Is Civilization at Risk?

Elon Musk is worried. Not so much about how he is going to turn X back into Twitter, but about the possibility that we might be on the verge of another World War. By his lights, if we fall into World War III civilization might not recover.

I trust that that gained your attention.

Interestingly, Musk believes that we made a crucial and critical error when we weaponized the dollar. Long time readers of my blog will not be surprised. I thought as much myself and dutifully expressed my view in these pages. 

When Russia invaded Ukraine, the rough and tough Biden administration decided that it would punish Russia with sanctions. Among those sanctions were the confiscation of the Russian wealth that had been held in Western banks. That meant, bank accounts in American assets and dollar denominated securities.

Obviously, other countries got the message and started moving their assets out of dollars. 

So, Russia could no longer transact business with dollars. The result has not been a flight from the dollar. Some nations still wanted to do business with Russia. They wanted to buy Russian energy. If they could not do it with dollars, they were obliged to use other currencies.

This apparently threatens the status of the dollar as a reserve currency.

Musk comments:

With this weaponization of the dollar, I think we've overplayed our hand. Weaponizing the dollar with sanctions. You're now seeing a lot of countries de-dollar their transactions because we've sort of forced it. This goes beyond Russia, China, and Iran because countries like Brazil or India still want to transact with Russia and they can't do it with dollars, so we've forced them to de-dollarize their transactions, thus weakening the strength of the dollar in the world.

For Musk the great danger is World War III. He wants us to improve relations with Russia, as a way to reduce the likelihood. If Russia and China are forming an alliance to counter American influence, we should improve relations with the one or the other.

So, these actions are strategically foolish. Like I said, we should stand back and ask what is the most important thing. The most important thing is avoiding World War Three because we may never recover from World War Three. And I think we currently have the risk of World War Three increasing rapidly. I think if relations are re-normalized with Russia, the probability of World War Three is dramatically lower.

We're not fighting small fry here, the potential is not a small fry battle, it is a massive battle where the industrial capacity is of comparable size to the Western alliance.

As for how difficult such a war would be, Musk points out that we do not have a very great advantage in manufacturing capacity.

… the point is we don't have an overwhelming advantage on industrial might and the foundation of war is economics. This should be obvious to everyone but it is often lost at this point, the foundation of war is economic power. Especially industrial output. How many tanks, guns, and drones can you make relative to the other side? That's what it comes down to. And it may be the case, if not now, in the future it probably will be, that a Russia-China-Iran alliance can outproduce the Western alliance.

As for the alliance between Russia and China, together they have massive industrial capacity. If our capacity is roughly comparable, then neither side will bring a potential war to an early and decisive end:

Unfortunately, our policy has been forcing Russia and Iran to ally with China, it's been forcing them. What choice have we given them?

Russia has the raw materials, and China has the industrial capacity. It’s frankly, a perfect match from a war standpoint. So I think we need to stop doing that. It's unwise, and I think it will lead to an immense risk to civilization.

I want to emphasize there’s a civilizational risk -- there are tragedies on an individual level, tragedies on a community level, and then there's civilizational risk. We just need to make sure that we’re not putting civilization itself at stake, which is World War Three.

So, a new concept-- civilizational risk. Then again, does Musk mean that Western civilization is at risk? Does he believe that liberal democracy might lose out in competition with the Russia/China axis?

Surely, it is worth some thought.

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