Earlier this week, I was listening to a podcast episode with macro strategist Whitney Baker, and she mentioned George Soros’ theory of reflexivity:

It’s just the idea that a certain cause will create an effect, and that will then create another cause that kind of works in a circular way. So you can think about anything like a virtuous cycle or a vicious cycle as having some degree of self-reinforcing reflexivity.

In simple terms, it’s the idea that investors are not rational and have various biases and cognitive flaws. Given these limitations, when investors make decisions, they are acting based on subjective views of reality. These actions lead to self-reinforcing feedback loops that affect the actions of other investors, which in turn reinforce similar behavior, leading to boom and bust cycles. You can read about the idea in detail in Soros’ own words here if you are interested.

Anyway, I was bored of listening to finance podcasts, and I started listening to a podcast about World War 1. Learning about WWI has long been on my wish list, but I never got around to it. The list of regrets in my life is only matched by the number of books I want to read but haven’t read yet.

The podcast was decent, but I was searching for a better show. I then remembered that a week ago, a colleague had mentioned that he was listening to Dan Carlin’s Hardcore History. If you have never heard of the podcast, then shame on you. It’s arguably one of the greatest podcasts ever, and it has done more to popularize podcasts than anything or anyone else.

Dan Carlin had narrated a six-part series on the history of WWI called Blueprint for Armageddon that’s about 23 hours long. I had heard one or two episodes several years ago, but I had forgotten about them, so I started listening again. I finished the first episode, and it’s bloody brilliant. The sheer breadth and depth of research that’s gone into making the series is insane. It’s like listening to the summaries of several great tomes on the Great War.

What makes the show special compared to other WWI podcasts is Dan Carlin’s deep, gravelly, and intense voice. There’s something about his tone. The man’s voice can evoke an orchestra of bloody and violent horrors in your head. The undulating intensity of his voice slowly heightens the tension and keeps you hooked.

Your imagination lights up as you listen to him, and you become a witness to history as his voice deftly guides you through one of the bloodiest phases of humanity. From the great halls in which weak men made fateful decisions to the killing fields that consumed millions, history comes alive. Carlin is a true Sherpa of history.

As I heard the first episode, I couldn’t help but think of George Soros’s theory of reflectivity. The events leading up to the First World War were a textbook case of reflexive feedback loops. One fateful action triggered another, and the whole world, which was peaceful just a few weeks before, was in flames.

While World War I was a fight between European powers, it touched the entire world through colonial connections. Over 1.5 million Indians, 1+ million Africans, 400,000+ Australians, and hundreds of thousands more from Canada and New Zealand served in the war. Several bloody battles were fought across Africa.

I work in finance, and the one thing that the markets beat into you is the fact that the future is uncertain and things can change on a dime. You also learn that most things that you do to reduce uncertainty are a road to ruin. I had a newfound appreciation for this fact as I listened to the series. Let me explain what I mean. But before that, I’m not an expert on World War 1, and what I’m about to describe is a very broad and deliberately superficial outline. So please don’t post mean comments. I have low self-esteem, and I will cry.

Slouching towards Armageddon

In 1908, the Austro-Hungarian Empire formally annexed Bosnia and Herzegovina, which it was administering. This created deep resentment among Serbians who dreamed of their own independent nation. So in June 1914, when Archduke Franz Ferdinand, the heir to the Austro-Hungarian throne, and his wife Sophie decided to visit Sarajevo, the capital of Bosnia, there was a mood of tense anticipation. The date for the visit was set for June 28, 1914. It would prove to be a fateful day.

Nationalist passions were intense in Serbia and Bosnia. Their antagonism toward the Austro-Hungarian Empire had given birth to several nationalist organizations. One such group was called the Black Hand, a secret military society formed by officers in the Serbian army.

The Black Hand decided to take advantage of the archduke’s visit and assassinate him because they saw him as a threat to their independence. On that fateful day of June 28th, they lined up seven assassins at various points to assassinate the archduke.

Ferdinand and his wife, Sophie, made their way through Sarajevo in an open car. As the convoy passed, the first assassin, a Bosnian-Serb named Nedeljko Cabrinovic, threw a hand grenade at the archduke’s car. There’s no agreement on what happened next. Some accounts suggest that the driver may have heard a loud noise and decided to accelerate, causing the grenade to bounce off the car, while others say that the archduke may have swatted the grenade away.

The archduke was unfazed and decided to continue the day as planned. He goes to the city hall as scheduled and delivers a speech. After this, Franz Ferdinand decided to visit the hospital to check on the injured before he left. It was decided to change the route for security reasons, but not all drivers understood this.

On the way, the archduke’s driver took a wrong turn, and realizing his mistake, he stopped to back up. As fate would have it, he stops directly in front of 19-year-old Gavrilo Princip, one of the assassins. Princip steps forward and fires two shots, killing the archduke and the duchess Sophie.

With a wrong turn and two shots, the entire continent would be at war in just a few weeks. Of course, the assassination wasn’t the cause, but one of many that triggered the war.

Here’s Dan Carlin’s vivid description of the events leading up to the assassination of Archduke Franz Ferdinand from first episode of the podcast “Blueprint for Armageddon”:

The person who was closest to the whole thing was Count von Harrach, who was on the running board, not doing that great of a job apparently at security. He says as soon as the shots were fired, they reversed the car, and he later testified this quote: “As the car quickly reversed, a thin stream of blood spurted from His Highness’s mouth onto my right cheek. As I was pulling out my handkerchief to wipe the blood away from his mouth, the Duchess cried out to him, ‘For God’s sake, what has happened to you?’ At that, she slid off the seat and lay on the floor of the car with her face between his knees.

I had no idea that she too was hit and thought that she had simply fainted with fright. Then I heard His Imperial Highness say, ‘Sophie, Sophie, don’t die! Stay alive for the children!’ At that, I seized the Archduke by the collar of his uniform to stop his head drooping forward and asked him if he was in great pain. He answered me quite distinctly, ‘It is nothing.’ His face began to twist somewhat, but he went on repeating six or seven times, ever more faintly as he gradually lost consciousness, ‘It’s nothing.’ Then came a brief pause, followed by a convulsive rattle in his throat caused by the loss of blood. This ceased on arrival at the governor’s residence. The two unconscious bodies were carried into the building, where their death was soon established.”End quote.

As a way to sort of prove that the old adage “one man’s terrorist is another man’s freedom fighter” is true, you have only to note that among Serbs today, many will consider Gavrilo Princip a heroic figure, someone who fired the first shots that started a chain of events that, while it would be horrible in both world wars for the Serbian people, eventually led to a time when those countries exist without having to be just simply a province in some other major superpower’s territories.

I still can’t wrap my head around the sheer improbability of the fact that WWI was triggered all because of a wrong turn. Now, of course, the archduke’s assassination wasn’t the only cause of the great war. It just lit a spark in the dynamite-laden cracks in the peace between the great European powers of the era.

The Europe of this era was a multipolar world with several superpowers. After the horrific and destructive Napoleonic Wars, almost all of the major powers had mutual defense treaties with each other.


From episode 1 of Blueprint for Armageddon:

This is the era of a very complex web of alliances that bind European countries to each other. It’s perhaps the most enduring work of Otto von Bismarck, the 19th-century German diplomat who played a very large role in the foundation of modern Germany. Bismarck also played a huge role in creating a system of alliances that both expanded Germany’s possibilities while at the same time preserving general peace in Europe.

There were wars between Napoleon and the First World War, and some of them were directly the fault of Bismarck, but there wasn’t a general European conflict involving all the major powers. Let’s not forget that this is an era that we would today call a multipolar world, which is hard for us to understand in an era of one or two superpowers. Europe during this time period had at least five first-rate power states: Britain, France, Germany, Russia, and the Austro-Hungarian Empire. Many people throw in Turkey and Italy too, which would make seven. These states were all bound to each other with complex alliance systems, and complex is the way Bismarck wanted it.

Bismarck had set it up so that basically, no matter what happened, he was in the driver’s seat. This worked unbelievably well, especially for German interests but also for European interests as a whole, for a long time. However, by the time 1914 rolls around, this genius who created this system that’s so complex only he knew how to run it had been fired by the leader of Germany. Now, this complex machine that the genius of Bismarck had created and run was being run by people who couldn’t carry his jockstrap, as we used to say.

It was inevitable that something like that would break down. The reason that the Austro-Hungarians didn’t just march into Serbia the minute they found out that the Serbs were responsible for killing their heir to the throne is that they knew that would mean war with Russia.

After the archduke’s assassination, the Austro-Hungarian Empire seeks the help of its ally Germany, because if it invades Serbia, then Russia will step in to help the Serbs. There’s no agreement among historians on this, but the German Kaiser Wilhelm II is supposed to have given the Austrians a blank check to deal with the Serbians.

The Austro-Hungarian Empire gives the Serbians an ultimatum with a list of demands that’s impossible to meet. Serbia chooses to comply with most of the demands, but this wasn’t enough for the Austrians, and on July 28th, they declare war on Serbia. In response, Russia orders a mobilization of its troops to support the Serbs.

The Germans send an ultimatum to the Russians to stop mobilization, which Russia ignores. On August 1st, Germany declares war on Russia. France had a mutual defense treaty with Russia and a plan to mobilize its troops. Within one month of the assassination, four major powers in Europe were at war.

Britain was the only superpower remaining on the sidelines. Now, Britain had carefully managed to avoid any permanent alliances. It had a gentleman’s agreement with France to come to its aid, but it wasn’t binding, so it decided to stay on the sidelines. But it wouldn’t last long.

Germany had a serious problem—it was encircled on both sides by its enemies. On one side, it shared a border with Russia, and on the other, it shared a border with France. Its worst nightmare had come true, and it was now at war with both countries.

The National Museum of Australia

However, Germany had planned for this eventuality for a long time. Germany’s plan for a two-front war with Russia and France involved sending a massive number of troops to quickly defeat France and then running back to fight the Russians. The assumption here was that it would take a long time for Russia to mobilize its low-tech army across such a large geography.

Peacetime strategic planning was relatively new in Europe (in the Crimean War the British and French had first declared war and then decided how to fight it). It had started in Prussia, and after Bismarck’s victories in 1866 and 1870 it was copied elsewhere. Recent research has shown the war plans were more adaptable than Taylor suggested and were subject to regular revision: the French in 1914 implemented their Plan XVII and the Russians Plan XIX Altered, while the German plan was a rolling document amended every year.

We now also know that many military chiefs envisaged a conflict that so far from being over by Christmas would last at least eighteen months. Even so, in the summer and autumn of 1914 the belligerents’ war plans almost uniformly failed.

The German plan (best referred to as the Schlieffen-Moltke Plan) entailed moving the bulk of the field army westwards to defeat France quickly by wheeling through Belgium and outflanking the modern fortresses the French had built along the Franco-German border. The more archaic Belgian fortresses round Liège and Namur could be overcome quickly by mobile heavy artillery, and the French had left their northern frontier largely unfortified.

But there was a problem: The mutual border that France shared with Germany was one of the most fortified places on the planet. With enough time, Germany could smash through them but they didn’t have time. If they took time, Russia would be in Berlin by then. So Germany had only one option: hit France on the other side, which is lightly defended, but there was again a problem here.

On the other side, France didn’t share a border with Germany, but with Belgium and Luxembourg, both of which were neutral states. In a tragic twist of fate, in 1839, Britain had promised to protect Belgium’s neutrality if it was violated. Germany had no option but to go through Belgium, and Britain was dragged into the war, and the whole continent was in flames.

In a sense, the Great War was a series of tragic coincidences that happened all at once. Of course, the nominal cause of WWI was the assassination of Archduke Franz Ferdinand, but there were deep fissures in Europe. Historians still bicker about who or what caused the war, but the reality is there isn’t just one person or country to blame, even though many historians do.

Here’s an excerpt from historian Margaret Macmillan’s wonderful talk on the causes of WWI:

But when you try to find the causes of the First World War, I think you’re looking at everything from individuals, and I think individual decisions in fact do at various points make a difference, but you’re also looking at the world in which those decisions were made. You’re looking at the values of that world, the assumptions of that world, the tensions in that world. And so you have to take into account such things as national rivalries, economic rivalries, competition for colonies. You have to, I think, look at the arms race, which was becoming increasingly expensive and increasingly important in Europe in the years just before 1914. You have to look at the military plans.

I sometimes feel as if what you’re doing when you’re trying to understand the First World War is trying to understand a chess game which is played on three different boards, at least, all of them connected so that moving a pawn or a queen or a castle on one board affects something on the other two boards.

The best explanation I’ve come up with, which is not, as you will see, a very satisfactory one, is that what happened in 1914 was very much like a perfect storm. A number of things came together in a particular sequence which made what might have been yet another crisis in the Balkans (because there had been several crises in the Balkans before 1914) uncontrollable. And once Europe had got into the war, it became very, very difficult to stop it. The war turned out to be much longer than most people who had been making decisions, and most people who had been watching those decisions, could ever have expected.Text within this block will maintain its original spacing when published. — Explaining the Outbreak of the First World War.

Aside: She’s also The author of The War That Ended Peace: 

The cost of the war was dear. Not just in terms of money or blood, but in terms of how it shaped the world after. Here’s an excerpt from a wonderful talk that Christopher Clark, the author of The Sleepwalkers: How Europe Went to War in 1914, gave:

This war in particular, I think, has rightly been described as the primal catastrophe. The term is Kennan’s, George Kennan originally, the primal catastrophe of the 20th century. It’s been widely taken up in the German language historiography, the “Urkatastrophe”.

“Urkatastrophe” has a kind of, I don’t know, a hairy, scary sort of feel to it, which “primal catastrophe” doesn’t, but in any case, it consumed, and this term “primal catastrophe” is now controversial. The point has been made that, you know, this war was not a primal catastrophe for everybody. It wasn’t for the Baltic states or for Poland.

Everybody, but it is, I think, if we think about the amount of poison released into the European political system by this war, about its destabilizing effect on global politics, about its long-term consequences in the Middle East, it is, I think, right to think of this war, in its global frame, as a primal catastrophe. It consumed four great empires: the German Empire, the Russian Empire, the Ottoman Empire, and of course, the Austro-Hungarian Empire. All were consumed in the cauldron of this war.

More importantly, it caused the deaths of between 10 and 13 million young men. These are just military deaths on its numerous fields of conflict. The global statistics about wounded men are not very reliable, but the estimates sort of oscillate between 15 and 21 million wounded men. And I’m not talking here about lightly wounded men who were treated in theater or in local field hospitals just behind the front, but men who had carried serious wounds, many of whom felt the effects of these wounds right through until the end of their lives.

And so I think that Fritz Stern, the German-American Jewish historian, a wonderful historian, is right when he says that this is the disaster out of which all the disasters of the 20th century sprang. It’s very difficult to imagine the rise and seizure of power of fascism in Italy without this war. It’s difficult to imagine the October Revolution in the Russian Empire without the First World War.

Everybody predicted something like the February Revolution: collapse of tsarist autocratic authority, a seizure of power by a sort of middling coalition of political entities, you know, right-wing social democrats perhaps, Kadets (Constitutional Democrats), nationalists, and so on. But no one had foreseen the coup-like takeover of power by the Bolsheviks and the creation thereafter of a one-party state under Bolshevik control, which of course in its course was attended by a further Russian Civil War that consumed yet another 5 to 7 million lives.

Again, we don’t have very good statistics, and of course, it’s difficult to imagine German history taking the disastrous and appalling turn that it took in the direction of Nazism and of the Holocaust without the titanic pressures brought to bear on German society and, above all, on German political culture by this vast conflict.

Fingerprints of the past

As I heard Dan Carlin describe in great detail how the world sleepwalked into a catastrophe of epic proportions, I couldn’t help but think of modern-day parallels. Today’s world, has many of the hallmarks of Europe prior to 1914. It may be the human brain’s tendency to seek patterns, our instinctive impulse to look to the past to understand the present, or maybe I’m an idiot who doesn’t understand history, but it’s hard not to see the similarities to the world before World War I.

You also hear many of the same arguments that were put forth before World War I as to why a war is unlikely. From Dan Carlin’s Blueprint for Armageddon I:

They’ve been snapping up books like The Great Illusion, written by Norman Angell where the historians point out how influential this book was. Angell is trying to explain to the people in that time period that this war that continually gets threatened, like the Russian Roulette trigger being pulled, is never going to happen. It can’t happen.

The world has become too interdependent in that time period; there’s too much globalization. This is the early period where all that starts, where you have the telegraph providing instant communication, and the railroads and the shipping lines, and trade had never been higher, wealth had never been grander, and Europe was at the height of its financial power, and Britain was at the height of everybody’s financial power. Why would you mess with that economic situation?

Guys like Angell were saying that what had happened is it was so profitable to simply do business as usual that there was nothing worth going to war over. What Angell was saying is that anything you would gain by launching a war would be dwarfed by what you would lose by destroying the system that was allowing everyone to make so much money. There’s an old line that when goods don’t cross borders, armies will. Well, this is the opposite situation. Their goods are crossing borders like crazy.

So guys like Angell tell you that, you know, because of that formula, and they believe in that formula, you can’t have a war. But the British are starting to find out, you know, as this dead zone period from the end of the archduke’s assassination to the ultimatum by Serbia, what the British are starting to find out is that Angell is at least partially wrong. He may be right that you will destroy a whole system that’s making everybody rich, but he seems to be wrong in thinking that the powers that be will avoid a war because of that.

Margaret MacMillan, from the same talk I linked above:

Question from the audience: You do draw a number of parallels between our current political situation and the situation at the turn of the 20th century. Do you have any ideas about perhaps the seeds of things that you see now that might cause people to do something equally as stupid as what happened then?

Margaret MacMillan: Okay, our capacity to do stupid things is huge, I think. You know, I think that’s a given. What worries me always is when you have disputes which engage nationalist feelings, because I think these can push governments in ways they may not want to go. Governments sometimes themselves, of course, encourage such things.

I’m thinking of the current tension in the South and East China Seas between China and its neighbors, and how this is becoming a nationalist cause in Japan, for example. I was recently in Japan and I talked to some Japanese international relations experts who were very concerned about the ways in which they thought Prime Minister Abe was using and appealing to Japanese nationalism to mobilize opinion against China, and the Chinese government doing something rather similar with Chinese nationalism. The trouble with those things is they can get out of control far too quickly.

And I think perhaps even more than in 1914, we expect governments to respond quickly. You know, if a government hasn’t responded in two minutes, people start getting impatient. And so the temptation to do something stupid… I mean, you know, should a Chinese – let’s hope not – but should a Chinese and a Japanese naval vessel have a clash, or should there be some incident in the air, the danger then, I think, is that opinion on both sides gets inflamed and it becomes very difficult for governments to back down.

I think the same thing with what’s happening around the borders of Russia, particularly of course in Ukraine. You know, the potential there for things to get out of control… On the plus side, I think we do have stronger and more international institutions. And I think we also have a very sensible recognition that any major war now would be so devastating that its consequences would probably be much worse than either the First or the Second World War.

But I’m not always confident about human nature. As someone once said – not me – we have a couple of design flaws there.

Christopher Clark again from the same talk I linked above:

And finally, there is the fact that we are no longer in the era of bipolar stability that we used to call the Cold War, and we are still scratching our heads and trying to work out what that means. I went to an interesting paper in Belgrade by George Friedman, the American political scientist, and he commented that we had the Cold War, then we had the post-Cold War – that was the period from 1989 till about 2007, and that was an era of total unipolarity.

There was only one great power left and everybody was watching Washington, and there was talk of full spectrum dominance and so on. That era has now passed and we are now in what he calls the post-post-Cold War. It gets more and more unwieldy – I was hoping he would come up with something a bit more handy, but no, the post-post-Cold War.

And this is an era when it is no longer unipolar. We are back in a period which is authentically multipolar, with numerous centers of power, a world populated not just by, on the one hand, a weary Titan – that was the term sometimes used about Britain before 1914, and some might like today to describe Washington as a weary Titan.

It is not in decline in any kind of metrically provable sense, but it is certainly wearying in some respects, subjectively at least, of its world role, or parts of it are. On the one hand, we have that, and on the other hand, we have rising powers, one in particular which is rattling at the cage of the geopolitical system in ways which unsettle many chancelleries, and I am not, of course, referring to Russia.

So, these shifts in perspective, which, I mean, this is of course a world which in many ways resembles 1914 more and more, rather than less and less, so we have a paradoxical situation where, even as 1914 recedes further away into the past, it actually in some ways feels more relevant.

I came across these two quotes as I was writing this post:

“History is the sum total of things that could have been avoided.” – Konrad Adenauer, first Chancellor of the Federal Republic of Germany (1876-1967)

History is a gallery of pictures in which there are few originals and many copies.” – Alexis de Tocqueville, French diplomat, political scientist, and historian (1805-1859)

In a previous post, I wrote about optimists vs. pessimists. When you learn about the history of WWI, and how leaders bumbled their way into a horrendous war, it’s a bit hard to be optimistic about humanity. Optimists may point out that we’ve managed to survive two world wars. However, what’s different this time is that the killing power of modern weapons has never been higher.

The history of the First World War is fascinating. I’ve just started learning about it, and I’ll continue to write as I learn more. Dan Carlin’s series is brilliant, and it’s one of the best places to start if you are interested. I cannot recommend it enough.