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Philip Mause
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My name is Phil Mause. I am a Senior Advisor with the Pacific Economics Group, focusing on energy, regulatory and valuation issues. I retired from 40 years of law practice earlier this year. I am a yield oriented investor and in the last two years, I have done reasonably well in junk bonds,... More
  • The Lessons Of 1914 2 comments
    Apr 7, 2014 5:08 PM

    One hundred years ago, a series of events led to the commencement of what was then called the Great War; the war, in turn, led to developments (the Russian Revolution, the US entrance onto the World stage, the rise of Fascism and Nazism, financial instability) which changed the world forever. Are there any lessons to be drawn from the events of 1914 for us today as we ponder developments in Eastern Europe, the Middle East and elsewhere? I think there are although the conclusions are ones which should be obvious even without the evidence of 1914 to back them up.

    1. Don't Confront Everyone At The Same Time - Duh! When facing multiple enemies or potential enemies, it is really stupid to force them all into an alliance against you at the same time. World War I could very well have been limited to a conflict with Germany and Austria on one side and Russia and Serbia on the other side. Germany would almost certainly have been on the winning side and Germany's main concern - the modernization of the Russian military - could have been alleviated by the creation of buffer states and other measures so that in any future global conflict Germany would have been in a stronger position. But Germany's infamous Schlieffen Plan required the invasion of France through neutral Belgium so that Germany added the UK, Canada, France, Belgium, Italy, Australia, the United States, Portugal and probably a few others to its enemies list. If Germany had a plan to simply fight a defensive war on its border with France while dealing aggressively with Russia, history would have been completely different. France might not have entered the war or might have entering it apathetically. The UK certainly would not have entered a war in which Germany was simply fighting defensively against France on the Western Front. The lesson for us is clear. Don't confront Russia, China, and everyone in the Middle East at the same time. If we are going to be in a situation of confrontation with Russia, then we should cool things down with China. If we are going to confront Iran, then we should cool things down with other potential enemies in the Middle East.

    2. No Invisible Lines - In 1914, the UK was - for a time - undecided about whether or not to intervene but then the German invasion of neutral Belgium tipped the balance and the UK signed on with France and Russia. There is some evidence that Germany was surprised by this. There is evidence that the Korean War resulted from statements of Dean Acheson defining the US defense perimeter in a way to exclude South Korea leading to an assumption by the North Koreans that we would not intervene if they invaded the South. A similar misunderstanding about the US response to an invasion of Kuwait by Iraq is said to have led to the first Gulf War. In dealing with Russia, the stakes are so high that this kind of misunderstanding could have catastrophic consequences. We must spell out clearly what we find to be intolerable. For example, the Baltic states are NATO members but have Russian minorities. If we would really go to war over an invasion of one of these countries by Russia, we should let them know and put boots on the ground so that they will have to fire on Americans if they want to proceed. With respect to the Ukraine, we should define what we consider intolerable in very clear terms. I would suggest that Ukraine minus Crimea should not be violated by force although room should be created for a process with honest plebiscites and other internationally supervised peaceful measures that could lead to restructuring. As to the Eastern European states that were never part of the Soviet Union, we should demonstrate in every way possible that Russian incursion will be considered an act of war against the United States. We were able to live peacefully with the former Soviet Union because both sides understood quite clearly what was and wasn't tolerable. For decades there was no action against a militarily insecure target (West Berlin) isolated behind the lines and neutral "buffer" states like Finland and Austria were permitted to function without interference by mutual agreement. Even Josef Stalin understood the rules and even though he was dealing with what he considered to be decadent capitalists, he was much, much more cautious than he was in 1939-41 when dealing with a madman frothing at the mouth. The reason was that we made it very clear what our position was and we backed it up on the ground. It turned out to be the safest and most anti-war strategy we could have used and it gave us years of peace. It is time to dust off the old playbook and get down to serious business.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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  • mikenh
    , contributor
    Comments (222) | Send Message
     
    Thanks for this article. While everything about WWI is oversimplified, any lesson based on actual events is better than conjecture. We visited NE France a few years ago seeking to imagine the events better, but roughly there's nothing left except Verdun. The most memorable point for me was the bitterness in the voice of the Reims Cathedral tour guide - the thoroughly European tour guide - when he describe the German attacks
    7 Apr, 07:26 PM Reply Like
  • Philip Mause
    , contributor
    Comments (3581) | Send Message
     
    Author’s reply » I think Churchill's book does a pretty good job on the war itself and the general atmosphere leading up to the war. He considers the German offensive against Verdun to be one of the most idiotic mistakes in the war. It would have been much smarter to increase the pressure on the Russians in the East and shore up the Austrians. The level of casualties in the war was enormous and it scarred Europe for at least two generations, maybe forever.
    Events like WW1 and the Depression lead intellectuals and the general public to question fundamental assumptions and entertain alternate ideologies. The Panic of 2008 has done that on a much smaller scale.
    7 Apr, 10:20 PM Reply Like
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