The recent brutal attack on Israeli civilians by Hamas agents has led to a growing regional conflict, fueled by historical feuds beyond traditional geopolitical considerations. The ongoing war in Ukraine, the conflict between Armenia and Azerbaijan, and the threat of renewed fighting between Kosovo and Serbia are all contributing to the breakdown of a global order established by modern assumptions.
The Whig theory of history, which posits that society is in a constant march toward progress, has led to a global order that has sown the seeds of barbarism. The success of fiat money has led to an economic system that benefits states and politically connected individuals at the expense of the rest of society. Technocratic public health initiatives have created authoritarian states in the face of a global pandemic, and politically driven climate hysteria has prompted a policy agenda that gambles away human well-being on utopian promises of a “green energy” revolution.
The modern “rules-based international order” influenced by post-Cold War US hegemony has been the deadliest of these false assumptions. The triumph of “liberal democracy” over the Soviet Union fueled the hubris of Washington and its allies, believing that the world could be shaped to fit into comfortable models, transforming concerns over ethnicity, religion, and the past.
Crisis periods can significantly change the global order, as seen in the case of Ludwig von Mises’ call for sound money, government restraint, and cultural conservatism after World War II. However, the West adopted ideologies of inflationism, interventionism, and cultural leftism, leading to a lack of material well-being. Mises argued that human conditions must not always improve, and recent attacks in Israel highlight the fragility of civilization from savagery.
The US’s dominance in the global economy and its role in bridging the gap between the rich and poor has been largely influenced by its strong dollar. The US has a significant financial advantage, allowing it to focus on nonstate terrorist groups and rogue state allies. This belief in a global order backed by American economic and military power has influenced other global actors, with foreign lobbies like Qatar, Saudi Arabia, China, Japan, and South Korea investing heavily in influencing American policy.
The assumption of American support has influenced nations’ strategic decisions about their security, such as Ukraine surrendering Soviet nuclear weapons in exchange for Western security promises, Japan demilitarizing in exchange for US security guarantees, and Washington and Tokyo shifting towards rearmament amid rising concerns over China.
Israel’s decisions have also been guided by false assumptions, such as the belief that militant movements would be easier to delegitimize internationally than other political actors seeking to create a Palestinian state. American military support, which became a staple of US foreign-aid military strategy following the Six Days War in 1967, has influenced Israel’s aims for Palestinian relations.
The belief that nonstate Islamic groups would be easier to control than functional states has been a persistent blind spot for Washington. Recognizing past government blunders is not about providing moral cover for the consequences suffered by citizens of these states, but understanding the cause and effects of state action is crucial for shaping future decisions to avoid such disasters.
The global order, built on the assumption that American blood and treasure can maintain stability and peace, is under severe stress. The US debt has risen from $3.4 trillion in 2001 to over $34 trillion in 2023, and the Pentagon’s lack of oversight has led to gross malinvestment and misallocation of resources. The breakdown of the old order also means that states are adapting to the times, such as Israel ending campaigns against Hamas due to civilian casualties.
The hubris created by the presumption of dollar dominance has sparked a blowback, with the BRICS nations calling for alternatives to the dollar for foreign trade and the Bank of England raising concerns about the dollar’s power and influence. Concerns about China and supply chain disruptions due to COVID and the Ukraine-Russia war have sparked renewed concerns over international trade relations, which could impact economic globalization.
Domestically, Western nations are being stressed by the false assumption that a common ethnic, religious, and cultural background is a building block of society relative to immigration policy. Large rallies in support of Israel’s “decolonization” have sparked new concerns about social stability and order. The future of modern nations, whose most shared experience is becoming a common tax collector, will be a potent political question, as witnessed by growing populist movements in Europe.