The Middle East is hopeless, but
not serious By Spengler
"Hopeless, but not serious," was the cafe
quip about the Austro-Hungarian monarchy before
World War I. Now that a consensus has emerged that
Iraq's position is hopeless, the next question is:
Is it serious? Judging from financial markets, the
answer is, "Not in the least." The same is true
for the Israel-Palestine problem.
Some
years ago I suggested that option theory offered
insights into geopolitics. During the Cold War,
the Soviet Union was the spoiler, seeking
advantage from instability, while the United
States
sought to maintain stability. In financial
parlance, the Russians were long volatility; they
stood to exercise their political options
opportunistically, and the more chaotic and
uncertain the state of the world, the better for
Moscow. For the past 20 years, though, it is
Washington that is long volatility; in the absence
of a contending superpower, instability frightens
all contending parties into seeking help from
Washington. The more unstable and uncertain the
world, the stronger the position of the United
States. Whether or not the US recognizes this is
beside the point; the fact that President George W
Bush has made a dog's breakfast of Iraq makes
America's world position stronger.
A
friend in financial markets observes that the
world appears to be safer than at any time on
record, judging by the cost of insurance against
economic disaster. That is, the cost of buying
options on the Standard and Poor's 500 stock index
stands at the lowest level since 1986, when
options on the index first were traded. Investors
who fear catastrophe pay for the option to sell
the S&P 500 Index at a fixed price. If it
falls far below that level, they earn a
windfall.
The price of options is measured in terms of
"implied volatility", a concept that interested
readers may investigate for themselves. [1]
Now, the fact that the financial market
believes the world to be safe does not prove that
it is safe. Professor Niall Ferguson of Harvard
observes that world markets anticipated the
outbreak of neither World War I nor II. As he
observed in the January edition of The Atlantic
Monthly, the predicament of Sunni, Shi'ite and
Kurd resembles that of the European powers just
before the outbreak of the World War I in 1914.
[2] I made a similar argument last year. [3] The
difference is that everyone cared if Germany,
France, Russia and Britain went to war. No one
today cares if Sunnis kill Shi'ites in Iraq or
Lebanon, or Hamas and Fatah fight to the bitter
end in Gaza - provided, of course, that US
aircraft carriers keep the oil flowing through the
Persian Gulf.
For the first time in
recorded history, none of the major powers has any
reason to fight any of the others. All of the
major powers enjoy levels of economic growth that
range from respectable to ebullient, and none of
them shows any vulnerability to financial crisis.
A great deal of violence flashes across the news
screens, to be sure, but the perpetrators of the
violence are not the decisive players in the
modern world, but rather those who reject the
modern world because they cannot adapt to it. By
definition, the rejectionists have small impact on
the major currents of the idea, precisely because
they have isolated themselves from these currents.
Bernard Lewis observed that the entire
Arab world, except for oil, exports less than the
5.2 million people of Finland. The economic
significance of the Shi'ites of Iraq and Lebanon
is negligible; the Palestinians represent a net
drain on the world economy, as consumers of
subsidies. If space aliens were to transport all
of them to another planet Tuesday next, world
markets would not notice. By the same token, if
the Sunnis and Shi'ites of Iraq and Lebanon were
to eat each other up like the Gingham Dog and the
Calico Cat, and the Palestinians of Gaza were to
annihilate one another, the impact on the world
would fall below the threshold of observation. I
do not mean to suggest that this would be a good
thing, for human tragedy never is a good thing; I
mean only to state the obvious, that it would not
be a matter of material importance for anyone
else.
For the past 40 years, the
foreign-policy establishment on both sides of the
Atlantic took as an article of faith the premise
that a solution to the Arab-Israeli conflict was
the key to stability in the Middle East.
Frustration at the inability of the Israelis and
Palestinians to come to terms has led the US
Baker-Hamilton Commission and other incarnations
of conventional wisdom to demand forceful
intervention to impose a settlement.
The
voice of conventional wisdom has fallen curiously
silent in recent weeks, as Saudi Arabia and Egypt
align themselves with the United States and Israel
to isolate Iran and its proxies, Hezbollah and
Hamas. I wrote on December 4, 2006, "The emergence
of an Iranian threat to Saudi Arabia makes
Palestine the odd man out. The Palestine problem
has dropped to the bottom of the Arab priority
list, and the fate of the Palestinians is to
become cannon fodder for proxy wars." [4]
I do not think any responsible analyst now
believes that a solution to the
Israeli-Palestinian issue has much bearing on
stability in the Middle East. Which Israeli was it
who began the Sunni-Shi'ite conflict? Iran's
delusions of grandeur and messianic expectations
stem, I have long argued, from the simple fact
that the country is entering a combined economic
and demographic crisis from which it has poor
hopes of recovering. [5]
The present
conflict in the Middle East is not between Arab
and Jew, but between Arabs and Jews who seek their
way in the modern world on the one hand, and Arabs
and Persians who reject the modern world on the
other. The latter have nothing to lose and are
prepared to fight to the death; how else do we
explain the unlimited supply of Muslims who are
prepared to die to murder Muslim civilians?
If individuals or indeed entire peoples
are determined to destroy themselves, it is
extremely difficult to prevent them from doing so
at length. The tragedy, I expect, will continue in
Iraq, as it did in Spain 1936-39, or the United
States 1861-65, until there no longer are
sufficient young men to put into the line. The
world will little notice or care.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
windfall.
The price of options is measured in terms of
"implied volatility", a concept that interested
readers may investigate for themselves. [1]
