ASSISTING ‘INVISIBLE HAND OF MARKET’: U.S. THREATENS GERMAN COMPANIES OVER NORD STREAM 2

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Assisting 'Invisible Hand Of Market': U.S. Threatens German Companies Over Nord Stream 2

In a last-ditch attempt to impede the Nord Stream 2, the Trump administration began to threaten German (and not only) companies who are involved in it with sanctions.

According to German media, this is a showing of a new, and incredible, “low point” in Transatlantic relations.

According to a report by German outlet Die Welt, the United States is increasing pressure on German and European companies involved in the construction of the Nord Stream 2 Baltic Sea pipeline.

In the past few days, US representatives had held video conference calls with contractors of the project to “point out the far-reaching consequences of continuing to work on the project,” the outlet reported.

The company representatives sometimes faced up to twelve representatives of the US government.

They “made it very clear in a friendly tone that they want to prevent the pipeline from being completed,” the newspaper quoted an unnamed observer of the talks:

“I think the threat is very, very serious.”

US Secretary of State Mike Pompeo announced that the controversial Baltic Sea pipeline to transport gas from Russia to Germany would now fall under a law that would allow punitive measures, among other things, against companies doing business with Russia or countries like Iran and North Korea.

In response, the German Federal Government declared that it rejected extraterritorial sanctions, since these were “contrary to international law”.

The German economy condemned the threats as an “incredibly low point in transatlantic relations”.

Nord Stream 2 is said to transport gas from Russia to Germany and is particularly controversial in Eastern Europe.

The main fear is a weakening of alternative pipelines and traditional transit countries, such as Ukraine. The US government argues that Europe is becoming energy-dependent on Russia.

The United States had previously tried to impose sanctions on Nord Stream 2. Sanctions put into effect by President Donald Trump at the end of 2019 are aimed at the operators of laying ships involved in the construction. The construction of the pipeline therefore had to be interrupted.

Russian President Vladimir Putin expressed optimism that the project would be completed by early 2021, with a delay of only a few months.

On July 16th, the US updated its sanctions regime against the Nord Stream 2.

Until July 15th, the scope of US sanctions legislation excluded direct investors, enhancing Russia’s ability to build export pipelines before August 2nd 2017. That cut-off date was removed, meaning contracts signed for Nord Stream 2 and the second line of TurkStream will be included.

“The US signals that sanctions could potentially be applied retroactively, including in respect of European companies that are Gazprom’s partners in Nord Stream 2. However, it is hard to see how this could be enforceable; this would be against the law and should it happen it would certainly be contested in international courts,” according to Katja Yafimava, researcher at the Oxford Institute for Energy Studies.

“The question is whether the state department has the right to independently enforce the provisions of this law. The state department is formally subordinate to the president, but no separate documents have been issued stating that the president gave the state department the right to impose sanctions from the [sanctions act] package,” according to Igor Yushkov, an expert of the National Energy Security Fund and the Financial University under the Government of the Russian Federation.

The proposed additional sanctions in the draft national defence act “are unacceptable and contrary to international law, and the EU firmly opposes them,” EU high representative for foreign affairs and security policy Josep Borrell said on June 25th.

The biggest issue is that the US is concerned that there are no buyers for its liquefied natural gas (LNG) that it wants to sell to Europe at prices, higher than those Russia offers Europe.

Sometimes, the invisible hand of the market requires a tangible attempt at a push for it to properly and “independently” settle the market on a desirable scenario.

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NATO 2020: A COALITION OF THE UNWILLING

 25.07.2020 

Written and produced by SF Team: J.Hawk, Daniel Deiss, Edwin Watsont

The problem with alliances is that they ultimately either become victims of their own success, or cannot figure out what to do with themselves once the original rationale disappears. The original Cold War-era NATO was a relatively cohesive entity led by one of the two superpowers, with most of its members being the industrialized democracies of Western Europe, with West Germany being its eastern-most European member, and alliance planning revolving around USSR. But even then there were cracks in the alliance. Italy, for example, had nearly no role to play as it did not border any Warsaw Pact country and did not practice deploying its forces to West Germany to practice its defense against the anticipated Warsaw Pact invasion. And while Greece and Turkey were ostensibly part of that alliance as well, in practice they spent more time clashing with one another than planning for joint action against USSR.

The end of the Cold War made the problem of alliance cohesion far worse, for two reasons. One, it quickly added as many members as possible thus greatly expanding its geographical extent, and two, it lost that single unifying factor in the form of USSR. Today’s NATO is a patchwork of mini-alliances revolving around the United States which is determined to replace the alliance aspect of NATO which assumes that all members have interests that are to be taken into consideration, by patron-client relationships.

Not to put too fine a point on it, the goal of the United States is global domination. This goal is shared by the entire political elite and major portions of the population, though it is nearly never discussed openly or directly. Instead, it is framed in terms of “American Leadership”, “New American Century”, and of course “American Exceptionalism” which is used to justify any policy that violates international law, treaties, or agreements. Given that every country which has not recognized “American Leadership” is described as a “regime”, there is no indication the US elite is interested in anything resembling peaceful coexistence with other sovereign states.

NATO plays a double role in achieving that goal. First, it is a military alliance that projects military power against anyone refusing to accept “American Leadership”. Military contributions by European member states are certainly important, not least by giving America the veneer of international legitimacy, but the presence of US bases on the European continent is far more so. US forces stationed in or staged out of European naval, air, and land bases are indispensable to its efforts to control the MENA region and to promote the US policy of driving a wedge between Europe on the one hand and Russia and China on the other. Secondly, a European country’s membership in NATO means a sacrifice of considerable portion of its sovereignty and independence to the United States. This is a wholly asymmetrical relationship, since US bases its forces in European countries and sells its weapons to them, not the other way around. The penetration of a European country thus achieved allows US intelligence service to develop agent networks and to employ the full range of lobbying techniques which have been particularly visible in the US efforts to press F-35 aircraft into the hands of NATO member states.

America’s self-appointed task is made not easier or harder by the fact that today’s NATO is therefore fragmented along both geographic and national power lines. The geographical divide is plainly easy to see: Norway and Denmark mainly care about the Arctic, Poland and Romania obsess about Russia, Mediterranean countries freak out about what’s happening in North Africa. The wrangling over sending more troops to Mali or to Estonia is the reflection of the differing security concerns of individual members of the far-flung pact. The power divide is less easy to see but more problematic for Washington. V_3 (A2) Of the European powers, only four—Germany, France, Italy, and Great Britain—may be considered to be powerful and independent political actors with which the US has to contend on anything like an equal basis. The first three form the core of the European Union, whereas Great Britain opted for Brexit, likely in part because of the looming big power struggle between the US and the EU that has the potential of degenerating into a destructive trade war. It is doubtful that the skirmishes over Huawei and North Stream 2 are anything but the opening salvoes in the confrontation over whether the EU will emerge as a political actor independent of the US, or be reduced to a collection of client states. Unfortunately, America’s task is made easier by the fact of the intra-European divisions mentioned above.

United States is pursuing development of several hypersonic missile systems with the aim of ultimately fielding very large numbers of them in order to be able to launch disarming first strikes against Russian and Chinese nuclear arsenals. Since the weapons themselves are relatively short-ranged (though that may change once the US allows New START to lapse), they require basing close to their intended targets. That means having to find countries willing to base them in Europe, where it is liable to provoke a  political debate of the magnitude comparable to that of the original Euromissile controversy of the 1980s. Since Germany is not interested in being reduced to the status of a US client, it has resisted the US on a variety of fronts, including the North Stream 2, the refusal to buy F-35s, and now also the lack of desire to host the new US missiles. Even the German defense spending increases are intended at least as much to counter US influence in Eastern Europe as the supposed Russian threat to NATO. The United States has responded using the usual array of tools: economic sanctions on any and all European entities participating in the project and even using the gas, apparently launching a cyber-attack that US-friendly German intelligence promptly blamed on Russia, and also threatening to move US troops out of Germany and possibly to Poland. There is even discussion and rumors that US nuclear weapons stationed in Germany might be moved to Poland.

The outcome of this so far is a power struggle between two NATO allies, US and Germany, over the political alignment of a third—Poland. While Germany has the power of EU institutions on its side and massive economic gravitational pull, US has cultivated a cadre of friends, possibly intelligence assets, as a result of post-9/11 collaboration in Afghanistan, Iraq, and in the realm of intelligence-sharing. This has produced a government more than willing to deploy US troops, missiles, and even nukes on Poland’s territory. The power of US influence is visible in Poland’s weapons procurement: Patriot, Javelin, HIMARS, F-35, and not a single comparable European system in recent years. The US weakness in this confrontation consists of the unwillingness to subsidize Poland economically which, combined with the ruling party’s fiscal irresponsibility, will make it difficult for the country to maintain its anti-German course in the longer term.

While in Eastern Europe US national security state is using Poland as a proxy against Germany, in the Mediterranean it has adopted Turkey as a proxy against France and Italy. After some hemming and hawing, the US hawks dropped the Kurds yet again, with Trump happily taking the blame, in order to piggy-back on Erdogan’s Libya ambitions to curtail French and Italian interests there. To be sure, Turkey retains far more autonomy in the relationship than Poland, which was unable or unwilling to play US and Russia and EU against one another in order to secure a measure of freedom of action. But the US Congress measures to allow the purchase of S-400 weapons from Turkey is an indicator that Turkey’s behavior is once again useful to the US. And even though Turkey was excluded from the F-35 program, its firms continue to make components for various assembly plants. The result has been a number of stand-offs between Turkish warships on one hand and French and Italian on the other off the coasts of Libya. And whereas France and Italy are backing the Marshal Haftar’s LNA, Turkey’s preferred proxy is the GNA, leading to a veritable “anti-Turkey” alliance being formed that includes Turkey’s old time NATO adversary Greece. While the US is officially aloof of the entire situation, in practice controlling Libya’s oil is part of the Washington strategy of “energy dominance” every bit as the North Stream 2 sanctions are.

The remarkable part of these two sets of conflicts among NATO powers is that in both cases Russia has sided with Germany and France against the US in both cases. It is Russia’s policies that are more beneficial to French and German interests than America’s, since Russia is not actually seeking to monopolize energy supplies to Europe in the way that the US clearly and openly is.

So far the US strategy consisted of steadily ratcheting up pressure through sanctions and proxies and occasional intelligence-generated anti-Russia provocations (sometimes helpfully delivered by British agencies), trying to find that happy middle of policies that actually force Germany, France, and Italy to change their policies and which do not force a permanent breach in the trans-Atlantic relationship. But the cracks in the relationship are clearly visible and they are not attributable to Trump’s erratic and brusque manner. It is the US Congress which passed the successive rounds of anti-North Stream 2 sanctions, with strong partisan majorities. It means the assertion of US control over European major powers is part of the US agenda. Since that agenda is motivated by a US political and economic crisis of a magnitude not seen since the 1930s, there is little likelihood Biden’s presidency would represent a radical departure from the current trend.

Of course, for Germany, France, and Italy to successfully resist US encroachment they would first need to transform the EU into something closer than a federation. The COVID-19 pandemic and the associated economic crisis already providing considerable impetus for such a transformation, America’s insatiable appetites might provide the rest.

Is Trump Using Nordstream 2 to Exit NATO?

By Tom Luongo
Source: Gold Goats n Guns

July 21, 2020

The one thing I never thought I’d say is that Donald Trump is consistent, and yet on the subject of the Nordstream 2 pipeline he has been.

No single project has caused more wailing and gnashing of teeth than Nordstream 2. And since Nordstream 2 is simply the substitute for South Stream, which was supposed to come across the Black Sea into Bulgaria and then feed eastern Europe, this U.S. opposition to another Russian pipeline spans multiple administrations.

So, this is policy that goes far beyond simple 2020 electoral politics, Trump trying to look tough on the Russians, or his misguided Energy Dominance policy.

With Trump rescinding the sanctions exemption for Nordstream 2 he now has declared open war against Europe, specifically Germany over this project.

But here’s the thing, I think Trump is doing this for updated reasons that fit a different agenda than why the U.S. opposed Nordstream 2 previously, because he knows he can’t stop the pipeline now. All he can do is further alienate Germany, who he has targeted as the main problem in Europe.

Before I go any further, though, I think a little history lesson is in order.

U.S. opposition to Nordstream 2 is deeply ingrained on all sides of the political aisle in D.C. From Republicans still fighting the cold war to Democrats having deep ties to Ukrainian gas transit there are a multitude of reasons why Nordstream 2 is verboten in D.C.

On the other hand, Europe’s relationship with Nordstream 2 is, in a word, complicated.

Russian President Vladimir Putin scuttled South Stream back in late 2014 because the EU changed its pipeline rules during its development after the contracts were in place.

Most of that was U.S. pressure, but some of that was Germany’s Angela Merkel working with then-President Barack Obama to create the worst possible scenario for Gazprom – a pipeline that wasn’t profitable.

Merkel backed Obama’s play in Ukraine in 2014 as a power move to control prices for Russian gas into Europe, putting Soviet-era pipelines under EU gas directive jurisdiction.

The EU was always going to use Ukrainian gas transit as leverage over Putin to drive gas prices below Gazprom’s cost thinking they had no other options.

Putin famously pivoted to China, singing the mega-deal for Power of Siberia in retaliation to that. Since Putin had already brought Crimea in from the cold war and tacitly backed the breakaway of the Donbass Merkel was now the one on her back foot.

At the same time, to salvage the work done on South Stream to that point, Putin cut a deal with Turkish President Recep Tayyip Erdogan to replace South Stream’s volumes to eastern Europe with Turkstream’s to Turkey.

The plans for Turkstream include multiple trains into eastern Europe with countries like Serbia, Hungary and the Czech Republic itching for that gas.

Russia’s options were manifest and Putin deftly outmaneuvered Merkel and Obama. These events forced Merkel’s hand after she stupidly caved to the Greens over ending Germany’s use of nuclear power and now she needed Nordstream 2.

And so Nordstream 2 became a big geopolitical football because Merkel saw, as well, the opportunity to bring the recalcitrant Poles and Baltics under her control as well, solidifying long-term EU plans to engulf all of Euope to Russia’s borders.

Nordstream 2 would nominally replace Ukrainian gas supplies and she could set Germany up to be the gas transit hub, supporting political power emanating from Brussels.

This would give her leverage over Poland, who are trapped between their hatred of the Russians and their unwillingness, rightfully, to submit to Germany.

But Merkel, ever the deft three-faced keeper of the status quo, worked with Putin to secure gas flows through Ukraine for another five years, allaying the worst of Poland’s fears while they have courted Trump to bring in over-priced U.S. LNG.

But from the beginning, Nordstream 2 becomes a different animal geopolitically the moment Trump comes to power. Because Trump is opposed to the EU’s consolidating power over Europe while also sucking the U.S. dry on trade and defense.

He’s made this abundantly clear.

Since the beginning of the year Trump has ratcheted up the pressure on both China and the EU. And the only way that makes any sense is if you are willing to see them as allies in undermining the U.S.’s global position.

This isn’t to say that the U.S.’s global position should remain as it is. Far be it for me, of all people, to argue that. But with the insanity of the COVID-19 fake pandemic, the World Economic Forum’s plans for The Great Reset, and the fomenting a cultural revolution in the U.S. the stakes are now as high as they’ve ever been.

The Davos Crowd is making their big move to consolidate power in Europe. Trump is working with Boris Johnson in the U.K. to oppose that. That’s the simplified version of the chess board.

And this is why I think Trump refuses to give up on stopping Nordstream 2. He’s seen the depths to which The Davos Crowd will go to implement this radical change and he’s forcing the moment to its crisis, as T.S. Eliot put it.

He’s making the choice very clear for Merkel and company. If you want Nordstream 2, suffer the consequences of having to do business without the U.S.

This isn’t about Russia anymore, at all. It’s about Germany and the future of the U.S. If Trump loses in November all of the work done to slow down this push for transnational technocratic oligarchy will end.

If he wins then the current policy sticks, the EU is forced to deal with the U.S. retrenching completely, pulling back on commitments to Europe while divorcing U.S. trade from China.

He may actually be courting lower U.S. dollar flow the world over and forcing Europe into real economic crisis by early next year.

This sanctions policy against Nordstream 2 is consistent with his ‘snap’ decision to pull troops out of Germany, his unilateral abrogation of both the INF treaty and the JCPOA while pressuring NATO to do more.

Merkel, meanwhile, is trying to run out the clock on both Trump and Brexit, as I talked about in my podcast from last week. She’s hoping that Trump will be defeated which will set things back to the way they were before him, force U.K. Prime Minister Boris Johnson to knuckle under in trade deal talks and establish the primacy of the EU as the center of Western power.

Putin, for his part, doesn’t care who he deals with in the long run. He can’t afford to. He has to play the cards on the table in front of him with the people in power, since Russia is still a minor player but with big potential.

For Trump, I believe he sees Nordstream 2 as the perfect wedge issue to break open the stalemate over NATO and cut Germany loose or bring Merkel to heel.

This next round of sanctions will target the companies involved directly in the pipeline. Germany can’t afford not to finish Nordstream 2. So, we are headed for an epic clash here.

Trump and Merkel hate each other, with good reason. And while I have mixed feelings about the way Trump does business, I know Angela Merkel is the key to the EU’s future.

I mentioned in a recent article that I feel Trump is a guy with almost nothing left to lose. If he’s going out he’s going out with a bang. Arrest Ghislaine Maxwell, sanction China and threaten war over Hong Kong, ramp up dollar diplomacy on Europe.

He knows that hybrid war is the only war the U.S. can ‘win’ decisively given the relative dominance of the U.S. dollar today.

While the end of dollar hegemony is in sight, do not underestimate how much damage can be done to the status quo while Trump is in power. That status quo isn’t good for anyone except those who currently want that power back.


How Geopolitical Economy Crossed the Atlantic – West to East

How Geopolitical Economy Crossed the Atlantic – West to East

by Francis Lee for the Saker Blog

Europe is tending to bring the society and culture of the continent into harmony with those of the United States, exulting the characteristics of the latter into models and objects of an uncritical and overwhelming admiration … There is no longer at present a European project. A North American project … under American command has replaced it … The hegemonism of the United States is clearly visible behind the disappearance of the European project in favour of a return to Atlanticism – political, economic, cultural, and militaristic.

Samir Amin (The Liberal Virus 2004)

According to current orthodox economic trade theory – see the works of David Ricardo (1772-1823) and his theory of comparative advantage – this is a hypothesis which in policy terms is predicated upon the free movement of labour, capital and commodities, which it is argued will result in flows into the most optimal investment and growth areas. This process will be seen to maximise social welfare in terms of income and output. Like many economic theories which have come and gone this particular addition to the collection may seem disarmingly plausible; in practise, however, the theory begs a number of key questions.

The current conventional wisdom as applicable to the free-trade paradigm rests on a one-size fits all prescriptive model; that is to say that always and everywhere it is regarded as the policy of choice. Free-up the dead hand of state controlled, interventionist policies, and the markets will deliver the goods, so it is argued. This is, it should be understood, not an empirical assessment but a purely theoretical paradigm, which is to say the least, questionable. The quasi-religious belief in the efficacy of free trade/markets and factor input movement is the cornerstone of trade agreements such as free-trade areas like NAFTA, on the Mexican/American border and trading blocs like the EU in Europe and MERCOSUR in Latin America.

This theory, which was effectively mobilized and globalized by the Anglo-American economic establishment (the Reagan-Thatcher axis) continues to be taught in schools and university courses so that generation after generation of students are infected by what has become known as the Washington Consensus, Neo-liberalism, Globalization call it what you will. However, in the cold and unforgiving world of actually-existing capitalism free-trade and free-markets have never to any great extent really existed. It cannot be emphasised enough that orthodox economic theory is, as Amin states elsewhere, a purely ideological construct bearing only a tenuous connection with the real world.

At the outset it should be made clear that capitalist development was and is a function of the market and state relationship. Public authority has always actively intervened in shaping and promoting the economic policies of the domestic and international economy contrary to hyper-globalist assertions which we might call ‘state-denial’. It should be stated unequivocally that the state and its role is and remains the most significant force in shaping both the national and world economy. This was evident as far back as Tudor England and beyond when the English monarchs banned the importation of woollen cloth in an early version of infant industry protection transforming England from an importing wool country into the most formidable wool and later manufacturing country in the world.

Mercantilism and its influence*

The same mercantilist policies initially carried out in England (as it then was) were then also in time operationalised in both the United States and Germany who played catch-up with the UK in the late 19th century. The architect of US mercantilism was Alexander Hamilton (born 1755 or thereabouts – died 1804) who overcame the free-trade preferences of Thomas Jefferson in the early stages of US economic development; but it was the civil war – 1861-65 – essentially a conflict between the protectionist north and the free-trading south, which settled the issue. Ex Commander-in-Chief of the Union Army of the Potomac, Ulysses Simpson Grant, later to become US President argued that:

“For centuries England has relied on protection, has carried it to extremes and has obtained satisfactory results from it. There is no doubt that it is to this system that it owes its present strength. After two centuries, England has found it convenient to adopt free trade because it thinks that protection can no longer offer it anything. Very well then, gentlemen, my knowledge of our country leads me to believe that within 200 years, when America has gotten out of protection all that it can offer, it too will adopt free trade.”(1)

In Germany, Friedrich List (1789-1846) who also had scant regard for any ‘free-market’ nonsense and the Ricardian corollary of comparative advantage was instrumental in promoting a system of political guidance from above as a policy for economic development.

‘’ … the first stage (of such a long-term policy) is one of adopting free-trade with more advanced nations as a means of raising themselves from a state of barbarism, and of making advances in agriculture; in the second stage, promoting the growth of manufactures, fisheries, navigation and foreign trade by means of commercial restrictions; and in the last stage, on after reaching the highest degree of wealth and power by gradually reverting to the principle of free-trade and of unrestricted competition in the home and in foreign markets’’. (2)

This was the policy instrumentalised by Bismarck during the middle and late 19th century which enabled Germany to outperform its European rivals, principally the UK. And still today in many ways German nationalist mercantilism which it rests upon has dominated the EU and is even now still much in evidence.

The peculiarities of financialised capitalism in Germany stands in marked contrast to that of the Anglo-American world. During the last 4 decades the German service sector has become proportionately larger, as should be expected from a financialised economy, but Germany has also systematically defended its industrial sector, not least by manipulating the exchange rate to protect its export industries. The distinctive feature of German financialization is a maintenance of a strong industrial base, in spite of weak aggregate investment. Additionally, the German financial system has retained much of its historic character as ‘bank-based’ in contrast to the ‘market-based’ system of the US/UK. Germany has a small stock-market in comparison to the Anglo-American model and a larger more diffused and competitive banking model – the Sparkassen which stands in sharp contrast to the liberalised and oligopolistic banking systems in the US/UK.

Generally speaking the reversion to free-trade from protectionism has been fraught with difficulties. The mutual benefits of free-trade only exists between highly developed nations, or between nations of roughly equal levels of development. There is no question that free trade can ever become a source of growth and development between nations of unequal economic status; such development has never worked for the less developed party in the trade relationship and in all probability never will. (See the Prebisch-Singer hypothesis.) The advantages will accrue to the more productive economy.

It is easy enough to cite examples of this phenomenon: Why for example do Portugal, Spain, Ireland, Latvia, Italy, run chronic negative trade figures on their respective current accounts? The answer is that their productivity levels are lower and therefore their costs are higher than Germany’s. This means that there is a structural problem of trade relations between Germany together with the core states (Holland, Scandinavia, Austria, and so forth) and the EU’s less developed peripheral states (See above). Moreover, given that they use the same currency free markets only work for the core of the EU. Germany and the core states run surpluses on their current account whilst the periphery runs chronic trade deficits. One nation’s surplus is another’s deficit. Hence given the policy prescriptions stipulated by the ruling institutions of global capitalism, and their applications, the increasing divergence between developed, semi-developed and under-developed states becomes apparent and understandable.

Furthermore, simply opening up a developing economy to global market forces will almost certainly lead to further disaster. There is always the danger of local businesses being wiped out by more efficient foreign competition before they can get a toehold into the wider world. This was certainly the case in Russia during the Yeltsin years. The imposition of the economic ‘shock therapy’, turned out to be all shock and no therapy. ‘Experts’ from the west in the shape of neo-liberal economists such as Jeffrey Sachs and Andrei Shleifer, and the lawyer Jonathan Hay, had a degree of influence over Russia’s economic policy that was unprecedented for a sovereign independent state. Together with Yagor Gaidar and Anatoli Chubais they formulated decisions that were inserted directly into Presidential decrees. The lesson learnt was that a prerequisite for positive and beneficial engagement with the global economy is the development of robust internal structures; the development of a national economy starts with internal integration and then moves on to external integration.

Strange as it may seem the development strategies employed in the East Asian states and economies were in flat contradiction to the IMF/World Bank prescriptions and met – mirabile dictu – with considerable success. These policies carried out by South Korea and Japan were in fact based on the exclusion of inward investment of western capital inflows particularly those of a short-term speculative nature (i.e. ’’Hot Money’’). The strategy was supplemented by an extensive programme of export driven development and gradually opening up the domestic economy for trade. A policy which is still extant with China now included.

What Price Comparative Advantage?

Yet the Ricardian ideology still holds sway in the textbooks and institutions seemingly unaware of the negative outcome of such policies. This is perhaps a classical example of the dissociation of theory from empirical reality; a hidebound and utterly incapable of reform of the institutions of global capitalism and their spokespersons are aptly personified in the words of one of Samuel Becket’s characters in one of his plays ‘’I must go on, I can’t go on, I’ll go on.’’ Neo-liberalism, in fact, proved extremely difficult to implement technically but then practical results have little to do with the persuasiveness of ideologies.

Suffice it to say that this ideological paradigm both permeates and is pretty much obligatory in the ruling institutions of global capitalism – the IMF, World Bank and WTO and in addition to other auguste bodies such as the Bank for International Settlements (BIS) the OECD and G7. Any questioning of the holy script is treated as blasphemy and relegated to mocking footnotes or treated as being non-existent.

With an unchanging policy consensus the EU defenders of the faith are completely sold on the putative beneficial outcomes to be derived from the holy trinity of free-movement of labour, capital, and commodities. And of course, this sacred trinity is crucial to an understanding of the results of these policies which have had extremely deleterious effects in practice, both in the developing world but more recently particularly in Europe. This meant that in Euroland the deficit countries could not devalue their currencies in order to rectify their trade deficits and would be forced into what became known as ‘internal devaluation’, more commonly understood as austerity.

In addition to this has been the lack of fiscal transfers from the more developed to the less developed or one state to another. Fiscal transfers within sovereign states, from Vermont to Louisiana or Surrey to Merseyside, or the North to the South of Italy, is quite normal, but fiscal transfers between sovereign states, for example, Finland and Greece, is more problematic. In the same spirit this lack of mutualization of public debt, i.e., allowing the debt of one-member state to be considered as an obligation of another and proposed to correct it through the issue of Eurobonds. However the members of the EU have neither the legitimacy nor the desire to carry the costs and burdens of each other’s actions. Nation states are not, after all, registered charities and charity stops at their borders.

‘’So long as a country is a member of the EU – even if it is not bound by a specific programme imposing austerity measures because of its huge debt, and so forth – it will still be bound by the catastrophic neoliberal rules imposed by the various EU treaties. That is to say the EU treaties that followed the Treaty of Maastricht, which institutionalised the opening and liberalisation of the markets for commodities, capital, and labour, and which, indirectly, also imply privatisations and the phasing out of the welfare state. (my emphasis – FL). This on top of the severe restrictions imposed on fiscal policy through the stringent rules and upon budget deficits and debt-to-GDP ratios (through the Stability and Growth Pact) which indirectly impose austerity.’’(3)

We should be by now also familiar with the imposition of the holy trinity of privatisation-liberalisation-deregulation policies and the effects which these policies have visited upon the world courtesy of the so-called ‘Washington Consensus’.

The problem is that there seems to be an invincible barrier of learnt ignorance nurtured within the governing institutions which direct and administer the global economy and its policies, and the shutting down or even the possibility of transcending what amounts to a religious dogma the consequences of which are manifest.

‘’We are now being asked to believe that these policies which have further impoverished people and are devastating the planet will in fact lead to diametrically different and highly beneficial outcomes, if only they can be accelerated and applied everywhere, freely and without restrictions; that is when they are globalized.’’ (4)

You see, the problem is easily solved by a more radical implementation of the existing – failed!- policies. Words fail one!

Predictably the result of the above guiding principles have reduced annual GDP growth figures for the Euro area which have been uniformly poor. These indicators were already baked in the cake and there were serious reservations regarding the sustainability of the global system as far back as 2019 which were bound to give rise to weak levels of investment and growth with the corollary of increasing unemployment – and so it turned out. From January 2018 Euro growth had slowed down to an average of 0.3% and then with the onset of the pandemic collapsed to a negative -3.6. As follows all are the latest figures for the 4 major EU countries: the UK -1.7%, France -5.0% Germany -2.2% and Italy -5.4% as of March 2020. GDP growth in the EU had been on a downward trajectory from 2.7% in 2017 to 1.3% in early 2020 and since the Covid-19 has plummeted to minus -3.6% (5)

IMF/WB Shock Therapy – Eastern Europe

A person sitting at a table Description automatically generated

Latvia. Soup de Jour: Russophobia. Enjoy.

Looking back and having witnessed the great Soviet meltdown with its attendant economic cataclysm the ex-Soviet satellites and republics have more recently received less attention in the business and financial media. What attention they have received paints a rosy picture of full-employment and runaway growth which have been a function of the rapid shock therapy which caused such mayhem in Russia in the 1990s. So much for the hype. What did in fact happen was rather different.

If anything the implantation of the neo-liberal virus and shock-therapy in the newly emerged post-communist states of Eastern Europe, together with an additional virulent and counter-productive Russophobic hostility should stand as a model for a botched and bungled attempt at social and economic development. The subsequent economic and social ravages has reduced these states to an almost Latin-American relationship with Western Europe.

The bald fact is that in economic terms there is little comparison to be made between Eastern and even Central Europe to Western Europe. This gap has not significantly changed and the only ex-soviet satellite comparable is Czechia reputed to be the success story. Czechia just squeezes into the bottom of the income hierarchy of the west as measured in GDP per capita of Purchasing Power Parity (PPP). The only western states which fall below the Czechia are Portugal $30,622.00 and Greece $27,812.00. (6)

These states, the ex-soviet Republics and satellites, having thrown off the yoke of communism wanted to taste the joys of western consumerism and national self-determination, apparently, and as subsequent events turned out, also for the imposition of the yoke of US imperialism, which for bizarre reasons they found liberating. Suffice it to say that their geopolitical outlook was unashamedly Atlanticist, and their economics were neo-liberal; this much to the dismay of the European Gaullists and socialists.

But this really was manna from heaven for the British and German Atlanticists. Their object all along had been to smash the Delors’ vision of Euro-deepening with the policy tool of Euro-widening. German big business in particular saw juicy opportunities to outsource its operations to a new low-wage, East European hinterland thereby lowering its costs, as well as opening up new markets in which to sell their products. European banks also saw opportunities to extend credit – a move that they would later regret bitterly – to these newly emerging states. From the British viewpoint Euro-widening effectively meant political and institutional dilution as well as economic and financial deregulation. The cheap armies of labour in the East would provide the perfect instrument for downward harmonisation of wage levels and workers’ rights and benefits in the West.

This was indeed a deep-going change in both the economic configuration and geopolitics of the EU. But I cannot recall any discussion prior to the event. Such big policy decisions, taken behind closed doors with minimal consultation (if any) to all those who would be affected only served to distance the electorates of the west further from the EU political and bureaucratic elites. Pretty much par for the EU.

A case study by Michael Hudson (7) is illustrative of the whole process which happened, and is still happening in Eastern Europe, he writes with reference to Latvia:

‘’Post-soviet economies were free of public debt, real estate and personal debt or other bank loans obtained with their political independence in 1991 … like other post-soviet economies Latvians wanted to achieve the type of prosperity they saw in Western Europe. If Latvia had actually followed the policies that had built up the western industrial nations, the state would have taxed wealth and income progressively to invest in public infrastructure. Instead Latvia’s ‘miracle’ assumed largely predatory forms of rent-seeking and insider privatisations. (My emphasis – FL).

Accepting US and Swedish advice to impose the world’s lopsided and set of neoliberal tax and financial policies, Latvia imposed the heaviest taxes on labour. Employers must pay a flat 25% tax on wages plus a 25% social service tax, whilst wage earners pay another 11% service tax … Persons who advocated taxing real estate and financial wealth, or even supported public spending, protecting consumers and other regulation were accused of threatening a return to communism. A black and white contrast is drawn either soviet style socialism, or neoliberal ideology denying that there is any such thing as a viable mixed economy (Op.cit. pp.286/287)

There followed a period of phony, debt-fuelled growth which inevitably popped in 2008 when in Warren Buffet’s amusing little quip ‘’You only see who’s been swimming naked when the tide’s gone out.’’ And in the fullness of time the tide went out for Latvia. By 2008 it had become common knowledge that the post-soviet economies had not really grown at all but had simply been financialised and indebted.

Eastern Europe – A Demographic Disaster Zone

If the economic problems of Eastern Europe were not bad enough there was the second wave of bad news. To wit, an unmitigated fall in population levels which have already have now resulted from a massive exodus of young and talented migrants from the Baltics and others to the more salubrious climes of Western Europe, mainly Germany and the Scandinavian states. The depopulation phenomenon was not a policy as such, but it emerged as the unanticipated corollary to other parts of the neoliberal policy baggage.

In addition to mass migration there has been a fall in the fertility rate (8) and a rise in the death rate as well as the exodus of skilled and ambitious young workers looking for a better life in Western Europe. For population growth to stabilise a fertility rate minimum of 2.1 babies for every one child-bearing woman per annum is needed. Suffice it to say that even Western Europe has not managed to hit this target let alone the Eastern periphery.

Post-independence from the Soviet bloc in 1991, the population of Latvia has been diminishing annually at the rate of 23,000 people a year. These frightening figures were unveiled last March by a professor at the University of Latvia, demographer Peteris Zvidriņš who would note that the sad reality is that Latvia loses a small town every two weeks. In raw figures, that is 55 people a day, or 1,650 people a month. Another Latvian demographer, who heads a local office of the International Organization for Migration of the United Nations, Ilmar Mezhs, has recently told Skaties.lv that most of those who are leaving Latvia are not planning to go back. Referring to the forecasts of Eurostat, Mezhs suggested that in sixty years in the place of 2.7 million people who had previously resided in Latvia, one would find less than a million people still dwelling in this country. According to preliminary reports, the country’s population has already been reduced to 1.946 million people. Latvia has been plagued by high mortality rates along with the massive exodus of its people since 1991. According to LTV7, a local media station, the situation in maternity wards across Latvia is critical: low salaries often go hand-in-hand with a shortage of medical personnel, especially young professionals. If the situation is not addressed urgently, as various Latvian media sources report, there will be no qualified doctors left in hospitals.

The latest Eurostat report on the situation in Lithuania shows that up to 29% of the inhabitants are living on the verge of poverty, with the situation remaining unchanged for eight consecutive years. At the same time, Lithuania is among the top five states of the EU where people are being employed for meagre salaries. The sad reality of this trend is evident in historical records showing an unprecedented drop in the population of this Baltic country, falling from 3.7 million back in 1990 to 2.8 million in 2016 – a 25% decline. Income inequality and the striking poverty of some Lithuanian residents is only getting worse over time, putting Lithuania on the list of the poorest EU states. A typical resident would pay a third of his monthly salary in a bid to get access to healthcare services.

It’s not surprising that for many years Lithuania has had the largest number of suicide cases in the EU. Therefore, it is quite understandable why Lithuania remains a country that consumes more alcohol than any other, as it’s been stated by the World Health Organization (WHO). A similar situation can be seen in other Eastern European countries, that are being described, according to Der Spiegel, as so-called “second speed EU states … Apart from migration additional factors exacerbate the problem namely: low birth and increasing death rates.

The long list of domestic social problems in the Baltic states has been largely ignored by media engaged in a massive Russophobia campaign promoted by Washington. Rolandas Paksas, the former president of Lithuania summed up the results of the post-Soviet period in the history of the republic in March. In his opinion, nothing has been done in the past twenty-seven years of independence nor has anything been built. Therefore, as Paksas points out, every year there are fewer and fewer people in Lithuania, and the life of those who remain is only becoming more difficult.

In general terms Eastern Europe’s population is shrinking like no other regional population in modern history. The population has declined dramatically in war ridden countries like Syria as well as in some advanced economies in peacetime, like Japan. But a population drop throughout a whole region and over decades has never been observed in the world since the 1950s with the exception of Southern Europe in the last five years and Eastern Europe over the last 25 consecutive years. The UN estimated that there were about 292 million people in Eastern Europe last year, 18 million less than in the early 1990s, that’s more than the population of the Netherlands disappearing from the region. The fall corresponds to a drop of six per cent – moreover, the trend continues

  • Lithuania 12%
  • Latvia 12%
  • Ukraine 9%
  • Hungary 8.5%
  • Romania 7%
  • Bulgaria 6%
  • Estonia 1.5%
  • Poland 0.5%
  • Russia, slight increase
  • Slovakia, slight increase
  • Czech Republic, slight increase.

But the most drastic consequences of the “post-communist breakdown” have been experienced by Ukraine – once one of the most developed republics of the USSR. If in the early 1990s there were 52 million people in the republic, now the population does not exceed 42 million. So much for the revolution of dignity and prospect of freedom democracy and abundance promised by the EU. The Kiev Institute of Demography estimates a population of 32 million by 2050 or perhaps sooner. According to recent polls, 35% of Ukrainians declared their readiness to emigrate usually to other Eastern European states; particularly Russia and Poland. The process accelerated after Ukraine received a visa-free regime with the EU: about 100,000 people leave the country every month. Ukraine is not so much a failing state, it is more a dying state.

In geopolitical terms a recognisable global configuration has since the 1990s come into being. This consists of a top down US-Zionist structure resting upon a West European layer of semi-comprador states, which in turns rests upon completely comprador regimes in Eastern Europe as was the case during their years of Soviet domination.

Unfortunately for them neo-liberalism and Russophobia didn’t put food on the table. The peoples of Eastern Europe have been subjected to a three-card confidence trick of ‘find the lady’ a card game practised by petty thieves on dumb overseas tourists in the streets of central London during the tourist season. It may work for a time, but ultimately the deteriorating conditions of life are and will be such that there will be a search for alternatives. But given their abject servility ‘will be’ should be perhaps be less likely than ‘may be’.

NOTES

*Mercantilism: economic theory and practice common in Europe from the 16th to the 18th century that promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism. Its 17th-century publicists—most notably Thomas Mun in England, Jean-Baptiste Colbert in France, and Antonio Serra in Italy.

  1. Monthly Review Press – 1967
  2. National System of Political Economy – Friedrich List – p.141 – 1841
  3. The New World Order in Action – Takis Fotopolous – pp.156/157
  4. The Case Against the Global Economy – Jerry Mander, et al.
  5. Source: – Trading Economics.
  6. Source: – Pocket World in Figures – The Economist 2020 edition.
  7. Killing the Host – Michael Hudson -2015
  8. The total fertility rate in a specific year is defined as the total number of children that would be born to each woman if she were to live to the end of her child-bearing years and give birth to children in alignment with the prevailing age-specific fertility rates. It is calculated by totalling the age-specific fertility rates as defined over five-year intervals. Assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population.

70 Years Of NATO: Is It A High Time To Retire?

Source

70 Years Of NATO: Is It A High Time To Retire?

NATO is a military and political alliance, a security community that unites the largest number of States on both sides of the North Atlantic. During its existence, NATO has expanded 2.5 times. It accounts for 70% of global military spending. It is rightfully considered the most powerful military association of States in the entire history of mankind in terms of combined armed power and political influence. The fact that this year NATO turned 70 years old, which is more than the independent existence of some of its member States, proves an incredible success of this project. However, while the Alliance has successfully resisted external enemies in its history, today it is experiencing significant internal divisions that threaten its existence more than ever.

The founding date of NATO is April 4, 1949, the day 12 countries signed the Washington Treaty. NATO became a “transatlantic forum” for allied countries to consult on issues that affect the vital interests of participating countries. The organization’s primary goal was to deter any form of aggression against the territory of any member state, as well as to protect against these threats. The principle of collective defense, enshrined in article 5 of the Washington Treaty, implies that if one NATO member state is the victim of an armed attack, all other member States of the Alliance will consider this act of violence an armed attack on all NATO countries and will take actions that the organization deems necessary. At the end of the 20th century, the real threat to the West was the Soviet Union.

70 Years Of NATO: Is It A High Time To Retire?

After the collapse of the Soviet Union, the question arose about the existence of NATO, as an Alliance created to protect against the Soviet threat. The disappearance of the external threat has led to a process of transformation that has been going on for 30 years. Each stage of transformation is directly related to the adaptation of the Alliance to certain changes taking place in the international arena and affecting the stability of the security system in the Euro-Atlantic and the world as a whole. In addition to the collapse of the Soviet Union, one of the key events that affected the development of the Alliance was the terrorist attack of 11.09.2001, which actually allowed the Alliance to be preserved, since then there was a common external threat to the member countries.

Traditionally, NATO’s transformations are considered in the following three areas: geographical changes, political transformations, and processes in the military-technical sphere.

Important political transformations are manifested in adapting to changes in the international arena, which are represented primarily by the disappearance of block opposition. The Alliance remains committed to the principle of collective defense, as set out in article 5 of the Washington Treaty. The main command structures also remain the same. The main transformations are expressed in the form of declarations of new NATO functions: maintaining peace and stability not only on the territory of the member States, but also outside the area of responsibility of the Alliance. The operations carried out in these territories are aimed at maintaining local and regional stability, eliminating ethnic and religious conflicts, maintaining respect for human rights and various national minorities, and, most importantly, fighting international terrorism and the proliferation of weapons of mass destruction.

The “new NATO” is being transformed from a regional organization into a guarantor of global stability, taking responsibility for stability in regions outside its own territories and in situations not covered by article 5 of the Washington Treaty. Assuming global responsibility, NATO is forced to maintain the necessary level of military power, participate in collective planning for the organization of nuclear forces and their deployment on its own territories. New threats encourage NATO to expand geographically.

The expansion of NATO, which implies the inclusion of former members of the Warsaw Pact And the full-scale advance of military infrastructure to the East, represents a change in geography.

Changes in the military-technical sphere imply a General reduction of the Alliance’s collective military forces, their relocation, etc. The main form of transformation of the armed forces was the transition from ” heavy ” military associations to more flexible and maneuverable groups in order to increase their effectiveness in the fight against new threats. The beginning of the economic crisis in autumn 2008 revealed the urgent need for reforms. Member States were forced to reduce their military budgets, which meant abandoning programs involving the development and purchase of precision weapons. In 2010 the plan of the NATO Secretary-General A. Rasmussen’s plan to optimize the budget, and in 2012, the Chicago summit adopted the “smart defense package”, which implies a parallel reduction of funds and increased efficiency.

However, despite all the reforms carried out within the Alliance, today the new missions do not have the same clarity as during the cold war. Options for the purpose of NATO’s existence after the collapse of the USSR vary: the fight against terrorism, assistance in the spread of democracy, nation-building, “world police”, the fight against “soft threats”, the fight against a resurgent Russia. But the main problem of the Organization is that none of the options is universal for all member countries. None of the considered “enemies” unites NATO.

After various stages of transformation, NATO turned out that the condition for its perfect functioning was precisely the situation of structured confrontation. The current unstructured confrontation, which implies that all member countries have different primary threats, makes it meaningless to have a cumbersome and generally rather inert organization.

70 Years Of NATO: Is It A High Time To Retire?
Illustrative Image

In 2014, NATO had another opportunity to create a common external enemy, the role of which was approached by Russia. The summit held in Wales in 2014 radically changed the agenda of the entire Alliance. The main topic of discussion was the Ukrainian crisis, which led to the conclusion about the need to contain Russia. The final Declaration of the summit notes that ” Russia’s aggressive actions against Ukraine have fundamentally called into question the vision of a whole, free and peaceful Europe”. “The illegal self-proclaimed annexation of Crimea and Russia’s aggressive actions in other regions of Ukraine” were highlighted as special threats among the spread of violence and extremist groups in North Africa and the Middle East.

The appearance of a ” dangerous external enemy ” entailed not only political transformations. There have also been reforms in the military sphere of NATO. Among the new security challenges were “hybrid wars”, that is, military actions involving an expanded range of military and civilian measures of an open or hidden nature. The adopted Action Plan, which includes the concept of “hybrid war”, was primarily aimed at countering the tactics of warfare used by Russia. Thus, a number of measures included in the Declaration were directed against Russia.

NATO was forced to return to the role of a guarantor against severe security threats, which significantly increased costs for the organization. At the 2016 NATO Warsaw summit, it was decided to further deploy 4 battalion tactical groups to existing military bases in Poland and the Baltic States. In addition, more than 550 tanks and an armored unit of the United States have been transferred to the region. These units are deployed on a rotational basis, which does not contradict the NATO-Russia Founding act of 1997. In the Declaration of the 2018 Brussels NATO summit it is recorded that the “enhanced presence in the forward area” of tactical groups includes a total of 4,500 military personnel, which is approximately equal to one brigade.

70 Years Of NATO: Is It A High Time To Retire?
Photo by SAUL LOEB / AFP

At the same time, it is clear that Russia does not pose a real threat to NATO. Real foreign policy practice proves that Russia will not threaten Western countries in the next 50 years. The only point of instability today is the Ukrainian conflict, which had no preconditions until 2014, and was in turn artificially created by the American establishment in partnership with Brussels. Russia, for its part, even in this conflict does not seek to expand its influence, and also observes the Minsk agreements that are unfavorable to It.

“The main reason why the United States has assumed the role of arbiter of the fate of Ukraine and its citizens is the allegedly increasing threat from Russia not only to Kiev, but also to Europe and the rest of the world. And this is despite the fact that it was with the help of the United States that mass protests were organized and the elected government of Ukraine was overthrown in 2013-2014, which led to the war that has now unfolded in the heart of Eastern Europe,” writes geopolitical columnist Tony Kartaluchi in the new Eastern Outlook.

In 2016, the RAND organization conducted a study that showed that in the event of a Russian invasion of the Baltic States, Russian troops can be on the approaches to the capitals of Estonia and Latvia within sixty hours. The study showed that NATO forces are not sufficient to repel the Russian attack. In an interview, NATO Deputy Secretary General Rose Gottemoeller said that the main goal of deploying additional forces in Eastern Europe and Poland is to demonstrate the unity of the Alliance, and to maintain its members ‘ commitment to article 5 of the Washington Treaty. Thus, NATO adheres to the policy of declarative deterrence of Russia, in fact, its forces are not enough to respond to a potential attack from Russia. The NATO administration is well aware that the likelihood of a military conflict with Russia is minimal, but it continues to maintain the image of Russia as an aggressor in order to unite the member countries.

70 Years Of NATO: Is It A High Time To Retire?
U.S. President Donald Trump, left, and Poland’s President Andrzej Duda, leave at the end of a joint press conference in Warsaw, Poland, in June 2017. (Czarek Sokolowski/AP)

Moreover, maintaining the image of a dangerous enemy gives the United States the opportunity to promote its own interests in Europe and manipulate its “partners”.

On June 25, Donald Trump finally confirmed that part of the American military contingent in Germany would be transferred to Poland. In the end, the American contingent in Germany will be reduced from 52 thousand people to 25 thousand. According to official data, in Germany there are about 35 thousand US military personnel, 10 thousand civil servants of the Pentagon and about 2 thousand contract workers. Some of the US military will return to America, some will go to Poland to strengthen the deterrence of the “Russian threat”. In addition, according to media reports, Polish President Andrzej Duda and Donald Trump discussed the possibility of transferring 30 f-16 fighters.

“They [Germany] spend billions of dollars to buy Russian energy resources, and then we are supposed to protect them from Russia. It doesn’t work that way. I think this is very bad, ” said Donald trump, accusing Berlin of supporting the Nord Stream 2 project.

When asked whether the US administration is trying to send a signal to Russia, Donald Trump stressed that Moscow was receiving a “very clear signal”, but Washington still expected to normalize their relations. This only underscores the fact that the US is taking advantage of the perceived Russian threat to NATO.

The American leader, by undermining cooperation between Moscow and Berlin in the energy sphere, not only prevents Russia, as one of their enemies in the international arena, from developing a profitable project. The US is also interested in weakening the leading European industries, primarily Germany. The United States does not tolerate strong enemies, but it also does not accept strong allies. It is in the interests of the Americans to prevent the redevelopment of Europe as a self-sufficient and independent center of power in the international arena.

70 Years Of NATO: Is It A High Time To Retire?
Defense spendings in relation to GDP of NATO member countries

Therefore, Donald Trump is strongly calling on Germany to reimburse the billions of dollars it owes the White House. Trump is dissatisfied with the fact that Berlin does not comply with the promise made by all NATO members to increase defense spending to 2% of GDP. At the same time, Germany has already followed this path, increasing funding to 1.38%. In its turn, the US spends 3.4% of the state budget on the needs of the Alliance.

The problem of NATO funding is very often the main criticism of Berlin. However, in addition to this issue, new problems are emerging in US-German relations.

Washington is very dissatisfied with Berlin’s interaction with Beijing. The White House, which has strengthened the anti-Chinese vector of its policy, blaming the PRC for the beginning of the coronavirus pandemic and accusing the Chinese side of “controlling” the World Health Organization (WHO), did not receive sufficient support in Europe, and Germany criticized.

Moreover, Berlin does not support Washington’s sanctions policy on Chinese Hong Kong, which Beijing allegedly takes away its independence from.

The US is particularly dissatisfied with the EU’s desire for a major investment agreement with China. Germany is the main ideologue of this process and seeks to close the deal during its six-month presidency of the EU Council.

70 Years Of NATO: Is It A High Time To Retire?
“One Belt, One Road” Initiative

China today, of course, is the main competitor of the United States in the struggle for world hegemony. China also raises considerable concerns among European countries, which is primarily due to economic expansion and the successful development of the large-scale Chinese initiative “One belt, one road”. European leaders are also competing with China for resources in third world countries in Africa and Southeast Asia. In addition, there are ideological differences between the two world regions. However, China does not currently pose a military threat to Europe, which does not allow the use of NATO forces against it.

While Western countries see Russia and China as the main threats, strategically they are primarily concerned about Iran and North Korea. These countries are also a threat primarily to the United States, but their European partners are not ready to conduct active military actions against them at the moment.

The only real dangerous factor that unites almost all NATO member countries remains international terrorism, in the fight against which Western countries act as a united front.70 Years Of NATO: Is It A High Time To Retire?

The current military and political course of the European Union is determined by the clear desire of its leadership to transform the military and political organization into one of the world’s leading centers of power. The aggravation of political and economic differences with the United States is the main incentive for the implementation of this goal. Thus, the EU’s focus on increasing independence in crisis management in the area of common European interests has had a decisive influence on the development of the common security and defense policy. In order to reduce dependence on the United States and NATO for conducting operations and missions within the framework of “force projection”, the leadership of the Association has stepped up activities to develop its own military component.

France and Germany are the main engines of this process, and are promoting the initiative to create the so-called European Defense Union. However, despite active efforts to expand military and military-technical cooperation within the EU, the declared goals of creating a “European army” with collective defense functions that duplicate the status and activities of NATO seem difficult to achieve in the foreseeable future. This situation is due to the reluctance of the majority of EU member States to transfer control over their armed forces to the supranational level. Moreover, the US opposition to the process of forming the European Defense Union and the limited resources available due to the absorption by NATO structures of the major part of the defense potential of European countries, most of which are simultaneously involved in two organizations, do not allow the full implementation of EU political decisions on military construction. In this regard, it is only possible to talk about giving a new impetus to military cooperation in order to increase the collective capacity to protect the territory and citizens of the States of the region.

Given the lack of forces and resources for conducting operations and missions, Brussels is interested in the practice of involving military formations of third countries in its anti-crisis actions on the basis of bilateral framework agreements. Currently, such agreements have been reached with Georgia, Moldova, Ukraine and a number of other States.

Currently, the European Union conducts 16 military and mixed operations and missions in various regions of the world, involving about 4,500 people. The greatest attention is paid to the “zones of instability” in North and Central Africa, the Middle East, the Balkans and the post-Soviet space.

70 Years Of NATO: Is It A High Time To Retire?
NATO Secretary General, Jens Stoltenberg

Thus, NATO today has to do everything possible to support the unity and coherence of actions of all its member countries, which are more than ever under threat. The main European leaders are no longer ready to support US policy and continue to sacrifice their own national interests. If in the case of Germany, this is manifested primarily in support of the Nord stream 2 project, despite the threats of the United States. France today supports its own interests in Libya, which contradict the interests of other countries-members of the Alliance: Turkey and Italy. Certainly, Turkey and Italy have different positions and aspirations in Libya. Italy was previously a traditional ally of France and does not actively intervene in the military conflict. However, now, given the current predominance of Turkey in Libya, Italy is trying to sit on two chairs. On the one hand, Italy, while supporting Tripoli, does not actively help them. On the other hand, in political terms, it clearly stands on the side of Tripoli and Turkey, thereby trying to ensure its share of participation in the next division of Libyan natural resources after the supposed victory of the Turkish-Tripolitan Alliance.

Summing up, today the imaginary Russian threat no longer allows US to unite the Alliance members, but only serves as a method of implementing US interests. The White House, which has always played a leading role in NATO and retains it thanks to the largest percentage of investment in the Alliance, allows itself to more openly abuse its leading position and promote its own national interests and the interests of its elites through the North Atlantic Alliance to the detriment of the interests of partner countries. Thus, article 4 of the Washington Treaty, which implies decision-making by consensus and is the basis of NATO itself, is of less and less importance in practice. The United States cannot renounce its membership in NATO and is interested in preserving it, because it is the Western Alliance that allows the US to give at least a small share of legitimacy to its military actions. A kind of neo-colonial policy, that the United States is used to employ in relation to European countries, and the current significant shift in the political paradigm within the US itself do not allow us to hope that the American leadership will be able to strengthen its position in Europe in the coming years.

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RUSSIA’S NEW DEAL AND WESTERN REACTION

Russia's New Deal And Western Reaction

Russia is holding a national voting on amendments to its Constitution. Last Thursday kicked off one week in which Russians are asked to cast their votes on changes to the document. The formal date is July 1, but the polling stations were opened as early as June 25 in order to avoid too high turnout due to the so-called pandemic.

Vladimir Putin announced a set of amendments to the Constitution in his annual address to the Federal Assembly on January 15. The same day he ordered to form a working group to draft these amendments. The group was composed of 75 politicians, legislators, scholars and public figures and it submitted the proposals that formed the basis of the new Constitution. On March 11, the State Duma adopted the draft amendments to the Constitution in the third reading. On the same day, they were approved by the Federation Council.

The referendum was originally scheduled for April 22. The date coincided with Vladimir Lenin’s 150th birthday. It was postponed due to the COVID-19 pandemic. The draft amendments to the Constitution were submitted to a referendum in accordance with article 2 of the Law on Amendments to the Constitution adopted on March 16, 2020. Voters are given a yes-or-no vote on the full text of the new Constitution.

After Putin proposed constitutional changes, the amendments sparked significant debate both inside the country and beyond its borders. The proposed amendments to the Constitution affect various spheres.

The amendments, which can be described as ideological, received the great public response. According to a sociological study, the most important among them for Russians was the amendment to “on the protection of historical truth”:

“The Russian Federation honors the memory of the Fatherland defenders and protects the historical truth. Belittling the significance of the feat of the people in the defense of the Fatherland is not allowed.”

This amendment is extremely relevant in Russian society. This is due to various external factors. First of all, Russia’s neighboring states such as Lithuania, Latvia, Estonia, and Poland issue resolutions condemning Russia’s position in the Second World War. This is accompanied by the demolition of the monuments to Soviet heroes in large cities, what causes great indignation among Russians and arouses great controversy at the international level.

Moreover, this amendment is gaining popularity due to the ongoing unrest in the West. In the USA protesters demolish monuments to prominent historical figures who formed the American identity – Roosevelt, Woodrow Wilson, Jefferson, and so on. The Russian government tries to prevent this in its own country, believing that the Empire collapses when it loses its ideology. Today, the strengthening of Russia as independent conservative ideological center may contribute to the further strengthening of the Russian position on the international arena.

Russian servicewomen march during the Victory Day parade. They were among 14,000 troops from 13 countries who took part in the event. Soldiers taking part had been tested and placed in quarantine ahead of the parade.

If this amendment is primarily of concern to the countries of Eastern Europe and has received little coverage in the Western media, the following amendment to the Russian Constitution has aroused great interest in Western Europe and the United States.

The proposals to amend the Article 72 of the Constitution gained wide resonance in the West.  The article says (the changes are in bold):

“In the joint jurisdiction of the Russian Federation and subjects of the Russian Federation are:

… the protection of family, motherhood, fatherhood and childhood; the protection of the institution of marriage as the union of a man and a woman; the creation of conditions for worthy education of children in the family, as well as for adult children responsibilities to care for their parents…”

Despite the fact that today same-sex marriages are not recognized in Russia, if the amendment is approved by a vote, the marriage between members of the LGBT community will be excluded at the level of the Constitution. Currently, there are no special laws prohibiting same-sex relationships or gender reassignment surgeries in Russia. At the same time, since 2013, there is a Federal law prohibiting the promotion of homosexuality among minors, which criminalizes public manifestations of non-traditional sexual orientations.

Conservative views on homosexuality are widespread in Russia, and recent polls show that most Russians are opposed to accepting homosexuality in their society. In particular, intolerance of homosexuality is present in regions with persisting traditional way of life, such as Chechnya or Dagestan.

Covering the proposal to introduce this amendment to the Constitution of the Russian Federation, The New York Times wrote in March:

“President Vladimir V. Putin has proposed a constitutional amendment banning gay marriage in what political analysts suggest is an effort to raise turnout for a constitutional referendum that could keep him in power but has so far stirred little enthusiasm among Russians.”

The Guardian in the article «Putin submits plans for constitutional ban on same-sex marriage» claimed that “[t]he move, announced by Putin in January, was initially seen as a way for him to hold on to power after 2024, when as things stand he will no longer be able to serve as president because of term limits.

Moreover, a flag of the LGBT community was displayed on the buildings of the US Embassy in Moscow to protest the proposed amendments on the first day of the national voting. The US move was followed by embassies of Canada and the UK. This is a concerted political action in direct contravention of Russian law on responsibility for propaganda of non-traditional sexual relations among minors.

US Embassy Helps Russians To Vote YES On Constitutional Amendments

The amendment to the Constitution excluding the possibility of same-sex marriage does not correspond to the newly imposed neo-liberal values labeled as the Wester-rooted. At the same time, believing its own values to be the only correct and universal, the collective West imposes them in various regions of the world, including in Russia. The promotion of liberal values is certainly necessary for the West to strengthen its world domination, but this often leads to negative consequences.

The reaction of the West to the amendment to article 72 primarily emphasizes that the introduction of changes to the legislation regarding LGBT communities serves as a distraction for the population, which will allow Vladimir Putin to remain in power after the end of his presidential mandate in 2024. Also, the Western community itself is much more concerned about the amendments to reset Putin’s terms than about the well-being of homosexuals in Russia.

By its ideological changes, Russia confirms the unacceptability of Western ideology for its society, while also making important changes to the country’s administrative apparatus itself, which will allow it to be strengthened.

Given that the West in general has a negative attitude to the figure of Vladimir Putin, primarily because of his success in governing the country and in strengthening Russia, the amendment to reset the terms of his rule is particularly frowned upon. Paragraph 3 of Article 82 of the Constitution of the Russian Federation states:

“The same person may not hold the office of President of the Russian Federation for more than two consecutive terms.”

In this wording, it is proposed to remove the word “consecutive”, and to extend the effect of this amendment only to the current President of Russia, Vladimir Putin. This allows resetting the terms of Vladimir Putin’s presidency, and gives him the opportunity to run for the presidency in 2024.

Political analyst Nathaniel Reynolds wrote in a paper for the Carnegie Endowment for International Peace:

“Putin’s use of more than 200 amendments was a “stunning trick” to mask the real purpose of the constitutional vote — allowing him to remain in office. It was a shocking exercise in political deception, even to the many regime insiders left in the dark.” Reynolds also noted: “A younger Putin recognized the dangers of such a precedent. He told a journalist in 2005 that if leaders change the constitution for their own purposes, there will be nothing left of the state.”

Moreover, Western media reproach that the attention of the population is not particularly focused on this key amendment. The Russian authorities are conducting a large advertising campaign of other amendments, primarily socially conservative ones such as protection of historical truth or a ban on dual citizenship for government employees. These principles, designed to unite Russians, are at the heart of the system of conservative Patriotic values of the head of the Russian state.

During his presidency, Vladimir Putin brought Russia to the international arena and significantly strengthened its position as a regional power center. Further strengthening of the country is unacceptable for the West that provokes strong criticism of this amendment. However, the abolition of the presidential term limit only increases the level of democracy in the country because people have a chance to vote for an actual president as many times as they want. The President can only be chosen through democratic elections, and allowing Putin to run in 2024 does not guarantee his victory. Moreover, most likely, the amendment to reset the time frame allows to stabilize the situation in the country for the next few years. If it is not accepted now, then a tough power struggle in Russia will begin today which will significantly destabilize the country.

On June 18, the Venice Commission criticized some amendments to the Russian Constitution initiated by Vladimir Putin.

The European Commission for Democracy through Law – better known as the Venice Commission as it meets in Venice – is the Council of Europe’s advisory body on constitutional matters. It involves all countries that are members of the Council of Europe, including Russia, and some countries outside this organization. Its role is to analyze the laws and draft legal advices to its member states.

Russia's New Deal And Western Reaction

European experts expressed concern that the new Constitution proposes to include the possibility of dismissal by the Federation Council of judges of the constitutional court on the proposal of the President.

‘’The proposed innovations make the constitutional court more vulnerable to political pressure, since the powers of judges can be terminated on the proposal of the President,’’ experts say.

European experts also recommended the proposed amendment to Article 79 to be changed or completely deleted. It proposes to affirm the right not to execute “decisions of interstate bodies adopted on the basis of provisions of international treaties of the Russian Federation in their interpretation contradicting the Constitution of the Russian Federation”.

This amendment provides for the possibility of not complying with the decisions of international courts, including the European court of human rights. Experts of the Venice Commission in their conclusion point out that by joining the Council of Europe and ratifying the Convention on human rights, Russia is obliged to comply with the decisions of the European court of human rights, and with article 46 of the Convention, which indicates that the execution of court decisions is mandatory.

On June 25, the representative of the European Commission Peter Stano made a statement that the amendment on the priority of the Russian Constitution over international law violated the international obligations of the Russian Federation.

In response to criticism from Europe, the Chairman of the Committee on International Affairs of Russian State Duma, Leonid Slutskiy, emphasized that this practice is widely used by countries, including members of Europe, and the amendment does not cancel Russia’s international obligations.

We have consistently explained and continue to explain to our European partners: the amendments to Article 79 do not nullify the international obligations of the Russian Federation, Russia has fulfilled them and will continue to do so. It is an issue of establishing the primacy of the Constitution, which fully complies with foreign experience. For example, there is much stricter primacy of national legislation over international legislation in European states like the UK and Germany, not speaking about the United States,”

Russia in its foreign policy has always defended the rule of international law in the world system. This international law should be based on consensus, and first of all should be represented by international institutions such as the UN. Today, Russia recognizes that international law is not more presented by an international agreement but by American legislation that applies anywhere in the world. The adoption of the amendment on the supremacy of the Russian Constitution over international law strengthens the country’s position and underlines its frustration with the current destruction of the entire world system.

According to social research, the most important for Russians is the amendment on the protection of the country’s sovereignty at the constitutional level. This amendment suggested to Article 67 is one of the most criticized abroad:

 “The Russian Federation ensures the protection of its sovereignty and territorial integrity. Actions (with the exception of delimitation, demarcation, redemarkation of the state border of the Russian Federation with neighboring States) aimed at alienating part of the territory of the Russian Federation, as well as calls for such actions, are not allowed.”

This amendment to the Constitution regarding the territorial integrity of the country caused a large condemnation by the United States.

Krista Wiegand, American expert on territorial disputes of the Center for Global Security Studies in Tennessee, claimed that “Russia does not want to play by international rules” and this is dangerous for Japan and Ukraine.

This statement is completely unjustified.

According to the Soviet-Japanese Declaration of 1956, ending the state of war between the countries, the USSR agreed to transfer the Habomai and Shikotan Islands to Japan on the condition that the actual transfer would be made after the conclusion of a Peace Treaty. Moscow’s position is that the southern Kuril Islands became part of the USSR, which Russia became the legal successor to, are an integral part of the territory of the Russian Federation legally based on the results of World War II and enshrined in the UN Charter, and Russian sovereignty over them, which has the appropriate international legal confirmation, is not subject to doubt. Today, it is not Russia that threatens Japan, but the opposite, as Japan claims “its northern territories” to be under Russian occupation.

A similar situation has developed on the Eastern borders of Russia. Since the accession of the Crimea to Russia is a fait accompli, Ukraine has no choice but to declare annexation and try to claim de facto Russian territories.

The amendment suggested to article 67 does not threaten any other state. First of all this amendment prevents separatism inside Russia.

The Guard of Honor of the Chinese People’s Liberation Army take part in the military parade marking the 75th anniversary of the victory in the Great Patriotic War on Red Square in Moscow, Russia, June 24, 2020.

The creation of the threatening image of Russia is beneficial for the Democratic American establishment. At the same time, countries with territorial disputes with the Russian Federation reacted with more restraint.

Japanese government Secretary General Yoshihide Suga noted that changes to the Constitution are an internal matter for Russia. Political expert Ikuro Nakamura noted that the Japanese government believes that the changes to the Constitution are aimed at increasing Patriotic consciousness in Russian society.

Former advisor to the Greek prime minister for co-operation with the Russian Federation and Eastern Europe, Dimitrios Velanis, said:

“Russia has many times throughout its history experienced an attack or an attempt by other powers to occupy its territory. It was in almost all wars. From all these wars Russia emerged victorious and lost none of its territories. This year marks the 75th anniversary of the Great Victory.”

Furthermore, the French Foreign Ministry proclaimed through its representative that “the constitutional change is a sovereign decision of the Russian Federation, which must fully comply with international obligations”.

It would be difficult to imagine the opposite reaction of the West to the proposed amendments to the Russian Constitution. They strengthen the country both insight and in the international arena, which causes fear in Western countries.

In response to criticism of the package of amendments to the Constitution, Chairman of the Foreign Affairs Committee at the Federation Council Konstantin Kosachev said:

“The West’s reaction to public discussions of amendments to the Russian Constitution is taking the form of an aggressive campaign bordering on interference in the country’s domestic affairs. The reaction of what can be described as ‘Collective West’ is taking the form of a hostile and aggressive campaign against Russia, which is bordering on interference in our domestic affairs.”

At the same time, Russian experts say that they expected a larger company from the West, and today’s criticism was much weaker than it could have been. Indeed, the US has demonstrated that it could lead strong anti-Russian companies, for example, by accusing it of interfering in the election of President Trump. The UK also conducted a strong informational campaign, which was called the “Skripal Case”. Today, Russia is faced with a choice, and its society is really experiencing great differences regarding the future development of the country. This moment is most favorable for external intervention and, if the West had the opportunity, it would be able to significantly influence the development of Russia in a way that would be beneficial to it. However, today the influence from outside is insignificant, which is primarily due to the weakness in the Western countries themselves. The crisis after the coronavirus epidemic, followed by large-scale protests in all countries do not leave the power for weakened world leaders. In addition, on a more global scale, while still maintaining the role of world hegemon, the US has never been so weak in relation to developing new centers, and it seems that it can no longer control the situation in various world regions, including Russia.

Collective West hostile campaign against Russia

The amendments to the Russian Constitution demonstrate that the current Russian leadership has tried to pass the period of reconstruction after the crisis of the 1990s and the period of the rise of the 2000s. The Constitution adopted in Russia in 1993 was essentially an ideal document that would allow Russia to reconcile with the market system world. It was mostly designed to satisfy interests of Western puppeteers of the new post-Soviet Russian ‘democratic’ elites. Russia was as an independent state and an international actor was weak in 1991. 30 years later, a stronger Russia is embarking on its own path of development, different from the Western one. And the gap between the Western way and the Russian one seems to be widening. Therefore, a chance exists that in the bright multicolored future there will be place not only for the neo-liberal minorities-ruled West and the radically-conservative Islamic East, but also for a balanced center in Eurasia.

Russia constitution amendment and West’s reaction

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Paradigm Shifts

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by Francis Lee for The Saker Blog

Paradigm Shifts

INTRODUCTION:

I first wrote this article in 2012 and have had to make a number of minor alterations. Of course a great deal has happened since that time, most of it bad. We now seem to stand on the threshold of an even bigger and deeper crisis than in 2008, plus additional worrying features, viz. the pandemic and possible future pandemics as well as increasing and widespread economic and geopolitical instability. The crisis portents were always there but both the PTB and the populations at large did not seem unduly concerned about these developments which were taking place and maturing through the post-2008 period.

Paradigm Shifts

Some years ago I reviewed a book – State Building – by one Francis Fukuyama. This was one of Mr Fukuyama’s lesser known works, he is more famous for being the theorist of the ‘end of history’ – a view promulgated during the halcyon days of the neo-liberal counter-revolution circa the 1980s. After the collapse of communism in Eastern Europe, and with social-democracy effectively throwing in the towel in Western Europe, Mr F postulated that liberal, deregulated, market capitalism was now the historical norm, and if countries had not arrived at this terminal point in their history, then in the fullness of time they surely would. In short this is when one paradigm or epoch ends and another one begins. Certainly, the world underwent a both quantitative and qualitative paradigm shift in 1980s an historical shift which has lasted for at least 4 decades.

This current view was to become the received wisdom in official circles, and I would argue that in a contingent sense still is, at least among the political, financial and media elites. But it could be plausibly argued that this current paradigm is in secular decline and a new paradigm seems to be emerging. That is why we study history. Epochs come and go. Whether this will be for good or ill is an open question. Paradoxically, the established paradigm – let’s call it the Thatcher/Reagan settlement – represented almost a theoretical mirror image of the cruder types of Marxist historical materialism. Of course, both were extremely contestable since the human agency was excised from the historical process; a process apparently beyond human volition and control; almost a force of nature. It followed from this, therefore, that politics was no longer about choice, according to the post-modernist fraternity, the grand political narratives were at an end; henceforth politics was to be simply about administration: the relevant question being who could run the system more efficiently. How simplistic and facile these notions now seem.

To be fair Fukuyama has now admitted that he was wrong, and the more humanistic interpretation of Marxism – as espoused by inter alia Georgy Lukacs and Antonio Gramsci – does allow for human intervention in the historical process, in fact it insists upon this. Marx also, at least in his early years, put forward the famous dialectic. ‘Men make history, but they do not do it as they please.’ This is to say that they were creatures of their time and made political choices, but these choices were historically conditioned and constrained.

However, it seems commonplace among the journalistic types and other jobbing mediocrities to think that history is something in the past and that the present is the point of arrival; a tendency to take the empirically given as somehow natural and inevitable; its permanence taken for granted. And of course those who have most to gain from the present dispensation will fight tooth and nail against any attempt to change this state of affairs. Reforms are possible – even though these will be generally opposed by these same entrenched interests – but the fundamental structures and institutions of the system will be left broadly unchanged. This is true at all times and in all places, including our own.

We can say, therefore, that the world crisis of 2008 and its various explanations were thus all based upon the notion that the neo-liberal capitalist order is inevitable and permanent. Even erstwhile radicals like Will Hutton of the Guardian and Paul Krugman of the New York Times believed this to be the case. These are essentially mainstream Keynesians, who argue for a more regulated capitalism which they regard as viable, whilst their opponents the free-market Hayekians – Peter Schiff and US libertarian Ron Paul – believe in less or even no regulation. But of course both schools are committed to the capitalist system so the argument has been something of an in-house debate between the two establishment viewpoints.

That the system is in a protracted and long-term crisis is self-evident. But the contending viewpoints above are posited in a rather narrow and orthodox spectrum of economic theories which I think fail to address the depth of the predicament.

The Hayekian/Von Mises Austrian school

For a long time after the Second World War these particular theorists were exiled to a virtual leper colony of macro-economic theory. This was a period of the Roosevelt/Attlee settlement, the spread of communism over Eastern Europe, China and Indo-China. The catastrophe of depression/fascism/war, all emanating from uncontrolled markets and market crashes, followed by trade wars of the 1930s and then the shooting wars, was rejected absolutely by the electorates of the western world as well as by their leaders. But Von Mises, Hayek, et al. bided their time until their moment came. This moment came in the 1970s when the post-war boom petered out. They found a populariser of their beliefs – albeit in crude form – in Milton Friedman of the Chicago School and what was called monetarism. These ideas then migrated from academe via the broadsheet press and finally to the right-wing political parties at the time headed by Thatcher and Reagan.

The Austrian school believe that attempts to control capitalism through state intervention will fail and will in fact be positively counter-productive. This is because such interventions distort the price mechanism leading to misallocation of resources, inflation, and asset price bubbles. A good example of this would be the credit/property boom (2008) which was enabled by the accommodative actions of the Central Banks and Treasuries around the world, but particularly by the Bank of England and the US Federal Reserve Board. Interest rates were kept low and both heads of the two respective central banks as well as Treasury officials, in the UK’s Labour government, Gordon Brown and Edward ‘light touch regulation’ Balls in the UK, and the Fed boss Alan Greenspan in the US. Thus the natural cyclical tendencies immanent in the capitalist system were given an additional push by government monetary policy. Why? The answer is disarmingly simple: booms and bubbles (at least during the up-phase) are popular with the masses and are therefore good politics. Who can ever forget ‘the-end-of-boom-and-bust’ triumphalism of the period? However, the Austrians continued to argue that booms and busts are intrinsic to the system. One cannot exist without the other. During the boom phase of the cycle investors and consumers tend to become overconfident and make foolish investment and purchasing decisions. Prices start to rise due to the continual demand for factor inputs, growth becomes more and more febrile, banks make foolish loans and acquisitions (Northern Rock and the Royal Bank of Scotland come to mind), and then, when rises in income can no longer support rises in asset prices, the whole thing collapses. This is what happened in 2008; the bust part of the cycle then begins. All the bad investments and overspending now come to light. Companies go bust, unemployment mounts, debts are written down simply because debtors cannot pay, and all the misallocations of resources can clearly be seen with half-finished empty houses standing as the self-evident physical symbols of the manic bubble period which preceded them. Here Andrew Gamble explains:

‘’For the Austrians, the business cycle had a necessary and important function within capitalism. The crisis phase of the cycle was crucial if capitalism were to renew itself and purge itself of the false values and the misallocation of productive resources which had grown up during the boom phase. The crisis was a moment of truth, when suddenly the plans, the claims and the expectations which had been formed during the upswing were put to the test. Many of them would be found wanting, and those responsible for them would have to face the consequences. The process was not just to keep capitalism efficient; it was also necessary to keep capitalism moral. Only if agents bore full responsibility for their actions would the values of prudence, reliability and sound judgement and trust, on which capitalism relied, be upheld. The crisis purged capitalism in a double sense: both practically and morally. To many of its defenders the two were equally important. It was what gave capitalism its moral legitimacy and its practical dynamism.’’ (1)

It was argued that full recovery would not be achieved by bail-outs, Keynesian deficit spending, or by rescuing companies which were simply inefficient or did not supply consumers or investors with their preferences as demonstrated by the market price mechanism. Such policies would simply create ‘moral hazard’ a tendency for investors and consumers to carry on as usual with their losses being underwritten by the state; in this situation there was no intention or incentive for improving their business efficiency. These bailed-out entities were the economy’s living dead, kept alive on state support – zombie banks as in Europe and Japan and zombie auto companies like Fiat, Kia, and GM, or insurance companies like AIG, all of which should have been allowed to fail. With their failure more competitive efficient companies would arise in their place.

Recovery could only get underway when, as during classical depressions, prices fell, which meant that if wages and interest rates fell more slowly – if at all – then disposable income would start to increase. This being the case consumers would start to spend again and businesses start to invest. Similarly bankrupted and distressed firms would be bought out at fire–damage prices by the more efficient and larger firms with more up to date equipment. Growth now resumes given the destruction of existing capital values. The process of accumulation can restart.

What is striking about this (Austrian) theory is its similarity to Marx’s view of trade cycles, and also to those views espoused by Schumpeter. But much of both theories were formulated in an earlier phase of capitalism. But for all that the Austrian theory’s analysis of the bust is quite plausible and sophisticated.

‘’The anti-deflation policies which have been adopted (i.e., Keynesian demand management) is largely a policy of price-fixing, a policy of preventing the market from exposing capital misallocations and then liquidating them. The root causes of the crisis remain in place and the underlying problems unaddressed … The economy cannot realistically be expected to rectify itself if the market is not allowed to liquidate capital misallocations. The state has erected a protective fence around the most dislocated sectors of the economy (house prices for example) trying to keep market forces outside. As long as it lasts no true recovery is possible.’’ (2)

Summing up the Austrian view, capitalism is intrinsically cyclical. The Growth periods tend to run out of control resulting in bad investments and resource misallocation. This process is fed by easy credit and excess liquidity. Asset price inflation rises to a level which can no longer be sustained by rises in income or further borrowing. The boom turns into a bubble and the bubble bursts. Then the whole process swings into reverse – the bust has arrived. However, the bust rectifies the situation by liquidating all the mal-investments and making way for a reconfiguration of the system on a more sustainable and efficient basis. Capitalism restructures itself through these types of crises.

Prescriptions

Although the Austrian (and indeed Marxist) analysis of the bust is, I would argue broadly speaking correct, but the future policy prescriptions of the Hayekians seem frankly alarming. The scope and interdependence of the system is such that the notion of simply letting the bust take its course would lead to quite massive economic, political, and social dislocations on a global scale – as would have been the case had world governments simply let the coronavirus pandemic rampage through societies and run its course in 2020 – such a policy would dwarf the depression of the 1930s and 2008. In a strictly logical sense the reasonings of the Austrian school are correct, but their policy prescriptions are simply too terrible to contemplate.

‘’The Libertarians are actively promoting policies sure to bring about immediate economic hell, in the faith that punishment and suffering are the prerequisites to an economic afterlife in a better world. While in the end their philosophy of economic karma may ultimately prove correct, before accepting the remedy through collapse, other approaches should be put to the test. Economic reincarnation could take a lot longer than the Libertarians anticipate. The Renaissance did follow the fall of Rome – but only after 10 centuries.’’ (3)

So what about the alternatives?

John Maynard Keynes and his followers

Well I think we need to clear up one or two things about Lord Keynes before we start. Keynes was emphatically not a socialist, if anything he was actively hostile to socialism. He opined that: ‘’The class struggle will find me on the side of the educated bourgeoisie.’’ (4) We might legitimately enquire who, apart from Keynes himself, might be the ‘educated bourgeoisie’ exactly! Further, The Labour party is a class party, and that class is not my class. Again, How can I adopt a creed – Socialism – which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement. It seems necessary to state this because of the widespread belief on the left that Lord Keynes was indeed some sort of (closet)-socialist. This could not be further from the truth: Keynes main aim in life was to save capitalism from itself.

His magnum opus, ‘’The General Theory of Employment Interest and Money’’ first published in 1936, represented the culmination of his earlier writings in which he elaborated what he believed to be the problem situation which had arisen in the world economy during the 1930s, and what he believed to be the solutions. But Keynesianism is not really a theory of the trade cycle, nor is it a general theory (more of which later) it is more a theory of boom/bust and possible ways out of economic depressions. The bust period in a capitalist economy generally follows a period of excess credit and hence debt-fuelled growth. This was the case during the roaring 20s with runaway credit (debt) fuelling growth until – pop went the weasel! Credit duly contracted as the defaults multiplied, and so the Roaring 20s transmuted into the depressed 30s.

‘’In 1930 the US money supply comprised currency held by the public (9%) and deposits held at commercial banks (91%). Banks used these deposits to fund their loans. When the credit that fuelled the Roaring 20s could not be repaid, the banks began to fail. When a borrower defaults it not only destroys credit, it also destroys the deposits which funded the credit. Between 1930 and 1933, 9,000 US banks failed. The corresponding destruction of deposits caused the country’s money supply to contract by a third from $46 billion in 1928 to $31 billion in 1933. As the money supply shrank the happy economic dynamic that expanding credit had made possible, went into reverse, and the global economy spiralled into catastrophe.’’ (5)

Post-crash, the problem was not excess demand but insufficient demand. This became known as debt-deflation. This is where Keynes and his co-thinkers entered the scene. With consumers and investors not spending, aggregate demand in deflationary conditions is flat, or even falling. Therefore the solution could only be increased spending by the government. This to be carried out by a mixture of monetary policy (lowering interest rates and Open Market Operations, and now Quantitative Easing – QE) and/or fiscal policy (taxation and public spending). This is of course something of an oversimplification of Keynes’ theories which were somewhat more radical than most of his enthusiasts found to their taste, but it broadly captures the gist of what he said. The increase in aggregate demand would feed through to the rest of the economy and so induce an increase in output which would be eventually self-sustaining. Governments would find it necessary therefore to run budget deficits during this period. Q.E.D.

This approach was taken up by the Roosevelt administration when it came to office in 1933. At that time unemployment in the US stood at the alarming figure of 25%. A raft of policy measures including the Works Programme Administration (WPA), National Recovery Act (NRA), Tennessee Valley Authority (TVA) Civilian Conservation Corps, were implemented. Unemployment fell to 14% by 1936, but then rose again during a new recession in 1937/38 to 20%. So the track record of Keynes policies seems patchy to say the least.

The Long Boom and its collapse 1980-2008

In our own time we have seen almost a repeat of the 1930s debacle. The long boom of 1980-2007 was floated on a sea of debt. But even this period was punctuated by blow-outs, first in the Savings and Loans episode of the 80s and 90s, then the Long-Term Capital Management collapse in the 90s, and finally the dot.com bubble in 2001. The 2008 crisis was, however, seemingly worse than these events and more global than that of the 1930s. In 2008 the whole credit/property induced boom came to a shuddering halt when the sub-prime borrowers in the US defaulted. House prices, which, had been rising by double digit percentages since the early 90s collapsed in 2006 and have been falling, apart from one or two transient minor upturns, ever since.

The same was to also happen in Iceland, Ireland the UK and Spain who had also built their policies around house-price inflation. Mortgage backed derivatives – i.e., those financial products which were based upon these repackaged dubious mortgages were parcelled up and sold as new financial products to brain-dead investors around the world after being given the triple AAA seal of approval by the ratings agencies. These derivatives were only producing a stream of income so long has the mortgagees continued to pay their instalments – when they defaulted the derivatives became worthless, the banks, who among others such as pension funds who had been purchasing these debt instruments, then found that their newly acquired ‘assets’ had turned into liabilities overnight. Many banks were effectively insolvent, and the great bank panic of 2008 spread around the world.

Governments found it necessary to bail-out these institutions in order to avoid a global meltdown. So the banks happily transferred their junk ‘assets’ onto the sovereign nations’ balance sheets courtesy of the Central Banks. Needless to say this was only the opening of the great recession of 2008/09 which in spite of its putative ‘recovery’ still drags on. The crisis was to cross the pond from the US – whose fundamental problems still seem unresolved – to Europe where the problem became more acute.

Stabilisation and low growth 2009-onwards

Since the nadir of 2008/09 there has been a stabilisation rather than what we might meaningfully call a recovery in the global economy. Growth is flat or falling in Europe, although there are very marked regional disparities, and very weak (and as I write, beginning to actually stall) in the USA, again with regional disparities. Interestingly, perhaps with all the clamour regarding austerity in the eurozone, no mention was made in the 40 or so US states – some effectively insolvent – which oversaw swingeing austerity programmes, California and Wisconsin come to mind, as does Detroit, famous for Tamla Motown and auto-vehicle production. A one time industrial city of 2 million people became a ghost town of 700,000.

Concomitant with this there were high levels of unemployment on both sides of the pond. Official figures for US unemployment, as found in the Bureau of Labor Statistics (BLS) are completely fraudulent and always have been since whole swathes of de facto unemployed have been disappeared off the register simply by definition. (The same disappearing trick was used with the core inflation figures.) The BLS gives three levels of unemployment according to how the word is defined. In fact there are six definitions ranging from U1-U6. The BLS uses U3 but the figure for U6 is double. And if the same definition were applied as used to be the case then unemployment would be almost 4 times the official account. The same jiggery-pokery is used when defining inflation. Each redefinition gives a lower figure.

Regarding this universal practise, it was the late Conservative Member of Parliament and at one time member of Mrs. Thatcher’s Cabinet, Lord Gilmour, who once said of his government’s unemployment reduction programme: ‘’Now we have reduced the unemployment figures, perhaps we can make a start on reducing unemployment.’’ I am afraid the pollution of statistics is the same for inflation, GDP growth and various other economic statistics. These statistics are not some measurements of objective facts, but simply political constructions. (6)

In passing we should become aware of a new economic development which came into being after 2008 and persists to this day. This was the genesis of the so-called ‘gig’ sometimes called ‘sharing’ economy. It should be made clear that this sector of the economy is generally very much ’off the books.’ The modern workforce has become increasingly stratified. There are well-paid jobs for a small portion with the requisite skills, but the vast majority of new employment is in the low-paid service sector, such as retail, leisure, hospitality, age-care and health-care. The sharing-economy is generally part of the informal sector but requires abundant cheap contract labourers to be available at the touch of a smartphone screen. Fulltime employees with normal benefits would make the model unworkable. This ‘gig’ or sharing economy exploits low-wage workers in a weak economic environment. This new ‘eke-onomy’ consists of individuals renting out their houses, cars, or labour make only a fraction of what they would receive in traditional full-time jobs, without any employment benefits. This is what Marx/Engels termed the industrial reserve army consisting of the unemployed and under-employed. Moreover, in the UK at least most of the workforce engaged in this low-paid, insecure drudgery are for the most part, immigrant labour, often illegal, from Romania, Spain, Portugal, Poland, the English-speaking part of Africa and even as far as China. Welcome to the ‘smart’ economy.

Keynesian policies … and debt levels

The general Keynesian response to the downturn has been a hue and cry for stimulus at all costs. Keynesian counter-cyclical policies traditionally consisted of 1. Monetary policy. This comes under the remit of the Central Bank and consists of control of interest rates and money supply. 2. Fiscal policy, which is the remit of the Treasury consisting of taxation and public expenditure. Sotto Voce It should be noted at this point that the Central Banks became the source of economic policy. This was a new departure since it meant that fiscal policy was relegated to a secondary role in economic planning. Monetary – i.e., central bank – policy now ruled the roost. The rigidly orthodox European Central Bank (ECB) – more catholic than the Pope – adopted hard-nosed monetary policies in the eurozone with alacrity, whilst the Anglo-American approach involving monetary and second-tier fiscal policies were partially adopted in the UK and more rigorously in the US.* The ECB put the weaker economies in the eurozone – Greece, Spain, Portugal, Ireland, Italy, Latvia – through the wringer of a grinding depression. No stimulus policies were undertaken, since it is argued this would pile more debt onto unprecedented levels already extant. Results have to say the least, not been exactly encouraging, particularly in the southern European periphery. This situation has received press coverage ad infinitum much of it justified, but much incredibly biased and ignorant, but hey, this is the white noise of democracy in action.

Given that the eurozone crisis has received saturation coverage we will move on to the UK. Here we have a bizarre mismatch of policies: a loose monetary policy with the Bank of England lowering the base rate to 0.5% and engaging in money printing – otherwise known as Quantitative Easing – and a tight fiscal policy with the Treasury cutting back on public spending. The result? The worst of both worlds, inflation, and – good old 1970s stagflation.

The poster child for the Keynesians was the United States which threw everything but the kitchen sink at the problem in both fiscal and monetary terms. This produced some low growth and a slight fall in unemployment, albeit from an extremely high level, and recently reversed, but each additional stimulus has had less of an impact than the one preceding it. A sort of diminishing returns was to set in, whereby more and more of the ‘fix’ is needed to get any sort of result.

‘’ … in the 1970s the increase in GDP was about 60 cents for every dollar of increased debt. By the early 2000s this had decreased to close to 20% of GDP growth for every new dollar of debt.’’ (7)

The Federal Reserve had already initiated 2 rounds of QE injecting literally trillions of $s into the economy. In addition it lowered interest rates to 0.25% – zero to all intents and purposes. The Fed’s purchase of paper assets was facilitated with the printing of paper monies. These paper assets consisted of US Treasury bonds and junk securities from government sponsored enterprises such as Freddie Mac and Fanny Mae, the two government agencies whose remit was to issue mortgages to prospective US homebuyers. This meant that the assets purchased by the Fed were nothing more than debt, unredeemable debt at that. This is a weird situation where the Fed was buying US bonds issued by the Treasury department so that the US Federal government could pay its current bills. And where did the Fed get its money from? Out of thin air apparently, it simply printed the stuff! When the stage is reached where governments have to pay their current expenditures by printing money then the alarm bells should start ringing. An idea of the monies involved was described as follows:

‘’Before the first round of QE began, the Fed held roughly $900 billion of assets. When it ended on March 31, 2010 the Fed’s balance sheet had more than doubled to $2.3 trillion. There is no precedent for fiat money creation on this scale in the US during peacetime.’’(8)

Suffice it to say that money printing has continued and massively expanded to the present day 2020. Increasing the supply of paper money in the economy in the absence of demand for it can only produce one result – inflation, albeit after a time lag. (But this works on the assumption that the velocity of circulation of such monies remains constant. If the circulation falls to zero, then there will be no inflation. Deflation is more likely if the money supply does not reach the real economy. If the rate of money circulation does not alter, we can expect inflation to appear.) It will be objected, however, that the US rate of inflation was at the time of the 2008 episode only 2.3%. True. But bear in mind that both food and fuel price increases are left out of the calculation in what is termed US ‘core inflation’; another egregious example of officialdom’s statistical sleight of hand. Were those price rises added in then at the very least the US inflation figures would almost certainly double. Moreover, the global effects of the Fed’s policies has been to export this inflation around the world as a mass of greenbacks flew out of the US looking for more favourable investment outlets. The global supply of these Eurodollars (i.e., US$s circulating outside of the US) had ballooned, and this led to an inflationary impact globally as food and commodity prices (notably oil) had spiked. This in turn led to food riots and political disturbances throughout the world, particularly in the Middle East. A sort of unforeseen justice was done, however, when higher oil prices hit the price of gasoline in the US – a boomerang effect. The inflationary effect of the Fed’s money printing also meant that local currencies were put under pressure. When the $ tsunami entered a country their own currency was subject to an upward revaluation, which meant a higher exchange rate. They were therefore faced with two choices: one, do nothing and let their export markets contract since their currency was now more expensive, or two, maintain the value of their currency against the US$ by purchases of more of these dollars with their own currency. This would mean that their own money supply would expand and become inflated. Thus US inflation had become global inflation. Yes, devaluation is a great way to start a currency war.

As far as fiscal policy goes the US has consistently run budget deficits since the 1990s when it actually recorded a small surplus. The cost of the government takeover of Fannie Mae and Freddie Mac, the cost of ongoing wars in the middle east, the cost of bailouts to various financial institutions, the cost of fiscal transfers to cash-strapped states and various stimulus programmes has raised the US budget deficit (2008 figures) to $15.5 trillion, which given that the Gross Domestic Product of the US as of May 2012 was $15.6 trillion, makes the ratio close to 100%. Even before the economic crisis, the U.S. debt grew 50% between 2000-2007, ballooning from $6-$9 trillion. Now the implications of this are indeed sobering.

According to the authors Reinhart and Rogoff when debt to GDP ratio reaches 90% this will constitute a drag on future growth. And bear in mind that this figure of debt-to-GDP has risen to 107% in 2020. Longer term implications of America’s chronic debt problem are manifest. Sure the Fed can print unlimited monies, but it can’t guarantee that these greenbacks will have any value.

Over the next 20 years, the Social Security Trust Fund won’t have enough funds to cover the retirement benefits promised to Baby Boomers. That means higher taxes since the high U.S. debt rules out further loans from other countries. Unfortunately, it’s most likely that these benefits will be curtailed, either to retirees younger than 70, or to those who are high income and therefore aren’t as dependent on Social Security payments to fund their retirement.

Second, many of the foreign holders of U.S. debt are investing more in their own economies. Over time, diminished demand for U.S. Treasuries could increase interest rates, thus slowing the economy. Furthermore, anticipation of this lower demand puts downward pressure on the dollar. That’s because dollars, and dollar-denominated Treasury Securities, may become less desirable, so their value declines. As the dollar declines, foreign holders get paid back in currency that is worth less, which further decreases demand.

The bottom line is that the large Federal debt is like driving with the emergency brake on, further slowing the U.S. economy.

Now if we add in private debt to the equation – i.e., the debts of household sector corporate sector, business sector, non-corporate businesses, State, and local government – then the debt soars to something like $50 trillion, or 363% of GDP. Then of course there is the chronic deficit on current account which adds a further dimension to the problem, and all of these seemingly intractable processes are still ongoing but hey, let’s not labour the point.

The seriousness of the situation is only matched by the complacency of the US authorities who seem to think they can go on raising the budget borrowing ceiling and that overseas investors will simply keep on buying their Treasury bonds forever. If ever there was a definition of unsustainable this is it.

In fact the structural problems in the US economy could well be fatal if these colossal debt levels are not reined in or simply stabilised. The US is being kept afloat by their ownership of the global reserve currency and the willingness (for now) of investors, mainly China, Japan and the oil-rich states in the middle-east to keep purchasing US Treasury paper – paper assets of dubious value and paltry yields. Overseas investors are aware of this situation and have begun to lower their exposure to the US$s and dollar denominated assets by diversifying into other assets and have also started to trade in their own currencies rather than the dollar. Straws in the wind perhaps, but indicative of future trends.

Taken by themselves Keynesian demand-side policies of stimulating the economy hardly begin to grapple with the problem. This is because deeper problems are on the supply-side not the demand-side of the economy. They can be classified as follows. Deindustrialisation as the manufacturing base is hollowed out or emigrates to cheaper venues; ageing populations; rising energy costs and scarcity; saturation of markets; lack of leadership at the political level; finance running amok; the ability to create paper money and assets without limit; an inadequately trained workforce; skills and investment deficit; and structural unemployment brought about by new technologies. And to crown it all there is the dreaded ‘Triffin Paradox’ to be factored into the equation, but this would take another article. Moreover, I could also have added in the issue of climate change but didn’t want to depress my readers unduly.

Keynesianism is fixated on the demand-side. But in a world beset by the sort of supply-side problems listed above traditional demand-management policies used since the war will not be effective. It is also worth adding that both Germany and Japan, where the wartime devastation was manifest both recovered strongly without Keynesian demand management. This actually serves to validate the Austrian and Marxist theory that upturns and booms in a capitalist economy are the result of the destruction of existing capital values. Japan and Germany roared ahead because their own industries and infrastructure was decimated, and they had to install the most modern up to date capital equipment and technologies and again start from scratch. Economies which start from a low base tend to have extremely high rates of growth.

I did mention earlier that Keynes’ General Theory is in fact not a general theory at all but a special theory. Such policies may have been appropriate for the post-war period with the usual cyclical movements of the trade cycle, but dare I say, this time it’s different. What we are now confronted with is a systemic global crisis of capitalism. In the present situation Keynesian policies – which are commonly understood and promulgated by his epigones – are unlikely to have the desired effect for the following reasons.

‘’Keynes’ theory that government spending could stimulate aggregate demand turns out to be one that works in limited conditions only, making it more of a special theory than a general theory which he had claimed. Stimulus programmes work better in the short run than in the long run. Stimulus works better in a liquidity crisis than in an insolvency crisis, and better in a mild recession than a severe oneStimulus also works better for economies that have entered recessions with relatively low levels of debt at the outset … None of these favourable conditions for Keynesian stimulus was present in the United States in 2009.’’ (9)

It has been calculated that growth would have to be at the rate of 6% per annum which when inflation is factored in reduces to actual growth of 2% to make any inroads into the huge debts. This seems very, very unlikely, although this is what the US authorities will attempt to do.

One final point with regard to Keynesian policies: They are often thought of as an alternative to austerity, when in fact they are simply austerity by other means. It is an open secret, though never admitted, that both the Fed and the Bank of England are attempting to monetize the debt levels in both countries. This entails keeping inflation one or more jumps ahead of wages, pensions, benefits, and interest rates. This inflation is engineered by the Central Bank which devalues the currency – supposedly to make exports more ‘competitive’ and printing money through QE. Devaluation leads to an increase in import prices which will tend to feed through the rest of the economy causing domestic inflation. The time-honoured claim made by the then British Prime Minister, Harold Wilson, in 1967 that the proposed 17% devaluation of the £ ‘would not affect the pound in your pocket’ was simply a barefaced lie. When a country devalues its currency it makes itself poorer (‘competitive’ is of course the preferred description). That is its whole raison d’être, and in this respect, it is no different from a policy of deflation.

Thus the disposable income of the mass of the population is effectively pushed down as prices rise, and the most acutely affected will be the poorer sections of the community or anyone who keeps their assets in cash. The more opulent, however, will be able to switch into stronger currencies, and physical assets such as precious metals, property, L’Objets d’Art which will appreciate in price. Inflation will help debtors since their debts will be effectively amortized, i.e. grow less as inflation lowers the magnitude of the debt. Of course the principal debtor is the government.

Forcing down interest rates to near zero in an inflationary environment gives savers two options. Do nothing and watch their savings melt away, or just go out and blow the lot. Similarly investors will be forced into more risky investments as they see the paltry return to safer bolt holes such as gilts being eaten away by inflation. It all rather sounds like a re-run of 2002-2007 credit-fuelled growth madness. And paradoxically, because disposable income is crimped by such a policy, aggregate demand falls, and this gives another push to deflation – the law of unintended consequences.

Keynesians see the problems of past and present capitalism as purely technical. They apparently believe that capitalism can be ‘fixed’ using appropriate tools and that it would therefore be possible to have permanent semi-boom conditions. This is clearly expounded by economists such as the American Keynesian, Paul Krugman in his book Peddling Prosperity, first published in 1994. Having spent most of his life during the post-war boom, he is apparently dumbfounded that it suddenly ended in the early 1970s. He intoned that … In 1973 the magic went away. Well ‘magic’ had nothing to do with it. Capitalism was beginning to enter into a periodic systemic convulsion which is now reaching its climax.

After Keynes – What to Do?

‘’Can Capitalism survive? No I do not think it can … Can Socialism work? Of course it can.’’ (10)

On the first point Schumpeter was at that time wrong, but it is now a question which needs to be raised again. On the second point, he has to be right. But this is a political rather than a purely technical question. The present crisis will be solved sooner or later (preferably sooner) but the question is how, by whom, and for whom?

The question for socialists, or for that matter any oppositionists to the present regime, is what should the strategy be for the coming struggles with this system – a system which cannot go on in its present form for the simple reason that it needs to grow at a compound rate of 3% forever – this is not possible for both political, economic and environmental reasons. (My emphasis) Socialism or a collapse into semi-barbarism seems to be on the agenda once again. But we shouldn’t be surprised by this; it is surely what we have been expecting since the trouble started brewing in the late 60s. After all capitalism moves in huge cyclical convulsions, and this is one of them.

This is a colossal question and I can only allude to possible areas of political action. The first thing to realise is that the historical window for a social-democratic Keynesian solution to the crisis is now closed. It was only made possible by a specific conjuncture of political and economic circumstances. The Thatcher-Reagan settlement and globalization marked the death-knell of the Keynes/Beveridge consensus. (11) Does this mean that socialists should not support a policy of reform within the system? Not at all. But this support must perforce have in view the objective of forcing a paradigm shift away from what has been a trade unionist approach of simply gaining and defending reforms – to a struggle for real political and economic power. (My emphasis).

The programme of the liberal-left – the type of journalism which we see in the Guardian and Independent and Labour party publications – actually advocates reform of a system which is beyond reformIt should also be clearly understood that such reforms as advocated by most of the liberal-left such as public spending on work creation programmes, investment in green technology, a national investment bank will only provide a temporary fix, and may well have negative downsides, such as inflation.

‘’A short-run revival of growth, as opposed to proliferating distress, can … buy time for longer term solutions to the transition to be worked out. But bought time is only useful if it is put to good use.’’ (My Emphasis – FL)(12)

Keynesian reform will not be a long-term solution, but it can alter the political balance of power and shift the argument in favour of the 99%. The politicisation of the mass of ordinary folk can begin with such an approach. Socialists, however, need to go much further than the type of Keynesian stimulus programme as advocated by Hutton, Krugman, Elliott, et al. Such a programme might consist of the following set of workable policies.

  1. Public works programmes to reduce unemployment. Or full maintenance for the unemployed.
  2. Nationalization of all deposit taking institutions and the setting up of a national bank.
  3. Strict rules on credit creation and the Shadow banking system.
  4. More transparency and an end to over-the-counter (OTC) trading.
  5. Closure of tax havens. Stop tax avoidance scams such as Transfer Pricing.
  6. Withdrawal from overseas conflicts and NATO.
  7. Harmonisation of corporate tax rates within the EU.
  8. End of the global reserve status of the US dollar.
  9. Indexation of wages, pensions, benefits, interest rates to inflation
  10. A move away from indirect to direct taxation, and higher tax rates for the upper quintile of the population.
  11. Tax harmonisation in Europe to prevent tax competition and the race to the bottom.

These represent the economic demands. But capitalism also works at a political micro-level. The power relations in the work-place are such that employees and consumers have no say in how the business is run, by whom and for whom. Shareholder value is all that matters. This should be replaced by a stakeholder approach were all the interest groups have a say in the running of the organization.

Of course there is no possibility that such demands as these will be met, there is a war going on after all, and at the moment the class enemy have the power and the veto, notwithstanding the democratic will of the people. Moreover, some of these questions can only be raised at regional and/or global levels. This opens up several additional cans of worms. There is the seemingly intractable issue of Europe and the euro? Reversion to national currencies (as advocated by the Guardian’s economics team) may only lead to devaluation and trade and currency wars. Then there are global currency and trade issues: What replaces the dollar as the basis for a global currency? The IMFs Special Drawing Rights? A new gold standard? Or Keynes’ idea of a global currency – Bancor – to replace national currencies, in international trade. Then there is the massive question of climate change and the massive ecological damage and negative externalities which is the corollary of consumer capitalism. The problem we face is that politics are national, but capitalism and economics are global. But reforms of this type can obviously only be carried out at international level (13) but the starting place must be national. Co-ordinated global action is not going to happen any time soon, but regional action, whether in Europe, North and Latin America as well as the ASEAN bloc is a possibility – in fact it is the only option for supra-national policy making at the present time.

The task seems truly Herculean, the point is, however, that these issues must sooner or later (preferably sooner) be raised. They cannot be evaded. We do not choose history, history chooses us. And this is the labour of Hercules which history has bequeathed.

‘’An alternative (to capitalism – FL) will have to be found. And it is here that the emergence of a global co-revolutionary movement becomes critical not only to stemming the tide of self-destructive capitalistic behaviour … but also to our re-organizing ourselves and beginning to build new collective organizational forms, knowledge banks and mental conceptions, new technologies and systems of production and consumption, all the while experimenting with new institutional arrangements, new forms of social and natural relations, and with the redesign of an increasingly urbanized daily life …

While capital has provided us with an abundant means with which to approach the task of anti-capitalist transition, the capitalists, and their hangers on will do all in their power to prevent such a transition no matter how imperative the circumstances may be. But the task of transition lies with us not the plutocrats. As Shakespeare once advised: ‘’The fault … is not in our stars, that in ourselves that we are underlings.’ Right now, as Warren Buffet (the famous American investor – FL) asserts his class is winning (the class war) our immediate task is to prove him wrong.’’ (14).

NOTES

(1) Andrew Gamble – The Spectre at the Feast.

(2) Detlev Schlichter – Paper Money Collapse.

(3) Richard Duncan – The New Depression p.105

( 4) JMK – Essays in Persuasion – 1925 – Am I a Liberal, A short view of Russia. Ibid

(5) Richard Duncan -The New Depression – p.121

(6) In this connection see ChrisMartenson.com Crash Course, Fuzzy Numbers and John Williams Shadow Government Statistics – passim.

(7) Foster and Magdoff – The Great Financial Crisis – p.49

(8) Richard Duncan Ibid.

(9) James Rickards – Currency Wars –pp.186/187 – My emphasis FL

(10) Joseph Alois Schumpeter – Capitalism, Socialism and Democracy – 1943

(11) William Henry Beveridge, 1st Baron Beveridge, KCB was a British economist and Liberal politician who was a progressive and social reformer. His 1942 report Social Insurance and Allied Services served as the basis for the

post-World War II welfare state put in place by the Labour government elected in 1945

(12) David Harvey -The Enigma of Capital– p.278

(13) I have since revised this view and would argue that that starting place for the sweeping reforms which are necessary at the global world system must include and start at the national level. This is not the EU we signed up to in 1976, and there comes a time in politics where it is judicious to give up flogging a dead horse. A progressive Labour government under Corbyn would not have been allowed by EU law to implement its economic reforms, cancel Trident, leave, or even modify its NATO membership. Democracy is impossible without some measure of sovereignty, and nations must get control of their own foreign and economic policies since if they don’t the globalisers and Bilderbergers will and have done

(14) David Harvey, op.cit

*The Federal Reserve Act of 1977 modified the original act establishing the Federal Reserve in 1913 and clarified the roles of the Board of Governors. The Federal Reserve has two mandates: maintaining maximum employment and maintaining stable prices and moderate long-term interest rates. Congress explicitly stated the Fed’s goals should be “maximum employment, stable prices, and moderate long-term interest rates. It is these goals that have come to be known as the Fed’s “dual mandate’’. All of which was enabled to act in both monetary and stimulus capacities.

Francis Lee

Updated from 2012 to 2020

روسيا ترفض قانون قيصر … فما هي مفاعيله

ناصر قنديل

بالتأكيد يضيف قانون قيصر للعقوبات المفروضة منذ سنوات على سورية أميركياً وأوروبياً المزيد، لكن هذا المزيد المتصل بالاستهداف المباشر لسورية كدولة واقتصاد يكاد يكون مجرد غبار إعلامي، لأن المصرف المركزي السوري والمصارف التجارية تحت عقوبات سابقة تمنع فتح الاعتمادات لزوم الاستيراد، والدولة السورية ممنوع عليها بيع وشراء النفط منذ زمن، والاستهداف الجديد المباشر كناية عن دفعات من الأسماء التي تطالها العقوبات، أغلبهم ليست لديه حسابات مصرفية قابلة للعقاب، ومَن لديه سبق ونال نصيبه من العقوبات، كما يقول مجرد الاطلاع على اللائحة الأولى التي سوق لها الأميركيون وجماعاتهم الكثير، بصفتها، الإشارة لحجم العقوبات التي يمثلها القانون.

قيمة القانون بالتأكيد لم تكن بتهديده للمتاجرين مع سورية، لأن الأوروبيين ممتنعون أصلاً، ومثلهم كثير من الدول والشركات العالمية، وبالتوازي ليست قيمة القانون بتهديد إيران وهي المعاقبة بما هو أشدّ من قانون قيصر. والقيمة الفعلية للقانون كانت يوم بدأت مناقشته قبل ثلاث سنوات، وهي اليوم كذلك، بكونه يستهدف الضغط على روسيا عبر التلويح بمعاقبة شركاتها التي تتعامل مع سورية، ومن ضمنها شركات تمثل عصب الاقتصاد الروسي سواء في مجال صناعات الأسلحة أو في قطاع النفط والغاز. ومثلما كان الأمر منذ ثلاث سنوات ويتجدد اليوم، ثمة ما تريده واشنطن من موسكو عبر التلويح بالعقوبات، كان في الماضي يوم صدر القانون الامتناع عن المشاركة في معركة حلب، وحسمت روسيا المشاركة وحسم النصر معها قبل أن يبصر القانون النور فتم صرف النظر عنه.

العودة للعقوبات في مخاطبة روسيا هذه المرّة لها عنوان موجود في نص القانون، وفي فقراته الأخيرة، وهي متصلة بمسار الحل السياسي، رغم أن موضوع القانون لا يتصل بالحل السياسي، والواضح لمن يقرأ القانون أن ما يريده الأميركي إشارات على حل سياسي تراعي طلبات محددة، تتوزع بين محورين: الأول هو وضع خاص يقارب الفدرالية لمنطقة سيطرة الميليشيات الكردية في شمال شرق سورية، والثاني ترتيبات أمنية جنوب سورية توفر أعلى الممكن من ضمانات لأمن كيان الاحتلال المكشوف أمام قوى محور المقاومة، ولذلك كان المحللون الأميركيون منذ الإعلان عن قرب وضع القانون قيد التنفيذ يراقبون يوماً بيوم ردود الأفعال الروسية، ولذلك حتى أول أمس كانوا يعتبرون القانون فعالاً بداعي أن موقفاً روسياً لم يصدر أسوة بما صدر عن إيران، لكن الموقف الروسي صدر أمس، وكان متعمداً تأجيله ليوم دخول القانون حيز التنفيذ علامة استخفاف روسي، ظهر بالقول إن موسكو ستزيد دعمها للدولة السورية، وإنها لن تخضع للتهديد بالعقوبات التي يتضمنها قانون قيصر.

على هامش تفاهة المحتفلين بالقانون من بعض اللبنانيين، وما يتحدثون عنه من انهيار سوري ينتظر بعض المدد من لبنان، تروى روايتان تطغيان على الإعلام، واحدة تقول إن حزب الله يشتري الدولارات من لبنان ويهربها إلى سورية، والثانية تقول إن تهريب المازوت والطحين من لبنان إلى سورية على قدم وساق، وإن هذين العاملين، شراء حزب الله للدولار وتهريبه ومثله تهريب الطحين والمازوت إلى سورية، سببا انهيار لبنان وصمود سورية، ورغم أن العاقل يعلم أن وراء هذا الكلام مجموعة مغفلين، لكن لا بدّ من كشف الخداع والغباء في الكلام. وهنا نسأل هل يشتري حزب الله الدولار من بيروت ويهربه إلى سورية بلا مقابل مالي أو تجاري؟ وهذا يعني كي يكون الرقم مؤثراً بالنسبة لسورية أن يكون حزب الله قادراً على بيع ليرات لبنانية وشراء دولارات مقابلها بمئات ملايين الدولارات، والأمران يجعلانه أهم من المصرف المركزي بمخزون لا ينضب من الليرات وقدرة لا تضاهى بالتخلي عن الدولار، بينما يفترض أن نصدّق أنه في أزمة أشدّ من سورية، أما إن كان حزب الله يحصل على المقابل للدولارات، فهل يُعقل أن يكون بالليرة السورية وماذا سيفعل بها؟ فإن كان يشتري بضائع لتباع في لبنان فهذا صار تجارة لاستيراد سلع يحتاجها السوق اللبناني بسعر أرخص حكماً من مصادر استيراد أخرى، يحتاج تمويلها لدولارات أكثر، وهذا يجعل العملية توفيراً للدولار لا استنزافاً له، بالنسبة للسوق اللبنانية، أما حكاية تهريب المازوت والطحين، فأولها الاقتناع أنها إن أخذت بالحساب فيجب التسليم بأنها لا تمثل إلا الجزء البسيط من حاجات سورية التي تعادل عشرة أضعاف استهلاك لبنان من المادتين، والحديث عن تهريب سقفه الأعلى 10% من استيراد لبنان، يعني 1% من استهلاك سورية، ورغم الحجم الهزيل نبدأ بالأسئلة، هل المقابل للطحين والمازوت هو ليرات سورية يتقاضاها المهربون، وماذا يفعلون بالليرات السورية، وإذا باعوها ليشتروا بها دولاراً، فيجب أن يكون المشتري بالنهاية في السوق السورية ليستعملها، ويصير الدولار المقابل دولاراً يخرج من سورية ليدخل إلى لبنان لا العكس، ويجب أن يكون سعر البيع للمواد المهربة أعلى من مبيعها في لبنان كي تكون العملية مجدية، أي أن دولارات أقل دفعت لشراء المواد ودولارات أكثر جاءت ببيعها، فكيف يكون لبنان مستنزفاً بالدولار. هذا رغم صحة أن التهريب يكلف الدولة فارق الدعم، ويجب وقفه، لكن المبالغات والأكاذيب آن لها أن تتوقف، لأنها لا تنشئ قضية ممكن الدفاع عنها أمام أي منطق.

Gosplan: The God that failed

June 04, 2020

By Francis Lee for the Saker Blog

Gosplan: The God that failed

Between 1989 and 1992 Soviet GDP per head fell by approximately 40 per cent. What happened?

The short century of the Soviet Union which began in 1917 reached its nemesis in 1989. The great experiment was, to all intents and purposes, over. Symbolically this was occasioned by the fall of the Berlin wall when huge crowds of East Germans simply strolled, unmolested by the Volkspolizei, into the western sector of the City. Moreover this historical watershed was to become highly infectious and led to a succession of Potemkin states in the rest of Eastern Europe going their own way (with a little encouragement from the west of course). These monumental events represented an unexpected application of the American ‘domino theory’.

It would be wrong, however, to understate the achievements of Soviet communism. No political/economic system is all bad; name one which is? Russia and its periphery were transformed from rural backwardness into an industrial and military super-power, albeit at a tremendous cost of civil wars and the great purges of the 1930s. That being said the modernization of the USSR enabled it to defeat the Wehrmacht in the Great Patriotic War 1941-45. In Winston Churchill’s words the Red Army had ‘torn the guts’ out of the once mighty German military machine in titanic battles most critical of which were Stalingrad and Kursk – but at a huge cost both economic and human.

On the more positive side the system introduced mass education and welfare systems which provided social security for its citizens. However, all this was achieved at a terrible cost in human lives, economic and social mayhem, including famine in the Ukraine, and absurd and inquisitorial show trials, and the mass destruction and near extinction of the country resulting from its ill-preparedness for war. But the USSR survived and counter-attacked.

As the Red Army went on the offensive and rolled forward into Eastern Europe after Kursk (1943) Soviet client regimes in eastern Europe were created in the Soviet image with the imposition of the Stalinist political and economic system. This was essentially a setting up of puppet states, but almost certainly a mistake as many of these regimes had been former enemies including Romania, Hungary and Slovakia who were integrated into the Soviet bloc with their own little marionette leaders such as Ceaucescu in Romania. Unfortunately, this was accompanied with an unprepossessing and macabre parody of the Great Terror of the 1930s ‘Yezhovschina’ – accompanied by the sinister pantomime of show trials and summary ‘liquidations’.

Moreover, armed insurrections against the regimes in both East Germany 1953 and Hungary 1956 were brutally suppressed. The system became a little more tolerant after the 1960s but never really lost its essentially totalitarian character. This was unquestionably a rigidly hierarchical society and, contrary to its claims, never in any sense egalitarian. However, unlike capitalism where power was in the hands of the owners of the means of production and their political apologists, power in these societies was concentrated in the state bureaucracy which included most importantly the communist party and the secret police.

It is in the nature of things that wherever societal scarcity exists – and this includes just about all societies – inequalities will arise. In this respect communism was no different to capitalism. The prominent East German dissident, Rudolf Bahro drew attention to this in 1978 as follows. ‘’ … Individual opportunity in our society – the DDR – is on the whole just as unequally distributed as in late capitalist society.’’ (1)

However it was the structural anomalies internal to the system rather than individual shortcomings of particular party officials such as Stalin and Ceaucescu, although these certainly played a key role. No, the problem was ultimately systemic, and it was this which eventuated in the final collapse. These internal structural weaknesses – which incidentally were just as applicable to capitalism and communism, given that the nature of these fault-lines and the dates were different – gave rise to inertia, and stagnation. The crisis became unavoidable.

This situation was in the fullness of time to become common knowledge as early as 1960. Disturbing reports from Soviet economists showed slowing rates of growth particularly in agriculture and manufacturing, in addition the poor quality of many goods and the most backward industry in the modern world. In particular there was criminal wastage in production ranging from timber to steel. Among the workforce there was widespread absenteeism and alienation. By 1980 the situation had reached critical levels. Gorbachov’s perestroika and Glasnost reforms were too little, too late, since by this time the entire system was beyond reform.

Various reasons have been put forward to explain this collapse. What gave rise to this systemic failure of communism and the command economy? The short answer was a lack of understanding of economic policy based upon a system of central planning and the role of the market mechanism. In a market economy price signals tells producers what, how, and when to produce. Take away this mechanism and decisions of these types are left to the planners. This is not to say that a market mechanism cannot be part of an integrated system of overall economic planning. Models of economic integration based upon markets and planning have been part of state-capitalist and social-democratic economic systems for at least a century and perhaps more. But the Gosplan model was characterised by the almost total exclusion of the market mechanism from economic policy. Instead of which various ministries were set up with a brief to oversee the establishment and implementation of what turned out to be policies with which none had any experience of the business end of economics whatsoever. Ministries responsible for the production of goods were not joined up to other ministries responsible for packaging, production and distribution. The situation was frankly amateurish, and the lack of overall coordination was built into the system from the outset.

Then there were also additional problems of accountability. These unwieldly and unresponsive bureaucracies, which were becoming increasingly parasitic and self-serving had little idea of what to produce and how much. In a market system a product which is shoddy will often fail as consumers turn to other producers to spend their hard-earned cash. In a command economy firms which do not deliver the goods go bust. But this was not a market economy; it was a centrally planned economy which could not go bust and there was insufficient incentive to maintain standards of excellence. In defence of a command economy it could be argued that it is good for producing T34 tanks, but the war was over and economic diversification was conspicuous by its absence.

Certainly efforts at quality control were attempted but none of them worked satisfactorily. Planners would specify a number of tractors to be produced by tonnage and the response of the local manager was to weld steel plates to each tractor as it moved off the assembly line. Tonnage quotas were thus being duly met and even over-fulfilled.

Given the distance between the planners and the local managers the imposition of production targets by the former tended always to be overoptimistic and politically driven. It became a pretend game. Everything was fine and dandy and nobody wanted to rock the boat. This was eerily similar to the current situation of western capitalism in 2008 and 2020. A much vaunted but totally overblown, western economic model – wholly deregulated, privatised and liberalised and based upon ‘pretend and extend’ gimmicks as well as other exotic variations of a Ponzi scheme whereby existing (record) debt levels are serviced by newer injections of debt.

But let’s get back to the USSR (courtesy) of the Beatles. This lack of economic realism was mirrored on the part of the local managers. These functionaries had a vested interest in keeping the production figures low and exaggerate the need for as much as possible in terms of resource allocation. So from the outset the information flow from managers to planners was invariably mendacious and distorted. Resources required would always be overstated, capacity underestimated and hoarded resources undeclared. This of course resulted in a gross misallocation of resources. Colossal waste was also a feature of this system since there was no incentive to reduce costs.

The system was to become ossified with the final nail in the coffin, being the Soviet economy’s inability to integrate the new technologies – which were just coming on stream in the 1970s and 1980s – into its production methods. A writer at the time noted that ‘’ … the most telling evidence of the command economy’s failure … was its inability to absorb and apply the latest developments in science and technology to the Soviet economy.’’ The book further quotes Gorbachov as saying: ‘‘At a time when the western countries started a large-scale restructuring of their economies with the emphasis on resource saving and the latest science and state-of-the-art technology, scientific progress slowed down (in the Soviet Union) mostly because the economy was not responsive to change.’’ (2)

This was hardly surprising given the universal nature of bureaucracy (the ‘Iron Cage’ as the great social theorist Max Weber 1864-1920 had called it) and its tendency toward routine and inertia. Like it or not this is a universal drift in the modern age. For those pursuing career paths within the organization, it became no longer a means to an end, but an end in itself. In sociological jargon this is known as ‘’goal displacement’’, This is explained as follows:

‘Initiative within a bureaucracy is always restricted and discouraged … not so much by getting the initiator into trouble … but rather by the experience of the fruitlessness of personal investment in any affair which oversteps one’s realm of competence. As far as careers are concerned … a progressive image is far more useful than any genuine activity, which disturbs the ‘’normal functioning’’ and may always be inconvenient, for whatever reason. The purpose of rivalry between employees who wish to get ahead can only ever be to present a ‘’positive appearance’’ to those above. The incentive to conform is thus built into the initiative mechanism from the outset … Bureaucracy, as the dominant form of management and work organization produces a specific human type of conservative mediocrity.’ (3)

By the 1980s the USSR was lagging badly behind the capitalist west in the development and application of computer technology, cybernetics, robotization, new energy sources, chemically-created construction materials, biotechnology and the like. Military spending was double that of the US from an economy half its size. What had become known was that ‘actually existing socialism’ was losing and eventually lost the economic cold war with western capitalism.

By 1990/91 the jig was up. The end of the Soviet system had sealed the initial, and I emphasise ‘’initial’’, triumph of globalization. The country was then thrown open to the vagaries of unrestricted competition both internal and external. The Soviet Union was fragmented into a number of smaller quasi-states with Russia being stripped of its industries. This involved the giving away of most massive of former state enterprises for pennies in the pound to ex-communist technocrats and secret service thugs. Russia was left with 70% of its economy in the hands of thirty-six corporations. That is to say, 36 men. It had been converted from a highly centralised public system into the most concentrated private sector of the world’s big economies. This was the beginning of the Yeltsin catastrophe: privatisation, liberalisation and free-trade became the new orthodoxy; about which the less said the better. It took Putin to stop the rot in 2000 but the struggle between the Atlantic integrationists and Eurasian Sovereignists – continues and is far from over.

The damage done during the Yeltsin period set back Russia and its economy to a semi-peripheral status. Trade policy became a case in point. It shouldn’t be a secret to anybody with a rudimentary understanding of international trade relations that when developed nations trade with developing nations most of the trade advantages accrue to the developed nations. This is due to the formers lower cost structures, higher levels of productivity, and comparative advantages in higher, value-added, research-intensive goods in the secondary product markets. However, the peripheral economies tend to produce primary goods – predominantly agriculture, raw materials, and plantation fruits.

As income rises expenditure on these income-inelastic primary goods stays static, or actually falls; contrariwise the demand for secondary goods, which are income-elastic – predominantly cars, computers, IPhones, etc. – rises in line with rises in incomes. From this it follows that primary exporting states need to sell more of their goods to developed states because the ‘Terms of Trade’ (see below fn 4) have a tendency to move in favour of the developed economies and against the developing states. It is argued that contemporary Russia is in international terms a semi-peripheral economy.

It has been particularly difficult for Russia to break out of this straight-jacket since Russian leaders have been seriously handicapped by the need to struggle against this internal corporate/criminal power structure. And it is a struggle which continues. Underdeveloped or semi-developed economies will not ascend the ladder of economic growth by relying on the production of primary goods. A policy of free-trade (actually there is no such thing, but let that pass) was rejected in the 19th century by the United States – under the influence of Alexander Hamilton, and in Germany by Friedrich List. The object of their mercantilist strategic trade policy was to catch up and pass Britain during the course of the 19th century, which they did. Russia would do well to note this.

Summing up: The development of the USSR so long as the economic goals were simple and could be calibrated quantitatively – tons of steel, kilowatts of electricity, or numbers of tractors produced – centralised planning worked relatively well. Alec Nove, probably the most objective analyst of the Soviet economy over the years said.

‘’Planning worked in those sectors to which the state gave priority and whose needs could easily be quantified. This applied first and foremost to armaments, but also to electrical energy, where the product is homogeneous and thus readily ‘plannable’. It also applied to the production of oil and gas, and to the construction of a network of pipelines. In each of these fields the Soviet Union made impressive gains.’’ (5)

However as the Soviet economy became more complex, as the number and variety of products expanded, and it became increasingly obliged to measure its performance against that of advanced capitalism the systems inherent limitations and negative aspects were revealed.

‘’The plan as it turned out, was not really a plan at all. Simply at the technical level the central apparatus had no way to process – let alone to absorb and evaluate – all the necessary information on resources, performance, transportation, warehousing, technology, consumer needs, and so on that would have to go into developing a realistic plan. (Since computers might have made at least the gathering and processing of such information possible, the fact that the Soviet planners never managed to ensure the full development and employment of computer technology is itself highly suggestive of the plans arbitrary character and the systems inherent inertia.) (6)

The Soviet Union and the other command economies stagnated and collapsed due to their general backwardness and involving inter alia the absence of any reliable method of resource allocation and quality control. The absence of the market mechanism in this respect left production and allocation decisions dependent on the subjective judgements of the planners as well as those nefarious semi-criminal activities cited above. This resulted in a misallocation of resources on a gigantic scale as well as inferior quality goods

However, it should be noted that the collapse of the command economies in Eastern Europe did not herald the beginning of any capitalist nirvana – quite the contrary. If anything the post-communist societies all experienced a catastrophic fall in production, living standards and most seriously of all depopulation. Some have now recovered but many are still worse off than before the fall of communism, and many are nostalgic for the old days of communist rule. The move from the command economy to the most extreme form of capitalism was in fact a jump out of the frying pan into the fire for some.

Thus by way of conclusion we may say that in contemporary society any viable economic system must include both planning and market/price mechanisms. Heeding the lessons of history it can clearly be discerned – unless we are ideologically blinkered – that both pure free markets (if they ever really existed) and command economies simply do not work in the narrower sense and record; the first because it is based upon totally unrealistic assumptions and works with timeless and purely formal categories of value, price and efficiency; these categories have little or no relation to the real world of actually existing capitalism, devoid as they are of any human or empirical dimensions; and the latter because it is simply too rigid and unresponsive to change and innovation which, because of its essential characteristics, it will tend to stifle and suffocate.

Markets are a good servant but a bad master. A system of regulated markets – this regulation being particularly rigorous in the case of financial markets – and economic planning are essential to any economic system since it is necessary to combine innovation and dynamism with stability and continuity. It is to be hoped perhaps some time in the future economists will remember these lessons when attempting to construct any social and economic orders.

(1) Rudolf Bahro – The Alternative in Eastern Europe – 1987

(2) Irwin Silber – Socialism: What Went Wrong? – 1996.

(3) Bahro – Ibid

(4) Terms of Trade. The main theory for the declining commodity terms of trade is known as the Prebisch-Singer thesis, after two development economists who explored its implications in the 1950s. They argued that there was and would continue to be a secular decline in the terms of trade of primary commodity exporters due to a combination of low income and price elasticities of demand. This decline would result in an ongoing transfer of income from poor to rich countries would only be combated only by the efforts to protect domestic manufacturing industries through a process that has become to be known as import substitution. But as well as this growth and modernisation can and has been achieved by export driven growth characteristic of East Asian countries. It could be argued that this problem of primary producing countries is not dissimilar to the position of Russia. It was argued that,

‘’After the Soviet Union collapsed, its former constituent republics embarked on the transition to capitalism. But this was not, and could not be, a transition to the highly developed capitalism of the global centre … within the framework of the world capitalist system, these newly converted states could only occupy a place in the backward and dependent periphery … The share in exports represented by products of manufacturing industry is very low … (Moreover) the data shows that the net outflow of private capital is a persistent tendency of the Russian economy. In the crisis of 2014-15, alone, it exceeded $210 billion. This huge amount could have been used to increased wages and investment and overcome the slump.’’ See Semi-Peripheral Russia and the Ukraine Crisis, Ruslan Dzarasov – Department of Political Economy, Plekhanov Russian University of Economics, Moscow.

(5) Abraham Brumberg – Chronicle of a Revolution – 1990 – p.54)

(6) Irwin Silber – Actually Existing Socialism – Socialism: What went wrong. pp,124/125 – Pluto Press 1994

China, the World System and Brazilian dystopia

May 22, 2020

China, the World System and Brazilian dystopia

By Fábio Reis Vianna for the Saker Blog

When Admiral Cheng Ho ordered the retreat of his naval fleet around the year 1424, he left, in the words of the anthropologist Abu-Lughod, “a huge power vacuum”. The first great Chinese expansionist project, started during the Ming Dynasty, was prematurely interrupted there.

After impressive naval expeditions that reached territories as far away as the Indian Ocean and the coast of Africa, and in a decision not yet fully clarified by scholars of the subject, China would abruptly give up the first great expansionist project on a global scale.

It would take no more than 70 years for the Europeans to occupy the great void left by the Chinese and actually begin the adventure that gave rise to what we today call world system.

Six centuries later, China led by Xi Jinping finds itself in an unprecedented crisis in its recent successful history as the undisputed leader of the globalization process. The Covid-19 pandemic that abruptly hits the entire planet, for China in particular, was a hard blow that created an imbalance in its model of political and economic stability.

In the first three months of 2020, trade between China and the rest of the world fell by 6.4%, a figure unthinkable by Chinese standards. In particular, trade with the United States, the European Union and Japan declined 18.3%, 10.4% and 8.1% respectively.

Even with the strong decrease of contagion within Chinese territory, there is a great concern to accelerate the reopening of productive activities. The concern with increasing poverty and political destabilization are evident. In his recent visit to Shaanxi province, Xi Jinping made a point of underlining in his speech the importance of the fight against poverty.

In addition to incentives to businesses, investments in infrastructure and financial aid to the population, a series of structural reforms are planned to enable the country to overcome the terrible crisis triggered by Covid-19. An important annual session of the National People’s Congress is scheduled for May 22nd, and more details can be examined there.

Meanwhile, Brazil, one of the countries that in the recent past could be considered one of the most important allies of the Eurasian integration project outside Eurasia, is experiencing the greatest political-economic crisis in its entire history and is sinking deeper and deeper into an unprecedented internal war.

Something that is being discussed internally among the Chinese establishment is precisely the creation of mechanisms to contain the risk of instability that the social tensions arising from economic difficulties could trigger.

Brazil had already been experiencing cascading crises that had accumulated year after year since June 2013, when the country was the target of a destabilization process – or hybrid war – that triggered a series of other more or less orchestrated events (such as the lawfare against specific targets) that culminated in the weakening of institutions that had been strengthened since the enactment of the 1988 Constitution.

To make matters worse, and in contrast to the Chinese stance in seeking to contain internal instability, the country is astonished at the erratic attitudes of President Bolsonaro, under the consenting silence of his military orbits.

Having been chosen to occupy the highest position in the Republic, in all probability during the fateful visit of the then American secretary of defense, James Mattis “Mad Dog”, in August 2018 (two months before the presidential elections), when in a peculiar and closed meeting between the American and the High Command of the Armed Forces the password was given, and Bolsonaro was anointed to the mission to prevent the return of the left and realign Brazil to the satellite condition of the United States.

Everything leads us to believe that the crumbling of the Brazilian institutions has lit a warning signal within the Brazilian Armed Forces, which, in a mixture of sincere concern and sense of opportunity, took advantage of the power vacuum to move forward in the resumption of a protagonism that has been dormant for over 30 years.

Many forget, but the presence of the military – and especially the army – in the Brazilian political tradition dates back to the proclamation of the Republic in 1889, which opened the series of military coups that guided the entire Republican period to this day.

It is worth remembering that the occupation of strategic positions by the military became more visible when the current Minister of Defense, Fernando Azevedo e Silva, strangely, was appointed by the president of the Supreme Court, Dias Toffoli, to the position of special advisor.

Curiously, this has been happening in the month of September 2018 (between the visit of Secretary James Mattis and the election of Bolsonaro), where Dias Toffoli said he would have invited General Azevedo e Silva after requesting a nomination to the then commander of the army, General Eduardo Villas Bôas.

General Villas Bôas is the same man who, in April 2018, wrote on Twitter a veiled threat to the ministers of the Supreme Court if they found the habeas corpus request of former President Lula to be justified. The day after the constitutional remedy was judged, former President Lula would have his arrest ordered by then-judge Sergio Moro.

As a kind of Ayatollah, General Villas Bôas reproduces a classic character of Brazilian politics until the 1950s: the military chief.

At that time, personified by the figure of Brigadier Eduardo Gomes, the military chief was a kind of “guardian of morals and good customs” of the nation and justified the political action of the military as holders of an unwritten “moderating power”. In this way, the military attributed themselves to the exercise of the “veto power” of the Republic. In the context of the Cold War, the power of veto was invoked to curb the communist threat.

After more than 60 years, and when many thought that the Brazilian Armed Forces would be totally professionalized and away from politics, we find ourselves led by an Executive Power integrated by no less than 3 thousand military personnel; not to mention the eight ministries occupied by men in uniform.

As in a trench battle, the military had been advancing day after day in the control and tutelage of state organs and institutions of the Republic, but if there was a well articulated strategy of occupation of power, with the arrival of Covid-19 the pieces definitely shuffled.

Today Brazil is moving forward to become the world epicenter of Covid-19, and as the pandemic seems to get out of control, the more the military tries to control the internal systemic chaos.

Moreover, if before Covid-19 there was some cohesion in the Brazilian establishment around the neoliberal reforms carried out by the Ministry of Economy, with the bursting of the health crisis, it is every day more evident the split between business sectors, the big media, the National Congress and the Judiciary, which are now frontally positioned in opposition to the government.

The recent meetings between the President of the Chamber of Deputies, Rodrigo Maia, and the President of the Supreme Court, Dias Toffoli, with the Minister “eminence parda” of the Palácio do Planalto, General Braga Netto, were a subtle attempt at intimidation and framing of two of the most important civil authorities of the Republic by the Bolsonaro government.

At the same time that the basements of the government’s disinformation machine slanders adversaries and agitates the low ranks of the Armed Forces and the military police of the states (its faithful allies), the country sinks in what is certainly the greatest existential crisis in its history.

As if all this were not enough, the rest of the world coexists with the prospect of incurring a public debt only seen, according to the British magazine The Economist, “amid the rubble of 1945”.

Beyond the health crisis itself, the economic consequences of the post-Pandemic will be devastating from the fiscal point of view, because the compulsory closure of industry, offices and various segments of the service sector will certainly bring about a fall in government revenues.

As many analysts have already noted, the world is experiencing the exact moment of transition between what no longer exists and what is yet to be born.

Even before the pandemic, the acceleration of interstate competition is noticeable, which denotes the phenomenon of deconcentration of power that throughout the history of the world system always occurs in periods of decline in the long cycles of international politics.

Something that the Brazilian elites, especially the military elites – psychologically trapped in imaginary enemies such as Chinese communists and “cultural Marxists” – have not yet realized, is the dimension of Brazil’s importance in the geopolitical context of this new century that is beginning.

With the shattering of Bretton Woods institutions and the liberal order hegemonized by the United States, the world draws – and we are all characters – a systemic configuration that has not yet been defined. In process.

As it had happened between about 1550 and 1640, when the world, still dominated by the powerful Spain, saw the movements of contestation to the empire that had built its power in the newly discovered America flourish.

Trapped by the wealth of gold and the medieval system of government that no longer corresponded to reality, the Habsburgs – in their alliance with the papacy – fought so that their hegemony would not disintegrate amid the rise of the newest actors in the system, namely, France, Holland, Sweden and England.

At that time, Europe was swallowed up by an unprecedented escalation of wars stemming from those new realities of power whose new actors, emerging in the northwest of the old continent, were unwilling to submit to Spanish power.

The translation of that scenario was the deepening of the systemic chaos that would be pacified only with the advent of the Treaty of Westphalia. Any resemblance to the present world moment is no mere coincidence, at least for geopolitical scholars.

Going back to the year 2020, it is very likely that some aspects will prove to be clearer and bolder in the post-Pandemic. Technological competition, more visible around 5G, tends to radicalize in many other areas. And the search for natural/energy resources is already a reality and places not only Africa, but South America itself as the target of the new imperialist race that should also deepen.

For now, the Brazilian establishment is a mere spectator of the rapid changes that the world system will see in the coming years.

China, even though it has been severely hit by the Covid-19 meteor, is reinventing itself in its policy of global humanitarian aid to effectively combat the virus and is focusing its action on strengthening the Eurasian integration project; in particular the Belt and Road Initiative – BRI.

Demonstrating impressive resilience, despite the strong retraction in exports to central countries, the Chinese saw an increase of 3.2% with the New Silk Road countries. Although not comparable to previous years, it shows that BRI’s infrastructure projects have not been so strongly affected by the adverse effects of the health crisis.

Nothing more appropriate to the thought and conduct of Confucian cosmology, based beyond mere rambling, in a concrete act, an action.

Thus, the Chinese follow their journey towards the central helm of the world system, consciously absorbing the pillars of Western modernity, but without ever losing the essence of Confucian thought, the Tao-to that always seeks effectiveness beyond mere thought.

Next June marks seven years of uninterrupted political-institutional instability in Latin America’s largest country. May the history of the oldest peoples and the winds of change teach us to guide the helm of our own destiny.


Fabio Reis Vianna, lives in Rio de Janeiro, is a bachelor of laws ( LL.B), writer and geopolitical analyst. He is currently a columnist in international politics for the printed version of the centennial Brazilian newspaper Monitor Mercantil.

Six Million, 9/11, Iraq and Epstein

Six Million, 9/11, Iraq and Epstein

August 13, 2019

by Jimmie Moglia for The Saker Blog

Scratching the surface of things is akin to scratching a lottery ticket. The results are routinely disappointing, sometimes unexpected, sometimes exceptional.

I recently attended an online conference, held by an Italian researcher named Mario Biglino. Mr. Biglino has dedicated many years to producing a new translation of the Bible. His effort centered on verifying and correcting official translations of the Bible from the Hebrew and/or Aramaic. With particular attention to original words whose meaning, or case, or number have been modified, in his view, to fit a particular pre-conceived theological or pseudo-theological scheme.

I briefly relate here what I have understood. There is no implication or even hint that I have any specific knowledge on the matter.

A typical example is the word ‘elohim,’ whose number is plural, whereas in the official home-Bible versions, the term is translated as if its number were singular.

In turn, through such change-of-number there derives the name ‘Yahveh.’ But according to a more accurate translation, the term ‘elohim’ is plural. Or rather, there were a number of ‘Elohim’ who fought among themselves – and quite brutally – for the possession of sundry chunks of Middle Eastern land – Yahveh being one of the Elohim. The saga of the internicine wars is varied and prolonged, and during the contests – that abound in the Bible – the prevailing Elohim often imposed the wholesale murder of women and children of the losing party.

The matter has stirred debates among lexicologists and theologians – though, in support of his translation, Mr. Biglino has found agreement even among the high echelons of Jewish academia.

It does not help that, as I have learned, the biblical Hebrew language did not have vowels. To alleviate the difficulty and to ensure some conformity of understanding, Jewish lexicologists added sundry dots and dashes below the consonants, in the way of vowels. This happened possibly around the 3rd-5th century AD, approximately when the Talmud was written.

But this is not what I would like to entertain or bore my twenty-five readers with. The above is intended as a background on the explorer, and as an introduction to another subject that also interested him, more historically verifiable but no less curious. Namely how the number of 6,000,000 among the Jews, victims or expected victims, appears in various occasions, publications and newspapers, as far back as the 19th century, up to 1200 AD and even to the year 135AD, as we will see next.

Mr. Biglino says that he began this research out of curiosity – though he says he was reprimanded by unmentioned sources, for cultivating an ‘unhealthy curiosity.’ Given that curiosity is the mother of knowledge, I fail to see unhealthiness in exploring this generally unknown chapter of historical statistics.

For we probably agree that there is no state more contrary to the dignity of common sense than that in which the understanding lies useless, and every opinion is received from external impulse.

In the instance, as you will see, the ‘external impulse’ is actually a fact, indispensable to form an opinion. And though it may be redundant to say it, the matter has nothing to do with ‘sensationalism’ of the type peddled by tabloids, ever ready to surprise the unawareness of the thoughtless.

The material is authentic and verifiable in the archives of the various publications involved.

Let’s start with,

“The Chicago Tribune,” July 19, 1921. Here are three titles:

Title A. 6,000,000 Jews in Bread Lines” Straus Writes – by Nathan Straus.

Title B, with Picture and Description “Nathan Straus, noted philanthropist and merchant, who pleads for the relief of destitute Jewish people in Eastern Europe”

Title C, (Straus) Begs America Save 6,000,000 in Russia. – Subtitle “Massacre Threatens All Jews as Soviet Power Wanes, Declares Kreinin, Coming Here for Aid.”

Beginning of Article:
Copyright 1921, by the Chicago Tribune Co.

BERLIN, July 19. – Russia’s 6,000,000 Jews are facing extermination by massacre. As famine is spreading, the counter-revolutionary movement is gaining and the Soviet’s control is waning. This statement is borne out by official documents presented to the Berlin Government, which show that numerous pogroms are raging in all parts of Russia….

The New York Times

published: October 31, 1911
Copyright © the New York Times

title: CHURCHES IN PLEA TO CZAR FOR JUSTICE

Creeds Unite In An Effort To End Religious Persecution In Russia
SEND RESOLUTIONS TO TAFT

Also Ask That Treaty Be Canceled Because Russia Has Not Accepted Our Passports

“The Resolutions.”

The resolutions passed were:

  1. The 6,000,000 Jews of Russia are singled out for systematic oppression and for persecution by due process of law.
  2. They are confined within congested districts at times ruinous to health.
  3. Education is prohibited to all but a few, resulting necessarily in the increase of illiteracy.
  4. They are restricted in occupations, reducing many to starvation.

… the list of grievances continues

The New York Times

published: May 9, 1920

Copyright © the New York Times

title: JEWISH CAMPAIGN EXTENDED A WEEK

Judge Rosalsky Announces That Efforts To Get Full $7,500,000 Will Continue

Full Quota Is Imperative To Succor 6,000,000 (Jews) Facing Starvation And Disease

… the need today is more pressing than ever because to farming and distress in some of the stricken district has been added the dread specter of typhus, and to abandon the sufferers now or to apply half measures in succoring then would mean that some 6,000,000 men women and children will be exposed to the menace of an awful death…

The Jewish Chronicle, April 7, 1939

Title: “Dictators Make Headlines… You Make the Eternal Story of Jewish Survival”

Subtitle: Not in Hitler’s Hands, in Yours…The Fate Of 6,000,000 European Jews –

United Jewish Fund Drive Gives You Chance To Help Suffering Millions –

by Maxine Hirsch Bader

The Palm Beach Post – Tuesday Morning June 25, 1940

DOOM OF EUROPEAN JEWS IS SEEN IF HITLER WINS.

NEW YORK. JUNE 24. – AP –

Dr. Nahum Goldmann, administrative committee chairman of the World Jewish Congress, said today that if the Nazis should achieve final victory, 6,000,000 Jews in Europe are doomed to destruction.”

“Their only hope for future existence is in the ability of Great Britain to resist the Nazi conquest.” Declared Dr. Goldmann, who arrived here Friday from Geneva. He issued a statement calling upon United States Jewry to take leadership in mobilizing Jews in North and South America for an organized defense program.

Address by Rabbi Wise at a Convention of Jewish Charities in Chicago. The clipping of the article does not include the date – estimated end of 1800, early 1900 (Rabby Wise died in 1927).

“The day would never come when I will care less for Zion, when there will be anyone who will strive more for the glorious ideals of Zionism. Two great conventions of Jews are being held tonight….(in Chicago)

There are 6,000,000 living, bleeding, suffering arguments in favor of Zionism. They do not to beg but ask for that which is higher than all material things. They seek to have satisfied the unquenchable thirst after the ideal. They ask to become once again the messengers of right, justice, and humanity.

… Of Israel and Zion one thing is true. They can conquer. God is our leader, and with the general of the heavenly hosts to lead, who we say that we go not to victory?

The New York Times

published: May 9, 1920

Copyright © the New York Times

HOOVER PLEA NETS $1,6000,000 FOR JEWS

Tells Of Typhus Menace At Launching Of New York Campaign For War Sufferers

3,000,000 CHILDREN IN NEED

Louis Marshall And Judge Elkus Picture Plight Of Stricken People – Large Contributions Made

… The menace of typhus was the note struck by all the speakers. Mr. Marshall declared that typhus menaced 6,000,000 Jews in Europe.

The Jewish Criterion
October 13, 1939

…. The coming world war would be the annihilation of the 6,000,000 Jews in East and Central Europe

For the next entry I could not source the newspaper, only the clipping of the article available. Estimate of the date: 1905-1910

title: DR. PAUL NATHAN’S VIEW OF RUSSIAN MASSACRE [Dr. Paul Nathan died in 1927] Startling reports of the condition and future of Russia’s 6,000,000 Jews were made on March 12 in Berlin to the annual meeting of the central Jewish relief league of Germany by Dr. Paul Nathan, a well-known Berlin publicist, who has returned from an extensive trip through Russia as the special emissary of Jewish philanthropists in England, America, and Germany, to arrange for distribution of the relief fund of $1,500,000 raised after the massacres last Autumn…

The American Jewish Year Book #5672

September 23, 1911, to September 11, 1912

The position of our coreligionists in Russia grows increasingly deplorable, and recent advice from the country indicate that there is little likelihood of any relief being afforded…. The situation is of the greatest. It may be doubted whether Jewry has ever confronted a greater crisis since the overthrow of the Jewish state by the Roman Empire. Not even the horrible persecutions of the times of the Crusades, or the expulsion from Spain and Portugal affected so large a mass of our coreligionists. Russia has since 1890 adopted is difficult to plan to expel or exterminate 6,000,000 of its people for no other reason them that they refused to become members of the Greek church, but preferred to remain Jews….

THEY WHO KNOCK AT OUR GATES
A Complete Gospel Of Immigration – 
by Mary Antin

printed 1914 – Houghton Mifflin Company

“those who think that with the Spanish Inquisition Jewish Martha Dom came to an end are asked to remember that the Kishinieff fair is only eight years behind us, and that Bielostock has been heard from since Kishinieff, and Mohileff since Bielostock. And more terrible than the recurrent pogrom, which packs and burns and tortures a few hundreds now and then, is it continues bloodless martyrdom of the 6,000,000 Jews in Russia through the operation of the anti-Semitic laws of this country…

TURTLE MOUNTAIN STAR, ROLLA, N. DAKOTA

title: Jews Are Fighting For A Homeland – October 6, 1918

Drawing of a man operating a horse drawn device, seemingly spreading seeds with a gun on his shoulder.

Script: ready at any moment to defend the strip which she is trying to convert to fertility is the Jewish settler of the Jesrcel Valley

“Five or 6,000,000 Jews, uprooted by dictatorships and tossed about by economic storms, may have to depend upon the development of the Holy Land, on the British mandate, as a solution of their difficulty. But they face the hostility of the Arabs living there, whose economic and religious interests conflict with theirs.

THE OPEN COURT – A Monthly Magazine

Devoted To The Science Of Religion, The Religion Of Science, And The Extension Of The Religious Parliament Idea

Vol. XI (no. 5) – May 1897

Chicago – The Open Court Publishing Company.

…. National fanaticism, indeed, was not extinguished; but it burned itself completely out in the vigorous insurrection led by Bar-Cocheba, the pseudo-Messiah, in which nearly 6,000,000 Jews lost their lives, with the famous Rabbi Akiba. One of the pseudo-Messiah’s most ardent adherents (135 AD). Titus, to annihilate forever all hopes of the restoration of the Jewish kingdom, accomplished his plan by establishing a new city on the side of Jerusalem, when she called Aelia Capitolina…

Furthermore, in a Jewish publication dated Nov 6, 1900, reference is made to a prophecy based on the ‘Sefer ha-Zohar’ a Cabalistic Bible written around 1200 AD. Where it is said that 6,000,000 Jews must die before (presumably) the others will be allowed to return to Israel. And the same Cabalistic word containing the prophecy of the 6,000,000victims, also predicts that the Jews will return to Israel in 1948.

And, in a Jewish magazine, shown by Mr. Biglino, Netaniahou told Putin that Iran plans to kill 6,000,000 Jews in their pending or imminent war against Israel.

Why should the above be of interest? – you may ask. I suggest two reasons, one historical, one current. For, as the world knows well, the limelight has not yet been turned off from the mysterious episode of a well-healed, well-known and well-connected pervert, who committed suicide while he couldn’t, wouldn’t or shouldn’t have been allowed to do so.

As for the historical reason(s), the Encyclopedia Judaica of 1954 printed that “several hundred-thousand” Jews had died in concentration camps, in World War 2, due to terrible conditions, famine and disease.

As a reminder, everyone knows that Americans with Japanese ancestry or Japanese appearance were interned into concentration camps, during World War 2. And though they did not suffer the consequences of carpet-bombing applied to the whole of Germany by the Allies, it is reasonable to suspect and expect that many died in the camps, during their internment.

But in the case under scrutiny, in 1972, in New York, the victims jumped from several hundred thousands to 6,000,000. Lest anyone suspect that raising the issue implies disrespect for the dead, I believe it should be the position of anyone and all to bewail and condemn even the death of one innocent victim.

In the instance, however, the issue is mathematics and history, rather than crime. When Columbus undertook the voyage of conquest in the Americas, it is estimated that Mexico had 20-million inhabitants – after the arrival of the Christians they were reduced to 2-million. In North America the natives were reduced from an estimated 80-million to 10-million

In other words, the effect of the genocide, resulting from the European invasion, was a radical reduction in numbers of the autochthonous populations. But with the ethnic group in question, the number of the affected population remains the same, before and after wars, persecutions or starvation. Which entails either a miraculous power of almost instant mass regeneration, anytime and anywhere, or a mathematical oddity of such scope as to be rated a conspiracy.

Hence the second and current reason why the recurring number of 6,000,000 may be of more than a historically-curious note.

It goes without saying that the universe is under the perpetual superintendence of uncontrollable forces. Philosophers and theologians have not yet satisfactorily resolved the issue. The doctrine of the enslaved will is at the core of the Protestant ideology. Luther struggled against evil and failed. Hence he rationalized his failure by claiming that there was no struggle. “I have often attempted to become good,” he said in 1524, “however the more I struggle, the less I succeed. Behold then, what free will is.”

With much necessary simplification, Calvin expanded on the idea, by providing a theological foundation for neo-liberal capitalism. The rich is by implication blessed by God – while the same God socks it to the poor. Interesting conclusion, for it follows that man is but a robot whose software, at least at present, is proprietary and in the hands of God.

But let’s for the moment set aside the thorny paradox. Wealth, as we know, is inextricably linked with greed and power. And through a quasi-alchemic combination, the evil produced by wealth and greed is proportional to power.

As a rule and as we know, political power pays deference to the idealized individual, the unsubstantial puppet, shown as a shadow on the walls of Plato’s cave. The greater the respect for the inexistent idealized puppet, the greater the contempt for the actual non-idealized flesh-and-bones individuals, meaning the people at large.

This everyone knows, but there are endless variations of the political pantomime – therefore it is easy to be drawn into following the detail, while losing sight of the whole.

As a rule, power can resist anything but temptation, and furthermore the power of evil is sadistic. It vicariously enjoys fooling the flesh-and-bones individuals in the Platonic cave, for each deception is a victory, and the bigger the deception the greater the victory.

On its side, evil can count on the lovers of secrecy. For it is natural that ‘secrets’ have intrinsic appeal. Check the secret formulas, the secret recipes, the secret remedies etc. Partly because to know a secret implies some distinction compared to those who don’t. Partly because secrecy partakes of the unexplained and, by extended inference, of the mysterious, the miraculous and the metaphysic. Consequently, it is natural and fertile ground for fanciful speculatists, and for the plentiful and wackiest theories invented by those who, by explaining the unexplained, pamper to their own vanity. All this is grist to the mill for evil, as the wackier is the theory the more easily it can be ridiculed as a ‘conspiracy theory.’

Conspiracy theory is a kind of quasi-theological term that defines heresy against the official doctrine. A doctrine that is itself a totally artificial construct. The new anti-conspiracy centers, censoring alleged “fake news” were established to prepare the ‘Revolution of Silence,’ while acting as disguised tribunals of inquisition. They simply indict him who gives a different interpretation to daily scriptures.

Nevertheless – at least it is pleasing to think so – there are limits to power’s implied presumption of gullibility, applied to the inhabitants of the Platonic cave, deceived by the shadows.

9/11, the Iraq War and now Epstein’s suicide qualify as master-examples of the theory applied to practice. There are more, but if these are not enough and do not stir the ‘distracted multitude who like not in their judgment but their eyes’… – stir them to quit watching the puppet show and ask for a reckoning, I don’t know what will.

For those who have been pushing for all the recent Middle Eastern wars and keep pushing for a war against Iran, may not be overly concerned about a global conflagration. Evil knows no limit, especially when the soldiers of evil know in advance that they will save their ass.

Or maybe we should trust chance. For chance is a subtle and insidious power that, at times, disrupts very elaborate, evil and lugubrious plans.

As for the business of the 6,000,000, it is now legally dangerous just to raise related questions in some European countries. Elsewhere it is not as yet illegal. Still, let the reader draw his own conclusions, in a low tone of voice.

America Dumps INF Treaty. Time for Russian Missiles in Latin America?

Image result for America Dumps INF Treaty. Time for Russian Missiles in Latin America?
Robert Bridge
August 9, 2019

Washington’s withdrawal from the INF Treaty is just the latest move against Russia that will serve to intensify an arms race on the European continent that is already underway. It may also force Russia to take things to the next level.

Aside from the unprecedented stockpiling of weapons of mass destruction on an epic scale, a whirlwind of regional developments are now underway that foreshadow extremely unsettling consequences. First and foremost is this month’s formal announcement by the Trump administration that it would be pulling out of the Intermediate-Range Nuclear Forces Treaty (INF Treaty), signed into force by Mikhail Gorbachev and Ronald Reagan back in 1987.

With the INF consigned to the dustbin of history, the US and Russia are free to design and produce ballistic and cruise missiles within a 500-5,500 kilometer range (310-3,420 miles). Would any NATO country be so foolish as to host these American-made weapons on their territory, thereby opening itself up to a devastating first-strike attack in some worst-case scenario? Poland is one possible candidate. After all, Polish President Andrzej Duda last year offered the United States $2 billion in financing for the construction of a permanent American base on Poland’s eastern border. While the two NATO countries are still considering the idea, it is clear that the eradication of the INF Treaty promises to ratchet up tensions between Russia and its neighbors.

Washington’s pullout from the INF did not occur in a vacuum, of course. It followed in the tank tracks of George W. Bush’s disastrous decision to withdraw from the ABM Treaty, one of many opportunistic moves committed by the United States in the aftermath of 9/11. With the ABM out of the way, the United States was able to establish a missile defense shield in Romania, just miles from the Russian border. Washington’s overtures to Moscow that it would welcome Russian participation in the project were eventually revealed as a deceitful stalling tactic. Russian President Vladimir Putin was not fooled, however, and wasted no time researching and developing of a lethal array of new weapon systems, including a nuclear-powered cruise missile with unlimited range.

156 человек(а) говорят об этом
At this point in the updated ‘Great Game’ there is a temptation to say that the US and Russia have entered yet another ‘MAD’ moment, that is, ‘mutually assured destruction’ should one side or the other attempt fate with a first-strike attack. Check mate, as it were. After all, Russia has got its “unstoppable” nuclear-powered cruise missile and other fearsome hardware, while the US has its missile defense shield, as well as numerous NATO set pieces, bolted down in Europe. Everything is wonderful in the neighborhood, right? Well, not exactly.

Comparing the present standoff between the US and Russia to the Cold War realities is erroneous and dangerous for a number of reasons. First, the opportunity for some sort of mishap resulting in all-out war has never been greater. The reason is not simply due to the dizzying amount of firepower involved, but rather due to the proximity of the firepower to the Russian border.  During the Cold War standoff, Moscow, the nerve center of the Soviet empire, was well guarded by the buffer of Warsaw Pact republics. Today, that buffer has practically vanished, and NATO is not only encamped deep inside of Eastern Europe, but – in the case of the Baltic States of Estonia and Latvia – smack up against the Russian border. Although the entire concept of time, distance and space has been made somewhat redundant by the exceptional speed of modern missiles and aircraft, this has not reduced the possibility of NATO and Russia accidentally stumbling into a very bad situation.

Now with the INF Treaty out of the way there is the possibility that Washington will place intermediate-range missiles in Russia’s backyard. Such a move would flush with Washington’s revised nuclear doctrine, which not only aims for increasing its nuclear arsenal, but – in pure Dr. Strangelove fashion – lowering the threshold for which nuclear weapons may be used. To think that Russia will watch passively on the sidelines as the US disrupts the regional strategic balance in its favor would be wishful thinking.

Even as the corpse of the INF treaty was still warm, Mark T. Esper, the new US secretary of defense said he favored the deployment of new American ground-based missiles to Asia, without specifying a precise location.

“It’s fair to say, though, that we would like to deploy a capability sooner rather than later,” Esper said while en route to Australia for foreign policy meetings. “I would prefer months. I just don’t have the latest state of play on timelines.”

Meanwhile, the Pentagon is reportedly moving ahead with the development of missile systems, including a cruise missile with an expected 1,000 km range and an intermediate-range ballistic missile with a 3,000 to 4,000 km range. With the ‘shield’ of a US missile defense system already established in Eastern Europe, Russia will not sit by idly and wait for NATO’s other hand to pick up a sword.

What options are open to Russia at this point? Aside from its Russia-based defenses already mentioned, Moscow will feel very compelled to move its strike abilities closer to the United States in order to match NATO’s newfound capacity just over the Russian border.

Putin has emphasized that Russia will not deploy ballistic missiles unless the US does so first. If he were required to respond, would Russia consider a permanent missile base somewhere in Latin America, just miles from US shores, mirroring the same situation that Russia faces in Eastern Europe? Imagine a situation where ‘Trump’s Mexican Wall’ became in reality a host of Russian launch pads. Although ti would solve America’s migrant problem, it probably won’t do much to help Americans sleep better at night. Impossible to imagine, of course, yet that is the exact dire scenario Russia faces on its own border with the Baltic States.

A more likely scenario, however, is that Putin, in the event Trump ‘goes nuclear’ in Eastern Europe, will deploy round-the-clock stealth submarines armed with ballistic missiles near the American shoreline as an insurance policy. It is a dreadful new reality to consider, yet as the United States continues with its reckless treaty-trashing posture it is a reality the world will be forced to live with.

The CSTO members build a defensive system – from information and politic to logistics and equipment

The CSTO members build a defensive system – from information and politic to logistics and equipment

http://redstar.ru/eshelony-kollektivnoj-oborony/

Alexander ALEXANDROV for the Red star newspaper

Translation by Scott Humor

 

The upcoming joint operational-strategic exercises of the Joined forces of the Collective Security Treaty organization called “Combat brotherhood – 2019” are intended to demonstrate the unity of the states parties in matters of collective security. During the maneuvers that will unfold on territories of four member states, political and diplomatic tools, combat potential, as well as mechanisms of information and other non-military impact for prevention and settlement of military conflicts in the zone of responsibility of the organization will be tested.

This, in particular, was discussed at a press conference held in Moscow by acting Secretary General of the organization Valery Semerikov via the satellite connection with locations in Minsk, Yerevan, Nur Sultan and Bishkek. However, the administrative head of the Collective Security Treaty Organization began the conference discussing threats of predominantly collective nature.

According to the CSTO Secretary General, the situation in Afghanistan, primarily on the Tajik – Afghan border, and its impact on the region of Central Asia is the focus of attention of the organization’s member states. “Tensions remain in the Caucus region due to an unresolved Karabakh conflict, tensions are also rising due to NATO’s military development on the territory of Georgia,” Valery Semerikov continued.

He also expressed collective concerns about NATO’s regular exercises in Eastern Europe, at the borders with Belarus and Russia. The Alliance’s obvious unwillingness to work with the colleagues from the CSTO, and instead – NATO insistence to cooperate with each of the member states separately, only confirms the conclusions of the Russia’s Security Council about a possible preparation by NATO to stage so-called color revolutions. This was confirmed by attempts of cyber attacks on the national infrastructure of the organization.

To respond to these threats, as the acting Secretary General made it clear, is a responsibility of the Crisis Response Center, whose tasks include information and analytical support of competent structures to combat the “hidden threats” “The CSTO crisis response center is engaged in monitoring military and political situation in the zones of responsibility of the states, identifying the prerequisites for crisis situations and analyzing the appropriate response,” Valery Semerikov explained.

The focus of the organization’s member states is on the situation in Afghanistan, primarily on the Tajik-Afghan border, and its impact on the Central Asian region.

The center was involved in a recent business game, in which a set of political and diplomatic response measures of the organization’s members were worked out in response to the crisis situation in some fictional state. In development, it gave a start to preparation for the operational and strategic exercises of the CSTO Joined forces named the “Combat brotherhood – 2019”.

“In 2019, we will hold six exercises on the territory of four countries: Belarus, Kyrgyzstan, Russia and Tajikistan, – Valery Semerikov said, answering journalists’ questions. – The total number of forces involved, according to our calculations, will be about 12 thousand”.

During these operational and strategic exercises of the CSTO Joined forces “Combat brotherhood – 2019,” as reported, an entire complex of measures of prevention or deterrent, as well as resolution of military conflict with the subsequent restoration of peace will be worked out in a logical sequence. National contingents of troops will work out different tasks as parts of separate episodes of one untied work-frame of a single military-political situation with a single strategic plan.

For example, the training of anti-drug units of the CSTO “Thunder-2019” in August will take place in Kyrgyzstan. The actions of the intelligence units within the framework of the “Search-2019” will continue with “Interaction-2019” drill of the Joined Rapid Response forces. It is also envisaged that maneuvers of the “Unbreakable Brotherhood” of peacekeeping forces will be held in conjunction with the exercise “Rubezh-2019” of the border guards on the territory of Tajikistan.

All actions of the coalition groups in the East European and Central Asian regions of collective security will be accompanied by deployment of troops within the framework of the exercise of the collective aviation forces “Air Bridge – 2019” and for the first time with a single material and technical support in a course of joint actions of the MTO logistics troops units “Echelon-2019”.

Expensive and Humiliating. Poland Bought Gas in the USA (Ruslan Ostashko)

June 30, 2019

TRANSCRIPT:

An extra billion cubic meters of absolutely unnecessary, and highly costing gas, the president of the US has managed to sell it to Polish nationalists. The full beauty of this “Ukrainian victory” can be understood only if you remember the history of the issue.

Andrzej Duda’s visit to Washington was marked not only by loud statements that (showed the depth of the historical illiteracy of the Polish President. http://thesaker.is/the-poles-are-braver-than-the-russians-the-president-of-poland/)

Another highlight of the visit was another deal imposed on Duda in the energy sector.

“Our countries have signed an additional contract for the supply of two billion cubic meters of gas,” the head of the White House said on June 12, noting that the total amount of the contract is about eight billion dollars. The website of the Polish gas operator PGNiG clarifies that the volume of LNG supplied to the country from the US terminal Plaquemines will be increasing starting with 2023 from 1.35 to 3.38 billion cubic meters (after regasification).”

https://ria.ru/20190617/1555578771.html

It has been almost 2 years since one of the best Russian analysts, my friend and colleague Ivan Danilov wrote a material titled “Trump is a vacuum cleaners salesman.” Let me remind you what Ivan wrote in July 2017.

“It would seem that selling liquefied American gas to Poland, which is much more expensive than gas supplied by Gazprom, is a difficult task. More precisely, it is possible to force politicians to make such a decision, but how to make even ordinary voters understand the overpayment, which, according to various estimates, will be from 50% to 150% compared to the price of Russian gas? The American President took one of the most effective trumps from the deck of marked cards of experienced merchants, offering the Poles a bonus in the form of “independence from Russian supplies.” In fact, the American leader said that not just gas is supplied to Poland, but the right American gas “with a taste of independence from Russia”, and, of course, it is implied that such gas should be very expensive, and its consumption is a sign of national success, prestige and belonging to an elite Western club.”

https://ria.ru/20170707/1498046623.html

The devil hides in two things. First, taking into account the LNG purchases in the US and the connection to the Baltic Pipe gas pipeline, Warsaw, starting from 2022, intends to purchase more than 14 and a half billion cubic meters of gas per year. Obviously, it doesn’t need that much. And, secondly, this American gas purchased by the Poles “with a taste of independence from Russia” can not be cheaper than 6-7 dollars per million British thermal units, BTU.

(BTU is an Anglo-Saxon unit of energy, just over a kilojoule. https://www.convertworld.com/ru/energiya/britanskiye-termicheskiye-yedinitsy.html)

So, Russian gas is already at the level of $5 per million of British thermal units. That is, the Poles intend to pay more to the extent of $1 to $2 per million BTU. While the Americans themselves are trying to buy cheaper energy.

The question comes: are people ruling in Warsaw so stupid that they do not understand that they have signed up to buy very expensive gas in quantities that their own country doesn’t need at all?

Turns out Poland plans to resell expensive American gas to other Eastern Europeans. They plan to act as an intermediary and not only to pay for their purchases of expensive energy with other people’s money, but also to get a profit.

“Previously, it was called the concept of ‘three Seas’ or ‘inter-Seas’, and a few years ago put forward the ‘Initiative of the three seas’ (Baltic — Adriatic — Black Sea, BABS). The impetus was the coming to power in the US Donald Trump, who promised ‘to save’ Europe from Russian gas with the help of American LNG. Donald Trump said that this project will provide BABS participants with ‘prosperity and security.’ And then he offered the Europeans to build terminals for American LNG — in the Lithuanian Klaipeda, Polish Swinoujscie and on the Croatian island of Krk in the Adriatic sea. It was assumed that from these terminals the network of gas pipelines would extend to the Czech Republic, Hungary, Slovakia, Slovenia, Bulgaria, Romania, Estonia and Lithuania, forming a barrier to gas from Russia to the Western Europe.”

https://ria.ru/20190617/1555578771.html

That is, three members of the EU – Poland, Lithuania and Croatia – imagined themselves the most intelligent, deciding to lick Uncle Sam’s shoes, and at the same time to cash in at the expense of their neighbors. For anyone with a head on their shoulders, the outcome was predictable from the start. But, as shown by the behavior of American satellites, they could not wait to take place of the “heroes” of a known saying: “a Ukrainian is stupider than a crow, but more cunning than the devil.”

As a result, the stupid crows all took a part in the operation BABS – Lithuania got into debt by renting a LNG terminal in Klaipeda, which it will never pay off. Poland is rowing expensive and unnecessary American gas, despite the fact that it does not even have money for, say, the modernization of its entirely coal-fired power plants for another type of fuel. And Croats decided to be the coolest of them all.

“In January 2019, Croatian Energy Minister Tomislav Ćorić, announced that a construction of a re-gasification complex on the island of Krk ‘will be carried out regardless of the lack of interest from natural gas buyers.’ In early February, the final investment decision was made on the project.”

https://ria.ru/20190617/1555578771.html

That is, the example of Lithuanians taught them nothing. They are so stupid that they will build a LNG terminal at a loss.

Why didn’t the BABS project take off? Because Russia has built the Turkish stream. And why Putin was able to agree with Erdogan on the construction of this gas pipeline to supply energy to the Southern and South-Eastern Europe? Because the American “geniuses of geopolitics” tried to overthrow and kill Erdogan by organizing a coup, and Moscow saved him.

Now Russian Prime Minister Medvedev offers Slovaks the natural gas bypassing “Tse-Europe” (Russian social media nickname for Ukraine from the Ukrainian nationalists’ saying ‘Ukraine is the Europe’ which is not true neither geographically, nor historically, demographically or culturally. – S.H.). As for Poland and Croatia, none of the sane buyers thinks about buying natural gas from the US.

Once again, the post-Soviet nationalists will pay in full for the “decommunization” they started and rise in Russophobia. As they are already paying in other energy issues.

I send my warm regards to all who hoped for the collapse of Gazprom, the rupture into shreds of Russian economy and the realization of other collective wet dreams of post-Soviet westophiles.

A thrifty pays twice the price, an idiot – three times, and a Russophobe always overpays.

The Other Ukraine

Source

by arras for The Saker blogThe Other Ukraine

Ukraine is a country in the Eastern Europe, which doesn’t require introduction to most readers as it was and still is filling pages of the newspapers and screens of a TVs. Courtesy of ongoing geopolitical conflict between the United States and the Russian Federation there. Some say, this is a conflict between East and West and thus suggesting that it is not just a place of competition between the world great powers, but between cultures and civilizations.

This conflict isn’t new to Ukraine. Ukraine is one of those places, where history never falls asleep it merely takes short naps. After the last nap, which we call the Cold War, history is back in Ukraine, writing new pages full of dramatic lines.

However, Ukraine has a sister. It was on the front pages of the newspapers as well not long time ago and it is also rich with dramatic history. The fate and history of both, including the most recent history, bears remarkable similarity and many parallels. Parallels that I intend to show you.

The name of the “other” Ukraine is Krajina and a reader might remember it as a place in the Balkans, which was one of the frontlines of the civil war in Yugoslavia. Krajina is a part of Croatia, but historically it was inhabited by the Serbs. The name of Ukraine in the native Slavic languages is “Ukrajina” and thus the difference in the name is just a prefix “U”. That’s not by a coincidence. Ukrajina and Krajina are the virtually same word, just pronounced slightly different in different Slavic languages. In English, it means “edge”, “margin”, “frontier” or “borderland” and that’s exactly what Ukraine and Krajina were. They were one of those places where realms, cultures, civilizations and empires converged and clashed. Seems they still are, and because of that, Ukraine and Krajina were not just ordinary frontiers, they were military frontiers. Romans used to call such places as “limes” and in the Western Medieval Europe, they were called as “march” or “mark” – ruled by “marquis” and of the same etymological origin as the word “margin”.

Ukraine was a borderland between Russia, Polish-Lithuanian Commonwealth and Crimean Khanate which itself was a remnant of the mighty Mongol Empire and at that time, it was a protectorate of the Ottoman Empire. Today Poland and Lithuania might seem like small countries compared to Russia while Crimean Khanate doesn’t even exist, but back in medieval and early modern era these were powerful realms vying for control over the whole region of the Eastern Europe. Krajina together with the similar region called Vojvodina on the other hand was a borderland between the Austro-Hungarian Empire and the Ottoman Empire. These places, were such powerful states, even religions and civilizations met weren’t the most peaceful ones and not very well suited for long prosperous life. They were in the state of almost perpetual conflict and war, because even if realms were in formal peace, irregular forces and local chieftains and feudal lords carried raids across the border seeking plunder or revenge, often with the silent consent of their sovereigns. Today we call it a hybrid war and plausible deniability. For that reason, such military frontiers had special status and were organized according to the military rather than civilian principles. Their purpose was to serve as a buffer zone, which was supposed to shield deeper inland territories from enemy attacks and raids and as a staging place for own attacks and raids against the enemy. Traditionally military settlers who had special status populated such territories. These settlers were typically freemen, as opposed to serfs in more secure territories and were exempt of taxes. Instead, they were obliged to carry military service on the border. Being half soldiers, half farmers, these men weren’t the best trained, equipped and disciplined comparing to the regular troops, but they were always available on the spot and required little or no pay as they supported themselves from their land which they supplemented with plunder from lands of the enemy.

These military settlers were often recruited from refugees. In the case of Ukraine, these were the peasants fleeing wars between Russia and Mongol Golden Horde in the east on the one hand and on the other advancing feudalization of Russia itself, which saw farmers being forced in to serfdom in the increasing numbers. Refugees were fleeing to the areas away from the main conflict and out of the reach of the central authorities. Here they begun to organize in to small communities and as soon as the situation in the central parts of Russia was consolidated and Russia has emerged victorious from the wars with Golden Horde and its successor khanates, these communities came in to attention of the Russian authorities who begun to utilize them as military settlers, giving them lands and tax exemption in return for the military service. Thus famous Cossacks were born. The word Kazak, which is Russian for Cossack, is of Turkic, not Slavic origin, and it is assumed to be originally describing nomadic mercenaries hired by the Russian princes to fight in their wars. Later it was used to describe men for hire, both in civilian and military roles and that is likely how it was originally applied to the people we now know as Cossacks.

It should be noted however that modern Ukraine is not identical to historical Ukraine. Historical Ukraine was much smaller compared to modern Ukraine and it never was official name of some administrative region with definitive borders. Not until the creation of the modern Ukraine at the end of the First World War. This term was vaguely applied to the lands that were bordering Russia, Poland-Lithuania and Crimean Khanate, border that kept changing with the fortunes in wars. Moreover, Russia did not had just one Ukraine, there were several ukraines and “little” ukraines (ukrajinka) all along Russia’s sensitive borders. There were ukraines in the west, on the territory of contemporary Belarus, there were ukraines in the south near Caucasus Mountains and there were ukrainas in the Eastern Siberia. Only in the north where Russia shared a border with polar bears, Russia did not have ukraine. However, as Russia kept growing in power, securing its borders or expanding them further, most of the other historical ukraines disappeared and the one that was left longest became The Ukraine. Consequently, Cossacks did not exist only in Ukraine, there were and in some cases still are other Cossacks. Cossacks on the rivers Volga and Don, Siberian Cossacks and Terek Cossacks in the Caucasus to name the most notable ones. Russians were not the only ones who recognized usefulness of Cossacks either, Poles and Tatars were actively using them as well. Cossacks themselves were keen on exploiting conflicts between those powers to extract political and economic advantages for themselves.

Delineatio Generalis Camporum Desertorum vulgo Ukraina cum adjacentibus Provinciis-General Draving of the Deserted Fields, vulgarly known as Ukraine together with its neighbouring Provinces by French cartographer Guillaume Le Vasseur de Beauplan (1600-1673), note that North is down and South is up): source: Wikipedia

Military settlers in Krajina on the other hand were recruited mostly from Serbs, Vlachs (Romanians) and Croats fleeing Ottoman Turks who conquered Constantinople, capital of the East Roman Empire (also known as Byzantium) and defeated the kingdom of Serbia and the fragments of Bulgarian empire in the Balkans and were aggressively pushing north towards the Central Europe engaging with Hungarians and Austrians. That’s how Krajina got its Serbian population. Just like in Russia, historical Krajina does not necessarily copy the borders of what is considered Krajina in Croatia today. And just like in Russia, there are other krajinas elsewhere in Balkans. Bosanska Krajina near Banja Luka, Timocka Krajina between Serbia and Bulgaria, to name a few. In 1881, with the danger of Ottoman incursions all but disappearing, Austrian Emperors dissolved Krajina as an administrative region and incorporated it in to the kingdom of Croatia.

Map of the Krajina (in red) cca 1800:source: Wikipedia

While Cossacks are widely known as famous horsemen, a few people know that Krajina, and neighboring regions of Balkans are where the other most famous light cavalry of Europe comes from. Not less famous Hussars. Hussars were originally irregular cavalry from Balkans. Hungarian kings and Austrian emperors who employed them in their armies introduced them to the Western Europe, where they were quickly copied and adopted by the other armies for their effectiveness. With the advent of firearms, European knights in their shining expensive armors, riding heavy warhorses were gradually withdrawn from the battlefields as European armies begun to appreciate less heavily armed cavalry in their place, which substituted speed and agility for direct protection and ambushes and flanking for charges in to the enemy front lines. And that’s where experience of combating Turks and Tatars of Asia who always preferred lighter cavalry came in handy. Through centuries of constant fighting, Cossacks and Hussars adapted themselves to the fighting methods of their opponents and adopted many elements of their equipment and tactics. Not everybody though served in the cavalry and contrary to popular belief, most Cossacks served as infantrymen. Horse, especially saddle horse back in those days was something that only the wealthiest Cossacks could afford.

Hungarian hussar in the 16th century. Woodcut by Jost Amman:source: Wikipedia

When Ottoman and Austro-Hungarian empires collapsed in the flames of the Balkan Wars and the First World War, which had aroused from the conflict over the Bosnia, Croatia and Serbia joined Yugoslavia, a new state that supposed to unite all the Slavic people of the Balkans. Krajina ceased to be a province on the edge and it seemed that history there would slow down. Nevertheless, history just took a nap. On April 1941, German army invaded Yugoslavia under Adolf Hitler’s orders and Yugoslavia quickly fell apart. In Croatia, with the support of the Germans, puppet state with the pro-German fascist political party of Ustashe in power was established. Ethnic cleansing campaign and persecution of Serbs and other minorities followed, and lasted until the defeat of Nazi Germany in the WWII. The exact number of Serbs who perished in those repressions is unknown, estimates vary between 300,000 and 500,000. About 50,000 alone died in one of the concentration camps in Jasenovac.

With the National Socialist Germany and their allies defeated, Yugoslavia was reinstated under the leadership of the Communist party and a war hero Josip Bros Tito. Whereas survived Nazi collaborators found a shelter under the wings of the US and British secret services in the West Germany, Canada, USA and Australia. Unlike Nazi scientists, they did not possess any great knowledge or technical skills, but experience of political repression and anti-guerrilla warfare were of the value for the CIA in the upcoming Cold War. The end justifies the means. Interestingly enough, Ustashe from Balkans found themselves thriving at the same centers and under generous tutelage of the same secret services of the same governments as Nazi collaborators from Ukraine – the infamous UPA (Ukrainian Insurgent Army) and its political leaders like Stephan Bandera. In some instances, political and cultural institutions of the Ustashe and UPA were located on the same streets, sometimes even inside the same buildings of Western cities like Munich. Just like Ustashe, the WWII records of UPA are full of the ethnic cleansings, mass murders and war crimes against civilian population that did not fit UPA’s racial and ethnic standards. Now they were to be sustained like bacteria of a biological weapon on a Petri dish in CIA laboratories, waiting for their time.

Ironically, their time did not come during the Cold War, even when there were some failed attempts to utilize them. Their time came with the end of the Cold War and fall of the Communist rule in the Eastern Europe and the collapse of the Soviet Union. The easiest way to destroy multinational country is to start ethnic conflicts between the peoples of a country itself and let them destroy it themselves. Under Tito, who himself was from mixed Croat-Slovenian family, stability was maintained between the various ethnic groups dwelling in Yugoslavia, but that balance was fragile and rested to a large extend on the authority of Tito himself. With his death, the institutions of the state and the way Yugoslavia was constructed came for a test.

Yugoslavia was constructed as a federation in such a way, as to prevent any one of the constituent nations from dominating the state. Serbs were always the most numerous and therefore strongest nationality in Yugoslavia and other nationalities, particularly Croats and Slovenians feared that Serbs would dominate the state. Not without a good reason either as interwar Yugoslavia indeed ended up being dominated by the Serbs and their elite. To prevent that, in post war Yugoslavia, Serbia was divided in to four parts: republics of Serbia and Montenegro and autonomous regions of Kosovo and Vojvodina. Later three had significant non-Serbian ethnic minorities. That accomplished the goal of creating a balance between the powers of national republics inside Yugoslavia, but it inevitably created feeling of injustice among the Serbs. It was only Serbia which was divided and weakened in such a way, neither Croatia, nor Bosnia or Macedonia were divided even if they too had regions with ethnic minorities present. Serbs in Krajina were an example and Bosnia was heterogeneous to such extent, that it was sometimes nicknamed as Little Yugoslavia.

After period of unsuccessful Communist experimenting with creating single Yugoslav supranational identity, which would replace individual nationalities, Tito and his Communists went the other way and in the new constitution of 1974 tried to placate nationalist sentiments by bestowing more power on to the republics and strengthening autonomy of the regions. In Voivodina, Montenegro and Kosovo that led to an increasing cultural, economic and political pressure against Serbs who became convinced that system inside Yugoslavia works at their expense and they are loosing. In Kosovo where Albanian population was steadily increasing due to immigration from Albania and higher birth rates, issue was especially sensitive because Serbs consider Kosovo to be historical cradle of their civilization.

But any attempts to change the situation by the Serbs, inevitably led to the reaction in the other republics creating endless spiral of increasing suspicion and tensions between the republics. With the economy and central institutions weakened by the gradual decline in the power of the Communists and change of the political and economic situation in the whole of Eastern Europe, it required only a gentle push from the outside to spark ethnic conflict. That’s were Ustashe and other similar groups been held in the reserve during the Cold War in the West were finally put to a good use. Under disguise of democracy and freedom of speech, they were re-imported back in to their countries of origin along with the literature and propaganda created around their ideologies in the Cold War exile thanks to the generous US and German sponsorship. Money from Saudi Arabia and other Arab countries played similar role in the Muslim communities of Yugoslavia.

Eventually it brought yields. Spinning in spasms, in 1990 Yugoslavia has arrived at the cliff when constitutional crisis completely paralyzed federal institutions, including Communist party itself. Republics were fighting each other. The only significant federal institution left willing to defend Yugoslavia was its army. However, army required an order from politicians to start acting, and there was no one to issue it. Yugoslavia was going to dissolve. The only question was how and when.

Anybody remotely familiar with Yugoslavia, knew, that if it would be done in unilateral uncontrolled manner, it would lead to a war. Only in Slovenia, the administrative borders were identical to the ethnic borders. The rest of Yugoslavia had ethnic minorities living all over the place. This was also well known in Washington and Berlin. Despite, or may be because of it, Washington and Berlin chose exactly this option even against the warnings from other European capitals. Berlin was the first to recognize independent Slovenian and Croatian states and hence British diplomats unofficially named the war that begun immediately in Croatia as “Gensher’s war“, after German foreign minister at that time Hans-Dietrich Gensher.

Single picture that explains civil war in Yugoslavia:source: Wikipedia

When Croatian government declared independence from Yugoslavia in 1991, Serbs of Krajina in response declared their own independence from Croatia. All peoples have equal rights for independence. Right? Wrong. “All animals are equal, but some animals are more equal than others” to paraphrase George Orwell and his famous book. Everybody likes to be independent himself, but not when others want to be independence at his expense. Croats are no different and independence of Republic of Serbian Krajina, which is how Serbs named their new country, was met with more than a strong disapproval in Zagreb, the capital of Croatia. A conflict flared almost immediately and it set off bloody civil war that engulfed other parts of Yugoslavia, eventually ending its existence.

When declaring independence, the most important thing isn’t who has the right for independence and who does not, the most important thing is who supports it. And here Serbs of Krajina were placed at a disadvantage because they were supported only by small Serbia, which itself was having plenty of problems inside, while Croats were supported by several world’s most powerful countries – USA, Germany and the entire NATO alliance. Serbs held for several years, but at the end fight was just too uneven. It ended when Croatian forces supported by the USA and Germany overrun Serbian lines manned mostly by local militiamen on August 1995 and proceeded to ethnically cleanse Krajina of its Serbian inhabitants for good. Up to 1500 of them lost their lives, 2/3 of that number were civilians and up to 200,000 had to flee to Serbia and Bosnia. It was one of the two places in former Yugoslavia, where an entire historical region was ethnically cleansed of its population during the civil war. The other region being ethnically cleansed of Serbs was Kosovo, also with the support of the USA and it’s allies. The irony that is still carefully hidden from the public by the politicians and journalists in Washington, London and Berlin who worked tirelessly to convince people in their countries that those are Serbs who perpetrate crime of ethnic cleansing and had to be stopped by noble and smart bombs, enriched with uranium. Everyone else were portrayed as victims. It was a deliberate lie. Even supposed plan of ethnic cleansing of Albanians in Kosovo by the Serbs, named “Operation Horseshoe” which served as a pretext for bombing of Serbia itself by the NATO forces, was after the war exposed as entirely fabricated by the German secret service BND with the help of Bulgarian government. To be sure, there were plenty of cases of local ethnic cleansing, perpetrated by all sides of the civil war, Serbian one including, but not on the scale of the entire historical regions like Krajina or Kosovo. Nevertheless, ethnic cleansing wasn’t the real reason for the intervention, the real reason was that USA, Germany and EU wanted Yugoslavia to be gone and Serbs in Krajina and Kosovo stood in their way. Yugoslavia was too large to be incorporated in to the EU and NATO, one has to join the EU and NATO as weak as possible and under the conditions favoring those who are in charge of the EU and NATO. Conditions that demand political, economic and cultural subordination and transfer of the control over national resources and markets to the global corporations. Corporations of the global Empire. Therefore, Serbs of Krajina and Kosovo had to go. All of them. Yugoslavia had to be broken in to small pieces and pieces then digested by the Empire one by one until the whole Balkans had “proper” democracy, endorsed “proper” values and values were “protected” by the US military base or two. Divide et impera, Romans used to say.

The conflict in Ukraine is driven by exactly the same motives and reasons and using the same old methods and the same propaganda tricks. Timed bombs in the form of the arbitrary changes of the administrative borders made by the ruling Communist elite blew up during break up of the USSR too, as well as their policies of creating new Soviet people. Former Nazi collaborationist were also used to instigate ethnic hatred. Place Soviet Union instead of the Yugoslavia, Russians instead of Serbs, Ukraine instead of Croatia, Donbas and Crimea instead of Krajina and Kosovo and the story is almost identical. Ukraine and Krajina share similar history once again. Almost. With the exception that the Soviet Union was much larger than Yugoslavia, Russia is much larger than Serbia, and Russia has powerful allies in the world of its own. A victim turned out to be too big and vital and the Empire appears to suffer major digestive problems as a result. Will Ukraine end up sharing the fate of its sister after all?

Or will Ukraine turn out to be one mouthful too many? One thing is certain, history did not stop. History has no end. Prophets of the Empire has been proven wrong.

arras‘s mini-bio: HIC SVNT LEONES

Balkan Report: The Macedonian Powder Keg Set To Go Off

Source

by Stephen Karganovic for The Saker Blog

The way things are shaping up down south (viewed from Belgrade) the tiny, helpless, beleaguered new Balkan state of Macedonia could be the trigger for a wider regional conflict. It is well to remember the adage of veteran politician Franklin Delano Roosevelt, especially in the present context: If it turned out a certain way, it is probably because that is the way it was planned.

If the stage is indeed being set for a new Balkan conflagration, many signs suggest that Macedonia has been assigned a key role in the process leading up to it. Slightly under two years ago, Guaido’s Balkan precursor, Zoran Zaev, was promoted by non-Macedonian interests to unconstitutionally replace the less compliant but democratically elected long-time stooge Nikola Gruevski as prime minister. Procedural niceties were brutally cast aside when Macedonia’s Western masters concluded that Gruevski was getting too many independent policy ideas and that letting him remain in office was therefore risky. In a ruthless, Kiev 2014-style coup, coordinated from the embassies of all the usual suspects, Gruevski was unceremoniously ousted. (By a remarkable coincidence, ambassador Jeffrey Pyatt, of Kiev fame, is now accredited to the neighboring Greek government and undoubtedly supervises these affairs from his Athens command post.) Usurper Zaev was promptly installed, though lacking the required parliamentary majority and in disregard of president Djordje Ivanov’s strong initial refusal to officially appoint him. But that did not matter in Armenia, why should it now in Macedonia?

The masters’ game plan was soon revealed. One objective was to make sure that the Russian pipeline’s passage through strategically located Macedonia would be permanently blocked with the cooperation of a reliable lackey. The other items on the agenda consisted of (1) rearranging the internal political balance of power to overtly favor the aggressive and Western-supported Albanian minority, laying the foundations for Macedonia’s violent Yugoslav-style, ethnically driven breakup at some point, and (2) getting Macedonia into NATO and shoring up NATO’s southern front by “settling” the name dispute with Greece, also to be accomplished to Macedonia’s disadvantage.

Zaev’s first order of business was to implement the so-called “Tirana platform,” an agreement he reached with Macedonia’s Albanian minority while still a private citizen. (He is obviously lucky that Macedonia does not have anything like the Logan Act.) Significantly, the agreement involving the de facto federalization of the tiny country and the granting of extensive privileges to a foreign-backed minority within it, was negotiated by Zaev in the Albanian capital of Tirana. No one seems to be quite sure how many ethnic Albanians there exactly are in Macedonia, any more than it is known for certain how many of them reside in neighboring Kosovo. They are alleged to constitute a respectable 25 to 30 % of Macedonia’s population. But questioning that allegation or subjecting it to empirical verification is actively discouraged. As a result, the western, most densely Albanian- populated portion of Macedonia contiguous with Albania itself has now been turned into a state-within-a-state where native Macedonians enjoy a status similar to that of Indians in the US. The Albanian language has been made official alongside Macedonian and one may assume that smart and farsighted people in Skopje, who get their cues from the embassies that are running the country, are now busy taking Albanian lessons.

Zaev’s second major “achievement” was to negotiate an end to the Macedonian name dispute with his Greek colleague, equally contemptuous of popular sentiment, the perfidious phony socialist Alexis Tsipras. Since Macedonia’s independence from Yugoslavia in 1992, Greece has strongly objected to the country’s name, asserting that “Macedonia” is a Greek copy-righted geographical and historical concept, that Alexander the Great was Greek not Skopje-Macedonian, and all the rest of it, typical Balkan stuff that most readers would probably find utterly boring. The name dispute, however, got hundreds of thousands of people quite excited and demonstrating vociferously on both sides of the border.

It was important therefore to settle, or to at least paper over this issue to make NATO’s southern flank reasonably united in anticipation of the impending big war in the East. The analogy with the geopolitical situation of the Kingdom of Yugoslavia in 1941, when its politicians were cajoled into signing off on the Axis pact, and Macedonia’s today, with its accession to NATO, is striking. And yes, Macedonia was “rewarded” for changing its name not just by being generously accepted into NATO, but also with the privilege of being targeted by Russian missiles should hostilities break out in the future.

NATO flag already adorns government offices of “North Macedonia”

Should anyone be wondering why until just a few days ago Macedonia was known by the clumsy and ridiculous acronym FYROM (Former Yugoslav Republic of Macedonia) it was because of Greece’s refusal to countenance any other label. The need to form a united front against Russia’s “malign influence” in the Balkans now clearly superseds such puerile nonsense. Orders were issued to both puppets from on high to kiss and make up, which they dutifully did, of course.

Incidentally, Macedonia’s new official name of North Macedonia, which Wikipedia has already hastened to duly acknowledge, is rather underwhelming from the standpoint of idiomatic English. “Northern” would have sounded better, a detail that was not lost on the linguistically savvier Turkish partners when they were setting up their own satellite entity, the Turkish Republic of Northern Cyprus, on the part of the island that they occupy.

So, the stage now seems to be set to plunge North Macedonia in a conflict its people clearly do not want, and to demolish it either by igniting ethnic warfare or making it disappear in a nuclear conflagration, whatever happens to suit global decisionmakers the best. I consulted my trusted Macedonian (I will not insult him by adding “North” to his sufficiently humiliated country’s cherished name) friend and local contact, journalist Milenko Nedelkovski, for his assessment of his country’s current situation.

First things first, I asked him about the current status of his widely watched, influential, notoriously patriotic, and therefore obviously politically misaligned television talk show and whether he was getting any heat from the new “democratic and Western-values” oriented authorities.

His response could not have been more dispiriting:

“Both the present-day authorities and the opposition which until two years ago ruled the country are under the command of the US Embassy in Skopje and ambassador Jess Baily. This is our 14th season. Three years ago, the American embassy ordered my show to be taken off the air by all television broadcasters. It was cancelled twice by TV Channel 5 and three times by Channel Alpha. Both broadcasters have a nation-wide frequency. We are being harassed by absolutely everyone. That is why I am posting my program on Facebook and YouTube. There, for the moment, we are not facing any restrictions and the viewing audience now exceeds anything we ever had in the traditional media.”

Considering that in the period preceding the degrading Zaev – Tsipras name change agreement mass demonstrations opposing it were being held throughout Macedonia, I asked Milenko why people seem suddenly to have given up in the face of the quisling fait accompli.

“The people have not suddenly gone quiet. Repression is such that the ordinary citizen is afraid. He is now articulating his anger through the social media and by boycotting presidential elections. At the moment in Macedonia, civil disobedience is the principal tool of resistance. And if by ‘going quiet’ is meant that the people are no longer out in the streets, that is because the opposition VMRO party is also collaborating with the American-Brussels occupiers, so they are not calling on the people to protest.”

Given the dismal conditions Milenko described, I asked him what the chances are for kicking the rascals out in the next elections.

His answer was: “Non-existent. In April we are due to have presidential elections the honesty of which is very dubious. Ballot boxes will be stuffed, there will be coercion… But under no circumstances will there be anything resembling an honest vote. And the result, of course, will be endorsed by the ‘international community’ as a great victory for democracy.”

My Macedonian informant’s answer to the question of what future he sees for Macedonia if the appeasement of the Albanian factor continues was most unsettling. These are his dark visions:

“Not just the future of Macedonia as a unified country, but the future of all of former Yugoslavia will be uncertain. The Albanians will press relentlessly their Greater Albania project. In practice that means the disintegration of Macedonia as we know it, but also the reduction of Serbia to the territory of the Belgrade district (пашалук) during the period of Ottoman rule. Kosovo and the southern areas of Serbia will be detached, and other parts of the country, around Novi Pazar for instance, might also be snatched away from Serbia. Bosnia will not remain in its present shape and within the present borders. Montenegro will also be required to sacrifice territories to the Greater Albania project. Some littoral and even inland areas will no longer form part of Milo Djukanovic’s little kingdom. The redrawing of borders in the Balkans at the expense of the Orthodox nations, including some Greek lands to which the Albanians aspire, is certain to occur. The only hope for us Orthodox is a large-scale international conflict, which might be sparked off by something that happens in Venezuela, the Kerch Strait, Eastern Ukraine, Syria, Kaliningrad, or North Korea, the consequences of which would be so grave as to cause the US to lose interest in interfering in other nations’ affairs. Things will get better for us when they stop supporting unconditionally the Albanian factor in the Balkans and the Albanian mafia world-wide.”

It could, of course, be said that Milenko’s remedy is worse than the disease. But this compelling cri de coeur, by a well informed and intelligent observer from the heart of the Balkan darkness that proud NATO (and who knows, perhaps soon even EU) candidate “North Macedonia” has been turned into, certainly ought not to be ignored.

A Trap in the Name of Peace – a Mechanism For the Transformation of the Nontransformable

February 09, 2019

By Rostislav Ishchenko

A Trap in the Name of Peace – a Mechanism For the Transformation of the Nontransformable
Translated by Ollie Richardson & Angelina Siard
cross posted with https://www.stalkerzone.org/rostislav-ishchenko-a-trap-in-the-name-of-peace-a-mechanism-for-the-transformation-of-the-nontransformable/ 
source: https://ukraina.ru/opinion/20190208/1022621728.html

On February 8th 1994, 25 years ago, Ukraine joined the “Partnership for Peace” (PFP) NATO program.

It happened practically immediately after the establishment of the program in January, 1994. It is characteristic that also then, in 1994, a similar plan of interaction between the EU and the post-socialist space was put forward by the French Prime Minister Edouard Balladur of that time. This was the first project that received the informal name “Balladur plan”. In 2007 he also voiced the idea of unification into one structure of the US and the EU, which also received the name “Balladur plan” in daily use. But unlike the project of 1994, nobody ever tried to realise the idea of 2007.

In 1994, within the framework of the “Balladur plan” numerous events (round tables) were held, and in their course a number of Eastern European countries was defined, which in the future, during the waves of expansion in 2004 and 2007, became a part of the EU. 10 years were spent for their preliminary adaptation to European structures. However, even now, 10-15 years after their accession, it is difficult to call these countries fully-fledged members of the EU. The stability of their budgets and financial systems directly depends not only on the financial aid of the EU as such, but also on the preservation of its volumes. Without permanent annual multi-billion injections from the EU, these states as economic systems are unviable.

The “Partnership for Peace” program was some kind of NATO analog of the “Balladur plan”. Removing the concerns of those post-socialist states that will never become NATO members, as well as the preparation for NATO membership of those who it was decided to accept, were its main tasks. At the same time, like in the case with accession to the EU, the achievement of the criteria that grants the right to become a NATO member was decided randomly, and the opinion of Washington played a decisive role in it.

Thus, for example, Romania – which was considerably inferior to Ukraine until 2014 in terms of economic and in military-political weight, in terms of the question of the development of democracy, and even in terms of the amount of corruption – nevertheless became a NATO member in 2004 and an EU member in 2007. In 2009 Albania – in the boondocks of Europe – was accepted into NATO (now it one of the first in the queue for EU membership). Washington tried only once, in 2008, at the Bucharest NATO summit, to push forward the Membership Plan of Action for Ukraine and Georgia (which would make them official candidates for membership in NATO), but this American initiative was blocked by France and Germany, who didn’t want to spoil relations with Russia. But the question of the reception of Kiev in the EU was in general never on the agenda.

At the same time, it must be kept in mind that the Ukrainian authorities did everything that depended on them to achieve at least the status of a candidate for NATO membership. In 2002 the NATO-Ukraine Action Plan – the highest form of cooperation within the framework of the “Partnership for Peace” (PFP) – was adopted. In April 2004 the Verkhovna Rada adopted the law on free access to the territory of Ukraine for NATO forces, and in June 2004 president Kuchma approved the military doctrine that determined the entry of Ukraine in NATO as the ultimate goal.

This, by the way, will be useful to grasp for those who consider that the danger of NATO bases appearing in Ukraine arose only in 2014 and only because Russia didn’t send tanks to fight against Banderists. By the way, the introduction at the initiative of Poroshenko of the amendments to the Constitution canceling the non-bloc status of Ukraine and determining NATO accession as the ultimate goal is also secondary. 15 years prior Kuchma, quietly, without excess noise and without paying attention to the Constitution, solved the same problem with his decree (which approved the military doctrine). In general, by the middle of 2004, half a year before Maidan, and seven months prior to Yushchenko coming to power, Ukraine was quite ready for NATO accession. Since then Kiev has been in the starting blocks during all this time, but it isn’t invited anywhere.

PFP for NATO played the same role that the “Balladur plan”, and then the “Eastern Partnership”, played for the EU. In fact, they were complementary programs. In 1994 the West still hadn’t made a final decision on what to do with the post-socialist space. Meanwhile, the former countries of socialist camp and the former federal republics were actively rushing into western structures, thinking that joining them would give them the opportunity to solve both their social-economic and military-political problems.

Originally the PFP program was supposed to bring down the heat of Eastern European emotions, busying the countries that were rushing into NATO with mastering a certain mechanism that allowed to “prepare” them over decades for “compliance to criteria” of membership. The criteria are extremely indistinct. PFP members are required to observe the UN charter and international law, to refuse to threaten with the use of force, to meet democratic standards of the West, to carry out military reforms, and to provide civil control over the armed forces. In general, “for everything good and against everything bad”. At the same time, the worthiest one – i.e., the US – had to decide who is most worthy for membership.

Another important point was that within the framework of PFP a country cooperated with NATO on an individual basis. Thus, the West prevented the creation of lobbyist groups, such as the Visegrád Four, which already existed back then (and which was originally considered by the countries that created it as a mechanism for joint accession to the EU and NATO).

In general, thanks to PFP the West received time to decide on a strategy concerning the countries of the former socialist camp. At the same time, their wishes weren’t rejected straight off. Moreover, a mechanism was created, and with its help it was possible to accept any country into NATO at any time and to reject any country under a specious excuse. This same thing also concerns the mechanisms that were created in order to regulate the process of the EU’s expansion.

Within the framework of PFP obligations were taken only by partner countries, while NATO agreed only to the emergency carrying out of consultations if a partner country feels that its territorial integrity is under threat. It is necessary to say that these consultations haven’t helped anybody to date; they created the mechanism of NATO (and de facto the US) interference in any inter-state conflict whereby at least one partner country is involved.

Today’s attempts to actualise the topic of accession to NATO undertaken by Kiev (in particular, the introduction of the corresponding amendments to the Constitution), which have a pronounced propaganda character and have no practical value, are indeed caused by the understanding of that fact that within the framework of PFP Ukraine is perhaps indeed a partner of NATO, but NATO isn’t a partner of Ukraine. Kiev can’t speak with Brussels as equals, it also can’t leave the PFP program, since it would be regarded as the largest foreign policy failure of the current authorities. At the same time, within the framework of PFP Ukraine can only follow the instructions of NATO (in reality, the US) while receiving nothing in exchange.

In general, PFP, which was originally presented as a mechanism for the adaptation of potential candidates to NATO requirements, quickly turned into a trap that keeps those countries that the bloc doesn’t intend to bring into its structure in the orbit of NATO in the quality of “junior partners”.

Talk of Western intervention in the Black Sea is pure fantasy

January 19, 2019

by Pepe Escobar (cross-posted with The Asia Times by special agreement with the author)Talk of Western intervention in the Black Sea is pure fantasy

Crimea is essential to Russia strategically and economically, but speculation over Ankara helping to boost the US presence in the Black Sea is far-fetched given Turkey’s energy deals with Moscow.

A power struggle over the Black Sea between Russia and the US plus NATO has the potential to develop as a seminal plot of the 21st century New Great Game – alongside the current jostling for re-positioning in the Eastern Mediterranean.

By now it’s established the US and NATO are stepping up military pressure from Poland to Romania and Bulgaria all the way to Ukraine and east of the Black Sea, which seems, at least for the moment, relatively peaceful, just as Crimea’s return to Russia starts to be regarded, in realpolitik terms, as a fait accompli.

After a recent series of conversations with top analysts from Istanbul to Moscow, it’s possible to identify the main trends ahead.

Just as independent Turkish analysts like Professor Hasan Unal are alarmed at Ankara’s isolation in the Eastern Mediterranean energy sphere by an alliance of Greece, Cyprus and Israel, Washington’s military buildup in both Romania and Bulgaria is also identified as posing a threat to Turkey.

It’s under this perspective that Ankara’s obstinance in establishing a security “corridor” in northern Syria, east of the Euphrates river, and free from the YPG Kurds, should be examined. It’s a matter of policing at least one sensitive border.

Still, in the chessboard from Syria and the Eastern Mediterranean to the Persian Gulf, Turkey and Crimea, the specter of “foreign intervention” setting fire to the Intermarium – from the Baltics to the Black Sea – simply refuses to die.

Ukraine Russia map

‘Russian lake’?

By the end of the last glacial era, around 20,000 years ago, the Black Sea – separated from the Mediterranean by an isthmus – was just a shallow lake, much smaller in size than it is today.

The legendary journey of Jason and the Argonauts, before the Trojan war, followed the Argo ship to the farther shore of Pontus Euxinus (the ‘Black Sea’) to recover the Golden Fleece – the cure for all evils – from its location in Colchis (currently in Georgia).

In Ancient Greece, steeped in mythology, the Black Sea was routinely depicted as the boundary between the known world and terra incognita. But then it was “discovered” – like America many centuries later – to the point where it was configured as a “string of pearls” of Greek trading colonies linked to the Mediterranean.

The Black Sea is more than strategic, it’s crucial geopolitically. There has been a constant drive in modern Russian history to be active across maritime trade routes through the strategic straits – the Dardanelles, the Bosphorus and Kerch in Crimea – to warmer waters further south.

As I observed early last month in Sevastopol, Crimea is now a seriously built fortress – incorporating S-400 and Iskander-M missiles – capable of ensuring total Russian primacy all across the eastern Black Sea.

A visit to Crimea reveals how its genes are Russian, not Ukrainian. A case can be made that the very concept of Ukraine is relatively spurious, propelled by the Austro-Hungarian empire at the end of the 19th century and especially before World War I to weaken Russia. Ukraine was part of Russia for 400 years, far longer than California and New Mexico have been part of the US.

Now compare the reconquest of Crimea by Russia, without firing a shot and validated by a democratic referendum, to the US “conquests” of Afghanistan, Iraq, Syria and Libya. Moreover, I saw Crimea being rebuilt and on the way to prosperity, complete with Tatars voting with their feet to return; compare it to Ukraine, which is an IMF basket case.

Crimea is essential to Russia not only from a geostrategic but also an economic point of view, as it solidifies the Black Sea as a virtual “Russian lake”.

It’s immaterial that Turkish strategists may vehemently disagree, as well as US Special Representative for Ukraine Kurt Volker who, trying to seduce Turkey, dreams about increasing the US presence in the Black Sea, “whether on a bilateral basis or under EU auspices.”

Under this context, the building of the Turk Stream pipeline should be read as Ankara’s sharp response to the rampant Russophobia in Brussels.

Ankara has, in tandem, consistently shown it won’t shelve the acquisition of Russian S-400 missile systems because of American pressure. This has nothing to do with pretentions of neo-Ottomanism; it’s about Turkey’s energy and security priorities. Ankara now seems more than ready to live with a powerful Russian presence across the Black Sea.

It all comes down to Montreux

Not by accident the comings and goings on NATO’s eastern flank was a key theme at last summer’s biennial Atlanticist summit. After all, Russia, in the wake of reincorporating Crimea, denied access over the eastern Black Sea.

NATO, though, is a large mixed bag of geopolitical agendas. So, in the end, there’s no cohesive strategy to deal with the Black Sea, apart from a vague, rhetorical “support for Ukraine” and also vague exhortations for Turkey to assume its responsibilities.

But because Ankara’s priorities are in fact the Eastern Mediterranean and the Turkish-Syrian border, east of the Euphrates river, there’s no realistic horizon for NATO to come up with permanent Black Sea patrols disguised as a “freedom of navigation” scheme – as much as Kiev may beg for it.

What does remain very much in place is the guarantee of freedom of navigation in the Dardanelles and Bosphorus straits controlled by Turkey, as sanctioned by the 1936 Montreux Convention.

The key vector, once again, is that the Black Sea links Europe with the Caucasus and allows Russia trade access to southern warm waters. We always need to go back to Catherine the Great, who incorporated Crimea into the empire in the 18th century after half a millennium of Tatar and then Ottoman rule, and then ordered the construction of a huge naval base for the Black Sea fleet.

By now some facts on the ground are more than established.

Next year the Black Sea fleet will be upgraded with an array of anti-ship missiles; protected by S-400 Triumf surface-to-air missile systems; and supported by a new “permanent deployment” of Sukhoi SU-27s and SU-30s.

Far-fetched scenarios of the Turkish navy fighting the Russian Black Sea fleet will continue to be peddled by misinformed think tanks, oblivious to the inevitability of the Russia-Turkey energy partnership. Without Turkey, NATO is a cripple in the Black Sea region.

Intriguing developments such as a Viking Silk Road across the Intermarium won’t alter the fact that Poland, the Baltics and Romania will continue to clamor for “more NATO” in their areas to fight “Russian aggression”.

And it will be up to a new government in Kiev after the upcoming March elections to realize that any provocation designed to drag NATO into a Kerch Strait entanglement is doomed to failure.

Ancient Greek sailors had a deep fear of the Black Sea’s howling winds. As it now stands, call it the calm before a (Black Sea) storm.

Military Analysis: Russian Coastal Troops – Russian military to be reequipped with Iskander-M missile systems in 2019

أزمات بريطانيا وفرنسا وأميركا وجوه مختلفة لجوهر واحد

ديسمبر 11, 2018

ناصر قنديل

– في بريطانيا انقسام داخل حزب المحافظين الحاكم حول حسن أو سوء إدارة رئيسة الوزراء تيريزا ماي تجاه قضية الانفصال عن الاتحاد الأوروبي قد يؤدي إلى سقوط الحكومة، والدخول في حال من الفوضى السياسية بسبب عدم تبلور أغلبية جاهزة للحكم، سواء من داخل المحافظين أو من حزب العمال. وفي فرنسا انسداد سياسي بخلفية اقتصادية اجتماعية تحمله تظاهرات السترات الصفراء في ساحات باريس والمدن الفرنسية كل سبت، مقابل عجز الحكومة عن المعالجة الأمنية أو التفاوضية، وفشل الرئيس أمانويل ماكرون في لعب دور الحكم بين الحكومة وجموع الغاضبين وتحوّله عنواناً للأزمة. وفي أميركا ملاحقة للرئيس دونالد ترامب في الكونغرس والصحافة والرأي العام على خلفية تمسكه بالعلاقة مع ولي العهد السعودي رغم تورطه في قتل جمال الخاشقجي ومسؤوليته عن حرب اليمن وما يتخللها من مجازر، وعجز واضح عن إيجاد مشتركات أو تسويات بين طرفي المواجهة الذاهبة إلى التصعيد بوسائل قانونية وسياسية وإعلامية.

– لا تحتاج المكانة التي تحتلها الدول الثلاث في رسم السياسة الدولية كزعيمة لمعسكر الغرب لإثبات، ولا يحتاج تظهير حجمها الاقتصادي في المعسكر الرأسمالي العالمي إلى دليل. وهي في كل حال الدول الغربية التي تملك حق النقض في مجلس الأمن الدولي، ونادراً ما تزامنت معايشتها أزمات يتداخل فيها الغضب الاجتماعي مع التراجع الاقتصادي والفشل السياسي، ويتولى الحكم فيها أشخاص جاؤوا من خارج الخيارات التقليدية، فأمانويل ماكرون الآتي من الغموض لا يختلف كثيراً عن دونالد ترامب القادم من خارج نخب الحزبين الديمقراطي والجمهوري، وتيريزا ماي لم تكن يوماً في واجهة القيادة المرشحة للحكم في صفوف حزبها.

– بعض التدقيق في ظروف الأزمات وولادتها في كل من فرنسا وبريطانيا والولايات المتحدة، سيوصلنا إلى أنها ارتدادات داخلية للفشل الخارجي في الحملة الإمبراطورية التي قادتها أميركا وشاركت فيها كل من فرنسا وبريطانيا، منذ سقوط جدار برلين وانهيار الاتحاد السوفياتي، وحققت نجاحات في المقلب الأوروبي من الخريطة الدولية مع حرب يوغوسلافيا وتمدد الاتحاد الأوروبي نحو حدود روسيا، لكنها أخفقت في نسختها الآسيوية التي بدأت منذ تسلّم المحافظين الجدد للحكم في البيت الأبيض وشنّ حربي أفغانستان والعراق، وتكرّر إخفاقها مع الفشل في الحرب الناعمة التي هدفت للسطو على سورية بعد نجاح خديعة الربيع العربي في تونس ومصر ونجاحها النسبي في ليبيا واليمن، والعنوان أخونة المنطقة وتمدد العثمانية الجديدة كرديف مواز للاتحاد الأوروبي في الوصول إلى حدود روسيا والصين بعناوين إسلامية، أملاً بأن ينتهي تطويق روسيا والصين وحصار إيران بالإمساك بسوق الطاقة بصورة تتيح التحكم بشروط تصدير الغاز الروسي إلى أوروبا، وشروط شراء الصين للنفط والغاز ودرجات النمو المسموح لها بتحقيقها، ومنع إيران من لعب دور فاعل في الجغرافيا السياسية للشرق الأوسط، خصوصاً ما يتصل بأمن «إسرائيل» ومكانة السعودية كركيزتين لمفاهيم السياسات والاقتصاد والأمن في غرب آسيا.

– الحلم الأميركي كان زعامة العالم، والنصيب البريطاني والفرنسي كان الحصول على غاز رخيص وقدرة تنافسية عالية مع بضائع صينية مرتفعة الأسعار لتعويض أثمان ضمّ الأجزاء الشرقية من أوروبا إلى الاتحاد، وما تجلبه من منافسة على مستوى اليد العاملة والبضائع الزراعية لدول غرب أوروبا، وتعويض أثمان استقبال موجات النازحين الذين تضخهم الحروب الأميركية نحو أوروبا، لكن الفشل الكبير قد وقع، وعادت روسيا القوية واللاعب الفاعل، وخرجت الصين قوة اقتصادية تدقّ أبواب العالم، وصمدت إيران، وكسر مشروع العثمانية الجديدة، وانضوت زعيمته تركيا تحت عباءة روسية إيرانية، وبقيت السعودية و»إسرائيل» حليفتين وحيدتين للعبة أميركية خطرة على المصالح الأوروبية بإثارة القلاقل في الشرق الأوسط، وكان العجز عن تأمين الشريك الفلسطيني في صفقة القرن والعجز الإسرائيلي عن مواصلة دور مخلب القط العسكري على حدود سورية وغزة ولبنان، والفشل في تحقيق إنجاز في حرب اليمن، علامات الشيخوخة التي فتكت بالمعسكر الغربي، ففي واشنطن تساؤلات عن الخيارات الكبرى، وفي بريطانيا انسحاب من المركب الغارق للاتحاد الأوروبي، وفي باريس أسئلة عن وعود الرفاه المفقود، كلها علامات أمراض الشيخوخة، زهايمر وبيركنسون وفشل كلوي وضغط شرايين القلب وسكري، وربما توقف مفاجئ في نبض القلب. هي وجوه متعددة لأزمة واحدة تعصف إلى إشعار آخر بالمعسكر الغربي في عواصمه الفاعلة، أزمة سقوط الحملة الإمبراطورية المتواصلة منذ ثلاثة عقود، حملة العولمة التي بدأت مع سقوط جدار برلين وفي مواجهتها الوطنية التي نجحت بتفكيكها مع سقوط حلب من بين براثن الحملة.

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