What are the levels of state power, and how are they differentiated?

Summary

How global power is actually tiered, why the dollar still anchors Western primacy despite erosion, what it would take for rivals to build real alternatives, and why capital keeps concentrating.

What it argues

1. Legal vs analytical power tiersPolitics

   Only the UN Security Council's five veto-holders form a legal tier; superpower and great-power labels are analysts' rankings. Guterres links the veto directly to superpowers' immunity from punishment. Small states like Panama gain outsized weight by controlling vital routes such as a canal. Legal authority and informal power rankings are distinct, and the veto remains the sharpest dividing line.

2. Western institutional position erodesPolitics

   The post-1945 order, including the veto and the US role as the UN's main funder, still keeps the US at the top tier. US policy unpredictability, unpaid UN dues and depleted military stocks are wearing that position down. Western institutional dominance persists but is weakening faster than its financial base.

3. Rivals' multipolar ambitionsPolitics

   Rivals stated in a 2025 treaty that they aim for a multipolar order. China has shown no willingness to take on the costs of leadership that such a shift would require. Calls for multipolarity have not been matched by any rival stepping into a leadership role.

4. Dollar's financial depthEconomics

   Deep US capital markets and the dollar's role as the world's liquidity backstop have no near-term substitute. This financial depth funds the military and institutional reach built on top of it. The dollar remains the strongest of the West's foundations, ahead of institutions and military reach.

5. Routes to local-currency marketsEconomics

   Non-Western states have real reasons to build their own markets: imported US shocks, frozen-reserve risk and currency volatility. The euro gained ground through open markets and record debt issuance; the renminbi stays near 2% of reserves because capital controls keep it closed. Rand volatility hit a post-COVID high when the Middle East war began. Depth comes from open, trusted markets, not from switching how trade is invoiced.

6. Payment links and bond-market toolsEconomics

   Regional fast-payment links (ASEAN+3 since 1997, Singapore-Malaysia, India-Bhutan) cut dollar exposure in settlement without replacing it as backstop. The Asian Bond Markets Initiative, launched in 2003, built local-currency bond markets under predictable law. Crypto can lower settlement costs but cannot build market depth; dollar stablecoins mostly spread dollar use further. Working tools exist for payments and bonds, but none yet substitute for trusted institutions.

7. What drives capital concentrationEconomics

   Since the 1970s, tax, financial and labour policy have favoured returns to capital over wages. Public backstops such as bailouts leave losses with the public while gains stay private. Concentration then captures regulators and spreads costs to wage earners and weaker economies through the dollar system. Concentration stems mainly from policy choices, not merit, and it reinforces itself.

8. Legal foundations of trusted marketsLaw & rulings

   Independent courts and enforceable contract, creditor and insolvency law are core to investor trust in local-currency bonds. Legal protection against arbitrary freezes or sudden capital controls matters as much as sound monetary policy. South Africa shows an independent central bank is not enough alone: state capture still stalled growth. Binding the state's own hands in law, not just monetary policy, is what gives lenders confidence.

Open questions

• Whether Security Council reform, through wider membership or a restricted veto, will actually happen.
• Whether any rival currency will reach the open, deep-market status the dollar holds.
• Whether BRICS proposals to link central-bank digital currencies will move beyond proposal into operation.
• Whether reforms to bargaining power and capital taxation will be adopted to curb capital concentration.