Geopolitics has always been a fascinating mystery to me. It is a deeply complex multi-faceted game theory problem and there isn’t an obvious level of abstraction to use to understand the system: countries are run by individuals, who have decision functions that may not align with the sovereign entity they represent. For instance, Papic points out that during the Brexit negotiations in 2019, Boris Johnson was playing a three-level game: unifying Tory infighting, securing Tory leadership over Labour, and strengthening (or damage-controlling) Britain’s standing in the world; only by understanding the interactions between these three levels could an analyst make an accurate forecast of the Brexit negotiations.
This complexity often can be confused for arbitrary subjective behaviour, for example, Trump’s “petulance” in the trade war and Putin’s imperialism. Papic rejects this (or at least, diminishes the relevance of these preferences). The core thesis of the book is that we should not be trying to understand the preferences of geopolitical agents, we should be trying to understand their constraints. Papic summarises his Constraints Framework thus: **“**Preferences are optional and subject to constraints; constraints are neither optional nor subject to preferences”.
Geopolitical Alpha explores several such constraints and uses case studies to illustrate how these constraints end up driving reality more so than individual preferences. The case studies are not clear-cut ex-post narratives: Papic aims to convey the full nuance of the concept instantiations, which happens to be in line with some modern research on optimally learning in ill-structured domains (Cognitive Flexibility Theory – see Cedric Chin’s explanation here). Unsurprisingly, the book has a strong practical bent – it is titled Geopolitical Alpha rather than Geopolitical Analysis for a reason. Papic’s focus is primarily on how we can understand geopolitical situations with a view to making investment decisions, taking into account the uncertainty of a situation and market positioning. Papic is quick to point out that his framework is descriptive rather than normative – he only wants to know what the world is, rather than what it should be, and advocates that would-be geopolitical analysts adopt a “professional nihilism”.
I wholeheartedly recommend the book. In addition to being highly information-dense, the book is an engaging read, amplified by Papic’s dry-bordering-dark sense of humour. While I don’t think I’ll be ready to start making bold geopolitical calls any time soon, Geopolitical Alpha has given me a whetstone to begin sharpening my probability distributions of geopolitical events.