The new year is beginning with the shadow of an old year flitting around the retina of our consciousness. That year is 1914; the year that Europe was convulsed in the world's worst war – 9 million dead.It was also the war from which the world never fully recovered. In its destruction of the old order in Europe, World War I laid the blueprint for the rest of the century; its emancipations and its enslavements, its triumphs and its horrors.
The century following World War I has been a century in which blood and ideas have flowed freely. As a consequence of the war and the Treaty of Versailles which ended it:
1. The Russian Revolution ushered in communism, and later the Cold War.
2. Britain and France carved up the Middle East with boundaries that created new countries, such as Iraq and Saudi Arabia, without regard to the promises that had been made to the Arabs during the war or regard for their sensibilities.
3. The Ottoman Empire fell, making way for modern Turkey.
4. The Austro-Hungarian Empire fell, changing the face of central and eastern Europe.
5. Monarchical rule ended in Europe.
6. Germany was so emasculated by the peace that the ascent of Adolf Hitler was possible.
7. Mechanized war was perfected with industrialized killing by gun, bomb and, for the first time, aircraft was unleashed.
8. The combatants lost the cream of their crop of young men, many of who would have risen to affect the 20th century after the war. The consequences of the loss of a generation of a young men can be speculated upon, but not calculated.
9. The stage was set for the United States — which played a decisive role in the war from the spring of 1917 on, but was not as deeply affected as the European powers — to become the dominant nation in the later part of the 20th century and to this day.
10. The social order throughout Europe began to liberalize. Its feudal underpinnings would remain until World War II, but there was a loosening of the old bonds of class across Europe.
11. Women were beginning to share their gifts with society.
12. African colonies were taken from Germany and handed to Britain for a kind of safe-keeping, but not for the imperial expansion that Britain had been enjoying for two centuries. Britain, France, Portugal and Holland remained the colonial powers — Britain's possessions were many times greater than the rest put together.
13. Fury at the colonial system was building, especially against British control of what are now India, Pakistan, Bangladesh and Sri Lanka. The beginning of the end of the colonial concept had begun, but it had many hurdles and another world war to go before it all ended in an avalanche of independencies.World War I began with the assassination of Archduke Franz Ferdinand of Austria, heir presumptive to the Austro-Hungarian throne and his wife, Sophie, in Sarajevo. The Balkans were the tinder for the war, but the fuel was everywhere: it was the growth in nationalism and its arrogance; a lack of enough understanding of what a modern war would look like; militarism in many countries, and especially in Germany, where the high command found a fatal friend in Kaiser Wilhem II.As tensions in Europe escalated, the players scrambled for allies and these alliances led to the broader war. For example, the German High Command did not think that Britain would join the war, despite Britain's commitments to France and Russia: It thought Britain could and would remain neutral.The great myth of the time was that the European powers were so intertwined in their trading relationships that war would cost too much and so peace was secure. Yet all the ingredients of combustion were present in 1914, and they were abetted by a lack of great leaders in all the countries that would fling themselves at each other.It was a time of crushing mediocrity in European governance. That may have been the real cause of the world's greatest, most terrible miscalculation, 100 years ago: a leadership vacuum. Beware. Happy New Year. –For the Hearst-New York Times Syndicate
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The great thing about being a pessimist is that something awful may still happen tomorrow. There are still plenty of pessimists about the economy, saying that we are spending our way into perdition; that the Great Reckoning is just around the corner, unless we do draconian things.However on Wall Street, there is hopefulness — even optimism. The stock market is up, the housing market is showing real life and corporate confidence has increased since the Congress delayed action on the fiscal cliff through a bit of old-fashioned give-and-take. Some economists are saying encouraging things, so are the business magazines.There is evidence that the economy, which was heeling badly, is beginning to right. The U.S. economy, still the economic lungs of the world, is breathing easier.Sure, there was a slight dip in performance in the last quarter, reflecting primarily reduced defense spending. It's a hard lesson for the political right to grasp: You can't extrapolate family financial rectitude into national policy, as they like to do. If a family spends more than it is earning, it simply has to cut expenditures. If it doesn’t, the end is known; credit dries up and horrors, like foreclosure, are at hand. Likewise, corporations cut costs, lay off employees and sell assets until the balance sheet recovers.When a family gets into trouble, it doesn't reduce its income by cutting luxuries, it reduces its spending. When a corporation cuts back, it tries to reduce staff not customers.But governments can worsen the situation when they tackle spending at the wrong time. If they cut expenditures too aggressively and too fast, revenues fall, unemployment rises and demands on the public purse grow. Unlike individuals and corporations, governments can’t walk away from their messes.Witness the recessions in Britain, Ireland, Spain and the total catastrophe in Greece. Irresponsible austerity has compounded the results of earlier promiscuous spending. Strong medicine has sent the patient to intensive care.Amy Kremer, head of the Tea Party Express, and many conservative members of Congress playing the pessimist’s card, like to say, and they say it often, “revenue is not the problem, spending is.”If only it were that simple. The problem is many things, including the global recession, the aging population, the high cost of medicine, two wars, badly timed tax cuts, China’s undervalued currency and the balance of payments deficit.Take your pick. The miracle is that the economy is as vigorous as it is.Already it has to deal with the tax increases that came with the budget deal in early January, particularly the increase in the payroll tax, which takes out of the economy money that would normally be spent — the large proportion of the tax which if left in the hands of the salaried class would be disposable. This may be about as much of a hit as it can take at present.But the pessimists, who believe that spending is the mortal sin of our age, want to let sequestration — a 10 percent across the board cut — happen on March 2. The Washington Post says there is no mood in Congress to compromise. But if there is no compromise, the effects could be more devastating than a simple cut in spending. The result, instead, will be a cut in program expenditures while the government’s overhead in salaries and fixed costs will eat up the budget.Austerity has been a disaster for Britain, Ireland and Spain. Do we want to follow the Europeans down that path?The pessimists, who also believe that borrowing is the original sin of politicians, would let this recovery falter through their belief that the government must be starved. Sequestration will starve it, alright. Trouble is we'll all go hungry. There’s pessimism for you. – For the Hearst-New York Times Syndicate
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