The Age of Abundance is Over
The post-Cold War deal is over, and scarcity is coming to reverse-engineer everything cheap energy built.
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A friend recently asked me which character from the ancient Greek tragedies I find most relatable, and answer came within a second: Cassandra. You know, the Trojan priestess fated to utter true prophecies and never to be believed.
I don’t consider myself particularly gifted in any specific domain, nor do I possess the confidence to believe I know more than someone else. Quite the contrary - all I know is that I know nothing. But fate has handed me two curses:
An obsessive tendency to observe the dynamics of past and present, recognise recurring patterns, and use them to anticipate probable outcomes, and;
The instinct to assume that the worst-case scenario is usually the one most likely to unfold.
Over the years, I’ve learned to live with these curses, and even use them to my advantage. When my own mother asked me a while back: “we are at war, aren’t we?”, and upon my reply, she asked me how I am so calm about it, I simply said: because I’ve had a decade to prepare.
There’s nothing noble or even pleasant in being able to anticipate the worst. For what is worth, I desperately wanted - and often prayed - to be wrong.
It is also worth nothing that I don’t live under the delusion that I’m the only person capable of connecting these dots. Far, far from it. Some of the people who see what I see are highly visible - analysts, academics, professional writers. Others are completely invisible - a taxi driver, a farmer, someone quietly watching from the sidelines and thinking about it deeply. I do not claim a monopoly on ideas that emerged from my excessive consumption of data generated and interpreted by others. Many of the more reputable voices out there work with privileged information, directly or through networks of sources, while mine is built purely on publicly available information filtered through my own analytical framework. For that reason, the confidence attached to my conclusions must sit toward the lower end of the probability distribution.
Why am I telling you all this?
Because the rest of this essay will be uncomfortable for anyone with 30+ years of skin in the game in this world, and I want you to know it’s perfectly fine to dismiss me as excessively doomeristic - or outright crazy. As I told a gentleman a few days ago, after he got angry at my conclusions and demanded solutions: I am not writing with the purpose of convincing anyone. If you don’t believe my analysis, you won’t believe my solutions either, so it seems kind of futile from both of us to try and achieve the impossible, doesn’t it?
However, if you don’t deem me crazy, what follows might actually help you prepare - mentally, physically, materially - for a future of volatility.
Abundance gave rise to the economics of waste. Scarcity will reverse-engineer it.
In a recent Substack note, I wrote about the widespread failure to distinguish consumer supply chains from industrial supply chains, and and how the Western mind has been conditioned to assume the former equals the latter. In reality, in every critical sector - be it energy, defence, semiconductors, telecommunications, agriculture - we, in the West, are no longer in control of the complete supply-chain infrastructure required to produce locally, or even entirely within the Western alliance system. Our dependence on third parties like China is deeply ingrained into our supply chains, and that dependence is now a vulnerability for us and a leverage for them.
Imagine yourself as a farmer. To make a living - keep the lights on, pay your employees, cover your own needs, and clear some margin - you must produce grain. That grain is sold both domestically and internationally. As an American farmer recently told me, 80% of his produce goes abroad, and he’s now scrambling to pivot toward domestic sales because fuel costs and wars that compromise freedom of navigation are strangling him. Agricultural hardware is comprised of gazillion components that are mined, refined, produced, assembled, and shipped - that equipment requires the raw materials, refineries, and labor of a hundred countries and hundreds of thousands of skilled hands. The only reason a typical farmer could pull navigate this complex web of dependencies was the access to cheap energy, relatively cheap raw materials, and just-in-time supply chains that ran smoothly. If only one (let alone all three) of these pillars collapses, the whole operation is in jeopardy.
Just-in-time - our de facto inventory philosophy for the entire global economy - rests on the assumption that raw materials and components arrive exactly when needed for production rather than being stockpiled in advance. The goal was to maximise efficiency, free up capital, and eliminate warehousing costs. But what happens when a succession of geopolitical tensions, trade wars, embargoes, a global pandemic, kinetic wars, and compromised freedom of navigation hits that system?
If you read only one passage of this analysis, read this: the unprecedented prosperity of the last three decades - and yes, it is indeed unprecedented in all of human history - was sitting on the shoulders of one post-Cold War deal of trade, cooperation, and just-in-time supply chain management. That era of abundance gave rise to what I call the economics of waste.
When energy and raw materials were cheap, supply chains smooth, and inventory costs near zero, it was more profitable to build a business models around constant consumption and frequent replacement. Why sell a television, a car, or a washing machine that lasts 20 years when you can shorten the replacement cycle and sell the same customer multiple products over the same period? The entire consumer economy was optimised around this logic.
We are now entering an era where energy and raw materials are being strategically contested, supply chains are vulnerable, and waste is increasingly expensive - not just environmentally, but economically and geopolitically. A system built around replacing rather than repairing made sense when inputs appeared limitless and supply chains could be taken for granted, but it makes no sense in an age of scarcity, disruption, and strategic dependency. Reverse-engineering that system will be incredibly painful for businesses and consumers alike - which is precisely why both will fight tooth and nail to preserve it, at the cost of even greater future shocks.
Europe and North America are finally waking from the dream in which we outsourcing crucial industries to countries whose strategic agendas differ fundamentally from ours is seen as a systemic risk. Remember COVID-19 and the sudden realisation that we depend on China for everything from masks to antibiotics? Rare earths - China again. Energy? Russia. The entire concept of globalisation has been overturned in the past decade - where we once believed the invisible hand of the market would guarantee access to resources, globalisation is now understood as a vector of economic dependence and strategic vulnerability.
This transition - in energy, in rebuilding supply chains within the alliance, in reforming how we consume - is going to cost us decades of painful re-adjustment. But if we do it, and do it correctly, we will reap the benefits for generations. The age of abundance and cheap goods is over, and now - an age of scarcity is upon us, and how we handle it will determine whether we spend the coming century in prosperity or in destitution and dependency on powers we would rather not depend on. Because the masks are finally off, and we know the real face of China and Russia, and they are not our friends, allies, or even partners. They are entities with their own agendas those agendas do not include our peace and prosperity per se.
U.S. vs. Europe: two ways of meeting scarcity
The downside of prolonged prosperity, spread over generations, is that the citizenry starts to assume prosperity is the default setting of the universe.
Through the entire Cold War, both North America and Western Europe lived well despite high military spending. There was upward mobility, relative peace and stability. Yes, there were recessions and inflation shocks - I’m not erasing them from the record. But on average, every generation between World War II and roughly 2008 lived better than the one before it. The post-Cold War period, 1989 to 2014, was the peak of the deal. Then Crimea happened, the trade wars followed, and everything started gradually falling apart.
Several generations of that trajectory produce a particular delusion in people - a belief that we no longer need heavy industry, people working in the trades and performing manual labor, and that the physical economy is somehow yesterday’s economy or something reserved for the poor and developing nations of the world. Nobody sees that side of the economy anymore in the Western world - but that side of the economy is the backbone. We can write all the software we want, invent all the services we can think of, including genuinely ridiculous ones - there is a woman in San Francisco charging $30,000 to help parents name their children - but for a civilisation to function in any meaningful way, it needs energy, raw materials, and physical things. Full stop.
People in Western societies will have a much harder time adjusting to scarcity than people from the former Warsaw Pact countries - because for us, scarcity is still in living memory. Eastern European millennials were little kids in the 90s and early 2000s, but we remember. Abundance came to us late, and it was never treated as a given. Meanwhile, Western millennials are watching their quality of life and upward mobility decline relative to their parents - what their parents afforded at age 30 is not something they can even dream of. We are two populations, with two completely different psychological baselines, yet we are both heading into the same storm.
Now, how do the two halves of the Atlantic alliance actually compare?
Europe has certain mechanisms in place due to historical reasons. European states are, on average, are more fiscally conservative than the United States, and yes, they tax heavily - but part of what those taxes buy is the relative peace associated with the fact that no substantial share of the population falls beneath a certain threshold. This isn’t done out of altruism - oh, no, no, no. European states have centuries of experience with what happens when the gap between classes gets too wide: civil unrest, revolutions, societal collapse. Which is why they built shock absorbers, so nowadays - no matter how poor you are in Europe, you will never be as poor as the poorest in the rest of the world, the United States included (I know, controversial take!). Meaning, you are far less likely to end up homeless, be denied access to basic healthcare or find yourself unable to meet your very basic needs.
The United States is more interesting in that regard - and I’d argue, more fragile. The U.S. is a place where, if you are young, healthy, ambitious, and capable, you can become wealthy on a scale that exists nowhere else on Earth. It’s no accident that the United States produced the world’s first trillionaire (albeit, on paper) - Elon Musk. No other country could (no, Zimbabwe doesn’t count). But there is a risk that needs to be priced in that equation - America’s national identity is pegged to economic prosperity. Think about it - what is the American Dream? The ability to bootstrap yourself into material success. What is American exceptionalism? A system that allows anyone, from any background, and any baseline, to become prosperous. That held true for a a while, especially in the post-war decades of American hegemony.
Here, we’re talking about generations that grew up with that software installed in their heads. Tell them tomorrow that the lifestyle they considered the default until yesterday is no longer on the table - because cheap energy, cheap raw materials, and just-in-time delivery are gone - and the news won’t go down so peacefully. What happens to a national identity when the material promise underwriting it stops paying out? People will fight very hard to hold on to that promise, and people fighting to hold on to an impossible promise are people ripe for manipulation. The hard they can - and are currently
That’s the citizen side of the argument. On the business side - especially big business - the risk is even greater. These companies do not care about China’s or Russia’s agenda, no matter how destructive it may be. They would happily sacrifice the entire state of Ukraine if it restored their access to cheap Russian energy and raw materials. They do not mind that Chinese state industrial policy is rendering hundreds of European and North American manufacturers non-competitive. We are talking about a class of people with enormous financial leverage over entire states, and the only thing they optimise for is their margins. Whether a farmer in the American Midwest or a manufacturer in Eastern Germany goes bankrupt, loses everything he built, and joins the rising suicide statistics in those demographics - that does not appear anywhere on their radar or balance sheet.
The hidden risks
The visible risks - war, embargo, supply shock - you already know. But there are also the hidden risks are the ones that operate inside our own societies.
Risk #1: capital will fight to resurrect a world that no longer exists. Big business, and especially the financial sector - private equity, commodity trading houses, the whole apparatus - will fight tooth and nail to restore the pre-2014 system, because the valuations of their assets were built on it. Those assets are enormously inflated relative to the world we actually live in now, and their owners know it. So they will work to undermine governments and institutions that pursue the necessary restructuring, and push instead for a return to the status quo - a status quo that is not coming back, no matter how hard they fight to return to it. They are willing to sacrifice several generations of citizens to chase that fantasy. Keep an eye on the following patterns: every politician lobbying to “normalise” relations with Moscow, every argument that decoupling from China is “economically irrational,” every think-tank piece about how sanctions “hurt us more than them.” Ask yourself - who funds these arguments and why?
Risk #2: the populists will sell the time machine. I wrote about this in The Politics of the Impossible. Ordinary citizens who have not been given honest information - by their media, their analysts, the people whose job it is to inform the public - cannot make informed decisions, so they’ll end up making emotional ones. Into that vacuum step the populists, promising the impossible: to freeze time, to turn back the clock to when everything made sense. When products were cheap, inflation was low, supply chains were undisrupted, and the deal held. These politicians are completely and utterly incapable of delivering on those promises, but they will make them anyway, and people will fall for them - because the alternative is accepting that your 1-bedroom apartment in an overinflated European capital is not actually worth 600k euros, and that the generous welfare arrangements built on the globalisation deal are built on a foundation that has already crumbled. Nobody wants to hear that. Absolutely nobody. So they will vote for the man who promises they don’t have to.
These two risks compound each other - capital wants the old world back for its asset prices, populists sell the old world back for votes. Both are selling the same, expired product - the past.
The only way out: an alliance of cooperation
I’ve been criticised, somewhat fairly, for pointing out what can go wrong without offering a solution. Disclaimer: you may not like it, because I tend to believe that the only way out of Hell is through.
Let’s first admit the structural truth - as Joseph Tainter laid out in The Collapse of Complex Societies, civilisations that reach a certain level of complexity hit diminishing returns - the cost of maintaining the system starts to outrun the benefits it produces. We are already here - our societies have become so vastly complex that no single nation can be self-sufficient. Self-sufficiency is a lie. In this century, nobody produces everything they need - not the United States with its continental resource base, not China with its manufacturing dominance, nobody. You will always need to trade and cooperate. The nationalists on the rise across the West - the MAGA “America First” school and its European cousins - are selling isolationism as a strength, when it is in fact a dangerous weakness. What they fail to understand (or they outright lie about) is that the lifestyle they’re promising to protect is physically impossible to sustain in a vacuum.
So the question is not whether to cooperate but with whom and on what.
On what: I am not arguing we need to sew our own t-shirts and stitch our own sneakers. My argument is about critical industries - the ones that affect national security. Defence. Communications, which is national security whether people recognise it or not. Energy - and that means the full diversified stack, including renewables. Say what you want about green tech: China is investing colossally in renewables even while burning staggering amounts of coal, gas, and oil to get there, and they are not doing it for the polar bears. They’re doing it because whoever controls their own energy production controls their own future. The lesson is not to repeat Merkel’s error - shutting down nuclear plants on the bet that renewables would be mature by 2020, a bet that spectacularly failed on a continental scale - but to build a diversified portfolio in which renewables are a component alongside nuclear and conventional sources, especially for industrial economies like Germany, France, Italy, and Poland. Then agriculture: equipment, fertilisers, water, energy. Space, AI. Everything on that list touches national security, and everything on that list currently runs through chokepoints we do not control.
With whom: The truth is that, despite what the national populists will tell you, not a single nation-state can tick all the above-mentioned boxes on its own. A broad alliance is needed - not just between the EU and North America, but across the world: our East Asian allies, Japan and South Korea; our Pacific allies, Australia and New Zealand; and even new partners, such as those in Central Asia and the Caucasus, and the Middle Eastern petrostates.
The solution for surviving Cold War 2.0 is pretty much the same as the one we utilised during the previous Cold War: cooperation among states that share values and strategic interests. And we can already see the first attempts taking shape: coordinated export controls on advanced chipmaking equipment, joint European defence procurement and rearmament programmes, and the slow stockpiling and re-shoring of critical inputs.
Granted, such baby steps are far from what one would call a grand strategy, but they prove that, if we wanted to, we could.
Ironically, Europe, of all places, is uniquely positioned for this - and I say this with the full knowledge that I will get a lot of pushback in the comments.
Say what you want about the European Union - and there is plenty to say - but no other entity in history has come close to getting 27 sovereign states to reach a consensus, however slowly, on how to move in one direction. That has never been attempted before, let alone executed with any meaningful success. As Professor Sarah Paine puts it, Europe’s core competence is institution-building. For decades, that competence had its pitfalls, such as suffocating entrepreneurship and innovation, but in the era we are entering, that same competence will inevitably become a strategic asset.
Now, I often hear the following objection: the other side cooperates too! China, Russia, Iran and North Korea - the Axis - coordinate not just among themselves, but with a growing number of Global South players, and they will use every tool in their toolbox to sabotage Western cohesion. That is correct.
But look closely at how their cooperation actually works, because this is where we hold an advantage we do not even realise we have.
Take the Power of Siberia 2 pipeline. China wants Russia to finance and build it - and then wants to buy the gas at the lowest possible price, reportedly pushing for something closer to Russia’s domestic rates than its export prices. Beijing has supported Moscow during its war on Ukraine, yes, with components, products and expanded trade. But at the same time, Beijing watches Russia grow weaker with every passing year and does not hesitate to monetise that weakness.
That is the mentality of the entire Axis: every member watches its back because every member knows its “allies” will stab it at the first opportune moment. The authoritarian Axis has an architecture of suspicion, while ours is one of trust—accompanied by the occasional bickering, yes, but you get my point.
The Western world rests on something the Axis cannot replicate: the understanding that, when things get truly bad, we coordinate for the benefit of everyone, rather than solely for the benefit of the strongest, as in China’s case. This framework was built over the course of 80 years, and it is the single most valuable strategic asset the West has. The Axis can coordinate transactions, but it cannot build trust because its members’ entire political systems are constructed on the premise that trust is for suckers.
That asymmetry is our edge over the Axis, but it is also our biggest vulnerability, because the infrastructure of trust is exactly what the nationalists at home and the propagandists abroad are working to destroy. The fight over “America First” and its European imitations is not a culture-war sideshow, but the main theatre of this new Cold War. That is why Trump and his loyalists are so detrimental: in their infinite wisdom, they decided that the architecture of trust is for suckers, and they do not want to be suckers.
One more thing: alliance cooperation buys us the time to retool without total collapse. It does not eliminate the pain of the adjustment. Even in the best-case scenario - a cohesive alliance, disciplined re-industrialisation, competent energy diversification, etc. - the transition will unfold over decades and require heavy upfront investment.
The window to lock in the cooperative path is now, while the infrastructure of trust still stands and before the populists and asset-holders finish selling us the time machine. The costs of the transition are unavoidable, so citizens had better get used to that now.
The Balkan Candor
I don’t have a generational memory of upward mobility.
For a brief window - the tsarist era under Boris III - both sides of my family did well. Merchants on one side, trades and business on the other. That window - during which 2 Balkan wars and 2 World Wars occurred - lasted about 50 years. Before it: the Ottoman Empire and a poor agrarian existence. After it: Soviet communism, and whatever the new regime allowed the few surviving branches of my family tree to keep. There is no line in my family history where each generation climbed higher than the last. I am - literally - the first. The first who could get an education, build a career, earn disposable income, own her home. The first to have what people in the West have had for several generations running.
And because abundance arrived late and was never a given, I have not forgotten severe scarcity. Which makes me and others like me, in a strange way, better prepared than most of my Western counterparts.
Here’s an example of what I mean.
My family talks openly about what’s happening in the world, and we are perfectly comfortable with the following contingency: if it gets truly bad, we go to the countryside, we tend the land, downsize, raise chickens, grow part of our own food, cooperate with neighbours, barter. Not because we’re survivalists or preppers, no - because that’s what we did years ago during the most difficult economic circumstances. For us it isn’t collapse, but a return to the starting position. Would it be pleasant? Of course not. But it holds no terror, because we’ve already been there not that long ago.
The risk in the West is that people are terrified of exactly this - and terrified people vote for time machines from populists and buy lottery tickets from grifters.
The harsh truth is that you have to be able to sacrifice some of your current comfort for a brighter tomorrow - and whether or not you have children, you have to be willing to plant trees whose fruit you will never taste. That is what functioning civilisations are made of. I say this as a millennial who knows exactly what it cost us: plenty of us wanted the marriage at 25, a starter home, and 2-3 kids - and the economics simply did not allow for it. I’m not dismissing the grief of derailed plans, but simply telling you the derailment already happened, and the only question left is what you do with it.
To be fair, some of you might actually end up better in the world that’s coming. There is an entire class of people that went into desk jobs and the service economy because that’s where the wages were - people with spatial intelligence and restless hands who would thrive as carpenters, electricians, machinists, etc., were forced into work that didn’t suit their talents. Talk to anyone who left a desk to work a trade or run their own project. Ask them if they’d go back to corporate, and watch what happens.
My point here is as follows: do not fear scarcity, it is not the end of the world. Do not fall for the populists selling you a ride backward through time. Do not fall for the casino economy either - the AI startup that will make you a millionaire overnight, the influencer showing you their golden retriever’s account earning 10k dollars a month. It’s a casino. They show you the handful who hit the jackpot and never the millions who fed their savings into the machine. Do not play that game.