Wars, Finance, The Future

I have been reading a book about the First World War and history can teach you many things and perhaps in the most extreme of human activities you learn the most. The First World War like any war had its turning points, but it was perhaps the first Great War where powers with such varying political systems came to battle. We could argue over semantics here and say that systems of government have always differed, but as democracy is relatively new then I would argue The First World war is where such radically different regimes and ways of governing have gone to war. It would be an interesting to study the wars and how different the political organizations been between the combatants have been and perhaps I am wrong and it is a question of perception.

So how close were the more democratic countries to defeat?

The difference between this war and the Second World War is that Germany completely defeated some of the geographically peripheral countries who acted as the swing countries in the central and western European battle for dominance. A truce was signed with the Russians which gave the Kaiser vast swathes of Eastern Europe. In the Second World War they swept through France which must have elated people like Hitler who had spent years in the trenches however, the main swing protagonist in the West remained the UK.

They would have won in the west without the UK in the First World War. In terms of knocking out opponents the French were not the people to beat as they didn’t have the navy, economy or empire the size of the British, they had better generals than the British in the first, lost more soldiers but they couldn’t decisively change the balance of power in Europe like the British. In a straight fight between France and Germany there would only be one winner. Between the UK and Germany it would be harder one to call given Britain’s relative Island security and its overseas resources, although one feels Germany in the second would have defeated it if they had only focused in the first it is much more doubtful and unlikely.

So I would argue the Germans were closer to victory in the First World War, particularly and importantly the Americans entered the battle so much later in the first than the second. The Germans made three mistakes; they conducted general submarine attacks and discussed with the Mexicans the opening of another front which brought America into the conflict and they failed to develop the tank.

My point would be that democracy was extremely close to being defeated in the First World War, and even though the Americans arrived late, the sheer numbers of men they could provide following the exhaustion of the European powers was decisive along with the tank. It is quite possible that the western powers would have negotiated a peace, if the Americans hadn’t arrived and I would put the odds at perhaps 30%. The tank may have swung the balance away from the power of defence and the trench system which is what the Germans excelled at, but the Germans could have learnt and developed their own perhaps. So if they hadn’t have antagonised the Americans they could have been left dominating continental Europe.

Democracy was close to being defeated. So what does this have to do with finance do you ask and our current predicament? We are so used to reading about the success of the democratic powers in defeating the German led allies on two occasions and then the winning of the cold war we forget how fragile our hard won freedom and democracy is.

Democracy is precious the market can function under many different political regimes and it has throughout history. It is the best way of allocating resources and most dynamic human creation although I wonder whether it will be able to actively help and assist in solving our resource\environment problems but that is another debate. That is not at risk what is at risk is democracy.

The Germans didn’t have a good tank in the First World War and paid a significant price. For the second they had well developed tanks and tactics. The American’s had terrible military intelligence at Pearl Harbour they didn’t make that mistake again. At the battle of Midway they had better intelligence than the Japanese, which proved critical. He who has the hardest lesson often learns the hardest. Not always but often.

Russia, China, India have had some hard lessons throughout the last century and they have learnt. They are developing, particularly in the case of Russia and China other ways of governing and they maybe able to harness the market differently to Western Europe and America. If they continue to progress and the West struggles then the greatest political system ever created for the average human could be threatened.

We have severe problems that need to be discussed and faced. The inherent short-termism endemic in the UK and US exacerbated by an extremely lengthy election process in the US and the media hunting packs who focus overtly on charisma and scandal. They forget issues, intelligence and judgement. The bonus culture has been discussed enough, but one would bracket it here along with the obsession with quarterly targets.

The work ethic and always assuming that everything will improve and get better, people wanting the easy life, governments petrified of allowing people to realize that sometimes life is tough and the hard times won’t always last and look population we are going to have a tough few years we will do our best to build a long-term future but hell life is sometimes tough we have to take the ups with the downs.

Democracy needs defending it is a fragile thing and not something we should take for granted or take liberties with.

Financial Armageddon a threat to democracy

So,

In this a age of modern technology where information is instant some problems never change and that is receiving relevant, accurate and timely information and interpreting the information you are presented with efficiently without allowing yourself to be swamped or swayed by the panic and emotions of yourself and those around you.

Great men in dramatic situations aren't the cleverest they are the ones which are best informed and able to quickly and efficiently work out what are the key pieces of information they are being presented with and then acting decisively. One day they will be able to test this skill and traditionally I guess they would have called it calmness of thought or having a steady hand.

The television I look at now is swamping me with information and the internet provides even more on this so called credit crunch. Bear Stearns was rescued America nationalized its mortgage market and one of America's great financial institutions today has collapsed as America's properties continue to decline in value. Alan Greenspan says this is a once in a century act without doubt he is correct but as a child of a great democracy he doesn't quite grasp what the real problem is, in the heat of the moment my interpretation would take his argument further.

Magazines such as the Economist and most economic writers blindly follow and write about the market as being the best system to distribute resources and power forward economies and the world. Laissez faire is the idelogy we should follow liberalism.

This idea is being challenged and with political economic and successful alternatives arising in the world the Western liberal democratic system is under attack as the best means of running a country.

Western Intellectuals need to realize that now more than ever we need to question our way of running our countries and economies, we need a rebirth of ideas and of economic management without this democracy could be on a potentially fatal death march. It doesn't need to be but we need careful thought about the limitations and problems in the way our countries are governed and managed.

Sarah Palin is very scary, not because of where she comes from, not because she carries a gun but because she is quite simply stupid. Listen to her interview here and cry. This is a problem and challenge to democracy if because an idiot is like us we will elect them.

http://www.youtube.com/watch?v=7jvfm8tn_Cw

When President Trueman fired General Macarthur during the Korean war it was because he was a wise thoughtful and clever man. The USA could have gone Nuclear and that would have had disastrous consequences for the world.

So it is with Financial crisis the markets have failed totally, utterly and completely this is a challenge to capitalism and the liberal democratic approach of managing them. The USA went socialist the other week when it nationalized its mortgage market.

If idiots continue to be elected to govern countries then effectively decisions will not be made by leaders but by experts who are able to grasp the problem or interest groups who are able to sway the leaders.

They should be informing leaders but if they are not clever enough to understand the problem they will not be making the decision and sorry but Sarah Palin is no Magaret Thatcher who had a degree in Science from one of the world's greatest university. She maybe more like us than Mrs Thatcher but that means she is even less capable of running a country

This is a challenge to the greatest system of government and economic management the world has produced. Fukuyama wrote about the end of History if we are not careful due to the rise of the East and alternative Political Economic systems, our financial mismanagement and our blind faith in the market is always right, the power of the media and the rule of the mob meaning idiots get elected, the short termism that is perhaps endemic such as quarterly profit drivers and a 4 year election cycle with a two year campainging period, may lead to the end of democracy.

This is the challenge facing us as we move forward.