· 49 min read

After Abundance

When the Winners Stop Believing in the Market

Europe is having a strange argument about China.

The words are familiar by now: subsidies, overcapacity, unfair competition, tariffs, labour costs, regulation.

All of them describe real questions. They may not describe the most important one.

While Europe is still debating how to restore the conditions under which its industrial model once worked, companies like BYD are already building for a world in which those conditions no longer exist.

BYD does not simply export cars from China and hope the global market remains open. It builds batteries and much of its core vehicle technology itself, expands production inside the markets it wants to serve, adapts products to regional conditions and operates a dedicated fleet of vehicle carriers to reduce its exposure to global shipping constraints.

This is not merely efficiency. It is architecture for control over technology, production, logistics and access to markets.

A tariff wall appears? Build behind it.
Shipping becomes expensive or unreliable? Control part of the shipping capacity.
The domestic market becomes more difficult? Expand into others.

That does not make BYD invulnerable. Its home market is under pressure, margins are contested and international expansion creates risks of its own. Nor does it mean China has somehow discovered perfect capitalism while Europe has simply forgotten how to build cars.

The interesting difference is strategic imagination.

For decades, Europe optimised for a particular world: stable globalisation, cheap inputs, open trade routes, predictable alliances and the assumption that dependencies were harmless as long as they remained economically efficient.

China spent decades building sovereignty through capacity. Europe spent decades optimising sovereignty away.

Cheap gas from Russia, manufacturing and supply chains deeply integrated with China, strategic military capabilities supplied disproportionately by the United States, and key layers of Europe’s digital infrastructure dominated by US-based providers. Each dependency made sense when evaluated individually. Together, they created a system that was extraordinarily efficient under one condition:

The world had to remain stable.

It did not.

What looked like efficiency in a stable world revealed itself as dependency in an unstable one.

That is where this story begins. Not with BYD itself, but with the assumptions BYD no longer seems willing to make.

1. The Wrong Question

When European industry talks about competitiveness, the conversation often sounds strangely retrospective.

Energy must become cheaper, labour costs must come down, taxes must fall, regulation must disappear and technology must remain “open”, a phrase that in Germany occasionally seems to mean keeping every technological path available until somebody else has already industrialised the winning one.

The underlying question is understandable:

How can we restore the conditions under which our existing model was successful?

It may also be the wrong one.

Those conditions were not simply the product of superior management or engineering. They belonged to a geopolitical configuration.

German industry could specialise deeply because energy arrived cheaply from Russia, global shipping was dependable and Chinese production lowered input costs. European integration removed enormous amounts of friction inside a common market, while United States military power supported much of the international security architecture.

Europe’s common market was real, but it never became an equally integrated economic polity. Goods could move across borders far more easily than energy policy, public investment, fiscal capacity, capital markets or strategic decision-making could be coordinated.

Companies could nevertheless optimise relentlessly because somebody else carried much of the redundancy. Inventories appeared wasteful, duplicate suppliers inefficient, domestic production of strategic inputs unnecessarily expensive, and spare capacity looked like a drag on returns.

For a while, this worked spectacularly.

Then the things classified as friction started looking suspiciously like resilience.

BYD represents almost the opposite instinct. The company grew out of battery production rather than traditional automotive manufacturing and gradually expanded into electronics, software and complete vehicles while integrating more of the production chain around them.

This is usually described as vertical integration. That is correct, but incomplete.

In a stable global market, vertical integration can be judged mainly through cost. Should a company manufacture a component itself, or can somebody else provide it more efficiently?

In an unstable world, another variable enters the calculation:

Can somebody else stop supplying it?

The cheapest dependency may no longer be the cheapest option once disruption, sanctions, tariffs or political leverage become plausible. The question shifts from who can provide something most efficiently to which capabilities an organisation can afford not to control.

That helps explain why some European responses to Chinese industrial strength feel so inadequate.

If the problem is interpreted primarily as Chinese workers being cheaper, European workers become the cost problem.
If electricity prices are higher, environmental policy becomes the cost problem.
If Chinese cars are technologically competitive, regulation becomes the cost problem.

The prescription then writes itself: lower wages or non-wage labour costs, weaken regulation, reduce taxes, subsidise energy and try to make yesterday’s production model profitable again.

But what if the competitive advantage is not primarily lower cost?

What if it is accumulated capability in batteries, manufacturing scale, supplier ecosystems, automation, infrastructure, software and logistics, combined with a state willing to coordinate those capabilities over periods longer than a quarterly earnings cycle?

Lowering German labour costs does not recreate that capability. It merely makes the remaining dependency slightly cheaper.

Recent research suggests that China’s electric-vehicle rise cannot be explained by subsidies alone. Industrial policy mattered, obviously, but so did improving product quality, broader model choice, falling battery costs, accumulated manufacturing knowledge and brutal competition inside the Chinese market.

“China subsidised it” can become a comforting explanation because it implies Europe did not really lose capability. The opponent merely cheated.

There is truth in the accusation. China used industrial policy extensively. The more uncomfortable fact is that much of it worked: infrastructure and supply chains were built, engineers accumulated experience, battery production scaled, companies learned under intense pressure, and those capabilities compounded over time.

Europe now faces the result.

A German car can still have exquisite panel gaps.

Unfortunately, panel gaps are not a geopolitical strategy.

BYD is useful not because Europe should copy China wholesale. China has its own dependencies, political pathologies, overinvestment risks and authoritarian structures. None of that disappears because it can build batteries efficiently.

BYD is useful because it exposes the question Europe postponed:

What is an economy supposed to optimise for when efficiency and sovereignty begin to diverge?

For decades, Europe could largely avoid answering. Globalisation made efficiency look like strategy because the geopolitical conditions underneath it appeared permanent.

They were not.

Once those conditions fracture, cheapness is no longer enough. Dependency becomes vulnerability and capacity becomes power.

At that point, we are no longer talking only about the future of the car industry.

We are talking about what happens when an economic system built around the promise of expanding abundance begins to suspect that there may no longer be enough room for everyone to keep winning.

2. The Promise of Abundance

For most of the postwar era, the dominant economic story in the West rested on a remarkably optimistic assumption: the pie could keep growing.

Countries did not need to fight over a fixed amount of wealth. They could specialise, trade and compete. Consumers would receive more goods at lower prices, companies would become more efficient, and even if the gains were distributed unevenly, continued growth would produce enough additional wealth to keep the arrangement politically tolerable.

The abundance described here was never equally experienced. It was the legitimating promise of the system: continued expansion would create enough additional room that distributional conflicts could be softened without fundamentally changing who already owned what.

Competition was not merely a mechanism inside capitalism. It became part of its moral vocabulary.

Monopolies were inefficient. Tariffs distorted markets. Protectionism made everyone poorer. If another country could produce something more efficiently, buying from it was rational specialisation rather than dangerous dependence.

The economist and historian Arnaud Orain offers a useful way to understand what happens when confidence in that story begins to disappear.

His distinction is unusual because he does not place free markets on one side and state intervention on the other. Instead, he describes two operating modes of capitalism.

In what he calls liberal capitalism, the promise is abundance through competition. Individuals, companies and countries can all become richer because the market is not treated as a zero-sum game. Freer trade, lower tariffs and policies against monopolies are supposed to enlarge the space of possible gains.

His alternative is the “capitalism of finitude”. Its starting assumption is almost the reverse: the pie cannot reliably continue to grow, so one actor’s gain increasingly resembles another actor’s loss. The objective shifts from maximising abundance to securing power. Tariffs return, monopolies become strategically useful, trade follows geopolitical alliances, and access to resources and markets begins to matter more than abstract efficiency.

This moves the argument beyond the familiar question of how much the state intervenes.

A government can intervene heavily in its domestic economy while still supporting an expanding international market. It can also privatise aggressively while using tariffs, sanctions and geopolitical pressure to shield selected corporations from foreign competitors. What matters is not simply the size of the state but the logic organising the larger system: expanding exchange, or controlled access.

Orain reads modern capitalist history through recurring movements between these modes.

The mercantilist economies of the seventeenth and eighteenth centuries relied on monopoly trading companies, colonial exclusivity and spheres of influence. With British dominance after the Napoleonic Wars came a period in which freer trade expanded under a hegemonic power capable of enforcing the rules around it. That order weakened as Germany, Japan and the United States emerged as industrial rivals, bringing renewed protectionism, imperial competition and eventually war.

After 1945, the United States became the new hegemon. Tariffs declined, international institutions expanded, monopolies and cartels became legitimate targets of policy, and competition returned as an organising ideal.

Orain deliberately places both postwar Keynesian capitalism and the later neoliberal period inside this broader liberal cycle. Their domestic economic policies differed enormously, but both operated within an international order committed to expanding trade, market access and competition.

Its most confident moment arrived after the Cold War.

Globalisation appeared to have escaped geography. Production could be distributed across continents, capital could move almost instantly, and supply chains could be designed around cost rather than political allegiance. Thomas Friedman’s “flat world” never existed in the way the metaphor suggested, but for a while it described the governing imagination surprisingly well.

China produced. America innovated, financed and consumed. Europe exported high-value industrial goods. International institutions provided rules. Container ships connected the system.

There were wars, exploitation, enormous inequality and plenty of coercion underneath this arrangement. The liberal phase was never an age without power. United States military dominance, privileged access to resources and deeply asymmetric institutions helped make the supposedly neutral marketplace possible.

But power was expected to keep markets open; increasingly, it is being used to decide who gets access to them.

The commitment to competition becomes much easier to test once competition stops reproducing the expected winners.

3. When the Winners Stop Believing in Competition

For decades, Western governments defended global integration even when individual industries lost from it. Production moving to a cheaper location was the price of competition. Consumers benefited, capital could be redeployed, and displaced workers would supposedly move into more productive sectors.

The market had spoken.

Then it started saying things the old winners did not enjoy.

China moved from supplying inexpensive manufactured goods to competing in industries that carry technological and geopolitical weight: batteries, solar equipment, electric vehicles, industrial machinery and increasingly sophisticated parts of the wider technology stack.

Suddenly comparative advantage acquired a less flattering vocabulary: overcapacity, unfair competition, strategic dependency.

Some of those descriptions are legitimate.

Chinese overcapacity can be real. Industrial subsidies, local incentives and investment structures can encourage firms to build more production than domestic demand can absorb. None of that makes the resulting productive capability imaginary.

A country can overinvest and still acquire factories, engineers, suppliers, logistics networks, manufacturing knowledge and technologies that become strategically valuable later.

The old doctrine therefore produces an awkward implication. If another country can produce electric vehicles or batteries much more efficiently, Europe should accept the result, close less competitive capacity and specialise elsewhere. That is, after all, what comparative advantage was supposed to mean.

Almost nobody in Europe is volunteering for that experiment.

Nor should they.

An automotive industry is not simply a collection of prices in a spreadsheet. It contains skills, suppliers, research capacity, infrastructure, employment, political leverage and the accumulated knowledge required to build whatever comes next.

China can therefore have distorted competition and built genuine capability at the same time. Proving the first does not make the second disappear.

And once industrial capability is recognised as strategic, something else becomes obvious: the market was never separate from power.

China was encouraged to industrialise, integrate and compete. It did so, very successfully, and when that competition began redistributing industrial power rather than merely lowering Western consumer prices, the rules suddenly looked less sacred.

No, not like that!

There are legitimate reasons for responding. Depending heavily on one country for technologies that determine future industrial capability creates genuine vulnerability. The issue is what follows from admitting that.

If batteries, semiconductors, energy infrastructure and industrial ecosystems are strategic rather than ordinary commodities, price can no longer be the sole criterion deciding where they are produced. Resilience, technological knowledge, bargaining power and the ability to act during disruption enter the calculation.

Yesterday’s winners discover that losing now means more than paying slightly more for an imported product. It can mean losing the capability to produce the next one.

The United States has made this shift unusually explicit through tariffs, export controls, industrial subsidies and the increasingly open use of market access as geopolitical leverage. Europe has moved more cautiously in the same direction. “Strategic autonomy”, “de-risking”, “economic security” and “industrial resilience” all acknowledge the same thing: economic relationships create dependencies, and dependencies create power.

The conflict is therefore not simply protectionism replacing free trade.

The old free-trade order itself rested on a distribution of power that made openness advantageous to the countries with the greatest influence over its rules. That distribution is changing. China possesses more industrial power, the United States is becoming more willing to weaponise its economic position, and Europe is discovering that an economy can remain sovereign on paper while becoming dependent in practice.

The winners have not stopped believing in markets.

They have stopped believing that market outcomes should remain beyond political correction when those outcomes threaten their own position.

Competition is still welcome.

The right to lose is becoming negotiable.

4. Sovereignty Optimised Away

Europe’s problem is not that it failed to participate in globalisation.

It may be that it participated too successfully.

For decades, European economic policy rewarded specialisation, integration and the removal of redundancy. If energy could be imported more cheaply than it could be secured domestically, importing it was rational. If manufacturing could be distributed across global supply chains, preserving every capability at home appeared inefficient. If United States military power already supplied much of the backbone of European security, duplicating those capacities looked wasteful.

This was not only a story about cheapness.

Europe also came to believe that economic interdependence could do some of the work that political alignment and strategic capacity had once been expected to do. If countries became sufficiently dependent on one another, conflict would become too costly to remain rational.

There was a reason this idea seemed plausible. European integration itself had bound former enemies together through trade, institutions and shared rules.

But the analogy had limits.

Interdependence inside the European Union sits within treaties, courts, shared regulation, political institutions and mechanisms for negotiating disputes. Russian gas came through a pipeline. Chinese supply chains were commercial relationships. United States security guarantees rested on an alliance whose ultimate capabilities and political decisions remained disproportionately controlled by one state.

Commercial interdependence outside a shared political structure does not automatically possess the same stabilising properties as integration within one.

Russia made that painfully visible.

Europe had allowed Russian gas to supply nearly half of its gas imports before the full-scale invasion of Ukraine. The assumption that enormous mutual economic costs would discourage confrontation proved much less powerful than the political and strategic objectives of the Russian state.

An action can be economically irrational and still be politically chosen.

The same underlying vulnerability appears elsewhere. European industry depends heavily on external supplies of critical materials, components and manufacturing capacity, with China occupying a central position in many of those supply chains. Key layers of cloud infrastructure and the wider digital stack are dominated by US-based providers. European defence depends not merely on NATO as a political alliance but on capabilities whose provision has long depended disproportionately on the United States.

Europe built a single market more successfully than it built a shared capacity to act.

It pooled enough sovereignty to remove enormous amounts of internal friction, but not enough to become a continent-sized strategic actor with comparable coherence in energy, defence, capital, infrastructure and industrial policy.

Meanwhile, external dependencies accumulated according to incentives that looked rational individually.

That is the European bargain in its most compressed form: specialise aggressively, remove expensive redundancy, import what others can provide more cheaply and trust that integration will transform dependency into mutual interest.

For a long time, the bargain generated extraordinary wealth.

It also hid a category error.

Dependency and interdependence are not the same condition.

Interdependence means both sides possess meaningful leverage and alternatives. Dependency becomes visible when one side can withdraw something essential more quickly than the other can replace it.

China spent decades building sovereignty through capacity. Europe spent decades optimising sovereignty away.

Sovereignty here does not mean self-sufficiency.

China is not self-sufficient. It depends on foreign markets, imported resources, maritime trade and technologies it has not fully mastered. Nor was every investment strategically brilliant. Enormous resources were wasted, unnecessary projects were protected and industrial capacity was built beyond plausible demand.

The useful meaning of sovereignty is narrower: enough productive, technological and institutional capability that the loss of one relationship does not remove your ability to act.

By that measure, China’s governing instinct was different.

It repeatedly treated industrial capacity itself as an asset. Infrastructure, manufacturing ecosystems, logistics, technical knowledge and strategic supply chains were worth building even when a narrower calculation might have produced a cheaper solution elsewhere.

Europe increasingly treated the opposite as sophistication.

The reasoning was perfectly legible at every individual decision point. Another supplier could do it more cheaply. Lower inventories improved capital efficiency. Imported energy reduced costs. US-based hyperscalers already offered excellent digital infrastructure. NATO already existed.

The cumulative result was a dependency graph nobody had designed as a whole.

Energy companies optimised energy costs. Manufacturers optimised supply chains. Governments optimised budgets. Consumers benefited from cheaper products. Investors rewarded capital efficiency. Defence ministries operated inside an alliance that appeared durable.

Local optimisation produced systemic fragility.

The old economic vocabulary made that fragility difficult to see because unused capacity looked like waste. Redundancy had no visible return until the primary supplier disappeared. Domestic capability looked expensive until rebuilding it became urgent. Strategic autonomy sounded like political vanity until another actor acquired the ability to transform a commercial dependency into leverage.

What looked like inefficiency was often optionality waiting to be needed.

Europe is now trying to rebuild some of what disappeared, reducing energy dependencies and developing policy around critical raw materials, semiconductor production, cloud infrastructure, artificial intelligence and defence.

The asymmetry is brutal: dismantling capability is much easier than reconstructing it.

A procurement contract can be moved in months. An industrial ecosystem can take decades.

Factories require suppliers, suppliers require skilled workers, workers require education and experience, and technologies improve through repeated production. Once those relationships disappear, money alone cannot instantly summon them back.

This is why much of the current European conversation about competitiveness remains frustrating.

Taxes affect investment. Energy prices matter. Regulation can become obstructive. Labour costs are real inputs.

None of them answers the deeper question of capability.

A country can become cheaper while remaining dependent. An economy can become more efficient while becoming easier to coerce. A company can maximise return on capital while gradually outsourcing the knowledge required to build its next product.

Sovereignty cannot mean autarky. Trying to produce everything domestically would waste resources, reduce innovation and replace one vulnerability with another. Europe will remain deeply interconnected with the world, and that is desirable.

The goal is enough capacity to retain meaningful choices when relationships change.

Sovereignty, in that sense, is not isolation.

It is optionality.

And once actors begin valuing optionality this way, the incentives of the entire system start to change.

5. From Market to Fortress

Once economic relationships are understood as dependencies, resilience can gradually become a strategy of control.

For a company, owning a critical supplier, controlling logistics or producing a strategic component internally reduces the number of outside actors capable of interrupting operations. States can make the same calculation at a larger scale through domestic production, strategic reserves, privileged resource access and control over trade routes.

BYD offers a relatively benign corporate version of this pattern. Its vertical integration reduces external veto points across batteries, electronics, software, production and logistics. Building inside important markets reduces exposure to tariffs, while dedicated shipping capacity reduces exposure to transport bottlenecks.

That is rational from the perspective of one company.

The problem begins when the same reasoning becomes general.

Orain identifies monopoly, the militarisation of trade routes and the reconstruction of exclusive spheres of influence as recurring features of the capitalism of finitude. They appear different on the surface, but they solve the same perceived problem: if an open market can no longer be trusted to provide access when it matters, control the conditions of access yourself.

Monopoly looks different through this lens.

For decades, Western policy formally treated monopoly as a market failure because competition was expected to discipline prices, force innovation and prevent private actors from accumulating enough power to dictate terms.

Yet concentrated power also creates strategic capacity. A sufficiently large corporation can finance long projects, absorb losses during expansion, internalise supply chains and make investments that smaller competitors cannot survive.

Peter Thiel makes the corporate version of this argument unusually explicit in Zero to One. Competition is not presented as capitalism’s ideal condition but as something a successful company should escape. Orain connects that logic to much older mercantilist structures, where powerful trading companies were valuable precisely because their scale allowed them to control prices, routes and access.

The argument becomes politically significant when corporate capacity doubles as geopolitical capacity.

A technology company is not merely another private supplier when its cloud systems host governments, its satellites support military communication, its platforms shape public discourse or its software becomes embedded in defence and intelligence systems. Breaking such a company apart may improve competition while simultaneously weakening something the state has come to treat as strategic infrastructure.

Government no longer merely regulates concentrated corporate power.

It also needs it.

The boundary between private market actor and geopolitical instrument becomes progressively harder to draw.

The same convergence appears at sea. Commercial shipping depends on naval protection, strategic ports and secure passages. Merchant fleets can become logistical assets during conflict, while canals, straits and shipping lanes become leverage points over entire economies. The supposedly clean separation between commerce and coercive power starts looking historically unusual rather than natural.

On land, states and state-linked companies secure mining concessions, agricultural land, critical minerals and infrastructure designed to direct resources into particular supply chains. These transactions can remain formally commercial while serving an objective that extends well beyond price.

They guarantee access when the market is no longer trusted to do so.

At the extreme, territorial politics becomes openly economic again. Greenland matters because of geography, Arctic access and resources. Canals matter because logistics confer power. Oil-producing states are evaluated partly through the strategic reserves beneath their territory. Questions that recently sounded anachronistic become plausible again once phrased as economic security.

The fortress that emerges from this logic is not autarky. Modern economies are too complex for that. It is a perimeter inside which some dependencies are tolerated, others are internalised and access to strategically important assets is controlled as tightly as possible.

That perimeter might be a corporation, a country, an alliance or an economic bloc.

The United States uses its enormous market and technological position as leverage. China secures industrial inputs and logistics while cultivating national champions. Europe increasingly talks about strategic autonomy, secure supply chains and economic security.

Different institutions and motives are converging on the same response to declining confidence in an open global market.

Here the logic turns against itself.

Reducing one dangerous dependency may make an actor safer. If every major actor simultaneously seeks maximum control over resources, production, technology and markets, the wider system becomes more adversarial.

A domestic semiconductor industry looks like resilience at home and technological containment abroad. A strategic mineral reserve appears prudent to the country building it and like impending scarcity to everyone competing for the same supply. A larger navy protects one country’s shipping while persuading its neighbours that they require larger navies of their own.

The fragility Europe created through excessive dependence can therefore reappear in reverse through universal enclosure.

Under the abundance story, cooperation remained plausible because tomorrow’s economy could be larger than today’s. Losing one opportunity did not necessarily mean losing permanently because another market, technology or source of growth might appear.

Under a politics of finitude, securing an asset before somebody else does becomes rational precisely because the next equivalent asset may not exist.

That expectation can manufacture the world it fears. If every actor assumes future access will be contested, each has an incentive to secure access now. Hoarding, exclusion, tariffs, monopolisation and military protection then make future access more contested.

The fortress begins as insurance against instability and gradually helps produce the instability it was designed to survive.

None of this should make the neoliberal order suddenly look innocent. Orain explicitly rejects the idea that the only alternative to predatory enclosure is a return to frictionless globalisation.

Up to this point, finitude has mostly meant a political expectation: actors behave as though future gains and access are becoming harder to share. That belief alone can produce tariffs, monopoly, resource competition and fortress behaviour.

But some limits do not care what anyone believes.

The two do not need to share a cause. Geopolitical rivalry does not require climate change, and planetary limits do not automatically produce geopolitical conflict. They become dangerous when they reinforce one another.

Political finitude explains why actors increasingly try to secure access through power.

Physical finitude explains why another round of unlimited expansion cannot simply be assumed to make the conflict disappear.

And unlike a factory, shipping route or semiconductor supply chain, the atmosphere cannot be moved safely inside anybody’s perimeter.

6. No More Elsewhere

For much of industrial history, expansion had an escape route.

Resources could be obtained somewhere else, production could move somewhere else, environmental damage could be displaced somewhere else, and many of the costs of cheap consumption could accumulate far from the people enjoying its benefits.

There was always another mine, another factory, another labour pool, another landscape capable of absorbing damage.

Or at least that was the assumption.

I explored a related mechanism in Time Theft: an adaptive system encounters a limit, finds a way around it, expands again and eventually encounters the next one. Fossil energy gave that process planetary leverage, capital accumulation accelerated it, and globalisation enlarged the geographical field across which consequences could be shifted.

Eventually, “somewhere else” stops functioning as an infinite resource.

Climate change makes this unusually visible. A company can move a steel mill, a country can import carbon-intensive products and an accounting system can move emissions between columns, but the atmosphere remains shared. Similar constraints appear in freshwater depletion, soil degradation, biodiversity loss, fisheries, land use and the extraction of materials required by industrial economies themselves.

Physical scarcity is real.

A drought can reduce the amount of usable water. A crop failure can reduce the available food supply. A mineral deposit cannot produce resources that are not physically there.

The political argument begins after that fact, not instead of it.

No physical limit arrives with its own distribution policy.

A finite carbon budget does not determine whose emissions are necessary. Limited land does not tell us whether it should become food, biofuel, restored ecosystem, luxury housing or a speculative asset. A constrained energy system does not decide whether the first sacrifice should be somebody’s warm apartment or somebody else’s private aircraft.

“There is not enough for everyone” can therefore conceal an entire argument by presenting a decision about consumption, ownership and priority as if physics had already made it for us.

Physical constraints determine what is possible.

Politics determines how those constraints are translated into lived scarcity, whose claims are protected and whose become negotiable.

Existing ownership becomes especially important because modern economies contain vast numbers of claims on future production. Shareholders expect returns, pension systems depend on future income, property values assume future demand, governments expect tax revenue, workers depend on industries continuing to exist, and companies invest against revenues not yet earned.

None of these expectations is individually irrational. Together they create a system with enormous difficulty accepting contraction where contraction becomes necessary.

Growth has therefore done more than produce additional goods.

It has acted as a political solvent.

A growing economy can postpone distributional conflict because tomorrow supposedly contains enough additional wealth to compensate today’s losers. Existing fortunes do not need to shrink for poorer households to gain something. Governments can collect more without explicitly taking more. Businesses can increase profits while wages also rise. The argument over who owns what becomes less explosive because everybody can be promised a larger absolute share later.

None of this requires claiming that economic growth must simply end.

GDP is not a measure of physical mass. Productivity can improve, services can expand, technologies can become more efficient, and some sectors can grow while others contract. It is entirely possible to create additional economic value while reducing particular forms of material throughput.

The narrower claim is more important anyway.

Permanent aggregate expansion cannot be treated as a guaranteed mechanism for dissolving distributional conflict forever.

Planetary limits make that guarantee impossible.

Where material throughput, emissions or resource use must stabilise or decline, the question growth helped postpone returns:

Which claims remain valid when they cannot all be satisfied?

That is more dangerous to the existing order than simple resource scarcity.

The system already contains mechanisms for answering it, but those mechanisms are shaped by power. Wealth purchases mobility, legal protection, access to scarce assets and the ability to relocate consequences. Corporations can internalise strategic supply chains. States can secure resources abroad. Those with fewer options experience the same constraint locally through prices, shortages, degraded public services or reduced consumption.

This is also where Time Theft connects directly to the politics of finitude.

When consequences can no longer be moved far enough through space, they can still be moved through time. Debt transfers costs forward. Deferred infrastructure maintenance does the same. Carbon emissions, groundwater depletion and ecosystem destruction create present value by reducing future options.

The present receives the product, the profit and the growth statistic. The liability belongs to people who cannot yet negotiate with us.

From the perspective of a market, future generations are exceptionally weak counterparties.

Capitalism did not invent humanity’s ability to exhaust resources or postpone consequences. Industrial capitalism created an unusually powerful system for converting both into continuous accumulation. Fossil energy accelerated expansion, finance made claims on future production tradable in the present, and global markets enlarged the territory available for extraction.

When those escape routes narrow, the accumulation logic does not simply switch itself off.

It searches for another way to preserve existing claims.

Control over existing capacity becomes more valuable. Access to minerals, energy, land, technology and markets begins to look like something that should be secured before somebody else secures it.

The fortress is therefore not merely a reaction to scarcity. It is an attempt to preserve a particular distribution of wealth and power under conditions in which growth can no longer guarantee it.

“Scarcity” is too passive a word for what may come next.

After abundance does not come scarcity. It comes the politics of deciding who scarcity is for.

That decision begins long before anybody calls it rationing.

7. Who Scarcity Is For

Not everyone encounters the same limit in the same way.

A wealthy household experiences higher energy prices differently from a low-income household. A multinational corporation can shift production, refinance, change suppliers or move assets across jurisdictions. A worker whose income depends on one factory in one region possesses far fewer options. Governments can build infrastructure against climate stress; individual tenants can do little about apartments that become dangerously hot every summer.

The constraint may be shared. Exposure is not.

Modern capitalism distributes more than wealth.

It distributes exit options.

The more capital someone controls, the easier it becomes to move around a problem rather than solve it collectively. Money can purchase insurance, redundancy, better housing, cooling, backup power, legal expertise, second residences and access to more favourable jurisdictions.

Corporations exercise the same privilege at a different scale by moving production, ownership structures, supply chains and intellectual property.

Most people cannot relocate their lives with comparable ease. They are attached to language, family, employment, pensions, housing, schools, healthcare and public infrastructure. Their exposure remains local even when the economic forces shaping it are global.

This creates one of the stranger asymmetries of the current political moment.

Capital becomes increasingly cosmopolitan while politics becomes increasingly nationalist.

Companies operate across borders, wealth is diversified between jurisdictions, supply chains connect continents and investment capital searches globally for returns. Meanwhile citizens are told that their primary political obligation is to defend “our country”, “our jobs”, “our borders” and “our way of life”.

National loyalty is demanded most intensely from those least able to leave.

That does not make national identity fake. For many people it is deeply felt, and states remain essential institutions for law, social protection and democratic legitimacy.

Nationalism nevertheless becomes an exceptionally useful political technology when distributional conflict intensifies.

If living standards stagnate, housing becomes unaffordable, infrastructure deteriorates and public services weaken, politics can ask how wealth, ownership, bargaining power and public investment are distributed.

Or it can ask who does not belong.

Membership is easier to police than ownership.

A conflict over resources and power can be transformed into a conflict over entitlement. Housing policy becomes an argument about which group deserves access first. Pressure on wages and public infrastructure becomes a story about migrants, welfare recipients, environmental regulation or whichever cultural enemy is currently available.

The material scarcity remains. Its political meaning changes.

This is how the class conflict supposedly made obsolete by globalisation returns in a different costume.

The postwar industrial compromise depended heavily on growth. Workers could receive higher wages, companies could increase profits, governments could expand public services and investors could accumulate wealth without every gain producing an obvious corresponding loss inside the same political community.

That compromise was incomplete and unequal. But enormous growth made it much easier to sustain.

A lower-growth or contracting economy makes its distributional structure harder to hide. Existing wealth wants to preserve its value, workers want security, pension systems need returns, governments want revenue, companies want margins, and households want affordable energy and housing.

Those claims cannot necessarily be fulfilled at the same time.

A system organised primarily around purchasing power already has a mechanism for deciding between them: those who can pay retain access longer.

This is why a purely market-based response to ecological limits can produce an orderly form of brutality. Nothing needs to be rationed explicitly if prices perform the rationing instead.

Flights become expensive enough that fewer people fly. Housing in climate-resilient regions becomes expensive enough that poorer households are displaced. Insurance premiums rise until some risks become effectively uninsurable. Energy remains available while becoming unaffordable to part of the population. Food still exists while consuming an ever larger share of the income of those already near the bottom.

The market may describe this as efficient allocation.

The people living through it may use different words.

An unequal society entering a period of constraint also creates particularly favourable conditions for authoritarian politics. Redistribution threatens existing claims at the top; exclusion can protect many of those claims simply by narrowing the circle of people entitled to share.

That bargain can unite actors with very different interests.

Wealthy groups receive protection of property, lower taxes or weaker regulation. Nationalist politicians provide cultural hierarchy, stronger borders and clearly identified outsiders. Parts of the electorate receive the promise that their relative status will be preserved even if their absolute material position deteriorates.

The politics can redistribute upward while presenting itself as revolt from below.

Status becomes a substitute for material security.

You may have less, but somebody else has been placed below you.
Public services may deteriorate, but they are supposedly being defended from outsiders.
Employers may gain bargaining power over workers, but the nation has been promised restored order and pride.

The economic actors best equipped to benefit from this politics often have the weakest attachment to the national boundaries invoked in its defence.

Capital remains global while citizenship becomes more conditional.

Which makes “our country first” an incomplete sentence.

Who exactly is included in “our”?

The worker whose factory closes because its owner found a better return elsewhere, the billionaire whose wealth is spread across several jurisdictions, the migrant nurse staffing an understaffed hospital, or the corporation routing profits through whichever tax system currently offers the greatest advantage?

National rhetoric makes the categories sound obvious. Economic reality makes them much less so.

It also complicates sovereignty.

A sovereign country needs more than borders and flags. It requires enough material capacity to make meaningful choices for the people living within them. If energy, digital infrastructure, defence, finance and industrial capability are controlled elsewhere, formal sovereignty can coexist with practical dependence.

Sovereignty can also fail from within.

A state whose strategic capacities exist primarily in private hands may discover that national capability does not automatically become democratic capability. A corporation can control technology, infrastructure and logistics while remaining accountable primarily to its owners.

Corporate sovereignty is not public sovereignty.

Geographical localisation is not the same thing as democratic control either. A semiconductor fab, cloud platform or battery factory located in Europe increases European productive capacity, but if its investment decisions, ownership and strategic priorities remain entirely private, that capacity does not automatically become public agency.

BYD can build extraordinary strategic capacity. That tells us something useful about how capabilities compound. It tells us much less about how those capabilities should be governed or whose interests they should serve.

The same is true for Europe.

Reindustrialisation, energy independence and strategic autonomy matter. If they merely rebuild concentrated corporate power behind European tariff walls while socialising the costs of transition, Europe may achieve sovereignty for institutions without increasing sovereignty for its citizens.

A fortress can protect assets while leaving people exposed inside it.

The questions that follow are not secondary social-policy concerns to address once competitiveness has been restored. They determine what sovereignty actually means:

Who owns the infrastructure?
Who captures the returns?
Who carries the transition costs?
Who retains meaningful choices when resources tighten?

8. Competition Is Not a Law of Nature

The emerging politics of finitude can make the available choices look narrower than they really are.

One response is to restore the old machine through cheaper energy, cheaper inputs, lower friction, expanding trade and enough growth to continue postponing the distributional conflicts underneath it. Environmental and social costs can once again be pushed elsewhere, provided another sufficiently cheap elsewhere can still be found.

The other is the fortress: secure our resources first, protect national champions, monopolise strategic capacity, control trade routes, close vulnerable markets and ensure that somebody else absorbs the shortage.

Neither offers a serious answer to planetary limits.

The first depends on recreating conditions that were never sustainable. The second acknowledges finitude but converts it into a contest over who can escape its consequences.

Orain explicitly rejects the temptation to rediscover neoliberalism as the lesser evil. The capitalism of finitude may be more predatory and dangerous, but returning to the choice between abundance through liberal competition and security through concentrated power would merely send us around the same loop again.

The more interesting question is whether competition deserves the privileged position both systems give it.

Competition is useful. It can expose bad ideas, challenge incumbents, distribute experimentation and create powerful incentives to improve. Markets coordinate some forms of decentralised information exceptionally well. Competition between firms has produced technologies, products and efficiencies that no central planner could simply have specified in advance.

None of that makes competition a law of nature that should organise every important human problem.

Climate change is not a contest one country can win while everyone else loses. Neither are ocean acidification, biodiversity collapse or the destabilisation of food systems. Germany cannot build a sufficiently competitive atmosphere. China cannot secure a private climate. The United States cannot tariff its way out of a planetary energy balance.

These are coordination problems.

Treating them as races can actively make them harder by rewarding each actor for transferring costs onto everyone else.

A similar distinction applies inside economies. Competition may be useful among companies producing consumer goods. It is much less obvious that healthcare, electricity grids, public knowledge, democratic infrastructure or the basic conditions of social participation should be governed primarily by whichever actor can extract the highest return.

We have spent decades treating markets not merely as tools but almost as an operating system for society.

Profit then stops functioning as one useful signal among others and begins to masquerade as purpose.

There is something worth learning from China here, even for those of us with no desire whatsoever to import its political system.

China has repeatedly treated economic development as a collective capability problem. Infrastructure, energy systems, manufacturing, technical education and strategic industries are coordinated because their value extends beyond the balance sheet of any single company.

At the same time, the companies operating inside many of those ecosystems compete ferociously.

That combination points toward a more useful distinction than “planning versus markets”:

Coordinate the capabilities. Compete within them.

Not everywhere, and not as a universal formula.

But consider what it means in practice. A society can collectively build electricity grids, transport infrastructure, research institutions, education systems, technical standards and strategic supply chains, while allowing firms to compete intensely over the products and services built on top of them.

Coordination at the capability layer does not require eliminating competition at the experimentation layer.

China demonstrates both the potential and the danger of doing this through a highly centralised political system. Its capacity for coordination has produced extraordinary infrastructure and industrial ecosystems, but also waste, overinvestment, protected incumbents and political structures in which large mistakes can be difficult to challenge.

Europe should be able to learn from the capability part without importing the authoritarian part.

There is nothing inherently authoritarian about deciding collectively that certain capacities matter enough to build and preserve. Public infrastructure already works this way, as do education, research, healthcare, social insurance and defence.

The useful design question is what must be guaranteed collectively, what can remain competitive, and where competition destroys the system on which it depends.

A reasonable post-abundance economy would still contain private companies, markets, entrepreneurship, competition and individual ambition. The point is not to replace one universal mechanism with another.

The market would have to return to being a mechanism rather than a moral authority.

Profit can indicate that people are willing to pay for something. It cannot tell us whether producing it is worth destabilising the climate, whether access should depend entirely on income or whether control over it gives one corporation unacceptable political power.

GDP can tell us that monetised activity increased. It cannot tell us whether a society became healthier, safer, more resilient or more capable of giving people meaningful control over their lives.

Prices contain information.

They do not contain ethics.

Once a single mechanism is no longer expected to answer every question, the institutional possibilities widen considerably.

Where infrastructure creates unavoidable dependency, public, municipal or cooperative ownership may sometimes provide more democratic agency than handing the entire layer to a private monopoly. Where private competition remains valuable, interoperability and open standards can preserve that competition without allowing one winner to turn infrastructure into a toll booth. Strategic public investment can build capabilities whose benefits arrive too slowly or too diffusely for markets to provide them reliably, while antitrust still has a role when accumulated corporate capability becomes private sovereignty.

None of these mechanisms is universally correct.

That is precisely the point.

We can choose institutions according to the problem instead of forcing every problem through the same institutional answer.

International cooperation also becomes more than moral decoration.

A sovereign Europe needs enough energy, industrial capacity, defence capability and digital infrastructure to make meaningful choices without asking Washington, Beijing or Moscow for permission. But the purpose of that sovereignty should be cooperation from a position of agency, not the construction of a slightly more tasteful European fortress.

Europe does not need China’s political system.

It could use some of China’s ability to remember that an economy is also a system of collective capabilities, not merely a marketplace.

The same balance applies socially.

Individualism protects something essential: the right to dissent, experiment, choose one’s own life and refuse the demands of a collective that claims to know what is best. Any economy worth building after abundance should preserve those freedoms.

Individualism becomes pathological when every shared problem is reduced to personal optimisation: buy the correct car, invest correctly, move somewhere cooler, acquire private insurance, install your own energy supply and build your own resilience.

That works exceptionally well for people with enough money.

For everyone else, civilisation exists precisely because some problems are easier to solve together.

China demonstrates both the power and danger of strong collective coordination. Contemporary Western economies demonstrate a different failure mode: formal individual choice can remain abundant while collective capability decays because nobody can justify maintaining it through immediate private returns.

There is a wide design space between authoritarian collectivism and atomised individualism.

We do not have all the answers.

That is not an argument for continuing with answers we already know are failing.

The neoliberal model tells us to restart the engine and search harder for another place to externalise the costs.
Fortress capitalism tells us to secure the remaining fuel before somebody else reaches it.

A more reasonable response starts by accepting that some limits cannot be defeated and that sharing those limits does not require abandoning freedom.

Growth can remain possible without remaining the governing objective. Profit can remain useful without becoming the purpose of society. Sovereignty can mean the preservation of collective agency rather than the ability to dominate others. Collaboration can be treated as rational wherever individual maximisation produces collective loss.

The age of abundance taught us to ask how much more we could produce.

What follows forces a harder question:

What is enough, who decides, and what must remain shared so that freedom is still possible?

9. After Abundance

We began with BYD because it offers a glimpse of an actor already adapting to a less stable economic order.

BYD did not wait for globalisation to become frictionless again. It accumulated technology, production capability, logistics and access to markets in forms designed to preserve options when conditions change.

That does not make a corporation a model for society.

But it does expose something Europe forgot.

China spent decades building sovereignty through capacity. Europe spent decades optimising sovereignty away.

The mistake was not trade, specialisation or international cooperation. Those produced enormous benefits. Nor was interdependence itself the mistake. Europe demonstrates how powerful interdependence can become when it is supported by institutions capable of governing it.

The mistake was treating commercial dependency as though efficiency alone made the surrounding political relationships durable.

Reversing that does not require autarky. It requires remembering that capability has value beyond its immediate price.

An economy with industrial depth, technological knowledge, functioning infrastructure and enough control over its critical systems can preserve options when the world changes. An economy without those capabilities receives more of its choices from elsewhere.

The value of sovereignty lies in preserving the ability to choose. But the ability to choose says nothing about what we choose.

If every company, country and bloc responds to instability by controlling more resources, enclosing more technology and securing more access before everybody else can, resilience becomes an arms race. The fortress protects its occupants by making the world outside it less secure, which gives everyone else another reason to build fortresses of their own.

Physical limits sharpen the problem, but they do not determine its political outcome.

Nature can constrain the amount of carbon we can emit, the rate at which ecosystems regenerate and the resources physically available to us.

Nature does not tell us who gets the remaining share.

We do.

That is why the end of the abundance story should not be understood simply as the arrival of scarcity.

After abundance does not come scarcity. It comes the politics of deciding who scarcity is for.

The old model tried to soften that politics through expansion. Growth created enough additional room to preserve existing claims while promising improvement to everyone else. When costs became inconvenient, they could often be moved to another country, another community or another generation.

The fortress offers a different escape. Instead of enlarging the pie, secure your slice.

Neither eliminates the distributional question. They merely postpone or export it.

What comes next does not require a complete replacement system waiting neatly on a shelf. We are not going to solve political economy in the final pages of a blog post, and anyone claiming to have done so should probably be kept away from both governments and sharp objects.

But some directions are clearer than others.

We need enough collective capacity to preserve meaningful choices without turning self-sufficiency into a fetish. We need markets and competition where they help us experiment and improve, without pretending every shared problem becomes easier when everyone is incentivised to optimise against everyone else. We need individual freedom without abandoning the institutions that make meaningful freedom possible for people who cannot purchase private substitutes for society.

Europe does not need to become China.

It does need to recover the ability to build deliberately.

And perhaps the larger lesson goes beyond Europe.

The interesting question after abundance is not whether we can somehow force the old machine to run forever, nor how quickly we can build walls around whatever remains.

It is what we want our economic systems to be capable of doing when permanent expansion is no longer available as the answer to every conflict.

Which capacities should we preserve? Which dependencies are worth accepting? Where does competition create useful experimentation, and where does it destroy the conditions it depends on?

Above all, who gets to make those choices?

The answer is not hidden in the market, in GDP, in a five-year plan or in the physical limits themselves.

Those are mechanisms, measurements, constraints and tools.

The choice remains political.

Finitude is physical. Scarcity is political. What comes next is still a choice.

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