Making the Most of a Crisis

How can we not only survive, but thrive?

To call an idea a cliché is to belittle and dismiss, yet ideas become clichés by virtue of repetition and longevity. And ideas that are repeated and survive for generations tend to be those which are true, or at least useful. So should clichéd ideas be belittled and dismissed? Quite the opposite, I think.

Take “every crisis is an opportunity,” and the long list of hackneyed sayings expressing the same idea. A horrible cliché. But true. And no idea could be more important to bear in mind in this moment of rupture: Yes, we stand to lose much in the present crisis, but there is lots more to be gained; energy and determination should be the order of the day, not despair.

Today, I want to take a look at three international crises which presented opportunity. In each case, the crisis was handled well and the opportunity seized successfully, to great benefit.

There are lessons in this history that we need to bear in mind now.

Poland’s first post-war president was Bolesław Bierut, a Communist who took office in February, 1947, following a rigged election.

Crisis #1: Creeping Communist takeover

In early 1945, at the Yalta conference, the three leading Allies — the Soviet Union, the United States, and Great Britain — agreed to the general shape of post-war Europe. A key part of that agreement was to allow the peoples of Europe to hold democratic elections and create democratic institutions of their own choice.

Stalin had no intention of honouring his word. His goal was to install his own Communist puppet governments.

As the occupying power, Stalin could have gotten what he wanted by brute force but that would have created a crisis in which domestic opponents would rally and the West would turn against the Soviet Union at a time when the United States alone had atomic bombs. He chose a strategy designed to avoid drama, crisis, and rupture.

Hungarian Communist Mátyás Rákosi called it “salami tactics” — slicing off bit by bit until you have the whole thing. In practice, that meant the first governments created under Soviet occupation were “national fronts” representing a wide array of political parties, including Communists and non-Communists. Outwardly, these satisfied the terms of Yalta.

But the Communists were given control of key posts, notably the interior ministries that controlled police and intelligence. They used these levers to harass, arrest, and otherwise cripple opponents. A deportation here. A licence removal there. An arrest. A publication ban. A little election-rigging. Gradually, non-Communists would be marginalized, leaving only Communists in power.

No drama. No crisis. No reaction. A fait accompli.

Stalin’s strategy relied on two basic features of human nature: inurement and inertia.

Inurement is simply the human tendency to adapt. When change happens, its novelty attracts attention, but time passes, attention fades and the change becomes a new normal. In a phrase, we get used to it. We can become inured to anything, positive or negative, pleasure or horror. Ask anyone who has lived in a democracy that fell into authoritarianism. The shock and anger fade. The unthinkable becomes ordinary. Life goes on. Inurement is both humanity’s greatest strength (we keep going no matter what) and its worst vulnerability (we normalize what should not be normalized).

By deploying slow, quiet, incremental change, Stalin’s strategy hoped people inside and outside his target countries would gradually normalize the change.

The ally of inurement in this strategy was inertia: People and groups think and behave in routine ways. The familiarity of routines makes them easy and comforting. To admit a crisis is underway often means acknowledging you must discard these routines, so there’s a strong bias against seeing a crisis. Or alternatively, a strong bias in favour of declaring a crisis to have passed.

Stalin’s strategy failed, for two reasons.

First, clear-eyed observers saw what he was doing and said so in strong language. There was George Kennan’s famous “long telegram” from Moscow in February, 1946, and Winston Churchill’s “iron curtain” speech in March, 1946.

But far worse for Stalin, there were repeated failures to avoid drama.

Communist parties were understandably quite popular immediately after the war. But that popularity quickly waned as Communist as people became familiar with Communist incompetence and bullying. Local parties responded by ratcheting up subversion efforts. In February, 1947, a Communist was elected the first president of post-war Poland — thanks to a rigged election. In June, 1947, a non-Communist Bulgarian leader named Nikola Petkov was arrested, and three months later was executed after “confessing” to espionage. In February, 1948, the declining popularity of the Czech Communist Party led the Communists to ratchet up efforts against non-Communist opponents — notably by filling police ranks with Communists — prompting twelve non-Communist Czech ministers to publicly resign from the government. With their hand forced, the Communists carried out a coup. It succeeded, but at the cost of making it clear to anyone with eyes what was happening.

Having failed to get what he wanted quietly, Stalin went loud: In June, 1948, he cut off traffic into and out of West Berlin. For a year, the Western Allies kept the city alive with an unprecedented airlift of supplies.

In April, 1949, twelve countries founded NATO, promising to come to each other’s aid if attacked. That may sound like a mere response to a crisis, not seizing opportunity presented by a crisis. But NATO was not just another ad hoc defensive alliance.

Here is the text of Article Two of the NATO charter:

The Parties will contribute toward the further development of peaceful and friendly international relations by strengthening their free institutions, by bringing about a better understanding of the principles upon which these institutions are founded, and by promoting conditions of stability and well-being. They will seek to eliminate conflict in their international economic policies and will encourage economic collaboration between any or all of them.

That provision says NATO is to be more than a defensive alliance against a common enemy. NATO is a community of countries sharing certain values and this provision commits members to seek greater cooperation — social and economic as well as military — based on those values.

A simple response to the crisis would have been a temporary defensive alliance. This was something more. This was seizing the opportunity presented by the crisis to a create a community of nations. The NATO partners have worked so closely together for so long that it can be hard to remember this community did not exist until it was slowly and deliberately built.

As a proud Canadian, I must also note that Article Two was the brainchild of Canada’s own Lester Pearson, future Nobel laureate and prime minister. In fact, Article Two was known as “the Canadian Clause.” So when it comes to making the most of a crisis, Canada has form, as the Brits say.

Crisis #2: Dying Europe

This crisis runs parallel with Stalin’s attempt to quietly subvert half of Europe.

After the Second World War, Europe was a heap of rubble. Almost literally. The destruction of productive capacity, both industrial and agricultural, cannot be overstated. Mass starvation was a real threat in much of the continent. So was freezing to death in the cold. After two years, the heaps of rubble in cities had been tidied up a little but not much more had changed. Ominously, support for Communist parties was growing rapidly, particularly in France and Italy.

In 1947, after heading the US Army throughout the war, George Marshall was US Secretary of State. He saw the threat Stalin presented to Europe. He understood that continued privation of European populations would only increase the appeal of Communism. So in June, 1947, he gave a low-key speech at Harvard in which he suggested the United States should underwrite a plan of recovery that would be created in partnership with Europeans. Between 1948 and 1952, the United States transferred something like $150 billion in today’s money (mostly in grants, not loans) to 16 European countries. It was called the “European Recovery Program” but others — Marshall would never be so arrogant — made it famous as the “Marshall Plan.”

It produced an astonishing transformation. By 1951, European industrial production was substantially higher than it was before the war. Hope returned to the continent, blunting the appeal of Communism exactly as Marshall had intended.

But that much is merely playing defence — responding to the crisis.

The opportunity? By reviving Europe, America revived the global economy, which was wonderful for everyone, including the United States. In time, the Marshall Plan turned a massive profit for America. And more than that: All across the continent, the people of Europe felt immense admiration for a country so wealthy it could afford to give away so much money and immense gratitude for a country so generous that it would. The term “soft power” wouldn’t be coined for another 40 years, but the Marshall Plan sent American soft power shooting through the roof, in Europe and around the world.

The Marshall Plan was arguably the most effective foreign aid program ever, as judged by the benefits it delivered to foreigners — but it was inarguably the most successful such program in history in terms of what it did for the donor.

Which makes it one of history’s most spectacular examples of seizing the opportunity presented by a crisis.

General George C. Marshall

Crisis #3: It’s 1974 and the world is ending

I’ve long been fascinated by the oil crisis of 1973-74, in part because it has been so completely scrubbed from popular memory.

In October, 1973, Egypt and Syria launched a surprise invasion of Israel, which prompted the United States and some European countries to send aid to Israel. In response, OPEC — the Arab-dominated Organization for Petroleum Exporting Countries — deployed “the oil weapon” by cutting oil production and embargoing all oil shipments to the US and the Netherlands. (They targeted the Netherlands because while many European countries tried to maintain a basically neutral position, the Netherlands broke ranks and provided substantial aid to Israel, including parts for tanks. The Netherlands was also the home of Royal Dutch Shell, so cutting off the flow of oil to Rotterdam would hurt much of Europe.)

Almost instantly, the price of oil quadrupled. The stock market crashed. The brutal combination of high inflation and low growth (“stagflation”) pummelled Western economies.

It’s hard to exaggerate the shock of the crisis. In developed countries, the whole post-war order had been built on cheap, abundant oil which, it was almost universally believed, would remain cheap and abundant far into the future. In an instant, this basic assumption was turned upside down. In an essay in The New York Review of Books, historian Geoffrey Barraclough surveyed a host of popular non-fiction books examining the crisis, which was unfolding alongside the Watergate scandal. All the books foresaw the crisis leading to either a second Great Depression or the rise of fascism. Barraclough disagreed. “The odds, it seems to me, are that we shall get both.”

In 1975, Supertramp perfectly captured the mood with the cover for their new album, “Crisis? What Crisis?”

Happily, we got neither depression nor fascism, although the decade that followed was grim at various points.

But the oil crisis did have huge and lasting impact. You can see it in this chart:

Until 1973, oil consumption was on a straight line up. Then the line bends.

I know that chart doesn’t look dramatic but bear in mind that it’s the view from 50,000 feet: By the standards of energy consumption across the whole globe, that’s sweeping and rapid change. It meant the world was using an ocean less oil than it would have if the status quo had been maintained.

So what happened? Governments all over the world responded to the crisis. They boosted exploration. They imposed energy efficiency regulations. They funded research into alternatives. It would take pages to simply summarize the changes.

The most dramatic response was in France. “In France, we don’t have oil, but we have ideas,” was the government’s slogan, and the French government had one of the most ambitious ideas in peacetime history: It would get rid of oil-fired electricity generation, build a huge fleet of nuclear power plants, rapidly expand the network of electrified high-speed trains, and drive energy efficiency into everything done in the country.

They did all that at lightning speed. In 1981 alone, France connected eight new reactors to the grid. It was the fastest, most successful energy transition in history.

French energy security soared. But France accomplished much more than that. Prior to the crisis, France was a minor player in nuclear power and high-speed trains; after, it was a world leader in both. (And still is to this day.) And a little bonus: When worries about climate change soared in the 1990s, France could say it had already implemented the most successful program of decarbonization in the world.

That is making the most of a crisis.

But notice something critical about the chart above: The transition to nuclear power really only starts to deliver in the 1980s. And the OPEC oil embargo? It ended in March, 1974, not even half a year after it started.

So in one sense, the crisis was very brief — but seizing the opportunity took many years, even decades. That’s a remarkable mismatch.

And remember inurement and inertia? If I’m right about the role they play in crises, surely the sense of crisis must have faded rapidly after 1975. So how did the French government maintain support for its hugely ambitious program between 1975 and the early 1980s? Why didn’t France take the easy way out? Scrap the program. Put the crisis in the past. Resume familiar habits. The “panic-neglect cycle” is a classic pattern in how people and countries respond to threats, with a fierce response, even over-reaction, when the threat first manifests, followed by a quick return to ignoring the threat to an irrational extent when are no longer staring at its bared teeth.

How did France resist the panic-neglect cycle and stick with its plan for years and decades?

One factor was simply the price of oil. After quadrupling, it didn’t drop significantly when the embargo ended. It remained high for years. That helped a lot. But it would be reasonable to expect people would get inured to those prices and the sense of crisis would ebb. That would have happened if prices had remained high and stable. But they didn’t. In January, 1978, the Iranian revolution broke out.

Still-high oil prices almost tripled again: The wolf was back and France was again staring in its teeth. Anyone who thought the crisis had vanished and could be forgotten looked deluded. France had to keep going with its all-out response.

Only in 1985 did the price of oil fall substantially. Even then, it took years for the collective sense that the energy crisis of the 1970s was well and truly over. And by then, the French response to the crisis was delivering obvious and substantial benefits. Just as importantly, the program had been institutionalized. It had huge sunk costs. It had supportive interest groups. It had momentum and life of its own.

That is how France was able to respond to a crisis in the mid-1970s with a program that took until the 1990s to fully deliver.

“Let me be direct,” Canadian Prime Minister Mark Carney said at Davos. “We are in the midst of a rupture, not a transition.”

Carney’s speech drew a standing ovation at Davos, and praise from around the world, not because he said something surprising, but because he said it. And said it well.

Corporate titans are silent, if not complicit. National leaders burble praise for a man they all despise, hoping lies will shield them from his wrath. There is a pandemic of dishonesty. It took Mark Carney to say what the great, sane majority knows to be true: We are in a crisis the likes of which we haven’t seen since the Second World War.

The only question is, what are going to do about it? Here is where the old cliché about crisis and opportunity must be trotted out.

The crisis is Donald Trump and his destruction of the international order. The crisis is keeping one’s country from being squashed underfoot as the Stay Puft Marshallow Man rampages across the landscape. The crisis is protecting peace and democracy as chaos descends and authoritarians rise.

But the opportunity? That is as large as the crisis.

Canada and Europe have long faced similar problems and met with similar failure to address those problems: Our economies are insufficiently dynamic and innovative. We don’t lead technological advances. We are falling behind the United States on productivity. We say “no” enthusiastically and often, “yes” only reluctantly and seldom.

Similarly, Canada and Europe allowed our militaries to atrophy. We let ourselves believe our values were so good they were enough, that hard power was a luxury we could dispense with. We let the Americans make the big strategic decisions and lead so often, for so long, we have forgotten how to.

What Mark Carney outlined at Davos was a response to the crisis: Like-minded middle powers must band together in a defensive alliance. He didn’t quote Benjamin Franklin but he could have: “We must, indeed, all hang together, or, most assuredly, we shall all hang separately.”

As I was writing this piece, news broke that Donald Trump is threatening Canada with a 100% tariff on all Canadian imports if Canada makes a trade deal with China. If Canada concedes that, we concede our sovereignty, a resource colony without even the right to vote for the government that controls us. Canada would be the first to reach subjugation — but not the last. Many of the leaders of those other middle powers stood and applauded Carney’s speech. Will they heed it now? This is the crisis.

But let’s not only be defensive. Let’s look at the opportunity.

Carney didn’t sound that theme much in Davos, but he often has in other forums. And the Europeans themselves are connecting the dots between the immediate crisis and long-overdue reform, as David Ignatius wrote in the Washington Post:

Greenland was a trigger, but the deeper anger was over what Macron described as economic “vassalization,” at a moment when Trump is in imperial overdrive. European leaders know they are being left behind by an AI-powered surge in the U.S. economy. Europeans want to join in that boom — and they finally seem to recognize that the European Union’s rules and regulations, and its heavy tax burden, are stifling the growth they need.

European leaders want their own version of “Liberation Day.” That means new trade partnerships with Latin America, Africa and Asia, and an understanding with China that it must share technology if it wants access to the E.U. market. But most of all, it means creating innovation-friendly economies at home — with fewer rules, lower taxes and a less rigid welfare system.

Europe needs an “urgency mindset” about economic reform, European Commission President Ursula von der Leyen told the forum. “Europe must speed up its push for independence. … The world has changed permanently. And we need to change with it.”

There is so much Canada and Europe could do together, starting with our militaries.

We must revive and rapidly expand their militaries with the speed and urgency of the re-armament programs carried out in the late 1930s. That’s a defensive measure. But the economic opportunities are as big as the budgets. Much military contracting involves the most advanced technologies in the world, and creating a huge, shared, guaranteed market will stimulate enormous research and development in those technologies. What could that lead to?

To the next Silicon Valley, possibly. Today’s Silicon Valley billionaires tend to be libertarians with soft spot for authoritarianism, so they don’t often how Silicon Valley first came to be. It wasn’t young tech entrepreneurs who created it. It was the US military: Thanks to the Korean War, then the Cold War and the space race, the US military saw its budget soar, and in the 1950s it continued its shift from the traditional American model of war — win with numbers — to one in which the US would hold the edge by having the best technology. So the military poured staggering amounts of into cutting-edge R&D. With world-changing results.

Nothing that the United States did in the 1950s to start the wheels of Silicon Valley rolling could not be done now by a consortium of middle powers. And we’ve started: Europe created the Security Action For Europe (SAFE) program to enable European countries to get low-interest loans to purchase military gear from European companies. Canada joined at the end of last year.

Other potential benefits of the crisis are less tangible, but they’re already evident. The childish belief that hard power isn’t essential is melting as fast as snow in June. Good riddance. The tendency to prefer a safe “no” over a risky “yes” so prevalent in Europe and Canada is similarly fading as people realize that “no” is no longer safe. We will be much better of without it.

Even long-standing problems of national identity and unity that festered thanks to the lazy tendency of leaders to take collective identity for granted — or worse, to turn their countries’ histories into woke litanies of guilt — are starting to correct. There’s nothing like having a thug wave a fist in your mother’s face to remind you what love and pride feel like. And that some things are worth fighting for.

I could go on and on. Just as France benefited spectacularly from its bold response to the oil crisis of the 1970s, so all the former friends and allies of the United States could benefit spectacularly by America’s betrayal. Band together. Get ambitious. Go to work. And don’t stop.

But that last part raises an obvious question.

Some of what we must do will take months. More will take years, even if we tackle it with the urgency France brought to the oil crisis. Much will take decades to fully come to fruition.

That leaves so much opportunity for inurement and inertia to do their work.

Maybe the crisis is over?

Can’t we just negotiate a new trade pact with Trump and let life go back to normal? It wouldn’t be so bad. And it’s so much easier….

As time passes, the sense of crisis could fade, and it would be so tempting to scale back and take the easy way out. A year ago, I worried we would. But not anymore.

Remember that what allowed France to carry out its long-term program years and decades after the 1973 oil crisis was the failure of the sense of crisis to fade. The price of oil stayed sky-high. People could see the crisis on signs at the gas station. And before they could get inured to those prices, a second meteor struck the earth, sending both prices and the sense of crisis soaring again.

For the sense of crisis to last, fresh coal must occasionally be shovelled into the engine. And Donald Trump is a compulsive shoveller of coal.

“President Trump is showing symptoms of an addiction to power, evident in his compulsion to escalate claims of dominion over domestic and international adversaries,” wrote Thomas Edsall in The New York Times recently. Edsall is a journalist, but his conclusion was based on interviews with a series of experts on the neuroscience and psychology of power.

They all saw Trump’s behaviour as a manifestation of malignant narcissism, among other psychological disorders Trump is so obviously afflicted with. The essence of malignant narcissism is not simply a grandiose sense of self, but a gnawing internal sense of worthlessness. The self-aggrandizement is compensation for self-loathing that cannot be dispelled, only eased briefly by displays of dominance over others.

And inurement has a role to play in Trump’s internal drama: Do a thrilling or delightful thing over and over and the kick it delivers will slowly diminish. To get the same kick, you must escalate.

That’s what we’re seeing with Trump. It used to be a thrill to muse out loud about investigating his enemies; now he needs to see them indicted. Calling the prime minister of Canada the “governor” delivered a kick once; now he gets the same thrill by threatening to crush Canada’s economy with a 100% tariff.

Needless to say, this is psychopathic, destructive behaviour that could easily escalate into a regional war. Or worse.

But it has one benefit: With three years left in his presidency — assuming he obeys the constitution, which is a foolish assumption at this point — the sense of crisis is most unlikely to diminish for years to come. Trump may go quiet, now and then. But set your clock. As predictable as a Swiss train, the next assault is coming. And it will be bigger than the last.

Trump is the walking, talking opposite of Stalin’s strategy of quiet takeover. He wants crisis. He needs it. He craves hearing the whole world in uproar.

I’ve long said our last best hope against Donald Trump is Donald Trump. The man is indisciplined, impulsive, incompetent, and incoherent. Aside from creating the image of success and getting elected, his most impressive accomplishment in life was defeating mathematics to bankrupt a casino. We could ask for no better ally against Donald Trump.

But the best thing Trump can do for us is to keep the sense of crisis alive for years — giving us the time to not only answer the crisis but seize the enormous opportunity it presents.

And he will. Because he can’t help himself.