A while back Daniel Drezner pointed out that the financial crisis would test theories of international great power relations that have been sidelined in favor of the debate over the war on terror and the neoconservatives vs. all-comers debate. Some scholars went so far as to point out Bush's relatively successful handling of East Asian affairs as evidence the administration did not fail on the "big" issue of great power politics.

But here we are in 2009, with a financial crisis throwing political and economic order into tumult across the globe. Theoretically, if globalization sputters to a halt and war breaks out between countries previously bound by international trade, we should deem liberal theorists correct. But perhaps of more interest to realists, or anyone concerned about shifting balances of power, would be the relative effects of economic decline. Certainly, global trade may face enormous setbacks. The G20's word on preserving free trade has been continually discredited by the actions of its member nations. It will not help that these international ties are weakened. But even if 5% of the world economy evaporates in a global market correction and the economy crashes, does that mean all countries are equally stricken by the loss? Of course not. Almost certainly, some countries have and will suffer more than others. The question is which ones, and what implications will their losses have on the global political order?

It is false to assume economic calamity automatically begets open state-vs.-state warfare. The 19th century panics produced no wars in their wake. WWI came at a time of unprecedented great power economic integration. (Internal conflict, on the other hand, is much more likely.)

Germany benefited disproportionately from the economic growth of the late 19th century thanks to the territorial acquisition of its predecessor states, while Russian economic growth in the early 20th century accelerated thanks to reform and investment (to some extent rearmament played a role in this, though arguably Russian rearmament was the reward, not the cause, of this growth spurt). The outcome, by the argument of some realists, was WWI - a nervous France and Britain seeking to hedge against Germany, and a Germany fearful of a modern, and thus preponderant, Russia on its border with its primary ally facing an existential threat. Economic changes altered the balance of power, and war was the result.

While history cannot tell us who will be facing down who in the aftermath of these recessions, it is likely the uneven setbacks and uneven recoveries that will drive great power political impacts, with the prospect of major combat delayed until revisionist great powers feel comfortable with challenging the ruling order. It takes time, after all, for economic disruptions to change the military status quo. The instruments of modern interstate warfare are costly and complex, and the tools necessary to challenge US air and naval superiority are especially so. Nuclear programs that could deter them take even more time, and are subject to international pressure. But the process by which a great power or minor power decides the US and its allies are unwilling or unable to prevent its gambit, by realist theory, would be inevitable.

Of course, this might not be the future at all. The US, contrary to worries that China is "buying low" on foreign assets and resources, might regain some sign of its traditional economic flexibility and come out the strongest. After all, China is wracked with all sorts of challenges to its seemingly permanent rise. Even if it does seem to come out ahead of the United States in relative terms, this recovery might require its government to forgo military spending so it can placate the population with developing schools, hospitals, and other infrastructure left behind by decades of short-term growth obsession.

With that in mind, I do not consider China's shenanigans in the South China Sea to be of profound consequence. They are not a harbinger of war, if anything they are a repeat of China's previous early-term showdowns as many commentators have pointed out. But they also serve to remind us of China's lingering (or growing, depending on your take) ambitions. China's interpretation of international law is ludicrous - exclusive economic zones are exclusive for economic purposes, they are not sovereign Chinese waters; China cannot exclude whatever vessels it will. The story is that the USNS Impeccable was mapping the seafloor, while China contends the hydrographic vessel was gathering military intelligence. Both could be correct. After all, scoping out the area around Hainan provides valuable intelligence for American submariners and subhunters, and as much of China's naval strategy relies on its southern approach, securing Hainan is vital to the PLA Navy.

Does the possibility of war between the US and China, or any combination of great powers, remain? Colin Gray believes so, and writes a convincing case for what is now an unfashionable argument: insurgency and terror are part of our present predicament but must not dictate strategy or force structure. But in America's Defense Meltdown, William S. Lind's chapter on the USN warns:

Overwhelming any comparison of fleets is the fact that war with either Russia or China would represent a catastrophic failure of American strategy. Such wars would be disastrous for all parties, regardless of their outcomes. In a world where the most important strategic reality is a non-Marxist “withering away of the state,” the United States needs both Russia and China to be strong, successful states. They need the United States to be the same. Defeat of any of the three global powers by another would likely yield a new, vast, stateless region, which is to say a great victory for the forces of the Fourth Generation. No American armed service should be designed for wars our most vital interest dictates we not fight.

Both economic and military catastrophe has the habit of producing insurgency. Earlier I parenthetically noted the danger to internal, not international peace, from this economic crisis. It is now cliche to cite Mexico and Pakistan as nearly-failed states, and it will likely soon be the same to lament Eastern Europe's financial insolvency. Then there are the already anarchic regions of Somalia and the DRC. Meanwhile America is still mired in Afghanistan and will have 50,000 "non-combat" (a meaningless distinction by most analysts' estimates) soldiers in Iraq. Despite the pressing need for successful counterinsurgency in Afghanistan, the financial crisis will test Europe's will in Afghanistan as NATO governments struggle to resolve the paradox of their commitment: the arbitrary limitations on the size and scope of European deployment will hinder the overall war effort, while the perceived failure of this effort further undermines Western support for the conflict's counterinsurgency campaign.

I do not hold the views of those fearing great power confrontation and state-vs.-state warfare and the "COINdinistas" and those focused on terrorism and "fourth generation" warfare to be necessarily incompatible. For example, while military conservatives argue that counterinsurgency campaigns will drain the country's military resources and willpower, counterinsurgents like David Kilcullen would respond that direct combat should be avoided until absolutely necessary. But there remain some glaring contradictions. Will non-state actors develop the capability to attack the modern "market-state" and thus force a revolution in strategic thinking, or does Thucydides remain the best guide for geopolitics? Should the US military strip down to fight the wars it is most likely to fight, or redouble its commitment to deterring great power conflict?

There are immediate limitations. On one hand, military spending seems like it will be crowded out by the massively expansionary spending of the Obama administration. For better or for worse, the government has reoriented towards domestic spending and the Obama-Gates team seems deadset on cost control for big projects like the F-22 and Future Combat System. This means the United States may not be able to ensure continued dominance in conventional affairs and restructure itself for COIN. Meanwhile, the wars America is presently fighting both dictate America's current military affairs (forcing America to learn COIN, leave, or lose - even former US commanders are saying America will be deployed in Afghanistan until 2025 to win) and circumscribe short and near term options. The consequence of the costly and difficult war on terror, piled on top of financial crisis, may be the sapping of American willpower and a retrenchment of power projection capability.

A possible, if hardly certain answer seems to be that warfare itself will, of course, evolve with the nature of the entities prosecuting it. War, by either the great power or COIN model, is still subject to Clausewitz's principles. But regular warfare is likely to become increasingly irregular, which means that state will adopt characteristics we identify with non-state actors, while irregular forces will become increasingly professional as they improve their technical capacities and the skill of their personnel. In other words, the true challenge is not necessarily to shift the military irrevocably in one direction or another, but to create a military (and a national security apparatus in general) that is flexible enough to respond to future threats. While it is likely impossible to satisfy both needs simultaneously, the military must become "a learning institution," while the procurement process must be radically overhauled so that weapons systems can at the very least be debated on their practical merit, not their political worth as jobs programs and corporate welfare.

This is, of course, easier said than done. Our Jominian, enemy-centric tendencies are still quite apparent in Pakistan, and the temptation now seems to be to kill as many AQ as we can, get out and leave, while hoping that any of the countless people we've alienated don't do anything else to disrupt our strategic interest. American politics, defense bureaucracy, and international institutions like NATO are not entirely conducive to counterinsurgency or anything that hints of a long term operation. Are we better off preparing for conventional war simply because that's what we know how to fight? Past experience tells us this is the case, and that the illusion counterinsurgency is something the US doesn't need to dirty its hands with will come undone eventually.