Throughout history, the decline of great powers has rarely occurred because they suddenly became poor, weak or technologically inferior.

More often, decline begins when those who govern them lose the ability to interpret reality clearly.

The warning signs are familiar throughout history: leaders surrounded by loyalists rather than truth-tellers, institutions weakened by personal loyalty, strategic decisions driven by political theatre rather than national interest, and an increasing gap between how a country sees itself and how the world actually sees it.

The Roman historian Suetonius described the reign of Nero as a period in which personal vanity, spectacle, and self-indulgence increasingly dominated imperial leadership while Rome faced serious challenges. Ancient sources must always be treated carefully, but the historical lesson is still relevant: a powerful state can become vulnerable when the priorities of its leadership are detached from the realities it faces.

The danger is not simply that leaders make mistakes. ALL leaders do.

The danger is when a leader becomes unable—or unwilling—to recognise those mistakes.

The historical pattern

History provides many examples of leaders who were not necessarily unintelligent, but whose judgement became distorted by power, ideology, ego or isolation.

Kaiser Wilhelm II was not a fool. He was energetic, politically engaged and ambitious. Yet his impulsiveness and inability to manage strategic risks contributed to Germany’s disastrous path into the First World War.

Napoleon III was not incompetent in every aspect of governance. Yet his belief that military prestige could restore French greatness contributed to the catastrophic decision to confront Prussia in 1870.

Benito Mussolini believed his own mythology about Italian power. His ambitions to recreate Roman greatness collided with the reality that Italy lacked the industrial base and military capability required for a major modern war.

Adolf Hitler demonstrated extraordinary political instincts in his rise to power, yet his later decisions increasingly reflected ideological obsession, personal arrogance and a refusal to accept inconvenient military realities.

Saddam Hussein underestimated the willingness of the United States and its allies to respond to Iraq’s invasion of Kuwait, leading to a war that devastated his military power.

The common thread is not simply intelligence. It is judgement.

The modern democratic dilemma

Modern democracies were designed to prevent the accumulation of power around a single individual. Institutions, professional civil services, courts, legislatures and independent media exist precisely because history teaches us that leaders are imperfect.

But institutions are only as strong as the people who operate them.

The United States has long benefited from powerful institutions and a deep reservoir of strategic expertise. Its military, intelligence community and diplomatic establishment contain extraordinary levels of experience.

However, even the strongest institutions meet challenges when political leadership becomes centred around personality rather than process.

This brings us to the uncomfortable discussion surrounding Donald Trump.

This is not an argument about whether one supports or opposes his policies. Democracies should allow vigorous disagreement about policy, ideology and national direction.

The historical question is different:

What happens when a leader of a great power becomes increasingly defined by personal perception, political performance and an unconventional relationship with institutional expertise?

The concern is not simply that a leader is controversial. Many transformative leaders have been controversial. The concern is whether decision-making stays anchored to reality.

Subscribe now

The importance of capacity and judgement

Age, experience and wisdom are not automatically connected.

Some older leaders have demonstrated extraordinary judgement. Others have struggled.

The challenge for any society is recognising when normal political disagreement moves into a more serious question about leadership capacity.

A leader’s public performances, communication technique, willingness to accept criticism and ability to process complex information all matter because modern states are incredibly complicated systems.

The president of the United States does not simply make speeches.

The president oversees military forces, nuclear deterrence, alliances, intelligence operations and economic policy affecting the entire world.

The burden of leadership needs not only confidence, but humility.

Not only strength, but self-awareness.

The danger of confusing image with reality

This question connects to a wider strategic issue facing the United States and its allies.

In recent years, we have seen repeated examples of powerful countries struggling because their assumptions about themselves did not match reality.

Russia believed Ukraine would collapse quickly.

Afghanistan demonstrated the limits of military power without political legitimacy.

Iran demonstrated that inexpensive asymmetric capabilities may impose costs on technologically superior opponents.

The lesson is consistent:

Reality eventually defeats mythology.

A nation can possess the world’s most advanced weapons, the largest economy and the strongest alliances, yet still make catastrophic decisions if its leadership misunderstands the world.

The final warning from history

Great powers rarely decline because they suddenly become weak.

They decline when they become convinced they are stronger than they actually are.

They decline when leaders prefer devotion over honesty.

They decline when institutions exist but are ignored.

They decline when national self-confidence becomes national self-delusion.

The lesson from Nero, Wilhelm II, Mussolini and others is not that history repeats itself exactly.

It is that certain patterns repeat.

The most dangerous moment for any great power is when its leaders stop asking:

“What is actually happening?”

and begin asking only:

“What do we want to believe is happening?”

Because the world does not adjust itself to political stories.

Eventually, reality arrives.

Share Dr. John Bruni's Substack

The conventional wisdom about a potential U.S.–Iran confrontation is that the United States possesses overwhelming military superiority, while Iran’s options are limited.

That assessment is broadly correct.

The United States can dominate the air and maritime domains. It can strike Iranian military infrastructure with a level of precision and reach that few nations could replicate. Iran cannot compete with America in a conventional contest.

But focusing only on conventional military power risks missing the way Tehran has fought for decades.

Iran’s greatest weapon has never been its ability to defeat stronger enemies directly.

It is its ability to create complexity.

And if Iran were seeking an asymmetric response to overwhelming American pressure, one of the most important places to watch would not necessarily be the Persian Gulf.

It would be southern Iraq.

The invasion scenario — and why it is unlikely

A direct Iranian invasion of southern Iraq would represent an enormous gamble.

Iran has the manpower. It has a large army. It has combat experience. It shares a long border with Iraq.

But an overt invasion would create significant problems.

Southern Iraq is Arab, not Persian. Iraqi nationalism remains powerful. Even among Shia communities that share religious connections with Iran, an Iranian military occupation would likely generate resistance.

Furthermore, any conventional Iranian advance would expose its forces to precisely the kind of American military superiority Tehran has spent decades trying to avoid.

The United States does not need to occupy Iran to impose devastating costs on Iranian forces.

A conventional invasion would therefore be unlikely.

But there is another possibility.

A hybrid campaign.

Iran’s strategic depth inside Iraq

Unlike many of its adversaries, Iran already possesses influence inside Iraq through a network of political allies, intelligence relationships and armed groups.

The Popular Mobilisation Forces (PMF), or Hashd al-Shaabi, represent a broad coalition of armed factions incorporated into Iraq’s security architecture. Within that structure are several groups with close ideological and operational links to Tehran, including Kata’ib Hezbollah, Asa’ib Ahl al-Haq and elements of the Badr Organisation.

Estimates of PMF strength vary, but the broader umbrella has been assessed at roughly 150,000–200,000 personnel, with the most committed Iran-aligned factions numbering in the tens of thousands.

The significance of these groups is not simply their numbers. It is their ability to operate within Iraq’s political and security environment.

Subscribe now

The real Iranian play: create paralysis, not conquest

If Tehran wanted to increase pressure on Washington, it would not necessarily need to send tanks across the border.

It could seek to create conditions in which the Iraqi state itself becomes increasingly unable to manage security in the south.

Southern Iraq is strategically vital.

Basra contains some of the world’s most important oil infrastructure. The region provides access to the Gulf and sits alongside the Shatt al-Arab waterway.

A campaign of disruption could focus on:

• political intimidation,

• mobilisation of armed supporters,

• pressure against Iraqi security institutions,

• attacks on critical infrastructure,

• creating uncertainty around energy exports.

The objective would not necessarily be territorial conquest.

The objective would be strategic paralysis.

How quickly could instability develop?

Hybrid warfare operates differently from conventional military campaigns.

There may be no obvious invasion day. Instead, instability could emerge through a gradual process:

First, political pressure.

Then, armed mobilisation.

Then, competing claims of authority.

Then, a perception that Baghdad cannot fully control the south.

At that point, Iran could present itself not as an aggressor, but as a power responding to instability. This is a classic feature of grey-zone warfare: creating conditions in which intervention appears defensive rather than offensive.

America’s dilemma

This is where the strategic challenge becomes apparent.

The United States has the military capability to defeat Iranian conventional forces.

But would Washington want to become responsible for another major ground commitment in the Middle East?

The experience of Iraq and Afghanistan remains politically significant. The question would not be whether America could respond. The question would be whether America would accept the long-term costs of restoring stability.

This is the central Iranian calculation.

Tehran does not need to defeat the United States militarily.

It needs to create a situation where the political costs of victory become unacceptable.

The coming contest

The future of any U.S.–Iran confrontation may therefore not be decided by a dramatic naval battle or a conventional invasion. It may be decided in the grey zone.

Iran’s strongest weapon may not be the ability to conquer territory.

It may be the ability to make territory difficult to govern.

The United States has overwhelming military power.

Iran’s strategy has always been to ensure that power cannot easily translate into political success.

And that is why southern Iraq may become one of the most important strategic fault lines in any future confrontation between Washington and Tehran.

Share Dr. John Bruni's Substack

For a fleeting moment, it seemed the Middle East had stepped back from the brink of conflict—a rare pause in a region long accustomed to turbulence.

That moment has passed.

American and Iranian forces are, once again, exchanging blows across the Gulf. Neither appears willing to absorb punishment without retaliation. Washington frames its strikes as defens…

Read more

The newly announced U.S.-Iran Memorandum of Understanding has been hailed by some as the most major diplomatic breakthrough in the Middle East since the initial Iran nuclear agreement.

Perhaps.

But before celebrating the arrival of peace, it is worth remembering that this agreement has developed not from reconciliation, but from exhaustion.

The war that began as an Israeli and American effort to constrain Iran’s strategic ambitions has concluded not with a decisive victory, but with a document. The guns may be quieter. The missiles may be temporarily absent. The Strait of Hormuz may reopen. Yet none of the underlying political realities that produced the conflict have disappeared.

If anything, many have become more acute.

The agreement itself is ambitious. It envisages a cessation of hostilities, the reopening of the Strait of Hormuz, sanctions relief, access to frozen Iranian assets, discussions regarding Iran’s nuclear program, and a sixty-day process meant to transform a ceasefire into something more durable.

Yet the vulnerabilities embedded within the arrangement are obvious.

The first is President Donald Trump himself.

Trump’s approach to diplomacy has always been highly personalised, highly public and highly unpredictable. Traditional diplomacy operates through private channels, carefully worded communiqués and disciplined signalling. Trump prefers public diplomacy conducted in real time through speeches, interviews and, most significantly, social media.

This style may energise domestic supporters, but it creates enormous uncertainty for adversaries and allies alike.

Iranian negotiators have learned over the years that a statement made by Trump in the morning may be modified by lunchtime and contradicted by evening. Agreements become vulnerable when one side continually negotiates in public.

The danger isn’t merely rhetorical.

A poorly timed post, an impulsive threat, an exaggerated claim of victory, or a perceived insult directed toward Iranian leaders could rapidly transform a fragile diplomatic opening into a renewed crisis. Even after the signing of the agreement, Washington and Tehran remain publicly divided over critical questions, including nuclear inspections, sanctions relief and the use of unfrozen Iranian assets.

The second vulnerability lies in Jerusalem.

Prime Minister Benjamin Netanyahu faces a political problem as much as a strategic problem.

For much of the conflict, Netanyahu framed the war as an existential struggle against Iran and its regional network of allies. Yet the agreement effectively freezes rather than resolves many of the issues that Israel regards as fundamental threats.

Within Netanyahu’s own coalition sit powerful figures who view compromise with Iran, Hezbollah, Hamas or virtually any adversary of Israel as strategically dangerous and morally unacceptable. Many members of the Israeli right have spent decades arguing that deterrence can only be maintained through overwhelming and sustained pressure.

For these constituencies, the agreement looks less like victory than restraint.

Netanyahu, therefore, confronts an uncomfortable balancing act. He must maintain his relationship with Washington while simultaneously reassuring coalition partners that Israel has not abandoned its long-standing security objectives.

This tension matters because Israel retains significant capacity to disrupt the diplomatic process.

A major strike in Lebanon.

An operation against Iranian assets in Syria.

An escalation involving Hezbollah.

Any of these could rapidly destabilise the wider framework.

Ironically, the strongest constraint on Israeli freedom of action may be the White House itself.

Subscribe now

Despite periodic tensions between Washington and Jerusalem, Israel remains heavily dependent upon American political, diplomatic and military support. The overwhelming majority of Israel’s most sophisticated military capabilities rely directly or indirectly upon the United States. American taxpayers, American manufacturers and American logistics networks continue to be indispensable to Israel’s military power.

That reality gives Washington leverage.

It is also why recent signs of frustration emerging from figures within the Trump Administration, including Vice President J. D. Vance, deserve close attention. While the U.S.-Israel relationship remains extraordinarily strong, there are indications that sections of the administration have become increasingly concerned that Israeli actions could complicate broader American strategic objectives in the region.

The third vulnerability is Lebanon.

Lebanon occupies a unique and deeply uncomfortable position in this emerging order.

Many Lebanese resent Hezbollah’s long-standing status as a “state within a state”—an armed organisation capable of making decisions about war and peace independent of the elected government in Beirut.

Yet this resentment does not automatically translate into support for Israeli military operations.

Indeed, many Lebanese simultaneously oppose Hezbollah and condemn Israeli incursions into Lebanese territory as violations of national sovereignty.

Recent Israeli operations in southern Lebanon, the Bekaa Valley and parts of Beirut have bolstered these sentiments. The result is a political paradox: opposition to Hezbollah does not necessarily produce sympathy for Israel. Instead, Israeli military action often strengthens nationalist sentiment and creates new pressures on the Lebanese state.

This matters because Lebanon remains one of the most likely arenas for any future collapse of the agreement.

Then there is Iran itself.

Iranian leaders have emerged from the war bruised but not broken.

The Islamic Republic survived.

Its political system remains intact.

Its missile capabilities remain largely untouched.

Its regional networks have been damaged but not eliminated.

Most importantly, Tehran can plausibly argue that it endured the combined military pressure of both Israel and the United States without experiencing regime collapse.

That narrative will resonate domestically.

It will also shape how Iranian leaders approach the next phase of negotiations.

The agreement may have paused the conflict, but it has not resolved the central strategic question that drove it: how much power Iran should possess and how much power Israel is willing to tolerate.

That debate remains entirely unresolved.

Which brings us to the Strait of Hormuz.

The agreement’s supporters point to the reopening of global shipping lanes as evidence of success. They are not wrong. The global economy desperately needed a reduction in tensions. Energy markets reacted favorably to the prospect of restored maritime traffic.

Yet the Strait remains less a solved problem than a suspended one.

Only days after the agreement was announced, Iran signalled once again that Hormuz stays a strategic lever available to Tehran should circumstances deteriorate. The mere possibility of renewed disruption reminds markets that the world’s energy system remains vulnerable to political decisions made in Tehran, Jerusalem and Washington.

This is the central reality that policymakers would do well to remember.

The agreement has reduced imminent risks. It has not eliminated them. Peace requires more than signatures.

It requires political restraint from leaders who frequently benefit from escalation. It needs strategic patience from governments that frequently prefer coercion. And it requires trust among actors who fundamentally distrust one another.

At present, none of those conditions exists.

The ceasefire may hold. The negotiations may succeed. A more durable regional settlement may yet emerge. But for now, the world remains hostage to three capitals.

A Jerusalem that fears Iran.

A Tehran that distrusts America.

And a Washington led by a president whose next social media post could be as consequential as any clause contained within the agreement itself.

That is not peace.

It is a pause.

And pauses, in the Middle East, have a habit of ending.

Share

For more than two centuries, capitalism has survived every prediction of its demise.

It survived industrialisation. It survived Marxism. It survived two world wars, the Great Depression, decolonisation, globalisation, and the 2008 financial crisis. Each time, the system adapted. Each time, political leaders found ways to redistribute enough of the gains to preserve social legitimacy.

The question now confronting Western societies is whether capitalism can adapt once again.

This time, however, the challenge is different.

Artificial intelligence is not simply another technology. It may represent a structural break in the relationship between capital, labour, and political stability.

For generations, technological revolutions followed a broadly familiar pattern. Machines displaced workers in one sector but created opportunities in another. The transition was often painful, but eventually new industries emerged, new jobs appeared, and rising productivity translated into rising wages. The social contract bent, but it did not break.

AI threatens to alter that pattern.

Unlike previous waves of automation, AI does not merely replace manual labour. It increasingly performs cognitive tasks once thought to be uniquely human. Lawyers, accountants, software developers, designers, analysts, administrators, translators, and countless other knowledge workers now find themselves confronting systems capable of performing substantial portions of their work faster and, in some cases, more cheaply.

Nor does AI spread gradually.

A steam engine had to be manufactured. A railway had to be built. A factory required years of investment. But once trained, an AI model can be deployed globally almost instantaneously. A single breakthrough can ripple across entire industries in months rather than decades.

Most importantly, the economic gains from AI appear likely to concentrate in ways previous technological revolutions did not.

The owners of compute infrastructure, foundation models, proprietary datasets, cloud platforms, and digital ecosystems stand to capture a significant share of the value created. Productivity may surge while wage growth stagnates. Economic output may rise even as fewer people participate directly in generating it.

This creates a problem that is economic on the surface but ultimately political.

A society can tolerate inequality.

What it struggles to tolerate is exclusion.

If millions of people begin to feel disconnected from the prosperity generated by AI-driven economies, then capitalism faces a challenge more serious than inefficiency. It faces a crisis of legitimacy.

The danger is not that capitalism becomes less productive.

The danger is that it becomes too productive for its own political survival.

The Return of the Legitimacy Question

The central political question of the twenty-first century may not be whether AI becomes more powerful.

It almost certainly will.

The more important question is whether democratic societies can create institutions capable of distributing their benefits widely enough to preserve social cohesion.

This is where a growing number of economists, policymakers, and strategic thinkers are converging on a difficult conclusion: the rules that governed industrial capitalism may no longer be sufficient for the age of machine intelligence.

What may be required instead is something resembling a new social settlement—a New Deal for the AI Age.

Not socialism.

Not nationalisation.

Not the abandonment of markets.

Rather, a new framework designed to preserve capitalism by adapting it to radically different technological conditions.

The historical precedent is not the Soviet Union. It is Bretton Woods.

After the Second World War, policymakers understood that unfettered economic competition had contributed to instability and conflict. Their solution was not to abolish capitalism but to create rules that would make it more durable.

Trade institutions, monetary coordination, regulatory frameworks, and social protections emerged not as alternatives to markets but as mechanisms for preserving them.

The AI era may require a similar act of institutional imagination.

Subscribe now

Treating AI Like Infrastructure

The first pillar of such a system would begin with a recognition that frontier AI systems are no longer merely products.

They are becoming infrastructure.

Modern societies already regulate infrastructure that possesses systemic significance. Banking systems, aviation networks, telecommunications, and energy grids operate under specialised rules because failures in those systems produce consequences far beyond individual firms.

AI increasingly belongs in the same category.

That does not imply government ownership.

It does imply greater responsibility.

Advanced AI models may eventually require licensing regimes, mandatory safety audits, incident-reporting obligations, and restrictions on deployment in sectors where failures could produce cascading social or economic harm.

The goal would not be to slow innovation.

The goal would be to ensure that innovation does not outrun society’s capacity to absorb it.

Who Owns the Future?

A second challenge concerns taxation and economic distribution.

The central economic reality of AI is that it creates what economists call rents—returns that exceed normal competitive profits.

If AI dramatically increases productivity while reducing labour demand, a larger share of economic value will flow to capital owners rather than workers.

That dynamic is not inherently unjust.

But it becomes politically unsustainable when the benefits become too concentrated.

One response would be for governments to recognise a new category of economic value: automation rents.

Under such a framework, advanced economies could establish common tax floors on AI-generated profits, coordinate digital-services taxation, and potentially levy modest charges on large-scale computational infrastructure.

The objective would not be punishment.

It would be stabilisation.

A portion of these revenues could be directed into national AI dividend funds, ensuring that citizens maintain a stake in the prosperity generated by increasingly autonomous systems.

The idea may sound radical.

In reality, it resembles a principle that already exists.

Resource-rich nations such as Norway recognise that extraordinary wealth generated by national assets should produce broad public benefits. The same logic could apply to the productive capacity of machine intelligence.

Capitalism Needs More Capitalists

The third pillar addresses ownership itself.

One of the defining features of the digital economy has been the concentration of wealth in relatively few firms and individuals. AI threatens to intensify that trend.

If a handful of corporations effectively own the engines of future productivity, economic concentration may eventually translate into political concentration.

A more resilient model would spread ownership more broadly.

Governments could establish sovereign investment funds to hold stakes in AI infrastructure. Employees in AI-enhanced firms could receive stronger ownership incentives. Public dividend systems could distribute returns generated by AI-related revenues. Essential AI services in education, healthcare, and administration could be offered through public-interest platforms.

The objective would not be to replace private ownership.

It would be to ensure that technological progress creates more stakeholders rather than fewer.

In effect, the challenge of the AI era may not be how to create wealth.

It may be about creating enough owners.

Preventing Intelligence Monopolies

The final pillar concerns competition.

The AI economy is becoming vertically integrated from semiconductors to cloud infrastructure, from foundation models to applications and data ecosystems.

History suggests that when critical technologies become concentrated in a handful of firms, innovation eventually slows and political influence expands.

The challenge is particularly acute because AI benefits from scale. Larger models attract more users, generate more data, and strengthen network effects.

The result can be a self-reinforcing cycle of dominance.

Breaking that cycle does not require dismantling successful companies.

It does require ensuring interoperability, preventing exclusionary control, and maintaining genuine competition throughout the AI stack.

Without such safeguards, the digital economy could evolve into something resembling an intelligence oligopoly.

That may be efficient.

But efficiency alone is rarely enough to sustain democratic legitimacy.

Why the Middle Powers Matter

Perhaps the most surprising feature of this vision is that it does not rely primarily on the United States or China.

Instead, its architects would likely be the world’s middle powers.

The European Union, Britain, Canada, Australia, Japan, South Korea, and a growing group of technologically sophisticated states share a common challenge. None alone possesses the power to shape the global AI order. Collectively, however, they represent some of the world’s most valuable markets.

Their leverage lies in access.

If market entry becomes contingent on compliance with common AI governance standards, taxation arrangements, and competition rules, companies will adapt.

This is how much of the modern trade system has evolved. Rules emerged not because a single power imposed them, but because access to large markets made compliance worthwhile.

The same logic could shape the AI era.

Saving Capitalism From Itself

Critics on the left will likely argue that such proposals do not go far enough.

Critics on the right will argue that they go too far.

That may be a sign they are aimed at the correct target.

The purpose of a New Deal for the AI Age is not to replace capitalism.

It is to preserve it.

The framework remains fundamentally market-based. Innovation remains private. Competition remains central. Entrepreneurship remains essential.

What changes is the distribution mechanism surrounding extraordinary technological productivity.

The choice facing advanced democracies is not between capitalism and socialism.

It is between a version of capitalism that adapts to AI and one that does not.

Because if AI accelerates returns to capital faster than societies can adjust, inequality will deepen, political systems will polarise, and public trust will continue to erode.

Eventually, voters will demand solutions.

History suggests that when moderate reforms arrive too late, more radical alternatives emerge.

The question, therefore, is not whether societies will respond to AI-driven disruption.

They will.

The real question is whether democratic governments can build institutions capable of responding before the political backlash arrives.

A New Deal for the AI Age begins from a simple premise.

The challenge is not preventing machine intelligence from transforming the economy.

The challenge is ensuring that the benefits of that transformation remain broad enough, visible enough, and legitimate enough that democratic capitalism survives to enjoy them.

The future of capitalism may depend less on what AI can do than on who gets to share in what it creates.

Share

For much of its modern history, Australia has prided itself on being the “lucky country”: a sunburnt continent blessed with abundant resources, stable institutions, and an unspoken compact of egalitarianism. Yet in 2026, that old self-assurance feels increasingly strained. From the parched stretches of the Murray-Darling Basin to the crowded rental markets of Sydney and Melbourne, Australians are coming to terms with challenges that defy easy solutions—or nostalgic slogans.

The familiar fractures are widening. The cultural chasm between the bush and the city, once bridged by mutual dependence, now echoes with resentment and misunderstanding. Political discourse, once marked by a certain laconic civility, has taken a sharper, Americanised turn, amplified by social media’s relentless algorithms.

Meanwhile, the existential threats—climate volatility, housing insecurity, the uneasy geopolitics of our region—press in with a new urgency.

But perhaps the gravest risk is subtler: a corrosion of the social trust that has long underpinned Australian life. When public debate is dominated by viral misinformation and the boundaries between fact and fiction blur, what becomes of our capacity to solve problems together? The question facing Australia is not simply who governs, but how we might rebuild the civic fabric that binds us—before the threads unravel beyond repair.

The Post-1990 Economic Order Is Fraying—But Nothing Is Ready to Replace It

In a recent conversation with economist Jenny Gordon, we returned repeatedly to a question that now sits just below the surface of economic and international debate.

Not whether the global economic order is changing.

But whether it still has a governing idea—and whether the political systems that sustain it are still capable of revising it.

For roughly three decades after the Cold War, the global system rested on a coherent intellectual framework. Trade liberalisation wasn’t just policy orthodoxy; it was a theory of prosperity. Comparative advantage was not simply an economic principle; it was a geopolitical stabiliser. And institutions such as the World Trade Organisation were established to embed these assumptions in durable rules.

It was a theory of peace through efficiency.

And for a time, it worked.

Subscribe now

But what is striking about the present moment is not only that this order is under strain. It is that the source of strain is increasingly strategic instead of purely economic.

Governments are no longer asking only what is efficient. They are asking what is safe.

Tariffs, industrial policy, export controls, and supply-chain reshoring are re-emerging not as divergences from the system, but as expressions of a new hierarchy of priorities. The language of trade has shifted accordingly—from efficiency to resilience, from integration to “de-risking,” from interdependence to “strategic autonomy.”

The implication is subtle but profound: economic mutual dependence is no longer assumed to be stabilising in itself. It is now also understood as a potential vector of vulnerability.

The political system beneath the economic system

Yet there is a second layer to this transformation that is often less examined.

Most advanced political systems are not structured to actively redesign economic architectures. They are structured to manage them.

Over time, this has produced a form of governance that is highly responsive—but primarily within a narrow corridor of adjustment. Policy becomes incremental: tax changes, targeted subsidies, monetary fine-tuning, and welfare adjustments.

This is reinforced by the structure of political incentives themselves. Parties depend on funding networks and advisory ecosystems that are closely embedded in the existing economy. That is not necessarily a distortion; it is how modern complex systems operate.

But it does shape the edges of imagination.

The result is a system that is highly competent at stabilisation, but less capable of systematic experimentation.

And here a more uncomfortable question emerges:

If political systems are largely negotiating between existing economic interests rather than redesigning the system itself, where does the citizen appear as a primary author of the economic structure?

In theory, democratic legitimacy resolves this through elections. In practice, however, citizens are often represented indirectly—through prices, labour markets, consumption patterns, and short electoral cycles rather than through sustained structural design.

The “we the people” of democratic theory becomes, in economic practice, something more fragmented and mediated.

This matters because the pressures now facing advanced economies—AI-driven labour disruption, demographic ageing, widening wealth inequality, and international fragmentation—are not marginal adjustments. They are structural transformations.

And structural transformations require something most political systems are not currently optimised to deliver: deliberate experimentation with alternative economic models.

A system built for stability, not redesign

Institutions like the WTO were designed to manage friction between sovereign systems, not to rethink those systems when underlying conditions shift. Macroeconomic policy evolved as a stabilisation toolkit rather than a mechanism for redesign.

The result is a system that remains powerful—capable of absorbing shocks and preventing collapse—but increasingly uncertain about its own foundations.

The central tension of the coming period may therefore be this:

The system is still strong enough to endure, but no longer settled enough to define its own direction.

And the political systems that sustain it are still responsive enough to adjust at the margins—but not still structured to experiment at the scale the moment may require.

What follows may be incremental adaptation. Or it may be a longer period in which economic models and political legitimacy slowly drift apart, until crisis forces alignment.

Either way, the question is no longer simply economic.

It is institutional:

Who has the authority—and the incentive—to redesign the system when incremental change is no longer sufficient?

Share

Today, as the downing of a U.S. Apache helicopter near the Strait of Hormuz ignited American retaliatory strikes, the Gulf has once again become the stage for a volatile drama with global repercussions. This is not merely another military exchange — it is a moment that crystallises the perilous cycle in which Washington, Tehran, and Jerusalem now find themselves locked.

It is evidence that the conflict has entered a familiar and increasingly self-reinforcing pattern.

What is striking is not the mere resumption of escalation, but the almost theatrical predictability of the script. A provocation is answered by force. Leaders on all sides perform a delicate dance of resolve and restraint. Markets, ever jittery, respond before diplomats can even begin to broker calm. And just as the world senses a lull, another incident careens onto the stage, shattering hopes for stability.

This is no longer a linear conflict moving toward a clear military or diplomatic end-state.

It is a cyclical conflict system.

Washington and Tehran are locked into an action-reaction dynamic in which each side believes it is responding defensively while simultaneously creating new pressures for escalation. Israel operates on a parallel but deeply interconnected track, pursuing its own strategic objectives and generating additional decision points for both capitals. Across the Gulf, regional states continue to absorb the economic, political, and security consequences of decisions made elsewhere.

The immediate question is not whether tensions will rise further, but where the next escalation node emerges.

Historically, Tehran has rarely responded symmetrically to direct military pressure. Rather than mirror U.S. actions, it has typically relied on asymmetric mechanisms: pressure on maritime traffic, calibrated missile and drone activity, proxy-aligned operations, and measures designed to impose costs without crossing thresholds likely to trigger overwhelming retaliation.

If recent patterns hold, the Strait of Hormuz once again becomes the most consequential pressure point.

And its importance extends far beyond the Gulf.

Global markets do not respond primarily to strategic intent. They respond to disruption, uncertainty, and friction.

As security risks increase around Hormuz, shipping insurers reassess exposure, tanker operators alter routing decisions, transit times lengthen, and energy traders begin pricing uncertainty into supply expectations. The first systemic reaction is therefore financial rather than political.

This is how geopolitical risk becomes inflation.

We have seen this dynamic before in previous phases of confrontation between Iran and the United States. What makes the current moment more unstable, however, is not simply the exchange of military force. It is the fragmentation of strategic authority and the increasing unpredictability of the signalling environment surrounding that force.

Washington is responding to Iranian action with military pressure. Tehran is responding to American strikes with threats of retaliation. Israel continues to act according to its own strategic calculus, often without complete synchronisation with either.

The result is a triangular escalation structure in which each actor believes it is acting defensively, while collectively generating systemic instability.

Trump, signalling, and the problem of compressed diplomacy

It is also worth noting that President Trump’s communication style has become a strategic variable in its own right.

Trump has repeatedly emphasised that he responds strongly to attacks on U.S. forces and assets. In the current phase of the conflict, that instinct has become operationally significant. Iranian planners are no longer simply assessing U.S. force posture and military capability. They are also interpreting a political signalling cycle in Washington that is unusually rapid, highly public, and often difficult to reconcile with events on the ground.

From Tehran’s perspective, this creates an additional layer of uncertainty. It becomes harder to determine whether Washington is pursuing escalation management or escalation dominance at any given moment.

That uncertainty feeds a broader Iranian assessment that there is no consistently predictable diplomatic counterpart in Washington at present.

Since the conflict intensified earlier this year, U.S. messaging has frequently compressed military, political, and diplomatic signalling into the same timeframe. Assertions that peace is near or that an end state is approaching have often appeared alongside ongoing military operations, threats of further retaliation, or declarations of strategic success.

Subscribe now

The problem is not merely inconsistency. It is what might be called ‘signal compression’ — a blurring of tactical threats and strategic intent, in which diplomacy and deterrence become indistinguishable in the cacophony of public messaging.

For adversaries attempting to interpret American intentions, it becomes increasingly difficult to distinguish between tactical signalling designed to create leverage and genuine indications of strategic intent.

That ambiguity narrows the space in which diplomatic off-ramps are normally tested and stabilised before being publicly announced.

The assumption of durability

A number of analysts have argued that the current cycle of action and reaction is unlikely to produce a complete breakdown of the ceasefire framework. The argument is understandable. Similar exchanges between the United States and Iran have historically remained bounded, with both sides preferring calibrated retaliation over uncontrolled escalation.

Yet there are reasons to be cautious about assuming that past patterns will necessarily hold.

The challenge is not simply about exchanging military force. It is the increasing unpredictability of the signalling environment surrounding that force.

Traditional deterrence theory assumes that adversaries can broadly distinguish between tactical actions, political messaging, coercive signalling, and genuine shifts in strategic intent. In the current conflict, those categories are becoming increasingly compressed.

Military strikes occur alongside public declarations that peace is imminent. Escalatory rhetoric is followed by diplomatic outreach. Claims of imminent victory coexist with warnings of further retaliation. Negotiation signals and coercive signals are often delivered simultaneously rather than sequentially.

The result is a conflict environment characterised by strategic ambiguity and rhetorical unpredictability.

This matters because wars are not mismanaged only through excessive aggression. They can also be mismanaged through misinterpretation.

The more difficult it becomes for Tehran, Washington, and Jerusalem to distinguish signalling from policy, the greater the risk that an action intended as limited coercion is interpreted as preparation for something much larger.

For this reason, the durability of the ceasefire should not be assessed solely through the scale of military exchanges. It should also be assessed through the predictability of the political signals accompanying them.

At present, that predictability appears to be weakening rather than strengthening.

Israel as a parallel escalation driver

Israel is the third node in this escalation structure, and arguably the least constrained.

Unlike Washington and Tehran, Israel is not operating within a managed bilateral escalation framework. It is operating within its own strategic logic of pre-emption, survival, and deterrence restoration—often at speeds and through channels that do not neatly align with U.S. or Iranian signalling cycles.

The result is that Israel functions less as a partner actor in a coordinated escalation ladder and more as a parallel strategic driver, shaping facts on the ground that both Washington and Tehran are forced to respond to after the event.

This creates a structural problem for crisis management. Even when U.S.–Iranian signalling appears to move toward de-escalation or negotiation, Israeli operations can reintroduce kinetic pressure into the system from a different axis entirely.

In practice, this means there is no single escalation manager in the system. There are three distinct strategic logics operating simultaneously, each pursuing its own objectives and each capable of disrupting the calculations of the others.

A System Built to Wobble, Not to Stand

The result of these overlapping dynamics is a form of managed instability. Each actor believes it is operating within a bounded escalation framework. Yet the interaction between those frameworks is increasingly producing outcomes that no single actor is fully controlling.

At the centre of this system remains the Strait of Hormuz: not just a chokepoint for oil, but a chokepoint for global confidence.

If IRGC-linked activity increases in the Gulf, the economic response will be immediate. Insurance premiums will rise, shipping will slow, and energy markets will tighten. Inflation follows friction, not intention.

But the deeper vulnerability is psychological.

Markets and governments are increasingly conditioned to treat the Gulf not as a stable energy corridor punctuated by occasional crises, but as a permanent risk environment punctuated by brief periods of calm.

Once that shift occurs, instability begins to self-price.

And at that point, escalation no longer needs to be intended. It only needs to be repeated.

For now, the conflict remains below the threshold of full regional war. Military exchanges continue to be calibrated, and all parties remain aware of the costs of uncontrolled escalation.

Yet the greater danger may not lie in deliberate escalation. It may lie in the growing gap between military restraint and political predictability.

The system increasingly relies on all actors correctly interpreting one another’s intentions while operating in an environment saturated with contradictory signals, compressed timelines, public threats, diplomatic overtures, and rapidly shifting political narratives.

That is a fragile foundation for crisis management.

The question is no longer simply whether Washington, Tehran, or Jerusalem wish to avoid a wider conflict.

It is whether they can continue to do so while becoming progressively less certain about what the others actually intend.

And in that respect, the greatest risk to the ceasefire may not be aggression.

It may be the fog of ambiguity — a danger as corrosive as any missile, and one we ignore at our peril.

Share

Modern audiences have inherited a deeply distorted understanding of warfare.

For many, war is viewed through a cinematic lens. The narrative is familiar. The protagonists are morally justified. Their opponents are corrupt, incompetent, or evil. Through superior skill, courage, technology, or determination, the heroes achieve decisive victory. The conflict ends. Justice prevails.

It is an attractive story.

It is also one that bears only a passing resemblance to how wars are usually won.

Real warfare is rarely defined via decisive moments. More often, it is characterised by endurance, adaptation, and survival. The side that ultimately prevails is frequently not the one that wins the most battles, but the one that refuses to collapse.

History provides numerous examples.

In 1940, Britain did not defeat Germany. At least not in the conventional sense. The British Army had been expelled from continental Europe. Much of its equipment had been abandoned at Dunkirk. Germany dominated the continent.

Yet Britain survived.

That survival became the basis for eventual victory.

The Winter War offers another example. Finland did not defeat the Soviet Union. The Red Army ultimately forced Helsinki to make territorial concessions. Yet Finland preserved its independence and sovereignty against overwhelming odds. What appeared on paper as a Soviet victory was widely regarded as a Finnish strategic success.

Subscribe now

Vietnam offers perhaps the clearest example of all. The United States won most of the major military engagements. It inflicted enormous losses upon North Vietnamese forces. Yet North Vietnam understood a basic truth: it did not need to defeat the United States militarily. It simply needed to endure longer than American political support for the war.

The same principle would later apply in Afghanistan, first against the Soviet Union and later against the United States and NATO.

The lesson is clear.

Victory is not always about imposing one’s will upon the enemy.

Sometimes it is about preventing the enemy from imposing its will upon you.

This distinction is important when examining contemporary conflicts, including the ongoing confrontation involving Iran.

Public discussion often focuses on whether Iran can defeat Israel or the United States. Such framing assumes that Tehran’s objectives mirror those of a conventional military power seeking battlefield dominance.

They do not.

Iran’s strategic objectives are likely far more modest and therefore far more achievable.

The Iranian leadership does not necessarily need to become stronger than its adversaries. It does not need to occupy territory. It does not need to destroy opposing military forces.

Instead, it needs to survive.

It needs to preserve the regime’s continuity.

It ought to maintain enough military capability to thwart future attacks.

It needs to avoid internal collapse.

Most importantly, it needs to convince its opponents that the costs of pursuing total victory exceed any realistic gains.

If it can accomplish these objectives, then Iran may well claim strategic success regardless of the destruction it suffers along the way.

This concept is often difficult for Western audiences to accept because Western strategic culture, particularly American strategic culture, tends to emphasise clear results. The expectation is that superior military power should produce clear political results.

Yet history repeatedly demonstrates that weaker actors regularly operate under a different calculus.

For them, survival is victory.

The stronger power seeks transformation. The weaker power seeks persistence. The stronger power seeks resolution. The weaker power seeks exhaustion. The stronger power seeks to win. The weaker power merely seeks not to lose.

And in many cases, that is enough.

As the strategic landscape remains increasingly fragmented and conflicts grow more protracted, policymakers would do well to remember this distinction. Military superiority remains important. Economic strength remains important. Technology remains important.

But none of these factors automatically guarantees success.

Ultimately, war is a contest of competing political wills.

The side that survives may not look victorious.

Yet history frequently remembers them as exactly that.

Share Dr. John Bruni's Substack

The Strait of Hormuz has long been the world’s most important energy chokepoint. Roughly one-fifth of global oil trade passes through this narrow corridor between Iran and Oman. When tensions rise—whether through conflict, sabotage, or naval escalation—markets react instantly.

But something important has changed in the structure of global oil supply. The world is still exposed to the Hormuz risk, but it is no longer structurally dependent on it as it once was.

That shift is being driven not by the Middle East, but by a new set of producers in the Atlantic Basin: Brazil, Guyana, Argentina, the United States, Canada, and parts of West Africa.

The Key Misunderstanding: Replacement vs Flexibility

A common analytical mistake is to assume that non-Middle East producers must “replace” lost Gulf barrels in a crisis.

They cannot.

If 10–15 million barrels per day were disrupted from the Strait of Hormuz, no combination of Brazil, Guyana, or Argentina could fully offset that in the short term.

But this misses the real point.

The modern oil system does not require perfect substitution. It requires redundancy, spare capacity, and logistical rerouting capacity.

That is where the Atlantic Basin has become structurally important.

Brazil: The Offshore Anchor

Brazil is now producing around 4 million barrels per day, driven by deepwater pre-salt developments operated largely offshore. These projects are capital-intensive but politically stable and export-oriented.

Crucially, Brazil’s production growth is steady rather than volatile, making it one of the most reliable incremental suppliers globally.

Guyana: The Fastest Supply Shock Absorber in the World

Guyana is the most dramatic case study in modern oil development.

From essentially zero production in 2019, it has rapidly scaled to nearly a million barrels per day through ExxonMobil-led offshore developments in the Stabroek Block.

This matters in a crisis scenario because Guyana’s output is:

• Light crude (highly desirable in tight markets)

• Export-oriented

• Located entirely outside chokepoint transit routes

It is one of the few genuinely “new” sources of global supply in the 2020s.

Argentina: The Emerging Shale Export State

Argentina’s Vaca Muerta formation is one of the largest shale resources outside North America.

Production is approaching 800,000–900,000 barrels per day, with strong growth potential if infrastructure constraints are resolved.

Unlike Brazil or Guyana, Argentina’s trajectory depends heavily on domestic economic stability and pipeline expansion—but the resource base is large enough to matter globally.

The African OPEC Layer

Alongside Latin America, African producers such as Nigeria, Libya, and Algeria provide additional supply flexibility.

These countries are not new entrants, but they are strategically important because they are:

• Outside the Strait of Hormuz

• Closely linked to European demand

• Capable of marginal output increases under price pressure

The Structural Shift

The deeper story is not any single country.

It is that incremental global supply growth is increasingly coming from outside the Middle East.

In previous decades, marginal barrels came primarily from OPEC Gulf producers.

Today, they come from:

• Atlantic offshore basins (Brazil, Guyana)

• North American shale (United States, Canada)

• South American shale (Argentina)

• Select African producers

This creates a more distributed energy system.

What This Means During a Hormuz Disruption

In the event of a major Strait of Hormuz crisis:

• Gulf producers still dominate global supply

• Price spikes would still be severe

• Strategic reserves would still be critical

But the difference today is that:

• More barrels are available outside the conflict zone

• More trade routes remain unaffected

• More production growth is still coming online, even during crises

This reduces systemic fragility at the margin.

And in energy markets, marginal barrels set prices.

Conclusion: A Less Centralised Oil World

The global oil system has not decoupled from the Middle East—but it has partially decentralised.

The Strait of Hormuz remains a critical chokepoint. But the world’s ability to absorb shocks is no longer concentrated in one geography.

Instead, resilience is increasingly coming from a wide arc stretching across:

Brazil → Guyana → Argentina → North America → West Africa

That shift does not eliminate energy crises.

But it changes their shape.

And that is a structural transformation worth paying attention to.

There be monsters out there…

Watching the unfolding Iran War, I’m struck by the sheer sociopathy gripping many of the principal actors. Not mere incompetence. Not simple strategic miscalculation. Something darker: leaders so consumed by ego, vengeance, ideological obsession, and political survival that they appear almost indifferent to the consequences their actions will unleash upon the rest of humanity.

The Trump administration, obsessed with ballrooms, golden statues, triumphal arches, and the theatrics of imperial grandeur, has helped drag the world into an extraordinary geopolitical disaster.

The Gulf is effectively closed to meaningful traffic. Affordable energy supplies have been shattered. And modern civilisation does not merely run on oil for cars. Energy underpins fertiliser production, food packaging, refrigeration, shipping, transport, and industrial agriculture itself. A recent UN assessment warned that some 45 million people are now at risk of severe food insecurity as a consequence of the Iran War and its economic aftershocks. That number will almost certainly rise as negotiations stall and escalation continues.

And this is where the true madness begins.

The remnant IRGC leadership, driven by vengeance and survival, has arguably shattered the Gulf’s long-term strategic model: transforming the region into a stable global hub for tourism, finance, logistics, and aviation. That model depended on predictability and confidence. Both are now evaporating.

The Gulf states relied heavily on expatriate expertise to build their economies. Many of those people may never return. Others will return only with exit strategies already prepared. Once skilled human capital loses confidence in regional stability, capital flight becomes human flight.

Then there is Israel — never an easy subject in polite conversation — led by Benjamin Netanyahu, a man who has transformed ruthless political survival into a form of high art. Since October 7, 2023, Israel has existed on an almost permanent war footing. Netanyahu, backed by powerful pro-Israel influence networks in Washington and reinforced by Trump-era political and family alliances through Jared Kushner, appears to have succeeded where previous Israeli leaders failed: convincing an American president to directly join a war against Iran.

Subscribe now

Republican and Democrat presidents alike resisted crossing that threshold for decades.

Trump crossed it.

Did the tail wag the dog? People will have their own conclusions. But let’s do the arithmetic:

A narcissistic American president + a vengeful Iranian revolutionary elite
+ an Israeli prime minister consumed by political survival and maximalist strategic ambitions = international chaos.

Trump does not appear particularly concerned with the global ramifications of this war. His priorities seem narrower: legacy, image, dominance, headlines, polls, personal mythology. The international system is merely background scenery to the drama of Donald Trump.

The surviving IRGC leadership is motivated by survival itself. In many ways, they have embarked upon the largest martyrdom operation in modern geopolitical history. Their mosaic strategy — dispersed networks, proxy leverage, asymmetric disruption — succeeded in helping deliver strategic control over the Strait of Hormuz. And they appear willing to burn the region, and perhaps much of the global economy, rather than surrender that advantage.

As for Netanyahu, Israel’s campaign long ago moved beyond simple retaliation for the atrocities of October 7. Gaza has been devastated. Iran remains in the crosshairs. Israeli forces remain poised for further escalation. Yet Israel is now tethered politically to the corpse of the Trump administration. Netanyahu cannot risk unilateral escalation if there is even the slightest possibility Trump, in one of his infamous fits of rage or ego, suddenly turns on him.

And the rest of the world?

We stick fingers in our ears and sing loudly, pretending this catastrophe belongs only to “that region.” It does not.

There is no return to the world of February 27. Even if the guns fell silent tomorrow, the damage inflicted upon the international system would take years — perhaps decades — to repair.

But tribal loyalty blinds people.

Trump supporters will insist he is a misunderstood genius with a master plan. Netanyahu supporters will portray him as Israel’s indispensable saviour. IRGC loyalists will elevate martyrdom into strategic virtue, because movements that glorify death over life become extraordinarily difficult to deter. That lesson should have been learned during the War on Terror.

Yes, there be monsters out there.

And the truly terrifying part is that many of them genuinely believe themselves to be righteous.

They seem wilfully blind to the forces they are unleashing. Mass hunger leads to desperation. Desperation leads to migration. Mass migration fuels political extremism across the West. The populist right is already rising on precisely those fears. This crisis risks becoming a self-perpetuating cycle of instability feeding instability.

There is a degree of collective insanity in all this that I struggle to comprehend.

Yes, there be monsters out there.

And if this continues, they may yet consume us all.

Share Dr. John Bruni's Substack

The problem is not that Australia lacks ideas. The difficulty is that Australia lacks urgency.

For decades, defence debates in this country have been shaped not by strategic necessity, but by political caution, bureaucratic inertia, and a deeply ingrained cultural instinct—the “she’ll be right” syndrome.

It is the quiet assumption that:

• warning time will always exist

• allies will always step in

• and that somehow, when the moment comes, Australia will find a way

But history suggests something else entirely.

A Country That Has Faced This Before

Australia is not new to the idea of national service or mass mobilisation.

In fact, it has grappled with it repeatedly—with mixed success and deep controversy.

• During World War I, two national referendums on conscription failed, fracturing the nation politically and socially.

• In World War II, Australia adopted a more controlled system of compulsory service for home defence, later expanded under existential threat.

• During the Korean War, national service returned in a limited form.

• And in the Vietnam War, the conscription ‘ballot system’ became politically toxic—ultimately abandoned under the weight of public opposition and strategic ambiguity.

Each iteration followed a familiar pattern:

👉 Introduced under pressure
👉 Contested domestically
👉 Sustained only as long as the threat was undeniable

And then dismantled.

Not because the concept was inherently flawed—but because Australia reverted to comfort once the pressure eased.

The Treasury Reflex: Counting the Cost of Survival

No serious reform escapes the gravitational pull of Treasury.

The argument is always the same:

• “Too expensive”

• “Not fiscally sustainable”

• “Unrealistic in the current budget environment”

And in isolation, these concerns are valid. But taken too far, they become dangerous. Because they frame defence not as national insurance, but as discretionary spending.

The reality is stark:

👉 War is always more expensive than preparation

A $3–4 billion annual uplift (Option A), or even a $10+ billion national service model (Option B), is routinely framed as excessive.

Yet these figures pale in comparison to:

• the economic shock of disrupted trade

• the cost of prolonged conflict

• or the price of strategic failure

Treasury’s logic is internally consistent.

But strategically, it risks producing a force that is efficient on paper and ineffective in reality.

Subscribe now

The Military Blind Spot: Platforms Over People

There is also a harder truth—one that sits uncomfortably within the defence establishment itself.

For decades, capability debates have been dominated by platforms:

• submarines

• strike systems

• advanced technologies

This has created what can only be described as a fetishisation of hardware.

The implicit belief:

👉 The right weapons will compensate for structural weaknesses in manpower

They won’t.

Weapons do not deploy themselves. Ships do not sail without crews. Aircraft do not generate sorties without technicians, engineers, and sustainment chains.

And yet, career incentives within the system often reward:

• managing large procurement programs

• overseeing high-value acquisitions

• aligning with flagship projects like AUKUS

Far less attention is paid to the harder, less visible task:

👉 Building and sustaining a fully manned, operationally viable force

The result?

A force that looks impressive in capability statements—but struggles to meet its mission requirements under stress.

The Conscription Taboo Inside the ADF

There is also a deep institutional bias against national service within the ADF.

This is understandable.

The legacy of Vietnam—politically divisive, socially disruptive—still casts a long shadow.

The argument often presented is that national service:

❌ Dilutes professionalism
❌ Lowers standards
❌ Creates a less capable force

But this argument does not withstand international comparison.

Countries such as:

• Israel

• Finland

• Singapore

• Sweden

have clearly demonstrated the opposite.

They maintain:

• highly professional core forces

• deep, trained reserve pools

• and the ability to mobilise at scale

National service does not undermine professionalism.

👉 It is anchored by it—when designed properly

The Real Resistance: Society Itself

And then there is the hardest barrier of all: Australian society. Modern Australia is deeply resistant to compulsion. The idea of being required—rather than choosing—to serve is instinctively rejected. This is often framed as a matter of individual freedom.

But there is another side to this equation.

Australia today is increasingly fragmented:

• socially

• culturally

• politically

We do not always see ourselves as a single national community.

National service challenges that.

It creates:

• shared experience

• shared responsibility

• shared identity

And in doing so, it offers something that extends beyond defence:

👉 A mechanism for national cohesion

In a more contested and uncertain world, that cohesion is not a luxury. It is a strategic asset.

What Defence Is Actually For

At its core, this debate is not about budgets, platforms, or institutional preferences.

It is about purpose.

Defence is not:

• protecting bureaucratic turf

• sustaining procurement pipelines

• or avoiding political discomfort

Defence is about one thing:

👉 Ensuring the Commonwealth of Australia has the means to defend itself—and endure in doing so, that requires:

• people in uniform

• properly supported

• sustainably structured

• and available in sufficient numbers

Because in any serious conflict, the decisive factor is not what you can deploy on day one. It is what you can sustain on day one hundred.

The Bottom Line

Australia has a choice.

It can continue:

• managing decline

• accepting hollow units

• and hoping the strategic environment stabilises

Or it can act:

• stabilise the force (Option A)

• build strategic depth (Option B)

• and re-centre defence around people, not just platforms

Because if history teaches anything, it is this:

Australia only embraces hard defence choices when it is already too late.

The question now is whether we are prepared to act before that moment arrives.

Share

Australia’s strategic outlook has hardened.

We hear it in the language coming out of Canberra: warning times are shrinking, the Indo-Pacific is more contested, and the risk of conflict—while still unlikely—is no longer remote.

But beneath this growing sense of urgency lies a quieter, more dangerous reality:

Australia’s defence force is not just small—it is hollow.

The Illusion of Capability

On paper, the Australian Defence Force (ADF) looks credible.

In reality, it is operating below strength.

• Authorised full-time force: ~62,000

• Actual strength: ~57,000

• Shortfall: ~5,000 personnel

The reserve story is worse.

• Nominal reserves: ~28,000

• Effective, usable force: ~16,500

This gives Australia a total effective force of roughly 73,500 personnel.

That might sound adequate—until you consider what is required to sustain operations, rotate forces, and absorb losses in a high-intensity environment.

What “Optimal” Actually Looks Like

A realistic, operationally credible ADF would look very different:

• Full-time force: 65,000–67,000

• Effective reserves: 30,000–35,000

That produces a total effective force of ~95,000 to 100,000 personnel.

The gap is stark:

👉 Australia is short by 20,000–25,000 trained personnel

This is not just a numbers problem.

It is a capability problem:

• Units that cannot deploy at full strength

• Ships that cannot sail due to crew shortages

• Air squadrons constrained by technical workforce gaps

• Brigades that exist on paper, not in practice

In strategic terms, this is what militaries call a “hollow force.”

Option A: Fix the Force We Have

The first pathway is straightforward: repair the existing ADF using a voluntary model.

This means focusing on three things:

1. Stop the Bleeding

Retention is the fastest way to rebuild strength.

If Australia reduces separations by even 25–30%, it could retain:

• 3,000–4,000 additional personnel over three years

This requires:

• Housing stability

• Family-friendly posting cycles

• Targeted retention bonuses for critical trades

2. Recruit at Scale

The current intake is insufficient.

Annual recruitment needs to rise from ~6,500 to:
👉 9,000–10,000 personnel per year

This includes:

• Lateral recruitment from partner nations

• Fast-tracked technical pathways (cyber, engineering, logistics)

3. Make the Reserves Real

Australia’s reserves are not a force—they are a register.

Reform would include:

• Minimum service commitments (40–60 days/year)

• Strong financial incentives

• Employer support schemes

The goal:

👉 Lift effective reserves from ~16,500 to 30,000+

The Cost of Fixing the Force

This is not cheap—but it is manageable.

• Retention incentives: ~$1B/year

• Recruitment expansion: ~$0.5B/year

• Reserve reform: ~$1B/year

• Training expansion: ~$0.7B/year

👉 Total: ~$3–3.5 billion annually

The Problem

Option A works—but slowly.

It stabilises the ADF. It improves readiness.

But it does not solve Australia’s deeper problem:

👉 Lack of strategic depth

Subscribe now

Option B: Build a Nation That Can Mobilise

The second pathway is more ambitious—and more controversial.

It is the phased introduction of national service.

Not mass conscription.

But a selective, modern system designed for resilience and mobilisation.

Phase 1: Voluntary National Service

• 5,000–8,000 participants annually

• 6–12 months service

• Focus on:

  • Cyber

  • Engineering

  • Logistics

  • Civil defence

This builds infrastructure without political shock.

Phase 2: Selective Mandatory Intake

• 15,000–20,000 per year (balloted)

• 9–12 months service

Split between:

• ADF support roles

• National resilience tasks

Within five years:

👉 Australia gains a trained reserve pool of 60,000+ personnel

Phase 3: A Mobilisation State

Graduates transition into:

• Active reserves

• Specialist capability pools

Within a decade:

👉 Australia could generate 75,000–100,000 trained specialists

This fundamentally changes the strategic equation.

The Cost of National Service

This is a serious national investment:

• Training & infrastructure: $4–6B

• Pay & allowances: $5–7B

• Administration: ~$1B

👉 Total: ~$10–14 billion annually

The Trade-Off

Option B is:

✔ Fast
✔ Scalable
✔ Strategically transformative

But also:

❌ Politically sensitive
❌ Expensive
❌ Culturally disruptive

After National Service (5–7 Year Horizon)

1. Full-Time Force (Stabilised & Expanded)

With Option A reforms:

• Target: 65,000–67,000

2. Active / Ready Reserves (Reformed + NS Graduates)

Existing reserves (reformed):

• Lifted to: 30,000–35,000 effective

National service pipeline:

• Annual intake: 15,000–20,000

• 5 years accumulation (with attrition):
  👉 60,000–75,000 trained personnel

But not all are “high-readiness.”

This breaks down to:

• High-readiness reserve (regular training): 30,000–40,000

• Lower-readiness strategic reserve: 30,000–50,000

Total Usable Force (Realistic Structure)

Tiered Force Model

🔴 Tier 1: Full-Time Force

👉 65,000–67,000

🟠 Tier 2: High-Readiness Reserves

👉 30,000–40,000
(Deployable within months)

🟡 Tier 3: Strategic Reserve (National Service Pool)

👉 30,000–50,000
(Deployable with mobilisation time)

Total Usable Force

👉 ~125,000 to 155,000 personnel

⚖️ What This Actually Means

Compared to Today

• Current: ~73,500

• Future: ~125,000–155,000

👉 Increase: +50,000 to +80,000 personnel

More Important Than Size: Structure

This transforms Australia from:

❌ A peacetime force
➡️ Into
✅ A mobilisation-capable defence system

Operational Impact

Without National Service:

• Limited rotation capacity

• Minimal surge capability

• High burnout risk

With National Service:

✔ Sustained operations over time
✔ Ability to absorb casualties and attrition
✔ Real homeland defence capability
✔ Expanded logistics, cyber, and infrastructure workforce

Critical Reality Check

Even at 150,000 total usable personnel, Australia is not becoming a mass army.

Instead, it becomes:

👉 A high-quality, scalable force with depth

This is much closer to:

• Finland-style resilience

• Singapore-style national service backbone

• Israeli-style mobilisation logic (though smaller in scale)

The Strategic Reality

This is the core issue:

• Option A fixes today’s force

• Option B prepares Australia for war

Right now, Australia is doing neither adequately.

World War E and the Limits of a Hollow Force

There is another layer to this problem—one that is still not fully understood in Australia’s defence debate.

We are not just entering a period of geopolitical competition.

We are entering an era increasingly defined by what can only be described as “World War E”—a global contest shaped by energy access, choke points, and economic endurance.

From the war in Ukraine to tensions in the Middle East, the pattern is clear:

• Energy is not just an economic asset

• It is a strategic weapon

The Strait of Hormuz, the South China Sea, and critical maritime routes are no longer abstract concerns. They are pressure points that can trigger systemic shock across the global economy.

For Australia, this creates a dangerous contradiction.

On one hand:

• We are deeply dependent on imported refined fuels

• Our supply chains are long, fragile, and exposed

On the other:

• Our defence force lacks the personnel depth to sustain prolonged operations

This is where the hollow force problem becomes acute.

Because in an energy-constrained crisis:

• Fuel supply becomes uncertain

• Logistics chains degrade

• Operational tempo slows

And without sufficient personnel:

• There is no capacity to surge

• No redundancy in the system

• No ability to absorb disruption

👉 Energy shocks don’t just hit economies—they break military endurance

The Strategic Convergence

This is the convergence Australia has yet to fully grasp:

• Energy vulnerability + manpower shortfall = strategic paralysis

Even a limited regional crisis could produce:

• Fuel shortages

• Economic disruption

• Military overstretch

And in that environment, a hollow force does not fail dramatically.

It simply grinds to a halt.

Why This Matters Now

Australia is investing heavily in platforms:

• Submarines

• Long-range strike

• Advanced capabilities

But platforms require:

• People to operate them

• Logistics to sustain them

• Energy to power them

Without those foundations:

👉 Capability exists—but cannot be sustained

The Real Question

This is no longer just about defence policy.

It is about national resilience.

Can Australia sustain military operations in a prolonged energy crisis?

Right now, the answer is deeply uncertain.

A Smarter Path Forward

The real solution is not choosing between A and B.

It is sequencing them.

1. Stabilise the ADF immediately (Option A)

2. Introduce a National Resilience Service (Option B, Phase 1)

3. Expand only as strategic conditions demand

This creates:

• A credible professional force

• A scalable reserve system

• A nation capable of mobilisation

Final Thought

Australia does not just have a defence capability problem. It has an energy–manpower crisis—and in the next war, those two will be inseparable. Only by preparing to confront this reality now will we be able to tackle the challenges the future presents with confidence and the capability necessary.

Share

For roughly eight decades, the global economy has rested on a largely invisible foundation: a strategic bargain between the United States and the rest of the world.

In simple terms, Washington provided the naval power necessary to secure freedom of navigation across the world’s oceans. In return, the international system aligned—loosely but consistently—around U.S.-led economic and security architectures.

That bargain is now fraying.

What we are witnessing is not a sudden collapse, but a gradual erosion. Yet the direction of travel is clear. The United States is becoming more selective, more transactional, and less willing to act as the default guarantor of maritime order. Whether this is driven by strategic overstretch, domestic political recalibration, or a reassessment of national interest is almost secondary. The effect is the same: uncertainty.

And in international politics, uncertainty is oxygen for competition.

The Return of the Choke Point State

In a system where maritime security is no longer guaranteed, geography reasserts itself with a vengeance. Strategic choke points—those narrow maritime passages through which global trade must flow—regain their historic centrality.

States that control these choke points will not simply manage them; increasingly, they will feel compelled to dominate them.

Why? Because the old assumption—that a U.S. naval presence would ultimately keep sea lanes open—is no longer reliable. In its place comes a harsher calculus: if you do not control your strategic environment, someone else will.

The likely outcome is a world drifting back toward a maritime “law of the jungle.” But this is not a simple regression to pre-1945 conditions. The technological context has fundamentally changed.

The Democratisation of Strategic Denial

Twenty years ago, the ability to meaningfully threaten a major maritime choke point was the preserve of advanced military powers. Today, that capability is diffusing rapidly.

A combination of technologies—cheap drones, precision-guided munitions, cyber warfare, space-based surveillance, and increasingly, AI-enabled targeting systems—has lowered the barrier to entry. Smaller or less wealthy states can now impose disproportionate costs on more powerful adversaries.

This is not about matching naval power ship-for-ship. It is about denial—making the cost of access unacceptably high.

In effect, the offence-defence balance in maritime spaces is shifting. Control of the seas is becoming less about dominance and more about disruption.

Subscribe now

Hormuz: A Glimpse of the Future

The Strait of Hormuz offers a real-time case study of this emerging dynamic.

Iran, through the Islamic Revolutionary Guard Corps (IRGC), does not need to defeat the United States in a conventional sense. It simply needs to create enough risk and uncertainty to disrupt the flow of trade. That alone is sufficient to generate global economic shockwaves.

And that is precisely what we are seeing.

The U.S., for all its military superiority, faces constraints. Rapid escalation carries risks that extend far beyond the Gulf. Meanwhile, Iran operates with a different risk tolerance, a different strategic culture, and a different set of priorities.

The result is a form of asymmetry that is not just military, but conceptual.

International commerce, agriculture, and logistics are not the direct targets of this confrontation—but they are its most immediate victims.

Misreading the IRGC

A critical flaw in current Western thinking—particularly in the approach associated with Donald Trump—is the assumption that economic incentives can reshape Iranian behaviour.

The logic is straightforward: offer relief, offer access, offer money—and in return, Iran moderates.

But this misunderstands the nature of the IRGC.

Yes, the organisation values wealth. But wealth is not its primary driver. Power is. And more specifically, power as a means of survival.

For the IRGC, control over strategic levers—like the flow of trade through the Gulf—is not simply an economic asset. It is an existential one. It underpins regime stability, internal cohesion, and deterrence against both external and internal threats.

To ask the IRGC to trade that power for money is to ask it to accept vulnerability.

And vulnerability, in their worldview, is fatal.

The Internal Dimension: Power as Regime Insurance

There is also a domestic dimension that is often underappreciated.

If the IRGC leadership were to accept a deal that visibly traded strategic leverage for economic gain, it would risk internal fracture. Hardline supporters—those who view the regime’s legitimacy through a religious and ideological lens—could interpret such a move as betrayal.

The consequences would not be limited to elite politics. They would cascade through the system.

A perceived sell-out to the United States could weaken the regime’s narrative, embolden opposition elements, and create fissures within the security apparatus itself. The Basij and other internal enforcement arms would likely respond with force—but the very need to do so would signal instability.

From this perspective, maintaining power is not just about external positioning. It is about internal coherence.

Strategy vs Transaction

This brings us to a deeper strategic mismatch.

The Trumpian approach—at least as it is often articulated—leans heavily on transactional logic. Deals can be made. Incentives can be aligned. Outcomes can be negotiated.

But the IRGC is not playing a transactional game. It is playing a strategic one, rooted in ideology, survival, and long-term positioning.

To put it bluntly: this is not a negotiation between two actors operating within the same conceptual framework.

It is, rather, a negotiation between fundamentally different worldviews.

One side is playing Monopoly—focused on accumulation, deal-making, and short-term gain.

The other is playing chess—focused on position, endurance, and survival over time.

The Fog Thickens

As the conflict continues, the fog of war will deepen. Motives will blur. Signals will be misread. Opportunities for miscalculation will multiply.

But certain structural realities are already visible.

The maritime order that has underpinned globalisation is weakening. Strategic geography is reasserting itself. Technology is empowering smaller actors to challenge larger ones. And ideological regimes are doubling down on power as a prerequisite for survival.

What Comes Next

If the U.S. continues to step back from its traditional role, the world will not remain in equilibrium. Other powers will move to fill the gaps—but not necessarily in ways that preserve openness or stability.

Instead, we may be entering an era of fragmented maritime control, where key choke points are contested, leveraged, and occasionally weaponised.

In such a world, global trade becomes more fragile. Supply chains become more politicised. And economic shocks become more frequent.

The age of secure, predictable globalisation gives way to something far more volatile.

Final Thought

The critical mistake at this moment is not a lack of power, but a misreading of it.

The assumption that all actors are ultimately motivated by the same incentives—that money can substitute for power, or that deals can override ideology—is not just optimistic. It is strategically dangerous.

Because in this emerging environment, some actors are not simply seeking advantage.

They are seeking survival.

And they are prepared to play a much longer, much harder game to secure it.

Share Dr. John Bruni's Substack

Australia’s latest defence thinking is built on a dangerous assumption: that we still have time.

Time to build; time to adjust, and time to rely on a system that is visibly weakening.

But what if we don’t?

The reality—laid bare in recent analysis of the 2026 National Defence Strategy—is that Australia is operating inside a narrowing window. The old strategic model is eroding, yet the new one is being built too slowly to matter when it counts.

For decades, Australia solved its security problem elegantly: outsource strategic defence to a reliable hegemon, build a small professional force, and contribute where needed. It worked because the international system was stable.

That system is no longer stable.

We now face a harsher reality: a mid-sized country, with a small population, a shallow industrial base, and vast maritime exposure, sitting at the edge of the world’s most contested region—without the ability to independently generate or sustain decisive hard power.

So the question is no longer abstract.

What does a country like Australia actually do when the strategic environment turns against it?

There are only two serious answers.

Option A: Fix the Volunteer Force — Properly

If Australia wants to avoid more radical measures, then the full-volunteer model must be transformed—not tweaked, not rebranded, but rebuilt.

Because the current model is too small, too brittle, and too slow to scale.

The answer is not just more ships, more missiles, or more advanced platforms. Without people—trained, retained, and available in sufficient numbers—those capabilities are hollow.

What Australia needs is a three-layer force structure:

• A larger, more lethal full-time ADF as the ready core

• A serious operational reserve, not a symbolic one

• A national support base of skilled personnel across logistics, infrastructure, cyber, health, and sustainment

This is about building depth, not just capability.

The real problem: people

Recruitment and retention are not administrative issues. They are strategic vulnerabilities.

If Australia cannot attract and keep personnel, then every acquisition program becomes a liability.

So what changes?

Recruitment must become faster, simpler, and targeted—especially for technical skills. Mid-career entry must be normalised. Reserve entry must be streamlined and genuinely flexible.

Retention, however, is the real centre of gravity.

Housing, family stability, predictable career paths, and flexible service options are not perks—they are strategic necessities. Losing trained people is the fastest way to hollow out force structure.

The Reserve must be reimagined

Australia’s Reserve forces need to move from “part-time adjunct” to strategic backbone.

They should perform three roles:

• Augmentation of active units

• Reinforcement in crisis or conflict

• Homeland defence and resilience

That means engineers, logistics units, port operators, cyber specialists, medical support, drone operators, infrastructure protection—not just light infantry.

The uncomfortable truth: this costs money

There is no serious version of this model that does not require increased spending.

Not marginal increases. Structural ones.

Australia must advance defence spending to 3% of GDP as soon as possible—not just for platforms, but for:

• personnel,

• munitions,

• fuel reserves,

• logistics,

• training,

• sustainment.

Because a warfighting system without people and sustainment is not deterrence. It’s theatre. And the 2026 National Defence Strategy, for all its high-sounding words, is just that, theatre, for one political party to play it ‘hard’ on defence rhetoric over the other.

The strength—and the risk

This model is politically feasible. It aligns with Australian values. And, importantly, it should be politically sellable while building a professional force.

But it has a weakness:

It may not scale fast enough.

And that matters, because the global strategic friction is accelerating.

Subscribe now

Option B: National Service — Strategic Depth at Scale

If the environment deteriorates faster than expected—and there are strong indicators it might—then the volunteer model alone may not be enough.

At that point, Australia faces a harder choice:

Reintroduce national service.

Not as a throwback to the 1950s but as a modern system designed for a modern threat environment.

This is not about mass infantry

A contemporary national service model would not simply produce soldiers. It would produce national capability.

Participants would be streamed into:

• military roles,

• cyber and AI support,

• logistics and transport,

• infrastructure protection,

• medical services,

• emergency response and civil defence.

This creates something Australia currently lacks:

A trained national reserve that can be mobilised at scale.

A four-layer national defence structure

Under this model, Australia builds:

1. A full-time professional ADF

2. An active, trained Reserve

3. A mobilisation pool of former regular and reserve military personnel

4. A civil resilience layer capable of sustaining the nation under stress

This is not just about fighting wars. It is about surviving them.

Why this may become necessary

The uncomfortable reality is this:

• Alliance reliability is becoming conditional

• Crisis warning times are collapsing

• Procurement timelines may prove irrelevant

• Technological disruption may outpace acquisition cycles

If that happens, Australia will need something it does not currently possess:

Mass.

Not just equipment—but trained people.

The strengths—and the cost

National service delivers:

• scale,

• resilience,

• mobilisation capacity,

• a broader national understanding of defence.

But it comes at a price:

• political resistance,

• social disruption,

• significant cost,

• the need for serious institutional reform.

It only works if done properly. A token system would fail.

The Real Choice

This is not a theoretical debate.

It is a question of timing.

If Australia acts early, invests seriously, and reforms its volunteer force, Option A can work.

If it delays—and the environment worsens faster than expected—then Option B becomes unavoidable.

My View

Australia should pursue the volunteer solution immediately—at scale, with urgency, and with real funding behind it.

But it should also do something else, quietly and deliberately:

Prepare for national service.

Build the legal frameworks.
Design the training pipelines.
Map the industrial and civil integration.

Not because it is politically easy.

But it may become strategically necessary.

Final Thought

For decades, Australia’s defence model was built on a simple premise:

That someone else would provide time.

Time to prepare. Time to build. Time to respond.

That premise is now looking decidedly quaint and irrelevant.

And if time disappears, the only thing that replaces it is preparedness.

Australia must decide—now—how it intends to build it.

Share

There’s a growing assumption in strategic circles that Donald Trump has two clear options when it comes to Iran: declare victory and disengage, or escalate further. At first glance, the rational choice appears obvious. But rationality has never been the most reliable predictor of political decision-making—particularly in moments of crisis.

The first pathway is the most conventional. Trump could frame recent actions as a success: Iran’s conventional military capabilities—already limited compared to U.S. and Israeli power—have been further degraded. More importantly, he could claim that Iran’s nuclear program has been disrupted.

But “disruption” is doing a lot of heavy lifting here.

Without a sustained on-the-ground presence, there is no credible way to verify the extent of that disruption. Nuclear material can be relocated, concealed, or compartmentalised. Infrastructure can be rebuilt. Expertise cannot be bombed out of existence. Even under Ali Khamenei, whose strategic caution has often been underestimated, Iran’s nuclear ambitions—whether latent or active—are unlikely to simply disappear.

Declaring victory under these conditions would be politically convenient, but strategically fragile.

Which brings us to the second pathway: escalation.

A ground war against Iran is, by almost any conventional military or political metric, a deeply unattractive option. Iran’s geography, population size, and asymmetric capabilities would make it far more challenging than the Iraq War or even Afghanistan. It would require a massive commitment of resources, carry significant regional escalation risks, and almost certainly lack broad domestic support in the United States.

And yet, dismissing it outright may be a mistake.

One of the enduring lessons of modern conflict is that wars are not always popularly initiated. The Iraq War itself proceeded despite significant public scepticism. Executive authority, particularly in matters of national security, provides U.S. presidents with considerable latitude to act—even in the absence of consensus.

Trump’s leadership style adds another layer of complexity. His unpredictability is not incidental; it is a feature. By remaining deliberately ambiguous about his intentions, he complicates adversarial decision-making. Iran’s leadership, including elements like the Islamic Revolutionary Guard Corps, may calculate that the United States is bluffing—that escalation beyond a certain threshold is politically or strategically impossible.

That assumption could prove dangerously wrong.

There is a paradox at the heart of deterrence: actions that seem irrational can sometimes be the most destabilising—and therefore the most effective. If Iran believes Trump will ultimately pull back, it may take risks it otherwise wouldn’t. Conversely, if Trump seeks to reassert credibility or break that perception, escalation becomes more—not less—likely.

There are also secondary dynamics at play. Strategic shocks—such as a sudden ground intervention—would reverberate through global markets, alliance systems, and energy flows. Volatility at that scale creates both systemic risk and, inevitably, opportunities for those positioned to benefit.

None of this means that a ground war is inevitable. But it does mean that it is plausible.

And that is the uncomfortable reality: in an environment shaped by executive dominance, strategic ambiguity, and a willingness to defy conventional logic, the range of possible outcomes expands dramatically.

So the question is not whether escalation makes sense.

It’s whether we are prepared for a decision-making framework where it doesn’t have to.

Australia’s strategic outlook has hardened dramatically over the past few years. The language coming out of Canberra is now unambiguous: the Indo-Pacific is becoming more contested, warning times are shrinking, and the risk of conflict—while still unlikely—is no longer remote.

In response, the government’s defence strategy points toward increased spending, potentially rising toward 2.5–3% of GDP over time. On the surface, this suggests a country waking up to a deteriorating security environment.

But the reality is more complicated.

The Illusion of Urgency

The defining tension in Australia’s current approach is this: the strategy speaks in the language of urgency, but the spending profile does not.

Yes, defence funding is increasing. But it is doing so gradually, over years and decades—not at the pace typically associated with rapidly deteriorating strategic conditions.

This creates a mismatch. If warning times are indeed shrinking, then a slow ramp-up in spending risks delivering capability too late to shape the environment it is meant to deter.

A Shift in What We Buy

Where the strategy is more convincing is in how money is being allocated.

Australia is moving away from a broad, general-purpose force toward a much more focused model built around a “strategy of denial.” The aim is not to project power globally, but to make it prohibitively difficult for an adversary to operate in Australia’s immediate region.

This has clear implications for spending priorities.

Investment is increasingly concentrated in:

• Long-range strike capabilities

• Submarines, particularly under the AUKUS framework

• Missile systems and stockpiles

• Northern Australian infrastructure and logistics

At the same time, legacy capabilities—particularly in the land domain—are being scaled back or rethought.

This is, in many ways, a necessary correction. For decades, Australia optimised its force structure for expeditionary operations alongside allies. The new strategy reorients the force toward the defence of Australia and its near region.

The Capital-Heavy Decade Ahead

The problem is that this new approach is extraordinarily expensive—and heavily backloaded.

The AUKUS submarine program alone represents the largest defence investment in Australian history, with costs running into the hundreds of billions over its lifetime. Add to this the need for missile production, infrastructure upgrades, and advanced technologies, and it becomes clear that Australia is entering a prolonged period of capital-intensive defence spending.

These are not quick wins. They are long-term bets.

And that raises a critical question: what happens in the interim?

The Capability Gap Problem

Australia is effectively wagering that it can manage rising strategic risk while waiting for future capabilities to come online.

This is a dangerous assumption.

Submarines will take decades. Infrastructure takes years. Even missile stockpiles require time to build at scale. In the meantime, the strategic environment continues to evolve.

The result is a potential “capability gap”—a period in which Australia’s existing forces may be insufficient for emerging challenges, while its future force remains incomplete.

The Procurement Reality

Even if the funding is there, there is another constraint: delivery.

Australia’s defence procurement system has a well-documented history of delays, cost overruns, and underperformance. This is not unique to Australia, but it is particularly acute given the scale and complexity of current projects.

In this context, more money does not automatically translate into more capability.

In fact, without reform, increased funding can simply lead to larger, more expensive delays.

Sovereignty vs Dependence

Another tension lies in the push for sovereign capability.

The strategy emphasises the need to build a domestic defence industry, reduce reliance on global supply chains, and increase national resilience. These are sensible goals, particularly in an era of geopolitical fragmentation.

But they come at a cost.

Producing defence equipment domestically is often more expensive than importing it. It also takes time to build the necessary industrial base. In the short term, this can slow capability delivery even as it strengthens long-term resilience.

At the same time, Australia remains deeply embedded in alliance structures—particularly with the United States. Programs like AUKUS reinforce interoperability, but also highlight the limits of true independence.

The Real Test: Execution

Ultimately, the success of Australia’s defence strategy will not be determined by how much it spends, but by how effectively it converts spending into capability.

This is where the greatest uncertainty lies.

The strategy is conceptually sound. The shift toward denial, the focus on the Indo-Pacific, and the recognition of a more dangerous world are all well-founded.

But strategy without execution is aspiration.

Australia is now entering a period where:

• Spending will increase

• Expectations will rise

• Strategic risks will intensify

If procurement remains slow, if projects continue to slip, and if capability arrives too late, then the current approach risks becoming a case study in misaligned ambition.

Conclusion

Australia is not standing still. It is investing more, thinking more clearly about its strategic environment, and making difficult choices about its future force.

But it is also taking significant risks.

The central gamble is that a gradual increase in spending, combined with long-term investments, will be enough to navigate a rapidly changing security environment.

That may prove correct.

But if it does not, the issue will not be a lack of resources.

It will be a failure to turn those resources into a timely, usable capability.

And in strategy, timing is everything.

This weekend may mark a pivotal moment in the Iran War.

The military indicators are increasingly difficult to ignore. One Marine Expeditionary Unit (USS Tripoli) is almost in position. Another (USS Boxer) is en route. Elements of the 82nd Airborne Division are being mobilised.

These are not symbolic deployments—they are capabilities designed for rapid, decisive action.

If the United States chooses to initiate ground operations, the most likely opening targets are not deep into Iran, but rather its strategically positioned island holdings: Abu Musa and the Greater and Lesser Tunb islands.

These islands sit astride one of the world’s most critical maritime chokepoints—the Strait of Hormuz.

A swift seizure would offer Washington a tactical and symbolic victory: demonstrating resolve, securing a key geographic advantage, and doing so with a relatively limited footprint and reduced risk of casualties.

But this would only be the beginning.

More ambitious operations—occupying Kharg Island or Qeshm Island—would significantly raise the stakes.

Kharg Island, in particular, is central to Iran’s oil export capacity. Any attempt to seize or neutralise it would likely be met with fierce resistance. Casualties would no longer be a risk—they would be an expectation.

Then there is the most dangerous scenario of all: a direct airborne insertion into mainland Iran. Locations such as Isfahan, long associated with Iran’s nuclear infrastructure, could become targets in a high-risk mission to locate and secure enriched uranium stockpiles.

Such an operation would depend on near-perfect intelligence. Without it, the risks multiply rapidly—not just operationally, but strategically. A failed or protracted mission inside Iran could trigger a broader regional war.

And this is where diplomacy—or the lack of it—becomes critical.

At present, negotiations appear stalled. Both Washington and Tehran are entrenched in maximalist positions, leaving little room for compromise. The diplomatic track, at least in the short term, seems unlikely to produce a breakthrough.

Adding further urgency is the reported U.S. timeline tied to potential strikes on Iran’s civilian power infrastructure. If these strikes are carried out, retaliation is almost certain. Iran’s most immediate and effective response would likely target the energy and infrastructure systems of the Arab Gulf states, or their desalination plants.

In other words, escalation would not remain confined.

What we are witnessing is a narrowing set of options, each more dangerous than the last.

The coming days will reveal whether this war stabilises—or whether it enters a new, far more volatile phase. But with Israel launching operations against Iranian proxy, Hezbollah, in southern Lebanon, perhaps the prelude to an Israeli invasion and occupation there, things aren’t looking good for any cessation of hostilities.

In a recent analysis, I argued that production would be a decisive variable in a U.S.–Israel–Iran war.

That remains correct — but only in a prolonged conflict. And by prolonged, I was assuming a three-to-six-month timeframe.

The deeper question is whether this war would be allowed to become prolonged.

When you layer in the economic dimension — Strait of Hormuz disruption, Red Sea insecurity, Gulf tourism collapse, and multi-front escalation — the war likely terminates before production curves ever become decisive.

This IS NOT an industrial war.

IT IS an ‘economic shock’ war.

The Military Timeline (Without Economics)

Purely on military logic:

• Iran begins with significant missile stockpiles (approx. 2,000, with perhaps as many as 300 launchers).

• U.S./Israeli air dominance rapidly attrits mobile launchers.

• IRCG ballistic firing capacity declines structurally within 7–14 days.

• Iran shifts toward drones and proxies to conserve its Transporter-Erector-Launchers (TELs).

• Coalition interceptor strain is real but manageable if launcher losses accumulate.

In that model, production matters IN WEEKS 3–6. And gets worse for all parties, but especially for the Islamic Republic, owing to its overall lower industrial productive capacities and economic isolation.

Factories do determine sustainability.

But this assumes markets remain calm. They won’t, as the past 24 hours have indicated.

The Economic Variable That Changes Everything

Roughly 20% of global oil consumption passes through the Strait of Hormuz.

Even partial disruption:

• Spikes crude & gas prices
• Which then drives insurance withdrawal
• And then stops tanker movements
• Accelerating already high global inflation

Add Bab el-Mandeb harassment, and you disrupt another major artery of global trade through the Suez Canal.

Add a collapse of Gulf tourism, and you introduce immediate political pressure in regional capitals whose economic model is built on stability.

The result is a compression of political tolerance.

Markets move faster than militaries.

Energy panic does not wait for launcher attrition curves.

The Clock Moves From Operational To Political

Under full air dominance, Iran’s launcher capacity likely degrades faster than coalition interceptor magazines.

But that trajectory requires time.

If oil hits crisis levels by Day 5–7, political leaders face:

• Domestic inflation spikes
• Market volatility
• Insurance paralysis
• Shipping disruption
• Tourism collapse
• Escalation risk via Hezbollah & the Houthis

Now the objective changes.

Not “win decisively.”

But:

• Degrade ‘enough’ of the IRGC
• Restore shipping confidence
• Stabilise markets
• And prevent the war spreading

Military production ceases to be the primary variable.

Political survivability becomes the dominant one.

The Most Likely End State

In this economically compressed scenario:

• The Iranian theocracy survives
• IRGC missile and launcher capacity is severely degraded
• IRGC proxy pressure reduced but not eliminated
• Shipping is partially restored
• Oil stabilises at elevated but slowly declining levels

No Iranian regime collapse. No decisive destruction of the IRGC. A hard, fast, economically constrained conflict.

The Reframing Of Production

Production still matters — but only in wars allowed to become protracted.

In this scenario, the war likely ends before factories become decisive. My earlier analysis was not wrong. It was incomplete without the economic layer.

Production is the long game.

Energy markets are the short fuse.

And in the Gulf, the fuse is always shorter than analysts expect.

Not All Bad News for Iran

The American and Israeli strikes may remove significant elements of Iran’s old guard leadership. That alone alters the internal balance of power.

For Iranians who quietly hope for change, this creates a narrow but real opening.

If the political theocracy survives this war — as appears likely — the next generation of religious and IRGC leaders will face a stark choice. They cannot reconsolidate power through force alone. Post-war repression without political adjustment would risk renewed unrest in a population already strained by sanctions, inflation, and war.

The more probable path is tactical adaptation.

Promises of reform. Managed political openings. Carefully calibrated concessions designed not to liberalise the system — but to stabilise it.

Such gestures may provide temporary respite for ordinary Iranians exhausted by economic hardship and state pressure. They may even soften the immediate post-war atmosphere.

But the central question will not be whether reforms are promised.

It will be whether they are believed.

If the new elite merely rebrands continuity as renewal, the regime may buy time — but not legitimacy.

And in modern Iran, time without legitimacy is a diminishing asset.

It is on that question — credibility — that the future of the Islamic Republic hangs precariously.

The first clear verdict on the Iran–US–Israel escalation did not come from the battlefield. It came from financial markets.

Oil spiked sharply.

Gulf exchanges halted.

Global equities turned risk off.

Gold rallied.

Markets are not emotional — they are probabilistic. And what they are pricing in is not immediate collapse. They are pricing in duration.

1. This Is Not About Decapitation

Much commentary focuses on leadership targeting and regime stability. That misunderstands the structure of the Islamic Republic.

The IRGC and the clerical establishment have built a redundant, distributed command architecture that can absorb shocks without systemic failure. Even significant losses do not automatically undermine operational continuity. This suggests that, for Iran, the conflict is less about absolute victory and more about prolonging the contest on terms that wear down the adversary.

This principle is as true in the economy as it is on the battlefield.

2. Economic Isolation: Constraint and (Unintended) Endurance

Iran’s economy has been profoundly shaped — and, in many ways, constrained — by decades of sanctions and financial isolation. These measures have cut off key sources of revenue, investment, and technology, making ordinary economic growth harder and more volatile.

Hard limits on access to capital and technology:

• Sanctions have reduced Iran’s ability to export oil and access Western financial systems, forcing it into a “shadow fleet” and opaque networks just to sustain revenue streams.

• Restrictions on imports of machinery and industrial inputs have eroded production quality and hampered sectors critical to long-range military logistics.

• Investment inflows have dwindled, excluding Iran from major capital sources that could modernise energy and defence manufacturing.

Social and structural strain:

• Chronic inflation, reduced exports, and recession risks deepen internal economic stress, undermining consumer spending and public services.

• Humanitarian effects — including shortages of medicines and essential goods — signal broader systemic constraints.

These constraints clearly hinder Iran’s capacity for sustained, high-tempo engagement. A long war — one where every missile fired and every drone deployed is paid for in scarce revenue — intensifies economic pressure and could deepen internal discontent.

At the same time, Iran’s economic isolation has inadvertently built a form of resilience:

Adaptation under pressure:

• Years of sanctions have forced Tehran to improvise — from smuggling networks to indigenous production of military components that were once imported. This has created alternative supply chains that can keep certain sectors, including munitions and missiles, flowing even under external pressure.

• Isolation has made the regime less dependent on global markets and more self-referential in its economic strategy — meaning external levers like sanctions are already “priced in” to Tehran’s decision calculus.

• Close ties with non-Western partners, especially Russia and China, give Tehran avenues for barter or indirect support that partially mitigate isolation.

In short:

Economic isolation both inhibits Iran’s capacity to finance an open-ended war and hardens it against the very kinds of external pressure Western powers have used for decades.

This is why markets — which price probability — are treating the conflict as a war of endurance, not a short punitive strike.

3. Why Oil Is the Real Front Line

The oil spike is rational.

Even without a full Hormuz closure, insurance premiums, rerouting, and precautionary disruptions raise structural costs. The energy risk premium now embedded in Brent and West Texas Intermediate (WTI) reflects two things simultaneously: the physical risk of supply disruption and the economic fragility of a major producer already under strain.

A war of days = volatility.

A war of months = structural repricing of energy and defence manufacturing.

Markets are asking:

Can Western stockpiles outlast Iranian missile inventories?

Can global energy flows be kept stable if logistical choke points are threatened?

Those aren’t purely military questions — they are industrial and economic ones.

4. What to Watch Next

If this becomes an attritional contest, three metrics matter more than rhetoric:

1. Interceptor burn rate vs replenishment rate — where industrial throughput becomes the contest.

2. Shipping insurance and Strait of Hormuz risk premiums — the economic expression of geopolitical risk.

3. Fiscal and social strain within Iran — the domestic consequences that could shape Tehran’s strategic choices.

Wars in 2026 are technologically dazzling.

But they remain industrial at their core.

If this escalates into a prolonged exchange, the centre of gravity will not be Tehran or Tel Aviv.

It will be production lines, financing channels, and economic adaptability.

The most seductive idea in modern coercive strategy is that air power can do politics. Hit the right nodes, shock the system, and an unpopular regime collapses from within. With Iran, that temptation is constant: the Islamic Republic is widely resented, the economy is battered, and the legitimacy deficit is real. Surely—so the argument goes—if U.S. and Israeli air strikes batter the IRGC and the state’s coercive machine, anti-government Iranians will finish the job.

But war rarely works that way. Bombing doesn’t purchase regime change. More often, it triggers a predictable trap: nationalism rises faster than revolution, and survival instincts crush street politics—at least at first.

Political scientists call this the rally-around-the-flag effect: in an external crisis, publics typically close ranks, at least temporarily, behind the state or the nation. Even when citizens dislike their leaders, an outside attack can reorder priorities: security first, politics later.

Iran is not immune. In a sustained air campaign—especially one that causes civilian casualties through misidentification, weapons failure, secondary explosions, or strikes near populated areas—the first mass behaviour is not “take to the streets.” It is get inside, find loved ones, ration fuel, locate medicine, and avoid exposed public spaces.

The critical question: will protesters become “foot soldiers” in an air war?

In the opening days of an air campaign, it is not realistic to expect large numbers of anti-regime Iranians to surge into the streets to topple the government in a coordinated way, for four reasons:

First: shelter beats politics when bombs fall.
When people believe another wave of strikes could hit within minutes, the street is not a political arena—it’s a kill zone. Even courageous protest cultures tend to pause under direct aerial threat.

Second: coordination collapses in blackouts and fear.
Air campaigns are typically paired with cyber/electronic pressure and internal security crackdowns. Iran has a long record of shutting down or degrading communications during unrest. Even where workarounds exist, the tempo of war makes mass coordination far harder than analysts assume.

Third: the “collaborator” stigma is lethal.
The regime will frame any street mobilisation during foreign strikes as treason. Many opposition-minded Iranians will refuse to be seen as an invading power’s auxiliaries—not out of love for the clerics, but from nationalism, pride, and fear of becoming the next Iraq-style cautionary tale.

Fourth: repression becomes simpler for the state.
Under wartime emergency logic, the IRGC can impose curfews, checkpoints, and mass arrests with less hesitation and fewer internal constraints. Protest becomes more costly, not less.

So yes: some dissident networks could try to exploit chaos, and you might see isolated sabotage, targeted attacks, or localised uprisings. But the idea of spontaneous mass “foot soldiers” rising because air strikes begin is far closer to Hollywood than to civil conflict realities.

National unity doesn’t equal love for the Islamic Republic

Here’s the nuance strategists miss: national cohesion can spike while regime legitimacy remains hollow. People can simultaneously believe:

• “This regime has ruined my life,” and

• “Foreign powers bombing Iran is unacceptable.”

That’s the nationalism trap: an air campaign can generate solidarity around the Iranian nation, even if it doesn’t generate loyalty to the Islamic Republic.

And the regime knows how to exploit this. Civilian casualties—especially women and children—are political accelerants. Even limited collateral damage becomes an information weapon: funerals, rubble, and grieving families saturate the media environment. The regime’s objective is simple: collapse the distinction between ‘Iran’ and ‘Islamic Republic’—to make defending the homeland synonymous with obeying the state.

Share

Could Israeli agents be preparing on the ground?

It is prudent to assume Israel has some on-the-ground capability in Iran, because credible reporting describes extensive Israeli covert activity and preparation for operations inside Iran, including smuggling systems and conducting sabotage-like actions connected to wider strike campaigns.

But a small covert footprint is not the same as the ability to manufacture a popular uprising on demand. Covert action can:

• gather intelligence,

• disrupt air defence,

• target specific nodes,

• amplify confusion.

It cannot reliably conjure a mass revolutionary movement at the precise moment bombs start falling—especially when the public’s first impulse is to protect family and survive.

Communications: Starlink as a partial workaround, not a magic switch

Recent reporting indicates large numbers of Starlink terminals have been smuggled into Iran, and that Starlink has served as a vital channel for getting video and information out during blackouts.

Iranian security forces have reportedly intensified raids and seizures of Starlink devices, including seizures in Kurdistan Province, a mountainous region associated with the Zagros Mountains—rugged terrain that can support concealment and smuggling routes.

Still, even with Starlink, two constraints remain:

1. War compresses time—people shelter; mobilisation windows shrink.

2. The regime can still hunt devices and people, even if it can’t fully shut down the signal.

The bottom line

If the aim is regime collapse, air strikes are a blunt instrument. They can degrade capabilities, punish leadership, and raise costs. But they also tend to:

• suppress protest through fear and survival behaviour,

• strengthen hardliners who thrive in siege conditions,

• and create a nationalist reflex that the regime can ride—briefly, but decisively—at the most dangerous moment.

So the realistic forecast is this: bombs don’t buy you regime change. They buy you uncertainty, temporary regime coercive consolidation, and a high probability that ordinary Iranians—however anti-regime—will initially choose shelter over street politics.

The paradox is cruel: the more a regime is hated, the more it may still benefit from the one thing that can temporarily shock society—war from above.

Subscribe now