(Photo by Gatot Adri at Scopio)
War used to be always violent, bloody and physically devastating, and of course a hot war still is. In World War II we learned to wreak peak destruction. In addition to the usual guns and mayhem, we used conventional bombs to create firestorms. Then we used nuclear technology to flatten and incinerate an entire city with a single bomb, and we did it again.
After that type of war, everything is wrecked. A great many people are dead or disabled. Countryside is ruined. It’s absurdly destructive. To the victor go the spoils, much of which have been reduced to rubble and woe.
After World War II, we sidestepped into the Cold War. There were still hot wars, violent conventional conflicts, but on a smaller scale. They were sometimes proxy wars in which opposing sides in a regional war were backed by opposing superpowers. Still terrible, still destructive, but not all around the globe at once.
We sidestepped again. Until recently it looked like war has become mainly a matter of online ’bots spewing disinformation and groups of cyber warriors using cyberspace to cause disruption in targeted countries. Spillover into hot war has been narrow. Spillover into terrorism has been erratic.
But something else is happening underneath, isn’t it?
For some time now, we have been in a war where the main weapon is money. Cyber warfare is part of the arsenal. Conflict spills over into terrorism and hot war as it’s doing in Ukraine. But while our attention is riveted on the familiar horror of military action, the battlefields that get torn up are mostly national or regional economies. The spoils taken by a victor are expected to be financially rewarding, with infrastructure more intact than after the world wars. Money is wielded not just to hire cyber warriors or support soldiers, but in a variety of other ways. It can compromise officials, often more subtly (and harder to trace) than straightforward bribes. It can buy controlling shareholding in key companies, create jobs or destroy jobs in a constituency, tie up assets such as housing in places where there is a desperate need for the shuttered assets…
In the past, imposing sanctions on a misbehaving country had limited impact that often seemed inconsequential to anyone except the sanctioned nation. For example, in the wake of the 1991 Persian Gulf war, until the end of 1999 the world strictly limited how much oil Iraq could sell and specified that two thirds of the proceeds from such sales had to be used for Iraq’s internal humanitarian purposes. The amount of oil involved was not enough to distort the global market and Iraqi oil is regarded as low quality, therefore not highly desirable, due to its high sulphur content. Most people outside Iraq and the oil industry hardly noticed.
This time the misbehaving country is Russia, a major player. Europe makes heavy use of Russian oil and gas, especially natural gas for heating and electricity generation. The sanctions that began to be imposed at midweek will be felt around the world, especially in Russia and Europe, as money and things it pays for slow down or halt. Nord Stream 2 pipeline is dead in its tracks. For Russia, that’s a lot of money lost. For Germany, it’s a lot of natural gas to forego, but continental Europe has gas reserves and LPG tankers are lined up to take on gas at American ports to take to Europe. Various Russian banks and oligarchs cannot move their money where they want to any more. Their money has been subsidizing extremists and political operatives to undermine governments and societal cohesion.
Sanctions imposed so far aren’t affecting Putin enough to give him much pause. With Russia’s invasion of Ukraine, we can expect big ‘money guns’ currently held back to be deployed. Perhaps the most noteworthy would be denying Russia access to the SWIFT system through which international payments usually flow. At the pace of events while I write, that may happen by the time this post is published.
We stand at a cusp. What Russia is using their military to do looks too much like Germany and the Sudetenland. It looks like the start of a classic world war.
What’s different this time is the war of money underneath it, an ongoing conflict about money being waged mostly with money. We were already in a world war of money before today’s military actions.
The casualties in a war of money are mostly hamstrung or crippled or warped governments and societies, businesses driven under, livelihoods slashed, living standards cut… not cities turned to rubble, countryside torn to shreds and appalling casualty counts.
If we are fortunate perhaps, just perhaps, the war of money might be able to limit the hot war. But I repeat, the money war was already global. A great many of us will feel its effects in one way or another.
Whether or not this money war will hurt us, personally, may depend upon what we do now to position ourselves for the ripple effects. Whether or not this hot war will become global is not yet clear. But it is seldom possible to guarantee complete safety in any type of war. The best you can do is all you can do, and then hold on through whatever happens.
As the saying goes, we live in interesting times.