The US has used finance and war to maintain its empire. Image: Screengrab / Marketwatch

Ideas come from history, from human experiences filtered through readings, reasoning and introspection. But the feeling on our skin, in our flesh, makes us believe more in something or another. After all, this is what Polybius explained two millennia ago, warning us against historians cloistered in libraries.

Then, the reasoning of two generals, one Chinese and one Italian, Qiao Liang, former education head for the Defense University in China, and Fabio Mini, former NATO commander in Kosovo, seems to arise also from what they lived through. The book collecting the reasoning, almost a virtual dialogue between the two, is L’arco dell’impero, recently released by LEG.

In the book, Qiao exposes the complex network of links that seem indissoluble between war and the financial system in the structure of the new American “empire.” His analysis stems from concrete experience.

Between 1997-98, when China had just regained control of Hong Kong, the seat of Asia’s largest stock exchange, an enormous financial crisis shook the continent. It began in Bangkok, practically hours before the July 1, 1997, handover ceremony.

From then on, within a few months, one by one, several Asian countries fell to the financial turmoil. Stock exchanges collapsed, societies were thrown into chaos and politics was disrupted. Many governments in the region failed, including the seemingly ironclad dictatorship of Indonesia.

In a few months, Wall Street finance changed the political landscape of the area, without a war or massive bloodshed, but better than a war. China was spared because it did not have, and does not have, a fully convertible currency, and because the Hong Kong dollar, a possible Trojan horse, was protected by a firm peg to the US dollar and by China’s substantial reserves.

In Beijing, the event was shocking, causing policymakers to look back. Just in 1993, similar financial turbulence had shot down the European monetary system, an agreement of semi-fixed exchange rates between the continent’s major currencies. In China, where the lens for observing everything is politics and strategy, they saw a link between the two events: America wanted to cut down two potential rivals, first Europe and then Asia.

The American intervention in the war in the former Yugoslavia in the 1990s was also accordingly interpreted in Beijing. It was an American attempt to undermine the political unity about to emerge in Europe after the euro’s launch on January 1, 1999.

The 2003 Iraq war was similarly interpreted in China as a move to take control of oil, ergo of petrodollars, and complete America’s global domination of finance and war.

A US soldier walks at the Qayyarah air base in Iraq. Photo: AFP / Ahmad al-Rubaye

The explanation can appear fantastical, the offspring of a fake news laboratory, looking to find plots in and for everything. It seems an heir to 19th-century conspiracy theories that saw schemes of the Free Masons or Jews for capitalist domination or socialist revolution.

But there is no suggestion of a grand old man pulling the strings or a planned, explicit rational intentionality in the 1997-98 crisis. Rather, Qiao sees a deep connection in a dimension of economic warfare that is different from the ancient and traditional dimensions of economic warfare.

That is, “war,” or the pursuit of political goals by the state, can be waged in modern times with an ad hoc alliance, modifiable from time to time, between finance and limited warfare in the Balkans or the Middle East, in this case.

In those years, America left aside the political-diplomatic dimension of its external relations and focused on trade agreements around the new framework of the World Trade Organization.

It was when history, that is, politics, was thought to be over, when clashes were between different civilizations, in contrast with each other, and it seemed that everything would pass through commercial and financial agreements. These could even be nudged by small wars. The model, however, was treading water, as Qiao notes.

It is not important here to see whether and to what extent there was a conscious and accomplished American intentionality in moving in this direction. Qiao notes objective contiguity, efficient in the 1990s but ceasing to function since the Iraq war in 2004, became a quagmire.

In China, where cruel realism is king, the point of criticism is not the intention to combine blood and money, but the failure to do so efficiently. Rather, the point of criticism is the disaster of the American system gradually detected since 2004, in being bogged down in the Middle East until the disastrous 2008 global financial crisis, until the failure of the so-called Jasmine Revolutions.

Thus, Qiao heaps admiration on the complex architecture of the American system, and it is not an antagonistic critique, like the Soviet one. It is an invitation to China to learn and, implicitly, an invitation to America to change.

The US weakness, according to Qiao, is the monetization of everything, exchanging pieces of paper for real goods. His solution is a new, digital currency.

China could be the first major nation to launch a central bank-backed digital currency. Image: iStock

Former NATO commander Mini, in his extraordinary introduction, a book within a book, introduces Qiao and explains the complications of the Chinese system, which is critical of the government but still manages to have a fair voice in the public debate. Then he tells of the fissures in the American empire.

His diagnosis does not imply the inevitable end of the American empire. It is a crisis that must be solved; otherwise, the whole world as we know it, hinged on America, will come crashing down.

Qiao understands that the American empire is a global order. However, as it applied in the last three decades, using structures conceived 80 years ago, during and after World War II, it should be changed in-depth to keep working.

In this, digital money implies a monopoly of power by one or more governments, or a total surrender of power to cryptocurrencies. But monopolies or total surrenders of power are historically flawed, as another Chinese book notes. One could perhaps say that financial solutions to political issues do not work, but neither does the reverse. Politics cannot replace finance; it creates just as much turmoil as the opposite, finance trying to replace politics.

These are complex issues to deal with, not least because the American empire is shy and even ashamed of itself; it keeps on saying that it is in crisis, and a deep fault has to be faced.

Mini writes: “American military interventionism abroad always occurs in the name of a supposed divine mandate to direct world affairs and the gratitude that others owe for the exercise of that role. The decision to resort to the use of force is theoretically parliamentary, but in reality, it is made by a small circle of people.”

He then quotes New York Times columnist Tom Friedman, who writes, “I can name 25 people (all located within a five-block radius of the White House) who, had they been exiled to a desert island a year and a half ago, the Iraq War would never have happened.”

Mini then goes on to write, “US foreign policy is focused on safeguarding its interests while those of its allies are irrelevant unless they coincide with those of the United States. The ideological address has become foreign policy and this for a certain period has guided the armed interventions, overt and covert, legitimate and illegitimate. The veil of American innocence and the myth of armed intervention to help allies and friends have long since fallen away.”

A US Chinook military helicopter gunner sits at the back of the chopper flying past mountains in Paktiya province in 2011. Photo: AFP / Ted Aljibe

Knowing this, some Chinese question: Is it better to have 25 people whose identities are unknown, who are always hidden, but for this very reason very powerful; or 25 people of the party politburo who at least are known to be there and are “clearly hidden?” But then can the world put itself in the hands of 50 “hidden-hidden” or “clearly-hidden” people?

These issues also contribute to the ongoing clash between China and the United States. They touch a profound problem, the faith and trust, which are the real root of power, the one that moves the men holding the guns. Power comes from them, from their trust, not from the inanimate barrel of the gun in their hands, as Mao famously once said.

They are soldiers, (from soldo, money, pay) i.e. paid men, they need cash, as well as trust, in order to move, as we know since ancient times. The link between military, money, power and faith is then welded by the motto on US dollars “In God We Trust.”

It explains that beyond rationalistic efforts, the issue of money and finance is one of trust, of being believed, of credit. If you do not believe in America, China or the world, everything collapses. Those who have credit, trust instead.

This story first appeared on the Settimana News website and is republished with permission. To read the original, click here.

Follow Francesco Sisci on Twitter: @francescosisci