By Eric Peters, CIO of One River Asset Management

The Fates

“What made the war inevitable was the growth of Athenian power and the fear which this caused in Sparta,” wrote Thucydides in the History of the Peloponnesian War. As an Athenian general, he had failed to prevent the Spartan capture of a strategic city, Amphipolis, and was thus exiled for 20 years. This separation allowed Thucydides to collect detailed information on the 27-year war between Athens and Sparta. “I have written my work, not as an essay which is to win the applause of the moment, but as a possession for all time,” he explained.

Graham Allison published his book “Destined for War: Can America and China Escape Thucydides’ Trap?” in 2017. The political gears of global conflict had been grinding since antiquity; they will never cease to turn. The political shocks of 2016, first in the UK and then in the US, alerted politicians in nations across the globe to some strange new subterranean force underway, the gods at play. Ever since the last great war ended in 1945, the global system had been stable, first with a cold war between two Titans, and then with a unipolar world of utter US dominance.

Perhaps it was the US elite’s self-serving support for China’s ascent and their simultaneous neglect for America’s working class that is responsible for the 2016 backlash. No mortal can know such things. But ever since, so much has changed. The world’s great powers are adjusting to this new reality. “If you give way, you will instantly have to meet some greater demand, as having been frightened into obedience in the first instance; while a firm refusal will make them clearly understand that they must treat you more as equals,” wrote Thucydides.

“In general, the men of lower intelligence won out,” wrote Thucydides, his work a gift to those intent on not repeating the great tragedies of ancient history. “Afraid of their own shortcomings and of the intelligence of their opponents, so that they would not lose out in reasoned argument or be taken by surprise by their quick-witted opponents, they boldly moved into action. Their enemies, on the contrary, contemptuous and confident in their ability to anticipate, thought there was no need to take by action what they could win by their brains.”

Much has been written now about the inevitability of conflict with China, the fall of the American empire, the unseating of the dollar as the global reserve currency. But in each case, there is a visible path to success, room for cooperation, a shared prosperity. Only by articulating our fears, have we a chance to avert our fate. And on May 22, the House approved the Financial Innovation and Technology for the 21st Century Act (FIT21), a final version of which may help extend dollar dominance (via US dollar stablecoin), for many decades to come.

“Right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must,” wrote Thucydides for all time. “The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it.” he wrote. “Those who really deserve praise are the people who, while human enough to enjoy power, nevertheless pay more attention to justice than they are compelled to do by their situation,” wrote the banished general. “And of all manifestations of power, restraint impresses men most.”