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.
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Bill H.
“industry fleeing Europe to the US. ” Are you kidding? The US can’t handle it. Industry is fleeing Europe, all right, but not to the US.
Feral Finster
The fundamental problem that Russia faces is that, short of launch a nuclear strike on Washington, it has not way to affect the lives of the people who make the decisions in the Ukraine War. Tens of thousands, hundreds of thousands of Ukrainians could die and nobody in Kiev, much less Washington, would lose so much as a minute’s sleep.
This, combined with ongoing Russian failure to respond to outrageous provocations, means that Washington will only continue to double down.
Purple Library Guy
Yeah, I think that’s pretty much how it’s going.
Although on Russia, I think in the medium term it’s possible they will actually gain economically–the war and the sanctions have forced them away from neoliberalism and towards import substitution and a somewhat wartime, which is to say more managed, economy. That’s probably good for them.
@Feral Finster I’m not sure the Russians care what decisions the Americans make. They don’t trust the Americans to keep whatever deal they might strike anyway. They think they can keep crushing Ukrainian soldiers plus all the materiel NATO can give them until there’s not enough left to defend Ukraine. At which point the Americans can make whatever “decisions” they want, the Ukrainian leadership will be making the peace agreement dictated to them by the guys with guns to their heads.
The results so far of the big Ukrainian counteroffensive with all the fancy NATO kit (almost zero territorial gains, many many blown up tanks) suggest they may be able to do exactly that.
elkern
And all this exacerbates US political dysfunction, leading to more stupid choices being made for short-term political expediency, with obvious feedback loops, spiraling downward ever more quickly.
Biden, the Democratic Party, and mainstream Liberals in general have gotten boxed in by believing their own BS, particularly regarding Russia and the war in Ukraine (all reinforced by TDS, also with more feedback loops). Biden can’t back away from commitments to Ukraine before the 2024 election; the GOP will blast him for “losing” Ukraine (while simultaneously framing Trump as the “peace” candidate!).
The GOP is still running the Reagan scam, promising Americans a return to the Golden Years (1950’s?) when America was Strong, while destroying what’s left of the New Deal which actually made the Post-War decades a [relatively] real Middle Class Utopia.
Right now, I’m most worried about the possibility of a nuclear false-flag event, with Ukraine/UK/USA blowing up the ZNPP and blaming it on Russia, then using that as an excuse for direct military involvement (perhaps even declaring war on Russia). US troops in Ukraine – in force, not just Mercs, Spooks, and “Advisors” – would lead to significant escalation by Russia, and likely big losses on both sides, making the situation ever more dangerous.
China – confident in its destiny – would try hard to keep both sides from going nuclear, but it won’t be easy. US political chaos and societal psychopathy forces a “Don’t Back Down” mindset; any President and Party who negotiates will lose the next election(s). US direct involvement would prove that Russian paranoia is justified, so they would demand an even larger buffer against US/NATO.
Also, any Democratic politician who even vaguely acknowledges that we are no longer “Number One” will be vilified and lose all future elections (or worse). Perversely, Republicans could get away with it; even more perversely, this might make GOP Presidents less dangerous than Democratic ones. The cost (of future GOP Presidencies) would be the end of the American Experiment (civil war, even?), a complete return to Oligarchy, and serious Climate disruption.
I’m terrified by the fact that this is my *rosy* scenario…
Art_DogCT
“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.”
I think we’re well into the shambling part, a ways to go before ending up a heap. As in Lambert Strether’s formulation, “[T]he Democrat Party is a rotting corpse that can’t bury itself”*, so to is the Indispensable Nation. Not Pax Americana, but Mors Americana is the gift to the world from our owners and masters. The tastiest of crumbs from their groaning table.
* https://www.nakedcapitalism.com/2020/11/notes-toward-an-definition-of-the-democrat-party.html
VietnamVet
This is really about the mental illness of human beings. We evolved only to feel empathy with one’s family and tribe. Or brains naturally avoid unpleasantness. Sexual selection is based on money — power and by acquiring resources to keep the clan alive. Agricultural Civilization added warring nation-state societies on top of this in the last 10,000 years.
The current Era started when Ronald Reagan upchucked his lunch when told the facts about nuclear deterrence. He green-lighted détente. This prompted the Soviet Managers to become fabulously rich Russian Oligarchs. The 1990s in Russia were the handwriting on the wall for neoliberal Globalism in the 21st century. Corporations and states merged into a superstructure of trade institutions. They cannot help themselves. They must take risks and get richer no matter the consequences of killing millions of human beings by pestilence, war or famine to make a profit. Their world is not finite but the Earth is.
The West is literally doubling down on gaining control of the resources left in Eurasia even though it has lost or was stalemated in every war in the last 78 years there. If NATO is going to avoid being vaporized, climaxed and radiated to death; Jimmy Carter’s Malaise must be addressed. Good governments that works by and for the people of Europe and North America must be restored.
Feral Finster
@Purple Library Guy: The United States will keep doubling down, since there is no cost to the decisionmakers for doing so.
Trinity
“there is no cost to the decisionmakers for doing so.”
This.
They can pivot anytime they want to, too. Like, I dunno, inciting a military insurrection in another country or something along similar lines. They can do anything, and the expectation is that they will (although hopefully there is one line they will not cross).
I know it’s fashionable to think they are stupid, but I believe it is dangerous to think that way, very dangerous. It’s never a good idea to underestimate the enemy.
Gaianne
Feral Finster: “The United States will keep doubling down, since there is no cost to the decisionmakers for doing so.”
The implications of this need to be followed–thought through and followed out–especially as they are very stark and grim for people living in the US itself. Losing the ability to plunder other countries, American elites plunder the US itself. The American populace suffers the most from this, while the oligarchs find that their own lives just get better than ever. So they continue. But destroyed people are not productive; neglected infrastructure breaks and goods and services cannot be created. So the US becomes, step by step, physically as well as mentally incapacitated.
As Bill H suggests, European industry is not coming to the US–the US is even more deskilled than Europe and rebuilding is not possible. I expect American oligarchs to make money off the deindustrialization of Europe, but the industry itself will end up somewhere else in the multipolar world. Much will go to China.
The US will turn into a land of destitutes, and drug gangs. Those who survive will have practical skills and the mental stability to avoid the craziness, which will be everywhere. It is not everywhere yet, but we can see the future that is coming in places like Los Angeles CA, San Francisco CA, Portland OR, and the Kensington neighborhood in Philadelphia PA.
During this process, the ability of the US to do anything physical in the world simply evaporates. American elites will make demands and give commands, but nothing will happen. The RoW (rest of the world) will gently help the US to implode.
There will be no nuclear war.
This is our main scenerio.
As to the last point, avoiding nuclear war, this requires some delicacy. The Russians have been thinking about this for some time–it is a key point. The Russians understand the need to avoid too much drama. The internet does not understand: How often do we hear that Putin is weak, and pursuing half-measures. But those “half-measures” are sufficient to steadily improve the strategic position of the RoW versus the Combined West. That is all that is needed. The US is already crazy enough–provocation serves no purpose.
Of course craziness builds in self-stroking cycles, as elkern implies. Eventually, the US will choose to destroy the entire world. But by the time that happens, the US will have lost the ability to do so.
–Gaianne