The Bomb
“We knew the world would not be the same. Few people laughed. Few people cried. Most people were silent. I remembered the line from the Hindu scripture, the Bhagavad Gita. Vishnu is trying to persuade the prince that he should do his duty, and to impress him, takes on his multi-armed form and says, ‘Now I am become Death, the destroyer of worlds.’ I suppose we all thought that, one way or another.”
J. Robert Oppenheimer, Father of the Atomic Bomb
It might be striking (or confusing) to talk about the atomic bomb in the same context as digital assets, yet I hope you can enthuse me as I not only wish to make parallels in the emerging technology used in warfare and finance, but also aim to fill in a puzzle piece that would go unnoticed if I strictly focused on the history of US market crashes. The picture of how the US Dollar is now the global unit of account becomes clear with the military industrial complex.
Picking up the pieces of The Great Depression involved another production boost after the bombing of Pearl Harbor. If it weren’t for the measures taken in the New Deal and the subsequent race against time to produce the atom bomb, history might have been written in German and Japanese. Instead, leading up to the end of the war, the Air Force was using firebombs in both fronts to wreak havoc on our enemies. There’s some debate about if firebombs could have done the trick to end the war in the Pacific, but the decision to drop the atom bombs came about in ways that are far above my pay grade. I read The Bomb by Fred Kaplan and still left it wondering what truly made us go to such lengths. The textbook answer is that it saved American lives, but using nuclear bombs opened the door to the greatest mexican standoff, the Cold War, and has left the world wondering if it would destroy itself ever since.
Truman mandated that the atom bomb was not a weapon to be controlled by the military and required a board of citizens to govern its usage. This quickly changed as Eisenhower took office, a five star general and Supreme Allied Commander who would succumb to the pressure of defense budgets and the leaders of the three branches of the military, known as the Triad. The Army, Navy, and Air Force began elbowing each other for who would receive funding from the government, with the Strategic Air Command as the front-runner since it would be needed to drop further nuclear bombs. This tribal fighting spiraled from here with more regard to increasing defense budgets out of fearmongering that a Communist attack was on the horizon and less on the practical application of the immensely destructive weapons.
If the Air Force needed planes to drop nuclear bombs, the Navy would develop submarines to launch them undetected beneath the ocean, and the Army would launch Intercontinental Ballistic Missiles from land to ensure they weren’t left out of the funding. When Eisenhower left office in 1961, he explicitly warned about the military industrial complex controlling the future of the country and stated that the only deterrence to the defense power getting out of hand was an alert citizenry.
What worries me today isn’t as much that the policy of the United States towards nuclear warfare is, and always has been, the need to pre-emptively strike any superpower with nuclear capability as soon as we felt war was inevitable, but the alertness of the citizenry. At present, there is a war backed by NATO against a growing BRICS adversary with both sides capable of destroying the world multiple times over, but more of the public’s focus is on domestic affairs or outright distractions from the looming nature of what was recently described at the UN as a more dangerous moment in time than any point in the Cold War.
The Cold War at its peak ratcheted up tensions to the tune of 32,000 American nuclear warheads ready to launch at almost every city, military site, industrial site, and transportation route in the Soviet Union and China. In turn, the Soviets were rarely but a few thousand warheads behind at any moment, ready to return the favor. The world has been at peace since the end of WW2, except wars between Third World countries or Superpowers and Third World countries, though it has also been bracing for the moment that bombs would be dropped again. The next time nuclear bombs are used will surely be the end of the world as we know it, and each president’s task since the end of WW2 has been to decide how to avoid nuclear apocalypse. Each president, regardless of political affiliation, has come to the same conclusion: the only way to stop nuclear annihilation is to build more nuclear capability than the opponent, saving the option of diplomacy if the military will allow it.
A quick run down of presidents and their actions towards the Cold War and impending nuclear threats:
Truman - dropped the only nuclear bombs in warfare the world has seen and was so horrified with the results that he didn’t consider the technology to be a military option, leaving the choice to a group of citizens instead.
Eisenhower - considered nukes to be similar to bullets, but when the time came to use them in the Korean War, he backed down and decided conventional weapons were best used until they couldn’t be. Even still, he withdrew from Korea before going nuclear.
Kennedy - the closest the world ever came to nuclear annihilation was likely during the Cuban Missile Crises, and his willingness to negotiate in private with Khrushchev brought the only answer the modern world has seen to avoiding nuclear conflict: diplomacy. Kennedy created enemies in the military industrial complex when he attempted to dismantle nuclear capabilities after reaching common ground with the Soviets, and there’s speculation he was assassinated from within his own government for resisting defense budget ideology.
LBJ - almost dropped nuclear bombs on the Vietcong, but similar to Eisenhower, he resorted towards conventional warfare in the end.
Nixon - engaged in Madman Theory by attempting to spread the propaganda that he was a furious, crazed leader that couldn’t be controlled to intimidate his nuclear adversaries into keeping the peace. Nixon used diplomacy to negotiate the Strategic Arms Limitation Treaty.
Ford - continued the defense budget increases and largely kept the status quo.
Carter - took more interest in the nuclear war games than any president prior, but even as a dove, accepted that nuclear armaments must increase to achieve security from foreign threats. He managed to create a treaty with the Soviets to reduce armaments using diplomacy with the Strategic Arms Limitation Treaty II.
Reagan - ended the Cold War by first giving speeches about nuclear superiority as a war hawk, boasting erroneously with the Star Wars speech that NATO could shoot down incoming nukes from space, only to use diplomacy to almost completely end the nuclear arms race, if it weren’t for a few military advisors in the room warning against it.
Bush I - made the most strides to reduce the number of active nuclear warheads to 1,500 from an analysis that frighteningly proved the military was ordering nukes based on the sole purpose of increasing the budget perpetually as opposed to using the most destructive force known to man efficiently.
Clinton - almost went to nuclear war with North Korea, but used diplomacy to reach an agreement that in turn for their compliance for refraining from producing nuclear weapons would receive nuclear technology to generate electricity.
Bush II - as Congress deliberated his authority to invade Iraq, he used the erroneous claim that Saddam Hussein had weapons of mass destruction while he sat on the information that North Korea had the capability to nuke the US. One could argue that oil was more profitable in Iraq than the human rights or impending nuclear capability of North Korea.
Obama - executed the Iran Nuclear Deal citing Kennedy’s American University Speech to disarm the world from nuclear power, but ultimately stayed the course of modernizing or replacing the nuclear armaments under his control.
Trump - the most vocally aggressive about using nuclear weapons of any on this list, the only president to threaten nuclear war explicitly, but ultimately used diplomacy to subdue tensions with North Korea, although he made no strides towards denuclearization, pulling out of the Iran Nuclear Deal.
Biden - currently in a proxy war in Ukraine over the anti-balistic missles placed in Europe in support of NATO as Russian President Vlamir Putin annexes former Soviet Union territories with the threat of using Hypersonic Nuclear ICBMs.
With each new leader comes the promise of doing something different to make the world a better place, a place with less imminent nuclear disaster. Some leaders were more effective than others at achieving this goal, and always through the route of diplomacy. The Cold War was between two allied victors of World War 2, a war that defeated Fascism, but started the power struggle of the Communists and Capitalists, with each taking their turn at declaring the other as Fascist. Today, the idea of two different ideologies getting along seems more domestic than foreign as the debt cieling crises is forcing a negotiation before the US Treasury note falls into uncharted, insolvent territory. One side of the aisle is considered at its political extreme Communist, while the other is Fascist. A proxy war in Ukraine is keeping the military industrial complex spinning faster than ever, but this time it climaxes not in a war with a Third World country, but with World War 3.
Libertarian Socialism sounds like an oxymoron, but Noam Chomsky and a few other intellectuals have been hinting at this prospect. To combine the different ideologies, Communism or Socialism and Capitalism or Libertarianism, would be an answer we haven’t tried yet, but to find the diplomats who could orate this seems less likely than picking up the rubble of whatever is left from the next disaster, if anything. However, a technological improvement leading to the seperation of finance and state would force action in the same revolutionary mindset as the seperation of church and state did 300+ years prior, and that’s exactly what the creation of Bitcoin has done.
The obvious threat from this emerging technology is not only to the global unit of account that is awarded to the winner of the latest World War (currently the US Dollar, but maybe soon the Yuan) or the central banking system that supports its prolification, but also the military industrial complex that ensures the jobs of the defense industry, the security of Superpower status, and also war itself.
I would argue that the adoption of digital assets could bring an end to nuclear warfare if it meant that there was no need to increase defense spending to prop up a fledgling economy by printing money, and it was granted that mankind could put aside its ego long enough to realize any pursuit of superpower would be over a radioactive wasteland if the current course is pursued to its end. The philosophical component of cypherpunk ideology will be necessary to demonstrate Bitcoin’s value, but before exploring the mindset behind Satoshi Nakamoto, we have to finish the course of market crashes that led to his motivation behind the Bitcoin White Paper.
With the end of the Cold War looming, 1987 found another financial instrument that would prop up markets, create a sense of security amid risk, and crash capital markets before Gorbachev could tear down his wall.
Next up, 1987.