Why no one saw the Ukraine war coming
PremiumPresumptions about Putin’s intent were proven wrong and so could predictions of the war’s impact
In his 2021 book titled Democracy Rules, Jans-Werner Müller, a professor of politics at Princeton University, writes about the important role played by individuals termed ‘demagogos’ in the ancient Athenian democracy. As Müller writes, the demagogo’s role was to act “as a kind of leader, or instigator, bringing up issues and appealing to people in light of particular ideas and interests." Hence, “in the absence [of] media… their function was very similar, and in fact indispensable for Athenian democracy to work for all."
Given this, the ancient demagogos were actually quite the opposite of the modern demagogues, whom the Cambridge dictionary defines as “a person, especially a political leader, who wins support by exciting the emotions of ordinary people rather than by having good or morally right ideas." There is no better example of such a person currently than Russian President Vladmir Putin, given his recent decision to attack Ukraine.
Most analysts who follow such things were caught napping primarily because they were trying to analyse the actions of a modern demagogue who’s trying to restore the so-called past glory of Russia in a rational sort of way, which includes looking at data.
The data clearly shows that countries don’t wage as many wars as they used to. As per Our World in Data, in 1950, 596,085 individuals died through direct violence in wars. The number has broadly been falling since and stood at 49,304 deaths in 2020. One reason for this lies in the fact that after World War II, countries across the world have become more economically integrated. As Mark Leonard writes in The Age of Unpeace: “Open markets remove one of the most important historical causes of war: the need to get access to raw materials and consumers for products. If any state can get access to anything through trade, why would it spill blood?"
In fact, increased connectivity can be used in different ways to hurt countries without the need to wage an outright physical war. As Leonard writes: “Trade wars, sanctions, cyber attacks, fake news and the expulsion of refugees have shown how leaders can manipulate these links between nations to inflict pain on others and get ahead themselves." Countries of the rich world have used sanctions in the past against other countries and created economic havoc in the process without going to war.
Now given that most analysis involves assuming that what is happening is likely to continue, it was assumed that Russia won’t attack Ukraine. By doing so, it ran the risk of being economically cut off from other parts of the world and that would hurt the Russian economy. Hence, why would a smart leader like Putin want to shoot himself in the foot?
This assumption turned out to be wrong. Interestingly, Putin in the past has sent his army into Chechnya and Georgia, even Ukraine. As Timothy Snyder writes in On Tyranny: “In its invasion of Ukraine in 2014, Russia transformed units of its own regular army into a terrorist force, removing insignia from uniforms and denying all responsibility for the dreadful suffering they inflicted." So, clearly, there was a precedent.
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Further, there is a certain nuance to the connectivity argument. Not all countries are economically connected with one another at a similar level. In Russia’s case, it’s the second largest exporter of oil in the world and the largest exporter of natural gas. When it comes to Europe, Russia supplies a large amount of natural gas used for heating purposes.
In that sense, any attempt to cut Russia off would lead to pain elsewhere as well. The price of Brent crude oil is already higher than $100 per barrel. Natural gas prices have also risen over the past year. Natural gas is a key input in the making of fertilizer, which is a key input for growing food.
Given this, Putin’s ability to hurt other parts of the world is very high. Of course, the Russian economy will also get hurt in the process. But a demagogue waging a war in this day and age would surely have taken that into account.
Analysts are now predicting where they see oil prices heading. Given the number of factors at play, it is next to impossible to predict one price. It’s very hard to predict how long this conflict will continue and how much it escalates. We can only hope it ends quickly.
When Archduke Franz Ferdinand and his wife Sophie of the Austro-Hungarian Empire were assassinated in June 1914, nobody knew that would lead to World War I. Or take the case of what happened after the first oil shock of 1973. In 1974, American economist Milton Friedman wrote in his column in Newsweek magazine: “The Arabs … could not for long keep the price of crude at $10 a barrel." Friedman would be proven to be right in the end, but only in 1986, more than a decade later.
Every forecaster should keep that history in mind. Rather than predicting a single price of oil, it is more important to highlight different possible scenarios and the impact they are likely to have on the economy.
To conclude, as the British economist John Maynard Keynes is said to have once said: “It is better to be roughly right than precisely wrong." We are in that kind of a situation today.
Vivek Kaul is the author of ‘Bad Money’
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