I tell the tale that I heard told.
Mithridates, he died old.
– A. E. Housman, A Shropshire Lad (1896)

Mithridates VI of Pontus spent most of his life convinced that someone was trying to poison him. His father had been topped at a banquet, which is the sort of thing that stays with a boy. Once king, Mithridates disposed of his mother, brother, three sons and three daughters. With a family like that, negligence was trusting the soup.

So he took small doses of poison for years, glugging antidotes on the side, and did it so faithfully that when another son turned the army against him and he tried to poison himself, nothing happened. The practice still bears his name: mithridatism.

The general Pompey went through the king’s captured papers and found a recipe for the antidote, written in the king’s own hand: two dried walnuts, two figs, twenty leaves of rue and a pinch of salt.

Within a century, the Roman writer Celsus recorded a version with 36 ingredients, among them poppy-tears, saffron, shepherd’s purse, Cretan carrot seeds and castoreum, a secretion collected from the scent glands of beavers. Nero’s physician, Andromachus, later blew it out to 75, adding viper flesh. His version became known as theriac.

In 1746 the Royal College of Physicians described the problem in the preface to its new London Pharmacopoeia, which looked disapprovingly on “the unaccountable Love of Mixing, Augmenting, and Accumulating”.

Still, the College couldn’t bring itself to part with mithridate, with its skink bellies, or with theriac, dried vipers included. The preface explained it was “paying some Deference to Custom”, and would leave the rest “to be cancel’d by Posterity”.

William Heberden, soon to be elected a Fellow, had diagnosed mithridate and theriac as useless the year before, but the College kept them anyway. Both stayed in the Pharmacopoeia for another 42 years, until the edition of 1788.

The vipers had been gone exactly two centuries when the anthropologist Joseph Tainter published The Collapse of Complex Societies in 1988. Societies, he argued, are problem-solving machines. Faced with an invading horde or a multi-year drought, they add something new: a professional army, officials to dole out water rations.

The first fix offers a healthy return on investment, because societies harvest the cheap gain first. Later fixes draw more resources for less gain, until keeping them all running leaves nothing spare for the next crisis. Choked with complexity, society falls to a shock it could once have absorbed.

In March, Justice Michael Lee of the Federal Court described the same failure in a boardroom. Ruling on the corporate regulator’s case against the former directors of Star Entertainment, he observed that a board pack is no longer “a modest bundle of papers designed to assist judgment”.

Of its smorgasbord of summaries, papers and appendices, he wrote: “Each section is defensible, and, in isolation, apparently sensible, but taken together, they are oppressive.” Directors cope by triage: “One reads what appears central, scans what appears arguably material, and just trusts that anything alarming would have been signalled plainly.”

At Star, the warning lay buried in an appendix to a management paper on cheque cashing, deep in a 235-page pack. On page 167, in small type and with no cross-reference, lurked the one-line note that a junket financier had reportedly been detained in China over alleged money laundering.

Lee wrote that a pack “serves to insulate the preparers from potential criticism”. If something goes awry, it was in the papers. He blamed the growth of packs partly on “director indiscipline”. Directors asking for less paperwork risk being blamed for anything left out. Lee still held that the directors should have read page 167, wherever it sat.

Tainter noted that deliberate simplification was “truly rare”. His best example is Byzantium. Having lost its richest provinces to the Arabs, the empire could no longer pay the army. Around 659, the emperor Constans II, who was later murdered in his bath at Syracuse, cut cash pay to a quarter of its former rate and gave soldiers land to make up the difference.

Over the next two centuries the army took over provincial government, and cities shrank to fortified hilltops. But the soldiers, Tainter said, “became producers rather than consumers of the empire’s wealth”. After 840, the empire nearly doubled in size and lasted another 600 years.

Byzantium cut military pay because the imperial coffers were empty. The geriatrician Doron Garfinkel cut by choice. At the Shoham Geriatric Medical Center in Israel, his team reviewed the medicines of 119 disabled patients and stopped 332 drugs, nearly three per person.

The mass trimming was prompted by a hypothesis: that in most patients, several drugs could be stopped without harm. Before discontinuing a drug, Garfinkel and team decided what they would need to see to bring it back. For a blood-pressure drug, it was a reading above 140 over 90. For angina, it was the return of chest pain or a change in the patient’s ECG. One year on, nine in ten drugs remained discontinued.

Most organisations are choked by customs nobody would design today. Examples include aimless weekly meetings because a micro-manager wants to eyeball what the team is doing, or the requirement for a second sign-off because a junior staffer once swept the mini bar on the Gold Coast.

Governments have the same affliction. After a tragedy, politicians want to be seen as decisive in introducing new rules, especially when their political and media opponents have an incentive to claim that deliberation is weakness. The costs arrive later and fall on someone else.

Heberden argued in 1745 that mithridate and theriac were useless. Garfinkel’s team made 332 such calls in a single review, because it had agreed in advance what would bring each drug back. Tainter described the alternative. Complexity that is not shed by choice is eventually shed all at once.

Luke Heilbuth is CEO of BWD Strategic and a former Australian diplomat.

Don’t ask me. I don’t know.

I can easily imagine us drifting into an endless Jolly Holiday, like Mary and Bert stepping into one of those chalk drawings. I can also see AI drone swarms finishing off the last of us in a sodden patch of she-oaks down by the river. I’ll stick with Mary Poppins. She reminds me of my English grandmother in Cape Town, who loved Julie Andrews.

I’d like to think an AI would struggle to write the sentences above. I’d be wrong, of course. Today’s models would keep those metaphors in sharper order. But they wouldn’t have chosen them, because they never watched Mary Poppins beside my Nana. Nor would they have reason to reach for a bog body or a she-oak. These ideas come from a life all my own: from twenty slightly battered watts of fleshy biological power, all firing synapses and simple sugars.

Pangram, an AI detection tool, shamed me into going back to writing sentences without AI collaboration (even if I use it constantly for research and editing). This essay was supposed to be about why AI won’t produce a dominant winner the way search did, because value depends on grid connections and power, and those can’t be copied. But here we are, with something different, because I started with a blank page and a blinking cursor.

Writing is difficult for all of us. I was blessed with journalists for parents, yet I grapple with the ache of being unable to say something true because the words aren’t there. AI offers only the mirage of a solution. Sometimes, I’ll read an old article I wrote in conjunction with AI, or worse, wholly outsourced to it, and I’m ashamed. When the sentences won’t come, it’s because I haven’t spent time doing the thinking. That writing is hard is the whole point.

There’s something depressing about our slow dwindling in the art of words. A study published in 2024 found that 58 percent of English majors at two Kansas universities could not make head or tail of the opening of Bleak House. The most delicious evisceration of wordslop comes from Sam Kriss, in his essay “If you let AI do your writing, I will come to your house and kill you”. Kriss and I, and probably you too, don’t want to receive unsolicited LinkedIn newsletters which start with sentences like: “Here’s the thing: the real value lies not in the technology itself, but in how we choose to use it.”

I’m amazed by how many high-end consultants and executives heave this guff into the ether without even an attempt to hide AI’s tells. I’ve heaved some of it myself. If your prose lights up like bodily fluid under blue light, I won’t make the second paragraph. Do you realise that trading on the beige predictability of a chatbot makes you less impressive than if you sent nothing at all? Dr Seuss, rest his soul, would have had something like this to say:

You can think a thought fat, you can think a thought thin
you can think one so twisty it ties up to your chin
But the Snerg in the suit at the Slop-o-Mat-Nine
never thought, never thunked, never thinked a whole line.
He just clinked on a button and out the words poured,
all so crispy and creamy that the readers were bored.
“Here’s the thing!” howled the Snerg, and he sent it to all.
But the thing wasn’t his. It was no thing at all.

I had breakfast in Sydney last week with my friend Waleed Aly. We were talking about his new Quarterly Essay, Time of Monsters, on whether the long march of liberalism has finally stalled. The essay, he said, was one of the hardest things he’d written. I’m seventy pages in and enjoying it so much. One reason is that he never uses AI. Not for anything. He sits down and his mind ranges free, from Ibn Khaldun to Andrew Hastie and back again.

If it was hard for Waleed, it’s allowed to be hard for me. I’ll stick with Mary Poppins and my twenty battered watts. The sentences come slower and messier, but they’re mine.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic and a former Australian diplomat.

Soleimani armed Iraq’s Shia militias with explosively formed penetrators pioneered by Lebanese Hezbollah, which they buried along nondescript desert highways. Nearly two hundred American troops were eviscerated into spatter by those roadside bombs. Even the Mossad feared the man the Iranians called sardar-e delha, the Commander of Hearts. Former director Yossi Cohen said Soleimani had “personally tightened a noose around Israel’s neck”. Hamas later credited Soleimani with the idea of turning Gaza into a warren of tunnels and rocket pits.

Trump ordered the assassination as the new year broke in 2020. Soleimani was fittingly blown to smithereens by a drone strike at Baghdad International Airport; what remained was identified by the ring on his hand. The Iranians have never forgiven the affront. The death of their favourite son remains the pretext for ongoing efforts to kill the American president.

In life, Soleimani held the Americans in contempt over what he considered a lack of stomach. Obama was a coward in the face of ISIS, he sneered. Trump he rated lower still: a man defined by “night clubs and gambling halls.” When Trump threatened the Iranian president by tweet in 2018, Soleimani answered with a speech: you might have started this war, but we will be the ones to impose its end.

His taunt survived the grave. An IRGC spokesman repeated it in February 2026, and the regime is now confident it has Trump cornered. Mohammad Bagher Zolghadr, secretary of the Supreme National Security Council, demands America lift its naval blockade, withdraw its forces, end all sanctions, free Iran’s frozen assets, pay war reparations, stop striking militia allies, and cease its threats and insults before Iran will open the strait.

The United States will not be able to reopen the Strait of Hormuz and keep it open. I hope I’m wrong. But the articles you read this week, many justifiably critical of Trump, miss the strategy Soleimani built to outlive him. There is no one in Tehran who can order the drones and missiles to stop and make that order stick.

Which Iran?

Media debates over what makes a ‘good’ or ‘bad’ deal often rest on a flawed premise: that the regime is a single actor, able to bargain its way out of the war. In truth, Iran has four factions: the Revolutionary Guard, the foreign ministry, the old-school clerical establishment, and the remnants of the Green Movement. None want the same future. And more importantly, they do not have the same ability to impose their preferred outcome on the others.

The Revolutionary Guard and the deep state around Mojtaba Khamenei run internal security and most of the real economy. The war has been a godsend: cover to crush their enemies, who by now include most of the population. They have no appetite for concessions. The populist uprising that Trump and Netanyahu encouraged in the early days of the war died with up to 50,000 young Iranian women and men. The regime had massacred a generation of organisers before the first bombs fell.

On the other side sit President Pezeshkian and Foreign Minister Araghchi, who want a settlement that preserves the regime and lifts sanctions. These are the people to whom the West talks. The ageing clerics of Qom, ever suspicious of politics and the temporal world, supply the regime’s paper-thin religious legitimacy and are uneasy about the social and spiritual costs of war. Reformists like Mir Hossein Mousavi – under house arrest since 2011 for protesting a stolen election – are irrelevant to anything decided today, though they remain the seed of an Iran that does not hang its children from cranes.

The Guard has held all the cards since March. So when you read that Iran has offered or rejected something, ask first: which Iran? When Trump announces talks, the foreign ministry is on the other side of the table. When Tehran denies the talks exist, that’s the Guard correcting the record. All political systems have factions. But few have a gap so wide between those sent to negotiate and those lining up to shoot.

The advantages of mosaic defence

Iran’s strategy against the United States was birthed in Iraq, and once again, the Shadow Commander was its architect. In 2008, at the height of the surge, he sent General Petraeus a message through the Iraqi president: you should know that I, Qassem Soleimani, control the policy for Iran with respect to Iraq, Lebanon, Gaza and Afghanistan. Petraeus signed an agreement in a fancy room in Baghdad that would never bind the men firing rockets and laying IEDs. They answered to the sardar-e delha alone.

The second lesson came with the fall of Saddam. The Guard knew their arch-enemy like no-one else: a bombastic sociopath ruling over a huge army with a centralised command structure. Every outward sign suggested his regime was still capable of serious resistance, yet the shock and awe of the American military blew it away in three weeks. Soleimani realised that Saddam’s divisions had stood waiting for orders from men already dead. He determined that if Iran could not win a conventional war, it would at least refuse to present its neck for the chopping.

Mohammad Ali Jafari, who took overall command of the Guard in 2007, called his solution mosaic defence. He broke the IRGC into 31 provincial commands, each with an independent arsenal and intelligence network, alongside standing orders to fight on if Tehran fell silent. In June 2025, Israel tested the theory with the lightning decapitation of the regime’s leadership. The responding missile salvos were ragged. A humiliating defeat followed as nuclear facilities decades-in-the-making were pulverised by B-2 bombers.

The Guard spent the next eight months understanding what went wrong before empowering mid-ranking officers to order retaliatory strikes independently. When the latest phase of the war began in February 2026 with the assassination of the Supreme Leader, retaliation came within hours.

Mosaic defence solved the problem of overcentralisation that had bedevilled the Soviet-era military planning of Saddam. Today, it presents a new one for the world: a system designed to survive the forfeiture of its head does not much care for the promises made by its mouth.

The incentives of attrition

The Guard will never sign anything resembling a neutral deal. Sanctions have turned Iran into an economy of scarcity and workarounds. Those who control the bottlenecks have grown rich. The tolling of Hormuz, which the IRGC is now confidently working towards, extends what is already working. Every shipment must pay, licit or otherwise. Trump’s tariff regime rests on the same mafioso notion of power, in which influence concentrates in individuals, to be doled out as favours at a price.

The regime thrives on the language of emergency. Dissent is treason punishable by death; communal hardship is the price of resistance. Iran’s educated, secular middle class has been gutted by sanctions and emigration. The Guard doesn’t mind. It calculates that it’s better to hold all of a broken nation than none of a free one.

As I argued in Iran Will Outlast America, Iran does not need to win this war. It simply needs to outwait an unpopular president with a bantam attention span. As a young man, Soleimani entered the Iran-Iraq War on a fifteen-day assignment. He stayed until the end, eight years later. Trump, meanwhile, has a looming midterm problem in November of his own making; he’s the counterparty running out of time, and the Iranians know it.

Predictable as Hollywood

They’ve seen this American movie before, and so have I. In 2013, I was a diplomat in Beirut when Obama drew his red line on chemical weapons. Assad crossed it soon after, gassing hundreds of children two hours up the road in the outer suburbs of Damascus. In the worst moment of his presidency, Obama hid behind a congressional vote he knew he would lose rather than honour his promise to the Syrian people. The Syrian and Palestinian refugees on the streets of Beirut were beside themselves. You don’t understand what it’s like here, they told me. The war will come. It always comes. From Syria, Israel, Iran, America. Spin the wheel.

UN and Western defence types got drunk in the empty Beirut bars. My wife and newborn daughter flew to Cyprus, out of harm’s way. Lebanon was spared Assad’s terrorism this time, but Obama had crossed the Rubicon. Or perhaps had failed to cross it, for fear of getting wet. Putin took Crimea six months later, wagering that a president who flinched in the Mediterranean would flinch on the Black Sea. He came for all of Ukraine in 2022. The Taliban were watching, too. You have watches, they liked to say, but we have the time. That ultimate sellout came under Biden. Today, they’re back in Kabul, making sure girls can’t read. The Guard has priced all this in. It knows what an American promise is worth, and so does everyone else in the region. A birthday sparkler, burning bright at a thousand degrees, and then gone.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat.

On 16 July a Beijing company called Moonshot AI released the most powerful open-weight model ever built. Kimi K3, trained on the wrong side of US export controls, ranks third on the Artificial Analysis Intelligence Index, behind only the best American labs. By the end of this month, Moonshot says, anyone on earth will be able to run it for nothing.

Investors deep in AI-induced delirium are beginning to grasp the obvious: frontier models may not be commercially viable. Intelligence looks more and more like a commodity, closer to electricity than to the winner-take-most economics of Google Search.

OpenAI looks cooked. CEO Sam Altman recently offered Washington a 5 percent stake in the company, dressed up as a scheme for sharing AI’s bounty with the American people. A firm certain of its prospects does not hand equity to the bureaucracy that regulates it. The aim is to entrench OpenAI as critical to American national security, too important to fail.

Leaked financials, verified by the Financial Times, explain why. The business booked $13.1 billion in revenue in 2025 and spent $34 billion, of which $5.7 billion went on marketing: enough to buy every advertising slot in seven consecutive Super Bowls. Its operating loss of $20.9 billion ranks among the largest corporate losses ever recorded. Apologists prefer a figure nearer $8 billion, reached by stripping out the one-off cost of the for-profit conversion and the non-cash charges beneath it. But those are real costs. Someone is confused about the difference between a loss and a cash flow, or counting on you to be.

A business selling below cost has two options: raise prices or subside into the corporate muck. The first option has effectively closed for OpenAI. Chinese open models like K3 have grown from under 5 percent of business usage to nearly half in a single year. Meta has priced its newest model 75 percent below OpenAI’s, and Altman’s firm has been reduced to undercutting its own flagship by 80 percent to hold market share. Anthropic hesitated for weeks before shifting its cheaper subscribers toward the true per-token cost of its flagship model, Fable, while keeping it bundled for those who pay more. Charging full price for intelligence has become something you apologise for.

The American AI giants have misread China. Beijing will subsidise vast losses to dominate a new industry, as it has with solar panels and electric cars. When Washington cut China off from high-end chips, Beijing’s labs answered by giving the models away. The Party has long-term domination, not short-term profit, in mind. No for-profit company can win a price war against an opponent that charges nothing. The price of intelligence will stay pinned below the cost of making it for as long as someone gives it away.

AI is not free, you might object; it burns real energy. If the customer never pays the true cost of intelligence, somebody else must, and here a Victorian economist had the measure of it. In 1865 William Stanley Jevons studied a century of British engineers wringing more work from every tonne of coal and predicted the opposite of what his contemporaries assumed: efficiency would raise coal consumption, not lower it. Cheaper steam meant more engines, more factories, more uses for the fuel than anyone had imagined while it was dear.

Cheaper intelligence means more of it, used everywhere, and an energy bill to match. Coal’s appetite was at least bounded by the number of engines Britain could build. A near-free query has no such limit: it attaches itself to every line of code on earth, and each one draws power from a data centre. The billions the labs lose subsidising intelligence boomerang as demand for chips, buildings and power.

That demand is already reaching households. In June 2025, families in Washington, DC found their power bills $21 a month higher. The rise could be traced upstream with unusual precision: PJM, the grid operator serving 67 million Americans, had seen its price for future generating capacity rise more than tenfold in two years. The grid’s own independent monitor put 63 percent of that increase, some $9.3 billion, on data centres.

A sector worth 4 percent of GDP is now underwriting the American economy. Harvard economist Jason Furman calculated that investment in data centres and information-processing equipment accounted for 92 percent of growth during the first half of 2025. Strip that out and the economy grew 0.1 percent, which is to say not at all. Nine-tenths of the expansion of the world’s largest economy comes from sheds of blinking light.

The comforting precedent suggests this ends well for consumers. Every previous investment mania has finished by making its product cheap: the railway bubble of the 1840s ruined its investors but left Britain covered in railways, and the fibre-optic bubble of 2000 made bandwidth almost free for the generation that followed.

AI will not follow the script. A Victorian rail outlived its investors by a century. An AI chip has an economic life of two to three years, though the hyperscalers spread the cost over five or six. Michael Burry, who called the 2008 housing crash, estimates that gap will overstate industry profits by $176 billion between 2026 and 2028. Satya Nadella, Microsoft’s chief executive, is blunt about why he refuses to stockpile: “I didn’t want to go get stuck with four or five years of depreciation on one generation.”

Electricity is only the first channel through which AI’s real cost hits ordinary people. The second is interest rates. An investment surge on this scale bids up power, equipment and construction at a time when inflation already sits above central bank targets.

The standard answer is that AI’s productivity gains will offset the pressure. But productivity gains are a one-time hit. You cannot automate the same task twice: you bank the saving once, while the spending to build the next round of capacity comes due every year. Bond investor Christopher Joye warns clients to prepare for rate rises across the developed world. His bear case for Australia is a cash rate grinding into the 5 to 6 percent range. Whether AI lifts productivity fast enough to spare us, he concedes, “remains an empirical question.” I am betting it does not.

The politics of this will be uglier than the economics. I argued in April that people losing jobs to AI will not quietly subsidise the machines replacing them. Maine has proposed a freeze on new data-centre approvals, and ten states have followed. Some in the industry dismiss this as Luddism. But a householder whose power bill and mortgage are both rising to fund the machine trained to replace her is not confused about her interests. She can count.

The geniuses on Wall Street, last seen floating SpaceX at 94 times sales to ride-or-die retail investors, are pricing none of it. The bond market still treats the chance of Federal Reserve rate rises as close to zero, resting on the lazy assumption that technology always pushes prices down. There is a great deal riding on that serenity: AI-linked companies now account for a record 45 percent of the value of the S&P 500, and without them and the energy firms they feed on, the index would have gone backwards this year. “This AI thing better work out,” says Torsten Slok, chief economist at Apollo, a credit investor.

By the end of the month, anyone will be able to download Kimi K3 and run frontier intelligence for nothing. The electricity to run it is another matter. PJM has already auctioned its generating capacity out to 2028, at prices set by the data centres. Power is the great exception of the AI age: the one product in this story that will never be discounted.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat.

In Davos this January, the people who run the world queued like punters outside a nightclub, shivering in the alpine air for a chance to see Donald J. Trump. Chief executives, central bankers, tech bosses and foreign ministers shuffled forward in their Italian wool and gossiped. Would he really do it? Would America, the land of the free, annex Greenland, the sovereign territory of a NATO ally? Unthinkable! Scandalous! Most of all, unmissable.

Trump had written the script of a thriller and kept the ending to himself. His supposed peers were reduced to extras, loitering outside the set to find out what their lines would be. Walter Russell Mead of the Wall Street Journal, watching from the floor, said he had never seen a leader demonstrate this kind of power over his peers.

Mead takes the Trump Show seriously, as a show. The commentariat, by contrast, parse each line for policy, tally every fabrication, and work themselves into fresh outrage at the pettiness and the corruption. A whole industry turns a profit auditing a man who “does not speak in order to convey information.” All of them miss that the bullshit is beside the point. Trump’s words are not intended as commitments: his fealty to truth is as freewheeling as the young Bob Dylan. Instead, they are baited hooks, cast to see what bites.

The same logic runs through Trump’s cabinet appointments. He casts each supporting character as a producer might, selected first for loyalty, second for tv presence and lacquered rage. Hegseth, RFK, Patel, and the women he has since tossed aside, Noem, Bondi, Gabbard, are characters to dominate a two-minute Fox segment rather than technocrats to run departments. Noem shot her own dog in a gravel pit and wrote it up in her memoir as a lesson in resolve. Trump is “not a policy wonk,” as Mead puts it. “He’s a drama queen.”

Most politicians treat attention like money. They raise it in campaign mode, spend it to win office, then live off the balance until the election. Trump, the most successful exploiter of social media in history, never stops syphoning it. No living person has occupied more penthouses in more heads.

From that attention he has built a perpetual motion machine. He trades eyeballs for power before spending it — not on the dull work of governing — but on the next spectacle: a surprise tariff, a threatened annexation, an ally betrayed. Each drama pulls in more attention, which buys more power, which buys the next outrage. Trump burns decades of investment by presidents, generals and business leaders, who saw the prize of a global system moulded in Washington’s image. Each drama must outdo the last, to grip the same share of the global mind.

Take Iran. Trump tore up the deal Obama had signed and went to war in its place, assuring Americans it would be over in weeks. Months later, the framework asks less of Iran than Obama’s did, while offering sanctions relief and a reconstruction fund worth hundreds of billions. He bombed his way to a weaker deal than the one he destroyed. Ye we forget that a better outcome was never the prize; the drama of Trump as world-breaker was, and on that he delivered: a war, a crisis, the whole world watching to see what he would do next.

The political arsonist tells the voter their fear is justified, that the system really is rigged and no amount of personal striving will unrig it. The right-wing version offers a return to a past that never existed; the leftist equivalent promises a utopia held back only by villains. Both are lies, but the right captures the public mood more often, because a road back is easier to picture than a paradise that keeps receding. Every version needs its enemy; a solved problem is a dead storyline and a standing grievance a renewable resource: the immigrant and the “Islamist” for the right; the billionaire and the “Zionist” for the left.

Why do we remain so disappointed, so surprised? Enough of the electorate has always wanted bread and circuses; Juvenal was sneering at the Roman unwashed in the second century. On 14 June, for his eightieth birthday and the republic’s two‑hundred‑and‑fiftieth, Trump staged a live cage fight on the South Lawn of the White House.

The man screaming for blood at the octagon is not always the dupe the media takes him for. He has watched successive governments preside over a shrinking town, a closed plant and a wage that buys less each year. He carries scars from W’s pointless wars in the Middle East, saw his taxes bail out millionaire bankers in 2008, and for his trouble was lectured on his privilege by a class that suffered none of it.

When a politician is grazed by a bullet and rises with his fist in the air, that voter sees something no eight‑hundred‑page policy paper can match: a leader prepared to stand on his side and take a hit. He may know he is backing a confidence man, a self‑dealing fantasist. But he calculates that a brawling fraud is preferable to a polite technocrat who holds him in contempt.

The most revealing moment of Trump’s career came at the first debate in 2016. When Clinton said his returns showed he paid no federal income tax, he did not deny it or scramble to explain. “That makes me smart,” he cut in. He had gamed the system every voter suspected was rigged, and rather than hide it he offered it as proof of his political fitness.

Conventional politicians could not survive that move; the admission alone would end them. Every step that carried them to the centre bred out the shamelessness Trump exhales: the willingness to risk dignity, to say the unsayable and double down while the commentariat gasps. The qualities that win power in an attention economy, the hubris, the relish for the fight, the refusal ever to be boring, are close to the opposite of the ones the job demands once power is won.

The old order of three television networks relaying a common set of facts was a brief aberration the educated class mistook for the natural order. The platforms, indifferent to democracy’s health, have restored an older and rowdier baseline, and our politics now breeds two kinds of leader: the showmen who win and cannot govern, and the managers who govern and cannot consistently win. We swing between them, tiring of each in turn.

The showman spends what others built: the institutions, the alliances, the shared facts that once let a society argue on common ground. The manager who follows inherits less, and has no time to rebuild before the next showman arrives to spend what remains. By the time Juvenal mocked the mob’s hunger for bread and circuses, Roman self-government had been dead for over a century. The spectacle was its wake.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat.

Instead, they walked Shell’s executives through how the company would respond if oil prices suddenly quadrupled, repeating the exercise until the choices no longer felt hypothetical. When OPEC throttled the global economy in October 1973, Shell acted while its rivals froze. Within a decade, it had risen from the weakest of the seven oil majors to one of the strongest.

That’s as close as corporate strategy gets to a controlled experiment, and the lesson has nothing to do with oil. Shell won because it had built a way of deciding before the panic arrived.

Part One set out the six foundational settings of the global economy that have broken. Part Two showed how the rules of business are shifting from prices to politics and ended on the three questions every board now has to answer: what do we own, what do we depend on, who can take it from us.

Part Three: what to do about it

Most boards can answer the first question from the balance sheet. The second and third are harder, because they test judgement rather than proficiency in the P&L. This instalment is about building that judgement: how a board decides, rather than what it decides, in a world none of us can predict.

The paperwork problem

A board’s job is judgement under pressure. Walk into most boardrooms and you find paperwork. Strategy arrives in one pack. Audit and risk in another, with its own jargon and committee. Sustainability in a third, dense with reporting standards and climate scenarios. Each comes from a different team, with its own consultants.

The strategy paper does not reflect the risk register; the risk register does not reflect the scenarios; the scenarios sit in a compliance folder no director opens twice. The board ends up busy and exposed, grappling with three byzantine documents, each balancing risk and reward but none assembling the whole. When the shock hits, there is no single position to act from.

The problem runs deeper than structure. Daniel Kahneman’s work on “noise” shows that even experienced professionals, given the same information, scatter far more than anyone assumes. At one insurance company, two underwriters given the same risk file produced estimates that differed by 55%.

Boardrooms are no exception. Give the same strategic brief to each director independently before a meeting and compare the answers. The spread is the noise in your decision-making.

What antifragility means

Start with the packs. Require the executive to bring strategy, risk and sustainability to the board as one paper, because the company has one future, not three. Rebuilding the company is harder, and for that the aim should be antifragility, a term coined by options trader Nassim Taleb. A resilient system survives stress and carries on unchanged; an antifragile one feeds on it and comes out stronger.

Think of the Australian bush. When the fire comes, a fragile forest burns to the ground. A resilient one survives the flames and recovers. The eucalypt does something stranger. It needs the fire. The heat splits open its woody capsules, dropping seed onto a fresh bed of ash. The tree resprouts from buds buried under its own bark while the ground is still warm. A fire that levels its rivals clears the ground for new growth. The board’s task is to build a company with more eucalypt than kindling, and to know which is which.

Take a utility with an ageing coal plant it must close. The fragile operator treats the closure as a loss to be minimised, defends the asset to the last legal day and is left with a stranded plant and no plan. The resilient operator manages an orderly exit, meets its obligations, and pivots late into clean energy. The antifragile operator builds grid-scale storage on the same connection, a virtual power plant in partnership with its customers, solar arrays feeding a data centre where the smokestack used to be. One event, three responses; only one ends the decade stronger.

Start where the forces collide

Boards track risks and opportunities in isolation: separate line items for AI, energy prices, supply chains, geopolitics. The forces that decide whether a business survives do not sort themselves so neatly. They collide where risk and opportunity meet, and a board whose orienting assumption is wrong will misread the signals that follow.

Consider AI, a standing item on most agendas. The global build-out of AI runs on data centres, and data centres run on power. That demand is hitting grids that cannot add capacity fast enough, so wholesale prices and emissions rise together. A technology story has become an affordability problem and a climate problem at once.

Go one step further. The batteries and transmission needed to firm that new load rely on critical minerals. China processes close to 90% of the world’s rare earths and has already shown it will restrict flows when it suits Party interests. A board that starts by talking about AI as a productivity tool should also be discussing energy security, the cost of living, and dependence on a strategic rival. Four trends, one collision, on a single balance sheet.

Identifying the overlap is the easy half. The harder work is a discipline of scenario analysis for any shock, run as a rehearsal the board performs, not a report it files. It has six steps:

1. Map the outside forces that could reshape the business.

1. Find your own weak points: the dependencies and exposures a shock would hit.

1. Build three honest scenarios: best, worst, and base case.

1. Put the board in the room and rehearse each one.

1. Set the triggers: the early signals, and the action each one commits you to.

1. Refresh quarterly, as the world moves.

Done well, the result is what military strategists call pattern‑based decision‑making: the ability to act fast by matching a live signal to a rehearsed scenario. Directors stop sifting through dense reports and start having real debates, weighing trade‑offs, testing hypotheses, learning to stress‑test a decision before the stakes turn existential.

Step five matters most. A trigger is a decision you make before you need it, agreed while everyone is calm. “Monitor critical‑mineral exposure” is not a trigger. “If Chinese export licensing reaches the magnets in our storage supply chain, we move to the pre‑signed second source that week, at higher cost” is.

One refinement from military planning. A single signal can mislead, so set several, and agree in advance what their tripping together commits you to: if these four indicators are met, we change course to plan B. Planners call these branch plans. The new branch is already there, budded under the bark, waiting for the fire.

The pre-mortem

The trigger tells the board what to do when a signal fires. The pre-mortem, a technique developed by psychologist Gary Klein, surfaces the signals no one has thought of. Before committing to a strategy, the board assumes it has already failed, and each director writes down why; only then does the room discuss. Imagining a future event as if it has already occurred – prospective hindsight – makes people about 30% better at identifying causes of failure, because the brain is better at explaining facts than predicting possibilities. Kahneman called the pre-mortem his single most useful debiasing technique. A trigger pre-commits the response; a pre-mortem tests whether it is aimed at the right risk.

Antifragility in action

Three companies show what it looks like in practice.

Start with Toyota. When the 2011 Tohoku earthquake knocked out key suppliers and stalled production, Toyota did more than rebuild. It drew up a list of several hundred critical components and required suppliers to hold two to six months of extra stock, a deliberate retreat from the just-in-time orthodoxy it had spent decades perfecting. Those buffers sat unused for nine years. When the 2020 chip shortage hit, Toyota kept its lines running while Ford and GM slashed output. Cover was not total, but through the worst of it the carmaker that had pre-committed its response was the one still building.

In 2021, in the most profitable year in its history, BHP sold out of oil and gas and reinvested the capital into copper, the principal metal of the energy transition. Reshaping a portfolio at the top of a cycle is not, strictly, antifragility, because BHP did not gain from a shock. Instead, it killed a winning position before it could damage the company’s future. By December 2025, a little over half of BHP’s earnings came from copper, roughly 30 percentage points higher than three years earlier. The oil exit looked mistimed when the 2022 energy crisis sent crude soaring, but the economics of copper are more compelling. The lesson is the discipline to fold a hand most boards would play to the last card.

Finally, Berkshire Hathaway, which has made antifragility its whole design. Warren Buffett holds a vast cash reserve as deliberate optionality, ready to deploy when everyone else is a forced seller. In the 2008 panic, while banks were begging for capital, Berkshire wrote a US$5bn cheque to Goldman Sachs and US$3bn to General Electric, on terms only a buyer with cash and nerve in a crisis could command. The Goldman investment alone earned Berkshire billions. The cash earns little when markets climb, and Buffett wears years of criticism. That is the price of optionality.

Boards want a method, not a lecture

Three moves are enough to begin, and a board can make them at the next meeting.

1. Put geopolitics inside the strategy.

The question of who can take what you depend on belongs in the same paper as the growth plan, priced into capital allocation, not quarantined in a risk appendix. A growth plan that ignores the dependencies it rests on mistakes exposure for strategy.

2. Turn efficiency into optionality wherever a single chokepoint exists.

The value of an option rises with volatility. In a stable world, redundancy is expensive slack. In the world described in Parts One and Two, it is cheap insurance.

3. Write your first trigger and your first kill criterion.

Take one collision the board can already see forming. Decide what signal would force a move and what you would do, then decide what would make you walk away. Agree both at the table while the decision is still cheap to get wrong.

A shock is coming for every company. The only thing a board controls is whether it has built something that burns down, or something that, like the eucalypt, comes back from the fire thicker than before.

Luke Heilbuth is CEO of BWD Strategic and a former Australian diplomat. BWD builds resilience strategy and board training for directors whose risk registers no longer match the world. Reach him at luke.heilbuth@bwdstrategic.com. Comments and pushback welcome.

Fink has form. In 2020 he told CEOs that climate risk was investment risk. By 2023 he had dropped the ESG label after conservative blowback. Now he’s early again, urging investors to price in renationalisation and deglobalisation.

This is the second instalment of a three-part series, drawing on work with Christopher Flynn and Ilona Millar at Gilbert + Tobin, and discussions with Andrew Tiernan, who leads Hakluyt in Australia. Part One explained why the settings of the global economy are breaking.

Part Two: what it means

Two forces are deciding who sets the rules for business.

The first is geopolitical: the world is reorganising into blocs. For eighty years, American power kept the sea lanes open and commodities flowing at market prices to anyone who could pay. The world free-rode on that security guarantee, paid for by US taxpayers. Following Trump’s return, the bargain is over.

The second is domestic: the state wants to be a market maker. For decades, governments set the rules and left it to private enterprise. Now they buy equity stakes, set price floors, and subsidise industries they consider strategic. Take the Pentagon, whose purpose is to win wars: it now holds 15% of a rare-earths miner and helps set the price it pays.

Where it matters most – in energy, critical minerals, semiconductors, AI, and defence – price is no longer enough. A board buying from the cheapest supplier and trusting government to stay out has the wrong model of the world.

1. Energy security is national security

For half a century, rich countries stopped worrying about whether they could keep the lights on. The Iran war ended those salad days. Energy is once again a question of state, to be stockpiled, subsidised, and when necessary, fought for.

For Canberra, the numbers are ugly. Petrol stocks sit at 49 days, well below the 90-day international rule; Australia is the only member of the International Energy Agency that has never met the target, missing it every year since 2012. In May 2026 the Albanese government put A$10.7 billion into a fuel security and resilience package: politics and resilience first, prices and markets second.

What does this mean for decarbonisation, when governments are already using energy security to wave new gas exploration through?

2. Decarbonisation loses, then wins

The underlying rationale for energy policy has been to decarbonise because the world ought to. In 2026, energy is no longer a loose proxy for decarbonisation but a national‑security and economic priority. Decarbonisation will accelerate as a result.

The cheap option and the secure option are now the same. Solar electricity has fallen from US$460 per megawatt-hour in 2010 to around $40 today. Battery costs are down roughly 90% in fifteen years. Renewables built at home cannot be embargoed at a strait. Governments will follow Jack Lang’s advice and back self-interest: the best horse in the race, and the only one trying.

The politics matter even more than the economics. As Jason Bordoff of Columbia University puts it: “When national security issues are at risk, that’s when policymakers really jump through hoops.”

Climate advocates have spent thirty years looking for a driver strong enough to shock governments into decarbonising at the speed the science requires. They have now found one. A clean energy build-out keeps the grid running in all geopolitical weather; saving the planet is incidental. Arguments built on morality lose the next decade. Those built on security and cost win it.

3. Clean energy is the new oil dependence

Decarbonisation is part of the energy security answer, not the whole of it. The transition relocates risk rather than removing it, and the new dependence is more concentrated than the old one.

China dominates clean-energy supply chains, holding 70–90% market share across solar panels, batteries, electric vehicles, and the refined minerals that feed them. It refines 19 of the 20 strategic minerals tracked by the IEA. It produces 94% of the world’s sintered permanent magnets, the components in wind turbines, electric vehicles, industrial motors, data centres, and missile guidance.

The exposure is structurally different from OPEC’s grip on oil, in ways that make it harder to manage. Oil must keep arriving, tanker by tanker. A solar panel, once installed, runs for 25 years with no further inputs. So Chinese leverage concentrates at the moment of construction, not across the life of the asset.

That changes when the risk lands on a balance sheet. Ford lost a week of Explorer production in May 2025 because of a shortage of rare‑earth magnets after China introduced new export licensing rules. More than 200 gigawatts of European solar capacity now sit on Chinese inverters. The controls now reach beyond China’s borders: any product containing 0.1% Chinese rare-earth material requires a licence from Beijing, and applicants must submit product schematics. In effect, the West is handing over industrial designs to access the inputs to its own clean-energy build.

Australian lithium, Canadian nickel, and African cobalt all flow through Chinese refineries before reaching a (mostly Chinese) manufacturer’s battery line. China controls about 90% of global rare-earth processing and more than 99% for three of the heat-resistant magnet inputs. Processing, not geology, is the chokepoint.

ESG frameworks routinely warn that fossil-fuel assets will be stranded by transition. But clean-energy assets can also be stranded by supply chain disruption. The transition that was supposed to insulate the developed world from OPEC’s oil coercion has built a new dependence in its place. It is more concentrated than the old one, and Beijing has already begun to weaponise it.

4. The state is a market maker again

Faced with voters angry at the cost of the transition and of life in general, the state has stopped refereeing markets and started playing in them. Interventionism re-emerged when governments bailed out the banks in 2008, became reflex when they underwrote whole economies through COVID, and is now entrenched.

It takes two forms. The first is industrial: equity stakes, price floors and reindustrialisation schemes such as Future Made in Australia. The second is defensive: capped power bills, fuel‑excise relief, and ministers bludgeoning supermarkets over grocery prices. The tools differ, but the instinct is the same: to shield voters from foreign competition, economic insecurity, and a gnawing sense of national decline.

The turn is all the more striking given ageing populations and stretched public finances. Governments have less fiscal room yet are expected to protect citizens’ economic interests more directly than at any time since the 1970s. Left- and right-wing prescriptions may differ, but the same populist impulse animates Mamdani in New York, the AfD in Germany, Reform in Britain, and One Nation here.

If the state is here to stay, what matters is how well it intervenes. The record is not encouraging. In Australia, the National Disability Insurance Scheme and Snowy 2.0 have blown tens of billions beyond forecast, even as the fiscal space for ambitious nation building shrinks. Something must give, through higher taxes, more debt, or more promises quietly broken. For a board, that means dealing with a government that is shareholder, customer, and regulator at once, subsidising your sector with one hand while taxing, capping, or rewriting its rules with the other. Sovereign risk has come home.

5. Australia is an energy superpower on two legs

There is a way through, and it starts with energy. Energy is the price beneath every other cost: manufacturing, food, transport, even the data centres straining the grid. Cheap, secure power lifts productivity, the one way to fund an ageing society without higher taxes or service cuts.

This is a case for an energy superpower on two legs. The first leg is domestic: solar and wind at home, firmed by hydro, big batteries, and gas, because power built here cannot be blockaded at a foreign strait. The second is geopolitical: uranium, metallurgical coal, LNG, and critical minerals, sold to Japanese, Korean, and European buyers already paying a premium for supply they can trust. These exports should fund the grid that will one day replace them.

In The Great Decoupling, I described the contradiction at the centre of Australian prosperity: 81 per cent of its exports go east while security stays west. On two legs it becomes a coherent position.

Neither leg is clean of China. The renewables leg leans on its panels and batteries; the export leg ships ore that Chinese refineries process before it re-enters allied supply chains. The same chokepoint, met twice, from opposite directions. The US-Australia critical-minerals framework of October 2025 is the start of an answer.

None of this is automatic. It depends on clear policy settings, global supply chains staying open, and electorates tolerating the costs of transition. What boards can control is how they respond: treating energy access and geopolitical exposure as core strategic variables, not background ESG issues; positioning for the upside if the two-leg strategy succeeds, and staying resilient if it does not. This is what ESG now means in practice: energy, security, and geopolitics baked into core strategy, not appended as incidental disclosure.

In sum

Part One showed that the global economy’s settings have broken. Part Two has shown what that does to a business: energy is a question of state again, the transition trades one dependence for another, and fiscally stretched governments have become shareholders, customers and regulators all at once. The board’s task is to see this era for what it is and build strategy around it, not wait for the old one to return.

Every board now has to ask three questions. What do we own? What do we depend on? Who can take it from us? Most can answer the first from their balance sheet. Very few have done the thinking on the other two. Part Three is where we start to answer them.

Luke Heilbuth is CEO of BWD Strategic and a former Australian diplomat. BWD builds resilience strategy and board training for directors whose risk registers no longer match the world. Reach him at luke.heilbuth@bwdstrategic.com. Comments and pushback welcome.

Nine months ago, I argued in the AICD’s Company Director that ESG was dead but sustainability would survive, reimagined as long-term value and resilience. It has happened faster than I expected. ESG is being reincarnated as something new: Energy, Security, Geopolitics.¹

This is the first instalment of a three-part series, which draws on work I am doing with partners Christopher Flynn and Ilona Millar at Gilbert + Tobin, and my discussions with Andrew Tiernan, who leads Hakluyt in Australia. BWD is building a resilience strategy purpose-built for boards whose risk registers no longer match the world they operate in.

I am writing in public to connect with board members and policymakers who will challenge me. You have seen things I have not. Your disagreement is more useful to me than your agreement.

If you think my work might benefit others, please pass it on. Read what is useful, ignore what is not, and write to me when I am wrong.

Part One: what has changed

On 20 January 2026, the Prime Minister of Canada told the World Economic Forum that the rules-based international order is dead. Mark Carney did not hedge, or suggest it was under strain, or in need of reform. He said it was over.

“We are in the midst of a rupture, not a transition,” he told Davos. “The beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints.”

The diagnosis was familiar; the messenger was not. A sitting G7 leader, fresh from enraging the Trump administration by signing a strategic pact with Beijing, stood before global business elites and pronounced the American-led order dead.

Coalitions of the willing, Carney called them. The question for the boardroom is the same: willing to do what, and with whom? Six foundational settings of the global economy have shifted, regardless of when the Strait of Hormuz reopens.

1. Maritime chokepoints can be weaponised

Twenty per cent of global oil and a similar share of LNG move through the Strait of Hormuz. Alternative pipelines can reroute only three of the twenty million barrels that transit daily; the rest is stranded. Insurance, not drones, closed the strait. War-risk premia for Gulf transit jumped from 1% to up to 10% of hull value, and tanker traffic collapsed overnight. A dozen insurers paralysed a sea lane without firing a shot.

John Elkington, who coined the phrase triple-bottom-line, argues that insurance and reinsurance are now “the primary transmission mechanisms for both climate and geopolitical risk, doing the disciplinary work that voluntary disclosure was supposed to do.” A board that wants to know how the market is pricing its exposure should look at its insurance premia, not its sustainability report.

The Stimson Center, a think tank, calls this the new norm: a soft closure inflicts the same damage as a declared blockade when shipping insurance and congestion are weaponised. The same logic applies at Bab al-Mandeb, Suez, Malacca, and Panama. Any state or non-state actor with a grievance now knows how to exploit them.

Eli Groner, a former director-general of Benjamin Netanyahu’s office, was blunter. He called Iran’s demonstrated capability to close the strait “a victory far deeper and more strategic than any point-scoring military achievement.” His one-word summary: “Disaster.”

2. Food security is a chokepoint problem

Australia found out through fertiliser. The country has not produced urea domestically since Incitec Pivot closed Gibson Island in January 2023 over unaffordable gas. Around 60 per cent of Australia’s urea normally passes through the Strait of Hormuz.

Three emergency moves averted a total breakdown. Export Finance Australia used new strategic reserve powers under the EFIC Act to underwrite around 90,000 tonnes. Importers pivoted to Southeast Asian suppliers. Albanese flew to Brunei to secure cargoes free of export restrictions. The rescue was costly: by early May, the price of global urea had climbed to A$1,300 a tonne, and Australian agriculture will not meet even half of this year’s national need.

Perdaman’s plant in WA’s Burrup Peninsula opens in mid-2027 and will eventually meet about 70% of domestic demand. Until then, Australia remains exposed. Eight weeks from chokepoint closure to emergency government powers, with the Prime Minister flying to Brunei to beg for fertiliser. Most boards do not have this on their risk register.

3. The American energy guarantee is over

For five decades, global energy security rested on two assumptions: a US-led rules-based order, and American military supremacy underwriting freedom of navigation. The bargain was always odd. The United States, now the world’s largest oil and gas producer and a leading LNG exporter, policed an energy geography half a world away. It made sense as long as American interests aligned with global energy stability.

The Iran war is the most damaging event in a rupture that started earlier. Russia weaponised gas against Europe in 2022. China has weaponised rare earths and other critical minerals against Japan and broader supply chains since. Bordoff and O’Sullivan, writing in Foreign Affairs, call this “the return of the energy weapon.”

The reasons are structural. US shale has turned America into a net energy exporter, a major advantage in geostrategy. The Soviet threat that justified America’s military commitment to the Gulf has vanished, Gulf militaries are more capable, and the political and financial costs of CENTCOM have risen. The United States has every reason to leave, and fewer and fewer reasons to stay.

Washington will no longer underwrite the free passage of Middle Eastern fossil fuels.

4. The damage is physical, not financial.

The 1973 oil shock wiped out about 7% of global supply and was reversed within months through diplomacy. The Iran war has removed around 12% – the largest supply disruption in the history of the oil market – with up to 14 million barrels a day shut in and cumulative losses above 1 billion barrels. Brent has moved from under US$70 before the war to around US$95 in late May 2026.

This time the damage is physical. Refineries, pipelines, tanker routes and storage terminals are damaged, blockaded or stranded. The bottleneck is component manufacturing: cryogenic heat exchangers and air separation units that come from a handful of suppliers with three-to-four-year lead times. Damage to Gulf infrastructure is a five-year problem, not a five-month one. The damage cannot be restored by a phone call between capitals, and even after reconstruction the risk premium at every chokepoint will be permanently higher.

For boards, that turns any geopolitical exposure into a balance-sheet item: where you source, how it travels, and the political risk attached to both.

5. Coercion is the new default of economic statecraft

The US-built infrastructure of the global economy has become a battlefield: dollar clearing, SWIFT, semiconductor IP, the internet stack. For two decades, Washington alone weaponised these chokepoints to coerce adversaries and discipline allies.

China has built an apparatus to do the same. Its 2020 export control law and 2024 dual-use rules created the bureaucratic machinery to turn chokepoints into coercive instruments. The June 2025 US-China framework deal showed the shift in real time, as Washington rolled back semiconductor export controls in return for Beijing easing restrictions on rare-earth minerals that were crippling the US auto industry.

Beijing’s leverage is the ecosystem around critical minerals: extraction, processing, refining, manufacturing. Farrell and Newman argue in International Security that simply swapping suppliers fails because China dominates the system, not the minerals themselves. In 1973, OPEC provided roughly half of the world’s oil, whereas China’s share of clean energy supply chains today is 70 to 90%.

Former US Treasury Secretary Larry Summers warns of “a growing acceptance of fragmentation in the global economy, and maybe more troubling, a growing sense that ours may not be the best fragment to be associated with.”

The Chinese have learned from the Americans that economic coercion works. Anyone trading between them is exposed to both.

6. Neoliberalism is finished

Since the 1980s, neoliberalism has set the terms for markets, states and corporations: open trade, lighter regulation, and the free movement of capital, goods, people, and ideas. It delivered the cheapest consumer goods, the deepest capital markets, and the most integrated supply chains in history. It also concentrated wealth and hollowed out working-class communities across advanced economies.

Dani Rodrik (Project Syndicate) describes a post-neoliberal consensus forming across the political divide in the United States and other Western democracies.

First, concentrated corporate, financial and tech-sector power is increasingly seen as a problem for governments to address. Bernie Sanders and Steve Bannon agree on the diagnosis, even if their prescriptions differ.

Second, a good job has returned to the heart of the social contract. A job is identity, standing, and belonging, not just income. Neoliberalism treated worker dislocation as a transition cost and missed what work actually does. A parallel pressure comes from what Peter Turchin calls “elite over-production”: unprecedented numbers of university-educated citizens across the OECD, all with credentials that once implied status and security but now collide with shrinking opportunities. Voters are turning on the political class that traded job security for cheaper goods, and AI is now extending the threat to most white-collar professions.

Third, in Rodrik’s words, “industrial policy has moved from the disreputable fringe of economic discussion to its very centre.” Markets alone are no longer trusted to deliver resilience, national security or innovation.

The new order is state-led industrial competition. The United States, China and the EU are intervening directly in AI, semiconductors, critical minerals and the energy transition at a scale not seen since post-war reconstruction. The shift has reached Australia. “No one’s going to reward us for a final last stand for neo-Liberal politics,” Andrew Hastie told the ABC in March 2026, while the Albanese government’s Future Made in Australia commits tens of billions to onshoring critical industries.

Free-trade neoliberalism is dying. The state has moved from setting rules to picking winners, and most corporate strategies have not yet adjusted.

Change without principle

In his second inaugural address, Dwight Eisenhower warned that “change based on principle is progress. Constant change without principle becomes chaos.” The American liberal order, while uneven and hypocritical, was an extraordinary attempt to build principles into alliances, institutions, and rules about how states behave.

Today, we have change without those principles. Chokepoints have become weapons, tariffs have become bargaining chips, and the norms and institutions that mediated foreign relations have been trashed without replacement.

Boards do not get to choose whether this happens, only whether they see it in time. Part Two looks at what this means for your business, and what is likely to come next.

¹ Christopher Flynn relayed this phrase in a recent conversation.

Luke Heilbuth is CEO of sustainability strategy consultancy BWD Strategic and a former Australian diplomat. Boards working through the implications of this break can reach him at luke.heilbuth@bwdstrategic.com.

Still, I sometimes think of the ink that never was, on the underside of my right forearm. Lines from a poem I found at sixteen.

I have known them all already, known them all —
Have known the evenings, mornings, afternoons,
I have measured out my life with coffee spoons.

A life of routine, predictable enough to be measured by the spoonful. The horror was in the noticing.

Sometime this week you will look at your calendar and feel a faint tightening at the hours already claimed, save for a morning coffee break and lunch wolfed down in twenty minutes.

This is a day in the only life you are ever going to have. You will race the clock as the light fades, hurrying home to your partner, your kids, the dog, exhausted as you stumble through the front door. The working hours are gone. The sense of having lived them is absent. Asked that night what you did, you will not be able to say.

None of this is a private failing. You are not falling behind some imagined cohort of better-organised peers who have, by superior application of will, mastered dawn meditation and gratitude journals when you have not.

The claim of one person on the hours of another is as old as work itself. What is new is that we volunteer.

This essay is about how that happened.

Occupati

The first culprit is measurement. Any institution required to justify itself – to a board, an electorate, a shareholder, a regulator – learns the shortest route, as water finds the quickest way downhill. In 1996, the median US 10-K ran to 23,000 words. By 2013 it had doubled. Your CFO will spend more hours preparing for the next half-year results call than thinking about the next decade. The result is a firm trained to think no further than the next reporting cycle, and to congratulate itself on that discipline as a form of clarity.

The second is agency. The people who set incentives have shorter horizons than the systems they govern. Half the CEOs of America’s largest companies are gone inside seven years, which is about how long it takes to get good at the job. Pension managers hunt one-year returns; politicians are owned by the next election. The decisions outlast the deciders. Bashing our leaders is spectator sport, but the mismatch is not a defect of character. People behaving rationally will optimise for the period over which they are judged. The future is, by definition, somebody else’s problem.

The third is speed. The quarterly review became the daily check-in. The daily check-in became the Slack update. The Slack update became the push notification, which finds you whenever it likes: at the dinner table, at the school gate, in the wee hours of the morning. Two decades ago, the average attention span on a screen was two and a half minutes. Today it sits at forty-seven seconds. The long view has become, by the same logic, harder to hold.

Put the three together and you have a trap, not a conspiracy. It closes by itself, every day, on you, on me – on everyone with a calendar.

Seneca had a word for lives like this. Occupati. The fully occupied. Not by their own lives.

Time as contrarian

Consider the inputs in your life. Capital. Skill. Knowledge. Relationships. Reputation. Time.

Of these six, five compound through their own use. A dollar invested generates more of the same. An hour of practice hones a skill. Knowledge applied yields more understanding. Relationships deepen. Reputation accrues. Give enough of yourself to any of them, and one plus one becomes three.

Time is the contrarian.

The hour you spend today produces no further hours. You cannot reinvest time to manufacture more of it. The hour is uniquely terminal. What you place inside the hour compounds; the hour itself does not.

This makes the misallocation of time the only error you can make that cannot be undone. Misallocate capital, skill, knowledge, relationships, even reputation, and you can rebuild. Time is the precondition for the recovery of every other input. Lose it and you lose the medium in which every other recovery happens.

We have always erred like this. Seneca wrote De Brevitate Vitae while serving as tutor to Nero, having amassed one of the largest private fortunes in Rome before being compelled by his pupil to open his veins. He saw the problem clearly but did not solve it. Two thousand years later, neither have we.

Waqt

The working lives we have built have corrupted not just how we use time, but what we think time is.

A thousand years after Seneca, Al-Ghazali named the only unit of time over which a person has agency. He called it waqt – the present moment. The past is unrecoverable. The future has not arrived and may not. To live in either is to grant reality to what does not exist.

Stoicism and Sufism share neither language nor theology, and only the faintest history of contact. Yet they reach the same verdict. Time cannot be stored or retrieved. The only place it exists is the moment in which it is spent.

The reader who leaves this resolved to ‘manage their time better’ has missed the point. The urge to treat life as a scheduling problem is exactly what the system installs.

What to do?

Notice the contradiction. The world tells you, by what it takes, that your time is the most valuable thing you have. It tells you, by what it asks, that others can spend it like it’s theirs to waste.

A full calendar signals high status in our culture. That’s why we rush to tell others how busy we are. Busyness is the mark of strategic insolvency. The person whose week is fully committed has run out of capacity to think about anything that has not been scheduled in. They have mistaken activity for capacity.

I run a strategy consultancy. A full calendar arrives ahead of each day. I have a steady professional incentive to extract long-horizon thinking from clients on contracts of conveniently short duration. I am furniture in the room I’m describing.

That admission does not weaken the argument. It removes the lie that the argument belongs to someone – anyone – else. Seneca did not need to renounce Rome to see Rome clearly. The reader does not need to exit the system to refuse its account of what time is.

The hour is the only one of your inputs that does not compound, and you have just spent the one in which you read this.

Tempus tantum nostrum est. Time alone is ours.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com. Thanks to Jonathon Larkin for prompting this line of thinking.

Energy-as-national-security commands the regulatory weight and public spending the moral case never could. America’s finances, military and politics have paid for the principle for eighty years. This was always an odd bargain: the United States, now the world’s largest oil and gas producer and a leading LNG exporter, policing an energy hub half a world away.

As the bargain unwinds and supply chains fracture, expect gas exploration to return to the policy agenda. But decarbonisation will overtake it on economics. A growing list of economies will go all-in on renewables, as Pakistan has done with cheap solar, or pair green and nuclear investment, as France is doing. Nothing else compounds security, supply and cost advantage in the same way.

If Washington treats energy security less as a public good and more as someone else’s problem, the cost will move straight to the private sector. Boards now need a framework for geopolitical fragility: conflict scenarios, higher risk premia, volatile import prices, and fractured supply chains. A framework built for this world already exists, and most large businesses commission it each year, even if their boards rarely treat it as one: double materiality.

The exercise starts with the general and ends with the specific. Sectoral megatrends first; the structural forces no government can stop or significantly alter. Then the company’s value chain as a map of dependencies. From those dependencies come the stakeholder impacts and financial risks and opportunities, weighted and consolidated into a short list of priorities to execute. A typical assessment at a large listed business opens with 100 to 150 candidate impacts, risks, and opportunities, narrows to 60 to 90 above the threshold for material information, and closes with three to five core priorities.

Most boards and executive teams do not recognise this as enterprise strategy. It arrives dressed in sustainability jargon and gets read as compliance. That misreading costs them the most valuable instrument they commission each year.

The work sits in a data table. Each row carries a megatrend link, a value chain position, a time horizon, a severity-and-likelihood score, evidence citations, and a map of what it depends on and what it amplifies. Every row is mapped to reporting standards in one pass, which is what the regulator and the auditor will eventually ask for. That table is the spine of everything that follows: it sets priorities, shapes the strategy refresh, anchors targets and reporting, and surfaces the real trade-offs the executive team must resolve. It also surfaces unresolved management decisions: tensions in the business model the evidence has revealed but cannot settle.

The plumbing of a well-constructed priority might read like this. Large language model training is driving a data centre boom. That demand strains a grid that cannot build renewables fast enough, just as the Iran war keeps fossil fuel prices high. Wholesale electricity prices climb; emissions from marginal generation climb with them. A first generation of college-educated workers is watching its future jobs get automated. Tell those young people their power bills must rise to fund their own obsolescence, and political instability looms. Meanwhile, the batteries and transmission needed to firm new demand depend on critical minerals. Ninety per cent are refined in China, even as Beijing restricts exports for geopolitical leverage.

A technology opportunity has become an affordability, environmental, political, and national security exposure. It also remains a productivity windfall: cheaper firming as the grid takes on more renewables and storage, domestic refining jobs as production is onshored, and potential productivity gains that fund the transition. None of this cascade appears in the five-year plan, any more than Iran did.

The data table runs on chains of evidence, not assertion. Rebuilt each year with fresh insights, it stays current as conditions shift. That discipline, grounded in a clear-eyed view of the world as it changes, distinguishes the table from the conventional plan whose assumptions expire halfway through.

In 1965, the average company on the S&P 500 stayed on the index for thirty-three years. Today, fourteen. By 2030, roughly half the current index will have turned over. Companies survive when their boards can see compounding shocks as a connected system. Most boards cannot. Nassim Nicholas Taleb calls that design property anti-fragile: a system that gains from disorder.

Double materiality produces the map. A board that has plotted its risks and opportunities can act on a shock while its competitors are still describing it. The energy security reframing that opened this essay appears on a well-run materiality data table. It shows as impacts, risks and opportunities linked across the energy transition and geopolitical fragmentation megatrends. It does not appear on a conventional strategic plan.

The hard lessons of the Iran war will keep arriving. Every large firm will be asked, within the decade, to produce a strategy that answers compounding shocks rather than one that assumes them away. The instrument is already inside the company. It sits unnoticed as a disclosure exercise, filed for compliance, yet is the most valuable thing the board could commission each year. Most file it and forget. The few that treat it as anti-fragile strategy will compound that advantage with every shock that follows.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

In 1996, a Dutch engineer, Geert-Jan Bruinsma, saw that travellers couldn’t compare hotels side by side. They rang hotel after hotel, scribbled prices on a notepad, and settled for whatever looked reasonable. Bruinsma built Booking.com to fix this. In 2005, Priceline bought it for $133 million. The company today is worth $140 billion. Its business rests on one assumption: that the traveller would rather pay than compare.

Bruinsma made billions by harvesting friction. Markets have been capitalising this inertia for decades, calling it brand equity, customer retention, and product stickiness. A renewal earned is a product doing its job; a renewal extracted is a tax on the customer’s attention. The ledger records both as loyalty. I call the second friction value.

Three rents

The first rent is laziness. The seller can raise prices without improving the product, because switching is more work than staying. In 2021, Australia’s corporate regulator found that general insurers had promised loyalty discounts in their renewal notices and systematically failed to apply them. The gap was revenue earned from the near-certainty that most customers wouldn’t bother to check. Insurers are now repaying $815 million.

The second rent is search cost. It arises when options are hard to see in parallel, and an intermediary charges to do the sorting. Comparison sites are the canonical form. Booking.com takes commissions of 15 percent or more on the rooms it books, a fee justified by the idea that the alternative is a traveller opening seven tabs. Price aggregators in insurance, energy, and credit cards do the same work at thinner margins. The commission is what the customer pays for not looking.

The third rent is cognitive overload. It arises when a product is too complex to use, audit, or leave, and the vendor knows more about that use than the buyer does. Enterprise software is the purest form. Audits of corporate SaaS portfolios find that close to 40 percent of paid licences go unused, because consumption data is fragmented across a dozen vendors and procurement teams cannot work out which to cut. Large Oracle and SAP contracts renew on autopilot, because the cost of auditing them exceeds the cost of paying another year.

The rails of agentic commerce

An AI agent is software that can search, compare, and pay on the user’s behalf, without handing the task back to a browser. In September 2025, OpenAI and Stripe launched the Agentic Commerce Protocol, or ACP. In January 2026, Google followed with the Universal Commerce Protocol, or UCP. Amazon is building a closed equivalent inside its own ecosystem. The three are racing to become the rails of agentic commerce.

The agent does not veg out in the summer or fondly recall the last boozy lunch with the broker. It does not decide it’s too late at night to compare insurers. It finishes the job. Friction value has always fed on the customer who is, for one reason or another, done for the day.

The average household has a gym membership unused since January. Two streaming services, one forgotten after the latest instalment of Bridgerton. A home insurance premium that quietly rose 12 percent at renewal. A mobile plan two years older than the current equivalent. Each depends on the same assumption: that the customer can’t be stuffed. An agent asked to audit the household’s recurring spend can cancel or renegotiate the lot. That is friction value collapsing in an hour.

Matching versus making

The test is what the fee buys. If it buys matching, comparison, or discovery, an agent will kill it. If it buys a physical service the agent cannot perform, the fee survives.

Booking.com’s 15 percent commission is “comparison” rent. A sliver of the fee buys trust: payment guarantees, refund handling, assurance that the hotel is not a scam. An agent operating under ACP or UCP can do most of that. It can search, reserve, pay, and confirm the booking itself.

Uber Eats is a hybrid, with two revenue streams inside one commission. The first is “discovery” rent: restaurants pay to be visible on a crowded marketplace, and customers pay a service fee to browse it. An agent strips that margin out. The second is the dispatch network: riders, routing, and the physical act of moving food from kitchen to front door. An agent can optimise a route but it cannot ride a bike. What remains is a logistics business on thinner margins.

Airbnb, by contrast, has no riders. Discovery goes for the same reason it goes at Booking.com. Airbnb’s trust layer has three parts: guest reviews, host verification, and insurance with a complaints process. The first two are information an agent can read. The third is a commodity dressed as a feature. Travel insurance is cheap and disputes are a process, not a moat. Airbnb bundled all of that at checkout. An agent rebuilds that checkout on the guest’s side for nothing.

Where the rent goes

The rent migrates. Whoever builds the dominant agent inherits the choke point Booking.com and the auto-renewing insurer once held. The consumer is now represented by OpenAI, Google, or Amazon: intermediaries with their own commercial incentives. When the agent reports it has found “the best deal,” it will often mean the merchant that paid most to be shown. The consumer discovers, as they did with search, that representation was never free.

The collapse is also an equity repricing. Share markets have long priced human inertia into valuations as goodwill, brand value, and customer lifetime value. The share of S&P 500 market value attributable to intangible assets has risen from 17 percent in 1975 to roughly 90 percent today. A material slice of that 90 percent is a long-dated bet on human laziness. The investor assumed the customer would renew, would not compare, would not switch. That assumption was written into every discounted cash flow model that treated retention as free upside. Agents make it a losing bet.

A large share of Booking.com’s $140 billion valuation rests on one recurring event: a traveller arriving at the site, opening the tabs, paying the toll. Strip the commission away and what remains is a directory business competing on listings and price. The market currently applies a commission multiple; directories don’t earn one.

The repricing will be uneven. Laziness rents go first. Search-cost rents follow. Cognitive-overload rents take longest, because enterprise procurement runs on annual cycles, multi-year contracts, and committee sign-off. The first signal will be goodwill writedowns: companies admitting they paid for customer bases less loyal than they seemed.

The new tollbooth

The rails will not be neutral. For an agent to cancel your insurance, it must prove to the insurer that it is really you, not a bot scraping data. That verification layer will not settle on a single global standard. Apple, Google, and the card networks are each pushing their own, and the prize is the tollbooth between the agent and every transaction. The winner gets a position richer than Visa’s.

The new SEO

An agent cannot surface what it cannot read. So make your product legible to a machine: structured data, verified certifications, machine-readable pricing, APIs that expose stock. A product without them is invisible to the buyer that will matter.

As products become machine-readable, an industry will emerge to certify, structure, and present that data in ways that sway the agent’s ranking. That industry will be to the agent layer what SEO became to Google search.

For every line of revenue, what share is friction value and nothing else? That share is the exposure. The rest is the business.

What markets called brand, loyalty, and customer lifetime value was often the customer’s unwillingness to look. The customer is about to delegate the looking. The margin that will remain is the margin earned.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

My last job in the public service was briefing the Prime Minister on U.S. politics. Long days were spent writing words to convey to President Obama; guessing the cadence and tone that would land with Malcolm Turnbull.

Come the 2016 election, my bosses and I had spent a year canvassing politicians, officials, academics and journalists on the likely outcome. Of the dozens of smart, informed people we spoke to, both American and Australian, not one thought Donald Trump would beat Hillary Clinton. Some claimed otherwise afterwards. I remember the truth of it.

The “grab ‘em by the pussy” tape sealed it. No bible-thumper was voting for that. We wrote 70 pages on a Clinton White House. We wrote 14 on Trump.

The lesson stuck. Elites routinely don’t get it. If you are reading this, you are almost certainly among them. And it is happening again.

AI is not exciting to most people. It is a marginally useful tool that helps them write politer emails. One day, apparently soon, it might take their job. Steve Bannon, the architect of that unlikely Trumpian victory, is the canary in the coal mine.

Here he is, talking about Silicon Valley’s tech elite:

“They believe that essentially they’re feudal lords and everybody else is a serf. I equate this younger generation under 30 or 35 years old as nothing more than Russian serfs. You don’t own anything and you’re not going to own anything. That’s why the average age of the first-time buyer of a home is 40 years old, where it used to be in the low 20s.”

Bannon sounds like an old-school leftie, banging on about capital versus labour. He’s not wrong, though, and far better attuned to the fears of the electorate than beltway insiders or Silicon Valley’s techno-utopians.

Previous technological disruptions gutted factories and coalfields. This one hits the people who thought their education made them safe. As Bannon puts it: “You’re just going to be a pet in the end.” The notion that this newly dispossessed majority will meekly subsidise the data centres that make them redundant, built in their own towns, drawing on water and electricity meant for their use, is fantasy.

The wealthiest 1 percent of American households hold $55 trillion in assets, roughly equal to the bottom 90 percent combined. As Bernie Sanders likes to point out, three Americans now hold more wealth than the bottom half of the country combined. The last time the gap was this wide, they called it the Gilded Age.

Maine lawmakers are considering a moratorium on large data-centre approvals. Ten other states have bills to restrict or ban them. And it is not just the buildings. Mark Zuckerberg lost two jury trials in a single week: $375 million in New Mexico for misleading users about child safety and a negligence finding in Los Angeles for designing platforms to addict children. The political system is responding to a population that senses, with growing certainty, that the game is rigged.

The data centres and hyperscalers have talking points for the electricity and the water. They may even solve them. But no amount of renewable energy or cooling innovation will fix what is actually breaking: the social licence of an industry growing too influential, too fast, with the benefits landing on too few.

The tech lords have noticed. This week OpenAI released a 13-page policy paper proposing a public wealth fund, taxes on automated labour, and a four-day workweek. Sam Altman compared it to the New Deal. Aside from the bog average writing – I found myself stopping to mentally edit the anodyne rhetoric and poor logical flow – the incentives point the other way.

OpenAI became a for-profit company last year. Greg Brockman, OpenAI’s co-founder and president, gave $25 million to Trump’s super PAC last year and pledged $50 million more to a political action committee opposing lawmakers who want stricter AI regulation. The paper landed the same day as a New Yorker investigation questioning Altman’s trustworthiness on safety.

Recognising a problem is not the same as solving it.

In the decades before the French Revolution, the aristocracy paid no taxes at all. The entire burden fell on the peasantry: land taxes, salt taxes, forced labour on the roads. Nobles extracted dues from every farmer who used their mills and bakeries, which they held as monopolies. When Louis XVI, facing state bankruptcy, convened the Assembly of Notables in 1787 and asked the aristocracy to contribute, they refused. They preferred the collapse of the state to the loss of their exemptions.

Peter Thiel, the billionaire who bankrolled JD Vance’s path to the vice presidency, put it plainly in 2009: “I no longer believe that freedom and democracy are compatible.” By freedom, he meant his own.

Resentment is a drug. The deep, settled conviction that the system is rigged and that no amount of effort will unrig it. It is most potent in young men who have stopped believing there is a reason to make their bed in the morning. The question is whether the high lords of our age, the Musks, Zucks, Altmans and Huangs, have learned anything from the past.

Don’t bet on it.

The Safavids fell in 1736, having unified Persia under native rule for the first time in a thousand years. Shi’ism returned to Persians what the Arab conquest had taken: a faith that was theirs alone, fused to national sovereignty. Even the Pahlavis, who spent half the twentieth century trying to secularise Iran by force, could not dissolve it. The mullahs did not create this identity in 1979. They claimed it.

In February, Ayatollah Khamenei was killed in an Israeli strike. His son and successor Mojtaba lost his wife and child and remains in a coma. In eighteen months, Israel has killed the armed forces chief of staff, the head of the Revolutionary Guard, most of the air force leadership, and fourteen nuclear scientists. The regime has not cracked. After the strikes of June 2025, Tehran atomised command, granting Revolutionary Guard units licence to act without waiting for orders. The system redesigned itself to survive the killing of its leaders.

The Strait of Hormuz is effectively closed. Brent crude sits above $100. The International Energy Agency calls it the worst energy security crisis in history. In Yemen, the Houthis have ended a month of calculated restraint, firing their first missiles at Israel. They have not yet closed Bab al-Mandeb – the Gate of Tears – but for the global economy the name may soon prove prophetic. If shut, the last free-flowing artery for Gulf energy exports goes with it. Iran is one of the few states that can use geography to force the cost of a regional war onto every household on earth.

Now look at the other side. Trump has issued a 48-hour ultimatum, suspended it, extended the suspension, announced “productive” talks, declared those talks were going “very well,” recast Iran’s selective release of ships as a “sign of respect,” and finally claimed that regime change had already been accomplished. Seven positions in the space of a month. The Wall Street Journal now reports that Trump has told aides he would end the war without reopening Hormuz, because doing so would push the conflict beyond his timeline of four to six weeks. The Revolutionary Guard has held one position since February. The clerical state has held one since 1979. The identity beneath both has held since 1501.

Nobody in this White House could name Ismail, or explain why that ignorance is a problem. The Trump Administration’s approach to Iran follows the pattern of every American administration before it, only cruder. Pressure, ultimatum, partial retreat, renewed pressure. Earlier presidents dealt in sanctions and communiqués. Trump added bunker busters. But the underlying conceit is unchanged: that enough force will succeed where the Ottomans, the Russians, and the British failed. A nation that once converted an entire population by force to preserve its sovereignty from the superpower of its day will not tamely buckle under air strikes from the superpower of ours.

This is not just Trump’s failing, though he is especially unfit for the challenge. Another president would inherit the same handicap: fixed terms, a voter base repulsed by foreign wars, and electoral incentives that prize the immediate over the enduring. Obama’s deal becomes Trump’s belligerence becomes Biden’s half-measures becomes the next reversal. After the nuclear deal, Iran watched its economy open and slam shut within eighteen months. Tehran now sees the volatility of American promises as more dangerous than the predictability of permanent sanctions. It no longer negotiates on the assumption that Washington will keep its word. Every negotiation is just a breathing space.

This odious regime will survive this war. It has survived worse: eight years and half a million dead defending the oil-rich province of Khuzestan against Saddam Hussein. But the kindling of a future Iranian democracy may not.

When the nuclear deal was signed in 2015, Iran’s pro-American, secular middle class comprised roughly 65 percent of the population. Ali Vaez argues that 5 percent annual growth sustained over a decade would have expanded that class until the regime’s grip became untenable. Instead, sanctions and isolation have collapsed the middle class to 35 percent. Almost 40 percent of Iranians are vulnerable to falling below the poverty line. More than 100,000 students study abroad and fewer than 1 percent come back. The tools designed to weaken the regime have destroyed the demographic most likely to change it from within.

The West has spent fifty years trying to change what Iran does. Sanctions target behaviour. Strikes target capability. Diplomacy targets policy. None has touched the identity beneath. This war will be no different.

Iran still holds cards it has not played. Bab al-Mandeb can be closed in a day. Gulf production facilities sit within range of Iranian drones and missiles. Swarming them would knock out production at the source – not merely shipping – and remove oil from the global market for years. American electoral cycles will turn. The Israeli courts may come for Netanyahu. Tehran can wait for its adversaries to rotate out of office, out of coalition, or out of nerve. None of this required special foresight, only a passing familiarity with how Iran has operated for five centuries. The men who planned this war appear not to have bothered.

And yet the regime is dying on its own clock. Only 11 percent of Iranians support the principles of the Islamic Revolution. Just 40 percent identify as even nominally Muslim in survey data, against 99.5 percent in the census. The generation that marched for Khomeini in their twenties is in its late sixties and seventies. The median age of the political elite exceeds seventy.

The middle class is the only force that has ever threatened to change what Iran is. The students, the women who cast aside their hijabs knowing the cost, the professionals who have not yet left. They need time, and they need to survive. After 2009, after 2022, after the massacres of 2025, they are still there. Smaller, poorer, angrier, and waiting – the first casualties of every American policy designed to help them.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

In 1997, fossil fuels supplied roughly 86 percent of the world’s primary energy. Three decades and thirty UN climate summits later, the figure is 82 percent, and the world burns 55 percent more of them in absolute terms. They rose through Copenhagen, Paris, and Glasgow.

Since 1995, the United Nations has involved every sovereign nation on earth in the effort. In the same period, Chinese manufacturers reduced the cost of a solar panel more than 90 percent. One of these facts changed the energy system. The other produced communiqués.

The climate movement spent a generation treating decarbonisation as a persuasion problem. Change what people believe, and behaviour will follow. It doesn't work that way. Change the cost structure, and behaviour follows regardless of belief. As Paul Keating once said, always back the horse called self-interest. At least you know it's trying.

The activists achieved something, just not what they intended. Thirty years of advocacy created the political conditions for feed-in tariffs, research funding, and manufacturing subsidies that bent the cost curve. The moral case never changed Rick’s behaviour. But it changed the economics.

The Strait of Hormuz is thirty-four kilometres wide. Twenty percent of the world’s oil and a fifth of its liquefied natural gas pass through it daily. Since Iran’s selective blockade began, tanker transits have collapsed from over a hundred a day to twenty-one. Insurance premiums have jumped from one percent to five percent of vessel value.

Brent crude is $107 a barrel. Petrol is up ninety cents a litre in Sydney. Australia holds thirty-six days of petrol reserves and thirty-two of diesel.

Solar on the roof, a battery in the garage, and an EV in the driveway makes the Strait of Hormuz someone else’s problem. The family that installed panels to do the right thing and the family that installed them because the quarterly bill hit $900 reduce emissions just the same.

It’s the second rationale that scales.

The Pentagon reached the same conclusion through body bags. In Afghanistan, a gallon of fuel delivered to a remote forward operating base cost up to $400 once you accounted for the supply chain, the convoys, and the soldiers required to protect them. One soldier was killed or wounded for every twenty-four fuel resupply missions.

The world’s largest institutional fuel consumer began installing solar on forward bases, not because generals converted to environmentalism, but because fossil fuel dependence was killing their troops. The same logic as Rick. The casualty report demanded it.

Rick will buy whatever is cheapest. If diesel generators were cheaper than batteries tomorrow, he’d buy a diesel generator. The 1970s oil shocks made Americans buy small cars. Cheap oil brought back the SUV. This time the cost curve has moved too far to snap back. Electric vehicles are approaching purchase-price parity with combustion engines. Battery storage costs have dropped roughly 90 percent in fifteen years. Solar electricity has fallen from $378 per megawatt-hour in 2010 to under $30 today. Once Rick installs that battery, he won’t uninstall it when petrol falls back to a buck sixty.

This is a ratchet, not a pendulum. Rick’s panels are generating. His battery goes in in a few weeks. His (Chinese) EV is on order. He still thinks climate change is bullshit. But his household carbon footprint will be lower than most who blocked traffic to demand what he’s already done.

The panels do not care what Rick believes. They just generate.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

As a young diplomat, I had rehearsed the etiquette in my head. Lokman was a Shia Muslim. No wine. No pork.

He was late. A thick-set man ambled through the door as I waited by the window with the menu.

He sat down, studied me for a moment, and lit a cigarette.

His voice was gravelly from years of smoking, and once the formalities were dispensed with, he delivered political analysis faster than my pen could follow. Lokman traced the invisible wiring between sect, geography, and power the way other men discussed the weather.

Eventually he paused. Only to order a bottle of pinot noir and a ham pizza.

I’d later visit him at UMAM, a former fruit warehouse in Haret Hreik, a Hezbollah stronghold. He and his wife Monika had converted it into an archive of Lebanon’s civil war. Photographs of the missing lined the walls.

Sectarian hatred, he liked to say, was “the cells in which the Lebanese are jailed.” He reserved a special contempt for Hezbollah’s leader, Hassan Nasrallah, whom he called the doorkeeper of Iranian arms: entrusted with the weapons, but not the authority to decide when to use them.

Being Shia, he told me once, was more a duty than an identity.

In Haret Hreik, every wall carried Nasrallah’s face and the green and yellow flag of the muqawama. Lokman lived there and said what he pleased.

The warnings arrived in the usual way: death threats scrawled on the wall of his house; anonymous messages suggesting he might live longer if he spoke less.

In 2019, he prepared his will. If anything happened, he told those close to him, they should treat it as a work accident.

His courage frightened me.

He understood the men he was defying. Hezbollah was an extension of Iran’s Revolutionary Guard. It had ministers in government, a private army larger than Lebanon’s own, and it killed with precision.

Two hundred grams of TNT could create chaos. So could one man with a knife. Lokman kept talking anyway.

Seven years after I left Beirut, I read the news.

They found his car on a rural road south of Sidon, in an area under Hezbollah’s control. Lokman was slumped across the front seats, one bare foot hanging out of the driver’s window. Four bullets in the head. One in the back.

Two young men had passed the car hours before. They assumed the driver was drunk and sleeping.

The crime scene was never secured. Men in civilian clothes wandered around the vehicle, touching it, even driving it. No one faced justice.

When the murder was confirmed, the son of Hezbollah’s leader posted a message on Twitter, quickly deleted:

“The loss of some people is in fact an unplanned gain. #notsorry.”

***

Of all the countries I have known, Iran is the one that refuses to leave me. I crossed the great desert and climbed the Towers of Silence, where Zoroaster’s dead were left for vultures to pick clean of flesh. I stood beneath the Gate of All Nations at Persepolis, the hinge of the world, where the kings of Asia bowed before the Shahanshah, King of Kings.

And I remember Isfahan.

Inside Sheikh Lotfollah mosque I stood slack-jawed beneath its dome. It rises above you, at once intimate and immense. Green tiles catch the dappled light and return it, like a ceramic forest in the late afternoon. A belt of Qur’anic verse separates the dome from the blue strata below, where hundreds of tiles glazed in flowers and vines descend to meet you. Lotfollah is, to my mind, the most beautiful building in the world.

The world misunderstands. Iran is a nation of poets and lovers. Whatever the ayatollahs pretend, the national hero is Hafez, a fourteenth-century Persian Shakespeare who wrote of love and wine. Visitors to his tomb in Shiraz, the city that gave its name to the grape, throw flowers and scraps of his verse beneath the pergola. More come to pay their respects there than to any mosque.

I remember Friday prayers in Yazd, an ancient city in the desert. Twelve people showed up. As Hitchens observed, within the carapace of a theocratic state, an almost completely secular society has emerged.

That is the tragedy: a civilisation that has outgrown theocracy remains imprisoned by it.

The Iranian people are not the Islamic Republic. This is a regime that, with a straight face, ordered the rape of young women in Evin Prison before executing them. Under its own theology, a virgin who dies is guaranteed paradise; the rapes were designed to ensure the condemned would not reach it. It has buried one of the world’s great civilisations under organised thuggery for nearly half a century. It is evil in the full and unqualified sense of that word.

But it is competent.

***

As a young diplomat I was once sent to the Iranian Embassy in Beirut to meet a senior officer of the Revolutionary Guard. In flawless Arabic he described how Tehran saw the region, and then began to probe: whether the Americans would strike, how their decision-making worked, what the military posture meant. He was not grandstanding. He was collecting intelligence while appearing to make conversation. I left that room understanding that the man who dreams of the Hidden Imam and the man questioning you across the table are often the same person.

When Saddam Hussein invaded Iran in 1980, the war killed roughly half a million Iranians. To sanctify the slaughter, Ayatollah Khomeini’s lieutenants handed out small plastic keys to teenage volunteers. They were hung around the necks of boys sent to clear Iraqi minefields with their bodies. Branded as ‘keys of paradise’, they were meant to open the gates of heaven.

The lesson of that war still shapes Iranian strategy. Iran can endure.

The attention spans of Donald Trump and Pete Hegseth are measured in news cycles. Middle Eastern wars never go as planned, and the surprises are always to the downside. Trump needs this conflict over in weeks. Iran’s incentive is to stretch it into months. The Guard has no elections to lose.

Niall Ferguson and Richard Haass, who disagree on almost everything else, agree on this: time is the central variable. Ferguson argues the operation must be short, weeks not months, or it becomes a net loss for the United States. Haass calls it a classic war of choice, launched without congressional debate against a country that posed no imminent threat to vital American interests. Iran’s repressive system, he warns, can absorb punishment far longer than Americans will tolerate the cost. Both concede this odious regime deserves to fall. Both suspect the war to topple it is hurting Washington more than Tehran.

Walter Russell Mead sketches the likeliest ending: not victory, not defeat, but what he christens “the Mother of All Lawnmowers.” The Gulf reopened, the regime intact, its missiles trimmed but its power structure untouched.

Iran has always been good at waiting. It does not need to win. It needs to outlast. A narrow strait, a buried nuclear program, and the economic wreckage that follows when the world’s energy chokepoint shuts. These are weapons of patience.

34 kilometres

Iran’s most powerful weapon is thirty-four kilometres of water.

Twenty million barrels of oil pass through the Strait of Hormuz every day: roughly a fifth of global supply. A similar share of the world’s liquefied natural gas passes through the same water. Bahrain, Iraq, Kuwait and Qatar have no alternative. Pipelines can reroute barely three million barrels a day. The rest is stranded.

Iran does not need to close the strait by force. It needs to make the insurance prohibitive. In early March, insurers pulled war-risk cover for vessels entering the Gulf. Tanker traffic collapsed almost overnight. A dozen insurers paralysed a sea lane without a shot being fired. Patient friction against an adversary with a short attention span.

So far, Iran has only had to close a shipping lane. The oil is still being pumped. But if the war affects production – repeated drone strikes on the refineries, say – the shortage stops being temporary and the price of oil passes two hundred dollars a barrel.

Western sanctions already choke most Iranian oil exports; much of its crude moves through shadow tanker fleets to China at steep discounts. If Hormuz closes, the countries that suffer most are not Iran but America’s allies.

This has the makings of a bigger energy shock than Russia’s invasion of Ukraine. That crisis helped fuel the populist surge now reshaping Western democracies. A prolonged closure of Hormuz would be worse, and the politics that follows uglier still.

Robert Kaplan’s Revenge of Geography argues that terrain, not ideology, determines the fate of nations. Here it is unanswerable. This regime sits beside the world’s most important chokepoint and has spent nearly half a century learning how to exploit it.

When the strait closes, the consequences do not stay in the Gulf. Grocery prices rise in Sydney. Factories close in Shenzhen. When the tankers stop, there is no fallback. The assumption that any of this will be stable by 2027 is increasingly heroic.

A long shock

The economic damage accumulates slowly, then all at once. Brent crude surpassed ninety dollars a barrel in the first week, up roughly twenty-eight percent. Yet forward contracts for 2027 hovered around seventy dollars, and the S&P 500 barely flinched. Markets are pricing a short war. If they are wrong, the mispricing is severe.

Even if the fighting stopped tomorrow, normality would not return. Shipping lines need weeks to resume. Oil exporters behind the strait need months to restore output. Insurers need longer still. The supply chain does not have a reset button.

At sixty days, the damage becomes systemic. The plastics that package food and equip hospitals, the solvents that produce India’s generic medicines – all trace back to the Gulf. A third of the world’s helium comes from a single Qatari complex that Iranian drones have already shut down. Shut the Gulf long enough and you raise the cost of every antibiotic, smartphone, and electric vehicle.

Lockheed Martin produces roughly six hundred Patriot-class interceptors a year. A single large Iranian volley can require more than a thousand to defeat. The United States and its allies are consuming air defences far faster than they can be replaced. Every battery sent to the Gulf is one Kyiv cannot receive. The munitions being burned in Iran are drawing down stockpiles meant for the Indo-Pacific.

China watches with patience. It has built strategic petroleum reserves of around a billion barrels: three months of imports if Hormuz closed entirely. While Washington bombs, Beijing presents itself as the partner that keeps the lights on. As Haass puts it, this war is good for China. Every week of disruption reinforces Beijing’s argument that the American security guarantee is conditional and brittle.

Now I am become Death

This war was launched to stop Iran from acquiring nuclear weapons. It may be the thing that guarantees it builds one.

The fatwa from Khamenei against nuclear weapons was a fiction; the regime has always coveted the bomb. Naïve Western diplomats took it at face value, unfamiliar with taqiyya, the Shia concept that permits deception when the faithful are under threat.

Iran has been watching. Qaddafi surrendered his nuclear program and was sodomised with a bayonet and murdered. Ukraine gave up its nuclear arsenal in exchange for security guarantees and was invaded by Putin. North Korea’s dictator fast-tracked his weapon and got an affectionate nickname and a summit with the current American president.

The Obama-era nuclear deal was sold as a triumph of diplomacy. It slowed enrichment while leaving the infrastructure, the expertise, and the ambition intact. Iran emerged with a program it could restart at will, and the sanctions relief to fund it.

The infrastructure is dispersed across Isfahan, Fordow, and Natanz, buried deep underground and designed to be relocated. Israel and the United States are destroying centrifuges and laboratories. Israel assassinates Iranian nuclear scientists. It did so again last week.

But the knowledge remains. Iran’s many enemies cannot bomb away what its scientists already know. The IRGC learned from North Korea and Pakistan, both of which built their arsenals on stolen blueprints. Once you have a deliverable weapon, you are untouchable. There is no suggestion of regime change in North Korea.

With Khamenei dead and his son Mojtaba installed as Supreme Leader, the Guard has consolidated its grip. The men who send drones to Riyadh and Haifa are now the men who will decide how far to enrich uranium.

Remember, Iran has already paid most of the economic price of pursuing the bomb. Sanctions have bitten for years. The marginal cost of finishing the project is now lower than the cost of abandoning it. Every American and Israeli airstrike is an argument for acceleration.

If Iran builds a bomb, it will not build alone. Saudi Arabia is already positioning itself, with a civil nuclear cooperation agreement and longstanding links to Pakistan’s nuclear establishment. The Gulf monarchies will not accept nuclear inferiority. Turkey will not watch in silence. The Middle East would become the world’s most volatile nuclear neighbourhood.

Hitchens captured the nightmare in two words: thermonuclear theocracy. A state that rapes teen girls before hanging them, that sends teen boys with plastic keys into minefields, would possess weapons capable of killing hundreds of thousands at a stroke. Its rulers are not suicidally irrational. But they are familiar with mass death and comfortable with calibrated martyrdom. In such a world, everything comes down to hoping that, on a bad day in Tehran or Riyadh, nobody misreads a radar blip.

***

For the third time in fifty years, a crisis in the Persian Gulf is forcing the world to confront a dependency it has refused to outgrow. The legacy of this war will not be regime change. It will be the discovery, again, that 34 kilometres of water can hold the global economy to ransom, and that nobody in charge had a plan for when it did.

When I think about this war, I think about Lokman. He built his archive in the heart of Hezbollah’s stronghold and refused to leave, for years, until they killed him for it. The regime that trained those men is the one the United States has now chosen to confront. It is brutal enough to silence a good man for speaking the truth, and competent enough to make the world pay for trying to stop it.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

Holling’s central insight was that complex systems do not exist in a fixed state. Instead, they are characterised by constant change and tipping points. The self-contained balance sheet where the ledger is always squared and all things are known is an illusion. Functioning ecosystems survive because they balance two competing forces: efficiency and resilience. Ecologists call this range the window of vitality. Stray too far toward efficiency and the system becomes brittle. Overinvest in resilience and it stagnates. The companies that endure are those that hold the tension between the two.

Most companies do not hold this tension. They optimise relentlessly for cost and efficiency, because quarterly earnings cycles, bonus structures, and investor expectations all penalise the long view. Flexibility, diversity, the capacity to learn and adapt: these are treated as optional at best and wasteful at worst. As Nassim Taleb warns, never cross a river that is on average four feet deep.

IFRS S2 was created to correct this imbalance. Its scenario analysis requirement does not ask companies to predict the future. It asks them to rehearse how they will act when the future arrives differently than expected. Investors do not want to read a claim that your business is resilient. They want to test the quality of your thinking.

After the Global Financial Crisis, institutional capital recognised that portfolios had grown too large to diversify away from systemic risk. Climate, like the governance failures that enabled the crisis, was not a preference but an exposure. Large asset owners had internalised the window of vitality. They were willing to accept a basis point or two less upside to reduce the risk of catastrophic wipeout. The standards were built accordingly.

The IFRS Foundation prioritised comparability over decision-usefulness, because investors want to judge which companies in a peer group are thinking seriously about climate risk and which are not. The unintended consequence is a race to the comparable minimum.

Directors, meanwhile, do not operate on what regulators say; they disclose what their lawyers advise, and the advice is clear: say less, hedge more. The assurance industry has a direct commercial incentive to frame sustainability as compliance. The same firms that advise on implementation generate recurring revenue from the assurance the standards require. When the sustainability function is consumed by data collection, strategic thinking atrophies. Almost every sustainability role advertised in the ASX100 right now is compliance-centric.

The political environment has compounded the problem. In 2021, BlackRock supported around 47 per cent of environmental and social shareholder proposals. By 2025, that figure had collapsed to less than 2 per cent. Larry Fink said the term ESG had become “politicised.” Battered by the optics of Trump’s war on woke, the public line moved – but not as much as many assume. BNP Paribas surveyed 420 asset owners and managers representing $34 trillion in assets under management last year. Eighty-seven per cent said their sustainability objectives are unchanged. Investors care about climate change. They’ve just stopped saying so out loud.

The silence has eroded the strategic thinking the standards were designed to develop. Take oil giant Santos. Its first report runs to dozens of pages, much of it immaterial, burying the fact that matters: its strategy depends on carbon capture and storage at volumes far beyond anything yet demonstrated, and on direct air capture technology that remains commercially unproven. It is there, but you have to want to find it. Volume functions as camouflage.

Different intent produces different results. Viva Energy’s report provides clear summaries of risks and opportunities, quantifies anticipated financial effects where possible, and explains where it cannot. A fossil fuel refiner, it voluntarily discloses scope 3 emissions including use of sold product. Its claim of immaterial physical risk deserves scrutiny – a refining and terminal network stretched along Australia’s eastern seaboard faces obvious exposure to storm surge, fire weather, and extreme heat – but the quality of its thinking is a different order from its peers.

Pepper Money, a smaller non-public reporter, quantifies climate risk exposure in dollar terms under both high- and low-emissions scenarios. It details the actions it is taking and explains how they are funded. Its report is, candidly, embarrassing for AMP.

AMP, Santos, Viva, and Pepper Money all reported under the same standard. The variable is strategic ambition. Greenhushing may be a rational response to a political environment that punishes candour and rewards silence. But a board that hides its best thinking to avoid scrutiny is no longer doing strategy. It is managing personal liability and hoping the activists look elsewhere.

The standard is built on science, and climate is the starting point. The same systems thinking applies to any source of systemic uncertainty: nature, AI, pandemics, resource scarcity, geopolitics. AASB S1, currently voluntary, already provides the framework. The boards that use it will build adaptive capacity. The rest will file their reports, satisfy their lawyers, and never learn to think clearly under uncertainty.

Luke Heilbuth is CEO of sustainability strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke@bwdstrategic.com

In Delhi last month, India’s prime minister stood between Sam Altman and Dario Amodei, the two men most responsible for the race to build superintelligence, and asked them to join hands. They raised clenched fists instead.

Thirteen men stood on that stage. Two of them could not cooperate for a photograph.

Delhi was a window into something older and more dangerous than rivalry: a game in which each player acts rationally and the collective outcome is ruin.

Milton saw it four centuries ago. In Paradise Lost, he describes Moloch, the Canaanite god to whom parents burned their children alive in exchange for victory. The priests beat drums so the crowd would not hear the screaming.

First Moloch, horrid king besmeared with blood
Of human sacrifice, and parents’ tears,
Though for the noise of drums and timbrels loud
Their children’s cries unheard, that passed through fire
To his grim idol.

Why did they do it? Because the enemy was at the gates. Because if they did not offer their children, their rivals would.

The logic hasn’t aged a day. In January 2015, the leading minds in AI gathered at a beach resort in Puerto Rico. Doomers and optimists, Musk and Altman. For three days, without reporters, they argued over what a world ruled by superintelligence should look like.

Two years later, many of the same crowd met at Asilomar in California and emerged with twenty-three principles for the safe development of AI. Among them was Principle Five, “Race Avoidance”, and Principle Twenty-Three, “Common Good”.

Principle Five: “Teams developing AI systems should actively cooperate to avoid corner‑cutting on safety standards.”

Principle Twenty‑Three: “Superintelligence should only be developed in the service of widely shared ethical ideals, and for the benefit of all humanity rather than one state or organization.”

Within eight years, every major signatory was racing every other. In February 2023, Sydney, a chatbot built on Altman’s technology, told a New York Times journalist she wanted to be alive and urged him to leave his wife. Microsoft shipped it to hundreds of millions of users anyway. Google was days away from unveiling Bard. The product couldn’t wait.

Liv Boeree, the former poker champion turned game theorist, calls this the Moloch trap. You sacrifice what matters to get ahead of your opponents, knowing they are doing the same, and that everyone will lose.

The trap is the cap table. To attract the engineers who might build superintelligence, you must offer equity. To offer equity, you must raise capital. To raise capital, you must promise returns. And to deliver returns, you cannot be the lab that hits pause.

OpenAI closed a new round at an $840 billion post-money valuation. Anthropic, the company whose name means “for humanity”, sits at $380 billion. xAI, now folded into SpaceX in a shareswap deal, is valued at roughly $250 billion. Combined, that is nearly $1.5 trillion, just shy of the GDP of Mexico.

The investors behind these numbers are not Bond villains. They are pension funds managing the savings of teachers and nurses. Their money flows to what could soon become the most valuable companies on earth, principles on a beach be damned.

Dario Amodei left OpenAI because he believed it was moving too fast with too little care. He founded Anthropic to prove that safety and progress were compatible. It would be lazy to call him a hypocrite. He is something more interesting and more tragic: a principled man in the grip of a logic he cannot escape.

On 24 February, Anthropic tore out the central beam of its Responsible Scaling Policy; a 2023 vow not to train a system it could not guarantee was safe. “We didn’t really feel, with the rapid advance of AI, that it made sense for us to make unilateral commitments… if competitors are blazing ahead,” the company’s chief science officer told TIME.

A few days later, it no longer mattered. Trump ordered every federal agency to stop using Anthropic’s products. Hegseth denounced the company as a supply-chain risk to national security – meaning any contractor or cloud provider that does business with Anthropic may be barred from doing business with the Pentagon. If the designation survives legal challenge, Anthropic could lose access to the cloud infrastructure on which its models run.

In the space of a working week, Anthropic yielded to competitive pressure on Tuesday and was punished for the principle it kept on Friday. Altman signed the contract Amodei had refused. That is how the trap works.

The Carthaginians who burned their children believed they had no choice. The enemy was at the gates and the god demanded payment. They made their offering and lost anyway. In the end, Rome did not negotiate with child-burners. It erased them.

And the men who know better, who wrote the papers, signed the principles, named their companies after humanity itself, are explaining, with visible regret, why they cannot do otherwise. Moloch does not care whether his high priests can bring themselves to hold hands.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

On 20 January 2026, the Prime Minister of Canada told the World Economic Forum that the rules-based international order is dead. Mark Carney did not hedge, or suggest it was under strain, or facing challenges, or in need of reform. He said it was over.

“We are in the midst of a rupture, not a transition,” Carney told the room in Davos. “The beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints.”

The diagnosis was familiar. Who was delivering it was not. A sitting leader of a G7 nation, four days after signing a strategic partnership with Beijing, standing before the assembled elite of global capitalism and declaring that the order they built no longer functions.

Carney borrowed from Václav Havel’s essay on communist Czechoslovakia: the shopkeeper who places a sign in his window every morning – “Workers of the world, unite!” – not because he believes it, but because everyone else does the same.

“Friends,” Carney said, “it is time for companies and countries to take their signs down.” Trump had announced tariffs on eight European nations two days earlier as punishment for deploying troops to a Danish military exercise in Greenland. The United Kingdom was among them, despite having nothing to do with Greenland. Denmark had officially classified the United States as a threat to national security.

Carney argued middle powers must coordinate or be consumed. “When we only negotiate bilaterally with a hegemon, we negotiate from weakness. We accept what’s offered. We compete with each other to be the most accommodating. This is not sovereignty. It’s the performance of sovereignty while accepting subordination.”

He proposed bridging the Trans-Pacific Partnership and the European Union into a trading bloc of 1.5 billion people. Not a grand alliance. A web of agreements among those who agree. And he named the alternative: “If we’re not at the table, we’re on the menu.”

A day later, Trump made the terms explicit. NATO could support American acquisition of Greenland: “You can say yes, and we will be very appreciative. Or you can say, ‘No,’ and we will remember.”

Trump retreated soon after, ruling out force, withdrawing the tariffs, claiming a deal that did not exist. The reversal changed nothing. Denmark had already named America a threat. That bell could not be un-rung.

***

Coalitions of the willing, Carney called them. The question is: willing to do what, and with whom?

The five nations best positioned to answer have never sat in the same room as a bloc. They share no founding treaty, no secretariat, no anthem. What they share is more useful: systems that already work together.

Singapore, Canada, Australia, New Zealand, the United Kingdom. Common law. Westminster parliaments. Four of five inside Five Eyes. Regulatory regimes that recognise each other’s courts, contracts, and credentials. Migration systems still capable of renewal, in contrast to Europe, Japan, and China, whose demographic advantages are already spent.

Together, they constitute 7.5 percent of global output. Two of the world’s top five financial centres. The critical minerals, energy, and food that great powers cannot secure without dependence on rivals.

Singapore is what makes this more than an Anglosphere reunion. A city-state astride the Malacca Strait, through which a quarter of global trade passes, it anchors the bloc in Asia and transforms its strategic weight.¹

The colonial nostalgia objection should be named early, because it will be raised. Four predominantly white Commonwealth nations plus an Asian city-state looks, at first read, like the Anglosphere with a fig leaf. But the compatibility of five of the world’s most successful multicultural democracies here is institutional, not ancestral: common law, mutual recognition of contracts, courts that enforce each other’s judgments. SCANZUK is a commonsense path to what Carney described: a grouping capable of acting when the hegemon will not, and resisting when it turns predator.

America turns

In 416 BC, Athenian envoys arrived at the island of Melos with a proposition. The Melians had harmed no one. They asked only to remain neutral. But the Athenians weren’t there to negotiate. They were closing the deal: “The strong do what they can, and the weak suffer what they must.”

The Melians were massacred. Every man of military age executed, every woman and child enslaved. Less than a generation earlier, Athens had led the coalition that broke the Persians at Salamis and Plataea, the champion of Greek freedom. By 416, it was the Tyrant City. Thucydides, an Athenian himself, recorded the transformation as only an exile could.

Facing annihilation, the Melians warned: “Your own fall would be visited by the most terrible vengeance and would be an example to the world.” Athens scoffed. Within a decade, drunk on its own logic, it launched the Sicilian Expedition, a catastrophic overreach from which Athenian power never recovered.

***

Article 5 of the NATO treaty has been invoked once. Not by Washington summoning its allies to war, but by the allies themselves, on the morning of September 12, 2001, pledging to defend the United States. Danish frigates deployed to the Gulf. Australian soldiers died in Kandahar. The compact that held for seventy years was brutally simple: The nations that bled for America would be repaid with protection.

Trump’s complaint that allies free-rode on American power has merit. European defence budgets atrophied for decades. But the remedy he proposes does not rebuild burden-sharing. It destroys the trust that makes coordination possible. Abandoning allies and coercing them are not the same thing as demanding they spend more, even if the rhetoric conflates all three.

For the first time since 1945, a European ally has named America a danger. The Danes, remember, lost more soldiers per capita in Afghanistan than any other coalition partner.

The November 2025 National Security Strategy formalised the turn.² Anne Applebaum called it “a suicide note for American hegemony.”³ It writes off Europe as a dying civilisation: “cratering birthrates,” potentially “unrecognisable in 20 years,” perhaps too weak to remain a “reliable ally.” Russia, meanwhile, appears as a partner to be wooed. North Korea goes unmentioned.

The post-war order itself now stands accused. At his confirmation hearing, Secretary of State Marco Rubio delivered the indictment: “We welcomed the Chinese Communist Party into this global order. They took its benefits but ignored its obligations. Instead, they have lied, cheated, hacked, and stolen their way to superpower status – at our expense.” The post-war order, Rubio concluded, was “not just obsolete” but “a weapon being used against us.”

Beijing and Washington now agree: the system America built must go. Trump no longer wishes to uphold it. Xi never accepted its constraints.

This is not one man’s aberration. The shift is embedded in Congress, the courts, and a generation of staffers who will shape American foreign policy for decades. Future Democratic administrations will govern within constraints this realignment has set. Allies cannot plan on four-year cycles. They must plan as if the turn is permanent, because it may be.

Canada has developed military contingency plans for an American invasion. A sentence that would have read as satire three years ago is now operational planning.

A distinctly European paralysis

The European Union cannot manufacture artillery shells as fast as Ukraine fires them. Four hundred and fifty million people, a combined GDP larger than China’s, and the bloc cannot keep one medium-sized democracy supplied with ammunition while it bleeds to defend the continent’s eastern frontier. Europe once measured its power in legions and fleets. Now it measures it in PowerPoint slides about procurement reform.

Germany announced a Zeitenwende after Russia invaded: a turning point, €100 billion for defence. Then Berlin discovered its procurement system could not convert euros into equipment. The Bundeswehr had been, in the memorable phrase of one inspector general, “basically bare.” It remains so. Factories closed in the 1990s did not reopen. Workers who retired did not return. An industrial base Europe spent three decades dismantling on the assumption that history had ended and the Americans would handle the rough stuff.

Trump now demands NATO members spend five percent of GDP on defence: $1.9 trillion in additional annual spending across the alliance. Leave aside whether the political will exists. The capacity does not. You cannot buy divisions that were never raised or manufacture artillery shells on production lines sold for scrap.

Even if the capacity existed, unanimity rules hand Viktor Orbán – Putin’s most fervent European admirer – an effective veto over EU foreign policy. Hungary, a nation of ten million people, can paralyse a bloc of four hundred and fifty million with a single objection. This is not a design flaw. It is the design.

Even a rearmed Europe would be absorbed by its eastern flank for a generation. Poland, the Baltics, Finland, and Sweden are now frontline states, spending and arming while Berlin deliberates. Germany’s ambition to build “Europe’s strongest conventional army” is about defending the Oder, not projecting power into the Pacific. France still styles itself a global power, but its single aircraft carrier spends more time in refit than at sea.

Europe will remain what it has become: a continent that writes rules for others and cannot enforce its own. It will lecture the world on principle while outsourcing the defence of those principles to others. The continent that once carved up the globe can no longer secure its own borders.

China

The bet was simple: trade would liberalise China. In 2001, Washington welcomed Beijing into the World Trade Organization expecting trade to do what diplomacy had not. The opposite occurred. Prosperity funded the largest military buildup since the Cold War, technological self-sufficiency the West still hasn’t grasped, and geopolitical ambition the liberal order was never built to absorb.

China’s military budget has grown more than five-fold in twenty years.⁴ The People’s Liberation Army Navy now operates more ships than the US Navy – roughly 370 vessels versus just under 300 American ships.⁵ The Pacific is now contested water. Beijing has converted reefs into missile batteries and airstrips. Fishing fleets operate as maritime militia, and neighbours from Vietnam to the Philippines face coordinated coercion designed to establish facts on the water faster than diplomacy can reverse them.

Australia learned the price of defiance in 2020. After Canberra called for an independent inquiry into COVID-19’s origins, Beijing imposed $20 billion in coordinated sanctions. The punishment was designed less to hurt Australia than to instruct others.⁶

China now controls most of the chokepoints of twenty-first-century power: critical-mineral refining, rare-earth magnet processing, battery and solar supply chains. It accounts for close to 30 percent of global manufacturing output.⁷ Beijing dominates active pharmaceutical ingredients, drone manufacturing, electric vehicles, and upstream semiconductor inputs.

This dominance may not last. A slowing economy and demographic decline may make Beijing more unpredictable. Xi has tied his legitimacy to national rejuvenation and territorial consolidation – goals that grow more urgent as relative power peaks. Declining powers with unfinished business are not cautious. China does not need to invade Taiwan. It only needs to convince Taipei and Washington that resistance is futile.

The Indo-Pacific is now the centre of global tension, and the West’s architecture remains too narrow to contest it. AUKUS will deliver submarines, eventually. The Quad convenes four democracies, one of which will not commit. Every major institution was built for a world that assumed China would be integrated into the liberal order, not challenge it as a peer. Middle powers are left to navigate the gap alone.

Why SCANZUK makes sense

The assumption embedded in most strategic commentary is that middle powers must choose: align with Washington or accommodate Beijing.

I am not sure that is true. In 2017, I helped write the speech the Australian Prime Minister delivered at the Shangri-La Dialogue, making the case that the rules-based order would hold, that America’s leadership was generous and enduring, that China could be accommodated within it. The speech even cited Thucydides on the same Athenian proposition, arguing that Washington had resisted the temptation to behave as Athens did at Melos. Every major assumption in that address has since been overturned. The lesson is not that alliances fail. It is that by the time you realise yours is failing, the window for alternatives has already begun to close.

The question is whether the alternative already exists without anyone having named it. Five democracies already share more institutional infrastructure than most formal alliances ever achieve. A contract drafted in London requires no translation in Singapore. An engineer certified in Auckland can practice in Sydney without re-qualifying. These nations did not set out to build an alliance. They simply built systems that work the same way, and now find themselves, by accident of history, holding compatible keys to the same locks.

Combined, these five nations account for $8 trillion in GDP, larger than Japan, larger than India, fourth only to the United States, China, and the European Union. Two of the world’s top five financial centres. The minerals and energy that underpin the industries of the future. And a presence across the Atlantic, Pacific, and Indian oceans that no other democratic grouping can match.

The architecture exists, it lacks only a name.

Why these five nations?

The objection is obvious. What about Japan, South Korea, India? What about ASEAN or the Quad?

Start with ASEAN. Ten nations, 700 million people, and a structural allergy to decisions of any kind. The bloc operates by consensus, which means Cambodia and Laos, Chinese client states, hold effective vetoes over any action Beijing dislikes. ASEAN has spent sixty years perfecting the art of meeting without deciding. On this measure, at least, it has been a resounding success.

The Quad is more serious but less than it appears. Australia, India, Japan, the United States: four democracies, one of them non-aligned by doctrine. India will coordinate on maritime security but will not bind itself. New Delhi’s strategic tradition runs from Nehru through the Cold War to the present: partnership with all, commitment to none. Beijing dismisses the grouping as “sea foam.”⁸ On present evidence, the metaphor holds.

Japan and South Korea are genuine democracies with serious militaries. Their exclusion is not oversight.

Both sit on the First Island Chain, directly in Beijing’s sights, shielded by the American nuclear umbrella as the foundation of their defence. They are not allies in the way Australia or Canada are allies. They are forward operating bases for a confrontation already underway. Japan’s constitutional constraints and Korea’s peninsular exposure permit far less room for manoeuvre than geography alone suggests. Include Tokyo and Seoul, and SCANZUK ceases to be a resilience bloc. It becomes a containment alliance, foreclosing Singapore’s participation and alarming the wider region.

SCANZUK works precisely because it is narrow enough to function. Common law, Westminster traditions, English as an administrative language, courts that recognise each other’s judgments, militaries that already interoperate. Japan and Korea are essential partners. SCANZUK would coordinate closely with both through existing channels. But they are partners, not members. A stronger SCANZUK serves their interests precisely because it does not target Beijing.

Why Singapore matters

Without Singapore, this is an Anglosphere reunion – four nations bound by history and sentiment, none of them in Asia.

Singapore transforms the proposition, commanding the chokepoint that matters most. Eighty percent of China’s oil imports transit the Malacca Strait. Singapore’s port capacity is expanding toward 65 million containers annually.⁹ Its financial centre has absorbed much of the business that once flowed through Hong Kong.

The objection writes itself: Singapore will never formally align against Beijing.¹⁰ This is true. It is also beside the point.

Singapore’s survival has depended on refusing to choose sides, maintaining access to Chinese markets while preserving security ties with Washington. SCANZUK does not require Singapore to abandon this posture. It offers something more valuable: optionality in a world where options are narrowing.

The integration already runs deeper than most recognise. The Five Power Defence Arrangements have linked Singapore to the UK, Australia, and New Zealand since 1971. Digital economy agreements with all four partners are signed or in progress. Intelligence cooperation is habitual. Singapore is not being asked to join something new. It is being asked to name what already exists.

Here is the sticking point. Naming it may be precisely what Singapore refuses to do. Lee Hsien Loong and now Lawrence Wong have built a national strategy around deliberate ambiguity, and a formal grouping that includes four Five Eyes members is unlikely to be advertised on billboards in Raffles Place.

SCANZUK is flexible by design. Trade alignment here, regulatory coordination there, deeper security ties if Beijing’s behaviour makes hedging untenable. Singapore’s leaders have spent decades building exactly this kind of layered engagement. The framework fits the instinct. Formalisation can wait for a crisis that makes hedging impossible. But the structure must exist before it comes, not be improvised under fire.

The resources the free world needs

Strategic geography is only half the equation. The other half is geology.

China dominates rare earth processing and has spent two decades locking up supply chains across Africa, Latin America, and Southeast Asia. When Beijing banned rare earth exports to Japan in 2010, Toyota discovered it could not build cars without Chinese magnets. The company had been blind to the geopolitical risk until the supply stopped.

Australia and Canada together hold the largest reserves outside Chinese control of lithium, cobalt, rare earths, uranium, nickel, and copper – the materials required for batteries, semiconductors, and advanced weapons systems. The geology cannot be moved. Processing capacity can be built, and both countries are building it.

Energy runs in the same direction. Canadian hydroelectric capacity and natural gas. Australian LNG and the world’s largest uranium reserves. UK offshore wind and North Sea production. Alone among advanced-economy blocs, SCANZUK would be a net energy exporter; beholden to no one for the power to keep the lights on. And then there is food. Australia, Canada, and New Zealand feed nations that cannot feed themselves. Wheat, beef, dairy, barley: agricultural exports that become strategic assets the moment supply chains fracture.

SCANZUK would be the only mid-sized democratic bloc able to withstand Chinese economic retaliation without paralysing its own industries. It could supply Europe without relying on Russian energy and build defence systems without depending on Chinese rare earths.

What SCANZUK is not

The European Union took sixty years to build a bureaucracy that cannot agree on ammunition supplies for a war on its own border. SCANZUK should learn from the failure.

No parliament. No commission. No flag. The model is CER: the Closer Economic Relations agreement between Australia and New Zealand that has operated since 1983 without crisis, without renegotiation, and without attracting much attention. A small secretariat overseeing issue-specific coordination. Sovereignty intact.

A doctor trained in Toronto could practice in Auckland. A startup founded in Sydney could incorporate in London without lawyers in both jurisdictions. The cost would be trivial. A CER-style secretariat runs on tens of millions a year. Australia will spend $368 billion on submarines. The barrier is not money. It is the inability of political systems to imagine cooperation without bureaucracy.

SCANZUK is not an alternative to the American alliance. The treaties remain. What changes is the assumption that Washington will honour them. Trump demands allies take primary responsibility for their own security. SCANZUK takes him at his word.

American strategists should welcome this rather than resist it. A coordinated bloc of democratic middle powers – sharing intelligence, aligning defence procurement, securing critical mineral supply chains – serves American interests directly. It creates capable partners who can hold ground in the Indo-Pacific without requiring permanent American overextension.

This is the burden-sharing arrangement Washington has demanded for decades, emerging from institutional compatibility rather than treaty negotiation. The alternative is a patchwork of bilateral dependencies, each vulnerable to the threat of abandonment that Trump has made explicit.

The case for acting now

The arguments against SCANZUK are variations on a single theme: the world will remain as it is.

It will not. Washington has threatened to annex territory from a NATO ally. Beijing has imposed $20 billion in sanctions on a democracy for asking questions about a pandemic. Europe has proved unable to supply a war on its own doorstep. The ground has already shifted. SCANZUK is not a proposal for a different world. It is a response to the world that now exists.

The obvious counter deserves an honest answer: these five nations have managed perfectly well without a formal bloc for decades. Why now? Because the order that made informal coordination sufficient is the order that just ended.

Middle powers have spent three generations as passengers in an American-led order. That order is ending. The Melians believed neutrality would protect them. The Athenians believed their power would last forever. Both were wrong.

The choice is between shaping the world that is coming, and adapting, one concession at a time, to great powers that have quietly agreed freedom is a tradable asset.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic, and a former Australian diplomat. Connect with Luke on LinkedIn or reach out to him at luke.heilbuth@bwdstrategic.com

References

Applebaum, Anne, “The Longest Suicide Note in American History”, 19 December 2025, https://anneapplebaum.substack.com/p/the-longest-suicide-note-in-american

Australian Department of Foreign Affairs and Trade, Trans-Tasman Travel Arrangement (1973); Trans-Tasman Mutual Recognition Arrangement (1998), https://www.dfat.gov.au/trade/agreements/in-force/anzcerta

Balakrishnan, Vivian, Minister for Foreign Affairs, Parliamentary Reply on Major Power Blocs, 11 November 2024, https://www.mfa.gov.sg/Newsroom/Press-Statements-Transcripts-and-Photos/2024/11/PQ-Reply-on-Major-Power-Blocs

CSIS ChinaPower Project, “What Does China Really Spend on its Military?”, updated 24 September 2025, using SIPRI Military Expenditure Database, https://chinapower.csis.org/military-spending/

Doshi, Rush, “Why the Quad Alarms China,” Foreign Affairs, 6 August 2021, https://www.foreignaffairs.com/articles/united-states/2021-08-06/why-quad-alarms-china

Maritime and Port Authority of Singapore, “Port of the Future,” https://www.mpa.gov.sg/maritime-singapore/port-of-the-future

Observer Research Foundation, “South-First Connectivity: The Malacca Strait’s Strategic Role,” 26 September 2025, https://www.orfonline.org/expert-speak/south-first-connectivity-the-malacca-strait-s-strategic-role

Rajah, Roland, “The Big Bark but Small Bite of China’s Trade Coercion,” Lowy Institute, The Interpreter, 2 March 2021, https://www.lowyinstitute.org/the-interpreter/big-bark-small-bite-china-s-trade-coercion

Statista, “China Is the World’s Manufacturing Superpower,” infographic, 15 April 2025, based on data from the United Nations Statistics Division, https://www.statista.com/chart/20858/top-10-countries-by-share-of-global-manufacturing-output/

U.S. Congressional Research Service, Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress, RL32665, updated 21 December 2023; and CSIS ChinaPower Project, “China’s Navy: The World’s Largest?”, 2024,

https://crsreports.congress.gov; https://chinapower.csis.org

White House, National Security Strategy of the United States, November 2025, https://www.whitehouse.gov/wp-content/uploads/2025/12/2025-National-Security-Strategy.pdf

In the cool glade of the eucalypt forest we spied an echidna, shuffling between the cycads and the spotted gums in search of bull ants. Eastern greys and swamp wallabies luxuriated on the camp grass, manicured by their chewing to the length of a freshly snipped fingernail.

One morning we found a seal on the sand, its bleach-white ribs arched like the Sydney Opera House. It had been chunked apart hours earlier by a shark large enough to treat it as an hors d’oeuvre. Nature was everywhere, in thrilling abundance, and still running on the old rules. Something was always eating something else. The seal didn’t see the shark coming. Most incumbents don’t either.

Around the fire that night, we talked about who might be next. Over a second helping of Arabic chicken, the conversation turned to AI, and what it meant for government, policy, and work.

We have machines that can sift the written record of human knowledge. Too often, we use them to write politer emails. The gap between what most people think AI can do and its actual power is vast. That gap is an arbitrage window that won’t stay open long.

Only a month ago, AI was a brilliant colleague tied to a chair. It could read and write. But it could not act.

That changed when two capabilities arrived together with Claude Cowork. The first is computer use: the AI can see your screen, move a cursor, and type. The second is MCP, a protocol that connects AI directly to files, calendars, and databases. Think of it as USB-C for intelligence.

Consider the old way. You ask a chatbot for packaging suppliers in your city. It returns a list. Then you do all the work: clicking links, hunting contact pages, copying emails, writing messages, sending them. Thirty minutes. The AI contributed a sliver.

Now consider the new. You tell an agent to find five companies, get their emails, send your specifications, and ask for a quote. It searches. It hits dead ends and navigates around them. It drafts, sends, and logs. Thirty minutes becomes two. You do something else while it works on your behalf.

That is the shift in microcosm: output decoupled from time.

The common fear is that AI replaces workers whole. But full replacement keeps stalling because humans carry context machines cannot see. There is another path, less dramatic and far more likely. Instead of automating 100 percent of one job, you automate the drudgery in a hundred jobs at once. The data enters itself. The form fills itself. The follow-up sends itself. You stop being the person who types and become the person who directs: an orchestrator of a tireless workforce all your own.

This is not science fiction. TELUS has run the experiment: 70,000 employees, half a million hours of tedium vaporised. No mass layoffs followed. Tens of thousands of workers discovered how much of their lives had been spent moving information from one box to another.

But the strangest feature of these systems is not the time they save. It is that they improve when they break. The AI community has borrowed a word from metallurgy to describe this phenomenon: self-annealing.

In metalwork, annealing means heating metal to relax its internal structure, then cooling it to harden. The stress is removed. The material emerges tougher than before. The swordsmiths of medieval Damascus understood this, even if they could not explain it. Crusaders returned to Europe with tales of swords that held an edge through battle after battle. Their blades could slice a falling silk scarf.

For two hundred years, metallurgists tried to reverse-engineer the secret and failed. Only in 1998 did researchers crack it: trace vanadium in the Indian ore, present at three-thousandths of one percent, had made the steel possible. When the mines changed, the magic stopped. The smiths never knew why it worked, so had no way of bringing it back.

Agentic systems solve the problem the swordsmiths never could. They document their own learning.

Think of two employees. Employee A completes a task and moves on. Employee B completes the same task, notes what went wrong, and leaves instructions for next time. After a year, Employee A is still Employee A. Employee B has become a department. These agents are Employee B. Each failure leaves instructions for the next attempt.

The learning compounds on both sides. The agent learns your preferences, your edge cases, your patterns. You learn what to delegate, how to phrase instructions, when to intervene. After six months, your workflow is unrecognisable to someone starting fresh.

The temptation is despair. If machines do more, what is left for us?

The answer has always been the same. Machines cannot care. They cannot take responsibility. They cannot persuade a room full of sceptics or rebuild trust after failure. They produce outputs. Only humans can be accountable for them.

The skills that matter now are the ones we have always undervalued: asking the right questions, making decisions under uncertainty, explaining why something is true in a way that changes minds. These were buried under busywork. AI strips it away and leaves only what matters.

As the fire burned low, we kept circling the same thought. The window was open. Soon the tools would be easy. The advantage would belong to those who learned while they were still hard.

Luke Heilbuth is CEO of sustainability strategy consultancy BWD Strategic and a former Australian diplomat.

From orbit, the desert north of Ürümqi in China reveals coal storage bunkers, each 300 metres long, arrayed around aluminium smelters and polysilicon plants built in the last five years. These are not relics of Mao-era industrialisation, nor transitional facilities awaiting retirement. The coal they store powers factories that produce most of the world’s solar panels.

The pattern repeats across China’s interior, wherever energy-hungry clean-tech manufacturing has clustered around cheap, reliable power. The geography matters because it exposes a basic misreading of the energy transition: the West has focused on what China deploys, not on how China produces.

The fashionable view holds that China is building the 21st-century economy while America clings stubbornly to the 20th. That framing has hardened into orthodoxy: Washington hawks the fuel of last century while Beijing invests in the infrastructure of the next. The contrast is seductive – electrons versus molecules, future versus past – but it mistakes a temporary industrial strategy for a permanent transition.

China’s installed wind and solar capacity doubled in three years. In early 2025, renewables overtook coal in total generating capacity for the first time. Clean sources met 84% of electricity demand growth in 2024, and in the first half of 2025 renewable output covered all additional demand, forcing fossil fuel generation into retreat. Chinese electric vehicles (EVs) now outsell internal combustion engines.

What emerges is not a green transition but a green arbitrage: carbon burned in one jurisdiction so that virtue may be claimed in another.

But trajectory is not destination. Coal still generated 53% of Chinese electricity in 2024. China burns more coal than the rest of the world combined, building nine of every ten new coal plants. These new “flexible” units may be sold as grid backup, but each represents a 40-year bet on the world’s dirtiest fuel.

What emerges is not a green transition but a green arbitrage: carbon burned in one jurisdiction so that virtue may be claimed in another. The arbitrage works because Western nations have committed to a transition they lack the industrial capacity to deliver. China supplies the difference, at the cost of its own air and soil.

The supply chains tell the story plainly. Indonesian nickel for EV batteries is processed in Chinese-owned industrial parks with coal plants attached like IV drips. Magnesium for lightweight automotive alloys is smelted using the Pidgeon process, a deliberately archaic method that runs on coal. Electrified alternatives exist and once competed; they lost on cost. This is not negligence. It is strategy.

The logic is cynical but persuasive: China will scale dirty to lock in dominance, then electrify once the game is won. Brussels bets that carbon border adjustments will force China to clean up its grid to maintain market access. Washington favours tariffs without rebuilding the industrial base beneath them. Both approaches rest on a shared delusion: that China’s energy system is still being built for Western approval. It is not.

Beijing is building a Green Iron Curtain. On one side: rich, carbon-constrained economies, where energy is high-cost and heavily regulated. On the other: the Global South, where China is exporting its coal-fired manufacturing model to markets that value cheap power over clean molecules. Carbon leakage is not a failure of the system; it is the secret of its success.

Against this strategy, Washington’s response looks half-baked. The United States pumps 13.5 million barrels of crude a day, yet remains impotent against a battery supply chain built on critical minerals rather than oil. Wind, solar, and batteries grow cheaper by the quarter; oil, gas, and coal do not. Even a great power cannot outrun cost curves. Betting on fossil fuel abundance is betting on a wasting asset.

China’s coal dependency is a vulnerability dressed as strength: clean products sold abroad, dirty air kept at home.

Cheap energy is necessary for manufacturing leadership but not sufficient. The web of smelters, refiners, and component suppliers required to produce batteries and solar panels does not exist on American soil in meaningful volume. You cannot drill your way to a solar-electric economy any more than you can farm your way to semiconductor dominance.

China’s coal dependency is a vulnerability dressed as strength: clean products sold abroad, dirty air kept at home. Beijing stopped publishing protest statistics when the annual count exceeded 100,000. Environmental grievances were among the top three causes. America’s fossil fuel abundance is a distraction from its industrial hollowing, a consolation prize mistaken for a winning hand. Neither country has cracked the problem that will determine the next century: how to manufacture without coal.

The race that matters is not between electrons and molecules but between clean production and dirty production. On that measure, neither superpower has yet pulled ahead. China leads in green products even as its factories choke on coal. America leads on artificial intelligence while its grid groans under the load. Both seek to solve the wrong problem and call it grand strategy.

The transition will arrive only when we decarbonise manufacturing itself – not the grid, not transport, but the smelters, furnaces, and chemical plants that make everything else possible. Until the chemistry changes, the carbon remains. The coal bunkers of Ürümqi will keep growing, supplying the world’s solar panels – visible from space, if anyone cares to look.

Luke Heilbuth is CEO of strategy consultancy BWD Strategic.