089 – Is it 2014 or 1914 ?

World War I

(click play for farm podcast)

I am a student of History.  I like to read about it, study, visit historical sites, and if I ever was going to be a college professor it would not have been in agriculture, but military history.  I especially like the time period from the French and Indian Wars up through World War I.  Not just American history, but the whole world.

You see the world really changed during this period.  Not because of just military might, but the Industrial Revolution, The American Revolution, Napoleon, the British Royal Navy after the Act of 1807 that abolished slavery,stopping the slave trade on the world’s oceans, even though it took them some time. The American Revolution and then Civil War. That in the end defined a country that for a long time was the Shining City on the Hill.  The Napoleon Wars that were the first time in history that whole countries mobilized to make total war on its neighbors.  The end of colonization by the major European countries after World War I that had been going on before Columbus sailed to America, which ironically is not where he was wanting to end up.

As I have gotten older I have gravitated to World War I.  I also am one of the opinion that there was really just ONE World War,  the armistice of 1918 was just a pause before the Second World War and the Cold War was the final act in this drama that started with a spark in the Balkans.  As much as the liberal media hates or will never admit it Reagan won the whole thing in the end.  But, just how fast did America throw that away to get us where we are now.

So why am I discussing this on an agricultural blog/podcast you ask. 

It is because what I believe is happening right now is going to affect agriculture as much as any other industry in the world.

American agriculture had its most profitable years ever, when the bread basket of Europe before World War I, which was Russia.  Who could no longer not just feed Europe it could not feed itself during the War.  This is the major reason people in Russia at the time gravitated to communism.  They were starving to death.  A starving person has nothing to lose, because if they do nothing they still are going to starve to death.

But what about now you ask.

The food industry around the world is less diversified, more specialized, concentrated and especially reliant on exports and imports to one another. It is not set up for major disruptions in world trade that a really big war would cause.  It also is set up for just in time delivery.  Have you ever went into a Wal Mart just before a big storm and seen store shelves emptied of goods?  Trucks don’t run, they quickly run out of bananas.  What if the banana boats cannot sail?

Nobody including the Chinese have 7 years stored up like Joseph did with the Egyptians who was just going to get through 7 years of drought.

This is the big reason I do not believe anybody except maybe a few crazy Iranians want a Global conflict.  But, what about a little spark when tensions are all ready running high over a few Islands that have lots of Oil under them with countries that might be under lots of economic pressures at home?????

Or when Israel and Saudi Arabia think they have no choice but to strike first to stop some crazy religious leaders in a revolutionary country from achieving the Atomic Bomb?  Boy here is an example that my enemy and your enemy being the same country must make us friends?

In the end I believe one thing is happening that generally does not mean world peace for a long time.  China’s gross domestic product is going to be larger than the United States.  And, I believe China, Russia, and some others want to settle world trade in something other than the U.S. Dollar.  Generally when one gets big changes in these types of economic matters it results in violence or is a result of violence.

Others say the consequences of China being the biggest dog on the porch is not as bad as others are saying.  Overall maybe not, but it may not be as good for agriculture as we all think it will be.

A perfect example of this is after the end of World War II the British Pound was replaced by the U.S. Dollar as the reserve currency used by everybody in the free world at the time.  It was not because the United States and Britain were at war with each other, no they were on the same side.  It was just because the U.S. emerged after that war in a much stronger economic position than anybody else including the British Empire, which in a few years did actually have the sun set on it.  At the start of World War I Britain was the economic powerhouse of the world.  And, if Germany had not violated Belgium’s neutrality I think Britain would never had entered that war, which Germany then could maybe had won, which probably would not have been a good thing.  And, Russia would probably not fallen to communism, with all of these dominos not maybe falling as they did.  European powers not losing their colonies as they did.  Still probably would have happened but more gradually and less socialism/communism in them.

Then there are the historians that said Europe was headed for a conflict anyway so if not in 1914 it would have happened by 1920.

Back to agriculture, how would you like to price you inputs and your exports in something other than dollars and have it be traded on an exchange in Shanghai rather than Chicago?  This could happen quicker than we think.

I will look into some of the economic consequences for agriculture if a big conflict happens.  What it holds for U.S. farmers and ranchers.  Or are we now going to be the Russian farmers this time around?

I also will discuss whether I think we are at 1914 in our time frame, and where is or what could be the spark and who is neutral Belgium this time????

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