Why the United States imports and what globalisation really is: interview with Dario Fabbri

Why a business owner should know about geopolitics

Dario Fabbri is a geopolitical analyst, journalist, scientific adviser and United States coordinator for Limes, the Italian geopolitics magazine. Together with its editor Lucio Caracciolo he is one of the main lecturers at the Scuola di Limes, which I am attending and which I recommend to all my fellow business owners because it opens the mind. He also writes for Luxury magazine, dedicated to Made in Italy and the high end. That is where the idea for this interview came from, for the readers of my book for small business owners, who mostly know nothing about geopolitics: conventional business training doesn't cover it. I asked him what geopolitics is and why a business owner should know at least its basic concepts.

Geopolitics, in its simplest form, is the study of the interactions between collectives, whether states, nations or empires, and of how this interaction, which can also be conflict, plays out on the map. It has to be grounded, tied to what can be mapped, otherwise it would just be ideas floating free: a discipline that studies the interaction between different collectives to increase or reduce the influence of one or the other in a given space.

Why does it matter to companies, even those that stay within the national economy? Because they operate in specific contexts whose details they often don't know. Producing and exporting, goods or services, means arriving in a real, concrete place: understanding how to get there, what context you will find, which public you are addressing and how the will of the collective prevails over the choices of the individual consumer. Otherwise everything is reduced to individual choices, and we don't understand why in other states the government imposes this or that choice on consumers and companies, forces industrial champions to invest here or there, bans movements, or turns away some companies while welcoming others. All of this is what geopolitics deals with.

Historic powers and post-historic countries

One of the basic concepts of the Scuola di Limes is the power of states, and the distinction between nations in a historic or a post-historic period, a concept the mass media ignore. The distinction concerns countries that are more or less inside someone else's system, someone else's empire, and those that are its antagonists or that, while inside it, keep a certain autonomy. The great powers, those competing for ultimate status, do not live off the economy: the economy is a tool of their action, not its final aim. The United States, China, Russia and Turkey pursue power and use the economy, among the other assets at their disposal, to achieve it. They are historic collectives, which still exist within history, do not believe it is over and act violently towards others, with a relatively young population and a self-image centred on the sacrifices that power demands.

Then there are the post-historic actors, which live off the economy and sit inside someone else's framework. Italy is one of them, like all the countries of Europe, satellites of the United States: they cannot pursue power on their own, so they devote themselves to the economy, to quality of life, to prosperity. Life is better in post-historic countries, but they are not countries that can dominate international relations, nor is that their goal. From this distinction comes the relationship between the powers that matter more and the lesser ones, devoted mainly to the economy.

Japan, the only Asian country in the G7, is hard to pin down: a great commercial power and a post-historic country tied to the United States as a satellite. However, it is strongly anti-Chinese and is rediscovering a vocation for power precisely to counter the rise of the People's Republic: it has an exceptional navy, with so-called helicopter carriers that can in fact be aircraft carriers, and it commits more each year to the maritime containment of China, beyond the pacifist outlook of its population. A post-historic country halfway through a transformation that will not be complete, because its median age is too high, but which should make it less post-historic than in recent decades.

Why the United States imports

My advice to business owners who want to export is to start with the near abroad, continental Europe, which loves Made in Italy, and move on to the United States later. For my company the US is the number one market, with cities like New York, Miami, Los Angeles and Atlanta, where clients love our products and budget is not a problem. Our product, beautiful and expensive, is also appreciated in Switzerland, France, Germany and Austria. I advise against starting with China, because of the distance, because of a different IT infrastructure that doesn't allow information to spread on the social networks we are used to, and because of a significant cultural difference: it isn't impossible, but it is much harder, and should only be tackled once Europe and the United States are exhausted. At the Scuola di Limes they explain that the United States imports because it is the lender of last resort. Is there a connection between this and the fact that, together with Europe, it is the main market for Italian companies?

The United States is a net importer, with a decisive trade deficit, and not by chance: it pursues it deliberately. Importing massively from others means creating dependence on yourself and making the dollar the global reserve currency, because when you buy you put your own currency in the seller's hands, forcing them to share in America's prosperity. All of this makes the United States a very attractive market, for cultural reasons of appreciation for Made in Italy but also because of the inclination of a market geared towards importing. Successive administrations try to reduce the deficit, because it weighs on the American population, but they cannot cancel that vocation, which is tied to preserving America's status. The advice for anyone dealing with the United States is to expect turbulence, but to bear in mind the inclination to import goods, driven by imperial reasons that outweigh economic ones, regardless of the rhetoric of this or that administration. The Trump years were described as protectionist, and tariffs were certainly applied to Italian products too, but the American trade deficit did not fall in those four years: no reversal of the trend.

And Germany, which in continental Europe is our client but also our main competitor, since Italy is the second-largest exporter of manufactured goods after it? It is the prince of post-historic, economy-driven countries, even more than Italy. Of course it is bigger, larger in population and industry, but it is the post-historic, economy-driven country par excellence. It is no coincidence that at this stage it has to decide what it wants to be when it grows up, pulled one way by the eurozone and the other by the United States, with no clear sign of which road it will take.

What globalisation really is

I had always thought of globalisation as a purely economic phenomenon, linked to the free market, as universities and chamber of commerce courses teach. In geopolitics the view is completely different. Geopolitics sees globalisation simply as control of the seas by a single power, at this stage the United States. Control of the seas matters so much because even today 90% of the goods that move around the world travel by sea. Whoever controls the seas can create a single planetary market, and that is what the United States achieved at the end of the Cold War, when the Soviet Union imploded. Commanding the seas doesn't mean controlling them kilometre by kilometre, which is impossible, but controlling the straits, the isthmuses, the chokepoints with no alternative route: that is where the dominant navy, the American one, stands in the way, at least in theory preventing passage to anyone who does not recognise its superiority.

This creates a single global market, which is not tied to free trade: absolute free trade has never existed, and what we mistake for free trade always involves tariffs against someone else. Europe, which prides itself on being a free-trade area, applies tariffs to products from abroad within the Union's borders, and the United States has always had tariffs. Globalisation isn't about more or fewer tariffs, but about American control of the seas, in other words the existence of a single global market on a maritime scale. It will end when the Americans can no longer control all the passages: then it will be balkanised, fragmented among different actors.

How long the American internet will last

Our companies, and our readers' companies, are very active online, advertising on YouTube, Facebook and Instagram. We have noticed that Russia in part, and above all the People's Republic of China, have a different internet, shaped partly by the regime's censorship. How long, years or decades, will the ecosystem built by the Americans, YouTube, Google, Facebook and Instagram, hold out in Western Europe and North America?

The internet as we know it, in the form we know it, is tied directly to American power, and will remain so as long as the United States has the globalisation we have talked about at its disposal. It is no coincidence that internet communications also run through the seas, with cables laid on the seabed that carry the network around the planet. The social networks we mentioned may change in a few years, there will be new ones and others will disappear, never take anything for granted in such a fast world, but they will remain under American supremacy, with makers and owners under different names, as long as globalisation is what we have described. The internet is its direct emanation and is tied to the trajectory of the United States, which may last a few decades: we are not at the end of that system.

The challenges facing Draghi's Italy

The last question has to be about Italy, led in 2021 by Mario Draghi. The challenges are many, but the main reason Draghi is there is to bring the Recovery Fund money, Next Generation EU, into Italy: money that comes guaranteed first and foremost by Germany, which with its triple A rating vouches to the markets for the bonds issued by the European Commission, the bulk of the resources allocated to our country. Draghi is there to say: trust me, I will manage it, we won't behave like the usual Italians. The point is that the money doesn't arrive in a single tranche but over the years, based on the plans implemented, so Draghi's presence should be seen as long-term, but it is far from certain that he will stay in his post that long, and it is not certain he will know how to put that money to use: we trust him, but we will wait and see.

The other reason is his exceptional relationship with the United States, which is worried by the leap forward Germany has guaranteed for us and for the eurozone with the bond issue, and is wondering what the Germans will want next. To stop the Americans seeing our slide into the German sphere of influence as a serious concern, since Germany is vouching for us and will want something in return, Draghi, who knows Washington so well, is there to say: don't worry, trust me, I know what to do. Indeed, in these months in government he has distanced himself considerably from Russia and China, to signal his goodwill to the United States. And we have to take into account the American rating agencies, which keep us two steps away from junk status: if the United States, by a more or less deliberate choice, judged the plans for using the funds poorly, a downgrade would be tragic, to say the least. We really are on a tightrope, but Italians always come through difficult times: all we can do is hope for the best.

You can find Dario Fabbri and his colleagues on the Limes YouTube channel and in the magazine, as well as in our own magazine, Luxury.