Is Russia's War in Ukraine the Start of World War III?

Until recently, this seemed far-fetched. The war is asymmetric: if the United States can wear down the Russian military machine by channeling roughly 10% of its defense budget into a proxy war and does not have to mobilize a single combat soldier, that doesn’t sound like a World War. 

Recently, a French intellectual by the name of Emmanuel Todd came up with an interesting claim: the Ukrainian war is a World War because it is existential for both Russia and the United States; hence, neither side can back down. I believe it is self-evident that the war is existential for Russia. Given that, I will focus on whether the war is also existential for America and, if so, whether it signals a World War. 

Let us look at the evidence:

• While NATO allies seem solidly behind the United States, the developing world is not. Their response is much more ambiguous. Todd argues that if you take developing countries into account, roughly 70% of the world population is not on the American side. The war may serve to crystalize public opinion in the developing world against the States.

• Of greatest importance is perhaps China, more on the Russian side of the Ukrainian conflict than the American. Russia and China share an interest in diminishing U.S. hegemony. Should the two join forces, they would represent a formidable alliance. Once again, the Ukrainian war has the potential to catalyze this process.

• Russian success in Ukraine may embolden China to attempt to take Taiwan and encourage other potential aggressors in the world, putting further pressure on American hegemony and sending a message that it is waning.

• India has continued to purchase large amounts of Russian oil despite the American-imposed embargo, demonstrating that the soon-to-be-most populous country in the world is, at best, an ambivalent U.S. ally.

Dimensions of War

Today, there are so many more dimensions of war than purely military. Experts call it hybrid warfare, which includes:

• security hacks, cyberattacks, etc.;

• misinformation (used, for example, to rig elections);

• kompromat (obtaining compromising information to blackmail a politician or other influential figure);

• trade wars (embargo on products crossing borders); and

• financial warfare (freezing reserves, blocking access to platforms such as the Swift international banking system. Or even something seemingly innocuous, such as paying for oil in yuan or gold. This diminishes the U.S. dollar as the world’s reserve currency. This position has allowed the States the “exorbitant privilege” of printing trillions of dollars, where the world accepts paper in exchange for providing America with goods. Saudi Arabia recently agreed to sell oil to the Chinese in yuan, weakening the dollar’s status.

In short, the Ukrainian war has unleashed a number of forces that serve to diminish U.S. global hegemony. A Russian victory, or even just Russia keeping one or more of the four oblasts it recently occupied in Ukraine, may serve to highlight the limits of American power and send a message that aggression can be rewarded. 

Fortress America

So Todd is right in the sense that the war in Ukraine is existential to the United States because it may reduce U.S. global hegemony. However, if U.S. territory itself is not threatened, can this be an existential threat? As geopolitical analyst Peter Zeihan argues, the United States could retreat behind its own borders and recreate “fortress America,” which would be a disaster for much of the world, but not the States.

In conclusion, the Ukraine War is an existential threat to U.S. global hegemony, but not to U.S. territorial integrity. 

The other element of Todd’s thesis is that neither side can back down. While the war has the potential to escalate into a full-fledged nuclear Armageddon, so far, all sides have shown remarkable adeptness at keeping a lid on the conflict, confining it to Ukraine. In my opinion, it is likelier that this war will continue for some time as a localized conflict. I do not rule out the addition of one or more similar disputes of a local nature.

The reality is that the world is becoming a much messier place. Combine the many facets of hybrid war (which do, in fact, touch U.S. territory) and localized conflicts such as Ukraine, and the likelier scenario is a continuation of this messy muddle; neither peace nor World War. 

As one commentator aptly put it: if we are arguing about whether we are in World War III, how can there be a World War? If there really were a World War, you’d probably know it!

Les Nemethy is CEO of Euro-Phoenix Financial Advisers Ltd. (www.europhoenix.com), a Central European corporate finance firm. He is a former World Banker, author of Business Exit Planning (www.businessexitplanningbook.com), and a previous president of the American Chamber of Commerce in Hungary.

This article was first published in the Budapest Business Journal print issue of January 27, 2023.