Jeffrey Sachs on the collapse of US hegemony and the unravelling of the post-Cold War world order
Glenn Diesen interviews economist and professor Jeffrey Sachs about the structural collapse of American unipolarity and its consequences.
Summary
Glenn Diesen interviews Jeffrey Sachs in this wide-ranging conversation recorded on September 4th, 2026. Sachs argues that the current global disorder — encompassing the NATO-Russia war, the US-Iran conflict, the bullying of allies, and looming financial instability — is the result of a fundamental collision between America's unipolar self-image and multipolar reality. He contends that the US missed a historic opportunity at the end of the Cold War to build a cooperative world order, and instead chose extraction, expansion, and hegemony. Sachs reveals that he personally submitted a financial stabilisation proposal for the Soviet Union in 1991 that was explicitly rejected by the White House National Security Council, with officials describing it as merely needing "a good PR package." He argues that broken promises on NATO expansion, combined with the transition from American beneficence to outright grifting under Trump, have brought the world to an extraordinarily dangerous and unstable juncture.
Key Takeaways
FULL TRANSCRIPT
The collision between unipolar ambition and multipolar reality
Glenn Diesen: Welcome back. Today is September 4th, 2026, and we have the great pleasure of being joined by Jeffrey Sachs. Thank you for coming back on the program. I want to start with a big question: how do you explain this time in history? We see NATO engaged in a war against Russia — it used to be a proxy war, but I think we've crossed that line. We see the US in a war with Iran which has spread to the entire region and could pull in the other great powers. Diplomacy is criminalised. The US is even now bullying and cannibalising its own allies. The Europeans are becoming less relevant, and the US seems to be at the cusp of some big financial crash. Yet our governments and media assure us that all is fine, that all of this was caused by other people, and that we are winning. All of this is very interconnected. How can you explain this period in history?
Jeffrey Sachs: Broadly speaking, it's the collision of the unipolar vision and intention of the United States with the multipolar reality. From the mentality of the military-industrial complex of the US — as certified, indisputably they thought, by the end of the Soviet Union — the US is the reigning world champion from now and forever. And that is colliding with a fundamental reality: it just ain't so. The United States is 4.2% of the world population, arguably 14.5% of world GDP. And that's not enough to be the reigning world hegemon. So what the US thinks it is, or acts like it is, or wants to be, or believes it needs to be, is in collision with an underlying reality in which China is a larger economy, and in which most of the world does not want to be under US-made rules or US hegemony.
That collision shows up in all of these theatres of war. This is the same story in the Middle East. It's the same story in Ukraine. It's the same story in East Asia. It's a US war machine — the military-industrial complex that runs the US political structures and the security state — that believed firmly from 1947 onward, after the end of World War II, that the US would win a twilight struggle with the Soviet Union and emerge as the world's unique leader, something like the British Empire of the 19th century or the Roman Empire of the 1st century AD. When the Soviet Union ended, all of this was confirmed, and the US went into overdrive to solidify the so-called unipolar moment. That was subscribed to by both political parties. So the idea that this is somehow a partisan issue or a Trump issue is not at all correct. This is a US issue — but not US in the sense of the body politic. US in the sense of the leading forces of the United States, which, as Dwight D. Eisenhower explained to the American people on January 17th, 1961, is the military-industrial complex. That is, understandably or traditionally throughout all of history, the leader of the state apparatus — the security state, the war-making capacity. In the United States it basically means the Pentagon, the CIA, and now Silicon Valley, the war contractors, and the financiers. That has been the guiding force of American foreign policy since the end of World War II.
When Dean Acheson, one of America's leading diplomats after World War II, wrote his memoirs, he called them Present at the Creation. I thought when I was young that was a clever title. Now I think it's a kind of madness. The creation was not 1945, or 1947, or 1949 — but from the American point of view, it was the creation of the American world. And the end of the Soviet Union was the confirmation of the American world. We have had nothing since then but rhetoric — from some sane people, from some less sane people — but all pretty much the same: America is the all-powerful country. Madeleine Albright, the Secretary of State in the 1990s, called the United States the indispensable country, the country that sees further than anyone else. The neocons said that we are the liberal hegemon of the world. Brzezinski wrote in 1997 — a very sane man, a very decent man — but he wrote that American power was irresistible, that Russia would have no capacity but to accede to American power. In a famous couple of sentences in his book The Grand Chessboard, he says American scientific, technological, financial, economic, and military dominance is so great that there is no alternative in the world.
And this, I think, is the real basis of where we are today. All of that is just not true. It's not true today, most importantly because of the rise of China, but also because in our world there is no such thing as the permanent hegemon. There never has been and there won't be, because no power has the unique advantage that it can impose its will on the rest of the world — and certainly not a power that wants to do it by extraction rather than by gift.
One final point about this collision: back in the 1940s after World War II, the United States really was extraordinarily powerful. It had, for four years, an atomic bomb monopoly between Los Alamos and 1949. It was indisputably the industrial power of the world. It was indisputably the financial power of the world. Unlike the Soviet Union, which had incurred 27 million deaths from Hitler's army, the United States had one day of attack — December 7th, 1941 — on its territory, and all the rest was building military capacity. So the US really was an economic, financial, and military titan at the end of the 1940s. And it was America's view at the time that it should use that advantage to underwrite an American world — the Marshall Plan being the most famous part of that.
Well, fast forward 75 years, with the US in a much diminished economic and financial role, without the dominance of technology, with big inequalities in American society and major debt — which is to a significant part mismanagement, but to some extent the cost of wannabe hegemony. The United States no longer says we underwrite the world order. It says we extract. The United States wants to charge other countries for the US military deployed in those countries. It literally says: we have bases in Korea and Japan, we defend you, you pay for us. The US demands from Europe that it spend 5% of GDP. The US says we need oil, so we'll invade Venezuela, we'll kidnap the president, we'll bribe or suborn the government, and then Venezuela's oil is ours. We turned from at least self-interested beneficence — it was self-interested, but still it was giving — we turned from that to grifting and extraction.
And Trump is a thug. He's a low-level thug. He's always been a low-level thug. He's a New York real estate developer who bankrupted his companies multiple times, but his normal way of doing business for decades was to sign a contract and then, after the construction was done, call in the counterparty and say, "I'm going to pay you half of what's in that contract, and you're going to take half." And the befuddled counterpart would say, "Excuse me, but we have a contract." And Trump would say, "Sue me." He's been that way for decades. This is his modus operandi. But now this is US foreign policy. This is actual extraction. So how can you be 4% of the world population, 14% of world output, about 13% of the import market for the world, extracting from everybody, invading where you want, threatening where you want, and expect to keep control of an environment like that?
The rest of the world is saying no thank you, and they're balancing — the most basic feature of geopolitics in history — which is: if you have a bully, the other side gets together and says we don't want the bullying. The Shanghai Cooperation Organisation meeting last week involved about 40% of world output and population, saying we don't want to be bullied. And BRICS will meet next week — that is approximately half of world output and population — meeting in Delhi, saying we don't want to be bullied. Now, the United States continues, one by one, with the Indians and others, to bully, threaten, bribe, and do whatever it can to try to break apart this balancing against the United States. But on the whole, the transparency of Trump's modus operandi is so clear — the thuggery, the crudeness, the illegality, the fact that there's no such thing as an agreement with Trump, since an agreement is what you reject the next day — I think this means there is no clever path for the United States to maintain the hegemony.
So that's how I view it: a basic collision between self-regard and reality, with an underlying change from self-interested beneficence to grifter gangster behaviour. And this is not a good situation. It's a very dangerous one.
Economic instability and the compounding crises of technology, ecology, and demography
Glenn Diesen: That was a nice description of it all. But this foreign policy, as you describe it — built around maintaining American primacy, and for the Europeans a policy of being the junior partner of the US and taking advantage of that — appears to have now shifted towards a foreign policy of ignoring new realities and trying to roll them back. How do you see the economic consequences of this building up? Trump keeps saying America's hotter than ever, and yet if you measure in terms of industrialisation, energy crisis, stability of currencies — how stable is this system now?
Jeffrey Sachs: Well, it's not much of a system after all right now. It is really a disorder rather than an order, and everybody is recalculating. Of course, the US looks like it has advantages, so no one's writing off the United States right now. The US has its AI. The US has a booming stock market, no doubt. The US is still the world's reserve currency. Some people say, well, in the end of the day, the US will crush Iran, or in the end of the day the US will get its way. And so, even though there's a clash with reality in this grandiosity of American foreign policy, a lot of countries are hedging their bets. I'm in touch with governments that say, "Well, yes, Jeff, we of course agree with you, but we dare not insult the big man." This is still not a decisive moment. This is a moment of great flux, a lot of unpredictability, and a lot of violence.
But from an economic point of view, it's worth remembering that in addition to the geopolitical changes and the wars, there are some very important deep changes underway in the world that will reshape the world economy as well. Number one is the technological revolution that's underway, which is absolutely real. It's not owned by the United States, though the US led it for much of the time. The AI revolution, the computation revolution, the digital revolution — this is real, deep, and transformative. And incidentally, in ways that are heatedly debated, because it is to some extent just an open future and to a big extent an unknown future. Will AI lead to the end of jobs? Will it lead to the age of abundance? Will it lead to runaway agents which end up blowing us all up because they take over the nuclear launch computers? We don't know the answers to some of these things. The United States is owned by these companies rather than governing them, and so there's a lot of technological uncertainty.
The ecological and environmental shocks in the world are absolutely huge as well. We are reaching major tipping points in the Earth's system functions. We could have a multi-metre rise of sea level anytime in the next century. It could be tomorrow — a major calving of the West Antarctic ice sheet that deposits enough of the Antarctic ice sheet into the Southern Ocean to lead to a pulse of sea level rise of several metres. That would devastate hundreds of millions of people. Have no doubt about it. It would be a catastrophic event. And for anyone who doubts the force of nature, look at the shocking videos that came out of Nepal a few days ago, with the collapse of a glacier that led to destruction in which buildings looked like a Hollywood film being brushed aside, and thousands killed suddenly. A lot of this is going to happen in the future because we are at tipping points of the ocean circulation, ocean sea level, the stability of the West Antarctic ice sheet, the boreal permafrost, and the rainforests — which are drying, especially in the southern Amazon. That's another point that's very important, and it involves fundamental issues of food security, water security, and physical environmental livability — for example, coastlines that will affect vast populations.
Normally you'd think we care about all of this. Well, Trump has pulled us out of every environmental treaty and trashed all the environmental science. He's trashed the websites of our scientific organisations, so the basic monitoring is no longer being done. And all of this is happening as we're going into what could be the most powerful El Niño in recorded history, just now. In the coming months, there are massive forest fires everywhere, big droughts, tremendous change.
We also have continued big demographic changes in the world. Africa will add at least a billion people between now and 2050 in net population, and arguably two billion people by the end of the century. That's a lot. And in other places there are offsetting major demographic changes. China's population could decline from 1.4 billion to under 1 billion people by the end of the century. So all of this is to say, Glenn, this would not be a quiet moment under normal circumstances. We'd have major investments to undertake, major innovations to manage, to govern, to absorb. And we're doing it at this absolutely bizarre moment where we have the weakest American leadership probably in history — although it's hard to really rank James Buchanan, Millard Fillmore, and Donald Trump, but Trump is definitely in the bottom five of all time, and certainly the most ignorant of all of them.
Weak leadership, geopolitical tensions, a government that is more run outside public view than inside public view. I think it's no accident that the CIA director was the one in Moscow last week. They have much more say over American foreign policy than the State Department, for example. What's behind the scenes is much more important than what is in front of the picture in America right now. So all of this is quite tumultuous, quite dangerous, and quite unpredictable.
The stable part is the following. China, Russia, and I hope and believe India and African countries are not destabilisers, revolutionary powers, or renegade states. They actually have a quite straightforward political agenda, and that is economic development. These are countries that want a better life, want to raise living standards, and want to do it in a context of massive technological, demographic, ecological, and political change. The vast majority of the world — what we call the emerging and developing economies, EMDEs, about 85% of the world — has no interest in American hegemony. It's not their business. They have no interest in Western hegemony. They're not obsessed with what's happening in Brussels versus Berlin. They want to get on with their lives. They don't want to overturn the global order. They're not revolutionaries. They want to make public investments, improve their infrastructure, adopt artificial intelligence and digital technologies, train their young people. That's the ballast in the world today. They're not out for world domination like the United States is. They're not dreaming of past empire like the British are. They're actually focused overwhelmingly on economic issues — pretty pragmatic. How do we pay for this? How do we pay for our education system? How do we build out a power grid? If we just focused on those practical issues, these geopolitical dramas would fall by the wayside. No one wants to invade the United States. No one wants to overturn the United States. No one wants to threaten the United States. If you made a list of Russia's hundred objectives, invading Berlin or Paris would not be in the top 100. Not even close. Russia has never invaded Western Europe — that count is zero. So don't worry about it. If we got past the geopolitical obsessions, we could actually get on to some pretty practical issues.
The missed opportunity of 1991 and the broken promises on NATO expansion
Glenn Diesen: I agree with the sentiment that the world is going through this massive shift in power, economy, technology, and environment, with all these wars as well. We really need the best leaders now to navigate through these times, and we have probably the worst on both sides of the Atlantic. But if we go back to the end of the Cold War — and you were there with a front-row seat — some very fateful decisions were made in terms of structuring the new world order and the European security architecture. Many of our leaders then understood the risks of the choices being made, primarily that of organising it around hegemony. What are the Western policymakers failing to understand about where we are now, and about this transition they are currently presiding over?
Jeffrey Sachs: Basically, the US got it all wrong at the end of the Cold War, and that was an absolutely huge mistake. The right response to the end of the Cold War was to say: my God, we came through 75 years of the Bolshevik revolution and ended with peace. This is quite remarkable. It was the Soviets themselves who said: that was not the right approach, we need to get out of this mess. It was the Russians. President Yeltsin said to me, said to my face: we want to be normal. We just want to be a normal country. We want to have a market economy. We want to be at peace. We want to cooperate with the United States. We want to be normal again after the period from 1917 to 1991. And this was the answer waiting for us on a silver platter.
Had the United States said, "Wow, that was lucky — we had thousands of nuclear warheads on both sides, we had what seemed at several moments in the last 50 years to be the possibility of the end of the world itself in nuclear war, and now comes President Gorbachev and President Yeltsin to say let's put an end to all of that" — if the United States had simply said, "Miracle, we go for it, we cooperate" — we'd be in a golden age right now.
I was trying to find a document which was completely shocking for me. In 1991, I recommended a series of financial measures to help the Soviet Union to stabilise. This was written with President Gorbachev's top economic adviser, Grigory Yavlinsky, and with colleagues of mine at Harvard and MIT. We worked together on a document that said basically: the Soviet Union is in a very financially unstable mode. It's the end of the Soviet Union itself in its current form. They want to democratise. The government is in a deep financial crisis. It's very unstable. We should be helping to stabilise the situation.
For me, in my intellectual formation, the big lesson of the 20th century was the difference between how we had handled the end of World War I and the end of World War II. At the end of World War I, there was a punitive settlement — the Versailles Treaty. At the end of World War II, there was on the one hand the Cold War, which I think was unnecessary, but there was also American self-interested but expansive beneficence — the Marshall Plan, development aid, and so forth. The lesson, as I learned it as a young student reading John Maynard Keynes's The Economic Consequences of the Peace, and then as I became a practitioner myself, is: don't miss a chance like 1991 to create a peaceful environment. Don't be punitive. Don't declare victory and impose subordination policies on the other side. Be magnanimous, but especially be clever enough to build an era of peace.
All of that is to say that I worked both for President Gorbachev and President Yeltsin on a package of Western assistance to help stabilise a profoundly destabilised environment. When an empire collapses, it's unstable. When the Soviet Union dissolves suddenly, 15 states that don't even have a means of trade with each other — when you go bankrupt, when you can't pay your bills as the Soviet Union and Russia became unable to do, you can get hyperinflation, you can get massive destabilisation. So as a financial expert, I recommended the mechanisms and tools of stabilisation.
All of this is to say that the proposal we made went to the White House, and I didn't know it for decades afterwards. But it was considered and explicitly turned down at a meeting of the National Security Council on June 3rd, 1991. Because of the Freedom of Information Act, someone ended up sending me the document — the minutes of the meeting in which the proposal is turned down. And the people in the White House are shocking in their recklessness — I would say imbecility — including the person who at the time was head of the Office of Management and Budget, Richard Darman, who had been a colleague of mine at Harvard University. He was a fool. He represented the arrogance, the blightedness, and the ignorance of the American leadership. And I'll quote one line. They turn down the proposal, and then Darman says the following: "I want to seem serious while not fooling ourselves. We have enough ingredients already for a good PR package. The list doesn't need to grow. We shouldn't shoot our wad now. Mikhail Gorbachev is a showman. He will pressure us no matter what. We may need something else later."
What is this saying? These are people saying we need a PR package. This is before the G7 summit where they told Gorbachev to go to hell. He went home. He was abducted in a coup. That was the crash that then led to Yeltsin coming to power and the dissolution of the Soviet Union. We need a PR package — that was their view. Gorbachev's a showman. Gorbachev was not a showman. Gorbachev was trying monumentally to change a global order to peace. And the answer from the other side was nothing.
And just to emphasise: this is one particular meeting about a financial package, but it's been all the way since 1990. We should remember the even bigger picture that was part of this scene, because I was there through all of this in person. I saw this. 1989 was a kind of miracle — peace, the end of the division of Europe — and Gorbachev was the constructive agent in all of it. I don't think people even understand that. When I was advising the Polish government in 1989 on how to democratise, make its economic reform, and stabilise, Gorbachev was the one putting together the coalition government that included the Solidarity opposition with President Jaruzelski. Gorbachev managed the peaceful transformation of Poland to a democracy and a market economy. He managed it personally. He talked to Lech Wałęsa's top deputies about joining the government. So here we have peace in our time.
Then the Berlin Wall falls. I was not in Berlin on that day — I was in Belgrade — but I was deeply involved in these events. And suddenly Helmut Kohl says, "Okay, Germany's going to unify." Now, Gorbachev had a veto to that had he wanted it. But Gorbachev didn't veto German reunification. Gorbachev said, "Yes, we will go along with that. We want a united Europe. We want a common home for Europe." And as we know — again, heatedly denied by the fools who supposedly lead the Western world — Gorbachev was promised non-stop in January and February 1990 that NATO would not take advantage of the situation. It wouldn't even budge. We know that Hans-Dietrich Genscher, the German foreign minister, gave a famous speech at that time saying this means no movement eastward. We know that James Baker III, the American Secretary of State, said this to Gorbachev. And Gorbachev's answer was: this is very important. We know that Helmut Kohl said this to Gorbachev on February 10th, 1990.
All of this is denied by the people in power today. What does Friedrich Merz say about Germany's promises of no NATO enlargement? Not a word. And what does American academia say about this? Almost nothing. It's disgraceful. All of this is on the record. People can find it on the National Security Archive of George Washington University. But none of this is talked about, because when you win, you're allowed to cheat. You can lie. You don't have to honour any agreements. And that's what happened.
So just as Richard Darman said Gorbachev's a showman and we need a good PR package, they said: okay, now NATO moves eastward. And by the way, when I was advising Poland, Zbigniew Brzezinski was very helpful — a real gentleman who really helped the transformation. But then in 1997 he wrote his famous book The Grand Chessboard, and he said the US is so dominant right now that we can move eastward with NATO and the European Union, and Russia will have no choice but to accede. That's what the whole book is about. Ukraine is what he calls a "geopolitical pivot" — that's the literal phrase of Brzezinski. And he defines it: a geopolitical pivot is something that we don't care about except that it's useful to us in our pursuit of primacy in Eurasia.
All of this is to say that they walked into this with the arrogance of victory, the laurel wreath around their heads. They were now the supreme sole world hegemon. And of course it was delusional then, and it has become extraordinarily dangerous for us today. The whole approach is not over, because now we have an absolutely reckless grifter as president who expresses this sentiment in the crudest possible way every hour of every day — that he will crush other civilisations, that Canada's the 51st state, that Greenland belongs to the United States, whatever it happens to be on a particular moment. He expresses this view like a gangster, like a thug, rather than like a president.
Brzezinski also wrote that we have to communicate clearly to the Russians: if they ever push back, we have to make it very clear to them that we can shut down their sea lanes. And we're kind of in the middle of doing that now, with seizing their ships and all.
The delusion has no enforcement mechanism
Jeffrey Sachs: Just to mention it as a final thought: we hold no chokepoints, no decisive technological advantage, no magic formula, no hold on the dollar, nothing that enforces the delusion. So whatever they may think about what OpenAI or Claude has, China's got it too. And if they don't have it now, they'll have it in six months. And they have so much of what we don't have. Iran can hold the United States to a stalemate or worse. We're well past anything remotely justifying the grandiosity. And so the good news for this world is that a change of mindset is actually the most important single thing that we need — and it's free. It would actually save trillions of dollars, and it may save the whole planet.