A note to the reader. This essay is written for people who follow world affairs because it matters for their work, their investments, or simply because they want to understand a turbulent decade — not because they study political science for a living. My thoughts here relate to a period when I was a Swedish exchange student in the United States in 1964–65, watching Lyndon Johnson win one of the biggest election victories in American history on a promise not to escalate in Vietnam — and then watching him escalate anyway, and lose his ability to govern in the process. By March 1968, the most powerful elected leader on earth could not even run for re-election in his own party. On paper, he still had all his power. In practice, he had almost none. That gap is the subject of this essay.
I think it matters now, and particularly for readers who are trying to assess where the world is heading. The current US administration made its name arguing against new wars in Iraq and Afghanistan but is now engaged in Iran. Johnson in 1965 did not expect to be politically finished by 1968. His generals did not expect it either. Room to manoeuvre was there, until suddenly it wasn’t. That pattern is what anyone exposed to geopolitical risk needs to understand.
When we talk about world politics, we usually say things like “Putin has decided”, “Trump is demanding”, “Xi wants”. This is a convenient shorthand, and it is almost always misleading. Behind every leader there is a coalition that keeps him in power, an administrative machine that has to execute his decisions, and an audience — voters, elite, party, oligarchs — that has to keep tolerating what he does. Every leader operates inside a box defined by those three things. The box is what could be called room to manoeuvre, and it has three separate walls:
- Authority — what the leader is formally allowed to decide.
- Capacity — what his/her state machinery can actually deliver.
- Legitimacy — what supporters and public will accept.
These walls move independently, and often in opposite directions. An American president can have enormous formal authority while the agencies that execute his orders are being hollowed out. A French president can have near-total constitutional power over foreign policy while lacking a parliamentary majority for anything domestic. A Russian president can rule almost without legal constraint while his actual options may shrink every month under the weight of a war economy. The job of serious analysis is to figure out which wall is closing in first, because that may tell you what the leader will actually do — regardless of what he says.
For anyone making decisions about supply chains, investments, factory locations, or insurance premiums, this distinction is not academic. The gap between what leaders promise and what they can deliver is where financial surprises live.
What I cannot say
Let me be honest about the limits of this method before trying to apply it. This way of thinking works best where information is open: democracies, with visible budgets, court rulings, opinion polls, strike statistics, and press coverage. It works worst where it perhaps would be most useful — inside the Kremlin or Beijing’s Zhongnanhai, where the inner circle for us is a black box and where leaders may pretend to have domestic constraints they don’t actually have, in order to extract concessions from the other side of the table. Any claim about what Putin or Xi “can” or “cannot” do is a hypothesis, not a fact.
The lesson of 1968, without the Hollywood version
The American textbook version of Johnson’s fall goes like this: the news anchor Walter Cronkite declared the Vietnam War unwinnable on television, and Johnson, recognising he had lost middle America, withdrew from the race. It is a tidy story. It is also largely a myth. The Cronkite quotation seems not to be reliably documented, and Johnson’s withdrawal was the product of a two-month cascade of very different pressures: a battlefield shock (the Tet Offensive on 31 January), an internal Pentagon review concluding that further escalation was militarily hopeless, a run on the dollar that produced a mid-March gold crisis and the collapse of the London gold pool, a surprisingly strong primary result by Eugene McCarthy in New Hampshire on 12 March, and Johnson’s own quiet concerns about his health. The announcement came on 31 March.
What is worth keeping from that sequence is simple. Room to manoeuvre is a consumable resource. It gets spent. The rate at which it gets spent is set by battlefield facts, money facts, party facts, and public-opinion facts — and none of them alone controls the outcome. Johnson’s landslide in 1964 had given him a nominal room to manoeuvre so large that the escalation of 1965–67 looked, domestically, almost free. It was not. The bill arrived in 1968. Is Trump in a comparable situation now?
Rather than force every world leader into the same template, let me refer to the most debated cases in passing and leave the rest as honest gaps.
Vladimir Putin is the most instructive case because his formal power is near-absolute and yet his real options are narrowing on two different clocks. Russia’s central bank took its main interest rate to 21 percent in October 2024 — an extraordinary level — and only began cutting in small steps through 2025 and into early 2026, reaching 15 percent by March. Growth is running at one to two percent on the central bank’s own numbers. Regional budgets are deteriorating and Putin has talked about all of this publicly just last week. None of this predicts collapse. What it describes is a slow rise in the price Russia’s elite must be paid to stay quiet, and a simultaneous shrinkage of Russia’s ability to pay it. The 2014 fix — a cheap victory in Crimea that produced a patriotic wave — is no longer available. For anyone with affected by the Russian economy, or anyone planning around a possible ceasefire in Ukraine, this may be the single most important fact to absorb.
Donald Trump is the case where European commentary gets the direction wrong most often. His formal authority has rarely been asserted more aggressively; his state’s ability to actually carry out policy has rarely been weaker. The ongoing DOGE-driven dismantling of federal agencies is doing damage that is likely to show up years from now, when any future administration — Republican or Democratic — reaches for a tool and finds it has been broken. His political coalition, meanwhile, is more sensitive to inflation and lost jobs than it looks from the outside: a tariff-driven price shock heading into the November 2026 midterm elections is the most plausible trigger for a sudden narrowing of what he can do. The engagement in Iran, layered on top of the unfinished business of Iraq and Afghanistan, is the kind of commitment whose political cost is currently discussed. For businesses modelling tariff and sanctions risk, this is a configuration in which sudden reversals are more likely than continuity.
Emmanuel Macron is a key European case. He has the widest foreign-policy authority of any Western leader, thanks to the French constitution’s domaine réservé, and but a weak domestic political base to get things done at home. His nuclear-policy speech at the Île Longue submarine base on 2 March 2026, announcing an expansion of the French arsenal and a new doctrine called dissuasion avancée — which allows French nuclear-capable aircraft to be temporarily deployed to allied bases for exercises — is best read as the conversion of his domestic weakness into European strategic leverage. The key sentence every non-French reader should underline is the one Macron repeated: the decision to use nuclear weapons remains in the hands of the French president alone. France is offering solidarity without sharing control.
Friedrich Merz is running the most consequential fiscal experiment in Germany’s postwar history. The March 2025 constitutional package exempts defence spending above one percent of GDP from Germany’s “debt brake” and creates a separate €500 billion infrastructure fund. These are two different instruments and should not be added together, as they often are in press reports. Merz’s own framing of Germany’s long-term defence-spending target has consistently been “3.5 percent as a floor, potentially extending to 5 percent” — not the cleaner headline number. Whether Germany actually becomes Europe’s strongest conventional military depends almost entirely on whether German industry and procurement can execute at the required pace and actual war fighting capability can be built.
Xi is the mirror image of Putin: immense authority, but a Politburo consensus that has become narrower and more expensive because power has been concentrated, and a Taiwan pledge that locks him in. Modi‘s nationalist coalition gives him wide room abroad and but narrow room at home on Pakistan and Kashmir. Zelensky‘s options are made largely in Washington, Berlin and Brussels, not in Kyiv and where the just approved 90 bn loan is a huge enabler.
And I note who is missing: Erdoğan, Netanyahu, Mohammed bin Salman, Meloni, Starmer, Lula, Ishiba, Prabowo. A serious multipolar analysis owes each of them a chapter.
Three things worth taking away
First, the conventional Western view inverts the real risk. It treats Putin and Xi as unconstrained free agents while fretting about the coalition problems of European leaders. That is backwards. Investors and business planners who assume Russian or Chinese stability because “the leader controls everything” are underestimating, not overestimating, the probability of sudden change.
Second, the unglamorous variables are important: interest rates, demographics, energy prices, procurement throughput, fiscal deficits. Russia’s 21 percent rate was not a policy choice; it was a consequence of running a war economy. Germany’s debt brake required a two-thirds parliamentary majority to modify. France’s budget deficit may shape the 2027 French presidential election
Third, the 2026–27 calendar looks unusually crowded. The US midterm elections, Macron’s pre-election vulnerability, and the one-to-three-year window during which Russian forces will try to reconstitute after any ceasefire — these dates are close together. Whether they become causally linked depends on whether various transmission channels activate: financial contagion from a US inflation shock into European bond markets; US signalling that compresses European decision windows; Russian force-generation bottlenecks; effects across European elections; sanction and energy feedback loops. Any is possible. A prudent planner assumes at least one will fire.
What this means for the negotiating room — and the boardroom
The rule a former negotiator will draw from all of this is: deal with the other side’s actual room to manoeuvre, not its stated position. It is a genuinely useful rule. It is also more dangerous than it sounds, because leaders — especially authoritarian ones — routinely exaggerate their domestic constraints at the table to extract concessions you didn’t need to give.
A few practical guardrails, more hard-earned than textbook:
- Treat every claim about a counterpart’s domestic constraint as a hypothesis, not a fact. Test it against what you can observe from outside: cabinet reshuffles, budget votes, media tone, military mobilisation, strikes.
- Assume the counterpart has an incentive to inflate his constraints in your presence. Autocrats are better at this than Western democracies are.
- Distinguish between giving the other side cover — a face-saving way to sell a concession he can deliver — and giving pre-concessions because you have convinced yourself he cannot. The Minsk II agreements on Ukraine is a well known example of the second mistake.
And there is one unresolved tension at the centre of the whole framework. A leader whose room to manoeuvre is narrowing can become either more dangerous or more cautious, and there is no reliable rule for predicting which in advance. Some of the literature on Russia leans toward “cornered leaders escalate”. Some of the literature on late-stage authoritarian regimes leans toward “cornered leaders freeze”. Both are defensible. The right answer depends on the specific case, the specific moment, and judgement under uncertainty.
Issues relating to coalitions, institutions, budgets and public opinion need to be taken seriously, rather than narrating the world through the personality of whoever is on the evening news. It is unfashionable because it is slow, and because it refuses to promise certainty. But the instruments we have for looking inside closed regimes are much weaker than commentators admit, and the instruments we have for reading democracies are better than they get credit for — provided we use them honestly. Any analysis of security policy in Europe, notably, which does not take the domestic situations into account is simplistic.
Lars-Erik Lundin
(PREVIOUSLY PUBLISHED BY CONSILIO INTERNATIONAL AB)