Cooperation without Collaboration in Great Power Rivalry — Doing the Right Thing Even if It’s for the Wrong Reason

Sun 09 Mar 2025 1045h
LSE China Development Forum
Keynote — “Cooperation without Collaboration in Great Power Rivalry: Doing The Right Thing Even If It’s For The Wrong Reason”

The world sees urgent need to address ever more pressing global challenges. These challenges threaten to permanently undermine international resilience — climate and environmental crises; impending risk of pandemic; cross-national management of AI and other disruptive technology; faltering international economic system, global energy transition, territorial and resource wars. These problems affect all of us. To address them, it advantages each of us individually to work together to help everyone at one and the same time. More than just helping ourselves, when working together whatever each of us does see multiplier impact when we work together.

That’s cooperation.

Over the last seven decades humanity’s default approach, indeed the logically sensible response, to any such comparable call has been indeed to seek global cooperation. Working together in that way could be made relatively automatic given an international system of rules-based order and multilateralism.

That multilateral rules-based order is daily under attack. For those of us who had been studying this for a while a large part of the concern had been how the rise of new Great Powers, ones charged with revisionism and who would remake world order in their undemocratic, “might makes right” image. However, as events have unfolded more recently, the large shock to the multilateral, rules-based order has instead come unexpectedly from established Great Power nations that many of us thought were the defenders of that system against new Great Power revisionism.

There is likely good reason for this unexpected switch in correlatedness between geopolitical disruption and national identity. Multilateralism is good for everyone, but has costs that are unevenly distributed. If the earlier supporters of multilateralism find the cost-benefit ratio no longer favorable, who are the rest of us to fault that economic calculation? We might ask only that you not unsettle the system for the rest of us, but feel free to quietly withdraw. But, alternatively of course, you could also feel others have been taking advantage of you (because the costs of multilateralism and the rules-based order are unevenly distributed), so it’s time for you to extract rough justice. You could feel that your shock to the system is only right following on what some of my economist colleagues called the China Shock, where trade under the old world order ended up “stealing your jobs, dismantling your industry, turning into ghost towns what were once thriving American middle-class communities”. At an extreme, it might be that you feel that multilateralism has produced a multipolarity that is enabling the rise of a hostile hegemonic power gaining ascendancy in the Indo-Pacific region, an ascent that will eventually restrict US prospects and freedom of actions.

Once, some might have connected this fragmenting of the international system to what John F. Kennedy referred to as the long twilight struggle” between democracy and freedom, on the one hand, and totalitarianism and tyranny on the other. Fewer and fewer ply this Cold War line now, it seems to me.

But for whatever reason, the probability grows ever smaller that the international community can actually come together in explicit collaboration to cooperate on addressing the global challenges humanity faces.

My discipline of economics, however, does not look at failure of goodwill and explicit collaboration, and think that cooperation is automatically then impossible. Indeed, 250 years ago, Adam Smith had written, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.”

What must we do today to bring about Smith-ian inadvertent cooperation, i.e., cooperation even without collaboration and goodwill? What do we need to organise of international affairs so that nations do what’s right even if they do so only for reasons that are wrong?

Let me give just one simple example. Take the global EV industry.

Humanity constantly aspires after good and ever-better quality of life. But the technology we normally use to achieve this is also burning our planet to a crisp. This is the sustainability challenge. Now, however, we have new technology that can help us be green and cool.

They are called EVs or electric vehicles. They use electric batteries. But, more generally, electric batteries provide renewable energy in many other applications. Solar panels too bear such promise of green and cool renewables.

Given the state of the fraught global environment, renewables have positive spillovers. Not only do they get the job done — serving our human, social need for energy to help us better regulate the physical context under which we live and work — they also substitute for dirty energy that emits greenhouse gases that, in turn, make the world’s climate more extreme. China says it subsidises EV consumer use, not Chinese industrial production, and so it is just as possible for Tesla as for BYD to indirectly receive such subsidies. The US and Western Europe, however, say that China subsidises EV production. They charge this is unfair competition. As a result they feel it is appropriate to raise tariffs and suggest sanctions against China.

Such punitive action discourages China from producing EVs and innovating on EV technology. It does not raise productivity in either US or Western European EV industry. The end result is lower EV production for global consumption.

Without taking a stance on the validity of either the US/Western European or China position, suppose we, the rest of the world, nudge the West to, not raise tariffs, but to subsidise and promote their own EV industries. Tariffs, subsidies - both interfere with markets, both concern unfair competition. Either makes the US/Western Europe feel they have taken appropriate retaliatory action against unfair competition. But notice with tariffs, global EV production falls. With subsidies, however, global EV production rises.

This is a huge boon to the Global South and the rest of the world, that intense, unfair competition between the US, the EU, and China actually results in greater supply of cheap, modern, sleek, new energy vehicles to use everywhere, hastening the move away from hydrocarbons to renewables.

In addition to inadvertent cooperation, two other proposals build on the idea: first, it need no longer be Great Powers that lead in decision making. Since a key objection to multilateralism is its feature of uneven costs, the modern continued move towards multipolarity — we must allow economic development to continue to take hold in poor parts of the world — means that the greater incentive to make the multilateral system work will rest on smaller states, not even the Middle Powers. Those small states — Third Nations — will need to work out greater engagement in the international system.

Second, and finally, if truly global universal cooperation is off the table, smaller groups might be able to build, for specific purposes, self-contained platforms that replicate the level playing field and cooperation of multilateralism, but only within the groups. This “pathfinder multilateralism” or plurilateralism can be open to yet other nations to join, when they have provided proof of concept. Again, the only thing such pathfinder groups ask is that those who object do not disrupt.

In a first-best cooperative world, humanity can come together to address global challenges and collectively improve resilience for global society. In a conflicted, disagreeing world, at the same time that we try to understand how that has come about, also we need to think of solutions. Inadvertent cooperation — doing the right thing even for the wrong reasons — seems to me to constitute a good basis for the way forwards.