Modern warfare—with its interplay of industry, economics and geopolitics—is too dangerous to leave to generals.
Economics underlies the ability to sustain conflict. Western-equipped Ukraine and Israel possess superior conventional firepower. But asymmetric warfare and low-tech improvisation using cheap drones and missiles can alter the balance, especially by calibrating escalation of hostilities.
Israel expended an estimated $1.4 billion in munitions and fuel (around 6 percent of its annual defence budget) to repulse Iran’s choreographed attack that cost perhaps $30 million. The Houthis in Yemen have disrupted transport routes using cheap drones.
A ‘boys with toys’ syndrome drives a touching faith in expensive high-tech weapons. The difficult-to-maintain-and-operate F35 jets cost around $150 million each. The Patriot air defence system costs over $1 billion, with each interceptor missile costing a further $6-10 million. Heavy battle tanks are $6-10 million each. Individual artillery rounds cost $3,000-5,000. Western weapons are frequently double the cost of Russian and Chinese equivalents.
Degrading the ability to finance military action is essential. Russia’s targeting of industrial and agricultural infrastructure combined with the displacement of manpower has reduced Ukrainian output by 30-35 percent. The cost of rebuilding is around $500 billion. Ukraine will need to restructure the country’s $20 billion international debt to avoid default.
Obliteration of the impoverished, aid-reliant Gaza is economically pointless except to drive residents out, paving the way ultimately for Jewish settlement. In contrast, Israel’s economy has shrunk, by perhaps 20 percent.
The $50-billion-plus cost to date (10 percent of GDP) of the conflict has substantially increased Israel’s debt and its credit rating has been downgraded.
Ukraine and Israel are reliant on Western backers. The US, NATO and their allies have provided Ukraine with over $175 billion in military, financial and humanitarian aid, primarily financed by government borrowings. Many European nations are in breach of EU-mandated debt limits. Since its founding, Israel, despite its high income, has been the largest cumulative recipient of US foreign aid—$300 billion (adjusted for inflation) in total economic and military assistance and loan guarantees. Lip-service to freedom and holocaust guilt notwithstanding, donors cannot afford this.
The US pushed for Saudi Arabia to normalise relations with Israel, reducing the threat from an united Arab front. Saudi Arabia might get a defence pact with the US and support for nuclear ambitions. It would improve its access to overseas investment and Israeli tech as well as offsetting Iran’s regional influence.
The real unstated imperative is protection of Arab monarchies and their wealth in the West. Given that over 90 percent of their population support the Palestinian cause, a perceived betrayal risks a new ‘Arab Spring’.
Such instability, which investors do not countenance, poses serious risks to global economy. The Gulf states hold 30 percent and 21 percent of global oil and natural gas reserves, respectively. Energy prices would be affected, especially if weaponised as in the 1970s. It would affect Suez Canal trade. Since the start of the Gaza war, the cost of transporting a container from China to Europe has quadrupled from $1,000 to $4,000 and added up to two weeks in travel time.
But if the Arab states unite against Israel, then an escalation in the conflict is also possible, with similar outcomes. Terror actions by non-state actors against Western targets is an ever-present risk.
As Sun Tzu outlined in the Art of War, those wishing to fight must first understand the cost.
MARSHALL #McLUHAN: BODY, AIR IMAGE, MASS MAN, PROPAGANDA https://t.co/jmPBgbUyOP
— Guillermo Ruiz Zapatero (@ruiz_zapatero) September 12, 2023
WWI was a railwayw ar of centralism and encirclement. WWII was a radio war of de-centralism. WWIII is a #guerrillainformation #war with no division between military and civilian#globalvillage pic.twitter.com/jfHVbbpIHB
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