The year began with two nuclear-armed leaders arguing about whose button is bigger.
A week earlier, US National Security Adviser General McMaster unveiled the country’s National Security Report. It is an “America First” strategy that prepares for future war and even identifies US rivals.
McMaster characterised Russia as threatening the US with “so-called new generation warfare” – sophisticated campaigns of subversion and propaganda “attempting to divide our community”. He also described China’s economic aggression as a threat that is “challenging the rules-based economic order that helped lift hundreds of millions of people out of poverty”.
The way to deal with these two threats was “competitive engagement”, he proposed.
Greek historian Thucydides (460-395 BC), who wrote “History of the Peloponnesian War” between incumbent power Sparta and the rising Athens, argued that “war is a matter not so much of arms as of money”. Thucydides Trap is a modern term coined for the inevitably of war between the incumbent great power and its challenger
Is future war inevitable? In modern times that could mean nuclear war with mutual mass destruction –which would be irrational. But we are not necessarily dealing with rational thinking.
Leading Israeli military historian Martin van Creveld argues that theory is less helpful than experience, because “war is a practical business”, since “no two armed conflicts are ever the same” and “war itself, forming an integral part of human history, is forever changing and will continue to change”. So, ego as much as economic rivalry could easily lead to physical conflict.
There are more parallels between war and finance than meets the eye. Modern quantitative economists, confident in their ability to measure risks (as volatilities), are largely blind to uncertainty in their models. Experienced generals know that the best laid battle plans can go out the window when the first bullet is fired. The best economic models and war games are often useless in the fog of war and financial crises.
Which is why economists are only just beginning to appreciate the importance of human psychology, whereas our best war strategists and thinkers – Sun Tzu (544-496BC) and Carl von Clauswitz (1780-1831) – focused largely on understanding the minds of the warring parties. Sun Tzu famously emphasised the need for understanding not only the enemy, but oneself. Clauswitz, on the other hand, understood that “war is nothing but a continuation of politics by other means”.
Just as the competition between Athens and Sparta was initially due to Athens’ growing trade and economic power, and that between Rome and Carthage over Mediterranean trade, the outcome of modern war rests on economics. This arises because globalisation has tied all the big powers both economically and financially, while the cost of modern weapons and logistics is very expensive. Indeed, both the World War I and II were won when the growing dominant power, the United States, threw its economic and industrial might behind the tired European allies. Sunzi understood that no country can afford a long war.
Just as Rome was founded on the back of slaves and conquered land, Europe and America’s rise to world dominance from 1450 to 1945 was fuelled by colonial conquests. Some of the problems with human migration and failing states in Africa and the Middle East are legacies of artificial borders drawn by colonial powers that bear no relation to geography and tribal lands.
But competition in the 21st century will be less over territory, than over space, cyberspace, technology, media and hard industrial plus soft financial power.
The intrinsic appeal of war lies not just in dominance, glory and status. Van Creveld identifies four reasons why war might benefit economic development: driving technological progress, creating economies of scale, encouraging creative ways of financing, and acting as economic stimulus.
Firstly, it is acknowledged that the Internet was invented by the US defence industry. What appears as wasteful and expensive new armaments have huge civilian spin-offs. Secondly, mass-production of air, sea and land equipment give rise to economies of scale that make new weapons cheaper and better. Thirdly, the power to print money and buy supplies enables a country to fight without impoverishing its citizens. The first central banks, in Sweden and England, were created to finance war. Fourthly, the European and American economies did not recover from the 1930s Great Depression, until they spent more on arms and defence.
The road to war between contending powers is not paved by ego or glory, but by basic insecurity and fear of each other. Thucydides died before the Pelopponesean war ended. If you read between the lines, he also argued that the elite in Athens likely wanted war, because they needed to divert the anger of their own citizens from corrupt governance, to external enemies. In the end, it was the inability to agree on how to fight the war against Sparta and to coordinate with allies that meant Athens fell.
In other words, the real Thucydides Trap may have little to do with external threats, but internal strife that forces the elite to turn the guns outward rather than inwards. It is easier to demonise outsiders than to deal with one’s own devils. Man’s future security rests on the elite’s own insecurity. I have always wondered why even with the best technology, we cannot combat growing social inequality. The real Thucydides Trap therefore is essentially political, not technical.
The best wars are won when there are no battles. Human competition and conflict are built into our genes, but as Churchill argued, it is always better to “jaw-jaw, than war war”.
Andrew Sheng writes on global issues from an Asian perspective.