Unsettling precedents for today’s world

Events evoke not the 1930s but the period before the first world war

Martin Wolf

Trump Kaiser
© James Ferguson

History does not repeat itself, but it often rhymes. This remark is often incorrectly attributed to Mark Twain. But it is a good one.

History is the most powerful guide to the present, because it speaks to what is permanent in our humanity, especially the forces that drive us towards conflict. Since the biggest current geopolitical event, by far, is the burgeoning friction between the US and China, it is illuminating to look back to similar events in the past. In a thought-provoking book, Destined for War, Harvard’s Graham Allison started with the account of the Peloponnesian war by Thucydides, the great Athenian historian of the 5th century BC.

However, I will focus on the three eras of conflict of the past 120 years. From them much is to be learnt.

The most recent conflict was the cold war (1948-1989) between a liberal democratic west, led by the US, and the communist Soviet Union, a transformed version of the pre-first world war Russian empire. This was a great power conflict between the chief victors of the second world war. But it was also an ideological conflict over the nature of modernity.

The west ultimately won. It did so because the scale of western economies and the speed of western technological advances vastly outmatched those of the Soviet Union. The subjects of the Soviet empire also became disenchanted with their corrupt and despotic rulers and the Soviet leadership itself concluded its system had failed. Despite moments of danger, notably the Cuban missile crisis of 1962, the cold war also ended peacefully.

Going further back, we reach the interwar years. This was an interregnum in which the attempt to restore the pre-first world war order failed, the US withdrew from Europe and a huge financial and economic crisis, emanating originally from the US, ravaged the world economy.

It was a time of civil strife, populism, nationalism, communism, fascism and national socialism.

The 1930s are an abiding lesson in the possibility of democratic collapse once elites fail. They are also a lesson of what happens when great countries fall into the hands of power-hungry lunatics.

2 charts showing that the period before the first world war saw the rise of the US and Germany. Share of global GDP (%) and  the share of global manufacturing output (%)

Going further back still, we reach the decisive period 1870-1914. As Paul Kennedy noted in his classic book, The Rise and the Fall of the Great Powers, in 1880, the UK generated 23 per cent of global manufacturing output. By 1913, this had fallen to 14 per cent.

Over the same period, Germany’s share rose from 9 per cent to 15 per cent. This shift in the European balance led to a catastrophic Thucydidean war between the UK, an anxious status quo power, especially once the Germans started building a modern fleet, and Germany, a resentful rising one.

Meanwhile, US industrial output went from 15 to 32 per cent of the world’s, while China fell into irrelevance. Thereupon, US action (in the 20th century’s big conflicts) and inaction (in the interwar years) determined the outcomes.

Today’s era is a mixture of all three of these.

It is marked by a conflict of political systems and ideology between two superpowers, as in the cold war, by a post-financial crisis decline of confidence in democratic politics and market economics as well as by the rise of populism, nationalism and authoritarianism, as in the 1930s, and, most significantly, by a dramatic shift in relative economic power, with the rise of China, as with the US before 1914.

For the first time since then, the US faces a power with an economic potential exceeding its own.

The pre-1914 period ended in a catastrophic war, as did the interwar period, albeit with a relatively successful post-1945 aftermath.

The cold war ended in peaceful triumph.

Now, the world confronts challenges that easily match those of the earlier periods. So what lessons are we to learn from these eras?

2 charts showing that the last 40 years have been notable for the rise of China. Share of GDP (%) and share of global manufacturing output (%)

Perhaps the most obvious one is that quality of leadership matters. President Xi Jinping’s capacities and intentions are clear enough: he is devoted to party dominance over a resurgent China. But the political system of the western world and especially the US and UK, the two powers that dragged the world through the 1930s, is failing.

US President Donald Trump’s erratic leadership recalls that of Germany under Kaiser Wilhelm. Without better leadership, the west and so the wider world are in deep trouble.

Another lesson is the overriding importance of avoiding war. Prof Allison describes well how mutual suspicion fuelled the journey to war in 1914. It is even more crucial for the US and China to avoid head-on conflict now. That was the great success of the cold war. But nuclear deterrence may not be enough.

Yet perhaps the most important conclusion is that avoiding yet another catastrophe is insufficient. We cannot afford the old games of great power rivalry, however inevitable they must seem. Our fates are too deeply intertwined for that. A positive-sum vision of relations between the west, China and the rest has to become dominant if we are to manage the economic, security and environmental challenges we face.

Humanity has to do far better than it has done before. Today, that must seem a fantasy, given the quality of western leadership, authoritarianism in China and rising tide of mutual suspicion. But we must try. We have to manage this difficult new era strategically. On our ability to do that all our futures now depend.

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