Game Theory #16: Pax Judaica Rising

• In this March 26, 2026 lecture to his Beijing high school students, Professor Jiang analyzes the ongoing US-Israel war against Iran and argues that the conflict will end not with an Iranian defeat but with the collapse of American power in the Middle East and its replacement by Israel as the region’s dominant imperial force.
  • He frames the war as a strategic competition between two fundamentally different approaches: the US trying to force the world to conform to its military strategy, versus Iran using military action to reshape economic, political, and narrative realities in its favor.
  • He argues the US is losing due to hubris, corruption, lack of political will, depleted manufacturing capacity, and an unwillingness to sustain casualties, while Iran is gaining economically and diplomatically from the conflict.
  • He introduces the concept of “Pax Judaica” (Greater Israel) as the likely outcome: Israel replacing the US as the imperial muscle serving global elite financial interests, controlling Middle East oil, trade routes, AI infrastructure, and data centers, while Iran survives as a separate regional power controlling the Strait of Hormuz and its own trade networks.

The US Strategy: Forcing the World to Conform to Military Plans

• The US entered the war expecting a quick decapitation strike that would force Iranian surrender, but Iran fought back in ways the US did not anticipate, including closing the Strait of Hormuz and striking US allies like Qatar, Saudi Arabia, UAE, Bahrain, and Kuwait.

  • President Trump expressed shock that Iran retaliated at all, revealing the US assumption that overwhelming firepower would produce immediate capitulation.
  • White House Press Secretary Karen Levit framed the problem as Iran “not knowing” it has been defeated, placing blame on Iranian ignorance rather than on flawed US strategy.
  • Secretary of War Peter Hegseth emphasized that the US military is winning and prefers to “negotiate with bombs” rather than seek a diplomatic offramp.

• The US is trying to align the narrative, political, and economic spheres to support its military strategy, which Professor Jiang argues is a rigid and self-defeating approach.

  • Politically: Trump ordered NATO to help open the Strait of Hormuz and refuses to acknowledge the war’s unpopularity at home, where only about 40% of Americans support it.
  • Economically: Treasury Secretary Scott Bessent unsanctioned Russian and Iranian oil to prevent a global supply crisis, but this had the unintended effect of allowing Iran to earn roughly $14 billion from oil sales, exceeding its entire annual military budget of $10 billion.
  • Narratively: Trump has threatened journalists with imprisonment if they report the war is going poorly, attempting to control media coverage.

• Larry Fink, head of BlackRock (the world’s largest asset manager), argued on the BBC that the war cannot stop now because a premature ceasefire would leave Iran in control of the Strait of Hormuz, keeping oil above $100–$150 per barrel for years and triggering a global recession.

  • Professor Jiang notes the irony: the war itself created the problem it now must solve, since Iran had no pretext to close the strait before the US attacked.

The Iran Strategy: Using Military Action to Reshape Economics and Politics

• Iran’s approach is the mirror image of the US strategy: it calibrates military moves to strengthen its economic, political, and narrative position rather than pursuing pure military victory.

  • Economically: Iran strategically allows Chinese ships and those of cooperative nations like Japan, Qatar, and Oman to pass through the Strait of Hormuz, ensuring continued oil revenue while using the strait as leverage.
  • Politically: Iran is trying to split the Gulf Cooperation Council (GCC), recognizing that Saudi Arabia and the UAE favor regime change in Iran while Qatar and Oman are more sympathetic to Iran.
  • Narratively: Iran is successfully shaping global opinion, with much of the world and even many Americans rooting for Iran, undermining the US claim to moral legitimacy.

• Professor Jiang argues this Iranian approach is superior because it allows for reflection, flexibility, and resilience, while the US approach leads to rigidity and self-destruction.

  • Reflection: Because Iran’s military serves broader economic and political goals, its strategists can adapt; the US cannot easily reassess because its entire strategy assumes the world will comply.
  • Flexibility: Iran can adjust tactics, such as charging tolls for passage through the strait; the US, when failing, simply doubles down on bombing or considers desperate measures like a ground invasion that most analysts consider suicidal.
  • Resilience: Iran gains popular support, foreign sympathy, and economic strength as the war continues; the US loses troops and equipment it cannot easily replace while facing domestic opposition.

Why the US Empire Is Falling: The Military-Industrial Complex

• Professor Jiang traces American decline to the military-industrial complex (MIC), a permanent war-making apparatus that emerged after World War II and has been the primary driver of unnecessary wars.

  • The US founding fathers opposed standing armies as threats to liberty, but World War I and WWII forced the creation of a professional military that never demobilized.
  • The Cold War, the War on Terror, and now the Iran war serve as justifications for the MIC to extract unlimited government funding, transferring taxpayer money to a transnational elite through never-ending conflict.
  • Julian Assange’s observation: the point of American wars is not to win them but to have never-ending wars that funnel public money to private interests.

• The scale of US military spending is staggering but deeply corrupt.

  • The US accounts for 41% of global military spending; China spends 8.2%, and Russia (America’s main military rival) spends only 4.1%, meaning Russia spends one-tenth of what America spends.
  • On September 10, 2001, Secretary of Defense Donald Rumsfeld admitted that $2 trillion was unaccountable in the Pentagon’s books.
  • Boeing received $20 billion in government contracts in one year after spending $16 million on lobbying and $2 million on political bribes, a massively profitable return on investment paid for by taxpayers.
  • Boeing’s civilian planes have been falling out of the sky due to engineering failures, and whistleblowers who tried to testify against the company died under suspicious circumstances.
  • A single army contractor stole $103 million without the army noticing; only the IRS detected the theft, suggesting such corruption is routine.

Three Critical US Weaknesses in the Iran War

• Professor Jiang identifies three structural constraints that make US victory in Iran impossible.

  • Lack of political will: Only 40% of Americans support the war, making it difficult to fund (Trump requested $20 billion) or to reinstate a national draft.
  • Lack of manufacturing capacity: The US cannot produce planes, bombs, and missiles fast enough to replenish losses in a prolonged war and risks running out of munitions.
  • Unwillingness to sustain casualties: The Pentagon fears reporting deaths because of political backlash, yet war inherently involves casualties; this makes the US military unable to commit to the sacrifices required for victory.

• These weaknesses are visible in the performance of America’s most expensive weapons systems.

  • The Patriot missile system, designed to protect GCC states and US bases from Iranian drones and missiles, has failed; Iranian drones freely fly over American bases and destroy equipment.
  • The F-35, the world’s most advanced stealth fighter jet at $100 million each and 26 years in development, has been shot down at least once by Iran using very basic radar, suggesting the program was designed to steal money rather than win wars.
  • The USS Gerald Ford, a $13 billion supercarrier (more than Iran’s entire annual defense budget), had to withdraw from the theater after just three weeks, either from an onboard fire, an Iranian missile strike, or because the Pentagon recognized it was useless in actual combat.

• Professor Jiang contrasts this with the Battle of Iwo Jima in World War II, where the US lost 6,000 Marines taking the island, representing the kind of sacrifice and determination that once defined American military power but has now been lost.

  • The US sent roughly 5,000 Marines to Iran with no coherent strategy, reflecting a desire to win quickly and cheaply that is incompatible with the reality of war.

Israel’s Audition to Become the New Empire

• Professor Jiang argues that Israel is using this war to prove to the global elite that it can replace the US as the imperial force maintaining the world system.

  • The global financial elite (City of London, Wall Street, Bank of International Settlements, asset managers) need an empire to provide military muscle for the system; when one empire fails, another must replace it.
  • Israel demonstrates the three qualities the elite look for in an empire: unity, capacity, and determination.

• Unity and determination: Israeli public opinion shows 82% support for expelling all Palestinians from Gaza and 66% who believe the war is an existential fight, giving Israel a domestic consensus the US lacks.

  • Professor Jiang acknowledges that what Israel has done in Gaza constitutes war crimes and a tremendous tragedy, but argues that from the cold perspective of empire-building, it serves as a “proof of concept” that Israel will do whatever it takes.

• Cost-effectiveness: Israel’s 2024 Lebanon pager attack, in which Mossad implanted bombs in Hezbollah pagers at a cost of $275 million over decades of planning, demonstrated strategic sophistication and psychological impact far exceeding its modest cost.

  • This signals to the global elite that Israel can achieve strategic objectives cheaply and intelligently, unlike the US approach of spending billions on weapons that do not work.

• Intelligence dominance: ISIS operates throughout the Middle East but never attacks Israel, leading many to believe ISIS is a Mossad creation or asset.

  • Professor Jiang cites the example of an ISIS commander who was revealed to be a Mossad agent, arguing that Israel uses proxy infiltration rather than brute force to control the region.
  • Israel is comfortable with the world knowing this, as it demonstrates superior strategic capability.

The Historical Pattern: Mercenaries Becoming Empires

• Professor Jiang identifies a recurring historical pattern in which empires subcontract violence to mercenaries who eventually overthrow their masters.

  • The Romans started as mercenaries for the Etruscans in Italy; the Aztecs for the Colhua in Mexico; the Greeks for the Persians; the Mongols for the Chinese; the Azd for the Sumerians; the Mamluks for the Ayyubids in Egypt.
  • In every case, the mercenaries eventually asked: why are we doing all the killing and dying for a corrupt, decadent empire? Why don’t we take over?

• Israel was created by the British and Americans as a “pitbull” or “aircraft carrier” in the Middle East to create instability and secure Western control over oil.

  • Now Israel is asking the same question: why should America control the Middle East when Israel does all the work, makes all the sacrifices, and receives all the global hatred?

The Greater Israel Project (Pax Judaica)

• Professor Jiang outlines the “Greater Israel” or “Pax Judaica” vision held by Israeli extremists: biblical prophecy promises the Jewish people the entire Middle East from the Nile in Egypt to the Euphrates in Iraq, encompassing Saudi Arabia, Jordan, Lebanon, Syria, and parts of Turkey.

  • Notably, Iran (Persia) is not part of this biblical territory, which explains why Israel’s true enemy is not Iran but the American Empire that currently controls the Middle East.
  • The war against Iran is a means to destroy American power in the region by forcing the US to overextend itself in a ground invasion, leading to defeat and withdrawal.

• After America withdraws, two regional powers will remain: Israel and Iran, each controlling their own trade networks and resources.

  • Israel will control Middle East oil and gas fields, trade routes, AI data centers, and the India-Middle East-Europe trade corridor, becoming the epicenter of global trade connecting Europe, Asia, Africa, and even Russia/Ukraine.
  • Iran will control the Strait of Hormuz, collecting tolls on oil shipments, and will be the epicenter of the North-South Transport Corridor (linking Russia to India) and China’s Belt and Road Initiative.
  • Russia and China will help develop Iranian infrastructure because it serves their economic interests.

Geopolitical Rules for the New World Order

• Professor Jiang outlines three rules of game theory that explain why Israel and Iran will ultimately cooperate despite being ideological enemies.

  • The strong respect each other and prey on the weak: Once both Israel and Iran prove their strength, and the US and GCC prove their weakness, Israel and Iran will find it more rational to cooperate against the weak than to fight each other.
  • The weak do not work well together: The GCC states (Saudi Arabia, UAE, Bahrain, Oman, Kuwait, Qatar) are individually weak and cannot effectively unite; they will split, with some aligning with Iran (Qatar, Oman) and others with Israel (Saudi Arabia, UAE).
  • The weak must ally with the strong for protection: The GCC’s structural weakness means it will cease to be a major geopolitical factor regardless of the war’s outcome.

• Iran is actually benefiting economically from the war, which is the opposite of US intentions.

  • Sanctions have been effectively lifted; Iran can now export oil freely and is becoming embedded in the global economy.
  • As US expert Trita Parsi notes, Trump and Israel’s war has delivered Iran de facto sanctions relief, giving Iran less incentive to end the conflict the longer it continues.

How Israel Will Replace America Without Fighting It

• A student asks how Israel will actually replace America if it doesn’t fight the US directly. Professor Jiang clarifies that Israel is not fighting America but auditioning to replace it.

  • The strategy is to cause America to implode economically: crash the stock market, drive oil prices catastrophically high, and foment domestic discontent to the point of civil war, forcing the US military to retreat from the Middle East to deal with internal collapse.
  • Iran cannot defeat America on the battlefield, and America can drag the war out for 20 years, but economic collapse can force a rapid American withdrawal.
  • Israel will then naturally fill the vacuum left by America’s retreat, and the global elite will accept this transition because it preserves the system they depend on.

• Professor Jiang emphasizes that this analysis is intellectual speculation and critical thinking exercise, not prophecy, and encourages students to keep their minds open to different outcomes.