Four structural shocks—great-power rivalry, Chinese overcapacity, artificial intelligence, and U.S. strategic uncertainty—are dismantling the post-Cold War order and creating a period of permanent instability with no near-term equilibrium in sight.
The global crisis now unfolding is not a temporary disruption but a prolonged transition between international orders. Four structural shocks are driving it: great-power rivalry, China’s industrial rise, the disruptive advance of artificial intelligence, and growing uncertainty over the role of the United States. Together, they are eroding the pillars that sustained the post-Cold War era—American primacy, economic integration, and confidence in technological progress.
The consequences are already visible. The struggle over the Strait of Hormuz, the war in Ukraine, escalating trade restrictions, and the rapid advance of AI are not isolated crises. They are manifestations of a deeper transformation in the global system. Each shock reinforces the others, intensifying geopolitical rivalry, economic fragmentation, and political instability.
The result is a period of persistent crisis with no obvious return to equilibrium. The old order is weakening, while the contours of the next one remain uncertain. Rather than waiting for the world to settle down, governments and businesses may have to adapt to a more turbulent reality in which instability is no longer the exception, but the defining condition of the age.
Global Crisis Deepens Now
The struggle for the Strait of Hormuz rages on, new US sanctions threats against Iran notwithstanding. Russian drone and missile strikes punctuate a savage war in Ukraine now approaching its half-decade mark. Fierce competitions afflict regions from East Asia to Eastern Europe. American alliances are in a state of upheaval, while the global economy is fractured by tariffs and sanctions. It seems that nearly every week brings the next AI breakthrough, both promising and portentous.
It’s natural to wonder, amid all the present furies, when the world will settle into a stable equilibrium. The answer is that it won’t, at least anytime soon.
Four historic shocks — a great-power shock, a China shock, an AI shock and a USA shock — are convulsing the global landscape. They have jolted the world into a messy, likely protracted transition from one era to the next. For now, expect to live in a period of perma-crisis, in which the sources of instability are structural and disruptions are constant.
What Ended the Old Order?
The post-Cold War order was defined by hegemony and integration. Dominant US power and globe-spanning US alliances provided geopolitical stability. Globalization brought deepening economic and financial interdependence. The world looked to be converging toward democratic values; the benefits of technological progress seemed assured.
Washington worked to suppress threats such as international terrorism, with mixed success, while staving off the return of great- power rivalry through military deterrence and economic integration. But every aspect of that system is being challenged and perhaps transformed.
Great-Power Shock Hits Eurasia
The great-power shock comes as revisionist states — principally China and Russia, as well as Iran and North Korea — assail US influence and alliances in every key region of Eurasia. They shatter global rules, whether freedom of the seas or prohibitions on conquest.
At the core of this rivalrous era is a new clash for hegemony between America and China — the sort of system-defining conflict that tends to produce catastrophic hot wars, decades-long cold wars and other upheavals that polarize and pervade the globe.
China’s Overcapacity Warps Trade
The geopolitical shock is related to the China shock. President Donald Trump’s protectionism gets more headlines, but the greatest economic disruption of our time is Chinese industrial overcapacity: Beijing’s drive for primacy in areas from steel and aluminum to EV batteries and semiconductors.
The resulting distortions threaten countries everywhere. Chinese overcapacity could stunt the rise of developing economies hoping to establish their own manufacturing sectors. It confronts advanced countries, especially in Europe, with progressive deindustrialization and the political radicalism that economic distress can bring.
An earlier China shock, at the outset of this century, flooded the world with low-cost goods. Today’s China shock could entrench Beijing’s dominance in sectors that define global growth — even as it creates dangers, from industrial deflation to a wave of retaliatory protectionism, for China itself.
AI Shock Brings Dangerous Power
Meanwhile, the AI shock reverberates violently. New models are turning once-hypothetical propositions into concrete facts. Advances in AI could turbocharge economic productivity; they are already revolutionizing cyberwarfare, spycraft and the ways that countries build and wield military might. New models could also bring exotic dangers, like sophisticated bioweapons that unleash novel pandemics. And as AI remakes economies, social dislocations and political blowback inevitably follow.
Then there are the larger, existential challenges coming into view — not least, the risk that out-of-control AI could turn against its creators.
Technological revolutions always disturb the balance of power between geopolitical competitors. This revolution, like the Industrial Revolution before it, will affect every aspect of society by disrupting the relationship between humans and machines.
USA Shock Shakes Alliances
The resulting instability is amplified by the USA shock. For decades, American foreign policy helped the world navigate economic and geopolitical dangers. Today, the nation’s ability to play that role is being tested by chronic fiscal strains, acute munitions shortages and political dysfunction. Its willingness to play that role is also in doubt, as Trump lacerates the world trading system, threatens longtime allies and conducts globe-shaking military interventions with little forethought.
US power is still unmatched. But profound questions about America’s global purpose may take several more electoral cycles to resolve.
Global Crisis Futures Diverge
The interaction of these trends could produce a vast array of futures. Perhaps we’ll end up in a new cold war — a tough but tolerable scenario in which the US and its traditional allies reforge their bonds to blunt China’s economic, geopolitical and technological push. Or maybe America’s roguish impulses will triumph and the world enters an age of anarchy as all the great powers pursue revisionist projects.
It’s possible, too, that the AI shock will dwarf all others, bringing a moment in which every society is principally focused on the fallout from this technological explosion. Or perhaps pervasive geopolitical conflicts and intensifying US-China tensions will ultimately bring global war.
The outcome may not be clear for several years, perhaps even one or two decades. When the old order passes, the contours of the new system often take time to cohere. Between now and then, don’t expect much respite. As four epic shocks create deep structural instability, our period of perma-crisis is here.