Terrorism, Russia, and Geopolitical Concerns for the Decades Ahead

Over the past decade, the focus of the news media has been on Islamist terror organizations such as Al Qaeda, and understandably so. The September 11, 2001 attacks were the biggest acts of terror in history, and every American remembers well the site of the twin towers falling to the ground. It was a traumatic experience that set into motion a chain of events that culminated in the Iraq War in 2003.

But as devastating as the 9/11 attacks and their aftermath were, they must be taken in context. Al Qaeda, even were the organization to acquire contraband nuclear devices, has never had the ability to seriously threaten the existence or power of the United States. And all of the rhetoric about weapons of mass destruction aside, a nuclear-armed rogue state like Iraq under Hussein, Iran, or North Korea would likewise lack the ability to seriously threaten the existence or power of the United States. They could potentially destroy one or more major cities, kill millions or tens of millions of civilians, and severely disrupt our economy, but annihilate us? Not a chance. The only country today that could credibly be said to have that power would be Russia—though in the not-too-distant future, China may too share that distinction.

Masters of Illusion: American Leadership in the Media AgeThe most serious threat to world security and peace is not terrorism but great power rivalry. At least this is the view of Steven Rosefielde and D. Quinn Mills, authors of Masters of Illusion: American Leadership in the Media Age.

According to Rosefielde and Mills, “Conflict of the great powers, when it comes, is the greatest danger mankind faces. For this reason it is essential always to keep our eye first and foremost on the great powers.”

I appreciate a historical perspective. As I wrote in the April 2010 HS Dent Forecast, I truly believe that King Solomon had it figured out 3,000 years ago when he concluded that there was nothing new under the sun. In Masters of Illusion, Rosefielde and Mills make much the same argument about geopolitical relations. Continuing their comments of the risk of ignoring great power politics, they write:

Woodrow Wilson made this basic mistake at the end of World War I and thereby contributed to the making of World War II. He believed that the dissatisfaction of minorities within polygot empires was the basic cause of the war (after all, didn’t a Serbian nationalist assassinate the heir to the throne of the Austrian Empire and thereby occasion the war?). So he worked for the dissolution of the Austrian and European parts of the Russian empire; but left the German empire (made up of a single nationality) intact. Thus, he surrounded Germany with weak states, providing the temptation and opportunity for Hitler. We are in danger of doing the same now. We are taking our eyes off the great powers, and looking instead at issues like terrorism.

The great powers in question are, of course primarily Russia and China. With the fall of the Berlin Wall and the discrediting of communist ideology, there was a popular belief that we had reached “The End of History,” in Francis Fukuyama’s words. With no more ideological divisions, capitalist liberal democracy would be the ruling order of the day. There would be rogue states, of course. But the days of great power rivalry were over. We were all on the same team now; why would we need to fight?

This kind of thinking could only have been born in the 20th century. We humans have a tendency to look only at the recent past. And for the past century, we have seen conflicts driven primarily by ideology. Of course, looking further back into history, it is easy to see that conflicts between states far predate ideological concerns.

Long before the “isms” of the 19th and 20th centuries (communism, fascism, Nazism, etc.) there were rivalries between the monarchies and republican movements in Europe. Before that, there were wars of religion between Protestants and Catholics and between Christians and Muslims. But before any of this, there were simple conflicts between states or even between tribes for money, power, and influence. This is the oldest form of great power rivalry, and it has always been a contributing factor to the others.

The problem with the Fukuyama argument is that pre-World-War-I Europe largely enjoyed similar conditions. The Continent was at peace and had largely been so since the close of the Napoleonic Wars. The royal families of Europe knew each other and most were related to one another. Republican France had no axe to grind with its monarchical neighbors. This was the first golden age of globalization and free trade, and Europe was becoming wealthy—and it ended in an orgy of bloodshed in the worst war the world had ever seen.

Rosefielde and Mills do not see a return of warfare such as it was practiced in WWI and WWII. No, they actually see something far scarier. They see the basic dynamic of the Cold War returning—Mutual Assured Destruction. But instead of a bi-polar version, they see something far more complex. With nuclear proliferation spreading to new powers such as India, Pakistan, and possibly Iran, Mutual Assured Destruction becomes a very different animal. It also becomes increasingly difficult to stop the spread. If Iran gets the bomb, then Turkey and Saudi Arabia will both want it too in order to keep Iran’s regional power in check. The same would hold true for Japan and Taiwan. With China aggressively pursuing new missile technology and the United States distracted be developments elsewhere, might not Japan and Taiwan want their own nuclear deterrent?

Which is scarier, Al Qaeda with a bomb that could destroy a city or two, or a world of multiple, rivalrous nuclear powers with the missile technology to launch?

The Resurgence of the Russian Bear

Like George Friedman, whose book The Next 100 Years I reviewed in the March 2009 issue of the HS Dent Forecast, Rosefielde and Mills see a resurgent Russia under the leadership of Vladimir Putin being a significant geopolitical risk to the United States for the next decade. But knowing a little something about demographics, they know that the Russian bear doesn’t have much time left:

For ten years [2010-2020], there will be great danger of an overt conflict with Russia. But if we survive that period, then by 2020 the population of Russia should have fallen from 2005’s roughly 143 million (it was some 293 million as the Soviet Union) to only 110 million, and China’s economic and military progress will be daunting (China’s population will then be some 1.4 billion). It will then be clear to everyone that the jig for Russia is up. Russia will become increasing vulnerable to dismemberment, should any of its potential enemies choose to act.

The problem, of course, is that Russia won’t go down easy. Should China decide to invade or annex parts of mineral rich Siberia, Russia could well retaliate with nuclear weapons.

My argument has always been that Russia will make a lot of noise but that the country is already too economically and demographically weak to pose much of a threat to anyone outside of its old Soviet sphere (think Georgia, Ukraine or Chechnya). But the authors make an interesting point about the speed at which things can change. Consider this passage:

With respect to Russia it cannot be stressed enough for an American audience that a large nation with modern technological capabilities and an educated workforce can be weak and demoralized one day, and yet become – with effective leadership – a great power at alarming speed. In 1932, for example, Germany was disarmed and disillusioned by the loss of World War I and street clashes between communists and fascists roiled its politics. Germany posed a military threat to no one. In that same year, however, Hitler came into power… Just seven years later, in 1939, Germany was strong enough to launch World War II. And less than one year after the start of the war, Germany crushed France… In sum, Germany progressed from weakling to deadly world threat in just eight years under Hitler’s leadership. Russia is able to pursue a similar course from weakness to strength. It has done so in the past.

Stalin’s Red Army was a joke at the beginning of WWII. Its leadership was political and completely inept. But by the end of the war, the Red Army was the most feared land force on earth.

Much the same could be said about the United States, for that matter. Prior to World War I, the U.S. military was a joke. And a good chunk of our navy was wiped out at Pearl Harbor prior to World War II. But in both cases, the country militarized virtually overnight.

It remains to be seen how Russia will challenge the United States in the years ahead. The war with Georgia, in which Russia effectively occupied and partitioned parts of the country, went largely unchallenged, as did the assassination by radioactive poisoning in London of Alexander Litvinenko, a vocal critic of the Putin regime. Russia’s next move is anyone’s guess.

On the Conflict of Moralities

Rosefielde and Mills have an interesting analysis of what they call the “conflict of moralities.” They see history as a continuous cycle of conflict between “Puritanism” (defined as being patriarchical, religious and moralistic) and “Cosmopolitanism” (defined as being egalitarian, tolerant and amoral
The authors’ view of history goes back as far as recorded history:

  • Abraham was puritan; the Mesopotamians and the Egyptians were cosmopolitan
  • The Hebrews were puritan; the Phillistines were cosmopolitan
  • The Persians were puritan; the Babylonians were cosmopolitan
  • The Persians became cosmopolitan; the Greeks were puritan
  • The Greeks became cosmopolitan; the Romans were puritan
  • The Romans became cosmopolitan; the Germanic tribes were puritan
  • The Byzantines were cosmopolitan; the Arabs were puritan
  • The Chinese were cosmopolitan; the Mongols were puritan
  • The Catholic Church was cosmopolitan; the Protestants were puritan
  • The Cavaliers were cosmopolitan; the Roundheads were puritan
  • The English were cosmopolitan; the Americans were puritan
  • Today, America is cosmopolitan its Islamic radical antagonists are puritan

(To the authors’ list, I might add that the West was cosmopolitan during the Cold War and the Communist bloc was puritan. )

It would appear that all successful puritan societies evolve into cosmopolitan societies. The key here is “successful.” The Communists were not successful and never evolved into cosmopolitans. They simply disintegrated, as in Russia, or rebranded themselves as capitalists, as in China. So, the puritans do not always win, and I certainly would not expect to see the Islamic radicals win this time. They might make our lives difficult, but as I wrote earlier, they present no existential threat to America or the West.

Closing Thoughts

As the authors tell us, America’s most immediate challenge is the war on terror, but it is by no stretch the most important. The biggest threat and most important challenge remains what it has been for more than sixty years: to avoid a nuclear exchange between great powers.

With the nuclear weapons anti-proliferation regime in tatters and with Russia desperately trying to hold on to its past glories and China rapidly expanding its military and economic might, this threat is as significant now as any time in history.

Charles Lewis Sizemore, CFA

This blog is a free service of Sizemore Financial Publishing LLC, publisher of the Sizemore Investment Letter.

If you’re not reading the Sizemore Investment Letter, then you are missing out on rock-solid investment recommendations designed to profit from the major macro trends shaping the world today.

SUBSCRIBE TODAY and get access to information that is simply not available anywhere else.

, , ,

Comments are closed.


Disclaimer: This site is for informational purposes only and should not be considered specific investment advice or as a solicitation to buy or sell any securities.

This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.