Thucydides Trap and gold
Comment of the Day

June 20 2019

Commentary by Eoin Treacy

Thucydides Trap and gold

This article from aheadoftheherd.com may be of interest to subscribers. Here is a section:

His main focus is to outline where the US and China are with respect to realpolitik, or practical considerations, and how to avoid war. The signs are not good.

Writing in The Atlantic, Allison states that “Based on the current trajectory, war between the United States and China in the decades ahead is not just possible, but much more likely than recognized at the moment.” That was written in 2015, before the trade war started, so the case for war is even stronger now.

According to Allison, events that could make two nations fall into the trap may be small, “business as usual” conflicts that, if they occurred in a different dynamic, would lead to nothing. For example, the assassination of archduke Ferdinand, a relatively obscure and minor figure, was the spark that lit a whole conflagration of events that plunged Germany, an ascendant maritime power, into war with Britain, whose Royal Navy ruled the seas for decades. Consider the current conflicts between the Chinese and US navies in the South China Sea and the Taiwan Strait. It would not take much - say a collision between two warships - to ignite the powder keg of war.

However, for the threat to be taken seriously, the rising power must have the capability to take on the incumbent power. Henry Kissinger, the US former secretary of state, wrote that “once Germany achieved naval supremacy … this in itself - regardless of German intentions - would be an objective threat to Britain, and incompatible with the existence of the British Empire.”

Eoin Treacy's view

Technological innovation is a doubled edged sword. It opens up new markets and provides greater efficiencies. It helps to boost economic growth but it also displaces military technology and upsets the status quo. That allows new entrants a chance to gain comparative advantage.

Click HERE to subscribe to Fuller Treacy Money Back to top