In the classic game of “chicken,” two drivers race directly toward each other, and the first to swerve is the “loser.” If neither swerves, both will probably die. In the past, such scenarios have been studied to assess the risks posed by great-power rivalries. In the case of the Cuban missile crisis, for example, Soviet and American leaders were confronted with the choice of losing face or risking a catastrophic collision. The question, always, is whether a compromise can be found that spares both parties their lives and their credibility.
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There are now several geo-economic games of chicken playing out. In each case, failure to compromise would lead to a collision, most likely followed by a global recession and financial crisis.
- The first and most important contest is between the United States and China over trade and technology.
- The second is the brewing dispute between the US and Iran.
- In Europe, there is the escalating brinkmanship between British Prime Minister Boris Johnson and the European Union over Brexit.
- Finally, there is Argentina, which could end up on a collision course with the International Monetary Fund after the likely victory of the Peronist Alberto Fernández in next month’s presidential election.
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I am really enjoying the game of chicken between China and the United States. Except, it’s not the normal game of chicken. In this case trying to keep driving cars made of tin foil and cheap metal, based on flawed designs that they stole from someone else, head on into US vehicles that are big, clunky, heavy, slow, and impenetrable. I hope they keep it up. Eventually they are going to run out of energy and realize that they have overplayed their hand.
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