Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Category: Age of War and Revolution Page 13 of 21

The Democratic Bargain, Abortion and Responsibility

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On May 11, 2022

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The Problem With Aristocrats Is That They Inflict What They Can Never Suffer

— (someone else, can’t find the original)

The democratic bargain, or really, the bargain of all civilization that is worthy of existing, is based on the idea of resolution of conflict by means other than violence. Band level hunter gatherers are much more egalitarian than we are, and are generally better off on most metrics than anyone except industrial age humans (who they are still better off than in terms of free time, equality, dental health and female hip width) but they usually have higher levels of violence than we do.

Early civilizations were also shockingly violent and extremely cruel, both to their own residents (not citizens, residents) and to those nearby. “An eye for an eye” wasn’t even the law: punishments for crimes were often excessive, feuds were common and often lead to far more death and suffering than the original crime being avenged.

In civilizations and especially in democracy, at least in theory, the idea is that we give up our private right to determine what is right and wrong and especially our private right to take justice into our own hands. In exchange we avoid the evils of vengeance and feuds and reduce the amount of internal violence. (Native Americans might not think that British democracy reduced violence, though, note, nor did Rome’s neighbours think Republican Rome reduced violence towards them.)

In Democracy we elect people to make and enforce our laws, and to implement policy. This is based on the idea that people we elect will act largely in the interests of society as a whole, and thus that more people will be better off. Because it is impossible to make policy or laws without harming at least a few people, those who run society are supposed to be disciplined not by violence but by legal means and thru the ballot box.

However, representative democracy (not direct democracy, which has other failure modes), especially when combined with capitalism, tends to fall into oligarchy. There are multiple forms of oligarchy, an oligarchy isn’t always rich, but under capitalism those with the most money tend to form the core of any oligarchy, even if it has some sort of base in the population. There would be no right wing in America of the current sort, or the world, without the massive financial support of the Koch brothers and other extremely rich individuals.

The end result of this is governments which act against the interests and desires of the majority. The Princeton oligarchy study found that, for all intents and purposes, the opinions of most of the American population have no effect on legislation.

Oligarchies are a form of aristocracy, and aristocracies have three fundamental principles:

  1. Aristocrats are the best people and deserve their wealth, power and privileges.
  2. Aristocrats as a class should never lose their power; and,
  3. Individual aristocrats should never be held responsible for their actions unless they harm other aristocrats or their interests;

There are two issues here.

First, democracies which become aristocratic oligarchies stop acting in the interests of the majority.

Second, the members of an aristocratic oligarchy don’t suffer what they inflict.

For well over 40 years now productivity and wages have not risen together, for example, where before they did. This is a direct result of policy, both legislative (massive tax cuts and regulatory changes) and monetary, central banks acting to “control inflation” by suppressing wages on theory that “wage push inflation” is the only important type of inflation, while also acting to increase asset prices held by the rich, like stocks, bonds and real estate.

Likewise, starting in the 70s many types of drugs were made illegal, but the rich don’t tend to be arrested for doing them, either because their drugs are legal, or by simple lack of enforcement, as with the widespread use of cocaine amongst elites in the 80s and 90s.

I recently read someone claiming that Federal Reserve members had “skin in the game” because they had to live in America, which is a massive misuse of the idea, akin to saying that Jeff Bezos and workers in his warehouses both have interests in common. Well, sort of. Or that just because they are Americans Bill Gates and homeless person both have skin in the game.

Yeah, OK. And the Queen and Boris Johnson have skin in the British game, just like food bank users and people who die from NHS cuts.

In 2008 there was a huge financial crisis, starting in the US, but spreading thru much of the world.

It was caused by the actions of executives in the financial sector and as a result, essentially every brokerage and most banks were, had they taken their losses, bankrupt. If the normal course had been allowed, they would have lost all their money, and thus their power

Aristocrats, as a class, must never lose their money or power. (Money is power, in our societies.)

The Federal Reserve and the Treasury department stepped in, with some legislative help, and saved them. The cost for saving them was, at the time, for America alone, something like 20 trillion dollars.

Some ordinary people were bailed out, but the vast majority weren’t.

Later, when banks foreclosed homes because of the financial crisis’s fallout, they fraudulently signed legal documents, en-masse, stating that they had title to the properties they were foreclosing. They were allowed to foreclose anyway, and they were not prosecuted for this clear crime.

Democracies which become aristocratic oligarchies stop acting in the interests of the majority.

As for the crimes which lead up to the crisis, of which there were many, most of the bubble, especially in the last two years, they were not prosecuted, but instead they were fined for amounts less than they had made, thus immunizing them from criminal penalties.

Aristocrats should never be held responsible for their actions,  unless they hurt other aristocrats.

The one major prosecution was of Bernie Madoff. Madoff had victimized out members of the elite, not the general public.

So, the system operated to save the rich and powerful and when saving them was in opposition to saving regular people it not only didn’t save them, it allowed the rich and powerful to victimize them further.

Much of this was illegal by the law at the time, but a lot of it was legal. Aristocracies make laws that favor those in power. They create policies which favor the already powerful and rich.

And, as the Princeton study showed, they ignore majority opinion if it contradicts elite preference.

Let us now move to abortion, the issue of the day. A majority of the population wanted to keep Roe vs. Wade, by about a 2:1 margin.

Some years ago I asked my father, a very conservative guy, his position on abortion. He said he didn’t like it but believed it should be legal. I asked why. “Because I saw what happened when it was illegal. Rich women got abortions, and poor women didn’t.”

Let us say that abortion becomes effectively illegal. Do you think that the wives, sisters and daughters of the rich and powerful will still have access to them?

We all know the answer.

Aristocrats inflict what they never must suffer.

An example given by, I think, Nassim Taleb, used the Roman Republic. When Hannibal wiped out a huge Roman army at Cannae, one-third of the Roman Senate’s members were killed. They fought in battles.

What important politician or rich person of the last two generations died in any of America’s wars? Most didn’t even fight, including Bush Jr., Trump and Clinton all of whom weaseled out of the Vietnam war using dubious means.

Now let’s bring this back. One of the benefits of civilization is the reduction of violence which comes from prohibiting people from taking vengeance or justice (not the law) into their own hands. The benefit of Democracy is supposed to be that the government acts in the interests of the majority of the population, and liberal democracy it is supposed to also protect the rights of minorites against the majority.

This is what the legitimacy of civilization and democracy rest on. In exchange for these benefits, people don’t make life unpleasant for people with power, they don’t get vengeance themselves and so on.

I’ve seen the argument that protesting outside the houses of Supreme Court justices is illegal. It is. Hiding slaves was illegal. Blacks riding at the front buses was illegal. Strikes were illegal. Almost nothing that the Nazis did was illegal when they did it, because they were in power and made the laws.

What the French aristocracy did before the revolution was legal, and so was what the Russian aristocracy did.

Legality isn’t justice, even in good societies, though sometimes it approximates it.

But when legitimacy is broken: when civilization or democracy or liberalism doesn’t provide what it’s supposed to do, people stop caring so much about what is legal.

Nobody on the supreme court is going to be affected negatively by the loss of Roe. They and their friends and families, all of whom are rich, powerful or both, will still be able to get abortion when needed or when they want them. They, their daughters, wives and sisters will not die of untreated ectopic pregnancies or bleed out from back alley abortions.

And, as a commenter pointed out, the supreme court did rule that protests outside the houses of abortion doctors were constitutionally protected free speech, but protests outside their houses aren’t.

The evil of aristocracy is that aristocrats inflict what they never suffer.

If you are a member of the American elite life has never been better. You are the richest rich the world has ever known, even richer than in the Gilded Age. For over 40 years salaries, stock options, stocks and other assets like real-estate have just gone up and up and up, and when they haven’t the government, often in the form of the Fed, has stepped into to make sure they do.

Meanwhile ordinary people increasingly can’t afford houses, rent or medical care and where one salary could support a 4 person family, now 2 often can’t. (Ignore the official inflation and wage adjusted stats, and focus on reality, the stats don’t tell the picture and everyone knows it.)

Life gets better and better for the elite; the aristocrats and some of their retainer class, and shittier for almost everyone else.

There isn’t really a social contract, but there is legitimacy, and our elites have broken it. Since they have broken it, I will gently suggest that expecting those will die or suffer in large numbers due to their decisions to respect them or their laws is unreasonable.

When Jared Diamond tried to figure out why societies collapse, he dug into many civilization collapses and found out they almost all had one thing in common: the decision makers were cut off from the consequences of their decisions. Things were getting worse for almost everyone else, but everything was good for them, and often even improving, so they did nothing.

Eventually that broke. Sometimes due to environmental collapse; sometimes economic collapse; sometimes invasion; sometimes rebellion; and sometimes a combination or all of them at once.

Our aristocratic oligarchy is inflicting on others what they won’t suffer, even as they enrich themselves and pat themselves on the back about how they deserve everything they have.

That is leading where it always does, and it starts with the loss of legitimacy.

Those who protest rudely when those who will never suffer what they inflict hurt them or kill them, are minor in this context, but they are a sign of what is to come.

And that will be far worse than some judges being made uncomfortable or scared. It will be an age of war and revolution, throughout the world, and it will also be an age where some of their victims decide that if they are to suffer, their victimizers will suffer too.

This means either full on dystopian police states or an age of assassination and rebellion, and probably both.

This is what our aristocrats have sowed, and they will reap it. Alas, so will the rest of us. In the meantime, those who try and intrude on their bubbles and make their displeasure known are actually doing them a favor, offering them one last (and it is very close to last) chance to course correct.

History suggest they won’t, but occasionally it does happen, and we must hope for that occasionally.

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The Possible Dire Consequences of NATO & Ukrainian Escalation

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On April 28, 2022

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So, UK foreign secretary Trus has said that the war in Ukraine must continue until Russia is forced out of Ukraine entirely, including Crimea.

Meanwhile, the UK is shipping weapons to Ukraine that are capable of striking Russian cities.

As a moral matter, of course, the Ukraine has the right to strike Russia, same as so many countries have the right to assassinate American leaders and bomb American weddings in which “high value targets” might be involved.

But let’s consider the state of the war. Putin calls it a special military operation. Reserves have not been called up, and a great deal of care is being taken in the use of force. Unlike in Iraq, Russia has not taken out power, sewage, water systems, most roads, or rail. It has not unleashed level bombers for massive bombing of Ukrainian cities.

Russia has also not called up its reserves. Putin appears to think that would be unpopular. Russia has millions of men in its reserves. It could call up two million men and not exhaust them. They’re not the best troops, but they would swamp Ukraine.

Now, if Ukraine hits Russian cities, however fair that is, what will happen to Russian public and elite opinion? Imagine Iraq somehow managed to hit New York and cause real damage in the 2000s (if you want a scenario: perhaps they could have smuggled bombs into the harbor on cargo ships).

How would Americans have reacted?

That’s how Russians will react. Add in some atrocity propaganda (and there are plenty of videos of Ukrainian soldiers doing horrible things, they aren’t saints) and Putin will easily have all the backing he needs to go to total non-nuclear war. In fact, even if he doesn’t want to escalate, it would be difficult to avoid.

This would mean, as a start, bombing every road and rail crossing leaving the Ukraine that Russia or Belarus doesn’t control, so more weapons can’t get into Ukraine. It would likely mean removing all power and water from western Ukrainian cities and forcing most of the remaining population in those areas to flee: 20+ million people. And it would mean taking major cities, which Russia will have the manpower to do.

Further, the idea that any Russian government would ever give up Crimea is insanity (that Russia would fight a war to keep Sevastopol is why I was able, in 2008, to predict the next war would be over Crimea).

This idea that NATO has that it can safely fight Russia to the last Ukrainian, without any chance of war-spillover is insane. Likewise, China CANNOT afford to let Russia be broken up. If it is, then China can almost trivially be blockaded and forced into subjugation. They need Russian oil, gas, coal, minerals, and food and without them they cannot survive a confrontation with the West. It is literally impossible.

What China sees is that the US wants to fight wars where they aren’t at risk. If there’s a war in Asia against China, without using nukes, China has little ability to hit the US mainland, while the US can hit China. Yes, Taiwan, South Korea, and Japan (if they’re stupid enough to join in) get devastated, but the US laughs as the damage is done overseas.

I strongly suspect the Chinese now see this as the US plan for them. The US has stated it wants to place hypersonic missiles in the first island chain off China, which includes Taiwan, the same sort of movement of weapons which contributed to Russia’s demands before the Ukraine war (the US is a year or two from hypersonic, but the placement of other missiles and ABM close to Russia has been protested by Russia for years), and recently there has even been talk of putting US troops in Taiwan as a trip wire similar to the one in South Korea.

This means China needs a conventional deterrent; they need missiles that can hit the continental US, and they need to increase their navy to the point where it can fight the US navy in international waters and win. Remember that China’s ship-building capacity is VASTLY larger than that of the US.

The US and UK, both of whom think that Russia and China can’t hurt them, are pushing this war in ways that are very dangerous. This is a bet, in fact, that Russia and Putin are entirely “rational”, despite the rhetoric and won’t risk escalation. But Putin is reputed to have spent hours watching the video of Gaddafi being sodomized by a bayonet before being killed, and the CCP knows that “regime change” is what the US wants for China.

Regime change in China will leave a lot of CCP members, and especially leaders, dead.

This is an existential issue for China and Russia. If they lose to America, their leaders are overthrown. Russia will be dismembered (this is what multiple NATO leaders have said they want), and China will be relegated to permanent 2nd tier status at best. Many of the leaders will die, and many of those will die ugly.

This is understandable for the US. They have a wasting asset: China, given enough time, will inevitably have a larger military, since it has the larger economy, and they are catching up in technology. The US Navy has been shrinking for decades and the US has lost the ability to build ships: they have had to cancel recent designs because on testing, they suck. The US’s ability to build planes is also in doubt: the F-35 was a massive mess and is far too expensive.

Since the US also judges that any escalation short of nuclear won’t hit them, except economically, and will hurt their enemies and their satrapies worse (making Europe weaker economically and stronger militarily is a win for the US), they have a great deal of incentive to escalate as much as possible, and just make sure it doesn’t go nuclear.

This isn’t in anyone else’s interest, but Europe is consumed with fear of Russia, and Western European leaders have accepted the narrative of Eastern Europe and the USA about Russia as a completely rogue power which must be destroyed, because it can never be trusted.

Meanwhile, the US’s ability to control foreign countries outside of Europe is dropping fast. Three of the four Gulf States (creations of the UK and kept in existence by the US) refused to side with NATO in the UN. Saudi Arabia has basically told the US to fuck itself. The Solomon Islands signed a military pact with China which spawned threats from Australia and the US of military action if a base is built because apparently the right to make military alliances and do what you want in your own territory is available only to would be American allies.

India has not gone along with sanctions and Malaysia is wavering.

US hegemony is breaking. Western hegemony is breaking. As alarmed and scared as Chinese and Russian elites are, American and Western elites are furious: absolutely livid that anyone dare challenge them, or that the days of their hegemony may soon be over. Right now, calculating that the costs of wars to stay in charge will not primarily be born by them, they are willing to escalate recklessly.

Since passions are up, I note that this is not a moral analysis about who is good or bad. There was certainly moral justification for going to war against the USSR at various points, but we didn’t and we avoided escalating beyond certain levels because we knew that war with them was unthinkable.

War with Russia is still unthinkable. War with China is abominable.

Our time is done. We sold our patrimony to the Chinese from the 90s thru the 10s, so that our elites could break our working class and get richer than if they had to pay 1st world wages and costs. That’s the truth. Our elites thought they were international elites, not national elites, and they were wrong. The Chinese knew they were a national elite, and, in effect, bribed our elites to give away the most important sources of their real power: having the largest industry, and having a huge tech lead.

Our elites gave it all away, for a few trillion dollars, and China paid happily. Our elites now see that their only chance to retain power is to use the waning asset of military supremacy. First they need to take out Russia, then they can choke China out.

This is an incredibly dangerous thing to do. Even if it doesn’t blow into nuclear war, it can easily blow into hot war. American allies in Asia, I would suggest, would be well advised to decouple militarily. This especially goes for Japan: build your own nukes and conventional deterrent and sit this one out. China can’t reach the US mainland yet, but it can reach you.

On top of all of this extraordinarily dangerous nonsense is the opportunity cost: we should be spending trillions on preparing for climate change and ecological collapse, not playing war games. NATO and Russia, over the last 10 years should have been disarming near mutual borders, not rushing troops, missiles and planes to the borders.

We are acting insane, chimpanzees trying to maintain dominance, locally or globally. And we are going to pay for it, even if we avoid nuclear war, with hundreds of millions, probably billions, of unnecessary deaths.

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How Big Is The Chinese Economy Compared to The West?

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On April 21, 2022

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I recently came across these charts, of the biggest trade partner of each country, from 1990 and 2020.

To simplify: China is now more dominant in trade than the US at the height of its recent power. (Also of interest is the change in the UK and Japan’s position, though the collapse of Japan is overstated: it’s not , but it’s still a big trade power.

Let’s put the 2020 chart in numbers, bearing in mind that doing it in US dollars will overstate the relative size of the US.

For imports (from Wikipedia):

So, China is the primary trade partner of far more countries than the US. It exports more than the US, and imports less. These numbers understate the situation, though, since they are “goods and services.”

French Economist Jacques Sapir recently did an economic comparison by adjusting GDP numbers (not trade) as follows. First, change them for purchasing power parity (PPP), which is to say you can buy more with the same amount of money in China or Russia than in the US or Germany. Then adjust for the service sector being overvalued, so you’re left with manufacturing and the primary sector (digging things up and refining them) as the primary drivers.

Do this and Russia’s economy is 5% to 6% of the world economy, and much larger than Germany’s. China is about 30%, and the EU + US are about 30%.

Now I don’t entirely endorse this, there are some useful things in “services” like parts of the tech industry (much is worthless though, serving ads better does not increase a country’s actual economic strength. It might sap it.)

But it puts the situation in better perspective than using raw GDP.

Really there are three primary drivers of actual economic power: manufacuturing, resources and technology. Everything else either exists to service those 3 areas, or is nice and maybe even important to social stability (law, entertainment) but not primary.

China is the world’s primary manufacturing power. Russia is a powerhouse for resource exctraction. Russia is a leader in some types of military technology and not far behind in many others, and China is rapidly closing on the West in terms of tech and is even ahead in many areas (5G, for example, or hi speed trains, civilian use of drones, and so on.)

China also has something the US doesn’t have: a belief in technology. Robots and drones are common, technology is viewed as good, not bad and a threat. The Chinese believe in the future in a way that the west hasn’t since the 50s.

On top of all of this China is the world’s largest developer of nations: if you want ports, roads, train stations, hospitals, schools, smart cities or anything else, China will build them for you. They’ll finance them, and some exceptions aside they offer good loan rates because usually they’re more interested in good trade relations and getting your food/oil/minerals than they are about making a profit off building the infrastructure. In addition, Chinese construction companies building overseas infrastructure means those industries don’t have to downsize: they build China, now there isn’t enough work, so they’re off in Africa and South America.

To summarize then: China is:

  1. the number 1 trade partner of more nations than anyone else, and more than the US had in 1990.
  2. the world’s largest manufacturing nation
  3. Technologically near even with the West, and in some places ahead.
  4. The nation that helps the most other nations develop.
  5. When you adjust for PPP and service sector crap, a larger economy than the US. With Russia, a larger economy than the US and the EU combined.

And this is the nation we want to enter into a Cold War with? We shipped them so much of our industry that they now have more than we do, and after doing that we decide it’s time to pick a fight?

One thing is true of post-industrialization great politics: industry, access to resources and tech are what determine power. Since there is no longer a situation where the West has technology that is vastly ahead of everyone else’s, it really comes down to industry + resources.

And with Russia locked in and South America and Africa tending to prefer it, China is ahead or secure in both of those those categories.

If we wanted to keep our supremacy, we had to not ship China our industry and our tech so we could make some of our elites even richer. The Chinese accurately sized up our elite’s weaknesses and exploited them to the hilt. They thought they were “international” elites and it didn’t matter where the manufacturing was done, or who had the technology. The Chinese, however, were a national elite, and they knew it did.

I’m not sure this was exactly a bad thing. The West, in the unipolar moment (and heck, before) vastly misused its power, over and over again. Maybe a two-polar world will be better, if it isn’t, at least all power won’t be centralized in America with a few satrapies getting a voice and maybe that will be better for many countries and billions of people.

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The Petrochemical Age In Context

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On April 19, 2022

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If you want to do super big picture macrohistory, humans have really had three eras:

1) Hunting/gathering

2) Agriculture

3) Industrial.

To over-summarize, hunter-gatherers, with some exceptions in nutritionally dense areas were generally egalitarian. They had high childhood mortality and a fair bit of violence, but they lived longer lives than any time period before the Industrial era, and were health. In some cases we still haven’t caught up (for example, the width of hips of their women was wider than ours, and that correlates to health and easier childbith.)

Agriculture started out OK-ish for about 2,000 years, but the nature of agriculture creates private surpluses and allows for large elites. It’s easy to appropriate food and service from farmers, because they can’t move away and they can’t hide their take well (crops are harvested at known times, and about how much land produces is also known.) For the vast majority of the population, living in an agricultural civilization sucked. Yes, there were more of us, but we were sicker, died younger and more likely to have a nasty overlord. Violence decreased (though these figures are controversial), but that’s because the lords and masters don’t want other people killing.

Humans in this period were essentially domesticated, and there’s some reason to believe the process weeded out most people who naturally rebel against control. This is little different from how wolves became dogs, and just as degrading.

We know the industrial era, because we live in it, but I want to invite you take the long view: imagine it’s a 1,000 years from now. Or 5,000.

What the industrial age looks like when you zoom out is “the petrochemical age”. We figured out how to harness coal, gas and oil, added in a few other sources of energy, and became clever at hooking machines up to our power sources.

The problem is that in a period of less than 300 years we’ve burned up so many petrochems that we’re overheating the planet thru the mechanism of climate changes gases, and our population is well over the planet’s carrying capacity, leading to a crush in ecosystem diversity and the absolute number of animals, plants and insects.

Since ecosystems + climate are what make the planet habitable for humans, from the long point of view, all the industrial/petrochem era looks like is a massive orgy: a predator species which has overshot the world’s carrying capacity.

If we can’t transition to a technological way of supporting ourselves which doesn’t destroy the world’s carrying capacity, then all this period will be looked back on as is a blip: a brief period of species-wide stupidity, where we exploited technologies and powers we were too foolish and stupid to control the consequences of.

Progress isn’t automatic, and it isn’t one way. When you look at charts of health characteristics in the western world from the stone age, on, one culture stands out: Greek City States. They live longer than anyone else, they are healthier on multiple metrics, and their civilization is destroyed by the Romans, who don’t have nearly as good lives.

The same thing can happen to us. We are not sustainably transitioning to a new way of living. Even when we do some right things like electrification, we don’t build items to endure. We’re dumping valuable minerals into phones and cars and consumer goods we’ll throw out in 5 years or so, and we don’t have the resources to waste. We’ve done nothing to stop climate change. We’re over-fishing. Over 90% of the insects in multiple areas (perhaps world wide) are gone, as anyone over 50 or so can tell you. The birds are gone, too. The big animals. The wild areas. The coral reefs are dying. The Amazon is dying and now a net-emitter of carbon, not a sink.

In theory we could probably still fix this. The technology either exists or is with in sprint to do so, but it’s about more than technology: we’d have to change how we live. Give up our consumption based society; get rid of planned obsolesence and use the same items for decades. Ditch exurbs and suburbs almost entirely, and re-wild or make it so that people who want land have to live by the rule that their presence must increase biodiversity.

The changes are radical, and there is no sign of anyone in power taking them seriously. Instead we build more and more crap, pollute more and more, spew more and more gases into the atmosphere, and salivate over drilling for gas and oil in the arctic, even as we run down or pollute our aquifers.

Our technology was a test: we were given (or gave ourselves) great power, and our task was to use it to benefit ourselves in a way which was beneficial, or at least not catastrophic, for the rest of life on Earth (our ecosystem) and to not destroy a climate which is the only one human civilization has ever known.

We failed in this task, and so the Petrochemical Age is likely to just look like a blip. Perhaps a new technological civilization will arise from our ashes: but if it is to survive and prosper it will  have to do what we didn’t and give at least as much back to nature as it takes out (and rather more, to fix the damage.)

As for us, it seems unlikely most of our civilization will make it. Doubtless hi-tech enclaves will continue to exist, but ecosystem collapse, water shortages and climate change make it unlikely our civilization as a whole will survive another century. It may not even make it 50 years.

And looked at from afar, it’ll be a 4 century mistake, in which some people lived very well, but the near permanent ability of Earth to support life was damaged, making every future human poorer in a very real sense.

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March of De-Dollarization: Russia Selling In Rubles

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On March 24, 2022

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So, as many readers will have heard, Russia has said it will only accept rubles in exchange for its exports to “hostile nations” — which is to say, those nations who have sanctioned it over Ukraine.

The main thing to understand is that the West froze hundreds of billions of dollars of Russian reserves on account in the West. They sold us stuff for Euros and dollars and we will now not let them use those dollars or Euros. Sanctions mean that even the dollars and euros they have cannot buy many, perhaps most things, in most Western countries and Japan.

So selling us anything in dollars and euros doesn’t make much sense: they can’t use them without exchanging them for other currencies, and our sanctions make that difficult, since they’re closed out from our banking system.

Thus, rubles. An additional advantage of this is that it increases the value of the ruble, which had collapsed under sanctions.

In order to buy Russian oil and gas, Europeans will have to get rubles. Russians are unlikely to want a lot of euros or dollars because they’re almost impossible to spend, so Europe will probably have to buy Yuan and Rupees, then trade those currencies for Rubles. Paying with gold isn’t really practical, because it would have to be physically shipped to Russia or on account with a country they trust (China, India, a few others). Obviously gold in Western banks is not safe.

Russia’s main exports are oil, gas, wheat and minerals. There are usually other sources, but without Russia there aren’t enough to satisfy world demand. Sanctions on Russia, because they are such a big wheat exporter, may wind up killing a few million people in the global South, more than will be killed in the war.

From the point of view of the West, this is a continuation of de-dollarization. If Saudi Arabia also sells oil to China in Yuan, it will be a big deal. Prices are still set in dollars, but I expect that may end fairly soon.

Payment systems are being set up, and the world will split into two different trade areas. China wants another five to ten years before the big (inevitable) split with the West, they may or may not get it, but if they have any sense they won’t allow Russia to be choked out. They certainly aren’t going to cooperate with US sanctions, and that means they need to cleanly separate their financial system from ours, so that funds can’t be seized in transit, executives can’t be locked up and so on.

The Russians didn’t expect this, they were taken by surprise. Probably because, in fact, it’s a weapon that can only be used against a country like Russia (as opposed to Venezuela or Iran or Afghanistan), once. No one outside the West can now trust the West’s system, and everyone with sense will want their reserves kept elsewhere.

This is mostly a good thing, the West has terribly abused its currency primary to hurt other nations, even before the abuse of sanctions which largely accelerated under Clinton. Control of dollars was part of the arsenal used to keep the South poor and the US in control. China was able to get around this because of American greed and stupidity, and now that it has, it has a veto. Since Russia being taken out will lead it to be surrounded by enemies, it is going to use that veto. Again, Russia cannot be choked out by financial and economic sanctions if China does not permit.

I have been writing about this for almost 20 years now, it was clear it would happen eventually but exactly when and how were unclear. For a few years I’ve been saying we were moving to a Cold War world, and we are.

The difference is that unlike in 1950 or 2000, the West is not clearly stronger than the coalition against it. The USSR was always weaker economically, and though for much of the 50s and 60s they had higher growth (something forgotten today), in retrospect and for some of the smarter people at the time, the outcome was never in doubt, it just needed to be managed so it didn’t turn into World War 3.

This time the outcome is in doubt, and I think the smart money would bet slightly against the West, maybe 3/2. The wild card is climate change, which will hit China very hard, but could also do great damage to Europe and America.

Putin was foolish to get into this situation, reserves should have been withdrawn, but this is a smart move. It’s also going to hurt Europe a lot and damage German industry, whose costs will skyrocket (I have little sympathy, given that Germany has used the Euro to basically de-industrialize most of the rest of the EU.)

The post-American hegemony world isn’t quite here, but it’s being born. Welcome to the Age of War and Revolution and the Twilight of the Neoliberalism.

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Three Lessons from the Melian Dialogue Which Apply Today

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On March 14, 2022

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In the Melian dialogue, the Athenians have sent a military force to the city of Melos. The Athenians urge the Melians to submit. If they don’t, the men will be killed, the children and women taken for slaves. The Athenians say, “The strong do as they will, and the weak suffer what they must.”

In other words, “Take the deal, or you’ll get even worse.”

This is, in essence, what Putin said to Ukraine, and Ukraine, like the Melians, refused. It is at the heart of most of US interactions with “enemy” nations since WWII, and especially since the end of the Cold War. Even if they didn’t promise destruction, enemies were told, “Resist, and we’ll destroy your economy with sanctions, and millions will suffer or die.”

There are two corollaries to this, however. The first is pointed out by the Melians:

But do you not recognise another danger? For, once more, since you drive us from the plea of justice and press upon us your doctrine of expediency, we must show you what is for our interest, and, if it be for yours also, may hope to convince you: Will you not be making enemies of all who are now neutrals? When they see how you are treating us they will expect you some day to turn against them; and if so, are you not strengthening the enemies whom you already have, and bringing upon you others who, if they could help, would never dream of being your enemies at all?

This is what the US did to many countries — these countries may not have declared their enmity, but they do not consider the US a friend. They view the US as a threat, and when the day comes that they can get their revenge, they will do so.

It is at the heart of what is happening in Europe: Rearmament. By using his military, Putin has convinced other nations, especially Germany, to rearm.

But there is a third side, mentioned by neither the Melians nor the Athenians.

“If the powerful can do this, if I do not do it, I am not powerful.”

A great deal of why Russia is doing what it is, and why it created all the little semi-states around itself, was in reaction to the US. “If the US can violate international law, create Kosovo, and go to war with other nations who are weaker than it, if we don’t, we admit we are not powerful.”

Powerful nations can violate international law. If Russia does not violate international law in the same ways as the US and its favored vassal states does, then Russia is admitting it is weak.

The massive sanctions response is a test. Is the West still strong enough to largely limit massive violations of international law to itself and its vassals, or is Russia capable of withstanding those sanctions, and therefore one of the strong?

This question has yet to be answered. It will take time. In large part, as I have pointed out repeatedly, it depends on China. Probably Russia isn’t strong enough; but China + Russia are.

And notice the key allies who are sitting this out: Israel, three of the four Gulf states, the Saudis, and to a large extent, Turkey.

“There is no difference to us between Ukraine and Iraq or various other violations of international law. We aren’t your allies because we are your friends.”

Meanwhile, the US is asking China, their declared enemy for the past twelve years or so, to undercut Russia, because the real question isn’t about Russia, it is about China.

“The strong do as they will, and the weak suffer what they must.” Who are the strong in our world?

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What Is Our Plan C if Sanctions and the Guerilla Trap Don’t Take Out Russia?

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On March 11, 2022

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First: To my knowledge, sanctions have never lead to regime change. They didn’t in Iran, Iraq, Venezuela, Libya, or anywhere else — not even North Korea and Cuba, which are still under some seriously savage sanctions.

Second: The targeted country’s leadership can still have pretty much whatever they want, it’s the population which suffers.

Third: While, in most ways, Russia is weaker than the USSR, it has a food surplus, while the Soviets always struggled. You can’t starve them out. It also has a fairly decent medical industry and access to Chinese and Indian medicines. Also, if sanctions continue, they will break our IP.

Fourth: The USSR didn’t have the largest industrial nation in the world as its ally (that would be China, not the US).

Fifth: China and Russia are synergistic. What China needs (food (desperately), oil, and minerals), Russia has. What Russia needs (consumer goods, medium to high-ish tech), China has. Plus, for China, having Russia as an ally mitigates the whole “US Navy cutting off supplies at the Straits of Hormuz” situation that every Chinese leader since Deng has stayed up nights worrying about.

Sixth: The logical response for Russia and China is to link their payments systems and to create an alternate monetary system. Because the West has repeatedly stolen billions of dollars from countries foolish enough to keep them on reserve in the West and then get on the West’s bad side, a lot of nations will move over to that system. Honestly, I’d trust China more than I would trust US not to steal my reserves, at this point.

Nobody seems to be thinking this forward. If sanctions don’t take out Russia and force it to collapse and/or have a government we like, what are we going to do next?

And as sanctions have never taken out a government, what’s our plan? Right now, it seems like the only alternative is to have a long guerilla war in Ukraine and bleed Russia dry. This strategy might work, though the human cost will be monstrous. (But then, why would the West care? We’re fighting to the last Ukrainian, after all.)

But if sanctions don’t work, and the guerilla trap doesn’t, what’s our Plan C? It’s particularly important because these sanctions are going to do a lot of damage to ourselves including, very likely, destroying the IP system that makes our rich so rich. (I, personally, look forward to Russia, and later China, breaking our IP system, but I don’t imagine high tech firms and/or Disney are as thrilled.)

Again, what’s our Plan C?

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What the West and Russia Want in Ukraine & the “Good” Result for Ukraine

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On February 28, 2022

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There’s a lot of nonsense going around, including talk of Russia losing the war because, less than five days into the war, they haven’t conquered Ukraine.

The German blitz of Poland took five weeks. The conquest of France took six weeks — and people were astonished. Ukraine is the largest country in Europe except for Russia itself.

The sources I respect say that Russia is taking losses, but the war is not in question, and they are advancing about as fast as the US did into Iraq. Russia will win the war, though they may take more damage than they expected (but as we have no idea what they expected, who knows?). Ukraine is a modern equipped army; it isn’t Iraq with obsolete equipment, or Libya, or Afghanistan.

The question is not whether Russia wins the war, it is who wins the peace.

What the US and Europe want is to turn Ukraine into a guerilla quagmire, like Afghanistan in the 80s, or like Iraq and Afghanistan were for the US.

What Russia wants is to turn Ukraine into a guaranteed neutral state and withdraw its troops out of the country, minus Donbas and Luhansk.

The good result for the Ukraine, which most Westerners don’t seem to get, is what the Russians want. Austria was neutral in the Cold War, and that was not horrid. A multi-year guerilla campaign will devastate Ukraine in ways that will take generations from which to recover, because if the Russians have to fight an insurgency, they will be utterly brutal, as they were in Chechnya (successfully).

Moralist yapping about “the right to choose” is off the board. The only good result for Ukraine and Ukrainians is a negotiated settlement. The West egged them on and left them to swing, as the smart people said they would.

This video, predicting this situation in 2015, is pretty much required watching.

As for the economic consequences for Russia due to sanctions, it depends on what they are. If they are stopped from selling oil, natural gas, and wheat to the West, that will hurt. Sanctions less severe than that will be painful, but not crippling.

The problem here is China. For the last six years or so, the US has declared that China is an enemy. They used sanctions to cripple the most important tech company in China, Huawei, and have slapped sanctions and tariffs on China.

Chinese leadership sees a confrontation with the US as inevitable. They had hoped to keep good relations with Europe, but European countries have bowed to US pressure to shut out Huawei based on jingoistic claims that “they’ll spy on you,” which is hilarious. “Instead of us being able to see all your info, the Chinese will!”

China needs Russia’s resources: oil, wheat, and minerals. They know that they can be cut off from most other sources, but because of geography, and because Russia needs China, Russia is a safe supplier. In turn, China can let Russia into their SWIFT equivalent, finance them, and sell that almost every manufactured good they need, with a few exceptions (primarily semiconductor based, but China’s working on that).

Further, to let Russia fall would mean that China would be encircled. The CCP isn’t that stupid.

Basically, the West wants to use sanctions to “choke out” Russia, but China believes the West will then want to use sanctions to choke them out. If they let Russia go down, they’re next (they’re next either way, really, but they can have a major ally or not).

What the US has succeeded in doing is making Europe choose to turn their back not just on Russia, but, inevitably, on China as well.

This is a strong cold war coalition (Cold War is our future, as I have been saying for about four years now), but notice that it is not as strong as the previous cold war, because China is now the primary manufacturing power and the most populous nation, not the US.

Most of Africa, the Middle East, and South America is staying out of this. Even India refused to vote against Russia in the Security Council. Three of the four gulf states refused to vote against Russia, and, in the UN general assembly, the West is struggling to get 50 percent to vote against Russia.

In the West, we have a huge propaganda bubble going on — “Russia is the worst ever, blah, blah, blah.” What they have done is certainly a crime, but no one outside the bubble can take American and European whinging seriously; they remember Iraq, and Libya, and know that the US still occupies Syrian oil fields, while US ally Saudi Arabia bombs the hell out of Yemen, and Israel has annexed land from neighbouring states (supposedly Russia’s great crime).

Russia has done something bad, but this is not about morality. It is about power. Only the US and its allies are supposed to be able to do what Russia is doing, and people outside the Western bubble recognize this hypocrisy.

The Chinese Embassy in Russia tweeted this:

Indians I follow are noting that Russia has been a firm friend to India since independence, and that the US and Europe have not been.

So the question here is whether or not Russia gets drawn into a guerilla quagmire. If it doesn’t, the question then becomes: How hard will the sanctions hit? In the medium to long term, this leads down the road to two separate economic and political regions and a new cold war, as I have been stating for years.

Despite the hysteria, nothing here is surprising. Russia asked for Ukraine as neutral and security guarantees, and didn’t get them. So they invaded, exactly as I wrote (in advance) was likely. Measheimer predicted this in 2015 (video above), and George Kennan, the architect of the Cold War containment policy, noted that NATO expansion would lead to this back in the 90s.

Russia is not Iraq. It is not Iran. It is not Venezuela. It is not Libya. It cannot be treated as minor state who can be choked out by the West at the West’s whim, especially not when the US has been stupid enough to tell China it is also an enemy.

Even in realpolitik terms, telling both Russia and China they are your enemy, at the same time, is breathtakingly stupid.

If you want the best for Ukraine, hope they negotiate soon. The longer they wait, the weaker their negotiating position. The best case for Ukraine is now (as it was three months ago) an Austrian-style neutrality agreement. There will be overflights and inspections, but that’s just how it’s going to be.

The world, outside the West and some of its closest allies, is not in hysteria about this. They recognize it’s aggressive war, but they do not see that what Russia has done is worse than American and European behavior over the last 20 years. Indeed, at least so far, and unless the US gets its wish for a guerilla quagmire, this is not nearly as bad as Iraq.

So relax and take a deep breath. This is bad, and there is a tiny chance of a miscalculation that will kill us all in nuclear armageddon. But, mostly, this is just geopolitics playing out as anyone with sense knew it would. The US has split Europe from Russia — and soon China and Russia will be strong allies, and a new cold war will occur, though how soon this will be crystal clear to everyone is, well, unclear.

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