy and discusses how the war is triggering global economic instability, particularly affecting oil-dependent Asian economies. The conversation further explores the “death of empire” through the lens of de-industrialization and remilitarization, while considering the future roles of regional powers like Israel, Russia, and China in a rapidly changing world order. (Mar 9, 2026)
TRANSCRIPT:
Introduction
GLENN DIESEN: Welcome back. We are joined today by Professor Jiang, who uses historical patterns and game theory to predict the direction of geopolitics. Professor Jiang is famous for many things. Among some, predicting the return of Trump and also the war against Iran. Now a second war. That is. So thank you for coming back on the program.
PROFESSOR JIANG XUEQIN: Thanks, Glenn.
Trump’s Failure to Articulate a Strategy
GLENN DIESEN: How do you make sense of this war, though, against Iran? I mean, how do you measure how this war is developing in terms of where the successes or failures are?
PROFESSOR JIANG XUEQIN: Right. So first of all, Trump has failed to articulate a purpose and a strategy for this war. At first, it was about nuclear uranium enrichment in Iran and the fear that Iran would develop a nuclear weapon. In fact, in Trump’s State of the Union address, he said that he would never allow Iran to develop a nuclear weapon. And both chairmen of Congress, both the Democrats and Republicans, rose to cheer and applaud. It was really the first time that Congress demonstrated any unity during that speech.
It was an extremely political speech. But the problem with that is that the Omani foreign minister, a few hours before the Americans and Israelis struck Tehran, told us that the Iranians had already agreed to zero uranium enrichment, even for surveillance purposes. So the idea that Trump needs to prevent a nuclear weapon — that doesn’t hold, it’s just a pretext.
And they tried many different excuses. And then finally, Rubio said this. Rubio basically said, “Look, we had to attack because Israel was going to attack first, and then the Iranians would retaliate against both the Israelis and us. So to defend ourselves, we had to preempt Israel and attack first.”
So they’re struggling for a narrative. They’re struggling to explain to the American people why this is happening. They’re also struggling to contain the fallout because after the Americans and Israelis struck, the Iranians started to bombard US bases in the GCC, and they closed off the Strait of Hormuz. And this is doing tremendous damage to the global economy.
Oil right now is approaching $120 a barrel — $110 a barrel, I’m not quite sure. But this is double from a week ago. And remember that the Strait of Hormuz delivers most of this oil to the Asian economies of Pakistan, India, China, South Korea, and Japan. Japan relies on 75% of its oil from the Strait of Hormuz. So in about seven or eight months, Prime Minister Takeichi has informed his cabinet that Japan will be out of oil. And Japan is a manufacturing powerhouse.
So this war has been a disaster. And even today, Trump has failed to articulate why the Americans are doing this, what the purpose is, and what the off-ramp is. And what we’re seeing day by day is pretty rapid escalation. In fact, I think the second or third day into this war, there are rumors of ground troops. Yesterday, there are rumors that the 82nd Airborne Division of the American army was given deployment orders — meaning it is possible Americans will choose to airdrop these soldiers into the middle of Iran.
For what purpose, we don’t know. There’s talk of the Americans seizing Kharg Island, which is the oil depot of Iran and which accounts for 90% of Iranian oil exports. There’s talk of the Americans funding proxies. There’s talk of using tactical and nuclear weapons. There’s talk of a national draft to find 500,000 soldiers for a ground invasion of Iran. So this war is completely out of control, and it’s completely unclear what the Americans hope to accomplish with this war.
A Poorly Planned Narrative
GLENN DIESEN: Yeah, the narrative, I think, was very poorly planned — even worse than the war has been planned — because it began, as you said, with nuclear weapons, then moved over to ballistic missiles. Then apparently they want to help protesters, and it was about the oil, that they should be taken out of the hands of Iranians. Then Trump mentioned Iran might take over the Middle East, so we had to go in. And as you said, the Israel thing was interesting because if the argument is that Israel will attack Iran, then Iran will retaliate against Israel — and the United States. So they had to go in first. And they’re essentially admitting that they’re fighting Israel’s war, but they can’t say that either.
So the ability to find a narrative was kind of poor compared to other wars. Other wars usually have one narrative. All the media organize around it, and everyone obediently repeats the same talking points. It hasn’t been done well.
But this is a war of attrition, though, to a large extent — both sides seeking, well, all sides seeking to exhaust each other. But this is in terms of weapons and ammunition, but it’s also spilling into energy and water, or just general economics. How do you see who would exhaust whom first?
War of Attrition vs. War of Destruction
PROFESSOR JIANG XUEQIN: Right. So I think Iran is trying to fight a war of attrition, where it is putting pressure on the global economy and on the GCC nations, because Iran believes that the GCC nations — especially Saudi Arabia, Qatar, and the UAE — can apply pressure on Trump to end this war as quickly as possible.
Unfortunately, the Americans are fighting a war of destruction. So even though they haven’t stated the purpose, it is clear from what is happening on the ground that the Americans and the Israelis are intent on complete and utter destruction of the Iranian government’s capacity to deliver basic services to its people.
What I mean by that is that they yesterday struck a desalination plant in Iran. You’re denying fresh water to the civilian population. That is a war crime. Then the Americans struck oil facilities in Tehran — these are civilian oil facilities so that citizens in Tehran can drive their cars. And if you look at footage from Tehran, it is the apocalypse. There’s acid rain, the entire sky is black. And these people have to breathe that air. So they will develop cancer, they’ll have birth defects. It’s almost like chemical warfare.
So if you are just saying this is a war of attrition, that makes no sense. A war of attrition means when you embargo Iran economically — why are you targeting civilians? In the first days of the war, a Tomahawk missile hit a school in southern Iran and killed about 170 schoolgirls. This is an elementary school. 170 schoolgirls were killed.
This war, the way it’s being constructed, the way it’s being fought, seems to me that the Americans are first and foremost focused on the destruction of Iran as opposed to regime change.
Iran’s Strategy and the Vulnerability of the Gulf States
GLENN DIESEN: Yeah, well, I guess that’s a good description of that. Iran is fighting a war of attrition so time won’t be on their side, while the US is seeking to destroy the country with its 90 million people inside. So this is quite problematic. But the Iranians of course are limited in what they can do to the United States. They can of course hit their bases, but it seems that Iran is obviously prioritizing going after the Gulf states because that’s a good way of creating some pain for the US-led alliance. How vulnerable do you see them being here, though?
PROFESSOR JIANG XUEQIN: Yeah, so the Gulf states are the great vulnerability of the American empire. Israel has eschatology — unfortunately, religious zealots have taken over the state of Israel. So they’re perfectly okay to die for what they believe in. And they can live in bomb shelters for years and years. That’s how strong their faith is. And Israel was designed as an extremely resilient, extremely creative society. So Israel will emerge from this war intact and probably even stronger.
But the Gulf states are different. The Gulf states are basically mirages. Fifty years ago, these were just deserts. And for most of human history, the Arabian Peninsula was not that inhabited because it didn’t have access to fresh water, it didn’t have much agricultural output, and so it cannot sustain a large population. Most were desert nomads engaged in trade.
But Pax Americana changed all that, because Pax Americana needed oil to fund its empire and it could offer protection to the Gulf states. So they developed really rapidly. Cities with maybe tens of thousands of people before are now in the millions. One striking example is Dubai. You go to Dubai, it’s just skyscraper after skyscraper. It is a very glitzy city and it’s trying to be the financial capital of the Middle East. And there are thousands of extremely wealthy individuals who’ve transferred their savings to Dubai because they believe that it’s safe, it’s comfortable — lots of good Michelin restaurants, lots of good five-star hotels — and they are not taxed.
But this image of Dubai as a financial hub is now shattered by this war. And they’ll never recover from this. In fact, we’re already hearing rumors of millionaires just fleeing with their wealth — now they’re going to Singapore, now they’re going to Southeast Asia.
A bigger problem is this: because the Strait of Hormuz is closed, their oil economies have collapsed. They can no longer sell their oil and they’ve shut down their oil production facilities. What people don’t recognize is that the Strait of Hormuz takes GCC oil to Asia, but then it brings back food. The GCC imports 80 to 90% of its food supply. So Dubai — the rumor is Dubai will run out of food in about a week’s time.
Then there’s the issue of fresh water, where the greatest vulnerability is actually desalination plants. The GCC nations’ desalination plants provide about 60% of all their water needs. And so if these desalination plants are destroyed, then they run out of water in one or two weeks, and this means the entire destruction of the GCC.
Now, destroying desalination plants will be the nuclear option for Iran. And so I don’t think they would use it very lightly. But there’s really no coming back from what’s happening. For the longest time the GCC had a reputation for being safe, for being extremely wealthy. And now that mirage, that illusion has been shattered. And once the illusion is shattered, you can’t ever resurrect it again.
The Petrodollar System and Consequences for the Global Economy
GLENN DIESEN: No, I very much agree. Well, the Gulf states are not just dependent on energy, but on finance and the real estate market, which is propped up by all the expats. But what you’re also describing is that this small monarchy selling its oil in dollars, and the US in return offering protection — this was also the petrodollar system that replaced Bretton Woods once they closed the gold window. So what do you see being the possible consequences for the global economy?
PROFESSOR JIANG XUEQIN: Right. So what Iran wants to do is basically kick the US out of the Middle East, for a lot of reasons. And the main advantage is that once the US leaves, Iran will be able to control the Strait of Hormuz. Therefore it will control trade access for the entire world. And so the Gulf states will basically become client states of Iran rather than America. And that oil money will then be able to finance the rebuilding of Iran. So that’s the end goal, or the endgame, for the Iranians.
The problem with empire is the hubris. And so another way of saying this is: the empire would rather destroy the world than surrender its power. So the idea that the Americans will just leave the Middle East peacefully is wishful thinking. Everyone’s saying that this war can only lead to the defeat of America, so America should just admit defeat right now and then go home and let Israel and Iran settle whatever problems they have. The Middle East is not America’s problem.
But again, the problem is that America is addicted to the petrodollar. Leaving the Middle East would destroy the petrodollar. And if the petrodollar is destroyed, it would collapse the American economy as well. America has $40 trillion in debt. And this debt is a Ponzi scheme — the American economy is sustained by a Ponzi scheme.
And so what the Gulf states do is they sell their oil, get petrodollars, and then they recycle it back into the American economy, mainly by investing in AI and data centers, which is now the main engine of growth for the American economy. So if the Gulf states were to stop investing in America, the AI financial bubble would burst and with it, the entire American economy. America would suffer a much greater depression than the 1930s. That’s how dire the situation is for America right now.
The Irrationality of Empire: Why the U.S. Attacked Iran
GLENN DIESEN: But the United States, though, they must have known that this would be a disaster. I mean, many of the top military people in the United States warned in advance that they would have limited weapons, they would have a limited ability to go on for too long. Which of course could explain why they instead going for burning down Iran if time is essentially on Iran’s side. But there’s been war games in the past where they show that they couldn’t pull this off. I mean, you had God knows how many American presidents who wanted to attack Iran, but they always knew that, yeah, that’s not a good idea.
So how do you make sense of this? Because that was my one concern. When they were building up to this war, sending more and more military hardware to the region, my main reason for thinking this might not happen was it would simply be too crazy. The likelihood of success, the amount of things that could go wrong — it just indicated that they can’t possibly go down this path. So I guess, why did they? They do have informed people in the United States, we know. So how do you make sense of this?
PROFESSOR JIANG XUEQIN: Right. So again, I agree with you in that this war doesn’t make any sense. It’s not rational. And everyone knows that America was going to lose this war. The problem is that when empires are in decline, this is just the way they behave. And the historical record is pretty overwhelming in that when empires decline, they lash out against the world. They start these stupid wars they can’t possibly win. They overextend themselves and the collapse is terrible for the world. And America very much is an empire in decline.
Look at things such as the collapse of the family. Look at things such as the collapse of the currency. Currency debasement in America is just a tremendous problem. The US Dollar is no longer worth as much as it was like 10 years ago. The political polarization in America — Congress just cannot function properly. The President has so much power nowadays because Congress has basically decided to just not do anything to avoid any political responsibility. And so it’s destroying the checks and balances systems of the U.S. Constitution.
The economic depression in America is great. Young people feel as though there’s absolutely no hope in the world. They’re refusing to have families. They’re refusing to invest in the future. They gamble all the time. And so America is really the end of empire at this point. And so what they do is they go and start wars in order to distract people’s attentions, in order to prove to the world that they still have it. You know, they still have a bully in a playground and they can still beat up every other kid even though they’re old and they’re weak and they’re handicapped.
And so, look at what was happening before Iran, right? Trump kidnapped the president of Venezuela, which went against international law. Trump deployed his navy in the Caribbean and started to bomb drug boats, which is, again, against international law. Trump was threatening to annex Greenland. He was threatening to invade Canada. He was threatening to attack Mexico. Right now he’s embargoing Cuba. And people don’t even recognize this is happening because so much is going on in the world.
But Cuba was dependent on Venezuelan oil. That was its energy supply. And now that Venezuela has fallen to the Americans, the Americans have embargoed Cuba. And so now people don’t have access to electricity, and there are actually people who are starving in Cuba. So this is an empire in decline. It just lashes out against the world. It attacks everyone. And Iran is just the most current iteration of this anger and this hubris.
But this hubris made the Americans underestimate the capacity of Iran. They went in thinking that once they decapitate the regime, then the government would fall. And what the Americans didn’t recognize was the resilience and resolve of the Iranian people.
America’s Strategic Disadvantages in the War
GLENN DIESEN: Well, about this imperial decline, it reminds me of something that Emmanuel Todd, the French scholar, argued because, again, he predicted the collapse of the Soviet Union already in the 70s by looking at these different social variables. But he also predicted the US Empire was heading towards a similar fate already in the early 2000s. And he described essentially this strange phenomenon — he called it micro militarism, this brutal use of military force in an effort to show power when it’s obviously draining.
So it is an interesting development. But you mentioned that the Americans are losing as if it’s a given. Why do you assess this? Is this mainly the focus on the military hardware at their disposal, or is it the lack of a clear objective? Well, I guess regime change will be very hard without the ground troops.
PROFESSOR JIANG XUEQIN: Right. So America right now has several disadvantages. The first major disadvantage is a lack of political will. And that just means the lack of a strategy, the lack of a purpose. It cannot unify the American people in order to make the sacrifice necessary to win this war. In fact, most Americans are against this war. Right before the war started, 70 to 80% of Americans voiced their disapproval of a possible war with Iran. Usually when a war starts, people rally behind the flag, but not in this case. Most Americans are still against the war. So the first issue is the lack of political will.
But if you look at the Iranians, they believe that this is a struggle of life and death. So they set aside their political differences and they’ve committed to winning this war. So that’s the first factor — political will.
The second factor is just manufacturing capacity. These past 30 to 40 years, America went from a manufacturing-based economy to a financial-based economy and they exported their manufacturing capacity to China. Now when you fight a war, what really matters is your capacity to produce ammunition, to replenish your munitions logistics. And America doesn’t have the manufacturing capacity to fight a long war. In fact, what’s happening already is that America is cannibalizing munitions from other parts of the world. They are now transferring munitions from South Korea over to the Middle East, which is stupid to do because now you’ve basically opened more flanks, opened more vulnerabilities throughout the world.
On the other hand, Iran uses drones and ballistic missiles. And we know that Iran is able to manufacture about 500 drones a day. And quite honestly, you only need to have 10 drones hit their targets in the Middle East every single day in order for the GCC to cry uncle. So manufacturing capacity is a very important factor as well.
And the third factor is that America is hamstrung by a lot of political considerations. So because they lack political will, they do not want to take too many casualties. Trump has said that six Americans have died in this war so far. There’s absolutely no way this is true. We are hearing rumors that there are a lot of casualties being flown to Germany to try to disguise the fact that many Americans are dying in the Middle East. But this tells us that America has absolutely no appetite to sustain any casualties. If you refuse to have any casualties, how are you going to fight a war?
On the other hand, the Iranians are very eschatological, they are very religious, they are Shia Muslim and they’re not afraid to die. In fact, they believe it is the highest honor to martyr yourself for the higher good. And the clear example of this is the Islamic Ayatollah Khamenei, who was killed in the first day of strikes. He could have gone to Moscow and he could have hidden in his bunker, but instead he chose to go to his office and carry on with his life because he’s 86 years old and he does not want to die afraid of the Americans. And so he set the example that is galvanizing the Iranian people. Just look at some social media footage from Iran. The Iranian people are now extremely energetic, extremely galvanized, and they will fight this war to the bitter end.
The Culture of Martyrdom and the Risk of Regional Escalation
GLENN DIESEN: Yeah, I was in Tehran last year and that’s one thing that really stood out — the culture of martyrdom, the way they would put the martyrs’ pictures on the walls at many places. It is an important variable beyond the material variables, if you want to assess how a country would actually fight.
And the whole idea of killing Khamenei and now everything will fall into place — I mean, his son has taken over now, and it has to be pointed out that the Americans killed his father, his mother, they killed his wife, they killed his sister, and they killed his son. I mean, as Trump said, “We will pick the next guy and he will have to be acceptable to us. He has to be more favorable to America and accommodating and more moderate.” It doesn’t make any sense. How can you burn down the country and, if you look at the new leader, slaughter his whole family, and then assume that they will just fall in line? If you look at the culture in Iran, again, the martyrdom culture, which is strong among Shiites in general — this was always crazy, but somehow that seems to have been the assumption.
But how do you see the possibility of this war spreading? Because, of course, they’re attacking U.S. bases, which covers a lot of countries. You have U.S. proxies being used, such as Kurds, which could then trigger a civil war in a country of 90 million people. And the American and British media especially, they’re up in arms that Russia is giving intelligence to Iran to try to make Trump push harder against Russia in Ukraine, even though this is also a dangerous path. I’m not sure to what extent China would get involved. Do you see a pathway here from it becoming a proper regional war, or even a world war? How do you see this?
The Escalation Trap: No Off-Ramp for the Iran War
PROFESSOR JIANG XUEQIN: Well, first of all, I don’t think there’s an off ramp for this war. I think it’s very hard to de-escalate. The idea that the Americans will just give up their petrodollar and the American bases and just go home is just absurd. That is not how empires behave.
Also, Israel, because it wants to achieve the Greater Israel Project, is heavily invested in creating a regional conflagration to create as much havoc as possible so that they could destroy the region and then be the only one left standing. And so what Israel wants to do is drag everyone into the war, including Turkey, including Saudi Arabia, including basically the entire Middle East.
And so during the first couple of days, there’s reporting that an Iranian drone had struck a Saudi Aramco oil facility. And so Aramco closed down all its energy production. But then later reporting came out to reveal that actually the drone came from Lebanon. So they didn’t come from the east, it came from the west, which meant Israel. Tucker Carlson on his TV show — sorry, on his show — said that he had received information from the Qataris that they had arrested two Mossad agents and they suspected these Mossad agents of trying to sabotage the Qatar oil facilities in order to create a false flag.
So the Israelis are heavily invested in trying to create as much conflict between the GCC and Iran as possible. And now there’s talk of Turkey coming in as well. Recently there was a drone attack from Iran against Azerbaijan. And Azerbaijan was very angry about this and even floated the possibility of sending ground troops against Iran. But then it was later discovered that this was probably a false flag of the Israelis. So the Israelis are heavily interested in spreading this war as far as possible and creating as much destruction as possible.
And they want this war to continue for as long as possible because they have nuclear weapons. So the Iranians are not going to hit them too hard. The Iranians are going to hit the GCC much harder. And so for the Israelis, they just have to endure, right? It’s a war of attrition. And then once Saudi Arabia is destroyed, once the GCC is destroyed, then Israel will be the only power left standing. So that is Israel’s intention.
The Pakistan Wild Card and a Widening War
Other nations will eventually have to be drawn in as well. So one wild card is Pakistan. So during the 12-day war, Pakistan supported Iran. But after that, a few months after that, Saudi Arabia signed a mutual defense pact with Pakistan. So if Saudi Arabia is attacked, Pakistan must come to its aid. And we know that Pakistan has nuclear weapons.
So it is very likely that at some point Saudi Arabia will join this war on behalf of the Americans. Because the animosity between Saudi Arabia and Iran go way back. Iran is a theocracy. Saudi Arabia is a monarchy. And they see each other as heretical — as against Islam. The Iranians hate Saudi Arabia because Saudi Arabia is the home of Mecca and Medina, the two holiest sites in the Islamic world. At the same time, they host a lot of American soldiers. These are infidels in the eyes of the Iranians. And so the Iranians are heavily interested in trying to topple the Saudi regime, and they’re going to apply pressure to cause uprisings throughout the GCC.
And I believe that at some point, the Saudi government will decide to enter this war. And if they enter this war, then Pakistan is obligated to enter this war as well. If the Americans were to launch a ground invasion, it would make sense to attack from multiple vectors. And one vector would be from Pakistan. Another vector, of course, would be from Iraq. The last vector would be from Azerbaijan. They would also try to seize the Strait of Hormuz as soon as possible in order to maintain global trade. So in the short term, we can expect the entire Middle East to be engulfed in this war at some point.
East Asia Drawn In: The North Korea Factor
In the long term, eventually the Southeast Asian economies will have to intervene. So South Korea and Japan are extremely reliant on oil from the Strait of Hormuz. In fact, they will basically starve to death if it were not for this oil from the Strait of Hormuz.
But there’s a wild card, and that’s North Korea. So if you’re in North Korea and you are analyzing the situation, you recognize that now’s the perfect opportunity to threaten South Korea because Americans are distracted in the Middle East and the South Koreans don’t have access to the oil they need to protect themselves against the North Koreans. So just threaten South Korea, and then the Americans are forced to divert their attention back to Southeast Asia and Japan is forced to come into this conflict as well.
And the North Koreans aren’t doing this to start a war — that would be suicidal. They’re doing this to extort as much as possible from South Korea and Japan. And so I expect that to happen as well.
The Western hemisphere will not be quiet this time either, because while this is happening, Trump is still intent on toppling the Cuban government. So it’s possible, two weeks from now, while this war is still raging, Trump attacks Cuba or Mexico or Colombia. It is complete insanity. But this is, unfortunately, the way an empire behaves as it declines.
GLENN DIESEN: So what you’re describing is more or less a suicide or death of empire, at least. But after this war is over, of course, it’s not going back to the way things were. So how do you see the wider change to the Middle East as a region?
After the War: Israel’s Greater Israel Project and Pax Judaica
PROFESSOR JIANG XUEQIN: Well, I think the GCC is done for. I don’t think it’s possible to come back from what’s happening. And after this war is done, I think that Israel emerges as a dominant power in the Middle East. It achieves the Greater Israel Project and the Iranians will not lose this war. They will maintain their sovereignty, but this war is going to destroy a lot of their infrastructure and they’ll have to rebuild.
Fortunately, they will be able to control the Strait of Hormuz and so they’ll have the financing necessary to rebuild their nation. And I think that after this war the Iranians will actually come out much stronger than before. They will control the Strait of Hormuz, they will have a more vibrant, coherent national identity and they will have upgraded a lot of their military capacity. So maybe after this war they’re destroyed, but they’ll rebuild and they’ll come out much stronger.
And this will lead to a long-term regional conflict between Iran and Israel. And in eschatology — in Islamic and in Jewish and in Christian eschatology — this conflict between Iran and Israel is often referred to as the war of Gog and Magog, when the entire world attacks Israel. So but before that happens, Israel will achieve the Greater Israel Project and it will create something called Pax Judaica.
So imagine that the center of gravity basically transfers from Washington D.C. to Jerusalem. Why? Because at this point in history, Israel controls all global trade. It’s already built the Ben Gurion Canal which cuts through Gaza and replaces the Suez Canal. It is the technological and financial center of the Middle East because the GCC has been destroyed. And so whatever oil money there is gets invested into Israel.
You know, Prime Minister Modi visited Netanyahu before the war began. And it was a very pleasant meeting. And the reason why is that in order to build Pax Judaica, Israel needs to import millions and millions of cheap laborers. And India is the best source of cheap laborers for Israel. So I think that is what they have in mind.
A lot of technological companies in the United States — Google, Nvidia, Oracle — will probably move to Jerusalem and help build the technological center of the world, create an AI surveillance state. These past few decades they created this surveillance model in Gaza and then they’ll just scale it out to include the entire Middle East.
So that’s what I see happening. In the short term this war will be devastating. In the midterm, Israel will achieve the Greater Israel Project and create Pax Judaica. And long term, Israel will face the world in a global conflict.
GLENN DIESEN: But to what extent would Israel be in a position to project this kind of power, because after this war, there would be seemingly a very diminished US presence — at least the ability to project power in the Middle East. Turkey is also growing more concerned about Israel. Indeed, the Israelis also have a very tough rhetoric about Turkey and especially Erdogan. And with the war as well, the amount of destruction that will be levied against the Israelis, the economic complications, the demographic problems, as many settlers might be simply leaving. I mean, it’s not a big country. What is this, like, 8 million people now? 7, 8. How would they be able to sustain themselves in this region once all of these things begin to kick in? Also, political instability, one could put to the list, I guess.
Israel’s Transformation: From Democracy to Theocracy
PROFESSOR JIANG XUEQIN: Yeah. So I think let’s talk political instability, because Israel is notorious for political divisions, right? It’s almost impossible to get people to agree on anything. Israelis argue all the time. But this war is going to have a traumatic effect on Israeli society. The democracy is going to have to give way to a theocracy. The religious zealots are going to get greater control over Israeli society, and whatever is left of an open, cosmopolitan, democratic society will wither away. Basically, Jerusalem will replace Tel Aviv as the heart and center of Israeli society. So that’s point one.
Point two is that people severely underestimate Israel because it is a small nation in a desert with very few resources. But the real wealth of Israel is the Jewish Diaspora spread all around the world. They are extremely well educated, they’re technologically savvy, and they are extremely united. They believe in the Greater Israel Project. So it’s possible for Israel to draw on basically unlimited financing, on the most advanced technology, on political support from all over the Jewish Diaspora.
And I think that once this war is over, Israel will have no peer competitor in the Middle East, meaning that Saudi Arabia will probably be destroyed and Turkey will be severely weakened in the process. I’ll be honest with you, I have very little hope for Turkey. It has suffered a great deal under Erdogan. If you go back and look at how Erdogan came to power and how he cemented power — I believe it was the 2018 coup — anyway, my point is that Turkey is an extremely corrupt and ossified society that is a paper tiger. And if Turkey were to enter this war, you’d be surprised by how badly it does. So Israel, in other words, doesn’t have a regional competitor. Iran will be a competitor in the future, but that is in the future.
Europe’s Energy Crisis and the American Pivot
GLENN DIESEN: Yeah, I think the coup attempt in 2016 — this was very clear. Well, it’s not the first time. They have this every now and then that the stability might be quite fragile. But you kind of covered very well the Middle East, how the US is impacted, how this could spread to East Asia. Israel could become a theocracy. Iran an even more confident regional power. How about Europe? Because the Americans liberated us from the Nord Stream pipeline by blowing it up. European leaders recently congratulated themselves for liberating themselves from Russian energy and gas and oil. And now, of course, we’ve also been cut off from energy from the Middle East. And all of this with the backdrop of the United States seeking to pivot away from Europe. So how does this debacle in the Middle East with the war in Iran impact the Europeans?
Europe’s Crisis and the New World Order
PROFESSOR JIANG XUEQIN: Well, Europe is completely hopeless. It’s a hopeless situation. For the past 20 years, America screwed over Europe. These wars in the Middle East created millions of refugees who then went to Europe. And I don’t know what the Europeans were thinking in allowing these millions of refugees to come into their society when they didn’t have the capacity to absorb these millions of refugees.
Ed Merkel, the Chancellor of Germany, famously said, “We can do it.” No, you can’t. And time has shown that these millions of refugees have put a tremendous strain on the social cohesion, on the capacity of the state to govern Europe. So there’s tremendous political fissures within Europe at this point. And so that’s why you see the rise of these right wing parties throughout Europe.
But the main problem, as you point out, is the economy. Europe suffers from an aging population. The population itself is no longer as dynamic as it used to be. Before, the German model was very good. It was this: buy cheap Russian energy, make really good German cars, subcontract the labor to Poland, and then sell extremely expensive German cars to China. It was a great model for Germany. But then when Trump came to office, Germany lost access to the China market. And then when this war broke out, Germany could no longer buy cheap Russian energy. And as you point out, the Europeans then pivoted to the Middle East, primarily Qatar. And now Qatar has basically shut down all LNG production. And so Europe is completely screwed in the process.
And Macron has talked about sending an aircraft carrier to the Middle East. What’s that going to do? Send an aircraft carrier so that the Iranians can sink it with a ballistic missile? What’s the point of that? And still at this time, the Europeans are still talking about drafting young men to go die in the trenches of Ukraine in 2029. The European elite have their head in the sand. They have absolutely no idea what’s going on. They have absolutely no solution to the multiple crises that they face. And Europe is a dumpster fire. I hate to say this, but it’s a dumpster fire.
The Collapse of Liberal Hegemony
GLENN DIESEN: Well, it’s hard to disagree with that assessment, but things are going from bad to worse. I think the reason why Europe went from this immense optimism to now just crash — you can say hubris and all this, which is all correct — I think it was the post-Cold War world order, though, that became ideal for the Europeans. That is, the United States declared a unipolar moment. The role of the Europeans in this world was: let’s have a collective hegemony of the political West standing on these two legs of the US and the EU, hoping that Europe would be an equal partner to the United States. And not only would the political West dominate the world, but it would be a force for good. Because not only would it prevent great power rivalry, but also by dominating, the liberal democratic West would be able to elevate the role of liberal democratic values and humanitarian ideals.
So again, it’s almost like a civilizing mission. The dominance and sovereign inequality is a force for good in the world. “The world will thank us for dominating.” So this is the benign hegemon. It’s very appealing if you’re a politician and you say we dominate and the world will love us for it.
So now, of course, this is falling apart. I guess it was a bit of a mirage, like the Gulf states were relying on. There is no clarity on what to do. And there’s no political imagination because they outsourced all strategic thinking to the US for 80 years. Now the US is essentially pulling out its knives for the Europeans. They’ve done this, as you said, over the past 20 years, but they did it more covertly. Now they’re quite open about their contempt for Europe.
I think Europe is done. But what does this mean for the wider world order? Because this idea of the international distribution being focused around US global primacy, legitimized by liberal democratic values — this world order, the post-Cold War world order of liberal hegemony, is gone. The US is not dominant anymore. And liberal democratic values — no one really thinks this is what the Western powers are, that these are their objectives in foreign policy. It’s a thin veil which has been tossed away. So what is the New World Order then? From your perspective, what will follow this?
Three Major Trends: Deindustrialization, Mercantilism, and Remilitarization
PROFESSOR JIANG XUEQIN: Right, so there will be three major trends that follow from this.
The first major trend is deindustrialization, because you don’t have access to cheap energy. So you need to make your economy much more balanced. Before, we had the growth of urban centers which engage in the knowledge economy, which engage in AI, in EV, in solar panels. But all of that requires access to cheap energy, which is what the Middle East provided. But now that the Middle East is going to be destroyed or engulfed in war for the next 10 to 20 years, you have to deindustrialize. You have to focus more on self-sufficiency. So that’s the first trend: deindustrialization.
The second major trend is mercantilism. What I mean by that is that the global order is dead. And so what you need to do is basically focus on local trade or creating your own supply networks and spheres of influence.
The third major trend, which is most troubling, is remilitarization. Because Pax Americana is dead, and Pax Judaica is not interested in protecting you from big bad bullies. So it’s either you rearm as soon as possible and defend yourself, or you will be eaten alive by a wolf.
I think in East Asia, the first nation to recognize the changing world order — because it has no choice in the matter — is Japan. I think they brought in Takeichi because she appealed to the young and she has the charisma to galvanize the young to make the sacrifices necessary in order to deindustrialize, remilitarize, and create a self-sufficient economic system. So I think that Japan will actually suffer in the beginning, but they will actually be in the forefront of global change. And nations that absolutely refuse to make these three necessary changes will be the most likely to suffer.
Quite honestly, I have very little hope for my own country, which is China. I think that because of these changes, Japan will start to emerge as the local hegemon, while China is still stuck to the old global order.
But in the short term, what this means is that the United States and China will have a rapprochement. So even though this war has started, Trump will still visit Beijing on March 31st at the end of this month for a three-day state visit. And I think that people will be surprised by how friendly and productive this meeting will be. In fact, this year there are scheduled three major summits between China and the United States. So I think that both nations are working towards rapprochement in order to repair the global order. But there’s no saving the global order. It’s dying.
And so if you omit this reality and commit to revamping society — deindustrialization, remilitarization, and moving towards a self-sufficient economy — then you are much more likely to weather the storm that is coming.
Russia’s Grand Strategy and the Siege of Odessa
GLENN DIESEN: You say that China is stuck in the old world order, and one can see why. With 40 years of unprecedented prosperity and growth in human history, one can see why one would want to at all cost keep this world going, even though it already went away. It’s not that unlike the Europeans, though, because in the 90s it was a rebirth of Europe, or so they thought, together with the US as the center of the world. I remember having books at university with the title Why the 21st Century Belongs to Europe. I mean, this was kind of the mentality. I thought that was also always a bit ridiculous. But anyways, there was reason for optimism, it seemed. So that’s why they also cling on to a world order which is dying, which is why they’re not able to adjust to the new world.
One place, though, where there’s a lot of pressure to readjust to the new order is Russia. The spokesperson Peskov made a comment recently saying that we have all lost what we call international law. So the system is essentially dying, if not dead. And I think what really shook them was the decapitation strike on Iran. Because this is the desperate act of a dying empire. And why wouldn’t they do the same towards Russia? Indeed, they’ve been attacking their nuclear deterrent very openly. I would say it’s likely that they tried to assassinate Putin at Valdai with this attack. At least, that’s a theory. And again, why wouldn’t they go for a decapitation strike against Russia? This is what many are thinking. They look at what they’ve done to Iran. There are no rules.
So why then is Russia doing this slow war of attrition? And also, they did this at the expense of their deterrent. That is, they allowed the Americans and Europeans to openly launch missiles deep into Russia. You can have a German chancellor sitting on stage saying, “Oh yes, we imposed untold casualties on the Russians.” There is so much pressure now on the Kremlin to drop whatever they’ve done the past four years. And why not do like the Iranians — time to bring some pain to the Europeans. Because the Europeans for the past four years said, “Why should the war be limited to Ukraine? Why not also extend it to Russia?” Well, why shouldn’t the Russians bring it to Europe?
This is what I see as the direction, which is terrifying, because this is a recipe for a much larger war. How do you see the Russian component here? Because they’re also one of the great powers.
PROFESSOR JIANG XUEQIN: Look, I personally think that of all the world leaders, Vladimir Putin is the only one with a grand strategy. He’s a very capable leader. He sees the big picture. He plays chess. And so what he’s waiting for is a US ground invasion of Iran. That’s what he’s waiting for. Because once the United States sends in ground troops, then the United States is all in. It can’t extricate itself from the situation.
At any point, the United States can stop this air campaign and say, “You know what? We killed the Ayatollah, we destroyed the Iranian nuclear threat, so we’re going to go home. Goodbye.” But once the United States sends in ground troops, then it’s locked in to this Iranian quagmire for five to 10 years and there’s no escaping. It’ll be like another Vietnam.
This gives Putin and Russia the perfect opportunity to move towards Odessa, which is the real goal and the end goal of this war in Ukraine. Because once they have Odessa, then they have basically achieved all their major military objectives. And so what’s going to happen is the Europeans will have no choice but to defend Odessa to the last European. And that’s where the next major conflict will be — the siege of Odessa.
And if the siege of Odessa were to happen, the Europeans would exhaust themselves defending against the Russian attack. The Russians have perfected drone artillery warfare in the trenches of Ukraine. And that’s a perfect combination if you are to besiege Odessa. The Europeans may be fresh, but they will be inexperienced. And so they will make a lot of mistakes. They will lose a lot of casualties, and this war will eventually become so unpopular back in Europe that the population would revolt against the governments.
Remember, this is a time of nuclear war, so you can’t actually destroy each other’s military. But what you can do is put so much stress and pain on the global system that the citizens ultimately rebel and overthrow the political system and impose a new system that is much more friendly towards Russia. So I think that is the grand plan that Putin has. And it’s going to work.
Closing Thoughts: The Illusion of Escalation Control
GLENN DIESEN: Well, I think it’s the Chinese who say we live in interesting times. So thank you very much.
PROFESSOR JIANG XUEQIN: It’s much too interesting.
GLENN DIESEN: Well, thank you for taking the time. And yeah, as you began saying, this war against Iran — it’s hard to believe that they went through with this given all the risks. But I always make the point: this is going to be the greatest catastrophe. It is this illusion of escalation control, the assumption that they can control all the variables, decide how it ends, who’s allowed to participate, how they contribute. This is really the same as with the Russians in Ukraine — this assumption of escalation control. This is what’s going to kill us, effectively.
PROFESSOR JIANG XUEQIN: Well, I will say this. I made this prediction two years ago that the United States would invade Iran. I’ve been saying consistently that this would happen. The moment that it happened, I was shocked and bewildered and I couldn’t sleep, because I was like, “Why would they do this?” So yeah, I sympathize with what you’re saying.
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