In the summer of 1914, all the world’s major economies were quite well run by governments that understood the benefits of industrialization and free markets. There were also no major ideological conflicts — the two most ideologically extreme countries, the socialist democracy of France and the still quasi-feudal autocracy of Russia were locked in a long-term alliance. A major war thus appeared inconceivable. After that war happened, several countries turned to political/economic models that were counterproductive to their citizens’ well-being and irreconcilably in conflict; therefore another war followed. In this troubled world, where the sound economic governance of 1914 is generally long gone, we can see several factors that might produce another July 1914 or lead to equally catastrophic long-term outcomes without a war.

Before 1914, there was no generally agreed rule prohibiting aggression against small and medium sized states, although if a small state had a Great Power protector, it was wise to warn that protector before undertaking such aggression. Thus, Austria’s ultimatum and subsequent aggression against Serbia in 1914 was entirely permissible, given the Serbian-backed assassination of Archduke Franz Ferdinand. Under the unwritten rules of that period, Russia grossly overreacted to Austria’s actions.

When Russia invaded Ukraine in 2022, a global chorus of bleating appeared, claiming that such aggression was unprecedented, and the subsequent Western overreaction was ferocious. Intellectually, that made no sense; the United States had invaded Afghanistan in 2001, Iraq in 2003, Libya in 2011 and Syria in 2014 and was to invade two more countries, Venezuela and Iran, within two months in 2026. Thus, there was no case in principle for deeming Russia’s action improper.

Ukraine’s 2022 borders had been set by Kaiser Wilhelm II at the Treaty of Brest-Litovsk in 1918, pushing the Ukraine/Russia frontier eastward as far as possible in order to weaken Russia, the Kaiser’s primary objective. For the next seven decades, this did not matter because the eastern frontier of Ukraine had no international significance, being merely an internal border deep within the Soviet Union. The Eastern third of Ukraine was primarily Russian-speaking and had very different economic and social characteristics to the Western part of the country. In Western Ukraine, there was also a significant divide between the parts centered on Kyiv and Odessa, part of the Russian Empire since at least the 18th century and the part centered on Lviv/Lemberg, historically part of the lost civilization of Austria-Hungary.

When I first wrote on Ukraine in 2007, long before there was any conflict, I noted that Eastern Ukraine was politically very different from the rest, being a staunch supporter of neo-Communists, as one would expect given its heavy industry heritage. Consequently, as the decade after 2004 showed, it was impossible for Ukraine to develop a stable reformist government, as indeed was demonstrated by the free election of 2010, which the neo-Communist Viktor Yanukovych won, promptly imprisoning his leading opponent, the reformist Yulia Tymoshenko.

Given the decades-long lack of negotiation with Russia over the inexorable expansion of NATO and the ostracism the Obama administration and the EU placed on Russia after the invasion of Crimea (historically always a Russian territory) it is not surprising that Vladimir Putin grew weary of Western shillyshallying and obfuscation, with the carefully negotiated 2014-15 Minsk Agreements never implemented, and invaded Ukraine in 2022. The West then extraordinarily over-reacted, pouring armaments into Ukraine to combat what Putin had intended to be a limited incursion –he had devoted only 100,000 men to it initially and he attempted to reach a peace agreement within a month.

As well as fostering an Eastern European re-run of World War I, the West violated the property rights both of the Russian people, whose dollar central bank reserves were stolen and those of foreign investors in Russia, whose holdings (including modest positions of my own) were thrown into a black hole. Most important, foreign companies that had invested in Russia, such as the Austrian Raiffeisen Bank, which had built up an excellent position as the strongest foreign bank in Russia, were forced to sell out.

The priority now must be to end a war that should never have started. It appears that Ukrainian dictator Volodymyr Zelenskyy is the principal obstacle to this; accordingly, he must be removed, by whatever means necessary, so that the fearful slaughter can be ended forthwith and eastern Ukraine put under Russia’s protection. Once that is done, properly supervised elections should forthwith be held in the remainder of Ukraine, so that a President can be elected with proper legitimacy – clowns and comedians should automatically be disqualified from running, as they will like Zelenskyy be stooges of the neo-Communists.

The truth is that the Western governments which took those statist, draconian and ill-judged actions in 2022 were further from the liberal democratic ideal than is Putin’s Russia. The EU is no longer a bastion of democracy; (at the center, it never was) it steals elections in Romania and elsewhere when it doesn’t like a particular candidate. Most EU governments now imprison private citizens who express views they don’t like, as disgracefully in view of that country’s traditions does the UK – most other European countries have a tradition of free speech that is less than a century old and was interrupted by its total negation in World War II, but Britain’s goes back to 1695 and was foundational in the creation of the United States. Most important, while the Russian economy remains more or less a free market (albeit with an erratic government and absurd amounts of corruption) EU countries, almost equally corrupt, are slaves to fanatic regulators and environmentalists who have no compunction in destroying their countrymen’s property rights and living standards.

The enthusiasm of the EU for regulations has had the expected effect on its economies; with the exception of the Eastern European countries whose living standards were pulling themselves up from Communism, the union has had effectively no increase in living standards since 2007. Given the uncontrolled Third World immigration from which the union suffers, which increases all kinds of social pathologies and draws massively on social benefits without contributing much to the economy, and the tax increases that has caused, the native populations of the western EU have been growing steadily poorer – and the eastern EU will now be joining them in stagnation, as the arbitrage effect of its low labor costs ebbs away.

Stagnation at a relatively high standard of living is not the worst fate for a population, but unfortunately economic stagnation is unstable. With no obvious benefits to voters from the free market and solid property rights, while endless bureaucratic attacks of further regulation swarm in, living standards decline and conflict between the native population and the new arrivals begins to increase. Voters are seduced by leftist dreams, as with the election of the inexperienced Marxist Muslim Zohran Mamdani as Mayor of New York. With no effective guardrails for property rights and the rule of law, and governments assuming the right to censor and imprison their political opponents, it is easy to see how an economic death spiral can occur, more damaging to the lives of the population than all but the most devastating of wars.

Unlike in 1914, there are several dangerous ideologies that might bring destruction, some of which as in Czarist Russia are endemic in the education system and among the intellectual classes. The least dangerous of these is Islam, albeit mixed with a poisonous brand of anti-Semitism that as in Czarist Russia and the Third Reich exacerbates other ideological ills. Islam itself is well understood and not especially dangerous. As it moves through the 15th Century of its calendar, it can be compared with Christianity at the equivalent epoch, no longer inspiring mass Crusades but still capable of vastly damaging and bloody internal schisms.

More dangerous than Islam is socialism, not the mild rationalist version of the British Fabian Society and the German Social Democrats, but the intensely anti-capitalist mania of Leon Trotsky and Rosa Luxemburg. This has been incubated in Western universities, which in the last 30 years have lost their ideological diversity and have become bastions of left-groupthink, buttressed by their comfortable salaries and academic tenure from any untoward market influences.

The pathetic belief of the 1990s that Communism had been discredited forever by the failures of the Soviet empire has now been utterly exploded. Pressure-cooked in the most prestigious universities, we have now generated a cadre of young people, especially women, whose jobs depend very little on market institutions – the pernicious nonprofit sector, growing like a cancer through its unwarranted and excessive tax privileges, is a prime incubator of this civilization-destroying bacillus.

If civilization wishes to survive, it must impose draconian punishments on those who finance its destruction e.g., the Soros family and similar. Only by doing so will civilization fight its enemies, such as this week’s UN resolution demanding reparations from Britain but not the Arab countries for slavery. Capturing institutions with apparent legitimacy like the UN and the international courts and through them leveraging weak liberal guilt has been a favorite tactic of revolutionaries since Trotsky.

However, the most destructive ideology prevalent today is environmentalism, especially in its “climate change” garb, utterly impervious as it is to rational refutation. To some extent, environmentalism is merely the tool of socialists, who use it very much as Rosa Luxemburg used the general strike, to foment economic destruction and thereby advance revolution. While some statesmen are coming to realize the nature of this scam, like German Chancellor Friedrich Merz, who has now admitted the closure of German nuclear power stations, ordered by his apparatchik predecessor Angela Merkel, was a “serious strategic mistake” the majority are still besotted by “climate change.” Britain’s Ed Miliband, in the interest of achieving “net zero” by 2050, refuses to allow drilling for oil and gas either onshore or offshore, even though Britain’s power supply arrangements are otherwise laughably inadequate, especially given disruption in the Strait of Hormuz. The difference between socialism and environmentalism is this: as the Soviet bloc showed in 1989-91, socialism can be reversed, while environmentalism requires the destruction of politically disfavored equipment, and hence may well be impossible to recover from.

As well as global war, probably fairly unlikely at least while President Trump is in office, there are several current threats that would destroy our civilization far more completely than World War I. We can thus envy our ancestors of 1914, who only through utter ineptitude ended the greatest century of progress that Humanity has ever known.

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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)