Let’s conclude our Lessons from History series by examining a false assumption: we can gain prosperity from war. Some economists claim that war is somehow profitable—but the fact is that war has never led to prosperity in any form in history. Let’s examine the truth of the matter.
The Investment in Peace
Numerous countries have invested in the military, including the United States. At the same time, continuous and substantial investment has been made in peace, even if not so named. This contradicts the idea that war is profitable.
In the last 50 years, nearly every major city worldwide has constructed an incredible international airport. This isn’t necessarily true of the U.S., but airports throughout Europe, the Middle East, and Asia are wonderfully beautiful and traveler-friendly. The money for these major airport investments didn’t come from surplus, but from a real investment in the future. Someday, someone will have to pay back this investment (future generations), and if tourism and adequate surrounding industry do not produce the tax revenueRevenueRevenue is the amount of money a business generates during a specific period such as a year or a quarter; also called sales., more problems will be created, as we have already seen with the war in Ukraine.
Such an airport is not simply a facility for the landing and taking off of planes—it becomes central to a small city unto itself. There are shops, boutiques and excellent restaurants inside and outside the airport. First-class hotels are conveniently located nearby.
Why all this investment from cities and countries and airports? Because people travel. This industry started almost 50 years ago and has boomed like no other with huge investments around the world. We can’t imagine what would happen if this industry were stopped by a crazy 3rd World War—COVID already showed us what it might look like on a smaller scale. And no one ever said, “Only people from a particular region of the world should travel. We don’t want anybody from the other regions.” No, travelers from all over the world are welcome at such an airport.
Investment has also been made in broader tourism, such as in 4 and 5-star resorts and hotels. As an Austrian living in the U.S., I have personal knowledge of the kinds of investments countries are making in travel. There is a ski resort in Austria called Ischgl that was built largely for Russians. The resort caters to Russians who travel to Austria to ski.
Other outstanding tourist attractions have also received significant investment. Cities around the world have fine museums so that visitors can enjoy the culture and art of a city. This summer, many people will visit Europe to see the Colosseum, the Vatican, the Sistine Chapel, and many other sites so they can get a feel for Rome and Florence. Not only are there museums and restaurants, there are the Red Buses in these cities so a visitor can hop on and take a tour.
Cruise lines have also become an enormous industry. 30 years ago we would never have imagined these huge ships, like floating cities, that dwarf even the Titanic. There are even cruises to Antarctica.
Realizing that the world is quite small, people have today realized they wish to see Europe, Thailand, Japan or Africa. And all these industries need consumers and tourists.
Now that we’ve seen some of the extraordinary investment made in sharing and peace in our world, let’s now look at what happens in a time of war, such as the current one in Ukraine.
To begin with, countless businesses depend on trade—and between warring countries, trade totally stops. At the same time, travel and tourism cease. How, then, can it be said that war brings prosperity? Real prosperity comes only in times of peace.
In investment, timing is quite important. For example, let’s say you want to expand a business to another country. You need to build a new location with multiple shops, like the Bacio di Latte ice cream shop is currently doing. Although it has Italian roots, the company is based in Brazil and has 2,500 shops. They are now expanding into the U.S. with their fabulous ice cream and can currently be found in several locations in the greater Los Angeles area.
It is clear that Bacio di Latte has carefully done its research, and has made its investments in a country that is relatively risk-free. But if you were an investor looking to invest in another country, you would certainly not do so if that country was at risk of internal or external conflict. No one will invest in a country at war, or even in a country adjacent to a war-torn region.
We can see, then, that our business strategy is ruined by war. On a global level, the business strategy of tourism that has been implemented over the last 50 years, with airports and surrounding businesses and infrastructure, is also being ruined. Why would we want to limit what is so profitable?
Three Pillars of Stability
The environment in which prosperity can exist must be stable, and is composed of three main pillars.
Cruise lines, airlines or railroads will not be patronized by travelers if they have the slightest worry about security. If a passenger doesn’t know whether a plane will be shot down or a ship torpedoed, they won’t use that mode of travel.
It is not only the vessel as a focus for security concerns, but also its station, airport or port. Thus, “security” is a holistic concept.
Any traveler or tourist will expect a great experience. They want to buy, they want to consume. Therefore, a destination must offer attractive goods, services and experiences. These, of course, require sales.
Access Must Be Easy
Anyone heading to a destination will desire easy access. This includes the means of travel. Events such as we saw recently in the U.S., with thousands of canceled flights and stranded travelers, are obviously barriers to global prosperity.
Customers will simply turn and walk away when access becomes difficult. A consumer will stop consuming and not buy in the future. Businesses and commerce as a whole then lose a buyerBuyerA buyer is an individual or organizational entity that purchases a product or subscribes to a service.. Therefore, access needs to be easy, not more complex, as it can be when it comes to air travel.
Elimination of Barriers
When the factor of government is removed from conduct of normal business, such conduct becomes easy. There are far fewer barriers to trade and consumption.
In a free enterpriseEnterpriseEnterprise (in the context of sales) is a relatively large organization typically composed of multiple levels, locations, and departments which need multi-layer software systems that support collaboration across a large corporate environment. environment, greater value is provided to customers through business competition. Competition without monopolies means that products and services are constantly improved. When products and services are more or less equal, the better provider wins.
Barriers to purchasing are not appreciated by buyers. I recently saw pictures of grocery stores in San Francisco that shoppers can no longer easily enter because of the intense security created by an overwhelming homeless situation and the constant threat of shoplifting. This situation has been created by a weak, unsustainable infrastructure.
Investments Being Destroyed?
Tourism infrastructures have received billions of dollars in investment. They were built to last 50 years or more and pay back their investors. What if they don’t survive?
Nothing has ever been produced by war except the mental and physical scars of wounded veterans, and death. Just listen to the survivors of the conflicts in the Middle East and Vietnam—they will tell you all about the realities of war.
We now find ourselves embroiled in yet another war. There are unprecedented occurrences such as the whole of the Western world chanting the mantra, “Russia cannot win, and we must feed every last Ukrainian into the war if it means removing Putin.” If this war continues and expands, all our investments of the last 50 years could disappear.
People have had quite enough. We see this in the riots in France and elsewhere in the world. People feel they are losing and don’t seem to care anymore, and they then go out and riot and steal (don’t get me wrong, I’m not in favor of any violence—protesting should be done in peace and with dignity).
An Age Comes to an End?
Author James Rickards, in his excellent book The Road to Ruin, explores the collapse, around 1200 B.C., of the Bronze Age. This event came with incredible speed, and within 50 years almost every major kingdom had crumbled. The Egyptians, Mesopotamians, Mycenaeans, Hittites, and others fell into chaos. Cities burned, trade vanished, invaders came, and wealth was lost. City dwellers fled to the countryside and became farmers. Thus began a 300-year DarkDarkDark is a description for the state wherein a prospect have become unresponsive to calls, invitations, emails and other attempts at engagement (e.g., Mr.Brown has gone dark.) Age that lasted until the rise of Athens and Rome.
The Bronze Age collapse, Rickards points out, was quite similar to the Roman Empire collapse occurring several thousand years later. The lesson, he says, is that civilization is not linear but cyclical. Society does not become endlessly rich and sophisticated and then collapse. It is not the end of the world, but the end of an age.
If we stay on our current course, the age we are now in could end with a plunge into darkness. No one knows how long it would take us to resume, if we ever would. That’s not going to happen right now—tourism is still thriving in many parts of the world. But it could all end in an instant if some mad leader with access to the red nuclear button decides to act on his or her psychosis.
Reversing the Trend
We can keep going as we are and bring everything to ruin. Or we can take it to the next beautiful level with the incredible technology, including A.I. and the Internet, available to us today.
Democratizing technology, available to everyone, allows us access to channels that are alternative to mainstream media, such as Telegram. Such channels give us a fuller picture of the unwise decisions being made by today’s leaders. In the past, ordinary people did not have access to real information. But today, technology allows us, with iPhone and Android devices, to photograph events as they happen and post them on social media. Lies can be completely bypassed. With the truth, we can move forward and be set free.
It is my belief we can make a change. Part of what inspired this belief was marching with our dog in the Pacific Palisades 4th of July parade. There were happy people all around, sitting, caring, eating and drinking, peacefully sharing, enjoying life and celebrating.
An insightful statement was recently published by Thomas Druyen, founder of the IZZ-Institut at Vienna’s Sigmund Freud University: “According to human judgment, the coming decades will be marked by further conflicts, which may well include nuclear or world wars. At the same time, the whole of humanity is waiting for an age of harmony. The dream of a world without warlike conflicts has existed since time immemorial. … We eagerly await a new, universal system that will agree on moral values valid for all.”
A beautiful Old Testament quote by the prophet Isaiah makes an incredible prediction of our future. It states that spears and swords will be beaten into plows and agricultural tools, and the war between nations will disappear (Isaiah 2:4). I believe that every generation has this prophecy to fulfill in their lifetime.