The chattering classes have stumbled upon a comforting new narrative. They look at fracturing trade alliances, regional manufacturing shifts, and the weaponization of SWIFT, and they conclude that the old global financial order is dying. In its place, they promise us a romantic, decentralized patchwork—a new economic order built piece by ad hoc piece, negotiated by agile states in bespoke agreements.
It is a beautiful fantasy. It is also entirely wrong.
This thesis mistakes turbulence for decentralization. The belief that the global economy is fracturing into localized, ad hoc networks ignores the brutal reality of structural power. We are not moving toward a decentralized mosaic of independent actors trading on bespoke terms. We are moving toward a hyper-centralized, highly weaponized economic duopoly. The plumbing of global commerce is not getting simpler or more localized; it is becoming more concentrated in the hands of fewer gatekeepers. The ad hoc economy is an illusion masking a deeper, more vicious consolidation.
The Friction Illusion
Proponents of the ad hoc economic theory argue that because countries like India, Brazil, and Saudi Arabia are cutting bilateral deals outside traditional Western frameworks, the monolithic global system is dissolving. They look at local-currency trade settlements and bilateral swap lines and see a decentralized future.
They fail to understand the difference between transactional friction and systemic architecture.
I have spent years analyzing cross-border capital flows and structural trade mechanics. Here is what happens when you attempt to build an empire on ad hoc, bilateral agreements: you drown in transaction costs. If Country A trades with Country B in local currencies, and Country B trades with Country C in theirs, you have not created freedom. You have created an administrative nightmare of illiquid currency pairs, unhedged foreign exchange risk, and massive capital inefficiencies.
Bilateralism does not scale. The moment economic stress hits, capital does not flee to an ad hoc network of middle powers. It flees to the deepest, most liquid capital markets on earth. The "lazy consensus" assumes that because nations want autonomy, they can simply manifest it through paperwork. But infrastructure beats intent every single time.
The Architecture of Coercion
The thesis of an ad hoc world ignores the inescapable reality of network effects. In digital platforms, users cluster around dominant nodes because that is where the value sits. The global economy operates under identical physics.
Consider the plumbing of international finance. The Western financial stack—comprising the US dollar, Western clearing banks, Euroclear, and the SWIFT messaging network—derives its power from network effects that have built up over eight decades. You cannot replicate the liquidity of the US Treasury market piece by piece.
When a nation attempts to step outside this system, they do not enter a free-flowing, ad hoc paradise. They enter a parallel, highly centralized stack run by Beijing.
China’s Cross-Border Interbank Payment System (CIPS) and the expansion of the digital yuan are not tools for a decentralized, multipolar world. They are the infrastructure of an alternative hegemony. If you are a developing nation seeking to escape Western financial hegemony, you do not get to negotiate a bespoke, independent future. You change masters. You trade the Washington Consensus for the Beijing Consensus.
The middle powers currently celebrating their "strategic autonomy" are living on borrowed time. They are exploiting a temporary geopolitical transition window. Once the alternative infrastructure is fully mature, the choice will be binary. The ad hoc middle will be crushed between two massive gravitational wells.
The Fatal Flaw of Friendshoring
A core pillar of the ad hoc argument is "friendshoring"—the idea that supply chains are breaking away from global hubs and relocating to a decentralized network of trusted allies.
This view collapses under structural analysis. Moving a assembly plant from Shenzhen to Hanoi or Monterrey does not decentralize the economic order. It merely lengthens the supply chain while keeping the core dependencies intact.
If you audit the components, raw materials, and specialized machinery required for friendshipped manufacturing, you quickly discover that the upstream dependencies have not shifted. Vietnam’s electronics exports rely heavily on Chinese intermediate inputs. Mexico’s automotive boom is powered by Chinese auto parts.
We have not built a resilient, ad hoc network of self-sustaining trade hubs. We have created a shell game. We have added layers of middlemen, increased shipping costs, and introduced massive tracking opacity, all to give politicians a press release about supply chain security. The underlying centralization remains untouched; it is just dressed in camouflage.
The Hard Truth About De-Dollarization
Every discussion about a new economic order inevitably brings up the death of the US dollar. Pundits point to central banks buying gold and bilateral oil deals settled in RMB as proof that the dollar's demise is imminent and that a fragmented monetary system is emerging.
Let us dismantle this premise with basic balance sheet mechanics.
To replace the US dollar as the foundational pillar of the global economy, an alternative asset must fulfill three criteria: it must be backed by deep, liquid capital markets; it must operate under an open capital account; and it must possess a strong, predictable rule of law.
Gold cannot run a global economy; it is too illiquid and cannot be used to settle trillions of dollars in daily trade velocity without friction that would freeze commerce. The Euro is shackled by a fractured fiscal architecture. The Renminbi is explicitly controlled by a closed capital account; Beijing will not tolerate the massive capital outflows required to make the RMB a true global reserve currency, because doing so would destroy their internal domestic economic model.
When India agreed to buy Russian oil in rupees, what happened? Russia ended up stranded with billions of Indian rupees that it could not spend, could not convert, and could not repatriate. The ad hoc solution failed because the structural mechanics of international trade require a global clearing asset, not a bucket of illiquid local currencies. The transaction collapsed under its own weight, and Russia demanded payment in yuan or dirhams.
The "People Also Ask" columns on search engines are filled with variations of: "Will a basket of currencies replace the dollar?" No. A basket of currencies is a theoretical abstraction used by multilateral institutions to write reports. It is not an investable asset class that can support global supply chains.
The Cost of the Illusion
There is an undeniable downside to rejecting the ad hoc narrative. Acknowledging that the world is splitting into a rigid duopoly means accepting a future of lower growth, higher inflation, and extreme structural rigidity.
For corporate leaders, stop designing supply chains for an agile, fragmented world that does not exist. Stop assuming you can seamlessly navigate a patchwork of independent regional markets.
If your strategy relies on playing both sides of the geopolitical fence, you are exposed. The regulatory architectures of the United States and China are moving toward absolute extraterritoriality. Soon, you will be forced to choose which stack you operate on. If your technology utilizes American IP, you will comply with Western export controls globally, or you will be severed from the Western financial system. If your growth relies on Chinese market access and supply infrastructure, you will bow to Beijing’s data security laws, or you will be expropriated.
The illusion of the ad hoc economy encourages complacency. It suggests that companies and smaller states can remain neutral, floating gracefully between shifting alliances. It is a strategy designed for a world that is already gone.
Stop Planning for a Mosaiced World
The concept of a new economic order built piece by ad hoc piece is a intellectual cop-out. It is the narrative of analysts who see change but lack the stomach to face the grim structural reality of where that change is leading.
The global economy is not becoming a decentralized network of agile entrepreneurs and flexible states. It is becoming a trench system.
The old global order is not dissolving into a fluid mosaic; it is hardening into a pair of competing fortresses. The infrastructure is being laid, the gates are closing, and the space between them is rapidly disappearing.
Build your strategy for the duopoly, or get buried in the middle.
