Alternate Geopolitical Alignments for Israel

 

What is the "best" Geopolitial Alignment for Israel? In this post, I look at some options: (1) None (Business-as-Usual, BAU, or Muddling Along, Random Walk, RW), (2) Alignment with the Region (Middle East North Africa, MEA), (3) Alignment with the World System (W) or (4) Alignment with the US. Google AI reports the Conventional Wisdom:

However, the first question is "what do we mean by best?"

In terms of Systems Theory, the question is whether a Steady State Economy in Israel (and the Middle East) would be best or whether the Neoclassical Economic Dream of unstable, endless exponential growth is best. I cannot answer the question for policy makers even though endless economic growth is not possible on a finite planet. We just have to keep the question in the back of our minds as we are evaluating Geopolitical futures for Israel.

Another more specific question is whether we are interested in the short- or long-term? In the short-term, Israel is at War with Iran and currently aligned with the United States. So, the Long-term Attractor Path is of more interest since the path is unknown.

Using various IL_L20 Models, I ran five alternatives plotted in the graphic at the start of this post.  The best long-term model, which provides short-term exponential growth and long-term stability, is the IL_L20 MEA Input model (see the Notes below).

The second-best option is the IL_L20 BAU Model, but it is unstable. As a policy counterfactual, consider stabilizing the BAU model (see the Notes--stability involves reducing growth rates). Under a stable BAU regime, the IL_L20 Model reaches a Steady State around 2150 and provides over a century of continued growth for Israel.

Interestingly enough, alignment with US input is not best because the model is quite cyclical (see the Phase Diagram of the IL_L20 US-Input Model here). The prediction from US-Input model is that, after the War with Iran, the US will direct strategic attention elsewhere (back to Asia?) as happened after past Peace Agreements.

• Abraham Accords a set of agreements that established diplomatic normalization between Israel and several Arab states, beginning with the United Arab Emirates and Bahrain.
• Oslo Accords a pair of interim agreements between Israel and the Palestine Liberation Organization (PLO): the Oslo I Accord, signed in Washington, D.C., in 1993;^[1] and the Oslo II Accord, signed in Taba, Egypt, in 1995.
• Israel-Egypt Peace Treaty following the 1978 Camp David Accords, the Egypt–Israel treaty was signed by Anwar Sadat, President of Egypt, and Menachem Begin, Prime Minister of Israel, and witnessed by Jimmy Carter, President of the United States.
• Israel-Jordan Peace Treaty an agreement that ended the state of war that had existed between the two countries since the 1948 Arab–Israeli War and established mutual diplomatic relations.
• Gaza Peace Plan a multilateral agreement between Israel and Hamas that aims to address the ongoing Gaza war and broader Middle Eastern crisis.
• Two-State Solution a proposed approach to resolving the Israeli–Palestinian conflict, by creating two states on the territory of the former Mandatory Palestine.
• Arab-Israel Normalization since the 1970s, a parallel effort to find terms upon which peace can be agreed to in the Arab–Israeli conflict and also specifically the Israeli–Palestinian conflict.

Notes

More readings:

• Israel: A Blind Spot for Steady Staters
• The Crisis in the Middle East is a Crisis of Growth
• The Myth of Israel Innovation
• Blog Roll: Israel

You can run the IL_L20 model, written in R-code, here. Instructions in the code show how to stabilize the system. Other models for the Middle East and North Africa are available here.

IL_L20 Measurement Model

Three Component State Variables explain over 98% of the variation in the indicators: IL1 = (Overall Growth), IL2 = (LU - KOF - EF) Unemployment Controller and IL3 = (EF + L  - KOF - HDI) Environmental-Labor Controller.

IL1 AIC Statistics

The AIC Statistics are all closely grouped meaning that there is not one, dominant Geopolitical model.

IL_L20 BAU Model

The IL_L20 BAU Model is unstable and cyclical.

IL_L20 BAU Model Controlled

The IL20 BAU Controlled Model is stable and cyclical.

The historical time plot for the IL_L20 BAU Model is presented above.

The historical time plot for the stabilized IL_L20 BAU model is presented above.

IL_L20 MEA-Input Model

The IL_L20 MEA-Input Model provides the best attractor path. However, it seems quite unlikely that a stable Middle East will happen anytime in the foreseeable future.

World-System (1960-2100) A New "Axis of Evil"?

 

On September 1, 2025, in the Chinese port city of Tianjin, Chinese President Xi Jinping held a summit in response to the Trump II Administration tariff policies that included leaders of Russia and India and other representatives from the Global South (here). Xi declared that "Global governance has reached a new crossroads," in the fight against US Hegemonic Power. Did Xi just announce the birth of the New Axis of Evil? And, what might this mean for the future?

The conclusion from my World-System models is that the future forecasts for the New Axis of Evil all lead to collapse of the system (except for one worrisome scenario).

In prior posts (see the Notes below), I have looked at the issue of US Hegemonic Dominance and the economic performance of Russia, India and China. In this post, I will look specifically at how the three countries (RU, IN and CN) could interact with the current World-System.

The Measurement Matrix (see the Boiler Plate for more information about Dynamic Component Models) is presented in the Notes below. In terms of overall growth, the first growth components for each country are relatively equally weighted (AXIS1). The historical feedback controller (AXIS2) is dominated by Russia. From the graphic above, Russia's dominance peaked before 1990 and then decline after the Fall of the Soviet Union.

--

For the late Twentieth Century, the system was dominated by the US. If that domination were to continue until 2100, the AXIS System would collapse--pretty strong motivation for eliminating US influence.

If the AXIS System were to align itself with the World-System (graphic above), the forecast for the future is also collapse.

If the AXIS System were to go it alone (as a BAU System), the countries could grow exponentially but it would involve the decline of the Russian historical feedback controller (AXIS2) -- a loss that would probably not be tolerated by Russia.

Unstable exponential growth will not minimize Environmental Damage from growth, so another option for an AXIS system not dominated by Russia is to stabilize growth (graphic above). Stability leads to a steady state after 2100 but would also probably not be tolerated by the AXIS participants.

In summary, none of the Geopolitical Alignments for the AXIS System look very promising. Either the system will eventually collapse or it's reason for existence (unending exponential growth) will not be consistent with World System Balance.

However, pursuing World System Balance does not seem to be a priority of any potential Hegemonic or Multipolar Leaders in the World-System.  In the Functionalist explanation, the AXIS System is necessary for the military-fueled expansion of all the participants .I will investigate the AXIS BAU scenario in a future post (here).

You can run the WL20_AXIS model here, the WL20_RU model here, the WL20_CN model here and the WL20_IN model here. 

You can run the AXIS_of_Evil models here.

Notes

Other relevant postings:

• Geopolitical Linkages: Canada, Mexico and the US
• US attempts to dominate India
• China and the Global South
• Six Futures for China
• India as a Small Regional Country
• Hegemonic Dominance Forecasts
• Globalization and Trump II Tariffs
• Five Futures for Russia
• Alternate Futures for the US
• How to Balance the World System

WL20_AXIS model Measurement Matrix:

World-System (1960-2100) Geopolitical Linkages: Canada, Mexico and the US

 

A recent article in the New York Times (here) suggests that Trump II Administration bullying (Trade Threats to both Canada and Mexico) might bring the two countries (CA and MX) closer together. It's hard to imagine Geopolitical Linkages between Canada and Mexico without the US. Mexico has strong cultural and economic relations with the Southwestern US and Canada has solid culture and economic relationships with the entire Northern US. There are strong inertial forces that will keep the Free Trade Agreements between the three countries moving forward well beyond the limited and inconsistent influence of the Trump II Administration.

The results presented below also suggest (not unexpectedly) that President Trump is tinkering with a system that he does not understand.

In this post, I will put the Growth Components (CA1, MX1, and US1, presented in the Notes below) of the three countries (CA, MX, US) together in a systems model and see what shape the future dynamics might take.** The first question would be which model would be best (from an AIC perspective), the two country model (CA1, MX1) or the three country model (CA1, MX1, US1)? The AICs  for the models are presented in the Notes below. From the AIC perspective, the three-country World-System linkage model is best.

But, let me clarify these results. I assume that politicians follow a BAU strategy: "our country is able to make it's own decisions without regard for other countries or the World System". The reality is, however, that each country is part of the World-System, whether they like it or not and whether they do or do not take into account World-System forces. The BAU results in the Notes suggest that CA and MX might reasonably consider going it alone together. The history of US, Canada and Mexico Free Trade Agreements also suggests that the countries understand the importance of the US as Hegemonic Leader of the World-System. Strong inertial forces will keep the three countries trading with each other long past the Trump II Administration. Inertia does not mean that there are not tensions and contradictions in the system!

The problem with forecasts from the WS-linkage model (above) is that each country will face a possible growth-and-collapse, Limits-to-Growth future. The US will peak a little later (2050) than CA or MX (2025). So, right out of the gate, World System linkage will seem like a bad idea to growth-obsessed politicians. From the standpoint of Environmental Damage from growth, Degrowth would be a positive outcome. So my assumption is that growth-obsessed politicians will turn away from a Limits-to-Growth future and focus on a BAU strategy such as NAFTA or the USMCA (the Trump I version of  NAFTA).

If each country (MX, CA, US) focuses on business-as-usual and their existing linkages (which  is very likely after the Trump II Administration), each country could experience unlimited exponential growth well after 2150 driven by the US, which is the unstable part of the system (you can experiment with the MX_CA_US model using the code provided here). At least unstable, unlimited growth was the vision prior to the Trump II Administration. 

I have suggested here that the Trump II Administration  is essentially taking the US on a Random Walk. If Trump is successful, the result (graphic above) could be a steady state (well after 2150) for all three countries if the US Random Walk persists (you can experiment with setting the US to an RW here; try to determine when the steady state will occur--it's way off in the future). 

In the short-run (year-to-year), the Mexican Economy is also a Random Walk (here). Additionally, setting the Mexican Economy to a Random Walk (graphic above) destabilizes the system and pushes the US into collapse mode. President Trump has to be careful with his RW-policy-approach because it can also destabilize the system.

All of the above is a round-about but necessary way of getting to the question of what effect will Trump Shocks have on the USMCA system? The graphic above shows how a negative shock to the US will affect each country, to include the US. Both MX and CA will be affected negatively to about the same extent and take over twenty years to reach equilibrium again. The US will respond positively in the first years (a prediction of the Shock Doctrine) but will eventually have to deal with the negative consequences for about the same twenty years. In other words, 

the Trade War works in the short run but in the long run helps none of the parties.

You can experiment with the MX_CA_US Model here and the MX_CA_US_W Input Model here. You can experiment with the MXL20 model here, the USL20 model here, the CA_LM model here and the WL20 model here.

In a future post, I will explore finding a steady state for the World System and what it's effect on the MX_CA_US_W Model could be.

 Notes

** More information about how the dynamic component state space models can be found in the Boiler Plate.

AICs

The AICs are: (CA1, MX1 = [104 > AIC=121.6, 137.5]) and (CA1, MX1, US1 = [112.5 > AIC=138.5 > 163]) for the Business-as-Usual Models (BAU) and (CA1, MX1 = [58.03  > AIC=101.6 > 134.2]) and (CA1, MX1, US1 = [ 51.14 < AIC=94.59 < 132.4]) for the World System (WS) input model (smaller is better for the AIC).

MX Components

CA Components

US Components

World Components

World-System (2000-2150) China and the Global South

 

In a prior post (here), I looked at China's possible Geopolitical Alignments, first with the World-System and then with Russia. In this post, I look at China's possible Geopolitical Alignments with the Global South. In the long-run, alignment with Latin America (LA) would clearly be in LA's interest; Africa (AF), not so much.

World-System (1960-2006) Seven Futures for Argentina

 

At the 2025 Conservative Political Acton Conference (CPAC, here) meeting in Washington, DC, Argentinian President Javier Milei gifted Elon Musk the "chainsaw for bureaucracy," a symbol of the deep cuts they both want to make in both the US and Argentina's bureaucracy. Elon Musk waved the chainsaw around on stage at CPAC. Milei has been president of Argentina since 2023 and is considered a right-wing libertarian as is Musk (currently). Milei considers himself aligned with the United States although prior Argentinian governments have sought closer ties with China and Russia (according to chatGPT). This post explores which of those Geopolitical Alignments might be best for Argentina. Another post (here), looks at the Economy of Argentina and whether bureaucracy is the problem.

From the time plot above, the BAU model (no input from other countries) exhibits unstable exponential growth, probably what most economists (including Javier Milei) would want. Alignment with China (CN), on the other hand, would produce unstable collapse. How Argentina would isolate itself from the World Economy is unclear but the country does have geopolitical options with China.

The more moderate alignments (the World-System, W, the US and the Latin American Regional economy LAC) all produce stable economic growth and a resulting steady state economy at some time in the future. Although a steady state economy might be preferred for environmental reasons, it is probably not an end-result embraced by current Argentinian elites. You can run the Argentinian state space model (AR20) under these various geopolitical influences here.

Geopolitical Alignment with Russia (RU) produces the strongest unstable exponential growth. Finally, alignment with Mexico (MX) is not much better than a Random Walk (RW).

Since the Random Walk is similar to the political strategy of the current Trump II Administration in the US (here), it is worth simulating the same future path for Argentina in the time plot above.  The result for Argentina is not the same as the US. Under a Random Walk there are neither growth nor collapse scenarios for Argentina.

Notes

The Akaike Information Criterion (AIC) statistics for all the Argentinian models are presented below.

In the Measurement Matrix below, the first six indicators in standard scores are taken from the World Development Indicators (WDI). KOF = KOF Index of Globalization, EF = Ecological Footprint, HDI = Human Development Index. 

The Error Correcting Controllers (ECC) are (Growth-EF), (LU+EF+KOF-Q), (EF+CO2-KOF-LU). It is interesting and somewhat unusual that, in Argentina, growth is controlled by the Ecological Footprint (EF) and the EF is important in the other two ECCs.

State Space Model Estimation

The Measurement Matrix for the state space models was constructed using Principal Components Analysis with standardized data from the World Development Indicators. The statistical analysis was conducted in an extension of the dse package. The package is currently supported by an online portal (here) and can be downloaded, with the R-programming language, for any personal computer here. Code for the state space models is available on my Google drive (here) and referenced in each post.

Atlanta Fed Economy Now

My approach to forecasting is similar to the EconomyNow model used by the Atlanta Federal Reserve. Since the new Republican Administration is signaling that they would like to eliminate the Federal Reserve, the app might well not be available in the future.

While the app is still available, there have been some interesting developments. In earlier forecasts, the Atlanta Fed was showing GDP growth predictions outside the Blue Chip Consensus. Right now, after unorthodox economic policies from the Trump II Administration, the EconomyNow model is predicting a drastic drop in GDP (the Financial Forecast Center is only predicting a slight drop here).

Climate Change

Another comparison for what I have presented above are the IPCC Emission Scenarios. These scenarios are for the World System. Needless to say, (2) the new Right-Wing Republican administration plans on withdrawing the US from all attempts to study or ameliorate Climate Change and (2) the IPCC does not produce any RW modes for the World System (but seem my forecasts here).