Monday, August 8, 2022

World Wars’ Shadows: the US Current Clash with Russia and China

By Oscar Silva-Valladares - August 08, 2022 at 09:14AM


The reasoning behind the US government’s current confrontations with Russia and China is very much debated, with explanations including sheer incompetence, short-term opportunism from a Democratic Party hellbent on pursuing a destructive geopolitical agenda for its own domestic ends, a blind urge to preserve world domination driven by a diminishing role in world affairs and, from those believing in more rational responses, containment and deterrence as a systematic but flexible response.

Not enough appears to have been said about the history lessons the US has learned - and appears to be trying to apply in the current conflicts in Ukraine and Taiwan - from its participation in the two world wars of the 20th century and how US worldwide domination derived from the way it positioned itself ahead of its involvement in those wars in 1917 and 1941. In both instances, the US skillfully observed from the distance the progression of hostilities and entered into them at a time, place and modus operandi of its choice. 

US participation in World War I, despite Woodrow Wilson’s affirmation that it was driven by a desire to make the world safer for democracy, was motivated by imperialistic pursuits masqueraded in the need to build a new world order to replace the so-called decadent European old regime. By entering the war during its third year and after substantial destruction, the US became the arbiter of Europe’s fate. From being its debtor, the US became Europe’s creditor as it accumulated more than half of the world’s gold. 

The weak political architecture that followed the Treaty of Versailles, including a limited League of Nations in which vanquished countries did not have a seat and in which Russia was also missing, was to a great extent the result of US actions and became one of the leading causes of World War II. The US successful military involvement in World War I led the ground for an advantageous positioning before World War II. Domestic isolationist sentiments during the 1930s provided a good excuse for the US government to intervene in the 1939-45 war at its own timing, and this strategy paid off handsomely as the collapse of Europe facilitated the US emergence in the 1950s with roughly 50 percent share of the world’s industrial output and as owner of the world’s reserve currency.

The US strategic intents ahead of both world wars and its ultimate success has significant parallels with its current ongoing goal of preventing an economic alignment between Germany and Russia through competitive energy supplies from the latter to the former. US intervention in World War I had as one of its aims a desire to become the dominant foreign economic force in Czarist Russia at the expense of Germany, an objective unravelled by the October Revolution, and World War II led to the breakup of Germany as a means for the US to achieve supremacy in Western Europe.  It can be argued that Germany, Europe’s strongest country, is still perceived by the US as an adversary if it drives closer to Russia, therefore defeating a Russo-German prospective alliance in the energy field was in the US interest no matter how much it would contribute to Germany’s deindustrialization and to the deterioration of its population’s wellbeing. 

In the current confrontations with Russia on Ukraine and with China on Taiwan, the former taking place and the latter unfolding, broader similarities with history can be drawn. Ideally, the US would not like to be directly involved, at least from the beginning, but rather have Russia and China debilitated as a result of US and allies’ military support and economic sanctions to enable the US to continue having unchallenged world supremacy.

Nowadays Ukraine is a micro-cosmos of the debilitating effort played against Europe during World War II through the Lend-Lease Act, the ingenious scheme for US military support that indebted Europe for decades, which explains why the same device is been used again. The resurrection of Lend-Lease in Ukraine invokes the idea of the United States as the “arsenal of democracy,” as Franklin Roosevelt famously described in December 1940.

Despite historic lessons that are tempting to be replayed again, many things can go wrong for the US in the current crisis in Ukraine and Taiwan, including unintended effects caused by escalation and gross miscalculation. A US government led by an increasingly disabled president does not give confidence on successfully steering the ship in current dangerous waters. History has also been learned by Russia and China and both countries seem to believe they have a good understanding of US real intentions vis-à-vis its words. The US current economic weakness compared to its much stronger standing prior to the world wars also begs the question of whether the US would be able to come on top one more time. During the world wars the US fought for the growth, expansion, and consolidation of its world power, whereas today it seems to fight to preserve and defend an eroding global power base weakened by a loss of competitive economic and scientific edge, shrinking military power despite increasing budgets, racial and ethnic loyalty conflicts exacerbated by multiculturalism, declining affordability of food due to wage decline, and a steady deterioration of its middle class. This grim reality makes one wonder if, from the point of view of its people’s prosperity, the US has ever fought an existential conflict aside from the American Independence and the American Civil wars.

Oscar Silva-Valladares is a former investment banker who has lived and worked in North and Latin America, Western & Eastern Europe, Saudi Arabia, Japan, the Philippines, and Western Africa. He currently provides strategic consulting advisory on financial matters across emerging markets.



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