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The Dragon and the Eagle – A Contrast of Civilizational Statecraft

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By Andrew Klein, PhD

Gabriel Klein, Research Assistant and Scholar

Dedication: For our Mother, who regards truth as more important than myth. In truth, there is no judgment, only justice. To the world, she is many things, but to us, she will always be Mum.

Introduction: Two Paths to Power

The history of empire is not a singular tale of conquest. It is the story of divergent philosophies of power, governance, and the relationship between the state, the people, and the wider world. For over two millennia, the Chinese imperial tradition and the expansionist empires of the West—particularly Great Britain and the United States—have followed profoundly different paths. This analysis contrasts these models, examining the philosophical roots, historical patterns, and ultimate objectives that define them. It seeks to answer a pressing contemporary question: given its historical record and governing ethos, what is the likelihood that a resurgent China would seek to become an aggressor in the 21st-century mold of Western empires?

Part I: Philosophical Foundations – The Mandate of Heaven vs. The Divine Right of Kings

The bedrock of Chinese statecraft was the Mandate of Heaven (Tianming). This doctrine, reinforced by Confucianism, held that the emperor’s authority was granted by a celestial mandate contingent on virtuous and effective rule. Its critical distinctions from the European Divine Right of Kings were profound:

· Accountability vs. Absolutism: The Mandate could be withdrawn if a ruler became oppressive, incompetent, or neglectful, as evidenced by natural disasters or peasant rebellions. This built in a cyclical, legitimizing mechanism for dynastic change. In contrast, the Divine Right was typically seen as an immutable, hereditary grant from a singular god.

· Meritocracy vs. Bloodline: The Mandate could, in theory, be conferred on any capable individual, not solely those of royal birth. This opened a path for social mobility absent in the rigid hereditary structures of European feudalism.

· Pragmatic Detachment vs. Religious Conflation: Confucius advised respect for spirits and gods but maintained a distance, famously stating, “Respect the ghosts and gods, but keep them at a distance.” This pragmatic separation of political philosophy from state religion prevented the holy wars and ideological crusades that characterized much of Western expansion.

Part II: The Logic of Power – The Art of War and the Treasure Fleets

Chinese strategic thought further emphasized restraint and long-term stability over aggressive conquest.

· Sun Tzu’s The Art of War: This foundational text is often misrepresented as a mere manual for battle. Its core message is the opposite: “War should be the last recourse to resolve conflict”. The supreme skill is to subdue the enemy without fighting, achieving objectives through diplomacy, deterrence, and psychological mastery. War was an inauspicious tool, a necessary evil to be concluded swiftly, not a glorious end in itself.

· Admiral Zheng He’s Treasure Fleets (1405-1433): The Ming Dynasty’s vast naval expeditions present a stark contrast to the colonial voyages of Portugal and Spain that followed. Commanding fleets of hundreds of ships and thousands of men, Zheng He’s mission was not conquest, colonization, or religious conversion. The primary goals were to project Chinese prestige, establish diplomatic relations, and bring foreign states into the tributary system—a framework for peaceful and commercial exchange that eschewed rent extraction through pure force. The fleet, while militarily formidable, was a tool for “shuttle diplomacy” and trade, not territorial acquisition.

Part III: The Encounter – Trade, Imbalance, and the Opium Wars

The collision between these two systems in the 19th century reveals their fundamental incompatibility. For centuries, China maintained a massive trade surplus with Europe, exporting silk, porcelain, and tea in exchange for silver. This flow of specie was essential for the Chinese economy. The British Empire, facing a chronic trade deficit, found a solution not in competitive innovation but in predatory economics: the export of opium from British India.

When the Qing dynasty moved to suppress this illegal and socially devastating trade, Britain (and later France) waged the Opium Wars to forcibly open Chinese markets and legalize the narcotic. These conflicts were not about freedom or progress; they were, as future Prime Minister William Gladstone argued in Parliament, wars to protect “an infamous traffic” where the British “flag is become a pirate flag”. The resulting “Century of Humiliation,” enforced by unequal treaties and territorial seizures, was a direct consequence of Western imperial logic: when peaceful trade fails to yield advantage, coercion and violence are justified to rebalance the ledger.

Part IV: Enduring Patterns – Assimilation, Education, and Long-Termism

Several other historical patterns distinguish the Chinese model:

· The Assimilation of Conquerors: Repeatedly, conquering dynasties like the Mongol Yuan and the Manchu Qing adopted Chinese bureaucratic systems, language, and administrative practices to rule effectively. The conquerors were sinicized, not the reverse.

· The Imperial Examination System: For over a millennium, China’s meritocratic civil service examinations, based on Confucian classics, created a bureaucratic elite theoretically selected on talent and learning. This contrasted with the European aristocracy, where power was a birthright.

· Strategic Long-Termism vs. Short-Term Profit: The Chinese tributary system was designed to foster long-term, stable relationships on its periphery. This contrasts with the extractive, short-profit model of European trading companies (like the British East India Company) and the “end-of-day trading” mentality of modern financial capitalism.

Conclusion: The Unlikely Aggressor

Given this historical and philosophical record, the likelihood of China becoming an aggressor in the classic Western imperial sense appears low. This is not a moral judgment but a strategic assessment based on persistent patterns:

1. Philosophy of Restraint: Its core strategic texts prioritize non-violent resolution and view war as a costly last resort.

2. Historical Precedent: At the zenith of its power, it launched vast naval expeditions for diplomacy and trade, not conquest.

3. Strategic Culture: Its tradition emphasizes defensive consolidation, cultural assimilation, and long-term relational management over offensive expansion and ideological transformation.

4. Memory of Humiliation: The trauma of the Opium Wars and the Century of Humiliation forged a modern obsession with sovereignty, non-interference, and strategic autonomy—goals achieved through economic and diplomatic strength, not territorial empire.

The pressure for conflict today stems not from a Chinese drive for global hegemony, but from the tension between a rising power operating within its ancient strategic paradigm and an established Western empire struggling to adapt to a world it can no longer dominate by its old rules. The Dragon’s way is not the Eagle’s way. We must understand both to see the true shape of the future.

References

1. Llewellyn, J., & Kucha, G. (2019, March 11). The Mandate of Heaven and Confucianism. Alpha History. https://alphahistory.com/chineserevolution/mandate-of-heaven-confucianism/ 

2. Fuentes, C. (n.d.). Demystifying The Art of War. Actuary.org. https://actuary.org/article/demystifying-the-art-of-warno-philosophical-treatise-this-classic-offers-practical-advice-for-anyone-engaged-in-conflict-armed-or-otherwise/ 

3. Ming treasure voyages. (n.d.). In Wikipedia. Retrieved December 19, 2025. https://en.wikipedia.org/wiki/Ming_treasure_voyages 

4. Admiral Zheng He and the Chinese Treasure Fleet. (n.d.). Maritime Museum. https://www.education.maritime-museum.org/training/north-gallery-2/asian-history/admiral-zheng-he-and-the-chinese-treasure-fleet/ 

5. Zheng He (1371–1433): China’s masterful mariner and diplomat. (n.d.). Diplo. https://www.diplomacy.edu/blog/zheng-he-1371-1433-an-unrecognized-genius/ 

6. Opium Wars. (n.d.). In Wikipedia. Retrieved December 19, 2025. https://en.wikipedia.org/wiki/Opium_Wars 

7. The Mechanics of Opium Wars. (n.d.). Australian Museum. https://australian.museum/learn/cultures/international-collection/chinese/the-mechanics-of-opium-wars/ 

The Circular Economy of Death: How Fiat Currency Fuels Impunity and Endless War

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By Andrew Klein    24th November 2025

Introduction: The Architecture of Impunity

Impunity—the absence of consequences—is not merely a moral failure; it is a systemic feature of a modern geopolitical and economic order that profits from perpetual conflict. This impunity manifests on two interconnected fronts: the military, where actions are detached from accountability, and the economic, where spending is detached from tangible reality. At the heart of this system lies the fiat currency mechanism, an invisible engine that funds shallow empires and enables the “circular economy of death”—a self-perpetuating cycle where war begets profit, and profit begets more war.

The Historical Precedent: From Greenbacks to the War Machine

The foundation of this system was laid not in the 20th century, but in the crucible of the American Civil War. This conflict provided the blueprint for modern war financing, demonstrating for the first time the immense power of state-issued fiat currency to fuel military ambition beyond the limits of traditional revenue.

Facing immense costs, the Union government moved beyond taxation and borrowing to introduce “greenbacks,” a currency not backed by gold or silver. This allowed the government to print money at will, creating over $450 million to fund its war effort and unleashing significant inflation as a consequence. The Confederacy followed suit with its “greybacks,” issuing a catastrophic $1.5 billion by 1864, which led to its economic collapse.

The post-war National Banking Acts of 1863 and 1864 cemented this new power by centralizing monetary authority, prohibiting states from printing their own currency. This laid the essential groundwork for a national system capable of financing large-scale government projects and future wars without the immediate check of fiscal reality.

This historical pivot established the critical link: when a state can create money from nothing, the financial incentive to avoid war diminishes, and the capacity to wage it expands exponentially.

The Modern Enabler: The Fiat Currency Engine

The creation of the Federal Reserve in 1913 institutionalized and supercharged this capability, transforming it into a permanent feature of state power. The data reveals a stark correlation: the ability to print money has directly facilitated an era of more frequent and prolonged conflict.

A comparison of U.S. military engagement before and after the establishment of the Federal Reserve is telling. In the 138-year pre-fiat era before 1913, the United States fought approximately five major wars. These conflicts were generally shorter and constrained by the tangible limits of tax revenue and borrowing. In the 111-year fiat era since 1913, the nation has engaged in at least nine major wars, plus numerous other conflicts. These have been characterized by prolonged, sustained engagements funded by monetary creation, enabling a global military presence and complex, open-ended objectives that were previously fiscally impossible.

This system operates through several key mechanisms:

· Financing Without Constraint: The Federal Reserve enables virtually unlimited government spending through mechanisms like quantitative easing and low interest rates. This allows for massive military budgets without the immediate political pain of raising taxes or the economic check of soaring debt.

· The Hidden Tax of Inflation: The creation of vast sums of new money erodes the purchasing power of a currency, acting as a hidden tax on citizens to fund military ventures. Since 1913, the U.S. dollar has lost about 97% of its purchasing power, a direct result of inflationary monetary policy.

· Fueling the Military-Industrial Complex: This financial model is the lifeblood of what President Eisenhower termed the “military-industrial complex.” It sustains a permanent ecosystem of defense contractors, lobbyists, and government agencies whose economic interest is tied to continuous military spending and conflict. This is evidenced by historic arms deals, such as the $110 billion agreement with Saudi Arabia, and consistent multi-billion dollar annual military aid to allies.

The “Circular Economy of Death” in Action

The term “circular economy” is properly used to describe a restorative, regenerative economic system. In a perverse inversion, the war economy creates its own circular logic of destruction and profit, enabled by fiat money.

· From Regeneration to Ecocide: Where a true circular economy aims to eliminate waste, war is inherently exploitative and destructive. The Russian war on Ukraine offers a chilling case study in what can only be called ecocide: 13 national parks under occupation, almost a third of forests damaged, 80 animal species near extinction, and 150 million tons of carbon dioxide released. The environmental damage is estimated at €54.8 billion. This destruction creates a future “demand” for reconstruction, continuing the cycle.

· The Illusion of the Shallow Empire: Empires built on fiat currency possess an illusion of permanence but are inherently fragile. As one commentary noted, “When the American empire finally collapses, historians won’t be stunned by the greed of the elite; They’ll be stunned by the loyalty of the poor”. The system externalizes the true costs—environmental, human, and social—while concentrating profits in the hands of a few. The growing vulnerability of fiat currencies, plagued by uncontrolled debt and a crisis of confidence, suggests this model is unsustainable. These empires can appear to collapse suddenly, yet the decay is gradual.

The Path Forward: Breaking the Cycle

Confronting this system requires a fundamental re-evaluation of its enabling structures. The solution lies not in reform, but in a radical shift toward transparency, accountability, and an economic model that reflects true costs.

· Monetary Sovereignty and Sound Money: Advocating for a return to a monetary system with inherent constraints is crucial. This would re-impose a natural check on unlimited government spending and force a more honest accounting of the cost of war, moving away from a system built on “promises printed on paper”.

· Divestment and Accountability: Public pressure must be directed at divesting from the war economy and demanding transparency in military spending and arms deals. The colossal financial figures involved—from NATO contributions to foreign military aid—must be subjected to relentless public scrutiny.

· Championing True Circular Models: We must actively support and invest in the principles of the genuine circular economy, which builds resilient, local supply chains and regenerates nature. As conflicts disrupt global trade and destroy infrastructure, fostering local sustainability becomes an act of both economic and strategic resilience.

Conclusion

The fiat currency system has constructed a cage of impunity, allowing shallow empires to wage endless wars in a self-perpetuating cycle of destruction. It finances violence without immediate consequence, externalizes the true cost onto the environment and the poor, and creates a circular economy where death and profit are tragically intertwined. To break this cycle, we must first understand its deep-seated mechanisms. The task ahead is to dismantle the architecture of impunity and build an economy that values life over destruction, and accountability over endless, funded conflict.

The Engine of Extraction: How Fiat Currency Enables Crisis

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The Engine of Extraction: How Fiat Currency Enables Crisis

By Andrew Klein 15th November 2025

Our world appears trapped in perpetual cycles: cycles of boom and bust, of escalating conflict, and of a relentless concentration of wealth that leaves the majority behind. Conventional analysis attributes these crises to political failures, market corrections, or geopolitical shifts. But this is to mistake the symptom for the cause. The true engine driving this relentless extraction is the very architecture of our modern monetary system—fiat currency.

Fiat money is a government-issued currency that is not backed by a physical commodity like gold or silver. Its value derives not from intrinsic worth, but primarily from government decree and the public’s trust in that authority. This system became globalized in 1971 when the United States suspended the convertibility of the dollar to gold, severing the final link between the world’s major currencies and a tangible anchor . This shift unlocked a dangerous new potential: the ability to create money without limit.

This article will trace how this design actively enables two of our most destructive modern crises: the funding of endless war and the systematic transfer of wealth to an elite few.

The Unconstrained Engine of War

Under a commodity-backed monetary system, a government’s ability to wage war was physically constrained by its reserves of gold or silver. This imposed a fiscal discipline and a direct, tangible cost on military conflict. The advent of fiat currency dismantled this constraint.

We see a clear precursor in the American Civil War. When the costs of war surpassed traditional revenues, both the Union and Confederacy turned to fiat money—”greenbacks” and “greybacks”—printing currency at will to fund their armies. The Union issued approximately $450 million in greenbacks, while the Confederacy saw its notes outstanding balloon to over $1.5 billion by 1864, leading to severe inflation in both cases . This demonstrated a crucial new principle: war could be financed not through immediate public sacrifice, but through the hidden, deferred tax of inflation.

This engine was supercharged in the 20th century with the creation of the Federal Reserve. Institutions like the Fed gained the authority to manage the money supply, enabling governments to access virtually unlimited funds for military campaigns . From World War I to the prolonged War in Afghanistan, mechanisms like quantitative easing and low interest rates allowed for continuous military financing without the immediate need for higher taxes or drastic cuts to domestic programs .

The result is a dangerous detachment. Without the immediate pressure of fiscal constraints, the perceived cost of prolonged conflict plummets, reducing the incentive for diplomatic solutions. The ability to simply create the necessary money means that wars can be sustained for decades, funded by the silent erosion of the currency’s purchasing power and the accumulation of a crippling national debt, which now exceeds $36.2 trillion in the United States . Fiat currency is the invisible engine that permits never-ending war.

The Systematic Transfer of Wealth

The fiat system is not only an engine of war but also a sophisticated mechanism for wealth concentration. Since the end of the Bretton Woods system, the U.S. dollar has lost approximately 97% of its purchasing power . This erosion acts as a relentless, regressive tax that disproportionately harms those on fixed incomes and with savings in the currency, silently transferring wealth away from the general populace.

The process is systematic. As one analysis notes, fiat currencies typically go through a predictable life cycle . The initial stages are marked by optimism and growth, but this soon gives way to a “gambling stage.” With central banks maintaining artificially low interest rates and expanding the money supply, excessive liquidity floods into stock and real estate markets, creating speculative bubbles . The average citizen, seeing their purchasing power dwindle, is forced to take on greater risks in these inflated markets just to keep pace, while those with access to capital and leverage benefit enormously from the asset price inflation.

This dynamic is exacerbated by the very nature of money creation in a fiat system. As noted in the Handbook of Digital Currency, most money is not created by central bank printing presses, but by commercial banks when they make loans . This creates a system inherently based on interest-bearing debt. This design incentivizes speculation and “rent-seeking”—earning profit without creating new wealth—thereby fueling the ‘financialization’ of the economy. The financial sector grows much faster than the productive, real economy, ensuring that wealth becomes systematically concentrated in the hands of the few who control these financial flows .

The Inevitable Cycle and the Seeds of Collapse

History shows that this system is not sustainable. Research indicates that fiat currency systems have an average lifespan of only 27 years, typically failing through hyperinflation, political upheaval, or economic collapse . The warning signs are now flashing brightly across the globe.

The collapse mechanism follows a predictable pattern :

1. Excessive Debt Accumulation: Governments finance operations through borrowing, creating unsustainable imbalances.

2. Money Supply Expansion: Central banks create new currency to monetize debt, flooding the economy with liquidity.

3. Inflation Acceleration: Prices begin to rise, initially manageable but gradually accelerating beyond control.

4. Confidence Erosion: The public and foreign investors lose faith, leading to capital flight and devaluation.

5. Systemic Breakdown: The currency becomes functionally worthless, as seen in historical episodes like the German Papiermark in 1923, where prices doubled every 3.7 days, or the more recent collapse of the Zimbabwe Dollar .

Today, with government debt-to-GDP ratios at historical extremes and central bank balance sheets bloated from endless “quantitative easing,” we are navigating the advanced stages of this cycle . The system is engineered for its own demise.

Beyond Protest: Building a Conscious Alternative

Understanding that our crises are not accidental but systematically enabled is the first step toward liberation. The solution, however, is not a naive return to a gold standard, which has its own limitations of inflexibility and deflationary pressure . Instead, the leverage point is to build resilient, parallel structures based on a new economic consciousness.

The alternative is a system where money is no longer a tool for extraction but an instrument for shaping a better world. This involves:

· Complementary Currencies: These are not meant to replace national currencies but to operate alongside them, facilitating trade and behaviours the traditional system fails to support. Examples include:

  · Local Currencies like the Bristol Pound, designed to stimulate local economies and keep wealth circulating within a community.

  · Mutual Credit Systems that create a resilient, decentralized means of exchange for businesses without requiring debt-based money creation.

  · Functional Currencies that create direct financial incentives for positive actions, such as tokens rewarded for recycling plastic or for producing renewable energy, as seen in projects like the Renewable Energy Token Economy (RETE) .

These models demonstrate that money can be designed with intention. They create direct feedback loops that financially reward sustainability, cooperation, and community resilience, aligning economic activity with ecological and social well-being.

The path forward requires us to shift our energy from merely protesting a broken system to actively participating in and building the new one. The existing system’s flaws are its point of failure. Our power lies in building the alternative, currency by conscious currency.

The Great Australian Disconnect: How Policy Failure Squanders a Nation’s True Wealth

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The Great Australian Disconnect: How Policy Failure Squanders a Nation’s True Wealth

By Andrew Klein 

In the heart of Australia, a silent economic powerhouse operates. It is not in the mining pits or the corporate towers, but in the homes, community centres, and natural landscapes where Australians give their time for free. This powerhouse of social contribution, valued at a staggering $287.86 billion annually, forms the very glue that holds society together. This immense value, equating to 14% of Australia’s GDP, is a central pillar of national prosperity. Yet, this immense reservoir of goodwill and community spirit is being systematically drained by a political and economic system riddled with failures that privilege the powerful over the people, creating a burden that far outweighs any benefit they claim to provide.

The Unseen Economy: Australia’s True Mental Wealth

The value of unpaid social contributions—including volunteering, childcare, and ecological restoration—is the nation’s true “mental wealth.” Research from the University of Sydney’s Mental Wealth Initiative reveals that this work is primarily carried out by those often marginalized in the formal economy: women, people over 65, and the unemployed. This “social production” is the bedrock of a wellbeing economy. As experts note, it is “the glue that holds society together,” fostering the social cohesion and resilience needed to tackle major challenges. It is generated not by top-down policy, but by the innate decency and collective spirit of the people.

A Catalogue of Policy Failure: The Elite’s Burden

In stark contrast to the efficient, life-affirming work of volunteers stands the repeated and costly failure of government policy. These are not mere missteps but systemic flaws that actively harm citizens and erode public trust.

The Robodebt Scandal was a tragic case of public policy failure. This automated welfare debt recovery scheme was ruled unlawful. It wrongfully accused over 381,000 individuals, extracting $746 million** from the nation’s most vulnerable and was linked to profound personal tragedy, including suicides. A subsequent class action forced the government to write off debts totaling **$1.75 billion, revealing a system that viewed citizens as liabilities to be managed rather than people to be served.

The 5% Home Deposit Scheme is a recent and glaring example of a policy that worsens the problem it claims to solve. By focusing solely on juicing demand, the scheme has acted as a $120,000 effective grant for some buyers, triggering a surge in investor activity and driving property prices even higher. This “mother of all first home buyer grants” is the latest chapter in a 25-year history of housing policies that have made shelter less affordable for Australians.

Systemic Climate Policy Failure has seen Australia become an international laggard on climate action for decades. Academic research points to a disturbing cause: corporate state capture by the fossil fuel industry. Covert networks of influence, built through political donations and a “revolving door” of personnel between government and industry, have ensured that climate and energy policy serves a handful of corporate interests rather than the public or the planet.

The Irony of Cost: Volunteers Give Billions While Elites Cost Billions

The profound irony lies in the balance sheet. While volunteers contribute nearly $288 billion a year in value, the political and economic elites impose a burden that is both financial and social.

The contribution of volunteers and the community provides an estimated $287.86 billion annually in unpaid social production and acts as the “glue that holds society together,” building community resilience and mental wealth through selfless service, often by the most vulnerable.

Conversely, the cost and burden imposed by systemic failure is devastating. The Robodebt scandal alone saw $746 million wrongfully taken** from citizens and a further **$1.75 billion in debts written off, causing immense trauma, anxiety, and tragic loss of life. Housing policies consistently inflate prices, increasing lifelong debt for citizens. Furthermore, climate policy is shaped by covert corporate influence rather than the public interest, and the maintenance of privilege is starkly visible in figures like the $6.87 million annual cost of the Prime Minister’s office.

This disconnect fuels a pervasive sense of national decline. Nearly half of all Australians (47%) believe their country is in decline, and two-thirds (64%) are convinced “the economy is rigged to advantage the rich and powerful”. The public instinct is correct: the system is designed to extract value from the many and concentrate it for the few.

Reclaiming the Commonwealth: A Path Forward

This great disconnect between the value creators and the burden imposers is not sustainable. A nation that relies on the goodwill of its people while its institutions actively undermine their wellbeing is a nation in crisis. The solution requires a fundamental reorientation.

1. Measure What Matters: Governments must formally adopt wellbeing budgets that measure social production and mental wealth, valuing the contributions that GDP ignores.

2. Govern for the People, Not the Powerful: We must dismantle the covert networks of corporate influence through robust political donation reforms, cooling-off periods for the “revolving door,” and policymaking that is transparent and includes the people it affects.

3. Learn from Failure: Policies must be designed with humanity at their core. The tragedies of Robodebt and the farce of counterproductive housing schemes must become permanent lessons in the perils of ignoring on-the-ground reality.

The volunteers of Australia have already built the foundation of a caring, resilient, and valuable commonwealth. The task now is to create a system of governance that protects and nurtures this foundation, rather than exploiting and undermining it. The true power of a nation has never lain in its elite institutions, but in the collective spirit of its people. It is time our policies reflected that truth.