“History doesn’t repeat itself, but it often rhymes.” – attributed to Mark Twain
“History never repeats itself, but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.” – Mark Twain & Charles Dudley Warner in “The Gilded Age: A Tale of To-Day” (1874 edition)
Mark Twain never uttered one of the most famous phrases attributed to him, that history rhymes rather than repeats.1 Yet, what he actually wrote, albeit less pithy, is probably truer: “Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.” I was reminded of Twain’s aphorism listening to a recent episode of Tom Holland and Dominic Sandbrook’s “The Rest is History.” As they recounted the path to World War in 1938, I was struck by the uncanny parallels between Britain’s challenge then from a resurgent, aggrieved Germany and the present test the US faces from the rise of Communist China. There are obvious differences between the two situations, but it is difficult to ignore the picture formed in the “Kaleidoscope” of 1930s’ “antique legends,” especially if “broken fragments” from Japan’s coincident rise are considered.
In that context, I wonder if we will someday look back at last year’s summit between former President Biden and President Xi in San Francisco as the modern parallel of Neville Chamberlain’s Munich meeting with Adolf Hitler in late 1938 (a meeting that Messrs. Holland and Sandbrook detail is much misunderstood in modern conventional wisdom).
By that, I do not mean that I expect an invasion of Taiwan within weeks to liberate the oppressed “Sudeten” Han Chinese nor do I anticipate an Asia-wide quest for Chinese “lebensraum” accompanied by a “final solution” ethnic cleansing (albeit the experience of the Uighurs suggests that can’t be excluded). Rather, as I first suggested in my 2024 Leitmotif 8, I worry that the consensus greatly underestimates both the likelihood and nearness of another World War. Indeed, one of the most important questions for our time – not just for markets – is how the Trump administration can simultaneously avoid war while rearming to prepare for one that historical parallels suggest might be inevitable. The answer has clear implications both for economic policy and for the probability of cataclysmic war.