War and Empire, Part I

Today, we take a break from looking at the world of finance and instead dissect an ancient war, that between Athens and Sparta. Using Thucydides (known as the first historian) as his guide, Byron King examines the Peloponnesian War – a war that would not end…

By 416 B.C., democratic Athens and oligarchic Sparta had been fighting for 15 years. The war had commenced in 431 B.C., when the Spartans took to the field in an effort to put a stop to the imperial expansions of Athens. But 15 years may as well have been a lifetime, because it was a time of pain that did not cease. Certainly, those 15 years had cost the lives of many thousands killed in battles on land and sea, or by the deadly plague that struck Athens in 429 B.C. In battle after battle, the armies collected their dead and raised the traditional funeral pyres. The bones of the deceased made their way back to the home state, there to be interred in crypts of honor and to the accompaniment of fine speeches. But was there some end in sight?

Conflict raged across the lands that are now Greece. Life was austere, even for the wealthiest families. Travel was difficult, and certainly dangerous. Social norms were breaking down. Nothing was safe. Few things were even sacred. "What have we done?" the people must have thought. "Into what pit have we fallen?"

A few people recalled the warnings of Sparta’s leader Archidamus, who had counseled against the original expedition against powerful Athens. "I fear," he said, "that it is more likely that we shall be leaving (this war) to our children after us." Anticipating an aspect of waging successful war that Carl von Clausewitz would write down 22 centuries later in his great work On War, Archidamus was forecasting no quick decisive victory. Yet still, the Spartans invaded.

The Peloponnesian War: Pericles’ Error

The Athenian leader Pericles also wanted to avoid a war with Sparta. But if war came, Pericles had counseled caution, and a strategy of defense. Pericles explained that "if the Athenians would remain quiet, take care of their fleet, refrain from trying to extend their empire in wartime and thus putting their city in danger, they would prevail." But this strategy relied on the enemy Spartans to fail, and not on the Athenians to take some move toward victory. In all likelihood, Pericles had never read, let alone heard of, the military scholar Sun Tzu. But in Chapter 4 of Sun Tzu’s great work, The Art of War, the Chinese master had stated that "invincibility lies in the defense; the possibility of victory in the attack." In a great strategic error, Pericles had set forth only half of the equation.

So after 15 years, the war had cost much, but at the same time had reached no outcome. There was no point in sight that could mark a real termination of fighting and hostilities. All of the blood and treasure, which had been poured into bitter combat, had not served to effect a fundamental change in the power relationships between Athens and Sparta. The war was ongoing.

As Clausewitz would have said, the centers of gravity of each state remained intact. Sparta still possessed its powerful army, and Athens maintained its dominating navy. There had been no culminating engagement, and neither side had won a decisive victory over the other. Skirmishing continued at the periphery of each state, as did each side’s attempts to form new alliances to the detriment of the other. But both sides faced the daunting prospect of their war with each other continuing for an indeterminate number of years. Something had to change.

Consciously or subconsciously, the Athenians were prepared to adopt a new strategy. And it was a man named Alcibiades, a dynamic young officer, who came up with a bold plan to expand the war in a manner that, he claimed, would ultimately benefit Athens and weaken Sparta. Alcibiades proposed to invade Sicily and assist a group of smaller city-states in attacking Spartan-related colonies there, specifically Syracuse. Although Sicily was 1,000 miles from Athens, the Athenian thinking was that bringing down Syracuse would lead to a serious weakening of Spartan power.

The operational plan of Alcibiades was to send a contingent of 60 Athenian ships, called "triremes," and a modest number of troops to Sicily. Once there, they were to form alliances with groups of Sicilian cities and tribes that were presumed to be friendly to Athens. Then, leveraging these local parties, the Athenian plan was to take over Syracuse and gain control over a main source of food and supplies that were being exported to Sparta. With Sicily in the Athenian alliance, it would be possible for Athens to use its naval power to blockade the regions around Sparta until the Spartans were starved into submission. It was a plan with relatively low material risk to Athens, yet potentially high strategic payoff.

The Peloponnesian War: Intelligence Failure

One of the key Greek leaders, Nicias, was opposed to the Sicilian plan of Alcibiades as a costly and distant diversion. But rather than oppose the Alcibiades plan directly on its merits, Nicias pretended to support it while pointing out its dangers and immense cost. In the tumult of the debate, the Athenians turned logic on its head and voted to send 100 triremes on the expedition instead of the 60 proposed by Alcibiades. The formerly low-risk plan was beginning to become a higher-risk play.

The Athenians also appointed Nicias as well as Alcibiades and another military leader named Lamachus as generals. In what we would today call an "intelligence failure," Athens apparently did not realize that Syracuse was a large and powerful city and, having been founded as a colony of Athens’ traditional competitor and Spartan ally Corinth, a probable enemy. Did the Athenians truly understand the scope of effort that would be required in Sicily?

The night before the expedition was to leave Athens, someone (probably enemy saboteurs) mutilated numerous statues of gods throughout Athens. Alcibiades was accused of profaning these god-images, a very serious crime against religion in that era. He wanted to answer the charges. But a significant number of Athenian allies and fighting auxiliaries had agreed to join in with the expedition to Sicily solely due to the presence of Alcibiades. Athens could not lose this key man, who was the architect of its strategy, so his trial was postponed.

In the winter of 415 B.C., the Athenians embarked for Sicily on 134 triremes with over 5,000 ground troops and a total force of more than 30,000. Logistically, it was an undertaking of immense scale. And also, in an early case of what we today call "mission creep," the original "low-risk" plan of Alcibiades had more than doubled in scope.

Initially in Sicily, the cautious strategy of Nicias and Alcibiades to use diplomacy and small engagements won over some small cities, and led to the establishment of an Athenian base camp. The plan of Alcibiades was beginning to take shape.

The Peloponnesian War: Betrayal of and by Alcibiades

Then suddenly and summarily, Alcibiades was recalled to Athens to stand trial for impiety. This cost this major Athenian expedition its true leader, its original planner, its prime architect. At home in Athens, the political leadership utterly misunderstood the implications of its obligation, and certainly its failure, to support the military leadership in the field. By way of comparison, this would have been the equivalent of President Lincoln firing General Grant based on rumors of Grant’s excessive drinking, instead of offering to send a barrel of Grant’s favorite whiskey to each of his other generals in the field.

Alcibiades sensed that treachery and political intrigue in Athens was the cause of his recall. So Alcibiades took an opportunity to escape while en route to Athens, and in an act of utter treason, went over to the Spartans. Alcibiades made a plethora of self-serving justifications for his defection, that he "loved his country" and hence was obliged to resist the evil leaders who were driving Athens to ruin. But in the end, Alcibiades went on to explain in detail the Athenian plan to the Spartans.

In Chapter 13 of his work, Sun Tzu writes of the use of spies in war, and the necessity of understanding what is going on in the enemy camp: "Spies are a key element in warfare. On them depends an army’s every move."

But Alcibiades was more than a spy and turncoat. He provided the Spartans with a complete tutorial on Athenian weaknesses and helped Sparta to develop a strategy for defeating Athens. Among other key insights, Alcibiades urged the Spartans to take and fortify a strategic region on the approaches to Athens, as well as to reinforce Syracuse. This was all but a road map to the heart of Athenian power. The Athenians condemned the absent Alcibiades to death, and his property was confiscated. But the damage was done.

Despite the loss of Alcibiades and probable compromise of not just operational security but the entire strategic plan, the Athenians continued to execute his strategy in Sicily. This was utter foolhardiness on the part of the Athenians. It was as if events on the ground in Sicily had taken on a life of their own, and the Athenians were incapable of re-assessing their situation, let alone of regaining control of their own destiny despite the defection of Alcibiades. Initially, the Athenians won some small battles against forces allied with Syracuse, but Nicias failed to press his advantage.

The Athenians had received promises of support from many smaller Sicilian cities before they set out. But when the Sicilians saw the tremendous size of the Athenian force, they became more afraid of the foreign Athenians than the local masters of Syracuse and refused to help.

Good will began to break down between the Sicilians and Athenians as the former began to question the motives of Athens in its pursuit of objectives in Sicily. In a debate with one Sicilian tribe, the local leader accused the Athenians of trying to win another empire. The Athenians admitted that they held their empire by fear but claimed they were concerned about security, not enslaving anyone. This tribe decided to remain technically neutral, but later supported Syracuse. Thus were events turning against the Athenians.

Still, the Athenians were confident that their army was powerful enough to besiege Syracuse without the need for local forces, and so they commenced this effort. The siege of Syracuse started promisingly enough. Generals Lamachus and Nicias took strong positions near the harbor of Syracuse and began to confront the walls of Syracuse. Within days, Athenian general Lamachus was killed in the fighting. But the Athenians pressed on with their siege.


Byron King
for The Daily Reckoning
November 08, 2005

P.S. The history of empires is a history of things great and sad, wise and foolish, filled with tales of error caused by human nature that is immutable. If you want to read more about the folly of empires past and present, please purchase a copy of a book that is so new that the ink is not even dry.

Byron King currently serves as an attorney in Pittsburgh, Pennsylvania. He received his Juris Doctor from the University of Pittsburgh School of Law in 1981 and is a cum laude graduate of Harvard University. He is a regular contributor to the free e-letter, Whiskey and Gunpowder, which covers resources, oil, geopolitics, military history, geology and personal freedom.

"Hey, you Americans aren’t all idiots," said an English colleague this morning.

In her hands was a copy of the International Herald Tribune, with an article headlined: "High home prices drive California exodus."

"These people are smart," she continued. "They’re selling over-priced property. They’re taking advantage of the property bubble without dying."

She referred to our lament about rising property prices in the United States. The only people who possibly benefit, we noted, were those who could get rid of a house without having to buy another. But now comes news that many Americans have figured out an alternative.

"A growing number of people are giving up on California after a decade of soaring home prices," explains the IHT. The article explains that there are now 100,000 more people leaving the Golden State than entering it.

It’s not hard to figure out why. With an average house price near half a million dollars, few average people can afford to buy a decent house. And those who bought their houses more than 10 years ago usually have very substantial capital gains – gains they can only enjoy by dying or moving. But in the Midwest, houses of similar quality sell for one-half to one-third as much money. So, if he owns his California home free and clear…the typical homeowner can move to Kansas or Missouri and put a quarter of a million dollars, or more, in the bank.

"Sounds like a good deal to me," concludes our English colleague. "But where is Missouri?"

Ah, there’s the rub, we explained. Missouri is a long way from anywhere.

Your editor is a real estate investor…perhaps a bad one. He is buying property at what appears to be the top in a huge, worldwide property bubble. The only thing that makes sense of it is that he buys in places that are a long way from anywhere – and, therefore, relatively cheap.

"But when the bubble pops, will not even cheap places become cheaper?" he asks himself. "Yes," is the only answer he can give. But what won’t?

All around the world, the supply of paper assets is increasing at breathtaking rates. Paper money in Britain is increasing at 11.2% per year. In Denmark, the money supply is racing ahead at 16.3% per year. In Australia, the rate is 9.8%. In this race to currency ruin the United States is a slowpoke – with a money supply growing at only 6.6%, which is still twice as fast as the increase in GDP or consumer price inflation.

So, the supply of "things" that can be manufactured is increasing rapidly. Billions have been invested in the factories of Asia to increase the production of "things." So many new "things" have been created that prices of them are falling – even as measured by paper currencies, which are also increasing at record rates.

But some things are hard to reproduce. Despite centuries of trying by alchemists no one has ever succeeded in turning base metal into gold, and the supply of land, as opposed to condos and houses, is still limited. We continue to buy both, carefully.

More news from The Rude Awakening…


Eric Fry, reporting from Wall Street:

"ExxonMobil earns billions of dollars. The Congress spends billions of dollars. These two truths seem to be inspiring Senator Clinton’s attempt to divert a few billion dollars from where they are earned to where they are spent."


Bill Bonner, back in London with more views…

*** More reader mail:

"As a Zimbabwean now living in semi-refugee mode in Cape Town I’d be grateful if you’d send a copy of Empire of Debt to Robert Mugabe. He won’t read it of course, but being a donation its (discounted) Z$1,700,000 value will have a substantial impact on our trade deficit.

"P.S. I suggest you attach a note to the copies (except Ron Paul’s) heading to Congress explaining that your book is not a novel."

Another reader writes: "Sending a copy of your new book to everyone in Congress is a great idea. But who is going to see to it that they read it?"

*** Speaking of buying gold: boohoo!

We’ve been watching the current correction in gold, hoping to see the price drop below our target price of $450. Alas, yesterday, the price turned up again and now is at $460 (December contracts). The gold bull market is still very young, we think. The general lumpeninvestoriat has no clue. The last bull market in gold took the price up to $850…when the public finally came in at the worst possible moment. Even today, more than 20 years later, there are still investors who bought at over $500, held for the next 15 to 20 years, lost half their money, and now never want to hear of gold again. But before this bull market is over, they’ll be back. And the price will probably rise to over $1,000.

Do we take a chance and buy now? Or do we stick with our discipline, and wait for the price to drop to $450? Will we ever see $450 again?

*** "Leaders Fiddle as France Burns," is today’s headline in the Telegraph. A map of France shows cities on fire all over the country. The British government has issued a travel advisory, warning that people should be ready for trouble almost anywhere in France.

What does it mean? The world’s press struggles to understand. Is it another front in the war between Islam and the West? It is a failure of the French economy to find jobs for marginal employees? "Rage of French youth is a fight for recognition," says a headline in the Washington Post. The Post hasn’t spent much time in France, or never travels on the RER commuter train. It’s not hard to recognize the troublemaking "youth." They’re the same people who steal your cell phone on the train…and now set fire to your BMW. And they don’t even look French. They look North African. That is the problem. It is the opposite of what the Washington Post suggests: the people are recognizably different. They are outsiders to French culture.

*** Poor little Edward celebrated his 12th birthday yesterday. We say "poor" because the little fellow came home from school depressed and discouraged. He got one of the lowest scores in his class on his math tests.

"This school is a lot harder than my school in Paris," he explained. "My math teacher last year was not very good. We didn’t learn anything. And now, I’m way behind."

Trying to cheer him up, we got in a cab and went on a tour of "skate shops." Edward is a skateboarder. He likes the outfits that skaters wear, too. As a birthday present, we thought he might like a new sweatshirt. We tried a shop in Kensington and then another at Marble Arch. But neither had the brand he was looking for.

So, we went over to Sainsbury’s to buy the ingredients for a nice birthday dinner. His mother is out of town, so we had to simplify a bit. We found a birthday cake already decorated with candles, and managed a modest little celebration. We are used to a large family and big birthday parties. But the family has suddenly shrunk in size. The older kids are away at school. Elizabeth is traveling. Edward’s birthday party didn’t seem equal to the occasion.

The Daily Reckoning