Sunday, November 23, 2014

The Return of the Sleepwalkers

PARIS – On June 28, 1914, Archduke Franz Ferdinand, the heir to the Austro-Hungarian throne, and his wife, Sophie, Duchess of Hohenberg, were murdered in Sarajevo – triggering a series of bad decisions that culminated in World War I. A century later, the world is again roiled by conflict and uncertainty, exemplified in the Middle East, Ukraine, and the East and South China Seas. Can an understanding of the mistakes made in 1914 help the world to avoid another major catastrophe?

To be sure, the global order has changed dramatically over the last hundred years. But the growing sense that we have lost control over history, together with serious doubts about the capabilities and principles of our leaders, lends a certain relevance to the events in Sarajevo in 1914.

Only a year ago, any comparison between the summer of 1914 and today would have seemed artificial. The only parallel that could be drawn was limited to Asia: pundits wondered whether China was gradually becoming the modern equivalent of Germany under Kaiser Wilhelm II, with mounting regional tensions over China’s territorial claims resembling, to some extent, the situation in the Balkans on the eve of WWI.

In the last few months, however, the global context has changed considerably. Given recent developments in the Middle East and Eastern Europe, one could reasonably say that the entire world has come to resemble Europe in 1914.

In fact, the situation today could be considered even more dangerous. After all, a century ago, the world was not haunted by the specter of a nuclear apocalypse. With the instruments of humanity’s collective suicide yet to be invented, war could still be viewed, as the Prussian strategist Carl von Clausewitz famously put it, as “the continuation of politics by other means.”

Nuclear weapons changed everything, with the resulting balance of terror preventing the Cold War’s escalation (despite several near-misses, most notably the 1962 Cuban Missile Crisis). But, over time, so-called “mutual assured destruction” became an increasingly abstract concept.

Iran is now trying to convince the United States that a fundamentalist caliphate stretching from Aleppo to Baghdad poses a far greater threat than nuclear weapons. Ukraine, in its escalating conflict with Russia, seems most concerned about an energy embargo, not Russia’s nuclear arsenal. Even Japan – the only country to have experienced a nuclear attack firsthand – seems indifferent to China’s possession of nuclear weapons, as it assumes an assertive posture toward its increasingly powerful neighbor.

In short, the “bomb” no longer seems to offer the ultimate protection. This shift has been driven at least partly by the global expansion of nuclear weapons. It was a lot easier to convince countries to accept a common set of rules when, despite their irreconcilable ideologies, they ultimately shared much of Western culture.

Herein lies the second fundamental difference between 2014 and 1914: Europe is no longer the center of the world. Kyiv today cannot be compared to Sarajevo a century ago. A conflict that began in Europe could no longer develop into a world war – not least because much of Europe is connected through the European Union, which, despite its current unpopularity, makes war among its members unthinkable.

Given this, the real risks lie outside Europe, where there is no such framework for peace, and the rules of the game vary widely. In this context, the world’s growing angst – intensified by the memory of Archduke Ferdinand’s assassination – is entirely appropriate.

A jihadist state has emerged in the Middle East. Asian countries have begun creating artificial islands, following China’s example, in the South China Sea, to strengthen their territorial claims there. And Russian President Vladimir Putin is overtly pursuing anachronistic imperial ambitions. These developments should serve as a warning that the world cannot avoid the truth and avert disaster at the same time.

In 1914, Europe’s leaders, having failed to find satisfactory compromises, resigned themselves to the inevitability of war (some more enthusiastically than others). As the historian Christopher Clark put it, they “sleepwalked” into it. While 2014 ostensibly has little in common with 1914, it shares one critical feature: the risk that an increasingly complex security and political environment will overwhelm unexceptional leaders. Before they wake up to the risks, the situation could spin out of control.

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    1. CommentedPete Voegeli

      Couldn't agree more except for Europe is far less safe than the author suggests. The speed with which a large EU is forced together by Brussels may cause kind of a civil war not that many years down the road. Too many politicians want to be credited for achievements and forget that history teaches us how quick change does not last. Not a danger in 2014 but maybe far too soon.

    2. CommentedHarlan Green

      The real struggle is over 3rd World or developing countries wanting more of resources controlled by major industrialized nations, or by kleptocracies, such as Saudi Arabia, Russia, and Oligarchies such as US, UK...e.g., US 5% of world's population can no longer control 25% of world resources.

    3. CommentedDmitry Dorofeev

      Good article and good analogy between 1914 and 2014...
      But then again, what Moisi calls "anachronistic imperial ambitions" by Putin may be called "the Russian national interest" by others...should we just desagree or go to war?!

    4. Commentedjoey jay

      The return of the collapse of the dollar again, now for real.

      Everybody is asleep, on purpose...distraction is the name of the game, while the financial crisis is coming full throttle, no matter what...

      The Fed has long believed that money printing or credit creation equals growth.

      In an effort to prove this (and to prop up the insolvent big banks), the Fed has embarked on QE 1, QE 2, QE 3, QE 4, Operation Twist 1 and 2, and kept interest rates at zero for over five years.

      All told, the Fed has spent nearly $4 trillion. To put this number into perspective, it comes down to a little over $12,000 for every man woman and child in the US.

      The end result has been the single weakest recovery in over 80 years. Adjusted for real inflation, we’ve essentially flat-lined.

      And now, we have a clear illustration that the Fed’s theories are totally false.

      Below is a chart of Loans and Leases in Bank Credit for All Commercial Banks in the US. Note how credit growth shot up at the beginning of 2014. All told, we’ve seen over $200 billion in credit growth in the first half of 2014 (h/t Bill King).

      Despite this growth, GDP growth has been an absolute disaster. Officially the GDP shrank at 2.9% in the first quarter of 2014.

        CommentedHarlan Green

        Are you kidding, J Jay?..."And now, we have a clear illustration that the Fed’s theories are totally false." Today's unemployment rate falls to 6.1%, some 6 million payroll jobs now created, 2%+ GDP. whereas EU has 0% growth, 11% unemployment is precisely because of Fed policies that we are growing, and EU isn't! Now that banks are willing to lend again (against $1T in excess reserves held by the Fed), and corporations hiring again (against $4.5T in hoarded cash and liquid assets), US econ will now grow faster! The only "catastrophe" is that austerity policies still exist, though proven wrong.

    5. Commentedj. von Hettlingen

      Mr. Moisi fears we may see the "return of sleepwalkers" - a term used by the historian Christopher Clark. In 1914 European politicians in Vienna, Berlin, Paris, London, Belgrade and St. Petersburg were said to "sleepwalk" the political stage, setting off blunders, which led to fatal decisions of historical importance. They had "failed to find satisfactory compromises, resigned themselves to the inevitability of war". Are Western politicians today as lethargic as those a century ago? Not quite, today most of them are rational players and are aware of the costs and risks of military actions.
      World War One warns us against misunderstandings and unintended actions in a conflict, which have the potential of a larger conflagration. The Balkans was a peripheral region in Eastern Europe, far from the centres of power and wealth. That it came to be the venue of a historical drama had much to do with the complexities of European imperial politics. What happened in Sarajevo was a local conflic, but it had turned into a global struggle, which had killed fifteen million people, destroyed three empires, and permanently altered world history.
      Will the tensions in Eastern Europe, Southeast Asia and the Middle East trigger a reprise of 1914? Mr. Moisi says "the entire world has come to resemble Europe in 1914". More importantly he sees "the situation today could be considered even more dangerous", as the world today is "haunted by the specter of a nuclear apocalypse".
      Compared to a century ago, Europe is a region of stability, Thanks to the European Union, there is little risk that politicians would demolish the decades of work that secure its freedom and prosperity. Yet they have little influence on the conflict in Ukraine. Although Russia had annexed Crimea they haven't been able to hold Vladimir Putin to account.
      In Asia and the Middle East, they see a rise of nationalism and militancy, as well as a bunch of rivalling power holders, who pride themselves on growth and ruling power. There is a risk that after having stumbled through crisis after crisis, they finally convince themselves that war may be the only solution to their conflicts. In Syria the protests against the Assad regime were responded with brutal crackdowns, which very rapidly morphed into a civil war, that was being hijacked by more extreme groups. The spillover effect is deeply felt in Lebanon and Turkey. Worst of all it is starting to unravel the boundaries of Iraq and Syria, drawn nearly a century ago by British and French colonialists.
      Many of us fear the geopolitical conflict in East Asia could spiral out of control, prompted by unintended signals sent by China and Japan, the worlds second and third largest economies. The two are in a state of un-moderated rivalry. China’s self-assertiveness and military buildup are generating tension with Japan and various countries in the South China Sea.
      A century ago there were no United Nations and other international organisations, that hold the international community together. It surely makes a difference today. We may not have perfect peace, nor will we have a World War Three neither.

    6. CommentedAlasdair MacLean

      It is strange that we are not entering another age of rearmament. Churchill, lived amongst sleepwalkers, and his calls for rearmament went unheeded, until it was too late. The other parallel is diplomatic pacifism, a feature of the time before WW2 and now repeated by sanctions not the placing of divisions on the opposite border to the aggressors divisions. The aggressor knows that that means no war will be fought against him on the immediate border and so can judge whether to move in or not as it suits or pleases him. In both things: lack of arms and diplomatic pacifism there is an opening for the aggressor. Unexceptional leaders create war by giving such openings.

    7. CommentedZsolt Hermann

      I fully agree with this very timely, alarm raising article.
      If we look back on human history we can see in fact we have been sleepwalking all along.

      We have gone through cycles, each time on qualitatively and quantitatively higher level, as if raising the stakes all the time, but we kept on following our basic self-serving, subjective, exploitative instincts, the very predictable knee-jerk reactions, and each time we culminated in an intolerable crisis prompting an explosive transition and we started again.

      I am sure each of us is groaning these days every time when we see in the media how politicians, economists or anybody else supposed to solve problems react, we could write their speeches in advance, we could easily plot the course of action even the most secretive organizations are doing.

      Finally we start to understand we are trapped in a movie with a guaranteed bad ending. We now know we are sitting on a train going with full speed towards the broken bridge.

      But if we fall into despair than we are forgetting only one thing.
      We are human beings after all. And the human being, the only creature in reality with such potential, is capable of critical self-assessment, and subsequent self-change. We have free choice.

      There is nothing else, or nobody else to blame but our own selfish and egoistic human nature. This is the nature that drives each of us without any difference.
      This is the "evil" that is the root of all of our problems.

      Thus changing politicians, parties, governments, changing ideologies or even governing or economic systems will not help. Nor will revolutions or endless wars.
      The only thing we need to change is ourselves.

      With education, with changing the values of society, with putting into immediate practice what science and experience is teaching us: in a globally interconnected and inter-dependent world we can only solve problem, moreover we can only survive together, in mutually complementing cooperation. Above and beyond borders, rejection and hatred.

      We have everything in our hands, all our negative historical experience, the total failure of solving our present global problems, the very real, threatening scenario of a global meltdown that could be triggered on multiple points.
      And we have a method.