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

Category: The Twilight of Neoliberalism Page 4 of 11

China Helps Bring An End To Yemen War

So, back on March 16th I wrote an article about the Chinese brokered Iran-Saudi Arabia peace deal. At the end of the article I wrote:

I am most interested to see if this will mean some sort of peace can be worked out in Yemen, or if it means the Iranians will abandon the Houthis, which would be sad.

Turns out peace with Yemen was almost certainly part of the deal:

Saudi Arabia has decided to end the war in Yemen . A Saudi delegation will travel to Sana’a next week to conclude an agreement with Yemen, Reuters reported

I suppose it’s a little early to be sure the war will end, but it seems very likely and this wouldn’t have happened without China. The US helped Saudi Arabia bomb the hell out of Yemen and cause a massive famine: China helped bring peace.

This is part of a massive realignment happening right now.

The number of states that are planning to join BRICS and Shanghai Cooperation Organization (SCO) increased significantly last year, about 20 countries want to join…

Among them are Turkey, Mexico, Indonesia, Argentina, Saudi Arabia, the UAE, Egypt and a number of other African countries.

China will now be the most important member of the most important economic organizations in the world, other than the WTO and perhaps the IMF, though the IMF is going to be increasingly sidelined, because loans from the IMF always come with horrible conditions and more and more there will be other alternatives.

China is the biggest trade partner for almost every nation in Africa and South America already, so this realignment only makes sense. Those expecting the US to remain the center of the economic world when it was no longer the most important economy in the world were always fools.

I suspect a some of this is also due to freeing up Russian gas and oil for sale to non-European buyers. Again, the locus moves away from the West to the non-West.

China may not be the most important country in the world yet, but it’s only a matter of time absent war or some catastrophe stopping them. None of the countries joining ever liked America and China just offers a better deal on almost everything from loans to goods to IP.

The sun is near the horizon for the American Empire as world hegemon and the opposing bloc in the new bipolar world will be economically stronger than America’s bloc.


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Why America Will Probably Lose The New Cold War

China’s support (along with India and various other nations) makes it impossible to take out Russia with sanctions, just as Russia’s support makes it impossible to take out China with sanctions or blockade.

The fundamental issue here is the West still thinks it’s 2000 — that China isn’t the major industrial power & that Russia isn’t a fuel, mineral and food exporter. The West isn’t /needed/. For a long time you could only get things you had to have from the West.

The West is trying to use sanctions against both China and Russia, and they aren’t working. What they are doing is speeding up the end of the Western world order by forcing faster independence and bloc formation. The quick Chinese progress on semiconductors and airplanes show this backfiring.

So what’s the endgame? A new cold war in which most of Africa the middle east and S.America are aligned with China/Russia and thus a bloc which has more manufacturing AND more resources. Pure insanity. China just gives southern nations not close to it a better deal than the West does and is their major trade partner, and they will align with it.

This isn’t a moral argument, this is purely about capability and resources. In the Cold War the West always had more. In Cold War 2.0 the West will have less. (This is also why the EU has chosen the wrong side. They should have tried for independence and third pole status. Still should.)

Part of this is because of essentialist cultural bullshit. We think our culture is superior to Russia’s and China’s and that’s why we won. But standard great power analysis is that the USSR had the inferior position and was bound to lose.

Our “system” is a subset of our culture, not the other way around but what made the West dominant was not “capitalism” it was being first to scale with industrial technology and keeping that advantage for a long time. Even if it was capitalism, well everybody is capitalist now, though the culture which comes dominant out of the oncoming dark age will be the one which finds the best alternative to capitalism or which finds the next production revolution which doesn’t destroy world carrying capacity.

The West, which included the USSR, was dominant for about two centuries because of an absolute advantage in production: the industrial revolution, combined with superior tech made possible by the industrial revolution. An absolute advantage is something you can do, that your enemy can’t, that makes you absolutely superior to them. (Nukes against a non-nuke nation are another example.)

The Mongols had an absolute advantage militarily for a long time and were only really defeated when other nations figured out how to use their methods against them: the first to do so were the Egyptian Mamalukes.

Every absolute advantage system ends. Either someone else learns how to do it too, or they find a counter.

Some absolute advantage systems are geographically bounded. Roman legions fail in steppes even against horse archers without stirrups. (Crassus says “oh no!”)

Steam/petrochemical/industrial was a time bounded advantage. Someone outside the club was bound to manage it eventually. China did because we deliberately helped them out of short-sighted greed.

Now outside the club should be unpacked. Britain helped both the US and Japan industrialize. The US helped Japan and S. Korea and Taiwan. But all of those nations were brought into the club, in Japan’s case thru force.

Japan got uppity, the US crushed it and it’s now a loyal member of the club, currently doubling defense spending to get ready to fight China. The US could crush it because they were about technologically equal, but the US had more people and resources.

Britain helping the US industrialize lead to Britain losing its world-leading position because the US was a larger nation. The US then thanked them by subjugating them and most of the rest of Western Europe after World War II, adding Eastern Europe after the USSR collapsed.

America helping China industrialize is leading to the US losing its position because China (or more accurately China’s coalition) is larger in the ways that matter.

China might have been made a member of the club IF Russia and most of the non-Western world had been kept on the side of the West/US because US/EU is big. But the rest of the world/Russia was not kept in the US/EU camp.

All of this follows fairly simply from “they have more resources and about equivalent tech” and that’s what matters. Culture and system are important as determinants of ability to tech and mobilize resources. China’s culture and system are very good at that.

One corollary of this is that the “Rest of the World” (aka. non US/EU/Japan/S.Korea or China/Russia) matter. They tilt the playing field. But China gives them a better deal than the West has for a long time, if ever, including more political independence unless nearby.

When historians look back they will see the final decision point for the end of Western hegemony as the Ukraine war. Without Russia, China could be choked out by US naval power. Without China Western sanctions would have crushed Russia. This is the primary axis. But that Africa and South America are mostly going to go with them, and that the Middle Eastern powers will wind up either neutral or in the Chinese/Russia camp also matters: a lot. It gives China the decided resource advantage.

Of course, there were earlier inflection points, but from a pure geopolitical point-of-view the West needed Russia in the club far more than it did Eastern European countries. It got Europe, but Europe won’t outweigh Russia, Africa and South America.

None of this it deny that everyone has problems. For Russia and China it’s a demographic time bomb (though I’m not sure that lower population is entirely a negative, even with an older population). For everyone the joker is climate change and ecological collapse. I wouldn’t be surprised in 50 years if both China and the US have broken up.

But on ordinary dynamics, my judgment is that the West has already lost: the coalition which is forming against them will have more industrial capacity and resources and equivalent tech.

You don’t win that competition.


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Reasons For Hope (1): The Solutions Are Known

Ok, this place has mostly been about how fucked we are, and how we’ve fucked up. Blame is more on our leaders than us, but as a species we’re on the hook.

But there is cause of hope because mostly we know what we have to do.

We know we have to reduce CO2 and Methane emissions. We even know mostly how. We pretend we don’t, because the how will involve changing the economic basis of our societies. Something between forty to fifty percent of our jobs aren’t needed or are actively harmful. People should mostly work from home if they can. We need to outlaw planned obsolesence and get rid of suburbs and exurbs as they currently exist. Everyone and everything needs to prove that it increases biodiversity and communities need to show a CO2/Methane deficit, without cheating and bullshit offsets.

We need to prepare for what’s coming. Solutions include but are not limited to

  • building seawalls
  • moving to renewable resources,
  • rewilding,
  • creating wetlands around vulnerable areas and replanting and rebuilding ecospheres
  • change agriculture to huge hothouses and vertical farming and so on
  • reduce our reliance on meat though not remove it entirely since there are regions that make sense as pasture land
  • Move to regional manufacture of specific items
  • Reduce reliance on large power grids
  • fix our infrastructure
  • replace a lot of our infrastructure with styles that last longer and/or are easier to repair (asphalt and steel-reinforced concrete have to go, fortunately we now know how the Romans created concrete that lasted thousands of years)
  • Fix our air infrastructure to check for CO2 , oxygen and to clean the air
  • Set up systems to allow individual buildings and neighbourhoods to be power and water self-sufficient where possible
  • stop poisoning or overusing our aquifers
  • stop growing water intensive crops we don’t really need in areas that don’t have water (almonds in California)

All of this is fairly basic. The details can be complicated, but we know what must be done and we either have the technology or can develop it.

The hard problem is not the technical stuff, complicated as it may be, the hard problem is the political question. The hard thing is that we have to change how we live and how we organize our societies in fundamental ways.

But we know, generally speaking, what has to be done. And that is cause for reasonable hope, because it means that if we do solve the political problem, we’ll be able to get moving very quickly.

We just, like any addict, have to be willing to actually change, and that means giving up our current way of living.

That’s hard. But it is going to happen. We can do it before we hit bottom, or we can do it the hard way. But we will do it.


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The Red Queen’s Race, Neoliberalism & Why Healthcare Is Being Privatized

Back in the early 2000s I remember reading an interview with Ted Turner, who founded CNN and later sold it. He wasn’t happy with how it was being run so the reporter asked him why he didn’t buy it back.

He explained that he had only a few billion dollars, which meant he wasn’t “in the game” anymore. People mocked him for it, since to a normal person that’s more money than they could ever use, but he was right. He had sold, and now he couldn’t re-buy; prices for key assets like CNN had gone up.

This the basic issue the real players, the mega-rich and the CEOs who run the big companies face. The amount of money that was enough last year isn’t enough this year, let alone in five years. Fall behind and soon you’re out of the game. This doesn’t have to be personal money, just money you control, so if you have effective management control of a company you don’t have ownership control of, you’re in the game, though such people generally reward themselves massively, so they at least aren’t embarassed in front of their peers.

Different oligarchs are competing against each other and so are different groups: tech, finance, manufacturing, military-industrial, etc…  If one gets enough of an advantage, then they buy out the others, and even if you’re still filthy rich, you’re out of the game and nowhere near as powerful as those still in the game.

As everyone knows now, the rich have been taking more and more of pie. The most famous chart is the labor productivity vs. wages one:

Furthermore, the real players have been narrowing: there are fewer and fewer people who are really in the game. Vast waves of consolidation in almost every industry have created oligopolies and monopolies, because those sorts of businesses can squeeze customers. Some games are easier to squeeze than others: healthcare is a famous example as people will pay almost anything to live. There’s a reason Bill Gates is buying up all the farmland he can get, too, with environmental disaster onrushing, he knows that those who control food will (with enough political cover) also clean up.

But at the end of the day, everyone is taking from the same pool: any increase in wealth that doesn’t come from productivity increases has to come from someone else. The rich do take from each other, though they play by the rule that unless you’ve betrayed other elites  you get to stay wealthy, but most of what they take still has to come from the masses.

Unfortunately they’ve been squeezing the masses for 40 to 50 years, maybe a little more. So they have to keep finding new places to squeeze. This is why power has been privatized and de-regulated; why water and sewage is privatized in the UK (and sewage is in the rivers again), and so on.

But in those countries with public health systems (aka. not the US) like Canada and the UK, well, that’s a place where the full squeeze hasn’t been put on. Prices can easily be raised, by moving to the profit maximizing price (insulin at $800, like in the US, and so on), though it means a lot of people will suffer and die.

There’s one last big public heifer to be taken down and consumed, in other words. And if you don’t get in on it, well, your rivals will and they’ll be richer than you, and you stand a good chance of being forced out of the game.

So, with a few exceptions (manufacturing used to be one of them), the elite consensus is to privatize health care. It’s a big cow, sitting there waiting to be chopped up, and if you get a big enough chunk you may be able to buy out some rivals or at least stay in the game.

And in some cases it’s pretty much the last one. In the UK, it’s the only thing of worth the government owns which it hasn’t privatized. So, as everyone understands by now, you deliberately underfund and sabotage it, then call in the private sector because it isn’t working well. The same thing is happening in multiple Canadian provinces, including where I live in Ontario.

And the real players will become fewer and fewer, and if it means that you die or suffer, well, that’s a price the players are willing to pay so they can stay in the game.

As the game narrows, the players will also turn even more on each other. This has already happened with the TransAtlantic elite, who used to more or less cooperate: the US is now feasting on Europe. But then the Germans had been feeding on much of the rest of Europe already. And it’s obvious that Chinese and US elites are moving to a confrontation, and this is driven in great part by the refusal of the CCP to allow anything important in their economy to be controlled by foreigners.

Sadly, there is a real economy, and it is being fantastically mismanaged, not least by allowing the real carrying capacity of the world to collapse. Elites had such a huge pie (to change metaphors) that it usually made more sense to fight over it than to cooperate to grow it more. So we’re at the beginning stages of collapse. There will come a time when the pie starts to shrink in ways no one can deny.

The silver lining, such as it is, is that so much will have been privatized and screwed up that when we finally do get serious about change, assuming we avoid a Dark Age (not a sure thing) we will be able to do things differently, since there will be so little legacy left.

It’s not much of a silver lining, but destruction does make change possible.

 

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The Death Throes Of The World Europe Made

Most people don’t really get just how extensive European conquest of the world was.

The map’s a bit inaccurate over in Russia: most of Russia is “not Europe” and was conquered — most of it should be green, like North America. Likewise, Japan was conquered by the US, which is a European colony. Leaving aside their brutal war crimes, they were stupid to pick a fight with an industrialized continental power: there was never any chance of winning against the US, as Admiral Yamamoto told them.

But the point is fairly simple: Europeans made the modern world. Wiped out almost all the natives in North America; conqured all of Africa and South America, and almost all of Asia. We went around and imposed our form of capitalism. We destroyed local industry, as in India (which was at least as industrialized as England before the conquests) and forced the natives to trade with us on negative terms, the most famous example being the two Opium wars to make China allow the Opium trade, since England had almost nothing else the Chinese wanted to buy.

World War I and II were a competition between the European powers (which include the US, who had by then essentially completely wiped out the natives) and the US and USSR, the peripheral continental powers won the war, divided Europe between them, “de-colonized” and then ruled the world between them till the USSR collapsed, at which point the US got to tell almost everyone what to do and how to do it for a good twenty-plus years.

A few nations managed to sort of resist: Cuba, Venezuela, Iran and North Korea, but they were made to suffer vastly for their defiance.

The era ended, I would argue, when Russia sent troops to Syria. They defied the US directly, and fought, and the US backed down. One could argue for Georgia, but it was on Russia’s border. Syria was an assertion that the US could not overthrow any government it wanted and that it didn’t control the Middle East minus Iran.

But Russia, important as it is, is now a junior ally to China. They have the nukes, but they don’t have the economy to stand up to the West and NATO without China’s support, and they know it. The competition is not really between Russia and NATO or Russia and the Ukraine, but China and the US, even though neither side has anything more than observers on the ground.

The Russians have chosen their side: chosen not to be Europeans but to be Asians. They say this frequently, it’s a deliberate choice. If this century is to be the Asian one, Russia will be Asian. This change from looking to Europe and being essentially European is massive, and it’s what makes it possible for China to win. Losing Russia, with its vast resources and land ties to China makes it nearly impossible to use American sea-power to “choke out” China thru trade interdiction.

The coming cold war, and possible hot war (or a series of proxy wars) with China is about whether a non-European power will be allowed to remake the world Europe made. Everyone recognized that the US was Britain’s heir, ruling indirectly, but ruling nonetheless. It is about a different, non-EuroAmerican elite being powerful: people who don’t believe in exactly the same things as the trans-Atlantic rulers.

It is an existential threat to European rule, and it is being treated as such. The “yellow peril” has arrived.

In 30 years, will Mandarin be the the new English? The new lingua-Franca? The language everyone has to know and that you can, if clumsily, get by on almost everywhere?

Absent a major war, likely nuclear, or civilization collapse, I find it hard to see a scenario where China doesn’t become the most important global power. Oh, they have problems–but so does everyone.  Cries of how they can’t do it because of culture seem weak to me: China was the civilization leader for most of the last 2,000 years, the idea that Chinese culture can’t produce science, music, arts and all the other flowers of civilization is absurd and they’ve certainly been able to adopt our innovations, just as we previously adopted gunpowder and the printing press from them.

Everything ends. We Europeans had our day in the sun (though my Irish ancestors missed most of it) and now the sun sets, as it always does.

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A Map Showing The Two Main Geopolitical Blocs

Yeah, it is mostly this simple:

This is pretty much the map for UN resolutions aimed at Russia, too.

As I’ve noted before the bottom line is that if you are a developing country, China offers cheaper loans and cheaper and faster development work like ports, airports, hospitals, roads, railways, schools and even cities. If you aren’t close to them, they don’t care about your internal politics, either.

I remember reading an interview with a minister of an African state who said approximately, “every time a western minister visits us we get a lecture, every time a Chinese official visits we get a new hospital.”

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As for sanctions, well, everyone’s scared of them, and everyone in that green zone knows that they could be sanctioned at the drop of the hat and that the sanctions never go away. Even if they don’t approve of some things Russia or China does, they don’t want the precedent of more and more sanctions and they want to belong to a monetary system which won’t lock them out.

Afghanistan is a particularly “amusing” case: when the US pulled out it then sanctioned Afghanistan and froze its foreign reserves. There was an immediate famine effecting millions. Biden is a perverse evil genius: by ending a war he was able to kill FAR more people than if he’d left troops in country.

Then there is Iran, where a treaty was signed under Obama which would remove sanctions. Iran kept its side, but the US pulled out anyway under Trump, and lo! Biden did not reverse him. Even the Europeans disagreed with that one.

China simply offers a better deal now than the West, and there’s a couple centuries or more of resentment towards Europe and America and Japan. Most countries would rather be allied with China.

And that’s why this map is fairly close to what the cold war map will look like. A few “green” countries will cut deals with the West, but most will go with China and Russia. And why wouldn’t they?

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A New Age Of Vertical Integration

There was a time when companies preferred vertical integration: they wanted to own their supply chain. Then, for a long time, the mantra was to concentrate on one’s core business and let other specialists take care of all the non-core parts of your business.

Well…

This is no longer viable business practice. In a period of civilization collapse supply chains become unreliable: you may not be able to get what you want or you may not be able to get it at a price you can afford.

Supply chains will become more unreliable as time goes on. Leaving aside the fact that logistics companies make out like bandits during periods of supply constraints and thus have little incentive to fix the problem, climate change, environmental collapse and the new era of cold and hot war will make supplies more and more unreliable and scarce.

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The more something matters, the more this will be true: many countries couldn’t get vaccines, no matter what, and countries which created them gave them to themselves and their allies first. When water, food, minerals and energy becomes scarce, countries and companies will prioritize themselves first, their allies second and everyone else not at all. Strong countries, faced with famine, will not export food they need, and weak countries will be forced to export resources they need even if it means death and deprivation for their people.

If you need something, you better make it yourself, or be in lockstep with a company or country who needs you as much as you need them.

The smaller you are, the worse this will get. Amid the shortages of the pandemic small and medium enterprises, including stores were largely cut off: the biggest customers got served first and everyone else got the scraps.

A reliable supply chain and predictable politics are necessary for ages where companies and countries specialize. Eras of war and decline and collapse are eres of vertical integration and keeping ones suppliers close. The extreme version of this was feudalism: make or grow everything you have locally, because you can’t count on anything more than a day’s travel.

Most areas of the developed world won’t wind up that bad for some time yet, but that’s the extreme end of the road we’re on. Hopefully we’ll never get there, but wise countries and companies will no longer rely on widespread supply chains they have no control over.

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The Rules Based International Order is the Minority

I’ve said this for a while, but now we have empirical proof that most of the world likes Russia and China more than the US (h/t Johnstone):

“Among the 1.2bn people who inhabit the world’s liberal democracies, three-quarters (75%) now hold a negative view of China, and 87% a negative view of Russia,” the report reads. “However, for the 6.3bn people who live in the rest of the world, the picture is reversed. In these societies, 70% feel positively towards China, and 66% positively towards Russia.”

However, across a vast span of countries stretching from continental Eurasia to the north and west of Africa, we find the opposite – societies that have moved closer to China and Russia over the course of the last decade. As a result, China and Russia are now narrowly ahead of the United States in their popularity among developing countries.

While the war in Ukraine has accentuated this divide, it has been a decade in the making. As a result, the world is torn between two opposing clusters: a maritime alliance of democracies, led by the United States; and a Eurasian bloc of illiberal or autocratic states, centred upon Russia and China.

Now, what they’re saying without quite saying it is that the Ukraine war correlated with even better public opinion towards Russia and China.

I find the next chunk predictable:

However, what matters may not be so much the presence of democratic institutions, but
rather, whether they are valued and appreciated by citizens. If so, attitudes towardscountries such as Russia or the United States might take into account their potential to assist – or damage – the health of their democracy. For a closer look at Figure 20 reveals anumber of electoral democracies, such as Indonesia, India or Nigeria, in which the public remains sympathetic to Russian or Chinese influence, in spite of a difference in political regime. Thus it is not simply whether democratic institutions exist that countsbut rather, the degree to which they are seen as functional and legitimate.

This seems reasonable, at first glance. Here’s the chart:

Eyeball those nations above and below the 50% mark.

What does the grouping below 50% all have in common? What does the grouping above 50% have in common?

Whether or not they could be considered part of the Westerns sphere. Those above the line are generally not those who have done well under US hegemony and who are not Western allies.

So, yeah, this looks to me to be a case of “correlation is not causation”. I would gently suggest that what creates the legitimacy of “democratic institutions” is whether they have delivered for people and that those countries under 50% tend to be those who have been inside the Western (US/EU/close allies bubble.)

So, yes, it is actually about the new cold war.

Now remember, China now does most of the world’s development. It isn’t even close. They build the new ports, airports, hospitals, roads, bridges and even cities. Further, they do it cheaper than the West does it.

So, if you’re a developing nation who isn’t inside the “blessed bubble”, even as bad as that bubble has become under neoliberalism, China looks good and America looks… well, not so good, especially since the US has been the primary driver of trade and finance rules which have been very bad for the third world.

This has been going on for a long time, but since the collapse the USSR there hasn’t been another option. China offers one, and Russia is thumbing its nose at a global order that has gone out of its way to screw over the countries which are above that 50% line.

So, I wouldn’t say it’s exactly about “democratic legitimacy” — that legitimacy is a dependent variable and it is associated with America, NATO and to a lesser extent the EU. When a global regime doesn’t deliver it is discredited, and in fact even in countries under the 50% mark, most have been losing trust in “democratic legitimacy” as well. Americans and British will know well of what I speak.

The end result is that most of the world now slightly favors China and Russia and the important part is that trend is likely to continue. There will be a cold war, and most of the world wants to remain neutral or slightly favors China/Russia. On election Lula in Brazil said they would keep trading with both sides and not be drawn into the cold war, but Brazil is one of the founding members of the BRICS (Brazil, Russia, India, China, South Africa) the most important economic bloc that doesn’t include the US. Brazil will remain “neutral” but 31% of Brazil’s exports now go to China and 11% to the US. If the US is stupid enough to push, and military might isn’t determinative, Brazil would be foolish not to go with China.

Power follows industrial capacity and popularity follows treatment. With a few notable exceptions, if you’re a third world country, China treats you better than the US has in ages. As for Russia, well, they may screw with nearby countries, but otherwise they don’t get involved much (remember Syria invited them in, and is a long time ally.) Indians, in particular, remember that Russia was a friend for generations when the US and Europe were not. As for Africa, China has been developing good relations thru trade and development for decades now.

In this cold war, the West is going to be the one isolated, as the above (older) map from the Economist suggests. Yes, they are “neutral” for now, but if forced to choose, don’t assume they’ll choose the current order.

The “rules based international order” is rather small and how it has been run has damaged democratic legitimacy far more than “China” or “Russia”.

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