From the September 2011 EWR
Writers for thousands of years have observed that political power corrupts the morals and the judgment.
Political power corrupts because it is, itself, corruption. It is the legal privilege of using brute force on persons who have not harmed anyone. Only governments have this privilege.
Please keep this in mind as I describe two trends in Chaostan that are likely to have a profound effect on you and your loved ones.
I coined the term Chaostan in 1992. It means the land of the great chaos. It refers to the area from the Arctic Ocean to the Indian Ocean, and Poland to the Pacific, plus North Africa. This is the most important area that entered the modern era without legal systems that were rational — meaning, for the most part, laws were and are simply made up out of nothing. There is no requirement for ethics or logic, so that area of the world has been a vast sea of blood and destruction for centuries.
If you don't have law based on ethics and logic, that's what you get. Chaostan has easily been the bloodiest place in all of world history.
The Soviet empire was the lid on the Chaostan pressure cooker. Ever since the USSR fell apart, launching the "new era of peace and brotherly love" two decades ago, I've been saying, invest in things that do well in wartime. As you can imagine, those who have followed this advice have earned astounding profits.
I think the spectacular performance of investments that do well in wartime has plenty of life left in it. The main reason is called Westphalia.
Since 1945, Washington has been the leader of the world and the top player in international agreements and international law.
In February 2001, I began warning about federal officials erasing the 1555 Peace of Augsburg and the 1648 Treaty of Westphalia.
These two treaties today are generally referred to as simply Westphalia.
The agreements were a reaction to the invention of gunpowder during the Middle Ages. Gunpowder was unnerving to rulers because the new weapon made it cheap and easy to blow down the walls of the castles where rulers lived.
The two treaties were a partly successful attempt to keep any Tom, Dick or Harry from settling old scores.
The treaties said no nation could attack another unless the other was a clear and present danger. This was a principle of ethics drawn from the old Common Law. My right to swing my fist ends where your nose begins.
We don't know how many wars these treaties prevented; none of this is measurable. We do know the treaties eventually led to the 1945-46 Nuremberg Trials in which Nazi leaders were sentenced to death for starting a war in the absence of clear and present danger.
In 2001, I warned that Clinton's attack on Serbia and Bush senior's attack on Iraq were precedents replacing this ancient Westphalian principle with a more primitive Roman one. The Roman principle says, the only justification you need to get into a war is the belief that the other side up to no good.
Qadaffi is one of the least important tinpot dictators of modern times. In the vast array of great political leaders, I doubt he has murdered enough people to rate an honorable mention.
You might remember, until this year US officials were boasting about taming Qadaffi. They said they had forced him to give up his weapons of mass destruction and he was no longer a threat.
But this year, on the completely unverifiable assumption the new rulers of Libya will be more ethical than Qadaffi, Obama followed the precedent of Clinton and Bush. He jumped into the North African war on the side of the Libyan rebels.
Obama's participation in the war certainly completes the demise of the Westphalian principle, but I've seen little about it in the mainstream press.
By replacing the Westphalian rule with the primitive Roman one — that is, by cementing the Clinton and Bush precedents — Obama has given any Tom, Dick or Harry permission to settle old scores. All you need now to start a war is the belief that the other side is up to no good. Clear and present danger is no longer required.
In an Armed Forces Journal article titled "A Darwinian world — Libya points to a new era of aggression and turmoil," Colonel Robert Killebrew reports — and this is my key point — "armed intervention across international boundaries into the internal affairs of other states is now accepted," and "the 'Westphalian' ideal of noninterference in the internal affairs of other states is as dead as a doornail."
So, geopolitically, we are back to the Dark Ages. As the title of Killebrew's article indicates, whatever geopolitical ethics were in effect for centuries are gone. We are entering a dog-eat-dog Darwinian free-for-all, a "new era of aggression and turmoil."
You can hit anyone for any reason.
Washington's erasure of the Westphalian principle must be one of the most extreme cases of hubris in world history. What is important about this for EWR investors is Killebrew's logical observation: as the protective function of borders evaporates, he says, military power "matters more and more."
The other big development in Chaostan is the use of mercenaries.1
At their peak in 2008, there were more than 160,000 mercenaries operating in Iraq. They outnumbered the uniformed Army, Navy, Marines and Air Force combined.2
The mercenary casualties are "off the books," no reliable count is kept by anyone we know of, so these casualties do not affect the political decisions about getting into a war or about staying in one.
Most importantly, mercenaries are called military contractors, which leads us to assume these are all guys who are our friends and neighbors, who were in the US armed forces and went private. They're American troops but they just aren't wearing uniforms.
Actually, a lot of them are Iraqi and Afghan warlords and their troops who are on the federal government's payroll.
For instance, Washington doesn't have enough of its own troops to secure the supply lines from Pakistan to Afghanistan, so it hires local warlords to do it. These warlords are paid a hefty amount of our tax money, part of which they hand over to al-Qaeda or the Taliban to buy passage along the road.
In effect, dear fellow taxpayer, the use of these mercenaries means our money is buying weapons and ammunition for al-Qaeda and the Taliban.
Mercenaries have worked so well for Washington — because they are, in effect, Washington's private army that is not subject to the law or to political debate — that lots of other governments around the world are getting interested in them.
So, returning to the point I made earlier, political power corrupts not only the morals but also the judgment. We're now seeing this demonstrated yet again, in Chaostan, specifically in Iraq and Afghanistan.
Put the two new Chaostan factors together — the abolishment of Westphalia and the rise of mercenaries — and what picture do you get?
The one I get is, kings, presidents and prime ministers with their own private, secret armies that invade other countries without regard for any law or any political process.
If you think the last two decades have been filled with war, you haven't seen anything yet.
1 "Contract terms," Armed Forces Journal, June 2011, p.8.
2 "In this issue," Armed Forces Journal, June 2011, p.6.
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