By John Mauldin
And while I can appreciate the passions involved in the unfolding Greek melodrama that is sweeping Europe, I must admit that I’m a bit weary of little Greece commanding center stage in the long-running Eurozone tragicomedy – or maybe we should just call it what it is: a parody of human relations. Mr. Yanis Varoufakis, the left-wing Keynesian economist who most recently taught at the University of Texas (irony intended) is now Greece’s finance minister. He is finding out that his theories about how finance should work in Europe are not how things work in practice. We are getting some pretty nice press-conference rhetoric and inflammatory speeches, though: here’s what Ambrose Evans-Pritchard shared on the topic today:
Mr Varoufakis is braced for an arid meeting on Thursday with his German counterpart and long-time nemesis Wolfgang Schäuble, a man he once accused – borrowing from Tacitus – of reducing Europe to a desert and calling it peace.
“I will try to be as charming as I can in Berlin. I will tell Mr Schäuble that we may be a Left-wing riff-raff but he can count on our Syriza movement to clear away Greece’s cartels and oligarchies, and push through the deep reforms of the Greek state that governments before us refused to do,” he said.
“But I will also tell him that we are going to end the debt-deflation spiral and do what should have been done five years ago. That is not negotiable. We have a democratic mandate to challenge the whole philosophy of austerity,” he said.
The Greeks run out of money in a few weeks, and right now the mood in Frankfurt and Brussels seems to be that no extension is possible without Greece’s agreeing to abide by the previous government’s commitments, with a few concessions (the ones being offered to the side of the table seem to be pretty serious, but who knows?).
And that brings us to today’s Outside the Box. My very good friend George Friedman (no stranger to longtime readers) has written what I think is one of the best books on Europe I have ever read. It is called Flashpoints, and it will be in your local bookstore or on Amazon.
To my mind, this is George’s best-written book. What he does is explore the idea that beneath the surface of sweetness and light in Europe there simmers a millennium of geopolitical issues. He calls these issues “flashpoints.” This is not an academic book but rather a fabulous story of nations and peoples and cities, a history of the world that many of us came from, but few of us understand.
I cannot recommend this book strongly enough. It helps put into context the present smoldering issues in Europe. These are not the issues of the European elite, who tend to want to dismiss them as remnants from an ancient past, but rather they are issues that are driven by the emotions of a significant fraction, if not a majority, of the voting population. We are now seeing the very real potential for populist movements on both the left and the right (depending on the country) to sweep the current management out of their offices.
George does not predict this will happen, but he points out that, given the power of the emotions and the realities of history, it is a possibility. If you want to understand Europe and both to take advantage of the potential and to avoid the problems that Europe poses for your portfolio, this is a book you should read. It gives you context.
George has allowed me to share the preface from Flashpoints as this week’s Outside the Box. I think you will find it intriguing. George is the founder of Stratfor and one of the premier geopolitical thinkers of our time. I’m excited that he has just agreed to speak at our upcoming conference. If you didn’t see my description of the other speakers, you can read it here in last week’s Thoughts from the Frontline.
I will wrap this up quickly as I see my gym time is approaching, as well as the deadline to get this to my team to send on to you. Have a great week.
John Mauldin, Editor
Outside the Boxsubscribers@mauldineconomics.com
Stay Ahead of the Latest Tech News and Investing Trends…
Click here to sign up for Patrick Cox’s free daily tech news digest.
Each day, you get the three tech news stories with the biggest potential impact.
The Preface from Flashpoints
By George Friedman, Stratfor
Between 1914 and 1945 roughly 100 million Europeans died from political causes: war, genocide, purges, planned starvation, and all the rest. That would be an extraordinary number of deaths anywhere and any time. It was particularly striking in Europe, which had, over the course of the previous four hundred years, collectively conquered most of the world and reshaped the way humanity thought of itself.
The conquest of the world was accompanied by the transformation of everyday life. Music was once something that you could hear only if you were there in person. Literacy was useless for most of human history as books were rare and distant. The darkness was now subject to human will. Men lived twice as long as they had previously and women no longer died in childbirth as a matter of course. It is difficult to comprehend the degree to which, by 1914, Europe had transformed the very fabric of life, not only in Europe but in the rest of the world.
Imagine, in 1913, attending a concert in any European capital. Mozart and Beethoven would be on the program. It may be a cold winter night, but the hall is brilliantly lit and warm with women elegantly but lightly dressed. In that grand room, winter has been banished. One of the men has just sent a telegram to Tokyo, ordering silks to be shipped and arrive in Europe within a month. Another couple has traveled a hundred miles in three hours by train to attend the concert. In 1492, when Europe’s adventure began, none of this was possible.
There is no sound like Mozart and Beethoven played by a great European symphony orchestra. Mozart allows you to hear sounds not connected to this world. Beethoven connects each sound to a moment of life. Someone listening to Beethoven’s Ninth Symphony must think of revolution, republicanism, reason, and, truth be told, of man as God. The art of Europe, immanent and transcendent, the philosophy and the politics, all have taken humanity to a place it has not been before. To many, it seemed as if they were at the gates of heaven. I think, had I been alive then, I would have shared that feeling.
No one expected this moment to be the preface to hell. In the next thirty-one years, Europe tore itself apart. The things that had made it great—technology, philosophy, politics—turned on the Europeans, or more precisely, the Europeans turned them on each other and themselves. By the end of the thirty-one years, Europe had become a graveyard of ruined cities, shattered lives. Its hold on the world was cracked. The “Ode to Joy” from Beethoven’s Ninth Symphony was no longer a celebration of European life, but an ironic mockery of its pretensions.
Europe is not unique in this. Other civilizations have undergone turmoil, war, and savagery. But the unexpectedness, the intensity, the rapidity, and the consequences for the entire world were distinctive. And most distinctive was that this particular civilization should be capable of self-immolation. There may have been hints of this in the cruelty of colonialism, the deep inequality of European society, and its fragmentation into many pieces. But still, the connection between European high culture and death camps is surprising at the very least.
The Europeans conquered the world while conducting an internal civil war throughout the centuries. The European empire was built on a base of shifting sand. The real mystery is why European unity was so elusive. Europe’s geography makes unity difficult. Europe does not consist of a single, undifferentiated landmass. It has islands, peninsulas, and peninsulas on peninsulas—and mountains blocking the peninsulas. It has seas and straits, enormous mountains, deep valleys, and endless plains. Europe’s rivers don’t flow together into a single, uniting system as do America’s. They flow separately, dividing rather than uniting.
No continent is as small and fragmented as Europe. Only Australia is smaller, yet Europe today consists of fifty independent nations (including Turkey and the Caucasus, for reasons explained later). Crowded with nations, it is also crowded with people. Europe’s population density is 72.5 people per square kilometer. The European Union’s density is 112 people per square kilometer. Asia has 86 people per square kilometer. Europe is crowded and fragmented.
Europe’s geography means it can’t be united through conquest. It means that small nations survive for a very long time. The map of Europe in 1000 is similar to the map of 2000. Nations exist next to other nations for a long time, with long memories that make trust and forgiveness impossible. As a result, Europe has been a place where wars repeated themselves endlessly. The wars of the twentieth century were different only in that this time technology and ideology led to a continental catastrophe.
Europe is divided into borderlands, where nations, religions, and cultures meet and mix. There is frequently a political border within, but the borderland itself is wider and in many ways more significant. Consider the border between Mexico and the United States; it is a clear line. But Mexican influence, language, and people spread far north of the border, and likewise, American culture and business spread far south. In Mexico those who live in the states bordering the United States are seen as having absorbed American culture, making them alien to the rest of Mexico. Culture north of the borderland has transformed itself from Anglo to a strange mixture with a language of its own, Spanglish. The people living in these borderlands are unique, sometimes sharing more with each other than with those in their own countries.
I live south of Austin, Texas, where place-names are Anglo or German—the Germans settled the area west of Austin. When I drive south on I-35, towns tend to have German names like New Braunfels. As I get closer to San Antonio, they become Spanish, and sometimes I feel as though I am in Mexico. In a way I am, but the border is more than a hundred miles farther south, and that still has meaning.
Europe is filled with such borderlands, but the most important one divides the European peninsula from the European mainland, the West from Russia. It is a vast area that encompasses entire countries like Ukraine, Belarus, and Lithuania. Over the past century, we’ve seen the political border sweep far to the west, with Russia absorbing the borderland, or now far to the east, creating independent countries. No matter where the border may lie at any moment, this is a region whose people have more in common with each other than with Russia or the West. Indeed, the wordUkraine means “on the edge,” or borderland.
This is not the only borderland, although it defines European history. There is a borderland between the French and German worlds, stretching from the North Sea to the Alps. The Balkans are the borderland between Central Europe and Turkey. The Pyrenees are the borderland between the Iberians and the rest of Europe. There are even smaller ones surrounding Hungary, where Hungarians live under the rule of Romanian and Slovakian states. There is even a water border, so to speak—the English Channel, separating Britain from the Continent. In such a small area, crowded and filled with ancient grievances, there will always be borderlands, and no place demonstrates this more clearly than Europe.
Borderlands are where cultures mingle and where smuggling can be a respectable business, but it can also be the place where wars are fought. These are flashpoints. The Rhineland is now quiet, but that was not always the case. Since 1871, three wars have broken out in the area between the Rhine and the French-speaking regions. They were flashpoints then because there were deep and serious issues dividing France and Germany. And when the flashpoint sparked, the region caught fire. Today, the borderland west of Russia has become a flashpoint. It is igniting and fires have started, but, as yet, the tinder has not caught everywhere and there is no general conflagration.
In World War I and World War II all the borderlands in Europe became flashpoints that sparked and set off fires that grew and spread. The world has rarely, if ever, seen the kind of general European firestorm that was set off in 1914, calmed briefly, and then raged again in 1939. People overflowed with terrible memories and fears, and when those sentiments ignited, the borderland was consumed and all the fires converged into a single holocaust.
____________________________________________________________________________
Advertisement:
Join us at CommonStockWarrants.com for the only listing and details on all stock warrants trading in the United States and Canada. All industries and sectors are represented and many opportunites for investors. Don’t overlook this unique opportunity. Visit our website now.
_____________________________________________________________________________
Europe rebuilt itself with difficulty and with help was given back its sovereignty by the actions of others. Out of this shambles came a single phrase: “Never Again.” This phrase represents the Jewish commitment to ensuring that their slaughter would never be permitted to happen again. The Europeans as a whole don’t use this phrase, but its sentiment shapes everything they do. Those who lived through the thirty-one years then had to live through the Cold War, where the decision of war and peace, the decision that would determine if they lived or died, would be made in Moscow and Washington. That there was no war in Europe is worth considering later, but as the threat receded the European commitment was that the thirty-one years never be repeated. Europeans ceded their empire, their power, even in some ways their significance, to the principle that they should never again experience the horror of those years nor live on its precipice as they did in the Cold War.
The institution created to ban their nightmares was the European Union. Its intent was to bond European nations so closely together in such a prosperous enterprise that no nation would have any reason to break the peace or fear another. Ironically, Europe had struggled for centuries to free nations from oppression by other nations and make national sovereignty and national self-determination possible. They would not abandon this moral imperative, even though they had seen where its reductio ad absurdum might take them. Their goal was for the sovereignty of all to be retained, but constrained in such a way that no one could take it away. The anthem of the European Union is Beethoven’s “Ode to Joy,” cleansed of its irony.
The most important question in the world is whether conflict and war have actually been banished or whether this is merely an interlude, a seductive illusion. Europe is the single most prosperous region in the world. Its GDP collectively is greater than that of the United States. It touches Asia, the Middle East, and Africa. Another series of wars would change not only Europe, but the world. The answer to the question of whether Europe has overcome not only the thirty-one years, but the long millennia of conflict that preceded it, is at the center of any consideration of the future.
That’s the reason I’ve written this book. In many ways this is the subject that has shaped my life and thoughts. I was born in Hungary in 1949 to parents born in 1912 and 1914. My family was shaped in the horrors and terrors of Europe, not only in the thirty-one years, but in their aftermath. We left Europe because my parents were convinced that there was a deep corruption in the European soul that could be hidden for a while but would always show itself eventually. As an American, I lived in a world where all things flow from decisions. As a European I lived in a world where decisions mean nothing when the avalanche of history overwhelms you. As an American I learned to confront the world. As a European I learned to evade it. My search for the answer to Europe’s riddle flowed directly from the conversations of my parents at the dinner table, and the sounds of their nightmares at night. My identity crisis— a term that already tells you how American I am now—was caused by the fact that a European’s approach to life was utterly different from an American’s. I was both, so who was I? I have boiled this down to a single question: Has Europe really changed or is Europe fated to constantly be mocked by the “Ode to Joy”?
As a young man I chose to study political philosophy because I wanted to confront this question at the highest level possible. In my mind, the most fundamental questions of the human condition are ultimately political. Politics is about community—the obligations, rights, enemies, and friends that a community gives you. Philosophy is a dissection of the most natural things. It forces you to confront the familiar and discover it is a stranger. For me, that was the path to understanding.
Life is never that simple. In graduate school I focused on German philosophy. As a Jew I wanted to understand where men who could kill children as deliberate national policy came from. But it was the Cold War era, and I knew the European question was really now the Soviet question, and the Soviets had affected my life almost as much as the Germans. Karl Marx seemed the perfect point of entry. And since what was called the New Left (communists who hated Stalin) was at its height, I chose to study it.
In doing so I returned to Europe on numerous occasions and formed close friendships among the European New Left. I wanted to understand its philosophers—Althusser, Gramsci, Marcuse—but I couldn’t sit in the library. There was too much going on outside. For most, the New Left was a way to get dates, a hip social movement. To a smaller group it was a profoundly serious attempt to understand the world and to find the lever for changing it. For a small handful, it became an excuse and obligation to undertake violence.
It is not always remembered that Europe in the 1970s and 1980s had become increasingly violent, and that terrorism predated al Qaeda. In most European countries, terrorist cells emerged, assassinating or kidnapping people and blowing up buildings. The terroristic Left existed in the United States as well, but only in a minor way. These limited groups fascinated me the most—the reemergence of political violence in Europe within the context of a movement that occasionally spoke of class struggle but didn’t mean it.
One habit that emerged was “kneecapping” enemies. This meant firing a bullet into their knees. I could never figure out if crippling someone rather than killing him was an act of kindness or cruelty. For me these people were the ones to watch because in my mind they were the heirs of the thirty-one years. They were the ones who took their moral obligations seriously and rejected the values of the community, which freed them to do terrible things. In encountering some, I noted that they did not really expect to change anything. Their action was pure anger at the world they were born to, and contempt for those leading ordinary lives. They saw evil in these people and they had appointed themselves the avengers.
My time among these people made me much less at home with the growing self-confidence in Europe that the past was behind them. It seemed to me that, like cancer when the surgeon misses a few cells, given the right circumstances the disease recurs. In the 1990s, two areas of Europe, the Balkans and the Caucasus, exploded in war. Europeans dismissed these as not representative. They dismissed the left-wing terrorists as not representative. Today they dismiss the new right-wing thugs as not representative. This view, representative of Europe’s pride and selfconfidence, may be correct, but this is not self-evident.
We are now living through Europe’s test. As all human institutions do, the European Union is going through a time of intense problems, mostly economic for the moment. The European Union was founded for “peace and prosperity.” If prosperity disappears, or disappears in some nations, what happens to peace? I note that unemployment in several southern European countries is now at or higher than the unemployment rate in the United States during the Great Depression. What does that mean?
That is what this book is about. It is partly about the sense of European exceptionalism, the idea that they have solved the problems of peace and prosperity that the rest of the world has not. This may be true, but it needs to be discussed. If Europe is not exceptional and is in trouble, what will follow? The question is posed in three parts. First, why was Europe the place in which the world discovered and transformed itself? How did this happen? Second, given the magnificence of European civilization, what flaw was there in Europe that led it to the thirty-one years? Where did that come from? Finally, once we have thought about these things we can consider not only Europe’s future but its potential flashpoints.
If Europe has transcended its history of bloodshed, that is important news. If it has not, that is even more important news. Let’s begin by considering what it meant to be European in the last five hundred years.Like Outside the Box?
Sign up today and get each new issue delivered free to your inbox.
It’s your opportunity to get the news John Mauldin thinks matters most to your finances.