War and Peace in the Globalized World (Part I)
EDITORIAL, 24 Feb 2020
The empirical truth of the following statements should be evident to any student of history:
 War is the continuation of politics by other means.
The recent and famous articulation of this statement is attributed to Prussian General Clausewitz of the early nineteenth century. Clearly, however, even two neighbouring tribes twenty thousand years ago would have behaved in a similar manner.
 The world has always been as “globalized” as the technology of the time permitted.
In other words, man has a deep-rooted instinct to explore, to trade and then – given the slightest opportunity! – to “conquer”. The means employed may vary from one age to another – rocks, axes, horses, sailing ships, tanks, missiles … or whatever. The underlying human instinct is the same.
 In any age, “geopolitics” of the day is governed by access to resources and trade benefits.
This statement has also been true over many ages. In particular, today this statement implies very clearly that all other claimed justifications for war – “freedom”, “democracy” or “responsibility to protect”, for example – are falsehoods. In other words, “It’s always the economy, stupid!”
Based on these facts, we can analyse the causative factors of war and peace in today’s technology-dominated, globalized world – a world which is vastly different even from the Prussian general’s world a mere two hundred years ago.
For realistic analysis, however, we need to also consider another crucial present-day fact.
Countries are the putative agencies of international relations, trade, war and peace. But today many countries around the world are experiencing significant internal stresses and strains, most often caused by growing economic inequality. How does this fact affect chances of war and peace?
With the aim of looking for an answer, we now take a look at the fractured domestic economy and politics of a typical “modern” country AB. A study of domestic fractures of AB will help us later to understand better the dynamics of war and peace between countries of the world.
The hypothetical country AB has annual GDP of about 5 trillion US dollars.
The country is named AB because its internal economy is composed of two distinct components A and B. The total population of AB is 100 million, but only about 2% of it is in B; the rest is in A.
While A and B are largely separated within AB, the separation is not total. Main roads and highways carry cars belonging to members of both A and B. Commercial airlines also carry members of both A and B. Schools, residences, shops, recreation et cetera are largely segregated, since the members of B see themselves as being a class apart.
Members of B have almost total control over how the country AB is legislated and governed. Any attempt by members of A to have their voice heard is met with hysterical and shrill denunciations by members of B – using terms such as “nationalism”, “populism”, “deplorable” … and so on.
The total GDP of AB is about equally divided between A and B, which means that the per capita annual income in B is fifty times that in A: US$ 1,250,000 versus US$ 25,000.
The economy of A consists of low value and low profit margin goods and services – such as farm produce, basic industrial products, manual labour, security (including police and military), clerical, retail, supervisory and delivery services, transport, nursing, housekeeping, beauty/hair care, and so on.
Therefore A supplies to B such low value and low margin goods and services. Since a population of 100 million supplies these goods and services to the much smaller population of 2 million, the prices of these goods and services remain depressed. To make matters worse for A, the members of B have fiercely kept their options open of replacing suppliers from A with lower cost suppliers from any other country in the world. Thus the B-types have retained maximum bargaining edge in their purchases from A.
B supplies to A high value and high profit margin products and services, related to finance, insurance & real estate (FIRE), media, PR, pharmaceuticals and law. Since these products tend to be complex, the relevant legal terms of trade between B and A are heavily biased in favour of the former.
As a result, every year B enjoys an “internal trade surplus” with A of about 1 trillion dollars, which explains in part the massive disparity between the annual per capita incomes of A and B.
B-types are addicted to chasing ever higher returns on their already huge assets; in fact that seems to be their only goal in life. They have tuned to perfection their schemes of exploiting debt-financing, “to-the-hilt” leverage and planned bankruptcy in all their financial ventures. To meet their growing demands for more and more debt, they have arranged for cheap and plentiful credit to be available “on tap”. For PR purposes, this “debt-on-tap” scheme is called “monetary policy” and touted as being good for AB.
From this “debt-on-tap” policy, the economy of B gains about half trillion newly-created dollars a year. No benefit of this accrues to A, however, since A has no role in the heavily financialized economy of B. However, when things go wrong, the members of A are expected to bail out the bad debts in B – supposedly to maintain “financial stability” within the country.
Money-on-tap gives the B-types virtually unlimited purchasing power – and purchasing power is power. Wealthy B-types buy the most expensive manpower and assets that money can buy, in effect behaving like “Sultans” of all that they survey. Almost anything can be purchased for a price, after all. Thus money-on-tap is the latest innovation to create the illusion of “conquering the world”.
Naturally, B-types have trouble dealing with manpower and assets that money cannot buy. The implications of this psychological effect will be explored in the second part of this article.
Others from around the world also participate in the free money and power game being played by B. Foreign money flows into B to the tune of about 0.5 trillion dollars a year. The basic idea seems to be:
As long as money can be created out of thin air, let the champagne flow.
The economy of B is run like a very exclusive and expensive club, with very high entry and annual maintenance charges. As deliberate PR policy, the myth is created that the highest goal available to a human being is to become a prominent member of B. Indeed, the life-dream of many an ordinary Tan, Deep and Ali around the world is to become a self-celebrated member of B.
The wealthiest among the members of B ensure that the hoi polloi of A have no say in how the affairs of AB are run. But they also go to great lengths to persuade the hoi polloi that their best interests remain uppermost in the minds of the wealthiest and the most powerful members of B. The PR term for this manipulation of A by B is “the art of governance”. Periodically, the wealthiest and most powerful members of B select a suitable person to act as the “front-person” for AB.
B-types understand very well that the myth of AB being “one country” is critical to them. After all, the multitudinous members of A are their dumb customers, lowly labour, tax payers, lackeys, fall guys, police, soldiers … and more. A “godsend”, indeed! How can B ever manage without them?
There are some 200 countries in the world today. Some are more “A-like” and some are more “B-like”; but, to greater or lesser degree, all of them are divided internally like the country AB here.
In Part II, we shall explore the implications of this type of global economic and political environment.
Dr. Naresh Jotwani is a semi-retired academic living in India and a member of the TRANSCEND Network for Peace Development Environment. Apart from part-time engagements in engineering education and consulting, he engages in an in-depth, personal exploration of how Gautam Buddha’s profound discoveries and teachings can be applied to the acute problems of modern life.
Tags: Capitalism, Conflict, Culture, Economics, Economy, Finance, Globalization, Money, Peace, Plastic Money, Politics, Power, War, World
This article originally appeared on Transcend Media Service (TMS) on 24 Feb 2020.
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