The dynamic between a rising power (China) and a ruling one (the U.S.) fits the historical pattern of the "Thucydides' trap." In 12 of the last 16 instances of this scenario, the confrontation has ended in open war, suggesting that a peaceful resolution is the exception, not the rule.

Historically, rising and ruling powers don't stumble into war directly. Instead, their heightened distrust creates a tinderbox where a seemingly minor incident involving a third party (like the assassination in Sarajevo pre-WWI) can escalate uncontrollably into a catastrophic conflict.

The current environment mirrors the late 19th century's first wave of globalization. Then, as now, rapid technological change concentrated wealth, fueling populism and nationalism that ultimately led to global conflict in 1914. We risk 'sleepwalking' into a similar catastrophe.

While a unipolar world led by one's own country is advantageous, a multipolar world with competing powers like the U.S. and China creates a dynamic tension. This competition may force more compromised global decisions, potentially leading to a more balanced, albeit more tense, international system than one dominated by a single unchallenged power.

The modern belief that deep economic ties between the U.S. and China will prevent war echoes Norman Angell's 1910 bestseller, "The Great Illusion." That book argued European economies were too intertwined for a major war, a theory tragically debunked just four years later by World War I.

A historian analogizes Taiwan's precarious situation to three pre-WWI flashpoints. It's a territorial claim (Alsace), a likely source of a great power crisis (Bosnia), and a strategic calculation for intervention by a global power (Belgium), making it exceptionally volatile.

The post-Cold War era of stability is over. The world is returning to an 'Old Normal' where great power conflict plays out in the economic arena. This new state is defined by fiscal dominance, weaponized supply chains, and structurally higher inflation, risk premia, and volatility.

Unlike the bipolar, economically isolated US-Soviet dynamic, today's world is multipolar. Crucially, the US and China compete within the same global economic system, making containment strategies from the Cold War era ineffective and dangerous to apply.

The period from 1870-1914 mirrors today's super cycle of innovation, wealth concentration, inequality, populism, nationalism, and geopolitical rivalry. This makes it a more relevant historical parallel for understanding current risks than the recent era of hyper-globalization.