By Eric Peters of One River Asset Management
“War is the continuation of politics by other means,” explained The Commander, quoting Carl von Clausewitz, the famous Prussian general and military theorist. “Von Clausewitz advocated that you continue to pound your enemy, you don’t stop a fight until you negotiate an end to it,” he added. “We tend to pause our military actions during negotiations, but Russia is doing as von Clausewitz advised. Putin is continuing to attack even as talks with Ukraine are taking place,” said The Commander. “All military leaders and strategists study von Clausewitz. And we all know our adversaries have internalized his work. Our weapons are more brutal today, but the theories are the same as when he wrote On War in the early 1800s.”
“War is the realm of uncertainty; three quarters of the factors on which action in war is based are wrapped in a fog of greater or lesser uncertainty,” wrote Carl von Clausewitz in the early 1800s. “A sensitive and discriminating judgment is called for; a skilled intelligence to scent out the truth,” continued the Prussian general and military theorist. Like so many of our greatest thinkers, von Clausewitz trained his sights on the essence of what it means to be human. He narrowed that focus to how we behave in times of conflict, which is to say, much of the time. Even now, with a full-scale war underway in Ukraine, a lesser battle has begun over inflation, and a long-simmering conflict over the dollar’s prominence as the global reserve currency is heating up. The backdrop to these conflicts is the internal division we see throughout much of the West, and this is set against the world’s authoritarians who are tightening their grip, attempting to consolidate power. These issues are inextricably woven. All times are unique, and what makes this one unlike others is the degree to which we are all connected, our world shrinking. It both raises the costs of failure and presents new opportunities, possibilities. “No one starts a war – or rather, no one in his senses ought to do so – without first being clear in his mind what he intends to achieve by that war and how he intends to conduct it,” wrote Clausewitz. And we are left to imagine exactly what the protagonists in the conflicts now underway over Ukraine, inflation, and the dollar, intend to achieve and what they are willing to undertake to claim their objectives. “If the mind is to emerge unscathed from this relentless struggle with the unforeseen, two qualities are indispensable,” wrote Clausewitz. “First, an intellect that, even in the darkest hour, retains some glimmerings of the inner light which leads to truth; and second, the courage to follow this faint light wherever it may lead.”
Military Minds: Carl von Clausewitz’s thoughts on war: – There are times when the utmost daring is the height of wisdom. – Theory must also take into account the human element; it must accord a place to courage, to boldness, even to rashness. – Everything in war is very simple, but the simplest thing is difficult. – There are very few men, and they are the exceptions, who are able to think and feel beyond the present moment. – If we read history with an open mind, we cannot fail to conclude that, among all the military virtues, the energetic conduct of war has always contributed most to glory and success.
Military Minds II: – The backbone of surprise is fusing speed with secrecy. – If the leader is filled with high ambition and if he pursues his aims with audacity and strength of will, he will reach them in spite of all obstacles. – If we have made appropriate preparations, taking into account all possible misfortunes, so that we shall not be lost immediately if they occur, we must boldly advance into the shadows of uncertainty. – The Statesman who, knowing his instrument to be ready, and seeing War inevitable, hesitates to strike first is guilty of a crime against his country.
Strength: “Powell developed a doctrine of projecting overwhelming force,” said The Commander, referring to Colin the General, not Jerome the Chairman, who fired last week’s tiny 25bp warning shot at a raging 7.9% inflation advance. “The idea is that there are people in the world who understand one thing, and that is power,” said The Commander. “Powell believed that the best way to avoid conflict was by making it clear to our adversaries that an act of aggression would be met with devastating force.” The Powell Doctrine led to the military buildup ahead of the 1990-91 Gulf War and emphasized ground forces together with widespread public support.
Weakness: “Kind-hearted people might of course think there was some ingenious way to disarm or defeat an enemy without too much bloodshed and might imagine this is the true goal of the art of war,” wrote Carl von Clausewitz. “Pleasant as it sounds, it is a fallacy that must be exposed; war is such a dangerous business that the mistakes which come from kindness are the very worst,” continued the Prussian. “If our opponent is to be made to comply with our will, we must place him in a situation which is more oppressive to him than the sacrifice which we demand; but the disadvantages of this position must naturally not be of a transitory nature, at least in appearance, otherwise the enemy, instead of yielding, will hold out, in the prospect of a change for the better.”
Action: “For political and social as well as for military reasons the preferred way of bringing about victory was the shortest, most direct way, and that meant using all possible force,” wrote Clausewitz. “The truth is that there are goons in this world, and they respect only one thing – strength – that’s it,” explained The Commander. “It is tempting to believe we’ve evolved past that kind of thinking, but it is wrong, we haven’t,” he said. “And this can at times create friction between politicians and military leaders, because politicians often seek to avoid conflict in the early stages, while military leaders understand that it is generally best to shut down conflict before it has even started, or at least in its earliest stages. Politicians and military commanders have the same goals, but different experiential perspectives.”
Anecdote: “Clausewitz taught that we must dismantle our enemy’s center of gravity to achieve victory,” said The Commander. “Each nation has strengths and weaknesses, and it’s natural to capitalize on weakness,” he added. “But it is critical to pick apart the strengths that make up the center of gravity,” explained The Commander. “In the case of the US, our core strengths are superior communications, logistics, and our carrier fleet.” Added to this would undoubtedly be our control of the global reserve currency and payments systems. “So it should not be a surprise that China has invested heavily in offensive space capabilities to target our communications. And they are very focused on hypersonic weapon development to neutralize our carriers.”
Efforts to unseat the dollar and create an alternative global payments system is also targeting our center of gravity. “In Putin’s case, his center of gravity in this conflict is his proximity. His supply lines are short, so it’s particularly devasting for him that his army failed so badly without anyone else’s help when it came to logistics,” said The Commander. “He miscalculated Ukrainian resistance, but worse still was the misjudgment of his own forces. And what you can now see is that his army is out of practice, and perhaps the worst thing is that it lacks agility,” he said. “In business and markets, I’m sure you understand the importance of agility. Well, in warfare, agility is vital to victory. And the US has the resources to train regularly. A modern army is incredibly complex and requires regular training, exercises.”
The Russians don’t have these resources and haven’t fought a major war in too long. “Putin understands his many weaknesses. He has no real ability to project force on a global basis other than nuclear. So that is why he’s directed his limited resources to those capabilities.” In the decades to come, they will be the only thing protecting his vast territories and shrinking population from 1.4bln Chinese on his southern border. “And the risk now, learning from Clausewitz, is that the weakness of Putin’s conventional force leads him to abruptly jump to a nuclear conflict. He’s a cornered rat. I wouldn’t rule anything out.”