The price of indifference

I was not alive for the wars that followed 1946, and I will not pretend to recall their architecture. But I spent the years after 1919 writing, with considerable urgency, about what happens when the men who hold power at a critical moment dismiss the long-run consequences of their decisions in favor of some immediate political satisfaction. The remark attributed to President Trump by CNBC — that he "couldn't care less" about Iran no longer abiding by the interim peace agreement — is, in this sense, a very old kind of statement, and a very dangerous one.

The economic consequences of war and geopolitical instability are not abstractions. They arrive as oil price shocks, as disrupted trade routes, as suppressed private investment driven by what I once called animal spirits — the fragile confidence that animates a business decision to hire, to build, to commit capital to the future. When that confidence evaporates, no interest rate cut and no monetary maneuver restores it quickly. The animal spirits flee; the aggregate demand collapses; and the state is left to fill the gap, at great expense, long after the moment of indifference has passed.

The death of two American service members in Jordan, and one missing, as reported by CNBC, is not first an economic fact — it is a human one, and I will not subordinate the moral weight of those lives to a ledger. But the two things are not separate. Every escalation of this kind forecloses diplomatic pathways that, once closed, are extraordinarily costly to reopen. The interim agreement, whatever its flaws, represented a negotiated constraint on an otherwise unconstrained situation. To abandon it with a shrug is to incur a contingent liability whose magnitude no one, by definition, yet knows.

I learned at Versailles — or rather, I learned from watching Versailles — that the negotiators most certain of their strength in the room are often the least attentive to what their settlement will cost the next generation. The indemnity imposed on Germany was supposed to make Germany pay; what it actually did was destabilize the European economy, destroy the middle classes of the defeated nations, and cultivate precisely the resentments that brought the world back to catastrophe within twenty years. I wrote The Economic Consequences of the Peace in the hope that someone would listen. Some did. Most did not, until it was too late.

I am not in a position to prescribe the terms of an Iran settlement, nor the precise diplomatic sequence that would restore some constraint to this situation. Those are engineering questions, and I defer on engineering I have not lived. What I can say, with the confidence of a man who spent a career studying what happens when macroeconomic and geopolitical risks are treated as someone else's problem, is this: the costs of instability are real, they compound, and they are always paid — by workers, by consumers, by the governments that must eventually spend their way out of the wreckage. The only question is whether you pay now, at the negotiating table, or later, at a far higher price.

"I couldn't care less" is not a foreign policy. It is the beginning of an invoice.