Category: The Twilight of Neoliberalism Page 3 of 11

So, if at first, or second, or third, or tenth you don’t succeed, try try again. The Netherlands, under heavy pressure, has canceled already approved sales of ASML lithography machines to China.

The leadership of ASML had resisted these sanctions because they said it wouldn’t work: what would happen is that China would learn how to make the machines themselves.

What he didn’t say, but it is true, is that ASML would not just lose the Chinese market, they would eventually lose the world market anywhere that didn’t put high tariffs on China or ban Chinese ASML machines, because when China learns how to make their own they will inevitably be cheaper, and the quality will catch up at some point.

Sanctions work on weak nations. They do not work on strong nations, or on nations which have strong friends. Russia sanctions might have worked if China and India and most of the South had gone along, but since China was never going to let Russia be destroyed, and since Russia produces all the fuel and food and most of the minerals it needs, plus still has a fair bit of advanced and heavy industry, especially arms manufacturing, it was never going to happen.

Sanctions against China are insanity. All they do is accelerate local production.

The thing is that before the sanctions most Chinese majors preferred US or South Korean designed chips. They were considered better and more reliable. Executives would not buy Chinese chips, even when they were available.

But when the US first launched its chip sanctions they were clearly trying to take out Huawei, one of China’s largest companies.

Being reliant on western chips went from the safe choice to the insanely risky choice and China, both private and public, spent vast sums and made huge efforts to build their own chip industry (including lithography machines are alternatives.)

There was a small window to turn this around when Biden was elected, but he doubled down on sanctions.

This needs, I think, some unpacking.

I don’t like to reach for arguments are about racism, but there’s a weird assumption in the Western ruling class that the West is just superior to everyone else: that our technological lead was somehow innate and inevitable and eternal.

Given that China had the tech lead over the entire world for a couple thousand years (or may 1,500 before which it was India or Ancient Greece and before that it was always Mesopotamia or Egypt) this seems strange. Europe took the tech lead for complicated reasons, both China screwing up and European events which were historically contingent and mostly not planned.

(This is a reader supported Blog. Your subscriptions and donations make it possible for me to continue writing, and this is my annual fundraiser, which will determine how much I write next year. Please subscribe or donate if you can.)

A full discussion is beyond the scope of this article (and fills many many books) but “Why Europe and not China” is its own genre.

But nobody with any sense thought it was because Europeans or those of European descent are innately superior to Chinese.

I’m a broken record on this, but where the industrial base goes, the tech lead goes, at least in the industrial era. Pre-industrial it’s a bit more complicated, but it’s not an awful guideline, the exceptions tend to be transient, but they do exist (the ancient Greeks were insanely advanced) and they tend to occur where there are is a group of constantly competing small nations, which is the over-simplified explanation for European pre-industrial revolution technological advancement and also explains the massive leaps China took during warring states periods.

But if you don’t have a forced competition between near equals who know they can’t sit still or a genuine breakthrough (the industrial revolution) or both, then the more normal processes mean that where the industrial base is, so goes the tech.

Now, sanctions against China would make sense IF and only IF, you were going to take advantage of them immediately. In other words, go to war or make really radical changes to try and re-industrialized.

How radical? Well, my estimate is that if the US wants to re-industrialize it needs to drop housing and rental prices by about two-thirds, and forbid all excess profits on any product which isn’t new, say less than ten years old (and a new model is not new. Smarthone producers should have been allowed to gouge on smartphone prices for ten years after the first iPhone, for example.) No food gouging, no pharma-price gouging on medicines decades old, and so on.

The US (and Europe) need a crash, not in living standards, but in price structures. That means the people at the top need to become a lot less rich, very very fast. Social welfare isn’t a problem, actually, letting ordinary people have a backup so they can take risks and start new companies is a good thing, and so is forcing companies to really compete for employees. Tech advancement and economic growth was far better in periods with when the US had more generous welfare systems.

Obviously these policies are extremely radical, and equally obviously, America isn’t going to pursue them, so anti-China sanctions are basically pointless and actually accelerate their tech progress.

China now has the lead in more techs than not. That’s not going to change: it’s going to get worse. When the US sent its industrial base to China that became inevitable because all “end of history” bullshit was, in fact, bullshit. Capitalism doesn’t require representative democracy and neither does fast technological progress. (It doesn’t need capitalism, per se, either, but that’s the only solution we know and it was necessary for China to do capitalism to get the industrial base transfer. Also, again, another book sized topic.)

Anyway, again, anti-China or Russia sanctions increase the speed with which they catch up in tech, not decrease it. The Russia sanctions could have been justified if they let Ukraine win, but obviously they didn’t, and it should have been obvious at the time they wouldn’t because of China’s very good reason for not allowing them to work.

Our leaders, still only good at making themselves richer, worthless for all other purposes. And, in the end, the policies they pursued to make themselves rich will just turn them into the people running shithole countries which don’t much matter.

SUBSCRIBE OR DONATE

What Was Important In 2023

By Ian Welsh

On January 2, 2024

Comments

From most to least.

Climate Change Tipping Point

2023 is the year when climate change appears to have moved from linear to self-reinforcing in a big way. This was the tipping point many of us have been waiting for. Because of how movement between points of stability works, it may flip back and forth a few times, but this is the future. We had 30C weather in the middle of southern winter. Droughts. Vast forest fires. Way less ice in the arctic than their should have been, and so on.

I suspect that the point where we could stop climate change with anything short of massive geo-engineering (and I am not endorsing geo-engineering) is now past. Before, the problem was politics. Now it’s physics, chemistry and biology.

As I always note, environmental collapse is just as important, and 2023 also so a collapse of Alaska fisheries and continued degradation of coral reefs, insects, birds, and pretty much everything else.

Climate change and environmental collapse, when historians look back at this period, will be seen to outweigh everything else by a couple magnitudes, at least. Everything else is a footnote, except in in in understanding how it contributed.

Covid Continues And Long Covid Numbers Keep Moving Up

Yeah, almost no one’s paying attention, but a pandemic which is also mass disabling event and which we’ve given up even trying is one of those brute facts which matters whether you believe it does or not.

Huawei and China Handle the US/Euro Sanctions

All those chip sanctions didn’t stop Huawei in the end. They made a top end phone. China became better and better at making their own chips, and even the US forcing an end to exports of the best chip lithography machines won’t matter. China is now ahead of the US and Europe in more fields of science and engineering than it is behind in, and catching up fast in those few.

Russia Sanctions didn’t work

Notice a theme here? With the support of China, India, Iran, and the Global “South” Russia did just fine. In fact, sanctions have lead, as they did in China, to increased industrial progress and “teching-up”. Western sanctions also finally forced Russia’s oligarchs to stay at home and invest in Russia.

Russia Sanctions Did Hurt Europe / Europe’s Continued Decline

Lots of energy intensive industry had to move out of Europe over the last couple years, since replacements of Russian energy cost a lot more. Meanwhile the EU is no longer a scientific leader: China, the US, Japan and South Korea are all moving much faster. Europe’s in decline, probably terminal decline, in the sense that there’s no effort being made to do the right things to reverse it. Africa’s rebelling and kicking the French out, since they don’t need France any more as they have China.

BRIC Expansion

The BRICS are now the most important trading bloc. It isn’t close, actually.

Movement Away From the US Dollar

As everyone with half a brain has expected for a long time. Slowly, then quickly. The US dollar is still number one, but a lot of deals are now being cut in other currencies, including for petroleum products. This will continue, and you can discount all the garbage about how it’s impossible. Once it was impossible that the British Pound would be replaced. This will still take some time.

This is, almost 100%, happening so soon because of US sanctions, especially freezing so much Russian money. Money that the US can and will just take away whenever it feels like makes other countries twitchy.

Ukraine Lost The War

Yes, there’s still a lot of shooting to go, but the failure of the counter-offensive and the fact that Russia has more manpower, and that it and its allies can produce far more weapons and munitions than Ukraine and NATO mean the war is lost. It may go one for another couple years, but peace will made on Russian terms at the end. This was predictable day one (and I did) but now it should be obvious to everyone whose job or emotional integrity doesn’t require them to ignore the obvious.

The Gaza War

What’s interesting about this is that Israel isn’t winning. Oh, it’s committing genocide, but it’s not winning. What’s also interesting is that the US can’t bigfoot Yemen, because as I pointed out over a decade ago, the new generation of weapons are cheap and can easily be afforded by and made by third tier powers. A movement as fundamentally weak as the Houthis can tell America to bugger off. Missiles and drones aren’t just weapons of the rich and powerful any more.

Continued Collapse Of American Elite Consensus

The various prosecutions of Trump, all by Democrats, and the efforts to keep him off the ballot indicate America’s elite consensus is breaking down. This is low on the list because it’s just a continuation of previous trends. And no, it wasn’t actually started by Democrats: the theft of the 2000 election (and yes, it was stolen), and the attempted insurrection at the capitol were Republican.

In a way what’s happened is that the Democratic party is finally fighting back. They are no longer willing to just let Republicans do what they want. but Republicans aren’t backing down either, and so the elite is splitting. We’ll see how it plays out, but historically it’s either resolved by someone winning resoundingly and creating a solid new coalition around a shared ideology (FDR, for example) or by civil war.

***

Welcome to 2024. It’s unlikely to be a better year than 2023.

SUBSCRIBE OR DONATE

National Futures In The Age of China & Collapse

By Ian Welsh

On December 19, 2023

Comments

The baseline is that China is now the dominant economic power: the greatest great power. This is not evident to everyone yet, it will be soon. They produce more science, are ahead in most technological areas and have the largest industrial base. I’ve written about this plenty, so I’ll leave it at that.

The next baseline is that we have three onrushing issues: climate change, ecological collapse and running out of various resources. The third isn’t obvious to most people yet, but it will be. China has won the lead horse position on a style of life and economy which is genuinely unsustainable, in the sense that continuing to run our economies on planned obsolesence: building lots of stuff to just throw it out in a few years, cannot be sustained because it’s destroying the conditions which allow for human life and a predictable economy.

This doesn’t mean that taking lead horse isn’t useful to China: if they have sense they can use all that industrial capacity and scientific and engineering expertise to speed thru the necessary transition. So far they aren’t, beyond some steps towards the renewable electrical economy, which is necessary but insufficient.

To put it simply, civilization collapse is on the way. Everyone is going to be hit by it, even China and America. I’d expect China to hold on longer than most, unless there’s an early inundation of their croplands in the North, but by 2070 to 80 at the latest, China will be in warlordism again.

However, let’s run thru some shorter term notes about various nations.

Europe is in terminal decline. Maybe a few parts will avoid this, but they are no longer leaders in new science and engineering (China, the US, Japan and South Korea are all ahead of them) and are losing their industrial base because of their high input costs, primarily energy. Making Russia their enemy is costing them their legacy heavy industry, since American energy costs much more than Russian.

Of the major European countries, the UK is in fastest decline, since they sold all their industry long ago and decided to try and live off finance but the entire subcontinent is moving back to its usual place in Eureasian affairs: a backwater.

India isn’t going to make it. Sorry, too many internal problems, too little time. To much corruption and the authoritarianism is clumsy and stupid (there is smart authoritarianism, India is not practicing it) and climate change is going to hit India fairly hard and early. But overall, the signs of takeoff aren’t there, and there isn’t enough time. India will be broken up by 2050 to 2060 and 2035 to 40 is entirely possible: when they have real crop failure, they will have famines which kill hundreds of millions and cause vast violence and displacements. And they are going to have vast crop failure.

South Korea and Japan are the American allies which actually matter. Everyone else is meaningless. These two countries still have industrial bases and fast scientific and engineering advancement. In per capita terms South Korea is first in the world, Japan is second. For now they’re fairly firmly on the US side, but if China is smart and willing to cut them a good deal and they’re smart, they make their peace with the other side. The sooner they do this, the better deal they’ll get.

Russia was done a vast favor by western sanctions, which have forced its oligarchs to actually spend money at home and which has allowed Putin to create new oligarchs based on seized western assets. No more wasting money on British football teams. The Russians are working hard on civilian aviation, they’ve vastly increased their military industrial output and in general sanctions have forced them into industrial policy. Their risk is being swamped by China, and they will have to be smart and cut deals where China lets them keep and extend certain industries.

Saudi Arabia and the oilarchies are screwed. They’ll have their little days in the sun, but they have no real industry or research and aren’t going to be able to ramp up enough. As the age of oil ends, and it is, they will fall into well-earned obscurity and meaninglessness. The only one which stands a chance is Iran, since sanctions forced it to create its own industries. As with Russia and pretty much everyone else, they’ll have to cut a deal with China to keep and extend that industry, but as early allies, that’s easily doable if neither they nor the Chinese get too stupid.

The Developing Nations have a window in which to cut good deals with China. I wrote an entire article on how to cut good deals with China, so I’ll leave it at that. If they don’t, well, the new order will still be more friendly than the late neoliberal order, but most such nations are not in a position to handle climate change and ecological collapse well. It’s going to be ugly. That said, for a few, there will be an opportunity to come out the other side comparatively much better off.

Overall we are moving into a period like that from 1914 to 45 or any other major power reset: the old power is falling, the new power has risen. America was actually ahead of Britain by 1890, and it took quite a while for the British to fall, but this isn’t an exact analogy, because in this case the old and new powers are in conflict and there is an onrushing global near-apocalypse.

There’s only so much time left before everything starts falling apart in ways which can’t be ignored. Smart nations and smart people will use that time to prepare.

SUBSCRIBE OR DONATE

Notes On The Structure Of American Imperial Collapse (State of the World 2023, #1)

By Ian Welsh

On October 31, 2023

Comments

The American empire is now in essentially unstoppable decline. Certainly there are things that could be done to stop it, but they will not be done, much as the British had to avoid WWI and not take profits by sending industry to the US.

(This is the first article on the state of the world, as promised in last year’s fundraiser.)

Everyone knows about comparative advantage, but what doesn’t get talked about is absolute advantage. In absolute advantage you have something people need that they can only get from you.

This can be weapons. It can be jets. It can be advanced computers. It can be the capital equipment (like lithography machines used to create semiconductors) used to make other things. Sometimes it can be a resource, like oil.

The USSR was competitive with the America and its satrapies when it could still offer most of what other nations wanted. They could shop at the West store or the USSR store and get jets and weapons and dams and electrical networks and so on. By the 70s this had started to come apart, and in the 80s their failure at microcomputers was starting to really hurt, plus their domestic economy was in serious trouble.

So from somewhere in the late 70s to early 80s, and certainly after the collapse of the USSR, if you wanted jets, good weapons, computers, internet and so on, you had to go to the US and its allies: or rather, its satraps. There were American jets, or there were European (Airbus) jets, and so on.

Starting in the 80s, but really taking off in the 90s, China began to really industrialize in the standard way: start at the bottom of the chain and sell to the West. They moved up the chain very fast.

For example:

Huawei and ZTE are both Chinese.

The numbers above are worse than they look, because Huawei 5G is banned in much of the West. So really, Huawei is dominant in much of the developing world (the South.)

China now has a domestic jet industry. It isn’t quite up to snuff, but within ten years it will be. The latest Huawei phone, post sanctions, was made with domestic chips and outperforms Apple and Samsung on some important metrics.

So, let’s move to the important charts. The world in 1990, right after the collapse of the USSR.

The world in 2020:

China is more dominant than the US was in its prime. (Well maybe not in 1946.)

Now this sort of thing is a leading indicator. Countries who were dominant are able to control more of the world’s resources than they deserve for some time after they lose their dominance.

Be clear, the US has LOST its dominance already. It’s all over except for the shooting. It doesn’t look or feel like that because of generations of accumulation and because the dollar is used for most world trade.

But those are lagging indicators. Britain’s pound was the main instrument of trade for decades after the US had overtaken it industrially.

This time it’s going to happen faster, because the US has abused its central position in financial networks in ways other countries, like Russia and China won’t tolerate.

Now, understand clearly, Western prosperity is based on commanding more of the world’s resources because everyone had to get what they needed from the US and its satrap (well, and the whole imperialism and military thing, but that’s another article.)

Since China now offers almost everything the West does, at better terms, they will come to command those resources. It’s that simple, though that doesn’t mean the road will be smooth. This will be an Age of War and Revolution, and civilization collapse, especially as this isn’t a normal changeover because of climate change and ecological collapse.

Within the West we are already seeing the US cannibalizing its satrapies. Germany had to have cheap oil and natural gas to run its industry and European patents are lagging, badly. Europe’s garden will go, and go relatively quickly. The Chinese will dominate the EV market, eat Airbus and Boeing alive and bypass European control of the machines which make semiconductors.

The main industry the West seems to still have a dominant lead in is biotech, but the Chinese will get there.

Japan and South Korea will do better because both are keeping up in scientific innovation, but my bet is that South Korea will peel off into the Chinese sphere at some point, economically they already have. I’m less sure about Japan, but they’d be wise to do so.

As for Europe, well, for twenty years I’ve been warning them they had to regain their independence and forge their own path. Most of Eastern Europe should never have been allowed into the EU or NATO. The EU should have built its own army and left NATO. And yeah, they should have done everything necessary to keep good ties with Russia, which would have been easy, because until fairly recently Russia wanted to be a European nation.

They did none of this, their rate of scientific advancement is abysmal outside of a few areas and they’re toast.

Donors and subscribers make it possible for me to write, so if you value my writing, please DONATE or SUBSCRIBE

The End Of The Post-War & Post-Soviet Eras

By Ian Welsh

On August 25, 2023

Comments

So…

The BRICS group of nations has decided to invite six countries – Argentina, Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates

BRICS already included Brazil, Russia, India, China and South Africa.

The era isn’t over yet, but when you consider that US/European sanctions against Russia failed to gain much support from India, China, and almost all of Africa and South America, it’s clear that US/West is down to its core again: the EU, Canada, Australia, New Zealand, Japan, Taiwan and South Korea. These are all either core West states or their key “uplifts” — the nations they let into the club and industrialized.

This leads to the new cold war, which everyone has noticed now, and has the world’s greatest industrial power, China, on the other side. Ironically the most important nations on the West’s side, other than the US, are South Korea and Japan, which remain technological powerhouses, while Europe is coasting on legacy technology and failing to advance compared to China, the US, Japan and South Korea (more or less in that order.)

The majority of trade, about 90%, still uses the dollar, but dollar reserves are at their lowest since the fall of the USSR, and will continue to fall, as the freezing of Russia’s dollar reserves (which will probably be seized in the end) and the massive sanctions have made it clear that dollars are only useful if you don’t cross America, and many nations, including China, know that’s only a matter of time.

Bilateral trade using local currencies will continue to increase, as will trade using the Yuan.

All Empires end, as do all eras. Neoliberalism is dying, the US world order is dying and the unipolar era is dead. A new multipolar era is upon us.

These are all good things, more than bad, for most of the world’s population as the post-Soviet order was used to crush countries the US disapproved of under horrid neoliberal austerity policies. That doesn’t mean the new era will feel good, or even be good: that’s not possible with our environmental problems, and the onrushing civilization collapse, but at least countries will increasingly be able to do what they feel is good for them and their citizens without the IMF and US/EU sanctions crushing them.

Folks, it’s your donations and subscriptions which make it possible for me to keep writing (since I need to eat and pay rent and the cost of both have skyrocketed) so please (if you aren’t struggling) DONATE or SUBSCRIBE.

The Distributed Nature Of Collapse

By Ian Welsh

On July 26, 2023

Comments

When the western world sanctioned Russia they expected Russia to collapse. It didn’t. The first reason is that most of the non-western world didn’t cooperate with the sanctions, but the second is simple: Russia has a food and fuel and mineral surplus.

The world as it stands now is every inter-dependent. The supply networks are dizzyingly complex and a final item like a car is made up of materials and parts extracted, made and assembled in dozens of locations.

The world isn’t always this way: it was like this in the late 19th, but after WWI that changed and the era of free trade ended, collapsing in particular during the Great Depression. The world did not become as “free trade” as it was before WWI again till the early 21st century.

But we are in a period of collapse. The peak, I would guess, will be seen to have been 2020, though different parts of the world economy will peak at different points (peak conventional oil was 2005, fracking and shale oil is not as good.) There will be water peaks, food peaks, peaks for various minerals like copper and so on. There will be a population peak, which will occur after a lot of other peaks. One model, which has been pretty accurate in general terms, is the Limits of Growth model, which regular readers will be familiar with:

Now the thing to understand is that as resources become genuinely scarce rather than simply distributionally scarce (we have more than enough food and have for a long time but people still go hungry) countries will stop trading away what they need and will move to more restricted trade. “We have excess food, you have excess minerals, we will trade with you for this, but we are not selling food generally on the world market to just anyone.”

In periods of genuine shortages, countries stop trading indiscriminately. Food riots are one of the main causes of government collapse and elites losing their lives. Running out of heating or cooling fuel or fuel to run the distribution network (diesel is probably near peak) can lead to fast internal collapse, and so on.

So when there isn’t enough, you stop playing around. You don’t trade unless you’re getting something concrete you need. If you need something, don’t have enough of it and either can’t or would rather not trade for it and still can run your military, you send your military to go get it. (This will become harder and harder though, as modern militaries are resource hogs.)

We’ve had a world economy for a long time now: most of the world since 45, virtually all of the world since the collapse of the USSR (and even before that the USSR, which had food shortages and petroleum to sell, was in the world market.)

Increasingly we will not. Some of this is driven, right now, by competition between the West (which includes S. Korea, Japan and Taiwan) and China, but even much of that is, I suspect, shortages in drag. Soon it will just be “there isn’t enough, who is going to get it?”

Take a good hard look at where you live and what it can make and grow and dig up itself, and how well it can be defended. Because that is going to matter even more in the not-so-far future.

This is a donor supported site, so if you value the writing, please DONATE or SUBSCRIBE.

Pax Americana Is A Zombie

By Ian Welsh

On June 23, 2023

Comments

On May 16th 2022 I wrote an article on who would win and lose from the Ukraine war. Summarizing, the big loser was obviously Ukraine. Even if they “win” they’ve lost millions of population who are never coming back and odds are they’re going to lose a chunk of their country on top of that.

Europe loses because of the economic effects: industry fleeing Europe to the US. They get some increased unity, but in a world where Europe is already in decline, this is a loss.

Russia I said would be about a draw: they’ll get some land, but Sweden and Finland joining NATO and the EU firmly set in place as US satrapies isn’t good for them.

The US—, well, I’ll quote myself.

The final major effect for the US is that freezing Russian reserves and encouraging the massive level of sanctions, is seen by most of the world as evidence it’s not safe to keep money in the US lead banking system, or even to trade with them. This has accelerated de-dollarization and I suspect will be seen as the precipitating event of losing reserve status for the American dollar. The world will split into two financial blocs, one centered around China-Russia, the other around the US-EU. The US receives huge benefits from reserve status and from being at the center of the world financial system, and as with Britain after WWI, it will suffer mightily when it loses this position.

My evaluation is that what the US will likely gain from the Ukraine war is less than it has or will lose: dollar hegemony and being the financial center of the world are a big deal, and confirming Russia as a junior Chinese ally makes their main geopolitical rival far stronger.

It’s clear this is happening. Multiple nations joining the BRICS; ASEAN creating its own trading currency; oil being sold in Yuan, and so on.

The US and the West in general had a BIG GUN. That big gun was going all out on sanctions, using their central position in the world monetary and trade system as a weapon. The US had been using this position coercively ever since WWII, but it really ramped up under Clinton and each President thereafter doubled down. Nations were genuinely scared of this power, seeing what it did Iran and Cuba and Venezuela and so on.

But the world changed. China became the most powerful manufacturing power. Russia recovered somewhat and became a huge net resource producer, including of food. The late USSR couldn’t feed itself, Russia can. China became the main trading partner for almost every nation in South America and Africa. The US declared China its main enemy, and China looked at the US and saw it was vulnerable to a blockade.

And so the sanctions failed, because China and most of the non-Western world, including India, didn’t cooperate.

The BIG GUN had been fired. The one everyone was scared of. And not only didn’t it work, the blowback damaged Europe.

It did damage Russia somewhat, but by not taking Russia out it showed that one could leave the system without being destroyed. And so that’s what’s happening.

Meanwhile, as inflation (largely from Covid, but much from the war) shuddered through the West, the US raised interest rates massively. This caused all the countries who owed money in US dollars extreme harm.

Being exposed to the US dollar was clearly a liability. A big one. Going off the dollar used to seem insurmountable but Russia had gone off it and while it lost a bit of GDP, basically done OK, because China and other countries supported it.

And if Russia could do it, well, so could other nations.

And so they are.

As for America, it reminds me of a 60 year old who still thinks he’s 40 and in training. “I can take him!” This isn’t the America of 1950, or 1990 or even 2000. This is a weak America, visibly become weaker.

Nobody likes America. Not even the Brits (outside their elites, who like America the way a poodle likes its owner.) Everybody was terrified of America.

Now a lot of them are only scared. And when you’re only scared, not terrified, you take action to protect yourself against whomever you’re scared by.

So, I have to say that I’m moving America from the “slight loss” column over to the big loss. It’ll take longer than Ukraine to be obvious, but the train is in motion and it isn’t stopping. Pax Americana is a zombie; it’s still shuffling along, but it’s functionally dead and only waiting for decay to reduce it to a shambling heap.

This is a donor supported site, so if you value the writing, please DONATE or SUBSCRIBE

Bruno Macaes On Putin And The World Order

By Ian Welsh

On May 31, 2023

Comments

Macaes was a Portuguese minister and is now a member of the European Council of Foreign relations. He’s written a few books and at least two of them, on the Belt and Road and on Eurasia in general are insightful, though Bruno is definitely a Eurocrat who sometimes struggles to see the world without Eurocrat lenses. This is particularly true when it comes to Russia (remembering that these books were written before Ukraine, which he did not predict) but there are some points where Macaes “gets it.”

This is primarily when it comes to Putin’s views of the international order:

Putin doesn’t think along national lines. In thinks in terms of larger blocs, and ultimately, in terms of the world order… You cannot resist the pressures that come from the world order. So either the world order will come to mirror some elements of the contemporary Russian regime or Russia will mirror the liberal, Western political order.

Notice how Russia is called a regime. It’s a small tell, but a tell.

Later, on, the European view (where Macaes is an insider):

The Brussels bureaucracy has a very simple theory of the world. States are captured by special interests, but they may reform if there is pressure from the outside. If they do, they will certainly prosper.

Obviously the Europeans see the “outside” as them, with an assist, perhaps, from the US. They don’t seem to have noticed that Europe has been in economic stagnation for some time, or consider that perhaps they are captured by special interests also. Macaes does later on touch on European subjugation to the US, but never really deals with it squarely.

But bottom line this is “we are the reasonable people with the right laws and regulations and way of doing things and you all should do what we say, and we will pressure you to do so.”

Europe knows best.

Back to Russia (somewhat paraphrased)

1) There are no neutral, universal rules. Neutrality is only a pretnse aimed at deceiving others. The benefits of globalization are unevenly distributed because rules are made by those with power to make them.

2) International politics is an arena of permanent rivalry and conflict.

This is, of course, similar to the first quote. The “rule based” international order is just the set of rules and institutions set up by those who had the most power, and the rules were set up to benefit those who had the power.

I don’t see how any of this could be controversial, though there are limits to it. The US did deliberately offshore its industry, for example, and this started after WWII to build up Europe, Japan and South Korea as strategic allies. When neoliberalism came to power, they then started offshoring it to what more clear-eyed people saw was a potential rival: China, because elites wanted short term profits.

But generally speaking the rules of the world order benefit the US and its satrapies like Japan, the EU nations, Canada, Australia, South Korea and so on. This was intentional and intended and anyone who thinks otherwise is nearly a candidate for an insane asylum their denial of reality is so strong.

It is the Europeans who are living in a fool’s paradise, thinking, forgive the expression, that their shit doesn’t stink and that they are mostly driven by pure motives: that their system works and is a universal model and that they have the right and duty to force it on others.

One could say the same for the Americans, except that more of the smarter ones know they’re hypocrites.

This nonsense was epitomized by Fukuyama’s “The End of History” which anyone with a lick of sense and the most minimal knowledge of history knew was absolute bullshit. But it was the bullshit that Western elites wanted to hear: they had won, their victory was eternal and everyone else would inevitably, in a pseudo-Marxist historical inevitability way, become like them.

So you could give the Chinese your industry and get filthy rich doing so and it wouldn’t matter because they were going to become a liberal capitalist democracy. There would only be one elite, a transnational one, and its enemy was its own population, not other members of the elite, no matter where they lived.

Now to be fair to Macaes he’s clearly anti-Fukuyama and by the time he wrote these books he could clearly see that obviously Capitalism and Democracy were not the same thing.

But this isn’t really about Macaes, it’s about differing views of the world order.

The West thinks, or among the more self-aware elites pretends to think that they have created a neutral world order they just happened to win, or, in more sophisticated terms, in which they had a first mover advantage, but which is basically fair.

Putin, and though it’s not dealt with here, China, plus most of the developing world see this as absolute bullshit: the world order is just the rules made by the strongest and enforced by them with their financial, economic and military might.

This is why Russia has often said that any real negotiations must be with the US. Not the Ukraine, not even with the EU, but with the US, because they are the ones who make the rules and they are the ones who decide on NATO policy. It is why the real negotiations have included the Chinese, because the Chinese are the coming superpower. It’s why China was able to make peace between Iran and Saudi Arabia: again, because China is genuinely powerful.

Putin, at least in relation to international politics, lives in the real world, not in some Fukuyama fairy-land. Seen from that point of view his actions become more understandable: to let the West continue to push NATO towards Russia and to succeed in its color revolutions and coups, is to acquiesce to a world in which Russia must be second rate at best, because none of Russia’s preferences for how the world order is set up are not implemented. Russia doesn’t need almost everything, nor does Putin believe Russia can get everything: if you want that you have to be as powerful as the US after the fall of the USSR or like the British empire at its peak.

But if Russia can’t get even the things that are most important to it, like Ukraine neutral and not in NATO, then the negotiations have to be changed: they have to become kinetic, to use the modern speak. A test of power is necessary: is the West powerful enough to impose its will or not?

And that is what is being determined in the Ukraine: can the US still just force Russia to accept what the US wants or not? Does the US still run the world order? It’s one reason why the Chinese, ultimately, are supporting Russia, because they agree about the shape of the world order. And it’s why the US and the EU have spent so much supporting Ukraine. Because this is a test and neither side feels it can afford to lose, for if it does, its preferences for world order take a huge hit: it shows that it doesn’t actually have enough power to enforce its will to the extent it desires.

For the US that is that Russia be a “gas station with nukes” at most and preferably be broken up, “de-colonized.” For Russia it is that a military alliance aimed at it can’t push further against its borders, and that its allies or satrapies can’t just be taken away (as Libya and Ukraine were) without great cost.

In the real world you get what you have the power to get. It shouldn’t be that way, but that’s how it is, at least for the time being. Perhaps we’ll change that at some point in our history, but it is the way the US and Europe have lived, it is how they rose to power and it is how they have retained their power. To say “no more war now that we’ve won the major wars and made the world in our image” is laughable.

Putin is just playing their game, because it’s the only game.

Donors and subscribers make it possible for me to write, so if you value this writing, please DONATE or SUBSCRIBE

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

Category: The Twilight of Neoliberalism Page 3 of 11

The Anti-China Chip Jeremiad Is The Stupidest Policy Imaginable

What Was Important In 2023

National Futures In The Age of China & Collapse

Notes On The Structure Of American Imperial Collapse (State of the World 2023, #1)

The End Of The Post-War & Post-Soviet Eras

The Distributed Nature Of Collapse

Pax Americana Is A Zombie

Bruno Macaes On Putin And The World Order