Sarajevo redux or how world wars come about

Feb 1, 2024·Alasdair Macleod

The First World War appeared to come out of nowhere, the assassination of Archduke Ferdinand in 28 June 1914 led to a major war including Austria, Germany, Russia, France, and Britain in only six weeks. Hamas’s excursion from Gaza, killing and taking Israeli hostages, followed by Israel flattening most of Gaza threatens a similar escalation.

The First World War was truly terrible. If we are on the brink of another one, this time it will have a high degree of automation, with hypersonic missiles in the hands of Iran, China, and Russia (if the latter two are drawn into the conflict). And we must not forget that all combatants (with the possible exception of Iran) have nuclear weapons. 

But will it come to that? There is reason to believe that the best guarantor of America not being drawn in is her fragile economic condition. It is hard to see how a nation with a debt to GDP ratio of 125, and government finances mired in a debt trap would survive a major war without crashing its own currency and financial system. Western capital markets would probably have to be closed for the duration.

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