Firmly ensconced in Bagholder’s list of the Top ten books ever written is The Art Of War by Sun Tzu. Keeping an open mind, adapting to change, and above all else, knowing thyself are just a few of the life lessons Sun Tzu provided. Not only are the lessons valuable, but their real-world applications are virtually limitless. Whether you want to grasp game theory, trade in the financial markets, understand politics, navigate a courtroom, manage a business, or run a criminal enterprise, the wisdom found in The Art of War is absolutely priceless. Even though it was written over 2,500 years ago, the ideas within are still used today by the world’s biggest players on the world’s biggest stages.
One of Sun Tzu’s best-known quotes was, “The supreme General is one who can subdue his enemies, without having to fight.” It makes sense, as there is no point in fighting if you don’t have to. There was no better historical example of this than the “Cold War” in the 1960s-1980s between the Soviet Union and the United States.
The Soviets lost the Cold War because they could not compete economically with the US. The Soviet economic system was a form of kleptocratic communism, where the politicos in charge enriched themselves while everything economically was controlled in a grossly inefficient manner, from the top down. The US, on the other hand, was an economic powerhouse thanks to capitalism. We produced more food than we could eat, more oil than we could burn, and more goods & services than we could use. All the while, what little the Soviets produced was poured into their military, leaving a gaping hole in the standard of living for the average Russian. In the end, the Soviet Union could not keep up, enabling the US to win the cold war, in true Sun Tzu fashion, without firing a shot.
Fast forward to today, and consider the current geopolitical landscape. Most would consider China the 2nd most powerful country on the planet, looking up only at the US. Anyone with even a shred of ambition would not want to stop climbing one rung short of the top, so the question for China becomes, how can we defeat the US and claim the top rung for ourselves? If they were to heed the wisdom of their countryman Sun Tzu, they sure wouldn’t do it on the battlefield, where the loss of infrastructure and human life would be staggering. Much better would be to draw from the US cold war playbook, and attempt to crush the US economically.
Enter Cold War II, the sequel…..
For years, China has been moving away from the inefficient economic system of top-down control, and more towards capitalism (Google: “China Little Giants”). Conversely, the US has been moving away from capitalism for decades. The politicos in charge here favor more tightly controlled top-down regulation, all the while enriching themselves and friends with insider trading, fat government contracts, and 10% for the big guy. Bag would call this a form of Kleptocratic Cronyism. As a result, China produces far more goods & services than they use, while the US is left vulnerable, completely dependent on other countries for those same goods and services.
Much like Russia in the original Cold War, the military is the biggest expense today for the US at the federal level, and it’s not even close. The US war machine gets all the funding they need, and plenty they don’t. At the same time, underfunded domestic problems like opioids, homelessness, and crime are allowed to run rampant, tearing at the very fabric of US society and, well, leaving a gaping hole in the standard of living for the average American.
It is no coincidence China sanctioned the Russian invasion of Ukraine. China knew that allowing Ukraine, which had some of the world’s most productive farmland, to become an unproductive war zone instead, would effectively drive worldwide food prices considerably higher. On the surface, it might seem higher food prices would affect both the US and China equally. But the fact is, China is a net exporter of food, so as a seller, they benefit from the higher prices. In sharp contrast, the US is a net importer of food, so as buyers, we suffer from higher prices.
It’s not just groceries, either. In the last year since the Russian invasion of Ukraine - a barrel of Oil has averaged $86 per barrel, more than double the $41 average in the year prior to the invasion. It might seem higher oil prices would affect the US, Russia, and China equally. Unfortunately, that’s just not the case. Russia is a net exporter of Oil, thus it is raking in cash at a staggering rate. The US is a net importer of Oil, leaving ordinary Americans to be punished with $5 a gallon gas at the pumps - more than double the average price of the Trump years. China is not at all bothered by rising oil prices. They were smart enough to lock up a multi-year supply at last year’s lower prices. At the same time China was buying last year, Bozo Biden the clown was busy selling off our strategic oil reserve, leaving the US without a backup plan.
Meanwhile, the Ukraine Quagmire is nowhere near a resolution, as neither side looks even remotely interested in peace talks. As a result, the US taxpayer continues to be bled slowly as our leaders pour Billions in aid, anti-aircraft missiles, Smart bombs, Abrams Tanks, etc… down a bottomless pit. China has to be laughing at all of this. While they are becoming an economic juggernaut, the US is flushing resources down a Ukranian toilet at an obscene rate. All the while, here at home, an economic depression is underway as collapsing banks, soaring inflation, and food shortages are, in the parlance of our time, the “new normal.”
All the signs are there for anyone who wants to see it. We are engaged in a Cold War with China, and they are kicking our ass. Worse yet, the US seems content to make all the same mistakes the Soviet Union made in the first Cold War, while China appears to be making all the right moves. It is high time the leadership in this country channeled the wisdom of Sun Tzu, and stop allowing the military to burn through resources on senseless wars. Make no mistake, this Cold War II with China… like most sequels… will not be anywhere near as good as the original.
Spot on and to make matters worse, the Russians have made massive progress in the field of hypersonic missles and integrated air Defence. Right now it’s is questionable if the US Airforce could achieve air superiority against such an integrated air Defence and is aircraft carriers are basically history at this point. Nice for power projection but in a real war they would need to be kept far far away to not get blown out of the water. And then there is Russian progress in their nuclear deterrent. If the us military wants to just catch up and negate these Russian advantages it will cost then huge investments - on an already insane budget. Putin made a statement months ago that they won’t repeat the mistakes of the Soviet Union in terms of overspending in arms etc. the US could really end up like the Soviet Union (spending itself to death with weapons) all while China is the “laughing” third.
Great stuff!