It’s not as idle a question as we’d all like to believe. I’m no catastrophizer, but authoritarian regimes have grown bolder over the last few years. Look no further than Russia’s invasion of Ukraine or China’s increasing threats of “reunification” with Taiwan.
I recently read The Fourth Turning Is Here by historian Neil Howe and found his arguments compelling. The one-sentence summary: Human cultures repeat a four-generation cycle, culminating in a major crisis, an existential threat. That crisis usually takes the form of total war.
The last generational crisis started with the Great Depression and climaxed with World War II. Howe argues that we entered the generational crisis era with the Great Recession, have seen it evolve through rising populism and political polarization, and the decades-long deterioration of our institutions has left many near-dysfunctional. In the timeline of these cycles, Howe proposes that we stand a few short years away from the climax of this crisis phase: most likely a large-scale war.
Every month, our passive real estate investment club at SparkRental gets together and discusses the risks of different real estate investments. We’ve never talked about war risk, but if one started brewing on the horizon, we certainly would.
Reasonable people can disagree over the likelihood of a major war, as in one that mobilizes the United States, over the next decade. But the risk isn’t zero. It exists as a risk factor, however small or great. As a real estate investor, what could you expect from a large-scale war?
History repeats itself sooner or later. Here’s what we can learn from it and eight factors to consider.
1. Higher Tax Rates, Fewer Tax Breaks
War is expensive—not just in human lives but also in cold, hard cash. It costs a massive amount of money to pay for troop salaries, small arms, tanks, jets, bombers, drones, artillery, ships, submarines, aircraft carriers, missiles, and all…