Machiavelli, in answer to the question of whether a prince should prefer gold or arms, replied that arms were the logical choice since gold could not always buy a strong military but a strong military could usually acquire wealth. This answer had not changed three and a half centuries later when Kipling wrote, “Gold for the mistress—silver for the maid— / Copper for the craftsman cunning at his trade. / ‘Good!’ said the Baron, sitting in his hall, / ‘But Iron—Cold Iron—is master of them all.'” Nor, as demonstrated by Iraq’s seizure of Kuwait, has another century changed this reality.

On a per capita basis, Kuwait has been for a generation one of the world’s richest countries. Kuwait’s oil reserves are more than half the size of Saudi Arabia’s and twice that of Iraq’s. Its refinery capacity is also second only to Saudi Arabia. It has a fleet of tankers that supply not only foreign customers but its own network of outlets for petroleum products in Europe. Kuwait has the Middle East’s largest nitrogenous organic fertilizer industry. It has overseas ventures in both oil and fertilizer (including ownership of oil reserves in the United States). It has a stock exchange and a general reserve of government-owned financial assets that have in some years yielded income rivaling that produced by its oil fields. It also had a long-term economic plan to assure its citizens prosperity for another century.

What Kuwait lacked was the ability to defend itself against a powerful and aggressive neighbor. Its unguarded wealth was an open invitation to plunder. This is not the first time gold has failed to provide a shield against iron in the modern Middle East. Lebanon was once the prosperous center of finance in the region, but the bankers were no match for the local warlords who turned luxury hotels into high-rise bunker systems.

It is fashionable to claim that the advent of a global economy has finally elevated gold above iron in world politics, but the global economy is already five hundred years old, and its principal effect has been to widen the scope and increase the scale of conflict. It is the very fact of interdependency that makes it vital for governments to project their power in an attempt to control events in distant lands or mold the international system itself in ways beneficial to its interests.

The concept of a “new” world order based on cosmopolitan commerce divorced from nation-state politics is an ahistorical illusion. Its imminent establishment has been falsely heralded for nearly three hundred years. Thus appeals to its enlightened values are unlikely to persuade Saddam Hussein to give up the wealth his army has won in Kuwait. Indeed, a U.S. policy of political and military appeasement that depended only on economic sanctions was sure to fail. Business “realism” would subvert any long-term boycott of Iraqi-controlled oil that was not backed by a credible show of force. President Bush had to throw American “iron” into the balance.

Americans need a refresher course in world history. During this century communism generated a great deal of bloodshed through war and revolution, and Soviet imperialism also served to amplify many other conflicts whose origins had nothing to do with Marxism. But the attention given the Cold War often made it seem a unique phenomenon, leading to the belief that if it would only abate, the world would return to its “normal” condition, which was erroneously thought to be peace. Yet there have been other wars in this century that were rooted in ideologies other than communism as well as wars based on religion and plain old Realpolitik. Among them must be counted the two world wars. During the 1980’s, in addition to supporting the Contra war against the Sandinista regime in Nicaragua and liberating Grenada, America used its military against noncommunist foes in Libya, the Persian Gulf, Lebanon, and Panama.

The respite in the Cold War has not changed the fundamental nature of the international system. It has only changed the balance of power within the system. The current crisis in the Persian Gulf has revealed that the decline of Moscow has not meant the rise of Washington. Indeed, just the opposite has occurred. Instead of seeing changes in Eastern Europe and the collapse of the Soviet economy as an opportunity for America to regain the superior position lost in the 1970’s, American leaders have taken events as an excuse to do even less.

The decline of both superpowers provides an opportunity for regional powers to expand. Iraq is the first, but will not be the last, to take advantage of this change in the global balance. At the same time, American military capabilities will be drastically reduced by politicians whose primary interest is cutting the budget.

The day after Iraq invaded. President Bush proclaimed a new force reduction target; a 25 percent cut in active forces by 1995 instead of by the 1997 date set earlier. This is still not enough for congressional Democrats who want the military cut by a full third. The argument is that with the Soviet threat reduced in Europe, the United States now has a vast surplus in military capability that should be reduced. What is forgotten is that throughout the Cold War, America and its NATO allies operated at a huge deficit in conventional forces versus the Soviet Union-Warsaw Pact, a deficit that required the West to rely on the early use of nuclear weapons should war erupt.

The Iraqi challenge has revealed that current U.S. force levels still show a deficit. Even if every division and tactical air unit could be transported from Europe to Saudi Arabia by magic (the only way it could be done given the lack of sea and airlift capacity), it is an open question whether these forces could defeat the battle-hardened million-man army of Hussein that would outnumber them by more than three to one. Of course, the question will soon be moot as American forces are brought home from Europe to be deactivated.

It is bad enough that budget decisions are being made with a blind eye to current events. But to make plans based on the notion that nothing adverse will happen the rest of the decade is irresponsible in the extreme. Political change in Europe may make it prudent to withdraw some or most of the American units now stationed there. However, these units should be retained as a strategic reserve in the United States, combat ready and supported by expanded transport and logistical capabilities. There is a high probability that they will be needed elsewhere.

The notion that America only needs a small “contingency army” composed of light units (paratroopers, rangers, infantry) without the heavy armored units deployed in Europe is dangerous nonsense. Equally false is the notion that aircraft carriers, cruise missiles, and stealth fighters are only needed to fight the Soviets. Tanks, heavy artillery, jets, submarines, and missile systems of all types fill the arsenals of governments around the world. Forty-one Third World states possess a total of over 250 submarines. A dozen regimes have 1,000 or more heavy tanks (Iraq has 5,500, triple what the U.S. has in Europe). Forty have domestic armament industries. Many states in Latin America, Asia, and the Middle East are developing ballistic missiles of intermediate range. And Iraq has successfully tested a three-stage rocket it claims can reach orbit (meaning it could be used as an ICBM). Nuclear, chemical, and even biological weapon technologies have also proliferated. The countries acquiring these new systems (Argentina, India, Iran, Iraq, North Korea, and Syria) would require a substantial military effort to subdue.

But in the current domestic political environment, the United States will not take the steps necessary to create or maintain a military capability of sufficient global reach to protect its interests. It thus risks becoming a larger version of Kuwait, a nation of great wealth but with major assets left exposed. The plundering process started long ago (OPEC’s 1973 grab in the wake of America’s retreat from Vietnam being the most obvious) but will now accelerate. Those who believe that they can trade iron for gold end up with neither.