Russia’s war with Ukraine is first and foremost a tragedy for the people of both countries, especially those who live—and die—in the battle zones. The priority for humanity, though apparently not for the political class, is to encourage Moscow and Kyiv to stop killing men, women and children and negotiate a peace deal.
Beyond the immediate confines of the conflict, the war is also seen by some as representative of an alleged clash between great powers and, perhaps, between civilisations. All wars are momentous, but the ramifications of Ukrainian war are already global.
Consequently, there is a perception that it is the focal point of a confrontation between two distinct models of global governance. The NATO-led alliance of the Western nations continues to push the unipolar, G7, international rules-based order (IRBO). It is opposed, some say, by the Russian and Chinese-led BRICS and the G20-based multipolar world order.
In this 3 part series we will explore these issues and consider if it is tenable to place our faith in the emerging multipolar world order.
There are very few redeeming features of the unipolar world order, that’s for sure. It is a system that overwhelmingly serves capital and few people other than a “parasite class” of stakeholder capitalist eugenicists. This has led many disaffected Westerners to invest their hopes in the promise of the multipolar world order:
Many have increasingly come to terms with the reality that today’s multipolar system led by Russia and China has premised itself upon the defense of international law and national sovereignty as outlined in the UN Charter. [. . .] Putin and Xi Jinping have [. . .] made their choice to stand for win-win cooperation over Hobbesian Zero Sum thinking. [. . .] [T]heir entire strategy is premised upon the UN Charter.
If only that were so! Unfortunately, it doesn’t appear to be the case. But even if it were true, Putin and Xi Jinping basing “their entire strategy” upon the UN Charter, would be cause for concern, not relief.
For the globalist forces that see nation-states as squares on the grand chessboard and that regard leaders like Putin, Biden and Xi Jinping as accomplices, the multipolar world order is manna from heaven. They have spent more than a century trying to centralise global power. The power of individual nation-states at least presents the possibility of some decentralisation. The multipolar world order finally ends all national sovereignty and delivers true global governance.
We need to distinguish between the ideological concept of “world order” and the reality. This will help us identify where “world order” is an artificially imposed construct.
Authoritarian power, wielded over populations, territory and resources, restricted by physical and political geography, dictates the “world order.” The present order is largely the product of hard-nosed geopolitics, but it also reflects the various attempts to impose a global order.
The struggle to manage and mitigate the consequences of geopolitics is evident in the history of international relations. For nearly 500 years nation-states have sought to co-exist as sovereign entities. Numerous systems have been devised to seize control of what would otherwise be anarchy. It is very much to the detriment of humanity that anarchy has not been allowed to flourish.
In 1648, the two bilateral treaties that formed the Peace of Westphalia concluded the 30 Years War (or Wars). Those negotiated settlements arguably established the precept of the territorial sovereignty within the borders of the nation-state.
This reduced, but did not end, the centralised authoritarian power of the Holy Roman Empire (HRE). Britannica notes:
The Peace of Westphalia recognized the full territorial sovereignty of the member states of the empire.
This isn’t entirely accurate. That so-called “full territorial sovereignty” delineated regional power within Europe and the HRE, but full sovereignty wasn’t established.
The Westphalian treaties created hundreds of principalities that were formerly controlled by the central legislature of the HRE, the Diet. These new, effectively federalised principalities still paid taxes to the emperor and, crucially, religious observance remained a matter for the empire to decide. The treaties also consolidated the regional power of the Danish, Swedish, and French states but the Empire itself remained intact and dominant.
It is more accurate to say that the Peace of Westphalia somewhat curtailed the authoritarian power of the HRE and defined the physical borders of some nation states. During the 20th century, this led to the popular interpretation of the nation-state as a bulwark against international hegemonic power, despite that never having been entirely true.
Consequently, the so-called “Westphalian model” is largely based upon a myth. It represents an idealised version of the world order, suggesting how it could operate rather than describing how it does.
Signing of the Peace of Westphalia, in Münster 1648, painting by Gerard Ter Borch
If nation-states really were sovereign and if their territorial integrity were genuinely respected, then the Westphalian world order would be pure anarchy. This is the ideal upon which the UN is supposedly founded because, contrary to another ubiquitous popular myth, anarchy does not mean “chaos.” Quite the opposite.
Anarchy is exemplified by Article 2.1 of the UN Charter:
The Organization is based on the principle of the sovereign equality of all its Members.
The word “anarchy” is an abstraction of the classical Greek “anarkhos,” meaning “rulerless.” This is derived from the privative prefix “an” (without) in conjunction with “arkhos” (leader or ruler). Literally translated, “anarchy” means “without rulers”—what the UN calls “sovereign equality.”
A Westphalian world order of sovereign nation-states, each observing the “equality” of all others while adhering to the non-aggression principle, is a system of global, political anarchy. Unfortunately, that is not the way the current UN “world order” functions, nor has there ever been any attempt to construct such an order. What a shame.
Within the League of Nations and subsequent UN system of practical “world order,”—a world order allegedly built upon the sovereignty of nations—equality exists in theory only. Through empire, colonialism, neocolonialism—that is, through economic, military, financial and monetary conquest, coupled with the debt obligations imposed upon targeted nations—global powers have always been able to dominate and control lesser ones.
National governments, if defined in purely political terms, have never been the only source of authority behind the efforts to construct world order. As revealed by Antony C. Sutton and others, private corporate power has aided national governments in shaping “world order.”
Neither Hitler’s rise to power nor the Bolshevik Revolution would have occurred as they did, if at all, without the guidance of the Wall Street financiers. The bankers’ global financial institutions and extensive international espionage networks were instrumental in shifting global political power.
These private-sector “partners” of government are the “stakeholders” we constantly hear about today. The most powerful among them are fully engaged in “the game” described by Zbigniew Brzezinski in The Grand Chessboard.
Brzezinski recognised that the continental landmass of Eurasia was the key to genuine global hegemony:
This huge, oddly shaped Eurasian chess board—extending from Lisbon to Vladivostok—provides the setting for “the game.” [. . .] [I]f the middle space rebuffs the West, becomes an assertive single entity [. . .] then America’s primacy in Eurasia shrinks dramatically. [. . .] That mega-continent is just too large, too populous, culturally too varied, and composed of too many historically ambitious and politically energetic states to be compliant toward even the most economically successful and politically pre-eminent global power. [. . .] Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire. [. . .] [I]t would then become a predominantly Asian imperial state.
The “unipolar world order” favoured by the Western powers, often referred to as the “international rules-based order” or the “international rules-based system,” is another attempt to impose order. This “unipolar” model enables the US and its European partners to exploit the UN system to claim legitimacy for their games of empire. Through it, the transatlantic alliance has used its economic, military and financial power to try to establish global hegemony.
In 2016, Stewart Patrick, writing for the US Council on Foreign Relations (CFR), a foreign policy think tank, published World Order: What, Exactly, are the Rules? He described the post-WWII “international rules-based order” (IRBO):
What sets the post-1945 Western order apart is that it was shaped overwhelmingly by a single power [a unipolarity], the United States. Operating within the broader context of strategic bipolarity, it constructed, managed, and defended the regimes of the capitalist world economy. [. . .] In the trade sphere, the hegemon presses for liberalization and maintains an open market; in the monetary sphere, it supplies a freely convertible international currency, manages exchange rates, provides liquidity, and serves as a lender of last resort; and in the financial sphere, it serves as a source of international investment and development.
The idea that the aggressive market acquisition of crony capitalism somehow represents the “open markets” of the “capitalist world economy” is risible. It is about as far removed from free market capitalism as it is possible to be. Under crony capitalism, the US dollar, as the preferred global reserve currency, is not “freely convertible.” Exchange rates are manipulated and liquidity is debt for nearly everyone except the lender. “Investment and development” by the hegemon means more profits and control for the hegemon.
The notion that a political leader, or anyone for that matter, is entirely bad or good, is puerile. The same consideration can be given to nation-states, political systems or even models of world order. The character of a human being, a nation or a system of global governance is better judged by their or its totality of actions.
Whatever we consider to be the source of “good” and “evil,” it exists in all of us at either ends of a spectrum. Some people exhibit extreme levels of psychopathy, which can lead them to commit acts that are judged to be “evil.” But even Hitler, for example, showed physical courage, devotion, compassion for some, and other qualities we might consider “good.”
Nation-states and global governance structures, though immensely complex, are formed and led by people. They are influenced by a multitude of forces. Given the added complications of chance and unforeseen events, it is unrealistic to expect any form of “order” to be either entirely good or entirely bad.
That being said, if that “order” is iniquitous and causes appreciable harm to people, then it is important to identify to whom that “order” provides advantage. Their potential individual and collective guilt should be investigated.
This does not imply that those who benefit are automatically culpable, nor that they are “bad” or “evil,” though they may be, only that they have a conflict of interests in maintaining their “order” despite the harm it causes. Equally, where systemic harm is evident, it is irrational to absolve the actions of the people who lead and benefit from that system without first ruling out their possible guilt.
Since WWII, millions of innocents have been murdered by the US, its international allies and its corporate partners, all of whom have thrown their military, economic and financial weight around the world. The Western “parasite class” has sought to assert its IRBO by any means necessary— sanctions, debt slavery or outright slavery, physical, economic or psychological warfare. The grasping desire for more power and control has exposed the very worst of human nature. Repeatedly and ad nauseam.
Of course, resistance to this kind of global tyranny is understandable. The question is: Does imposition of the multipolar model offer anything different?
Signing the UN Charter – 1948
Most recently, the “unipolar world order” has been embodied by the World Economic Forum’s inappropriately named Great Reset. It is so malignant and forbidding that some consider the emerging “multipolar world order” salvation. They have even heaped praise upon the likely leaders of the new multipolar world:
It is [. . .] strength of purpose and character that has defined Putin’s two decades in power. [. . .] Russia is committed to the process of finding solutions to all people benefiting from the future, not just a few thousand holier-than-thou oligarchs. [. . .] Together [Russia and China] told the WEF to stuff the Great Reset back into the hole in which it was conceived. [. . .] Putin told Klaus Schwab and the WEF that their entire idea of the Great Reset is not only doomed to failure but runs counter to everything modern leadership should be pursuing.
Sadly, it seems this hope is also misplaced.
While Putin did much to rid Russia of the CIA-run, Western-backed oligarchs who were systematically destroying the Russian Federation during the 1990s, they have subsequently been replaced by another band of oligarchs with closer links to the current Russian government. Something we will explore in Part 3.
Yes, it is certainly true that the Russian government, led by Putin and his power bloc, has improved the incomes and life opportunities for the majority of Russians. Putin’s government has also significantly reduced chronic poverty in Russia over the last two decades.
Wealth in Russia, measured as the market value of financial and non-financial assets, has remained concentrated in the hands of the top 1% of the population. This pooling of wealth among the top percentile is itself stratified and is overwhelmingly held by the top 1% of the 1%. For example, in 2017, 56% of Russian wealth was controlled by 1% of the population. The pseudopandemic of 2020–2022 particularly benefitted Russian billionnaires—as it did the billionaires of every other developed economy.
According to the Credit Suisse Global Wealth Report 2021, wealth inequality in Russia, measured using the Gini coefficient, was 87.8 in 2020. The only other major economy with a greater disparity between the wealthy and the rest of the population was Brazil. Just behind Brazil and Russia on the wealth inequality scale was the US, whose Gini coefficient stood at 85.
In terms of wealth concentration however, the situation in Russia was the worst by a considerable margin. In 2020 the top 1% owned 58.2% of Russia’s wealth. This was more than 8 percentage points higher than Brazil’s wealth concentration, and significantly worse than wealth concentration in the US, which stood at 35.2% in 2020.
Such disproportionate wealth distribution is conducive to creating and empowering oligarchs. But wealth alone doesn’t determine whether one is an oligarch. Wealth needs to be converted into political power for the term “oligarch” to be applicable. An oligarchy is defined as “a form of government in which supreme power is vested in a small exclusive class.”
Members of this dominant class are installed through a variety of mechanisms. The British establishment, and particularly its political class, is dominated by men and women who were educated at Eton, Roedean, Harrow and St. Pauls, etc. This “small exclusive class” arguably constitutes a British oligarchy. The UK’s new Prime Minister, Liz Truss, has been heralded by some because she is not a graduate of one of these select public schools.
Educational privilege aside, though, the use of the word “oligarch” in the West more commonly refers to an internationalist class of globalists whose individual wealth sets them apart and who use that wealth to influence policy decisions.
Bill Gates is a prime example of an oligarch. The former advisor to the UK Prime Minister, Dominic Cummings, said as much during his testimony to a parliamentary committee on May 2021 (go to 14:02:35). As Cummings put it, Bill Gates and “that kind of network” had directed the UK government’s response to the supposed COVID-19 pandemic.
Gates’ immense wealth has bought him direct access to political power beyond national borders. He has no public mandate in either the US or the UK. He is an oligarch—one of the more well known but far from the only one.
CFR member David Rothkopf described these people as a “Superclass” with the ability to “influence the lives of millions across borders on a regular basis.” They do this, he said, by using their globalist “networks.” Those networks, as described by Antony C. Sutton, Dominic Cummings and others, act as “the force multiplier in any kind of power structure.”
This “small exclusive class” use their wealth to control resources and thus policy. Political decisions, policy, court rulings and more are made at their behest. This point was highlighted in the joint letter sent by the Attorneys General (AGs) of 19 US states to BlackRock CEO Larry Fink.
The AGs observed that BlackRock was essentially using its investment strategy to pursue a political agenda:
The Senators elected by the citizens of this country determine which international agreements have the force of law, not BlackRock.
Their letter describes the theoretical model of representative democracy. Representative democracy is not a true democracy—which decentralises political power to the individual citizen—but is rather a system designed to centralise political control and authority. Inevitably, “representative democracy” leads to the consolidation of power in the hands of the so-called “Superclass” described by Rothkopf.
There is nothing “super” about them. They are ordinary people who have acquired wealth primarily through conquest, usury, market rigging, political manipulation and slavery. “Parasite class” is a more befitting description.
Not only do global investment firms like BlackRock, Vanguard and State Street use their immense resources to steer public policy, but their major shareholders include the very oligarchs who, via their contribution to various think tanks, create the global political agendas that determine policy in the first place. There is no space in this system of alleged “world order” for any genuine democratic oversight.
As we shall see in Part 3, the levers of control are exerted to achieve exactly the same effect in Russia and China. Both countries have a gaggle of oligarchs whose objectives are firmly aligned with the WEF’s Great Reset agenda. They too work with their national government “partners” to ensure that they all arrive at the “right” policy decisions.
US President Joe Biden, left, and CFR President Richard N. Haass, right.
The United Nations’ Model of National Sovereignty
Any bloc of nations that bids for dominance within the United Nations is seeking global hegemony. The UN enables global governance and centralises global political power and authority. In so doing, the UN empowers the international oligarchy.
As noted previously, Article 2 of the United Nations Charter declares that the UN is “based on the principle of the sovereign equality of all its Members.” The Charter then goes on to list the numerous ways in which nation-states are not equal. It also clarifies how they are all subservient to the UN Security Council.
Despite all the UN’s claims of lofty principles—respect for national sovereignty and for alleged human rights—Article 2 declares that no nation-state can receive any assistance from another as long as the UN Security Council is forcing that nation-state to comply with its edicts. Even non-member states must abide by the Charter, whether they like it or not, by decree of the United Nations.
The UN Charter is a paradox. Article 2.7 asserts that “nothing in the Charter” permits the UN to infringe the sovereignty of a nation-state—except when it does so through UN “enforcement measures.” The Charter states, apparently without reason, that all nation-states are “equal.” However, some nation-states are empowered by the Charter to be far more equal than others.
While the UN’s General Assembly is supposedly a decision-making forum comprised of “equal” sovereign nations, Article 11 affords the General Assembly only the power to discuss “the general principles of co-operation.” In other words, it has no power to make any significant decisions.
Article 12 dictates that the General Assembly can only resolve disputes if instructed to do so by the Security Council. The most important function of the UN, “the maintenance of international peace and security,” can only be dealt with by the Security Council. What the other members of the General Assembly think about the Security Council’s global “security” decisions is a practical irrelevance.
Article 23 lays out which nation-states form the Security Council:
The Security Council shall consist of fifteen Members of the United Nations. The Republic of China, France, the Union of Soviet Socialist Republics [Russian Federation], the United Kingdom of Great Britain and Northern Ireland, and the United States of America shall be permanent members of the Security Council. The General Assembly shall elect ten other Members of the United Nations to be non-permanent members of the Security Council. [. . .] The non-permanent members of the Security Council shall be elected for a term of two years.
The General Assembly is allowed to elect “non-permanent” members to the Security Council based upon criteria stipulated by the Security Council. Currently the “non-permanent” members are Albania, Brazil, Gabon, Ghana, India, Ireland, Kenya, Mexico, Norway and the United Arab Emirates.
Article 24 proclaims that the Security Council has “primary responsibility for the maintenance of international peace and security” and that all other nations agree that “the Security Council acts on their behalf.” The Security Council investigates and defines all alleged threats and recommends the procedures and adjustments for the supposed remedy. The Security Council dictates what further action, such as sanctions or the use of military force, shall be taken against any nation-state it considers to be a problem.
Article 27 decrees that at least 9 of the 15 member states must be in agreement for a Security Council resolution to be enforced. All of the 5 permanent members must concur, and each has the power of veto. Any Security Council member, including permanent members, shall be excluded from the vote or use of its veto if they are party to the dispute in question.
UN member states, by virtue of agreeing to the Charter, must provide armed forces at the Security Council’s request. In accordance with Article 47, military planning and operational objectives are the sole remit of the permanent Security Council members through their exclusive Military Staff Committee. If the permanent members are interested in the opinion of any other “sovereign” nation, they’ll ask it to provide one.
The inequality inherent in the Charter could not be clearer. Article 44 notes that “when the Security Council has decided to use force” its only consultative obligation to the wider UN is to discuss the use of another member state’s armed forces where the Security Council has ordered that nation to fight. For a country that is a current member of the Security Council, use of its armed forces by the Military Staff Committee is a prerequisite for Council membership.
The UN Secretary-General, identified as the “chief administrative officer” in the Charter, oversees the UN Secretariat. The Secretariat commissions, investigates and produces the reports that allegedly inform UN decision-making. The Secretariat staff members are appointed by the Secretary-General. The Secretary-General is “appointed by the General Assembly upon the recommendation of the Security Council.”
Under the UN Charter, then, the Security Council is made king. This arrangement affords the governments of its permanent members—China, France, Russia, the UK and the US—considerable additional authority. There is nothing egalitarian about the UN Charter.
The suggestion that the UN Charter constitutes a “defence” of “national sovereignty” is ridiculous. The UN Charter is the embodiment of the centralisation of global power and authority.
UN Headquarters New York – Land Donated by the Rockefellers
The United Nations’ Global Public-Private Partnership
The UN was created, in no small measure, through the efforts of the private sector Rockefeller Foundation (RF). In particular, the RF’s comprehensive financial and operational support for the Economic, Financial and Transit Department (EFTD) of the League of Nations (LoN), and its considerable influence upon the United Nations Relief and Rehabilitation Administration (UNRRA), made the RF the key player in the transformation of the LoN into the UN.
The UN came into being as a result of public-private partnership. Since then, especially with regard to defence, financing, global health care and sustainable development, public-private partnerships have become dominant within the UN system. The UN is no longer an intergovernmental organisation, if it ever was one. It is a global collaboration between governments and a multinational infra-governmental network of private “stakeholders.”
In 1998, then-UN Secretary-General Kofi Annan told the World Economic Forum’s Davos symposium that a “quiet revolution” had occurred in the UN during the 1990s:
[T]he United Nations has been transformed since we last met here in Davos. The Organization has undergone a complete overhaul that I have described as a “quiet revolution”. [. . .] [W]e are in a stronger position to work with business and industry. [. . .] The business of the United Nations involves the businesses of the world. [. . .] We also promote private sector development and foreign direct investment. We help countries to join the international trading system and enact business-friendly legislation.
In 2005, the World Health Organisation (WHO), a specialised agency of the UN, published a report on the use of information and communication technology (ICT) in healthcare titled Connecting for Health. Speaking about how “stakeholders” could introduce ICT healthcare solutions globally, the WHO noted:
Governments can create an enabling environment, and invest in equity, access and innovation.
The 2015, Adis Ababa Action Agenda conference on “financing for development” clarified the nature of an “enabling environment.” National governments from 193 UN nation-states committed their respective populations to funding public-private partnerships for sustainable development by collectively agreeing to create “an enabling environment at all levels for sustainable development;” and “to further strengthen the framework to finance sustainable development.”
In 2017, UN General Assembly Resolution 70/224 (A/Res/70/224) compelled UN member states to implement “concrete policies” that “enable” sustainable development. A/Res/70/224 added that the UN:
[. . .] reaffirms the strong political commitment to address the challenge of financing and creating an enabling environment at all levels for sustainable development [—] particularly with regard to developing partnerships through the provision of greater opportunities to the private sector, non-governmental organizations and civil society in general.
In short, the “enabling environment” is a government, and therefore taxpayer, funding commitment to create markets for the private sector. Over the last few decades, successive Secretary-Generals have overseen the UN’s formal transition into a global public-private partnership (G3P).
Nation-states do not have sovereignty over public-private partnerships. Sustainable development formally relegates government to the role of an “enabling” partner within a global network comprised of multinational corporations, non-governmental organisations (NGOs), civil society organisations and other actors. The “other actors” are predominantly the philanthropic foundations of individual billionaires and immensely wealthy family dynasties—that is, oligarchs.
Effectively, then, the UN serves the interests of capital. Not only is it a mechanism for the centralisation of global political authority, it is committed to the development of global policy agendas that are “business-friendly.” That means Big Business-friendly. Such agendas may happen to coincide with the best interests of humanity, but where they don’t—which is largely the case—well, that’s just too bad for humanity.
Kofi Annan (8 April 1938 – 18 August 2018)
On the 4th February 2022, a little less then three weeks prior to Russia launching its “special military operation” in Ukraine, Presidents Vladimir Putin and Xi Jinping issued an important joint statement:
The sides [Russian Federation and Chinese People’s Republic] strongly support the development of international cooperation and exchanges [. . .], actively participating in the relevant global governance process, [. . .] to ensure sustainable global development. [. . .] The international community should actively engage in global governance[.] [. . .] The sides reaffirmed their intention to strengthen foreign policy coordination, pursue true multilateralism, strengthen cooperation on multilateral platforms, defend common interests, support the international and regional balance of power, and improve global governance. [. . .] The sides call on all States [. . .] to protect the United Nations-driven international architecture and the international law-based world order, seek genuine multipolarity with the United Nations and its Security Council playing a central and coordinating role, promote more democratic international relations, and ensure peace, stability and sustainable development across the world.
The United Nations Department of Economic and Social Affairs (UN-DESA) defined “global governance” in its 2014 publication Global Governance and the Global Rules For Development in the Post 2015 Era:
Global governance encompasses the totality of institutions, policies, norms, procedures and initiatives through which States and their citizens try to bring more predictability, stability and order to their responses to transnational challenges.
Global governance centralises control over the entire sphere of international relations. It inevitably erodes a nation’s ability to set foreign policy. As a theoretical protection against global instability, this isn’t necessarily a bad idea, but in practice it neither enhances nor “protects” national sovereignty.
Domination of the global governance system by one group of powerful nation-states represents possibly the most dangerous and destabilising force of all. It allows those nations to act with impunity, regardless of any pretensions about honouring alleged “international law.”
Global governance also significantly curtails the independence of a nation-state’s domestic policy. For example, the UN’s Sustainable Development Agenda 21, with the near-time Agenda 2030 serving as a waypoint, impacts nearly all national domestic policy—even setting the course for most domestic policy—in every country.
National electorates’ oversight of this “totality” of UN policies is weak to nonexistent. Global governance renders so-called “representative democracy” little more than a vacuous sound-bite.
As the UN is a global public-private partnership (UN-G3P), global governance allows the “multi-stakeholder partnership”—and therefore oligarchs—significant influence over member nation-states’ domestic and foreign policy. Set in this context, the UN-DESA report (see above) provides a frank appraisal of the true nature of UN-G3P global governance:
Current approaches to global governance and global rules have led to a greater shrinking of policy space for national Governments [. . . ]; this also impedes the reduction of inequalities within countries. [. . .] Global governance has become a domain with many different players including: multilateral organizations; [. . .] elite multilateral groupings such as the Group of Eight (G8) and the Group of Twenty (G20) [and] different coalitions relevant to specific policy subjects[.] [. . .] Also included are activities of the private sector (e.g., the Global Compact) non-governmental organizations (NGOs) and large philanthropic foundations (e.g., Bill and Melinda Gates Foundation, Turner Foundation) and associated global funds to address particular issues[.] [. . .] The representativeness, opportunities for participation, and transparency of many of the main actors are open to question. [. . .] NGOs [. . .] often have governance structures that are not subject to open and democratic accountability. The lack of representativeness, accountability and transparency of corporations is even more important as corporations have more power and are currently promoting multi-stakeholder governance with a leading role for the private sector. [. . .] Currently, it seems that the United Nations has not been able to provide direction in the solution of global governance problems—perhaps lacking appropriate resources or authority, or both. United Nations bodies, with the exception of the Security Council, cannot make binding decisions.
A/Res/73/254 declares that the UN Global Compact Office plays a vital role in “strengthening the capacity of the United Nations to partner strategically with the private sector.” It adds:
The 2030 Agenda for Sustainable Development acknowledges that the implementation of sustainable development will depend on the active engagement of both the public and private sectors[.]
While the Attorneys General of 19 states might rail against BlackRock for usurping the political authority of US senators, BlackRock is simply exercising its power as valued a “public-private partner” of the US government. Such is the nature of global governance. Given that this system has been constructed over the last 80 years, it’s a bit too late for 19 state AGs to complain about it now. What have they been doing for the last eight decades?
The governmental “partners” of the UN-G3P lack “authority” because the UN was created, largely by the Rockefellers, as a public-private partnership. The intergovernmental structure is the partner of the infra-governmental network of private stakeholders. In terms of resources, the power of the private sector “partners” dwarfs that of their government counterparts.
Corporate fiefdoms are not limited by national borders. BlackRock alone currently holds $9.5 trillion of assets under management. This is more than five times the size of the total GDP of UN Security Council permanent member Russia and nearly four times the GDP of the UK.
So-called sovereign countries are not sovereign over their own central banks nor are they “sovereign” over international financial institutions like the IMF, the New Development Bank (NDB), the World Bank or the Bank for International Settlements. The notion that any nation state or intergovernmental organisation is capable of bringing the global network of private capital to heel is farcical.
At the COP26 Conference in Glasgow in 2021, King Charles III—then Prince Charles—prepared the conference to endorse the forthcoming announcement of the Glasgow Financial Alliance for Net Zero (GFANZ). He made it abundantly clear who was in charge and, in keeping with UN objectives, clarified national governments role as “enabling partners”:
The scale and scope of the threat we face call for a global systems level solution based on radically transforming our current fossil fuel based economy. [. . .] So ladies and gentleman, my plea today is for countries to come together to create the environment that enables every sector of industry to take the action required. We know this will take trillions, not billions of dollars. [. . .] [W]e need a vast military style campaign to marshal the strength of the global private sector, with trillions at [its] disposal far beyond global GDP, and with the greatest respect, beyond even the governments of the world’s leaders. It offers the only real prospect of achieving fundamental economic transition.
Unless Putin and Xi Jinping intend to completely restructure the United Nations, including all of its institutions and specialised agencies, their objective of protecting “the United Nations-driven international architecture” appears to be nothing more than a bid to cement their status as the nominal leaders of the UN-G3P. As pointed out by UN-DESA, through the UN-G3P, that claim to political authority is extremely limited. Global corporations dominate and are currently further consolidating their global power through “multi-stakeholder governance.”
Whether unipolar or multipolar, the so-called “world order” is the system of global governance led by the private sector—the oligarchs. Nation-states, including Russia and China, have already agreed to follow global priorities determined at the global governance level. The question is not which model of the global public-private “world order” we should accept, but rather why we would ever accept any such “world order” at all.
This, then, is the context within which we can explore the alleged advantages of a “multipolar world order” led by China, Russia and increasingly India. Is it an attempt, as claimed by some, to reinvigorate the United Nations and create a more just and equitable system of global governance? Or is it merely the next phase in the construction of what many refer to as the “New World Order”?
The pdf will be available after publication of Part 3.
Please subscribe to the Iain Davis RSS feed
I extend my gratitude to my editor, who has provided invaluable contributions to my articles since October 2021 (but who, for personal reasons, prefers to remain anonymous). Please feel free to share anything from iaindavis[.]com. I use a Creative Commons License. All I ask is that you give credit to the author and clearly mark any changes you make. Please share my work widely. Censorship is increasing and we need to get this information out there. If you value what I do then please consider supporting my work. Many thanks.
Who Are The New World Order – A Brief History The New World Order And the European Union Is It Joe Biden’s New World Order? Putin’s False Flag
An interpretation of Queen Cartimandua of the Brigantes, Celts who lived in Britain at the time of the Roman invasion (Image by Kate Spitzmiller). She lived at the same time as the more commonly remembered Queen Boudica, who fought the Romans. Cartimandua, instead, was what we would call today a "collaborationist". You might also call her a traitoress of her people, but so goes history. Can we learn something from the way the Romans subdued the Britons and incorporated them into their empire? As usual, history doesn't repeat itself, but it rhymes a lot.
Martys' Mac argues in a recent post that the American Empire had some special characteristics that make it different from other empires, especially the Soviet one. According to him, the US has been more benign, more open, more willing to let its client states develop independently, both economically and culturally.
Marty's Mac is a sharp observer but, in this case, I think he missed some basic points. Empires (and states, as well) are all very similar to each other, and the US and the USSR are not exceptions, as noted for instance by Dmitry Orlov. Not that I pretend to know more than anyone else about the old Soviet Union, but I suggest caution when discussing such wide-ranging issues. The Soviet Union was a complex reality that, in the West, remained largely unknown, shadowed by a barrier of language and propaganda. And we must be careful about falling into the trap of thinking that anything real looks in any significant way like the portrait that propaganda paints of it.
This said, let's discuss Marty Mac's position. He starts with:
A traditional empire does not seek to enter into mutually beneficial economic arrangements with its neighbors, but to suck up neighboring resources for its own benefit.
Which is, by all means, true. But it describes not just empires, but also states and kingdoms. There is a general law called "the rich get richer" that creates a centralization phenomenon. In all states, resources move from the periphery to the center. Think about France, which is not an Empire, but where the size of the capital, Paris, is so much larger than any other French city that it is outside the normally used statistical models. To the point that a specific term has been invented for it, "The Dragon King."
The argument Marty Mac's makes is mostly based on a comparison between the Marshall plan that the US enacted after WW2 was over, with the equivalent for the Soviet Union, the less well-known Molotov plan.
The Soviet Union imposed severe reparations on its conquered territories. Romania was obligated to pay $300 million (in 1938 dollars, i.e., prior to war inflation) to its new Soviet masters; Hungary was also obligated to pay $300 million (200 to the USSR and 100 to Czechoslovakia and Yugoslavia). The on-paper equivalent of the Marshall Plan within the Soviet sphere was the Molotov Plan, which officially offered aid to conquered Eastern European nations. However, this assistance was meager at best (nations like Romania and Hungary still suffered under their war debts), and could reasonably be understood as a public relations effort at countering the Marshall Plan.
It is true that the Soviet Union was considerably more stingy toward its client states than the United States with theirs. But why did the two empires behave so differently? We could argue that it was because of some ideological differences, but also, more simply, structural ones. The Soviet Union was a rival of the American Empire, but it was also smaller and poorer. The population of the Warsaw Pact countries (Soviet Union+allies) was around 400 million, that of the NATO alliance (US+allies) was over 600 million. Then, in terms of GDP and expenses, I wrote in a previous post that,
...in order to survive, the Soviet Empire had to match the rival Western Empire in military terms. But the Soviet economy was much smaller: we can roughly estimate that it always was no more than about 40% of the US economy, alone. To match the huge Western economic and military machine, the Soviet Union needed to dedicate a large fraction of its economic output into the military system. Measuring this fraction has never been easy, but we can say that in absolute terms the Soviet military expenses nearly matched those of the US, although still remaining well below those of the NATO block. Another rough estimate is that during the cold war the Soviet Union spent about 20% of its gross domestic product on its military. Compare with the US: after WW2, military spending went gradually down from about 10% to the current value of about 2.4%. In relative terms, during the cold war, the USSR would normally spend at least four times more than the US for its military.
In short, the Soviet Union just could not afford costs equivalent to the Marshall plan. So, the behavior of the US empire was, and remains, dictated by practical factors rather than ideological ones. When the US had a considerable surplus, it could afford an extravaganza such as the Marshall plan. Not just an extravaganza, though. It was also a good investment since the European states were a much better barrier against a possible Soviet attack if they were economically strong. Note also that the economic aid of the Marshall plan didn't come without strings attached. To have the money, the Western European states had to cut all ties with the Soviet Union and with the states of the Warsaw Pact. And the local communist parties, at that time still relatively strong, were to be kept outside government coalitions.
Now, of course, things have changed a lot. In the grip of a terrible crisis, probably in its last gasps, the US empire can't even remotely conceive a new Marshall plan. On the contrary, it is behaving like the old Soviet Empire. The whole West is turning into a police state, where the government controls all the media and criminalizes dissent. Then, it is not surprising that the imperial center is extracting resources from its client states in Western Europe to the point of beggaring them.
The discussion could be long and detailed, and Marty's Mac post is much more detailed than the few concepts I have reported here. But I think that, as usual, we can find much food for thought in the behavior of past empires. In particular, I think that a good illustration of the behavior of empires is given by how the Romans dealt with the Britons during the period that goes from the 1st century BC to the 3rd century AD. We see how the annexation of the Britons was only in part obtained by a military invasion. Mostly, it was a question of assimilation. The Romans "romanized" the Britons, making them appreciate such things as Roman money and the luxury items that money could buy. Then, they tricked them into borrowing money from Rome and, finally, when they could not repay the debt, they used that as an excuse to seize their assets and their lands. The similarities between the behavior of the US empire with Western Europe are evident. First, they offered money to the Europeans to rebuild their economy, and now they are squeezing Europe dry.
It is the typical way of Empires: they work like pushers. First, they offer you cheap drugs, then if you don't pay for more doses, they may beat the pants off you, or kill you. In this, they are helped by the traitors that they can place at the top of the states they want to incorporate. Also here, we have an example in the story of Britannia, with Queen Cartimandua as a symmetric equivalent of Queen Boudicca. Whereas Boudicca is seen as a heroine who rebelled against the Romans, Cartimandua allied herself with them. History, as usual, rhymes. A modern incarnation of the collaborationist (or traitoress) Queen Cartimandua could be found in Ursula Von der Leyen, president of the European Commission.
Below, a post that I published about Queen Boudica that illustrates the mechanism of corruption and assimilation that the Romans used to incorporate Britannia into their Empire.
The Queen and the Philosopher: War, Money, and Metals in Roman Britain
We know very little about _Queen Boudica of the Iceni (20 AD (?) - 61 AD) and most of what we know is probably deformed by Roman propaganda. But we may still be able to put together the main elements of her story and how it was that she almost threw the mighty Roman Legions out of Britain. Above, a fantasy interpretation of the Celtic Queen from "galleryhip.com" (This post was inspired by a note from Mireille Martini)_
You probably know the story of Queen Boudica. Tall, strong, and terrible, she was the embodiment of the fierce warrioress who fought - bravely but unsuccessfully - to defend her people from the oppression of an evil empire, that the Romans. It all happened during the reign of Emperor Nero, 1st century AD.
The passage of time has turned these events into legends, deformed by the lens of propaganda. But maybe we can still discern the reasons for Boudica's rebellion and learn something relevant for our times. As it often happens in history, to understand why something happens, you only need to follow the money. In this particular case, it is curious that the money that triggered the war may have been provided by no one else than Lucius Annaeus Seneca, yes, the Stoic philosopher. But it is a story that needs to be told from the beginning.
First of all, why were the Romans in Britain at the time of Queen Boudica? Simple: because of the British mineral resources. Britain had a long story of mining that went back to the Bronze Age and to even earlier times. The British mines could provide copper, tin, iron, lead, and even precious metals: gold and silver. These were all vital resources for the Roman Empire which used precious metals for coinage and all sort of metals for its various technologies.
The Romans already set foot in Britain at the time of Julius Caesar, in 55 BC. They set up a full-fledged invasion only in AD 43 under Emperor Claudius. But even before invading, according to Strabo's Geography, there was a brisk commercial network that connected Rome to Britain. The Britons exported metals and imported luxury goods of all sorts, silk, olive oil, food, slaves, and more.
It was all part of the way the Romans managed their empire. Their expansion was not simply a question of a blitzkrieg war machine. Invading a foreign kingdom was preceded by a long period of cultural and commercial assimilation and it was attempted only when it could provide a financial return. That required a certain degree of economic development of the regions being assimilated. It didn't work with the Germans, who had no mines and only a relatively primitive economy. And they were also a tough military force, able to defeat even the mighty Roman war machine - they did that at Teutoburg, in 9 AD. So, the Romans shifted their attention to the wealthier and metal-rich Britain. It worked: the invasion of 43 AD was relatively easy in military terms. Afterward, the mines increased their production by means of Roman technology, commerce boomed, new Roman settlements were built, and Britain started being romanized.
But something went badly wrong in 60 AD, when the Romans suddenly faced a major rebellion of the Iceni people living in Eastern England, led by their redoubtable queen, Boudica. At the end of this post, you can read the details of the story as we know it, told by Jason Porath in a light-hearted style. Summarizing, when Boudica's husband, King Prasotagus, died, the Romans intervened, seized his lands, had his widow flogged, and his daughters raped. The queen was not amused and the rebellion started with all the associated atrocities. Eventually, the Romans managed to get the upper hand and Boudica killed herself.
But what made the Romans behave in a way that was nearly sure to spark a rebellion? Maybe it was just their lust for power, but there is a detail told by Dio Cassius (vol VIII, Cassius Dio, Roman History, 62.2) that can help us understand what happened. Cassius says that Seneca (yes, he was a philosopher, but also a rich man) had lent to the Iceni a large sum of money and that the Iceni were unable to return it. That suggests that the key to the story was money.
According to Dio Cassius, we are talking of 40 million sesterces. What kind of money is that? It is not so easy for us to visualize this sum, but we know that in those times a Roman legionary was paid nine hundred sestertii per annum. So, 40 million sesterces could pay some 50 thousand troops for a year - a large military force for the time. From this and other data, we could say - very roughly - that the value of a sesterce was of the order of 50 dollars. So, 40 million sesterces could be compared to some two billion dollars today. Clearly, we are discussing of a large sum for a small economy such as that of the Iceni tribe had to be.
We don't know what King Prasotagus had in mind to do with that money, but we know that something went wrong. Dio Cassius faults Seneca himself for having precipitated the rebellion by insisting to have his money back. That Seneca did that out of personal greed seems to be unlikely, as discussed by Grimal. Cassius was writing more than a century after the events and he may have wanted to cast Seneca in a bad light for ideological reasons. But that's just a detail, what matters is that the Iceni (or, better said, the Iceni elite) defaulted on a large debt they had with the Romans.
In ancient times, defaulting on one's debt was a serious crime, so much that the early Roman laws punished it by having the debtor drawn and quartered. In Imperial times, there were considerably more lenient laws - but these laws very valid only for Roman citizens and Boudica was not one. In this light, flogging doesn't sound like an exaggerated punishment for defaulting on a large debt (2 billion dollars!). Even the rape of her daughters was not something unusual as a punishment for non-Roman citizens in those times. In any case, it is likely that the Romans didn't do what they did because they enjoyed torturing and raping women -- they used the default as an excuse to seize the Iceni kingdom. We can't even exclude that the loan was engineered from the beginning with the idea of annexing the kingdom to the Roman Empire.
Be it as it may, at this point, the Iceni elite had little choice: either lose everything or rebel against the largest military power of their time. Neither looked like a good choice, but they chose the one that turned out to be truly disastrous.
All that happened afterward was already written in the book of destiny - the archeological records tell us of cities burned to the ground, confirming the reports of initial Iceni victories told to us by Roman historians. Standard propaganda techniques probably caused the Romans to exaggerate the atrocities performed by the Iceni, just as the number of their fighters in order to highlight their own military prowess. Even Boudica herself was portrayed as a larger-than-life warrioress, but we can't even be completely sure that she actually existed. In any case, the revolt was bound to fail, and it did. In a few centuries, Boudica was forgotten by her own people: we have no mentions of her in the records from Celtic Britain. The Roman Empire faded, but the Roman influence on British customs and language remains visible to this day (and the ghost of the old queen may be pleased by the Brexit!).
What's most interesting in this story is the light it sheds on the inner workings of Empires. We tend to think that Empires exist because of their mighty armies - which is true, in part - but armies are not everything and in any case, the soldiers must be paid. Empires exist because they can control money, (or capital if you prefer). That's the real tool that builds empires: No money - no empire!
And that takes us to the current empire, the one we call the "American Empire" or "the "Western Empire." It does have mighty armies but, really, the grip it has on the world is all based on money. Without the mighty dollar, it is hard to think that the large military and commercial network we call "globalization" could exist.
So, can we think of a modern equivalent of the Iceni rebellion? Surely we can: think of the end of the Soviet Union. It was brought down in 1991 not by military means but by financial ones. The debt the Soviet Union had with the West is estimated at US$ 70 billion, in relative terms probably not far from the 40 million sesterces the Iceni owed to the Romans. Unable to repay this debt, the Soviet elites had only two choices: dissolve or fight. They made an attempt to fight with the "August Putsch" in 1991, but it rapidly fizzled out. There was no chance for the Soviet Communists to make a mistake similar to the one Queen Boudica made, that is starting a full-fledged military rebellion against a much more powerful enemy. That was good for everybody on this planet since the Soviet Union had nuclear warheads which might have been used in desperation. Fortunately, history doesn't always repeat itself!
But, if history doesn't repeat itself, at least it rhymes and the ability of the Western Empire to use financial means to bring countries into submission is well documented. Another, more recent, case, is that of Greece: again a nation that couldn't give back the money it owed to the imperial powers. For a short moment, in 2015, it looked like the Greeks had decided to rebel against the empire but, in the end, the Greek elites chose to submit. The punishment for the Greek citizens has been harsh but, at least, their country was not bombed and destroyed, as it happens rather often nowadays when the Imperial Powers that Be become angry.
But for how long will the Western Empire remain powerful? Just like for the Roman Empire, its destiny seems to be a cycle of growth and decline - and the decline may have already started as shown by the failure of the attempt of bankrupting the heir of the Soviet Union, Russia (again, fortunately for everybody, because Russia has nuclear weapons). The globalized empire seems to be getting weaker and weaker every day. Whether this is a good or a bad thing, only time will tell.
Beginning in 1949, the German Jewish philosopher Leo Strauss taught at the University of Chicago. He soon formed a small group of Jewish disciples from among his students. He taught them orally, which was quite different from his writings. According to him, the democracies had shown their inability to protect the Jews from the Nazi final solution. To prevent this tragedy from happening again and the hammer from falling on them, his disciples had to be on the other side of the handle.
He advised them to build their own dictatorship.
Organizing his followers, Leo Strauss called them his "hoplites" (soldiers of Sparta). He trained them to disrupt the classes of some of his fellow teachers.
Several of the members of this sect have held very high positions in the United States and Israel. The operation and ideology of this grouping were the subject of controversy after the attacks of September 11, 2001. An abundant literature has opposed the supporters and opponents of the philosopher. However, the facts are indisputable .
Anti-Semitic authors have wrongly lumped together Straussians, Jewish communities in the Diaspora and the State of Israel. However, the ideology of Leo Strauss was never discussed in the Jewish world before 9/11. From a sociological point of view, it is a sectarian phenomenon, not at all representative of Jewish culture. However, in 2003, Benjamin Netanyahu’s "revisionist Zionists" made a pact with the US Straussians, in the presence of other Israeli leaders . This alliance was never made public.
One of the characteristics of this group is that they are ready for anything. For example, they wanted to return Iraq to the stone age. This is indeed what they did. For them, all sacrifices are possible, including for themselves, as long as they remain the first; not the best, the first !
In 1992, an advisor to the Secretary of Defense, the Straussian Paul Wolfowitz, wrote the Defense Planning Guidance. It was the first official US document reflecting the thinking of Leo Strauss [(#nb4 "The 1976 report of the "B Team" accusing the USSR of wanting to dominate (...)")]. Wolfowitz was introduced to Strauss’ thought by the American philosopher Allan Bloom (a friend of the Frenchman Raymond Aron), but he himself only briefly knew the master at the end of his teaching in Chicago. However, the US ambassador to the UN, Jeane Kirkpatrick, recognized him as "one of the great Straussian figures" .
In the context of the dissolution of the Soviet Union, Wolfowitz developed a strategy to maintain US hegemony over the entire rest of the world.
The Defense Planning Guidance should have remained confidential, but the New York Times revealed its main lines and published extracts . Three days later, the Washington Post revealed further details . In the end, the original text was never made public, but a version edited by the Secretary of Defense (and future Vice President), Dick Cheney, was circulated.
It is known that the original document was based on a series of meetings in which two other people, all three Straussian, participated: Andrew Marshall, the Pentagon’s "thinker" (who was replaced three years after his death by Arthur Cebrowski), Albert Wohlstetter, the thinker of the atomic deterrence strategy, and his son-in-law Richard Perle, the future director of the Defense Policy Board. The Defense Planning Guidance was written by a student of Wohlstetter, Zalmay Khalilzad (future ambassador to the UN).
The document speaks of a new "world order [...] ultimately supported by the United States", in which the sole superpower would only have temporary alliances, depending on the conflict. The UN and even NATO would be increasingly sidelined. More broadly, the Wolfowitz Doctrine theorizes the need for the United States to block the emergence of any potential competitor to U.S. hegemony, especially "advanced industrial nations" such as Germany and Japan. Particularly targeted is the European Union: "While the United States supports the European integration project, we must be careful to prevent the emergence of a purely European security system that would undermine NATO, and particularly its integrated military command structure. The Europeans will thus be asked to include in the Maastricht Treaty a clause subordinating their defense policy to that of NATO, while the Pentagon report recommends the integration of the new Central and Eastern European states into the European Union, while giving them the benefit of a military agreement with the United States that would protect them against a possible Russian attack .
For thirty years, this document has been patiently implemented.
– The Maastricht Treaty includes a paragraph 4 in Title V, Article J4, which stipulates: "The policy of the Union within the meaning of this Article shall not prejudice the specific character of the security and defence policy of certain Member States and shall respect the obligations of certain Member States under the North Atlantic Treaty and be compatible with the common security and defence policy established within that framework. These provisions have been included in the various texts up to Article 42 of the Treaty on European Union.
– The former Warsaw Pact member states have almost all joined the European Union. This decision was a choice imposed by Washington and announced by Secretary of State James Baker just before the European Council meeting that endorsed it.
In 2000, Paul Wolfowitz was, together with Zbignew Brzezinki, the main speaker at a large Ukrainian-US symposium in Washington, organized by Ukrainian "integral nationalists" who had taken refuge in the USA. There he pledged to support independent Ukraine, to provoke Russia to go to war with it, and ultimately to finance the destruction of the resurgent rival of the USA .
These commitments were implemented with the passage of the Ukraine Democracy Defense Lend-Lease Act of 2022 on April 28, 2022 . Ukraine is now exempt from all arms control procedures, including end-use certificates. Very expensive weapons are leased by the USA to the EU to defend Ukraine. When the war is over, the Europeans will have to pay for what they have consumed. And the bill will be heavy.
Victoria Nuland and Anthony Blinken in John Kerry’s office
Although the European elites have benefited from their alliance with the United States so far, they should not be surprised that the United States is now trying to destroy them under the Defense Planning Guidance. They have already seen what Washington was capable of after the 9/11 attacks: Paul Wolfowitz forbade countries that had expressed reservations about the war, such as Germany and France, to conclude contracts for the reconstruction of Iraq .
At present, the rise in the price of energy sources and their increasing scarcity threaten not only the heating and transportation of individuals, but above all the survival of all their industries. If this phenomenon continues, it is the economy of the European Union as a whole that will suddenly collapse, taking its population back at least a century.
This phenomenon is difficult to analyze because the prices and availability of energy sources vary according to many factors.
First, prices depend on supply and demand. As a result, they have risen with the overall economic recovery from the end of the Covid-19 epidemic.
Second, energy sources are the main targets of speculators. Even more so than currencies. The world price of oil can be multiplied by 2.5 just by the effect of speculation.
So far, everything is usual and known. But the Western sanctions against Russia, following its application of the Minsk II Agreement, for which it was the guarantor before the Security Council, have broken the world market. From now on, there is no longer a global price, but different prices according to the countries of the sellers and the customers. There are still prices quoted on the stock exchange in Wall Street and the City, but they bear no relation to those in Beijing and New Delhi.
Above all, oil and gas, which were abundant in the European Union, are starting to run out, while globally they are still in overabundance.
All our reference points have been turned upside down. Our statistical tools, designed for the global market, are not at all adapted to the current period. We can therefore only make assumptions, without any means of verifying them. This situation allows many people to talk nonsense with an air of authority; in fact, we are all evolving at a guessing pace.
One of the current factors is the reflux of dollars which were used for trade and speculation and which are no longer usable for these transactions in certain countries. This mostly virtual currency is leaving Russia and its allies to go to or return to the countries where it is still used. This is a gigantic phenomenon that the Federal Reserve and the US military have always wanted to avoid, but which the Straussians in the Biden administration (Secretary of State Antony Blinken and his deputy Victoria Nuland) have deliberately provoked.
Wrongly convinced that Russia has invaded Ukraine and is trying to annex it, the Europeans forbid themselves to trade with Moscow. In practice, they still consume Russian gas, but they are convinced that Gazprom will cut off their gas supply. For example, their press announced that the Russian company was closing the Nord Stream pipeline, although it had announced a three-day technical interruption. Normally, gas pipeline deliveries are interrupted for maintenance for two days every two months. Here, Gazprom was hampered in its maintenance by the Western blockade, which prevented the return of the turbines it had sent for repair to Canada. However, the population understood that the evil Russians had cut off their gas on the eve of winter.
The European propaganda aims to prepare public opinion for a definitive closure of the gas pipeline and to put the responsibility on Russia.
In this case, the leaders of the Union are simply implementing the directives of the Straussians. In doing so, they are scuttling European industry to the detriment of their citizens. Already some energy-intensive factories have reduced their production or even closed.
The process of decrepitude of the European Union will continue as long as no one dares to oppose it. To everyone’s surprise, a first pro-Russian demonstration was held on September 3 in Prague. The police admitted to 70,000 people (for a country of 10 million), but there were probably many more. Political commentators despise them and consider them "Putin’s useful idiots". But these insults do not mask the unease of European elites.
Energy experts consider power cuts throughout the Union inevitable. Only Hungary, which has previously obtained exemptions, could escape the rules of the single energy market. Those who can produce electricity will have to share it with those who cannot. It doesn’t matter whether this inability is the result of bad luck or short-sightedness.
Brussels should start with voltage reductions, then cut off at night, and finally during the day. Individuals will have difficulties to maintain elevators, to heat their homes in winter, to cook if they use electric plates and, those who use trains, buses or electric cars, should have difficulties to move. Energy-intensive businesses, such as blast furnaces, are expected to close. Infrastructures are expected to become impassable, such as long tunnels that can no longer be ventilated. Above all, electronic installations designed for continuous operation will not be able to withstand repeated interruptions. This will be the case, for example, for antennas that are essential for cell phone networks, which will be thrown away after three months of this treatment.
In third world countries where electricity is scarce, battery powered leds are used for lighting and UPS to power low consumption machines, such as computers or televisions. But these materials are currently not available in the EU.
The EU’s GDP has already fallen by almost 1%. Will this recession continue as the Straussians plan, or will the citizens of the Union interrupt it, as part of the Czech people are trying to do?
The Straussians will go all the way. They have taken advantage of the decadence of the United States to take over the real power. Since a junkie, never elected, can use official planes galore to do business all over the world , they have quietly moved into the shadow of President Biden and are governing in his place. European leaders, on the other hand, are either blind or too committed to stop, acknowledge their thirty years of mistakes and turn back.
What to remember:
- The Straussians are a fanatical sect ready to do anything to maintain the supremacy of the United States over the world. They imagined the wars that have plagued the world for the past thirty years and the one in Ukraine today.
- They persuaded the European Union that Moscow wanted to annex first Ukraine and then all of Central Europe. With that, they convinced Brussels to stop all trade with Russia.
- The energy crisis that is beginning is leading the European Union towards electricity and power cuts that will wreak havoc on the way of life of its citizens and on its economy.
The UK and Commonwealth may be mourning the passing of Queen Elizabeth II yesterday. I am in mourning as well, but for a very different reason: the gathering of the Ukraine Defense Contact Group in the Ramstein air base in Germany yesterday reshuffled the deck on Western military and financial assistance to Ukraine, raising contributions to the ongoing holy crusade against Russia from still more nations and adding new, still more advanced precision strike weapons to the mix of deliveries to Kiev. It was an open summons to the Kremlin to escalate in turn, as were the test firing the same day of a new intercontinental rocket, the Minuteman III, from Vandenberg air base in California and the unannounced visit to Kiev yesterday of not only Secretary of State Antony Blinken, who was featured in Western media accounts, but also other top officials of the Biden administration. The most notorious member of this delegation was surely Blinken’s deputy, Victoria Nuland, who had stage managed the February 2014 coup that put in power in Kiev the Russia-hating regime that Zelensky now heads.
The Russians may be compelled to take the bait due to the course of military action on the ground. As now becomes clear, they have just suffered some losses in very heavy ground and artillery fighting these past few days around Kharkov. The Ukrainian gains were facilitated by the advanced weaponry recently arrived from NATO countries, by the targeting data they are receiving from the U.S. and from off-stage tactical direction from NATO officers. By ‘take the bait,’ I mean the Russians may escalate to all out war on Ukraine. This question figured prominently in yesterday’s major news and political talk show programs of Russian state television. I will go into these matters in some detail below.
Regrettably, all of the foregoing also obliges me to revisit the critique I published a couple of weeks ago on the latest essay in Foreign Affairs magazine by John Mearsheimer. His overarching message on the dangers of our stumbling into a nuclear war is better substantiated by the latest developments, even though I believe that Mearsheimer failed to identify the several successive steps that lie ahead before we find ourselves in such a war. Mearsheimer oversimplified Russian options to deal with setbacks on the ground. This also will be a central issue in my narrative below.
Finally, in this essay I will direct attention to the second dimension of the ongoing confrontation between Russia and the entire Collective West: the economic war being waged on the Russian Federation via sanctions, which now far outnumber those directed against any other country on earth. This war, as I will argue, is going well for the Russians. More importantly for us all, it is the sole area in which the peoples of Europe may have a say in putting an end to the mad policies being pursued by their national governments under the direct pressure of Washington.
Over the past ten days, we have witnessed the start of the Ukrainian counter-offensive which was preceded by so much anticipation in Western media. A reversal of Russian fortunes in the war was predicted, leading to the stalemate or outright defeat for Russia which Mearsheimer and some other analysts in the US foreign policy community feared would trigger a nuclear response from the Kremlin.
In fact, the Ukrainian counter-offensive got off to a very bad start. It opened in the south, in the Kherson region. Kherson, which is predominantly Russian-speaking, was the first major Ukrainian city to fall to the Russians and it has strategic importance for ensuring Russian domination of the Black Sea littoral. However, first results of the Ukrainian attacks there were disastrous for the Ukrainian armed forces. It soon was obvious that they had deployed new recruits who had little or no military experience. The infantry attacked across open terrain where they were easily destroyed in vast numbers by the Russian defenders of Kherson. I have heard the figure of 5,000 Ukrainian casualties in the Kherson counter offensive. Obviously the Russians were jubilant, though there were reports of some Ukrainian reservists being withdrawn from the field of action for redeployment elsewhere.
What followed was something the Russians evidently did not expect, namely a well prepared and implemented assault on their positions around the northeastern city of Kharkov, Ukraine’s second largest city. Kharkov was briefly surrounded by Russian forces at the start of the war, but was left in relative peace as the Russians refocused their strategy on taking the Donbas and avoiding major urban warfare except in one place, Mariupol. Exactly what the Russian game plan has been was recently explained in a remarkable paper published by a certain ‘Marinus’ in the Marine Corps Gazette. See https://www.imetatronink.com/2022/08/a-former-us-marine-corps-officers.html
A couple of days ago I picked up the following amidst the chatter of panelists on Evening with Vladimir Solovyov: “yes, we made some mistakes, but it is inevitable in a war that mistakes are made.” As from the latest news on the apparent loss of Balakliya and surrounding villages on the outskirts of Kharkov, we can see that the Ukrainian tactics were precisely those which Russia had been using so effectively against them from day one of the ‘special military operation,’ namely a feint in one war zone followed by all-out attack on a very different region. Of course, the ‘feint’ around Kherson, if that is what it was, entailed the cynical sacrifice of thousands of young and not so young Ukrainian foot soldiers. But the resultant distraction prevented the Russians from bringing up sufficient manpower to successfully defend their positions around Kharkov, which include the strategically important city of Izyum.
Izyum is close to the Russian-Ukrainian border southeast of Kharkov and is a major logistical base for munitions and weaponry that are sent onward to support the Donbas operation. The latest information on the Russian side appears to be that the Russians have now dispatched large numbers of reservists to this area to hold their positions. They also speak of intense artillery duels. We may well assume that both sides have experienced heavy loss of life. As yet, the outcome is unforeseeable. Meanwhile, Russian war correspondents on the ground in Donetsk insist that the Russian advance towards Slavyansk, in the center of the former Donetsk oblast, is continuing without pause, which suggests that the strikes on their munitions stores claimed by the Ukrainians have not been totally effective. If Slavyansk is taken in the coming few weeks, then Russia will quickly assume control of the entire territory of the Donbas.
In last night’s talk show program, host Vladimir Solovyov said that this latest push in the Ukrainian counter-offensive was timed to coincide with the gathering at the Ramstein air base, Germany of top officials from NATO and other allies under the direction of the visiting U.S. Secretary of Defense Lloyd Austin. If the Ukrainian efforts were failing in the field, then the cry would go up: we must provide them with more weapons and training. And if the Ukrainian efforts in the counter-offensive were succeeding, those in attendance at Ramstein would hear exactly the same appeal to aid Kiev.
Though Evening with Solovyov, on air from about 23.00 Moscow time, offered viewers some few minutes of video recordings from the opening of the Ramstein gathering, far more complete coverage was provided to Russian audiences a few hours earlier by the afternoon news show Sixty Minutes. Here, nearly half an hour on air was given over to lengthy excerpts from CNN and other U.S. and European mainstream television reporting about Ramstein. Host Yevgeni Popov read the Russian translation of the various Western news bulletins. His presentation clearly sought to dramatize the threat and to set off alarm bells.
For his part, Vladimir Solovyov went beyond presentation of the threat posed by the United States and its allies to analysis of Russia’s possible response. He spoke at length, and we may assume that what he was saying had the direct approval of the Kremlin, because his guests, who are further removed from Power than he is, were, for the most part, allowed only to talk blather, such as the critique by one panelist of a recent pro-Ukraine, anti-Russia article in The New York Review of Books by Yale professor Timothy Snyder, who counts for nothing in the big strategic issues Russia faces today.
So, what did Solovyov have to say? First, that Ramstein marked a new stage in the war, because of the more threatening nature of the weapons systems announced for delivery, such as missiles with accuracy of 1 to 2 meters when fired from distances of 20 or 30 kilometers thanks to their GPS-guided flight, in contrast to the laser-guided missiles delivered to Ukraine up till now. In the same category, there are weapons designed to destroy the Russians’ radar systems used for directing artillery fire. Second, that Ramstein marked the further expansion of the coalition or holy crusade waging war on Russia. Third, that in effect this is no longer a proxy war but a real direct war with NATO and should be prosecuted with appropriate mustering of all resources at home and abroad.
Said Solovyov, Russia should throw off constraints and destroy the Ukrainian dual use infrastructure which makes it possible to move Western weapons across the country to the front. The railway system, the bridges, the electricity generating stations all should become fair targets. Moreover, Kiev should no longer be spared missile strikes and destruction of the ministries and presidential apparatus responsible for prosecution of the war. I note that these ideas were aired on the Solovyov program more than a month ago but then disappeared from view while the Russians were making great gains on the ground. The latest setbacks and the new risks associated with the Western policies set out at Ramstein bring them to the surface again.
Solovyov also argued that Russia should now use in Ukraine its own most advanced weapons that have similar characteristics to what NATO is delivering to the other side. As a sub-point, Russia should consider neutralizing in one way or another the GPS guidance for U.S. weapons. Of course, if this means destroying or blinding the respective U.S. satellites, that would mean crossing a well-known U.S. red line or casus belli.
Next, in the new circumstances, Russia should abandon its go-it-alone policy and actively seek out complementary weapons systems from previously untouchable countries, such as Iran and North Korea. Procurements from both have till now been minimal. On this issue, a couple of panelists with military expertise were allowed to explain that both these countries have sophisticated and proven weapons that could greatly assist Russia’s war effort. Iran has unbeatable drones which carry hefty explosive charges and have proven their worth in operations that are unmentionable on public television. And North Korea has very effective tanks and highly portable field artillery which are both fully compatible with Russian military practice, because the designs were based on Chinese weapons, which in turn were copies of Russia’s own. These weapons also have shown their worth in the hands of unnamed purchasers in the Middle East. Moreover, North Korea has a vast store of munitions fully compatible with Russian artillery. It was also mentioned in passing that insofar as Kiev has mobilized in the field many Western mercenaries and covert NATO officers, Russia should also recruit from abroad, as for example, whole brigades from North Korea available for hire.
If any of these ideas put out by Solovyov last night are indeed implemented by the Kremlin, then the present confrontation in and over Ukraine will truly become globalized, and we have the outlines of what may be called World War III. However, I note that the use of nuclear weapons, tactical or otherwise, does not figure at all in the set of options that official Moscow discusses in relation to the challenges it faces in its Ukraine operation. Such a possibility would arise only if the NATO forces being sent to the EU’s ‘front line states’ grew in number by several times those presently assigned and appeared to be preparing to invade Russia.
Before Ramstein, before the news of Ukrainian successes on the ground in the Kharkov sector, I had plans to write about a very different development this past week that coincided with a different calendar: the end of summer vacations and return to work of our national governments. With the return, our presidents and prime ministers would finally have to address the critical state of the European economies, which are facing the highest inflation rates in decades and an energy crisis brought about by the sanctions on Russian hydrocarbons. Speculation was rife on what exactly they would do.
I was particularly struck by several articles in the 7 September edition of The Financial Times and planned to comment on them.
For months now, the FT has been the voice of Number 10, Downing Street, at the vanguard of the Western crusade to crush Russia. Their editorial board has consistently backed every proposal for sanctions against Russia, however hare-brained. And yet on the 7th their journalists ran away with the show and cast doubt on the basic assumptions held by their bosses. One article by Derek Brower in the “FT Energy Source” newsletter has the self-explanatory title “The price cap idea that could worsen the energy crisis.” As we saw today, Brower’s concern was misplaced: finally, the EU could not agree a price cap policy. This notion, promoted from the United States by none other than the Secretary of the Treasury Janet Yellen, is in full contradiction with the practices of the global hydrocarbon market, as even a few EU leaders understood, depriving the initiators from the Baltic States of their hoped for consensus.
Another article of the 7th in FT, by Valentina Pop, Europe Express Editor, analyzed quickly and competently the problems facing European policy-makers in their bid to alleviate the pain to households and industry that the latest electricity and heating bills would otherwise present, given that they are several times higher than just a year ago and are unaffordable by large swathes of the population. Pop identified the key issue thus: how to provide aid quickly to those most in need given the constraints and resources available to the various government bureaucracies: “Some capitals will take many months in determining which households require help” she says. Of course, ‘many months’ of patience in the broad population will not be there.
But the most surprising article in this collection from the 7th was in the “Opinion Lex” section of the paper which was nominally about how Russian banks have weathered the storm that broke out when the EU sanctions on their industry first were laid down shortly after the start of Russia’s ‘special military operation.’ Indeed, VTB and other major Russian banks have returned to profitability despite it all. The author finds that ‘sanctions are biting less than western politicians hoped.’ Not only did the expected banking crisis not materialize, but the ruble is at five-year peaks and inflation is falling. Moreover the official Russian financial data behind these generalizations is said to be sound by independent and trustworthy market observers. The key conclusions are saved for last: “Russia has shown it can bear the pain of western sanctions. Western Europe must endure reprisals as robustly, or concede a historic defeat.’ The ‘reprisals’ in question are the complete shutdown of Russian gas deliveries through Nord Stream I until Europe lifts its sanctions.
It is interesting that even the Opinion article by NATO Secretary General Jens Stoltenberg published on the 7th in FT carries the following grim warning: “We face a difficult six months, with the threat of energy cuts, disruptions and perhaps even civil unrest.’ [emphasis mine]
To be sure, here and there in Europe, there are a few clever administrators who find promising solutions to the pending crisis of energy bills. In her first day in office, Britain’s new Prime Minister Liz Truss announced one such solution: to immediately freeze the maximum energy bill per household at the present level of 2500 pounds sterling per year and then to turn around and agree with the power companies a subsidy for them to cover their losses.
This is fine for nipping in the bud possible ‘civil unrest.’ But the question remains how Britain will finance the estimated 150 billion pounds this will cost in the first year alone. If a similar solution were approved in the EU, the overall cost would surely approach the 800 billion euros of assistance borrowed to cover losses attributable to the Covid pandemic a year ago. But whereas the Covid aid was financed by collective borrowing of the EU, no such solidarity is likely to deal with the energy crisis, given that Germany, the Netherlands and other northern Member States oppose this becoming a general practice and will apply a veto. The British solution, however clever it may be, will hardly be available to many countries in the EU on their own given their high state indebtedness.
Then there is the second question of what to do to assist industry. Failure to give industry proper relief will result in company closures and rampant unemployment, which finally also sparks political protest. In any case, such solutions do not deal with the knock-on effects of vastly increased government borrowing to finance the energy subsidies, something which in the best of times always reduces capital available for other government services and capital available to private business for investment and job creation.
These various problems in dealing with the energy crisis that Europe created for itself by imposing sanctions on Russia may well be intractable and may well lead to spontaneous protests in a number of European countries this fall.
There is,no anti-war movement on the Old Continent to speak of. So popular protests over the ‘heat or eat’ dilemma being imposed from the chanceries on the people without anything resembling public debate may be the salvation of us all if they induce war mongering politicans to resign.
©Gilbert Doctorow, 2022
Plenary session moderator Margarita Simonyan: Good afternoon, or almost evening.
As you may know, we had a minor technical issue. Thankfully, it has been dealt with quickly. We are grateful to those who resolved this.
We are also grateful to the audience.
We are grateful to our leader, President Vladimir Putin, for traditionally fitting this forum into his schedule so that he can tell us about economic prospects and other plans.
We are grateful to President Kassym-Jomart Tokayev for attending our forum. We know that it is not an easy thing to do. Thank you for supporting our forum and our country. We really appreciate this.
We will have a lot of questions today. You may not like some of them, and I may not be happy to ask some of them. We would be much happier to speak only about good things, but this is impossible today.
Mr President, I would like to ask you to take the stand and to tell us what lies in store for us all. Thank you.
President of Russia Vladimir Putin: Thank you very much. President Tokayev, friends and colleagues,
I welcome all participants and guests of the 25th St Petersburg International Economic Forum.
It is taking place at a difficult time for the international community when the economy, markets and the very principles of the global economic system have taken a blow. Many trade, industrial and logistics chains, which were dislocated by the pandemic, have been subjected to new tests. Moreover, such fundamental business notions as business reputation, the inviolability of property and trust in global currencies have been seriously damaged. Regrettably, they have been undermined by our Western partners, who have done this deliberately, for the sake of their ambitions and in order to preserve obsolete geopolitical illusions.
Today, our – when I say “our,” I mean the Russian leadership – our own view of the global economic situation. I would like to speak in greater depth about the actions Russia is taking in these conditions and how it plans to develop in these dynamically changing circumstances.
When I spoke at the Davos Forum a year and a half ago, I also stressed that the era of a unipolar world order has come to an end. I want to start with this, as there is no way around it. This era has ended despite all the attempts to maintain and preserve it at all costs. Change is a natural process of history, as it is difficult to reconcile the diversity of civilisations and the richness of cultures on the planet with political, economic or other stereotypes – these do not work here, they are imposed by one centre in a rough and no-compromise manner.
The flaw is in the concept itself, as the concept says there is one, albeit strong, power with a limited circle of close allies, or, as they say, countries with granted access, and all business practices and international relations, when it is convenient, are interpreted solely in the interests of this power. They essentially work in one direction in a zero-sum game. A world built on a doctrine of this kind is definitely unstable.
After declaring victory in the Cold War, the United States proclaimed itself to be God’s messenger on Earth, without any obligations and only interests which were declared sacred. They seem to ignore the fact that in the past decades, new powerful and increasingly assertive centres have been formed. Each of them develops its own political system and public institutions according to its own model of economic growth and, naturally, has the right to protect them and to secure national sovereignty.
These are objective processes and genuinely revolutionary tectonic shifts in geopolitics, the global economy and technology, in the entire system of international relations, where the role of dynamic and potentially strong countries and regions is substantially growing. It is no longer possible to ignore their interests.
To reiterate, these changes are fundamental, groundbreaking and rigorous. It would be a mistake to assume that at a time of turbulent change, one can simply sit it out or wait it out until everything gets back on track and becomes what it was before. It will not.
However, the ruling elite of some Western states seem to be harbouring this kind of illusions. They refuse to notice obvious things, stubbornly clinging to the shadows of the past. For example, they seem to believe that the dominance of the West in global politics and the economy is an unchanging, eternal value. Nothing lasts forever.
Our colleagues are not just denying reality. More than that; they are trying to reverse the course of history. They seem to think in terms of the past century. They are still influenced by their own misconceptions about countries outside the so-called “golden billion”: they consider everything a backwater, or their backyard. They still treat them like colonies, and the people living there, like second-class people, because they consider themselves exceptional. If they are exceptional, that means everyone else is second rate.
Thereby, the irrepressible urge to punish, to economically crush anyone who does not fit with the mainstream, does not want to blindly obey. Moreover, they crudely and shamelessly impose their ethics, their views on culture and ideas about history, sometimes questioning the sovereignty and integrity of states, and threatening their very existence. Suffice it to recall what happened in Yugoslavia, Syria, Libya and Iraq.
If some “rebel” state cannot be suppressed or pacified, they try to isolate that state, or “cancel” it, to use their modern term. Everything goes, even sports, the Olympics, bans on culture and art masterpieces just because their creators come from the “wrong” country.
This is the nature of the current round of Russophobia in the West, and the insane sanctions against Russia. They are crazy and, I would say, thoughtless. They are unprecedented in the number of them or the pace the West churns them out at.
The idea was clear as day – they expected to suddenly and violently crush the Russian economy, to hit Russia’s industry, finance, and people's living standards by destroying business chains, forcibly recalling Western companies from the Russian market, and freezing Russian assets.
This did not work. Obviously, it did not work out; it did not happen. Russian entrepreneurs and authorities have acted in a collected and professional manner, and Russians have shown solidarity and responsibility.
Step by step, we will normalise the economic situation. We have stabilised the financial markets, the banking system and the trade network. Now we are busy saturating the economy with liquidity and working capital to maintain the stable operation of enterprises and companies, employment and jobs.
The dire forecasts for the prospects of the Russian economy, which were made in early spring, have not materialised. It is clear why this propaganda campaign was fuelled and all the predictions of the dollar at 200 rubles and the collapse of our economy were made. This was and remains an instrument in an information struggle and a factor of psychological influence on Russian society and domestic business circles.
Incidentally, some of our analysts gave in to this external pressure and based their forecasts on the inevitable collapse of the Russian economy and a critical weakening of the national currency – the ruble.
Real life has belied these predictions. However, I would like to emphasise that to continue being successful, we must be explicitly honest and realistic in assessing the situation, be independent in reaching conclusions, and of course, have a can-do spirit, which is very important. We are strong people and can deal with any challenge. Like our predecessors, we can resolve any task. The entire thousand-year history of our country bears this out.
Within just three months of the massive package of sanctions, we have suppressed inflation rate spikes. As you know, after peaking at 17.8 percent, inflation now stands at 16.7 percent and continues dropping. This economic dynamic is being stabilised, and state finances are now sustainable. I will compare this to other regions further on. Yes, even this figure is too much for us – 16.7 percent is high inflation. We must and will work on this and, I am sure, we will achieve a positive result.
After the first five months of this year, the federal budget has a surplus of 1.5 trillion rubles and the consolidated budget – a surplus of 3.3 trillion rubles. In May alone, the federal budget surplus reached almost half a trillion rubles, surpassing the figure for May 2021 more than four times over.
Today, our job us to create conditions for building up production and increasing supply in the domestic market, as well as restoring demand and bank financing in the economy commensurately with the growth in supply.
I mentioned that we have taken measures to reestablish the floating assets of companies. In most sectors, businesses have received the right to suspend insurance premiums for the second quarter of the year. Industrial companies have even more opportunities – they will be able to delay them through the third quarter as well. In effect, this is like getting an interest-free loan from the state.
In the future, companies will not have to pay delayed insurance premiums in a single payment. They will be able to pay them in equal installments over 12 months, starting in June next year.
Next. As of May the subsidised mortgage rate has been reduced. It is now 9 percent, while the programme has been extended till the end of the year. As I have mentioned, the programme is aimed at helping Russians improve their housing situation, while supporting the home building industry and related industries that employ millions of people.
Following a spike this spring, interest rates have been gradually coming down, as the Central Bank lowers the key rate. I believe that that this allows the subsidised mortgage rate to be further cut to 7 percent.
What is important here? The programme will last until the end of the year without change. It means that our fellow Russians seeking to improve their living conditions should take advantage of the subsidy before the end of the year.
The lending cap will not change either, at 12 million roubles for Moscow and St Petersburg and 6 million for the rest of Russia.
I should add that we must make long-term loans for businesses more accessible. The focus must shift from budget subsidies for businesses to bank lending as a means to spur business activity.
We need to support this. We will allocate 120 billion rubles from the National Wealth Fund to build up the capacity of the VEB Project Financing Factory. This will provide for additional lending to much-needed initiatives and projects worth around half a trillion roubles.
Once again, the economic blitzkrieg against Russia was doomed to fail from the beginning. Sanctions as a weapon have proved in recent years to be a double-edged sword damaging their advocates and architects just a much, if not more.
I am not talking about the repercussions we see clearly today. We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies.
So far this is not the case, but European politicians have already dealt their economies a serious blow all by themselves. We see social and economic problems worsening in Europe, and in the US as well, food, electricity and fuel prices rising, with quality of life in Europe falling and companies losing their market edge.
According to experts, the EU’s direct, calculable losses from the sanctions fever could exceed $400 billion this year. This is the price of the decisions that are far removed from reality and contradict common sense.
These outlays fall directly on the shoulders of people and companies in the EU. The inflation rate in some Eurozone countries has exceeded 20 percent. I mentioned inflation in Russia, but the Eurozone countries are not conducting special military operations, yet the inflation rate in some of them has reached 20 percent. Inflation in the United States is also unacceptable, the highest in the past 40 years.
Of course, inflation in Russia is also in the double digits so far. However, we have adjusted social benefits and pensions to inflation, and increased the minimum and subsistence wages, thereby protecting the most vulnerable groups of the population. At the same time, high interest rates have helped people keep their savings in the Russian banking system.
Businesspeople know, of course, that a high key rate clearly slows economic development. But it is a boon for the people in most cases. They have reinvested a substantial amount of money in banks due to higher interest rates.
This is our main difference from the EU countries, where rising inflation is directly reducing the real incomes of the people and eating up their savings, and the current manifestations of the crisis are affecting, above all, low-income groups.
The growing outlays of European companies and the loss of the Russian market will have lasting negative effects. The obvious result of this will be the loss of global competitiveness and a system-wide decline in the European economies’ pace of growth for years to come.
Taken together, this will aggravate the deep-seated problems of European societies. Yes, we have many problems as well, yet I have to speak about Europe now because they are pointing the finger at us although they have enough of their own problems. I mentioned this at Davos. A direct result of the European politicians’ actions and events this year will be the further growth of inequality in these countries, which will, in turn, split their societies still more, and the point at issue is not only the well-being but also the value orientation of various groups in these societies.
Indeed, these differences are being suppressed and swept under the rug. Frankly, the democratic procedures and elections in Europe and the forces that come to power look like a front, because almost identical political parties come and go, while deep down things remain the same. The real interests of people and national businesses are being pushed further and further to the periphery.
Such a disconnect from reality and the demands of society will inevitably lead to a surge in populism and extremist and radical movements, major socioeconomic changes, degradation and a change of elites in the short term. As you can see, traditional parties lose all the time. New entities are coming to the surface, but they have little chance for survival if they are not much different from the existing ones.
The attempts to keep up appearances and the talk about allegedly acceptable costs in the name of pseudo-unity cannot hide the main thing: the European Union has lost its political sovereignty, and its bureaucratic elites are dancing to someone else’s tune, doing everything they are told from on high and hurting their own people, economies, and businesses.
There are other critically important matters here. The worsening of the global economic situation is not a recent development. I will now go over things that I believe are extremely important. What is happening now does not stem from what happened during recent months, of course not. Moreover, it is not the result of the special military operation carried out by Russia in Donbass. Saying so is an unconcealed, deliberate distortion of the facts.
Surging inflation in product and commodity markets had become a fact of life long before the events of this year. The world has been driven into this situation, little by little, by many years of irresponsible macroeconomic policies pursued by the G7 countries, including uncontrolled emission and accumulation of unsecured debt. These processes intensified with the onset of the coronavirus pandemic in 2020, when supply and demand for goods and services drastically fell on a global scale.
This begs the question: what does our military operation in Donbass have to do with this? Nothing whatsoever.
Because they could not or would not devise any other recipes, the governments of the leading Western economies simply accelerated their money-printing machines. Such a simple way to make up for unprecedented budget deficits.
I have already cited this figure: over the past two years, the money supply in the United States has grown by more than 38 percent. Previously, a similar rise took decades, but now it grew by 38 percent or 5.9 trillion dollars in two years. By comparison, only a few countries have a bigger gross domestic product.
The EU's money supply has also increased dramatically over this period. It grew by about 20 percent, or 2.5 trillion euros.
Lately, I have been hearing more and more about the so-called – please excuse me, I really would not like to do this here, even mention my own name in this regard, but I cannot help it – we all hear about the so-called ‘Putin inflation’ in the West. When I see this, I wonder who they expect would buy this nonsense – people who cannot read or write, maybe. Anyone literate enough to read would understand what is actually happening.
Russia, our actions to liberate Donbass have absolutely nothing to do with this. The rising prices, accelerating inflation, shortages of food and fuel, petrol, and problems in the energy sector are the result of system-wide errors the current US administration and European bureaucracy have made in their economic policies. That is where the reasons are, and only there.
I will mention our operation, too: yes, it could have contributed to the trend, but the root cause is precisely this – their erroneous economic policies. In fact, the operation we launched in Donbass is a lifeline they are grabbing at to be able to blame their own miscalculations on others, in this case, on Russia. But everyone who has at least completed primary school would understand the true reasons for today's situation.
So, they printed more money, and then what? Where did all that money go? It was obviously used to pay for goods and services outside Western countries – this is where the newly-printed money flowed. They literally began to clean out, to wipe out global markets. Naturally, no one thought about the interests of other states, including the poorest ones. They were left with scraps, as they say, and even that at exorbitant prices.
While at the end of 2019, imports of goods to the United States amounted to about 250 billion dollars a month, by now, it has grown to 350 billion. It is noteworthy that the growth was 40 percent – exactly in proportion to the unsecured money supply printed in recent years. They printed and distributed money, and used it to wipe out goods from third countries’ markets.
This is what I would like to add. For a long time, the United States was a big food supplier in the world market. It was proud, and with good reason, of its achievements, its agriculture and farming traditions. By the way, this is an example for many of us, too. But today, America’s role has changed drastically. It has turned from a net exporter of food into a net importer. Loosely speaking, it is printing money and pulling commodity flows its way, buying food products all over the world.
The European Union is building up imports even faster. Obviously, such a sharp increase in demand that is not covered by the supply of goods has triggered a wave of shortages and global inflation. This is where this global inflation originates. In the past couple of years, practically everything – raw materials, consumer goods and particularly food products – has become more expensive all over the world.
Yes, of course, these countries, including the United States continue importing goods, but the balance between exports and imports has been reversed. I believe imports exceed exports by some 17 billion. This is the whole problem.
According to the UN, in February 2022, the food price index was 50 percent higher than in May 2020, while the composite raw materials index has doubled over this period.
Under the cloud of inflation, many developing nations are asking a good question: why exchange goods for dollars and euros that are losing value right before our eyes? The conclusion suggests itself: the economy of mythical entities is inevitably being replaced by the economy of real values and assets.
According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves in these currencies.
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation.
As for Europe, their failed energy policy, blindly staking everything on renewables and spot supplies of natural gas, which have caused energy price increases since the third quarter of last year – again, long before the operation in Donbass – have also exacerbated price hikes. We have absolutely nothing to do with this. It was due to their own actions that prices have gone through the roof, and now they are once again looking for somebody to blame.
Not only did the West’s miscalculations affect the net cost of goods and services but they also resulted in decreased fertiliser production, mainly nitrogen fertilisers made from natural gas. Overall, global fertiliser prices have jumped by over 70 percent from mid-2021 through February 2022.
Unfortunately, there are currently no conditions that can overcome these pricing trends. On the contrary, aggravated by obstacles to the operation of Russian and Belarusian fertiliser producers and disrupted supply logistics, this situation is approaching a deadlock.
It is not difficult to foresee coming developments. A shortage of fertiliser means a lower harvest and a higher risk of an undersupplied global food market. Prices will go even higher, which could lead to hunger in the poorest countries. And it will be fully on the conscience of the US administration and the European bureaucracy.
I want to emphasise once again: this problem did not arise today or in the past three or four months. And certainly, it is not Russia’s fault as some demagogues try to declare, shifting the responsibility for the current state of affairs in the world economy to our country.
Maybe it would even be nice to hear that we are so powerful and omnipotent that we can blow up inflation in the West, in the United States and Europe, or that we can do things to throw everything into disorder. Maybe it would be nice to feel this power, if only there were truth in it. This situation has been brewing for years, spurred by the short-sighted actions of those who are used to solving their problems at somebody else’s expense and who have relied and still rely on the mechanism of financial emission to outbid and draw trade flows, thus escalating deficits and provoking humanitarian disasters in certain regions of the world. I will add that this is essentially the same predatory colonial policy as in the past, but of course in a new iteration, a more subtle and sophisticated edition. You might not even recognise it at first.
The current priority of the international community is to increase food deliveries to the global market, notably, to satisfy the requirements of the countries that need food most of all.
While ensuring its domestic food security and supplying the domestic market, Russia is also able to scale up its food and fertiliser exports. For example, our grain exports in the next season can be increased to 50 million tonnes.
As a priority, we will supply the countries that need food most of all, where the number of starving people could increase, first of all, African countries and the Middle East.
At the same time, there will be problems there, and not through our fault either. Yes, on paper Russian grain, food and fertilisers… Incidentally, the Americans have adopted sanctions on our fertilisers, and the Europeans followed suit. Later, the Americans lifted them because they saw what this could lead to. But the Europeans have not backed off. Their bureaucracy is as slow as a flour mill in the 18th century. In other words, everyone knows that they have done a stupid thing, but they find it difficult to retrace their steps for bureaucratic reasons.
As I have said, Russia is ready to contribute to balancing global markets of agricultural products, and we see that our UN colleagues, who are aware of the scale of the global food problem, are ready for dialogue. We could talk about creating normal logistical, financial and transport conditions for increasing Russian food and fertiliser exports.
As for Ukrainian food supplies to global markets – I have to mention this because of numerous speculations – we are not hindering them. They can do it. We did not mine the Black Sea ports of Ukraine. They can clear the mines and resume food exports. We will ensure the safe navigation of civilian vessels. No problem.
But what are we talking about? According to the US Department of Agriculture, the matter concerns 6 million tonnes of wheat (we estimate it at 5 million tonnes) and 7 million tonnes of maize. This is it, altogether. Since global production of wheat stands at 800 million tonnes, 5 million tonnes make little difference for the global market, as you can see.
Anyway, Ukrainian grain can be exported, and not only via Black Sea ports. Another route is via Belarus, which is, incidentally, the cheapest way. Or via Poland or Romania, whichever you prefer. In fact, there are five or six export routes.
The problem is not with us, the problem is with the adequacy of the people in control in Kiev. They can decide what to do, and, at least in this particular case, they should not take their lead from their foreign bosses, their masters across the ocean.
But there is also the risk that grain will be used as payment for arms deliveries. This would be regrettable.
Once again, the world is going through an era of drastic change. International institutions are breaking down and faltering. Security guarantees are being devalued. The West has made a point of refusing to honour its earlier commitments. It has simply been impossible to reach any new agreements with them.
Given these circumstances and against the backdrop of mounting risks and threats, Russia was forced to go ahead with the special military operation. It was a difficult but necessary decision, and we were forced to make it.
This was the decision of a sovereign country, which has еру unconditional right to uphold its security, which is based on the UN Charter. This decision was aimed at protecting our people and the residents of the people's republics of Donbass who for eight long years were subjected to genocide by the Kiev regime and the neo-Nazis who enjoyed the full protection of the West.
The West not only sought to implement an “anti-Russia” scenario, but also engaged in the active military development of Ukrainian territory, flooding Ukraine with weapons and military advisers. And it continues to do so now. Frankly, no one is paying any attention to the economy or well-being of the people living there, they just do not care about it at all, but they have never spared money to create a NATO foothold in the east that is directed against Russia and to cultivate aggression, hatred and Russophobia.
Today, our soldiers and officers, as well as the Donbass militia, are fighting to protect their people. They are fighting for Russia's future as a large, free and secure multiethnic country that makes its own decisions, determines its own future, relies on its history, culture and traditions, and rejects any and all outside attempts to impose pseudo-values steeped in dehumanisation and moral degradation.
No doubt, our special military operation goals will be fulfilled. The key to this is the courage and heroism of our soldiers, consolidated Russian society, whose support gives strength and confidence to the Russian Army and Navy and a deep understanding of the truth and historical justice of our cause which is to build and strengthen Russia as a strong sovereign power.
My point is that sovereignty cannot be segmented or fragmented in the 21st century. The components of sovereignty are equally important, and they reinvigorate and complement each other.
So, what matters to us is not only the defence of our political sovereignty and national identity, but also strengthening everything that determines our country’s economic, financial, professional and technological independence.
The very structure of Western sanctions rested on the false premise that economically Russia is not sovereign and is critically vulnerable. They got so carried away spreading the myth of Russia’s backwardness and its weak positions in the global economy and trade that apparently, they started believing it themselves.
While planning their economic blitzkrieg, they did not notice, simply ignored the real facts of how much our country had changed in the past few years.
These changes are the result of our planned efforts to create a sustainable macroeconomic structure, ensure food security, implement import substitution programmes and create our own payment system, to name a few.
Of course, sanction restrictions created many challenges for the country. Some companies continue having problems with spare parts. Our companies have lost access to many technological solutions. Logistics are in disarray.
But, on the other hand, all this opens up new opportunities for us – we often talk about this but it really is so. All this is an impetus to build an economy with full rather than partial technological, production, human and scientific potential and sovereignty.
Naturally, it is impossible to resolve such a comprehensive challenge instantly. It is necessary to continue working systematically with an eye to the future. This is exactly what Russia is doing by implementing its long-term plans for the development of branches of the economy and strengthening the social sphere. The current trials are merely resulting in adjustments and modifications of the plans without changing their strategic orientation.
Today, I would like to talk about the key principles on which our country, our economy will develop.
The first principle is openness. Genuinely sovereign states are always interested in equal partnership and in contributing to global development. On the contrary, weak and dependent countries are usually looking for enemies, fuelling xenophobia or losing the last remnants of their identity and independence, blindly following in the wake of their suzerain.
Russia will never follow the road of self-isolation and autarky although our so-called Western friends are literally dreaming about this. Moreover, we are expanding cooperation with all those who are interested in it, who want to work with us, and will continue to do so. There are many of them. I will not list them at this point. They make up the overwhelming majority of people on Earth. I will not list all these countries now. It is common knowledge.
I will say nothing new when I remind you that everyone who wants to continue working or is working with Russia is subjected to blatant pressure from the United States and Europe; it goes as far as direct threats. However, this kind of blackmail means little when it comes to countries headed by true leaders who know the difference between their own national interests, the interests of their people – and someone else’s.
Russia will build up economic cooperation with these states and promote joint projects. At the same time, we will certainly continue to cooperate with Western companies that have remained in the Russian market despite the unprecedented arm-twisting – such companies exist, too.
We believe the development of a convenient and independent payment infrastructure in national currencies is a solid and predictable basis for deepening international cooperation. To help companies from other countries develop logistical and cooperation ties, we are working to improve transport corridors, increase the capacity of railways, transshipment capacity at ports in the Arctic, and in the eastern, southern and other parts of the country, including in the Azov-Black Sea and Caspian basins – they will become the most important section of the North-South Corridor, which will provide stable connectivity with the Middle East and Southern Asia. We expect freight traffic along this route to begin growing steadily in the near future.
But foreign trade is not our only priority. Russia intends to increase scientific, technological, cultural, humanitarian and sports cooperation based on equality and mutual respect between partners. At the same time, our country will strive for responsible leadership in all these areas.
The second principle of our long-term development is a reliance on entrepreneurial freedom. Every private initiative aimed at benefiting Russia should receive maximum support and space for implementation.
The pandemic and the more recent events have confirmed how important flexibility and freedom are in the economy. Russian private businesses – in tough conditions, amid attempts to restrain our development by any means – have proved they can compete in global markets. Private businesses should also be credited for Russia’s adaptation to rapidly changing external conditions. Russia needs to ensure the dynamic development of the economy – naturally, relying on private business.
We will continue to reduce administrative hurdles. For example, in 2016–2018, we imposed a moratorium on routine audits of small businesses. Subsequently, it was extended through 2022. In 2020, this moratorium was extended to cover mid-sized companies. Also, the number of unscheduled audits decreased approximately fourfold.
We did not stop at that, and last March, we cancelled routine audits for all entrepreneurs, regardless of the size of their businesses, provided their activities do not put people or the environment at high risk. As a result, the number of routine audits has declined sixfold compared to last year.
Why am I giving so many details? The point is that after the moratorium on audits was imposed, the number of violations by entrepreneurs – this was the result – has not increased, but rather it has gone down. This testifies to the maturity and responsibility of Russian businesses. Of course, they should be offered motivation rather than being forced to observe regulations and requirements.
So, there is every reason to take another radical step forward, that is, to abandon, for good and on a permanent basis, the majority of audits for all Russian businesses, except on risky or potentially dangerous activities. Everyone has long since understood that there was no need to check on everyone without exception. A risk-oriented approach should be at work. I ask the Government to develop the specific parameters of such a reform in the next few months.
There is another very sensitive topic for business, which has also become important today for our national security and economic resilience. To reduce and bring to a minimum all sorts of abuse and loopholes to exert pressure on entrepreneurs, we are consistently removing loose regulations from criminal law that are applied to economic crimes.
Last March, a law was signed, under which tax-related criminal cases against entrepreneurs shall only be brought before a court by the tax service – there is no other way. Soon a draft law will be passed on reducing the statute of limitations for tax-related crimes and on rejecting lawsuits to initiate criminal proceedings after tax arrears have been paid off.
Working comprehensively, although prudently, we need to decriminalise a wide range of economic offenses, for instance, those that punish businesses without a licence or accreditation. This is a controversial practice today because our Western partners illegitimately refuse to provide such licenses.
Our own agencies must not single-handedly make our businesses criminally liable for actually doing nothing wrong. The problem is this, and small businesses understand it very well – if a licence has expired, and Western partners refuse to extend it, what are businesses to do, wrap up operations? By no means, let them work. State oversight should continue, but there should be no undue interference in business.
It also makes sense to think about raising the threshold of criminal liability for unpaid customs duties and other such taxes. Additionally, we have not for a long time reconsidered the parameters of the terms ‘large’ and ‘very large’ economic loss for the purposes of economic offences despite inflation accruing 50 percent since 2016. The law now fails to reflect the current realities and needs to be corrected.
We need to reconsider the conditions for detaining entrepreneurs and for extending preliminary investigations. It is no secret that these practices have long been used inappropriately.
Businesses have been forced to cease operations or go bankrupt even before the investigation is over. The reputation of the owners and of the brand name suffers as a result, not to mention the direct financial loss, loss of market share and jobs.
I want to ask law enforcement to put an end to these practices. I also ask the Government and the Supreme Court to draft appropriate legislation before October 1 of this year.
In addition, at the Security Council, a special instruction was given to look into criminal cases being opened without later proceeding to court. The number of such cases has grown in recent years. We know the reasons. A case is often opened without sufficient grounds or to put pressure on individuals. We will discuss this in autumn to take legislative action and change the way our law enforcement agencies work.
It goes without saying that regional governments play a major role in creating a modern business environment. As is customary during the St Petersburg Forum, I highlight the regions that have made significant progress in the National Investment Climate Rankings compiled by the Agency for Strategic Initiatives.
There have been changes in the top three. Moscow and Tatarstan have remained at the top and were joined by the Moscow Region which, in a span of one year, went from eighth place to the top three. The leaders of the rankings also include the Tula, Nizhny Novgorod, Tyumen, Novgorod, and Sakhalin regions, St Petersburg and Bashkortostan.
Separately, I would like to highlight the regions that have made the greatest strides such as the Kurgan Region, which moved up 36 spots; the Perm Territory and the Altai Territory, up 26 spots; Ingushetia, up 24 spots; and the Ivanovo Region which moved up 17 spots.
I want to thank and congratulate our colleagues in the regions for their good work.
The federal government and regional and municipal governments should focus on supporting individual business initiatives in small towns and remote rural communities. We are aware of such stories of success. That includes developing popular software and marketing locally produced organic food and environmentally friendly products nationwide using domestic websites.
It is important to create new opportunities, to introduce modern retail formats, including e-commerce platforms, as I mentioned above, and to cut the logistics, transportation and other costs, including by using upgraded Russian Post offices.
It is also important to help small business employees, self-employed individuals and start-up entrepreneurs acquire additional skills and competencies. Please include corresponding measures tailored specifically to small towns and rural and remote areas as a separate line in the national project for promoting small and medium-sized businesses.
Today I would like to address our officials, owners of large companies, our business leaders and executives.
Real, stable success and a sense of dignity and self-respect only come when you link your future and the future of your children with your Fatherland. We have maintained ties with many people for a long time, and I am aware of the sentiments of many of the heads and owners of our companies. You have told me many times that business is much more than just making a profit, and I fully agree. It is about changing life around you, contributing to the development of your home cities, regions and the country as a whole, which is extremely important for self-fulfilment. There is nothing like serving the people and society. This is the meaning of your life and work.
Recent events have reaffirmed what I have always said: it is much better at home. Those who refused to hear that clear message have lost hundreds of millions, if not billions of dollars in the West, in what looked like a safe haven for their assets.
I would like to once again say the following to our colleagues, those who are both in this audience and those who are not here: please, do not fall into the same trap again. Our country has huge potential, and there are more than enough tasks that need your contribution. Invest here, in the creation of new enterprises and jobs, in the development of the tourism infrastructure, support schools, universities, healthcare and the social sphere, culture and sport. I know that many of you are doing this. I know this, but I wanted to say it again.
This is how the Bakhrushin, Morozov, Shchukin, Ryabushinsky, Akchurin, Galeyev, Apanayev, Matsiyev, Mamontov, Tretyakov, Arsanov, Dadashev and Gadzhiyev families understood their noble mission. Many Russian, Tatar, Buryat, Chechen, Daghestani, Yakutian, Ossetian, Jewish, Armenian and other merchant and entrepreneurial families did not deprive their heirs of their due share, and at the same time they etched their names in the history of our country.
Incidentally, I would like to note once again that it remains to be seen what is more important for potential heirs: money and property or their forefathers’ good name and service to the country. The latter is something that cannot be squandered or, pardon my language, wasted on drink.
A good name is something that will always belong to your descendants, to future generations. It will always be part of their lives, going from one generation to another, helping them and making them stronger than the money or property they might inherit can make them.
A responsible and well-balanced macroeconomic policy is the third guiding principle of our long-term development. In fact, this policy has largely enabled us to withstand the unprecedented pressure brought on by sanctions. Let me reiterate that this is an essential policy in the long term, not just for responding to the current challenges. We will not follow in the footsteps of our Western colleagues by replicating their bitter experience setting off an inflation spiral and disrupting their finances.
Our goal is to ensure robust economic growth for years to come, reducing the inflation burden on our people and businesses and achieving the mid- and long-term target inflation rate of four percent. Inflation was one of the first things I mentioned during my remarks, so let me tell you this: we remain committed to this target of a four-percent inflation rate.
I have already instructed the Government to draft proposals regarding the new budget guidelines. They must ensure that our budget policy is predictable and enables us to make the best use of the external economic conditions. Why do we need all this? To put economic growth on a more stable footing, while also delivering on our infrastructure and technological objectives, which provide a foundation for improving the wellbeing of our people.
True, some international reserve currencies have set themselves on a suicidal path lately, which is an obvious fact. In any case, they clearly have suicidal intentions. Of course, using them to ‘sterilise’ our money supply does not make any sense. Still, the principle of planning one’s spending based on how much you earn remains relevant. This is how it works, and we understand this.
Social justice is the fourth principle underpinning our development. There must be a powerful social dimension when it comes to promoting economic growth and business initiatives. This development model must reduce inequality instead of deepening it, unlike what is happening in other countries. To be honest, we have not been at the forefront when it comes to delivering on these objectives. We have yet to resolve many issues and problems in this regard.
Reducing poverty and inequality is all about creating demand for Russian-made products across the country, bridging the gap between regions in terms of their capabilities, and creating new jobs where they are needed the most. These are the core economic development drivers.
Let me emphasise that generating positive momentum in terms of household income growth and poverty reduction are the main performance indicators for government agencies and the state in general. We need to achieve tangible results in this sphere already this year, despite all the objective challenges we face. I have already assigned this task to the Government.
Again, we provide targeted support to the most vulnerable groups – pensioners, families with children, and people in difficult life situations.
Pensions are indexed annually at a rate higher than inflation. This year, they have been raised twice, including by another 10 percent on June 1.
The minimum wage was also increased by 10 percent at the same time, and so was the subsistence minimum – a reference figure used to calculate many social benefits and payments – accordingly, these benefits should also grow, increasing the incomes of about 15 million people.
In recent years, we have built a holistic system to support low-income families with children. Women are entitled to state support from the early stages of pregnancy and until the child reaches the age of 17.
People’s living standards and prosperity are the most important demographic factors; the current situation is quite challenging due to several negative demographic waves that have recently overlapped. In April, less than a hundred thousand children were born in Russia, almost 13 percent less than in April 2020.
I ask the Government to continue to keep the development of additional support measures for families with children under review. They must be far-reaching and commensurate with the magnitude of the extraordinary demographic challenge we are facing.
Russia’s future is ensured by families with two, three and more children. Therefore, we need to do more than provide direct financial support – we need to target and direct the healthcare system, education, and all areas that determine the quality of people's lives towards the needs of families with children.
This problem is addressed, among other approaches, by the national social initiatives, which regional teams and the Agency for Strategic Initiatives are implementing together. This autumn, we will assess the results of their work, review and rank the Russian regions by quality of life in order to apply the best experiences and practices as widely as possible throughout the country.
To be continued.
Questions not being asked about the Mariupol die-hards, about the availability from today of Euro and dollar cash withdrawals at Russian banks, and much more
As I have remarked in earlier diary entries, the Russians are very sparing in the information they release daily on the status of the war effort. A couple of days ago, we were shown the 1300 or so Ukrainian marines who surrendered in Mariupol. Yesterday, Russian television devoted a lot of time to brief interviews with some of these prisoners of war, all of whom were Russian speakers, by the way. No surprises there, of course, since the whole region is basically Russian speaking, which is why there is a civil war going on against the extreme nationalist government in Kiev which has sought from the beginning to wipe out the language, the culture and all Russian ethnic identity.
There was another curious news item yesterday on Russian television: a video report on the capture of the latest mobile air defense system produced in Ukraine, which was abandoned by its technical crew in mint condition, with all of the manufacturer’s technical brochures still intact. Here again, most peculiarly, all of the technical documentation is in Russian! This would be amusing if the broad context were not tragic, set alongside the number of Ukrainian servicemen whom the Russians have listed as killed in action: over 23,700. That is approximately eight times the number Zelensky gave to the press the day before.
Finally, Russian news in the past day recounted how a Ukrainian freight plane loaded with Western military supplies was shot down by Russian forces as it approached Odessa from the sea.
Aside from these feature items in the news, Russian authorities continue to give no overall picture of how the campaign is proceeding. Strangely, Ukrainian news sources from the field can be more informative. Among the items today posted on www.news.google.ru are reports from the Ukrainian controlled administration of what remains of Lugansk under their control. They speak of Russian artillery attacks, on the damage being done to houses in hamlets, on the evacuation of civilians to the West ahead of Russian advances on the ground. All of this is in anticipation of the full-scale Russian onslaught on Donbas expected imminently.
Western media have been featuring today the “brave” decision of the remaining Ukrainian forces in Mariupol, holed up in the underground fortress of the Azovstal works, to refuse the Russian offer of their lives in exchange for unconditional surrender. But Western coverage asks no questions whatsoever about the decision and what it tells us about the regime in Kiev that these thousand or so die-hards are serving, seemingly heroically. Russian talk shows today shine a spotlight on that very question and produce some interesting interpretations. We are told that Kiev instructed the Azov battalion leaders and those aligned with them in Mariupol to fight to the end and not to negotiate with the Russians over surrender. From within the ranks of the desperate troops underground, whose ammunition, food and water are all depleted, we are told that anyone daring to speak in favor of surrender is being shot on the spot. We are also told that among the 1,000 or so hold-outs are 400 foreign mercenaries including a goodly number of high ranking NATO instructors. Since from the standpoint of Kiev those instructors are better dead than taken alive, we may assume they are from Member States lower in the pecking order than the British pair of cut-throats taken several days ago who may yet be saved by intervention of Boris Johnson in a prisoner exchange. Shall we assume that the NATO instructors in the lower tunnels of Azovstal are Polish or Lithuanian? I think that would be a fair guess.
So much for easy questions that go unasked, let alone unanswered by Western media, by Russian media or by both. Now I will raise a different question just to demonstrate how the news and analysis flow on this ‘special military operation’ or war, if you will, runs in a narrow rut. The net result is that we have very limited ability to understand what is going on and where we are all headed.
I will just turn attention to the announcement in Russia that as of today the public can make cash withdrawals of dollars and euros in substantial amounts, and also can order foreign currency transfers abroad, up to $5,000 if I understood properly. This means that poor Mr. Piotr Aven, the billionaire banker and Russian wheeler dealer sitting in London at present with his vast assets frozen under sanction rules, may yet be able to pay his chauffeur by ordering a transfer from his Sberbank account in Moscow.
Curiously no one is asking how and why Russia has reopened nearly free currency exchange and cash withdrawals after a month of strict clampdown. Where are the dollar bills and euro notes coming from? Surely the question is begging to be asked. It is not coming in from tourists to Russia since there are virtually no foreign tourists in Russia at present. It is not being carried by foreign business visitors for the same reason. So let us guess. Could it be that Germany and other select EU Member States are delivering plane loads of cash to Moscow to pay for their gas, oil and coal deliveries? Yes, this would allow them to claim they are defying Putin over payment in rubles while respecting the terms of their long term contracts with Gazprom. But it is a pretty picture that they would not want made public, since the European Parliament would make the life of them all quite unbearable if the word got out. Perhaps readers can offer better explanations.
This article is a follow-up to :
- Russia wants to force the US to respect the UN Charter, January 4, 2022.
- Washington pursues RAND plan in Kazakhstan, then Transnistria, January 11, 2022.
- Washington refuses to hear Russia and China, January 18, 2022.
- Washington and London, deafened, February 1, 2022.
- Washington and London try to preserve their domination over Europe, February 8, 2022.
- Two interpretations of the Ukrainian affair, 16 February 2022.
- Washington sounds the alarm, while its allies withdraw, 22 February 2022.
At dawn on February 24, Russian forces entered Ukraine en masse. According to President Vladimir Putin, speaking on television at the time, this special operation was the beginning of his country’s response to “those who aspire to world domination” and who are advancing Nato’s infrastructure to his country’s doorstep. During this long speech, he summarized how NATO destroyed Yugoslavia without the authorization of the United Nations Security Council, even bombing Belgrade in 1999. Then he perused the destruction of the United States in the Middle East, in Iraq, Libya and Syria. Only after this lengthy presentation did he announce that he had sent his troops to Ukraine with the dual mission of destroying the Nato-linked armed forces and ending the Nato armed neo-Nazi groups.
Immediately all the member states of the Atlantic Alliance denounced the occupation of Ukraine as comparable to that of Czechoslovakia during the “Prague Spring” (1968). According to them, Vladimir Putin’s Russia had adopted the Soviet Union’s “Brezhnev doctrine”. Therefore, the free world must punish the resurrected “Evil Empire” with “devastating costs”.
The interpretation of the Atlantic Alliance is aimed above all at depriving Russia of its major argument: although Nato is not a confederation of equals, but a hierarchical federation under Anglo-Saxon command, Russia is doing the same. It refuses Ukraine the possibility of choosing its destiny, just as the Soviets refused it to the Czechoslovakians. It is true that Nato violates the principles of sovereignty and equality of states stipulated in the UN Charter, but it should not be dissolved, unless Russia is also dissolved.
Perhaps, but probably not.
President Putin’s speech was not directed against Ukraine, or even against the United States, but explicitly against “those who aspire to world domination”, i.e. against the “Straussians” in the US power structure. It was a real declaration of war against them.
On February 25, President Vladimir Putin called the Kiev leadership “a clique of drug addicts and neo-Nazis”. For the Atlantic media, these words were those of a mental patient.
During the night of February 25-26, President Volodymyr Zelensky sent a ceasefire proposal to Russia via the Chinese embassy in Kiev. The Kremlin immediately responded by setting out its conditions:
– arrest of all Nazis (Dmitro Yarosh and the Azov Battalion, etc.)
– removal of all street names and destruction of monuments glorifying Nazi collaborators during the Second World War (Stepan Bandera, etc.),
– laying down of weapons.
The Atlantic press ignored this event, while the rest of the world, which knew about it, held its breath. The negotiation failed a few hours later after Washington intervened. Only then would Western public opinion be informed, but the Russian conditions would always be hidden from them.
What is President Putin talking about? Who is he fighting against? And what are the reasons that have made the Atlanticist press blind and mute?
A brief history of the Straussians
Let us stop for a moment to consider this group, the Straussians, about whom Westerners know little. They are individuals, all Jewish, but by no means representative of either American Jews or of Jewish communities worldwide. They were formed by the German philosopher Leo Strauss, who took refuge in the United States during the rise of Nazism and became a professor of philosophy at the University of Chicago. According to many accounts, he had formed a small group of faithful students to whom he gave oral instruction. There is no written record of this. He explained to them that the only way for the Jews not to fall victim to a new genocide was to form their own dictatorship. He called them Hoplites (the soldiers of Sparta) and sent them to disrupt the courts of his rivals. Finally, he taught them discretion and praised the “noble lie”. Although he died in 1973, his student fraternity continued.
The Straussians began forming a political group half a century ago, in 1972. They were all members of Democratic Senator Henry “Scoop” Jackson’s staff, including Elliott Abrams, Richard Perle and Paul Wolfowitz. They worked closely with a group of Trotskyite journalists, also Jewish, who had met at the City College of New York and edited the magazine Commentary. Both groups were closely linked to the CIA, but also, thanks to Perle’s father-in-law Albert Wohlstetter (the US military strategist), to the Rand Corporation (the think tank of the military-industrial complex). Many of these young people intermarried until they formed a compact group of about 100 people.
Together they drafted and passed the “Jackson-Vanik Amendment” in the midst of the Watergate crisis (1974), which forced the Soviet Union to allow the emigration of its Jewish population to Israel under pain of economic sanctions. This was their founding act.
In 1976, Paul Wolfowitz  was one of the architects of the “Team B” charged by President Gerald Ford with assessing the Soviet threat . He issued a delirious report accusing the Soviet Union of preparing to take over “global hegemony”. The Cold War changed its nature: it was no longer a question of isolating (containment) the USSR, it had to be stopped in order to save the “free world”.
The Straussians and the New York intellectuals, all of whom were on the left, put themselves at the service of the right-wing president Ronald Reagan. It is important to understand that these groups are neither truly left nor right wing. Some members have switched five times from the Democratic Party to the Republican Party and back again. What is important to them is to infiltrate power, whatever the ideology. Elliott Abrams became an assistant to the Secretary of State. He led an operation in Guatemala where he put a dictator in power and experimented with Israeli Mossad officers on how to create reserves for the Mayan Indians in order to eventually do the same thing in Israel with the Palestinian Arabs (the Mayan Resistance earned Rigoberta Menchú her Nobel Peace Prize). Then Elliott Abrams continued his exactions in El Salvador and finally in Nicaragua against the Sandinistas with the Iran-Contra affair. For their part, the New York intellectuals, now called “Neoconservatives”, created the National Endowment for Democracy (NED) and the U.S. Institute of Peace, a mechanism that organized many colored revolutions, starting with China with the attempted coup d’état of Prime Minister Zhao Ziyang and the subsequent repression in Tiananmen Square.
At the end of George H. Bush’s (the father’s) term of office, Paul Wolfowitz, then number 3 in the Defense Department, drew up a document  based on a strong idea: after the decomposition of the USSR, the United States had to prevent the emergence of new rivals, starting with the European Union. He concluded by advocating the possibility of taking unilateral action, i.e. to put an end to the concerted action of the United Nations. Wolfowitz was undoubtedly the designer of “Desert Storm”, the operation to destroy Iraq that allowed the United States to change the rules of the game and organize a unilateral world. It was during this time that Straussians valued the concepts of “regime change” and “democracy promotion.”
Gary Schmitt, Abram Shulsky and Paul Wolfowitz entered the US intelligence community through the Consortium for the Study of Intelligence’s Working Group on Intelligence Reform. They criticized the assumption that other governments think the same way as the US government . Then they criticized the lack of political leadership in intelligence, leaving it to wander into unimportant issues instead of focusing on the essential ones. Politicizing intelligence is what Wolfowitz had already done with the B-team and what he would do again in 2002 with the Office of Special Plans, inventing arguments for new wars against Iraq and Iran (Leo Strauss’ “noble lie”).
The Straussians were removed from power during Bill Clinton’s term. They then entered the Washington think tanks. In 1992, William Kristol and Robert Kagan (the husband of Victoria Nuland, widely quoted in the previous articles) published an article in Foreign Affairs deploring President Clinton’s timid foreign policy and calling for a renewal of “benevolent global hegemony” . The following year they founded the Project for a New American Century (PNAC) at the American Enterprise Institute. Gary Schmitt, Abram Shulsky and Paul Wolfowitz were members. All of Leo Strauss’s non-Jewish admirers, including the Protestant Francis Fukuyama (the author of The End of History), immediately joined them.
In 1994, now an arms dealer, Richard Perle (a.k.a. “the Prince of Darkness”) became an advisor to the President and ex-Nazi Alija Izetbegović in Bosnia-Herzegovina. It was he who brought Osama Bin Laden and his Arab Legion (the forerunner of Al Qaeda) from Afghanistan to defend the country. Perle was even a member of the Bosnian delegation at the signing of the Dayton Accords in Paris.
In 1996, members of the PNAC (including Richard Perle, Douglas Feith and David Wurmser) wrote a study at the Institute for Advanced Strategic and Political Studies (IASPS) for the new Israeli Prime Minister, Benjamin Netanyahu. This report  advocates the elimination of Yasser Arafat, the annexation of the Palestinian territories, a war against Iraq and the transfer of Palestinians there. It was inspired not only by the political theories of Leo Strauss, but also by those of his friend, Ze’ev Jabotinsky, the founder of “revisionist Zionism”, of whom Netanyahu’s father was the private secretary.
The PNAC raised funds for the candidacy of George W. Bush (the son) and published before his election its famous report “Rebuilding America’s Defenses”. It called for a Pearl Harbor-like catastrophe that would throw the American people into a war for global hegemony. These are exactly the words that PNAC Secretary of Defense Donald Rumsfeld used on September 11, 2001.
Thanks to the 9/11 attacks, Richard Perle and Paul Wolfowitz installed Admiral Arthur Cebrowski in Donald Rumsfeld’s shadow. He played a role comparable to that of Albert Wohlstetter during the Cold War. He imposed the strategy of “endless war”: the US armed forces should not win any more wars, but start many of them and keep them going as long as possible. The aim would be to destroy all the political structures of the targeted states in order to ruin these populations and deprive them of any means of defending themselves against the US ; a strategy that has been implemented for twenty years in Afghanistan, Iraq, Libya, Syria, Yemen…
The alliance between the Strausians and the revisionist Zionists was sealed at a major conference in Jerusalem in 2003, which Israeli political figures from all sides unfortunately thought they should attend . It is therefore not surprising that Victoria Nuland (Robert Kagan’s wife, then ambassador to NATO) intervened to declare a ceasefire in Lebanon in 2006, allowing the defeated Israeli army not to be pursued by Hezbollah.
Bernard Lewis and Benjamin Netanyahu
Prime Minister Office
Some individuals, such as Bernard Lewis, have worked with all three groups, the Straussians, the Neoconservatives and the Revisionist Zionists. A former British intelligence officer, he acquired both U.S. and Israeli citizenship, was an advisor to Benjamin Netanyahu and a member of the U.S. National Security Council. Lewis, who halfway through his career assured that Islam is incompatible with terrorism and that Arab terrorists are in fact Soviet agents, later changed his mind and assured with the same aplomb that the religion preaches terrorism. He invented the strategy of the “clash of civilizations” for the US National Security Council. The idea was to use cultural differences to mobilize Muslims against the Orthodox, a concept that was popularized by his assistant at the Council, Samuel Huntington, except that Huntington did not present it as a strategy, but as an inevitability that had to be countered. Huntington began his career as an advisor to the South African secret service during the aparteheid era, and later wrote a book, The Soldier and the State understanding national security needs.
After the destruction of Iraq, the Straussians were the subject of all sorts of controversies . Everyone is surprised that such a small group, supported by neoconservative journalists, could have acquired such authority without having been the subject of a public debate. The U.S. Congress appointed an Iraq Study Group (the so-called “Baker-Hamilton Commission”) to evaluate its policy. It condemned, without naming it, the Rumsfeld/Cebrowski strategy and deplored the hundreds of thousands of deaths it had caused. But Rumsfeld resigned and the Pentagon inexorably pursued this strategy, which it had never officially adopted.
In the Obama administration, the Straussians found their way into Vice President Joe Biden’s cabinet. His National Security Advisor, Jacob Sullivan, played a central role in organizing the operations against Libya, Syria and Myanmar, while another of his advisors, Antony Blinken, focused on Afghanistan, Pakistan and Iran. It was he who led the negotiations with Supreme Leader Ali Khamenei that resulted in the arrest and imprisonment of key members of President Mahmoud Ahmadinejad’s team in exchange for the nuclear deal.
Regime change in Kiev in 2014 was organized by the Straussians. Vice President Biden is firmly committed to it. Victoria Nuland came to support the neo-Nazi elements of the Right Sector and to supervise the Israeli “Delta” commando  in Maidan Square. A telephone intercept reveals her wish to “fuck the European Union” (sic) in the tradition of the 1992 Wolfowitz report. But the leaders of the European Union do not understand and protest only weakly .
“Jake” Sullivan and Antony Blinken placed Vice President Biden’s son, Hunter, on the board of one of the major gas companies, Burisma Holdings, despite opposition from Secretary of State John Kerry. Hunter Biden is unfortunately just a junkie, he would serve as a front for a gigantic scam at the expense of the Ukrainian people. He would appoint, under the supervision of Amos Hochstein, several of his stoner friends to become other front men at the head of various companies and to plunder Ukrainian gas. These are the people that President Vladimir Putin called a “clique of drug addicts”.
Sullivan and Blinken relied on mafia godfather Ihor Kolomoysky, the country’s third largest fortune. Although he is Jewish, he financed the heavyweights of the Right Sector, a neo-Nazi organization that works for NATO and fought in Maidan Square during the “regime change”. Kolomoïsky took advantage of his connections to take power within the European Jewish community, but his co-religionists rebelled and ejected him from international associations. However, he managed to get the head of the Right Sector, Dmytro Yarosh, appointed deputy secretary of the Ukrainian National Security and Defence Council and to get himself appointed governor of the Dnipropetrovsk oblast. Both men would be quickly removed from any political function. It was their group that President Vladimir Putin called a “clique of neo-Nazis.”
In 2017, Antony Blinken founded WestExec Advisors, a consulting firm that brought together former senior Obama administration officials and many Straussians. The firm’s business is extremely low-key. It uses the political connections of its employees to make money; what anywhere else would be called corruption.
Joe Biden is not a Straussian, but he has been doing business with them for about fifteen years. Here with Anthony Blinken.
The Straussians are still the same as ever
Since Joe Biden returned to the White House, this time as President of the United States, the Straussians have been running the show. “Jake” Sullivan is National Security Advisor, while Antony Blinken is Secretary of State with Victoria Nuland at his side. As I have reported in previous articles, she went to Moscow in October 2021 and threatens to crush Russia’s economy if it ded not comply. This was the beginning of the current crisis.
Undersecretary of State Nuland resurrected Dmitro Yarosh and imposed him on President Zelinsky, a television actor protected by Ihor Kolomoysky. On November 2, 2021, he appointed him special advisor to the head of the army, General Valerii Zaluzhnyi. The latter, a true democrat, rebelled at first and finally accepted. When questioned by the press about this astonishing duo, he refused to answer and mentioned a question of national security. Yarosh gave his full support to the “white führer”, Colonel Andrey Biletsky, and his Azov Battalion. This copy of the SS Das Reich division has been staffed since the summer of 2021 by American mercenaries formerly from Blackwater .
Having identified the Straussians, we must admit that Russia’s ambition is understandable, even desirable. To rid the world of the Straussians would be to do justice to the million or more deaths they have caused and to save those they are about to kill. Whether this intervention in Ukraine is the right way remains to be seen.
In any case, if the responsibility for the current events lies with the Straussians, all those who let them act without flinching also have a responsibility. Starting with Germany and France, who signed the Minsk Agreements seven years ago and did nothing to ensure that they were implemented, and then with the fifty or so states that signed the OSCE declarations prohibiting the extension of Nato east of the Oder-Neisse line and did nothing. Only Israel, which has just got rid of the revisionist Zionists, has expressed a nuanced position on these events.
This is one of the lessons of this crisis: democratically governed peoples are responsible for the decisions taken for a long time by their leaders and maintained after alternations in power.
Regarding the video above, you have to have a little fun with things now and then! If you don’t you’ll go crazy.
I could easily spend my entire day linking to the latest pandemic and political commentary given the flood of information coming from all directions. However, I trust that most of you are already following other sources on these matters, and division of labor is a wonderful thing.
Nearly 50 years after the original publication of "Superimperialism", Michael Hudson revisits how the lucrative dollar-based economic system that the US set up after WWII has evolved with the rise of China and the Covid-19 pandemic. What financial weapons is the US likely to use, and does China's de-dollarisation protect it from such attacks?
The book provides a detailed analysis of how the US has used its economic might to control international relations. The book is complicated, but essentially documents how after WWII the US held an unprecedented amount of the world's gold reserves (50%). These reserves were depleted with the incursion into Korea, and subsequent involvement in Viet Nam, requiring the US to abandon the "gold standard" for valuing world currencies. A failure that proved itself valuable, pushing the US to develop multiple strategies that today allow it to make other countries pay for its military dominance.
Welcome to the first event of the Oxford Economics Society for this academic year. I’m Oscar, the Co-President of our society, and I’m glad to welcome you back for another term of exciting discussions. Although we were hoping last term to be back in-person by January, due to the worsening Covid-19 situation in the UK our events this term are going to remain online, so that everyone at home can still participate.
A new year calls for new resolutions, and our society’s resolution for 2021 is to increase the diversity of economic topics discussed. To give you an idea, we’ll be hosting a presentation on Decolonising Economics and its role in Emerging Markets by Dr. Ingrid Kvangraven, the executive board member of Diversifying and Decolonising Economics. We’ll be hosting Prof. Randall Wray, a strong proponent of the much-discussed modern monetary theory, who was also as I just discovered, professor at the University of Missouri-Kansas City, like our guest today. We’ll also be hosting a presentation on the Young Scholars Initiative run by the Institute of New Economic Thinking at Oxford, a community some of you will definitely be interested in joining that brings together more than 15,000 young economists from around the world. Finally, we’ll be organizing a moderated discussion with the FT’s Chief Economics commentator Martin Wolf, and many other events of course.
To start us off, we are proud to host Michael Hudson, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, former balance-of-payments economist at Chase Manhattan, and an economic advisor to governments worldwide, including Iceland, Latvia and China, on finance and tax law. Now, nearly 50 years after the original publication of “Super Imperialism”, Professor Hudson will be discussing “Changes in Super Imperialism: The position of the USA & China in our Global Economic System”. How has the rise of China and the Covid-19 pandemic affected the USA’s capacity to control financial flows? How will the USA modify its behaviour as a result?
The talk will last 45 minutes, with 15 minutes of questions at the end. Make sure to send in your questions throughout the talk through our Pigeonhole page. The link should be in the description of this event. If you would like to re-watch our events, they’ll be posted to our YouTube channel afterwards.
Thank you for joining us, Professor Hudson…
It’s good to be here. Thank you for inviting me, especially since you mentioned people that I’ve known for a long time. Randall Wray, both of us are now at the Levy Institute and working in other places, and Martin Wolf I’ve been friends with.
The reason that I’m writing a new version of Super Imperialism is that I was asked to by China, and I thought, “As long as they want to bring out a new translation and basically an update of the book, I might as well do it in English too.” I bought the rights back from Pluto and in about two or three months I will be reissuing the English language edition. The context for de-dollarization today by China, Russia and other countries is basically “How do you make an alternative to an international financial order that really was designed from the beginning to benefit the United States in its own self-interest?”
This issue was discussed after WWI when the intergovernmental debt system broke down into Allied debts and German reparations. It was discussed again at the 1930s when the United States sort of scuttled the London Economic Conference of 1933, and it was especially discussed in 1945 in December, in parliament. In the House of Commons, the British parliamentarians were discussing, “Do we want to accept the terms of the British loan?” which ended up being 3.75 billion USD, written down from what Keynes had wanted, or “Do we want to go it alone?”
It was the Conservative pro-empire Members of Parliament that wanted to reject the loan. Churchill wanted at least to abstain, but there was no alternative. In 1945 and again in 1971 when America moved off gold, in every case the alternative seemed to be anarchy. The U.S. strategy was to say, either you accept U.S. rules that favored the United States – in the beginning creditor rules, but debtor rules after 1971, and essentially gave it control of the world economy – or you go it alone and risk anarchy.
Britain was not able to go it alone in 1945. I did not include the parliamentary discussion in the first version of Super Imperialism, but I’ve included that discussion in the new version, because Britain said very clearly: “The United States basically wants to absorb the British Empire and the Sterling area into the Dollar area on its own terms and leave us almost broke. What can we do about it?” Both parties said: “We see that the United States is treating us, its ally in WWII, as a defeated party.” They came right out and said that. “But we don’t have an alternative because we can’t go alone. We have to rely on the United States.”
Let me review what the U.S. strategy is, and what’s led to major changes over time. Dollar supremacy was established after World War I by America’s creditor position. Something very novel happened after. In every previous war, for instance the Napoleonic wars and the earlier wars England had been involved with, the allies had forgiven all of their mutual debts at the end of the war. There was something that the British called “shared sacrifice”, and the idea was “We’re going to have a clean slate after the war.”
This idea goes all the way back to Babylonia in the second millennium BC. Throughout history there was a debt cancellation. There was no carryover of war debts after victory was achieved, because the idea was that if you leave war debts in place, that’s going to bankrupt the allies that you had during the war. It’s also going to bankrupt the defeated countries, and leave them no choice except to fight back.
The laws of Hammurabi showed this. His whole dynasty showed this. My book on Forgive Them Their Debts is a whole history of debt cancellations. But the United States broke this practice after WWI and said: “The debts have to be paid.” The amazing thing is that Europe went along with it. It had a pro-creditor ideology. It believed in the sanctity of debt, and was not going to question that because there was a guiding assumption – which is erroneous – that all debts somehow can be paid if only countries will either devalue or transform their economy, or impose austerity.
Keynes had a long debate with the anti-German Jacques Rueff of France and the American-Swede Bertil Ohlin. Keynes explained that there was no way that debtor countries like the allies or Germany could pay their debts to the creditor unless the creditor is willing to buy their exports, to provide them with the foreign exchange to pay. That debate obviously he won in reality, but that assumption was rejected by the United States, and continues to be rejected by the International Monetary Fund today. The junk economics that was brought in after World War One to consolidate the American position was: “Of course you can pay: simply destroy your economy and let us take you over, and sell out all of your industry and raw materials out to us, and that will enable you to pay.” That’s what the Americans demanded. It’s what the creditor demand has always been. Essentially you have to be willing to destroy your economy in order to pay your debts.
Keynes said this was crazy and he was right, but Europe went along with it and said, “Yes, we are willing to destroy our economies; we are willing to create the resentment for World War II rather than question the assumption that all the debts have to be paid.”
What Keynes pointed out was that there was a distinction between the budget problem – in other words, taxing the economy to raise a domestic fiscal surplus in German Marks or British Sterling – and the transfer problem of paying foreign currency. What happened was that the Allies said, “If America is going to insist that we pay, we’re not going to wreck our economies. We’re going to make Germany pay reparations.”
As you all know, the result was to bankrupt Germany, causing a hyperinflation there that was only solved by Germany essentially borrowing the money from the United States. German municipalities would borrow the money in dollars for local spending, use the dollars to turn over to the Reichsbank to pay the Bank of England and the Bank of France, in turn to pay their dollar debts to the United States. That was a circular flow.
It could only be kept going by the Federal Reserve making interest rates very low here in the United States to promote an outflow of foreign investment to Germany. But those low interest rates also created a stock market boom that crashed in 1939. In the end, the Inter-Ally debts had to be canceled. There had to be a moratorium [on those debts], along with German reparations, as the system broke down in 1931. There was an attempt to reconstruct the economy at the London Economic Conference of 1933 but Roosevelt scuttled that and said, “We’re going to go it alone.”
The basic principle of American foreign policy is that no other country can tell us what to do. We can tell other countries what to do, but they cannot tell us what to do. So we will not join any agreement in which we don’t have a veto power that gives us control of the World Bank and the International Monetary Fund, or the veto power in the United Nations and any international organization that the United States will join. So the question is: how could this supremacy be established all over again as World War II came to a close?
In 1944 and 1945, America made plans for the postwar economy. Its guiding logic was that: “In order to have full employment in the United States we have to have an export-based industry. Now that we’ve destroyed Germany and Japan our major enemy is the United Kingdom.” It became very clear that America’s enemy immediately on the ending of World War II was not Russia or the Soviet Union, but England. It developed a strategy that was designed to essentially bankrupt England with the 1946 British Loan, to force England to accept to end Imperial Preference, to break up its empire, to make it free the about 10 billion pounds Sterling, to be used for spending not in England as blocked currency as the British Board of Trade expected, but in the United States. So England was stripped of all of the blocked currency, stripped of the currency area, stripped of its exclusive Sterling Area, and thereby the empire that became absorbed into the Dollar Area.
The parliamentarians and members of the House of Lords said, “We know that we’re bankrupting Britain, but the alternative is to go it alone, and we can’t really make an alternative.” Keynes said, “Of course you could create your own currency and trading area with India, Canada and other countries, but that would involve a great shrinking.”
At the time they believed still that there had to be some means of settling international payments on creditor terms with gold. The United States had most of the gold in 1945. The British understood very clearly that what seemed to be the gold exchange standard – for countries that settled their balance of payments deficits in gold – was really the Dollar standard, because the dollar was defined in terms of gold. What seemed to be a gold standard was actually the Dollar standard, and in fact the arrangements that America created in 1945 were so one-sided that by 1950 it had drawn another five billion dollars’ worth of monetary gold into the United States out of Europe. There was a refugee flight of gold in the 1930s that was followed by a post-war flight out of Europe. British banks and the wealthiest classes began to move their money to the United States.
By the time of the Korean War in 1950 and 1951, America’s balance-of-payments deficit changed abruptly. From 1951 through the 1960s and 1970s, the entire U.S. balance of payments deficit was military. At first this deficit was welcomed by Europe and by other countries because finally the United States was providing the rest of the world with dollars that it needed to grow. The dollar outflows became the basis of Europe’s central bank reserves along with gold. Some of the dollars were cashed into gold especially by France, and by Germany even more.
The U.S. balance-of-payments deficit was entirely due to America’s military spending. The U.S. private sector was exactly in balance. All of the deficits were on government account, and were entirely military. American foreign aid actually made money in balance-of-payments terms. In the 1960s when I was working at the Chase Manhattan Bank, every Friday the Federal Reserve would publish statistics on the gold cover. All of the paper currency in the United States had to be backed 25 percent by gold. Every Friday we would look at what is the gold cover – how much over the 25 percent does America have in free gold to sell, to settle the military deficit from spending in Southeast Asia, in the Vietnam War and other military operations throughout the world.
It was obvious already in the mid-60s that the United States at some point would run out of gold if it continued its military spending. That led Chase Manhattan’s Chairman of the Board George Champion to oppose the Vietnam War, saying it was fiscally irresponsible. It was the business community and the right-wing in the United States that opposed America’s foreign war, not the labor movement. The labor movement was for the war because it was causing an inflation and helping wages rise. The golden age of American labor was the 1960s and 1970s, resulting from the balance of payments deficit. It was the business community that opposed the war – but not David Rockefeller when he took over from George Champion. Rockefeller wanted to “do the right thing.” He sort of followed what the Treasury asked Chase to do and the other Wall Street leaders followed suit.
Already in the mid-60s the United States faced the problem of how to avoid its balance-of-payments deficit. The solution was to make America the haven for criminal capital in the world. Somebody from the State Department joined Chase Manhattan, and asked Chase to set up enclave affiliates in the Caribbean to essentially attract the criminal capital of the world. As they explained it to me: “We want to be the new Switzerland.” They said the most liquid people in the world are the criminal class, the drug dealers. “We want the drug dealer money; we want the criminal money because it’s liquid. They have nowhere to go. Let’s make America safe for the flight capitalists, for the kleptocrats, for the crooked heads of states of the world for putting their money. Don’t have them put them in Switzerland to push up the Swiss currency. Have them put it in the branches of Wall Street banks that then would take this money in the Caribbean tax evasion and offshore banking center enclaves and then send the money to the head offices.”
The Federal Reserve every three months would publish statistics on head office bank liabilities to their branches in the Caribbean and Panama and Liberia and other countries that were used as tax avoidance centers. We were following that quite closely. Despite trying such stratagems, the United States went off gold in August 1971. At the time it worried about what on earth was going to happen. “Are we going to lose the creditor position that has enabled us to dictate the trade rules and the financial rules and political diplomacy of the world when they went off gold?”
In 1972, a year after the United States went off gold, my Super Imperialism was published. Its theme was that American diplomacy was in an even stronger position now that its deficit was not having to be paid with gold. What were other countries to do? How were foreign central banks going to hold their international reserves? There was only one currency that they could hold, and that was the U.S. dollar. So the fear by Wall Street and the U.S. Government that the dollar would be devalued as a result of its military spending didn’t materialize, because foreign central banks were in a quandary: If they did not recycle the dollars that they received from the America’s balance of payments deficit, their currencies would rise and that would hurt their export interests.
From the American point of view, central banks recycled dollars into Treasury bond holdings, because foreign central banks at that time could only invest in official government securities; they were not creating sovereign wealth funds. America’s balance-of-payments deficits thus financed its domestic budget deficits.
The response to my book on Super Imperialism was not primarily from the Left but from the U.S. Government, especially the Defense Department. I went to work for the Hudson Institute with Herman Kahn, and immediately we got a contract from the Defense Department to explain to them how Super Imperialism was working. I didn’t want to call the book Super Imperialism. I wanted to call it Monetary Imperialism, but the publisher thought differently. Most of the copies were sold in Washington to the Defense Department, the State Department and the CIA, and Herman Khan brought me numerous times down to the White House to discuss this. The Americans made it very clear that – for instance when OPEC quadrupled its oil prices in 1973 and 1974, after America quadrupled its grain prices – Kissinger and the State Department and Treasury told them that they could charge whatever they wanted for the oil, but whatever they charged they had to recycle into U.S. financial markets, mainly into government bonds. They also could buy U.S. stocks and U.S. corporate bonds, but couldn’t buy majority ownership of any big American industry. American had to be in control of its industry. The Arab countries were told “you can buy all the stocks you want through the stock market”. I think one of the Saudi Arabian kings bought a million shares of every company on the Dow Jones Industrial Average.
So you had a recycling. The more dollars Americans spent abroad on its military deficit, the more money flowed into the bond market to finance America’s budget deficit. What the American government had achieved by its creditor status before 1971, it achieved by its debtor status after 1971. Once again, it told the rest of the world: “What’s the alternative? The alternative is anarchy.” Essentially it used that threat. President Johnson insisted that Europe give America special trade favoritism, special advantages, and the rest of the world felt that it had to go along to survive.
At the time there was a discussion concerning the advantages of gold. Herman Khan was a monetary right-winger, and believed that gold should be reintroduced into the international monetary system. He and I went down and gave a presentation to the U.S. Treasury, saying, “Gold is a peaceful metal because it’s a constraint on the balance of payments. If countries had to pay their balance-of-payments deficit in gold, they would not be able to afford the balance-of-payments costs of going to war.” That was pretty much accepted and that was why the United States basically responded, “That’s why we’re not going back to gold. We want to be able to go to war and we want the only alternative to hold central bank reserve to be the United States Dollar.”
The United States also arranged the World Bank and the International Monetary Fund to favor the U.S. economy. In the World Bank it would only make foreign currency loans to other countries. It sent out missions to foreign countries to say “What does the country need?” and almost every mission said “What Latin America, Africa and the Near East need is not foreign currency. They need domestic currency for agricultural development.” You had a latifundia problem in Latin America. The United Nations came out with two wonderful reports on the need for land reform throughout the Third World in order to grow domestic food. But the World Bank was set against other countries becoming food independent. The most important heads of the World Bank were former Secretaries of Defense like McNamara and John McCloy. You can look through who the heads were. The Americans said that any foreign country wanting to grow its own food instead of depending on U.S. grain exports was counted as an Act of War and would be overthrown. That was the explicit reason why the United States established military dictatorships and client oligarchies in Latin America.
The World Bank did promote plantation agriculture but the plantation agriculture was for tropical export crops to compete with other exporting countries, to lower the price of export crops, of tropical crops that could not be grown in the United States. These countries were not supposed to grow their own food supply.
The World Bank became a huge market for American firms to build dams etc. I was told that the World Bank person in charge of designing dams had been a chronic bed-wetter as a child, sort of acting it all out. It also got countries into debt, and once countries were in debt they were forced into the International Monetary Fund, which said basically” “In order to pay your debts, you have to engage in a vicious class war against labor”. You have to lower wages because it’s the only variable in world trade. There’s a common world trade [price] in raw materials: All countries pay the same price for copper, machinery, and other materials. There’s a common world price for oil; there’s a common world price for capital goods. The one variable in foreign trade is the price of labor. So the IMF said, “You’ve got to prevent unionization, you’ve got to prevent any kind of pro-labor reform. Your only way of paying debts is to polarize your economy and impoverish your labor force.”
That is exactly what the opponents of Keynes had urged in the 1920s, and you saw the result in Germany. The same thing was imposed on the Third World countries. That is why, until a few years ago, all the countries of the world tried to get free of the IMF’s “conditionalities,” the terms on which the IMF would lend money. You should essentially think of the IMF as a small office in the basement of the Pentagon, deciding what countries to support, and what countries are following policies that the United States does not want and therefore wants to wreck. That explains why the IMF will give loans to completely non-creditworthy countries such as Argentina under the dictators, or the Ukraine with no visible means of paying off the debt.
The loans to Ukraine, the loans to Greece recently that ended up bankrupting it, the loans yet again to Argentina have demoralized the IMF staff. They complained that every forecast they make shows that the debts can’t be paid, but the IMF continues to make them anyway. The IMF has become a pariah among competent financial analysts throughout the world. The United States is still trying to force countries into the IMF as a means of controlling them, saying “Either you engage in a pro-American war against labor and [engage in] neoliberalism, or the alternative is wreckage.”
Ironically what’s changing all this is the United States’ cold war against Russia and China. The United States has begun to impose sanctions on the Russian and other post-Soviet economies, and on China. This is driving them into a position where their only defense is to do what Britain could not do in 1945: to create an alternative economic order with its own rules. So for the last five years or so China, Russia and other countries are discussing how to de-dollarize their economy.
What do they want to do? They say: “The first thing we have to do is we don’t want to hold our international reserves in loans to the U.S. Government, because that finances the United States military deficit, building its 800 military bases all around us, to try to threaten us militarily. If we withdraw from this international financial system based on the U.S. dollar free-lunch, then dollars can’t be spent ad infinitum without any constraint on military policies that we don’t agree with – right-wing and anti-labor policies that we don’t agree with. So we’re going to take the lead in creating a new grouping – China, Russia, Iran, the Shanghai Cooperation Organization members basically – to do this.”
They’re trying to do what the world began to talk about doing in 1933 at the London Economic Conference: “How do we make a fair system?” When Keynes outlined his plans for Bretton Woods in 1944, his alternative was the Bancor. He said there should be a central bank that can make loans, creating fiat money to enable deficit countries to pay. So that if they ran a balance-of-payments deficit, they wouldn’t have to impose austerity. Austerity and anti-labor policies never enable a country to pay debts. It makes them less able to pay, and even more dependent on creditor countries. So the Chinese and Russians are discussing today “How do we create a currency, a central bank that will help us actually develop? We’ll use international reserves to promote the industrialization and the upgrading of labor and public infrastructure investment, instead of the U.S. demand to privatize infrastructure development and sell it off to foreign rent-seekers.”
What China and Russia found out very quickly is what initially seemed to be an economic rivalry between America and China and other countries was not really an anti-China rivalry as such. It’s a conflict of economic systems. The conflict is between neoliberalism – a financialized world order that wants to privatize all infrastructure and create monopoly rents for transportation, education, healthcare, like what occurs in the United States – and having these basic investments in the public domain, to be subsidized and their services provided at minimum cost. The question at issue is what kind of economy the world is going to have. Will it be a neoliberal economy, a privatized economy – Reaganized, Thatcherized and financialized, organized by central planning in Wall Street – or is the government going to plan?
China and Russia do not want a centrally planned economy anywhere near as centralized as the United States is promoting with Wall Street. In the United States the center of economic planning has been shifted from Washington to Wall Street financial institutions. Banks create credit not to create new means of production, not to build new factories and plant and equipment, but essentially to extend credit against assets already in place. Eighty percent of bank loans in the United States and in England are mortgage loans for real estate, against real estate that’s already in place. I think three percent of mortgage loans are for new construction as long as these loans are already collateralized with promises to buy apartments etc.
So the question is what kind of financial system are you going to have to back up a central banking system and credit creation? Is credit going to be a public infrastructure enterprise as it is in China, where the banks of China are able to decide who is going to get the loans. A public bank is not going to make corporate takeover loans or loans to corporate raiders. It’s going to make loans to actually increase the tangible economy, not to take it over and turn public infrastructure – the education system, healthcare, transportation and communications – into rent extraction.
We’re having today finally a revival of the kind of debate that classical economics was all about in the 19th century – Adam Smith, John Stuart Mill, down through Marx and Alfred Marshall. At issue was how to minimize unearned income as economic rent. At that time, the main form of economic rent they were trying to minimize was land rent. The idea was to get rid of the hereditary landlord class, which was treated as a form of overhead. In today’s economy the main rentiers are financial. There’s not a landlord class anymore, because two-thirds of Americans own their own home (on credit, to be sure). Home ownership rates are higher in continental Europe and England. You don’t have a hereditary landlord class living off land rent. What you do have is a financial class that’s emerged after World War I in a way that they have become the new central planners. It’s a new concentration of wealth, engaging in a new kind of economic war, not only against labor but against government as well, to appropriate the public domain by financializing it. This is done by getting governments into debt and having them sell off the public infrastructure. That’s happening in America at the state and local level, for indebted cities and states like New York.
How do China and Russia avoid their economies becoming financialized? How do they avoid a financialized economy from becoming a high-cost economy and losing their international trade advantage? What’s at stake in de-dollarization is how to create an alternative to a financialized, dollarized economy, one that is going to try to minimize the cost of living and minimize the cost of doing business, instead of a high-cost economy as is occurring in the United States.
The answer they have is that to some extent there’s going to be gold as a means of settlement. But most of all China, Russia, Iran, and other countries are going to mutually hold each other’s trading currencies. They’re replacing dollars with gold and with each other’s currencies. That essentially is the response that the world could have taken after World War One and didn’t, and could have taken after World War II if it had followed Keynes’s policies. Finally, with the help of Donald Trump isolating China and Russia, U.S. diplomacy is creating an independent bloc and helping them do what was unthinkable in the past.
Great, thank you very much. We’ve got some questions coming in.
To start off, yesterday Joe Biden was inaugurated, making him the 46th President of the United States. What are your expectations regarding his stance on China? We’ve heard him talk a lot about democracy as a guiding foreign-policy principle to distinguish between what is good and what is bad for the U.S. Which measures are likely to be used to advance the USA’s interests: will it be tariffs, sanctions or could we even see a military buildup and embargoes?
The question is, what are the U.S. interests? Again and again in the 1920s, the 1930s and today, the U.S. Government interests were the opposite of U.S. industrial interests, opposite of U.S. economic interests. Just because the Biden administration has an emotional hatred of Russia does not mean that it’s in the U.S. interest. The Biden administration said, “On second thought we’re not going to join the Iran agreements because we’re going to talk to Israel first,” and Blinken, his neocon Secretary of State, said that we won’t do anything without Israel’s approval regarding Iran. Biden also said that the United States will not do anything about solving the world problem of global warming that the oil industry doesn’t like, because basically what’s called the “interest of the United States” is that of his political campaign contributors. So almost his first act was to approve more oil drilling. Here we have the Supreme Court’s Citizens United ruling that lets campaign contributors dominate U.S. policy, not the voters. The American voters were not given a choice in this election. Biden did not do well in the early primaries and Kamala Harris got only one percent of the primary vote.
Polls show that what American voters want is basically a Bernie Sanders type policy. They want what you have in Europe. They want public healthcare, universal healthcare. They don’t want to have to pay 18 percent of America’s GDP for medical insurance and medical expenses, because there’s no way that American industry can compete in markets and American labor be employed in export industries, having health care monopolies protected by successive administrations.
The American public didn’t want the Obama administration to evict 10 million American families, and it looks like the Biden administration is going to outdo Obama. Biden basically says, “We’re going to evict another 10 million American families. What Obama did I can do more.” Many families have not been able to pay the rent or even pay the mortgage if they’ve been unemployed or if their income is reduced because of the Coronavirus. There’s going to be a huge wave of evictions in the United States that will be even larger than the Obama evictions.
The Obama evictions were targeted mainly against Black and Hispanics, who were the victims of the junk mortgage loans. Biden has made a point of appointing many Black women and men to administer positions as a cover story for the fact that his policies are going to be just as viciously anti-Black and anti-minority and anti-Hispanic as the Obama administration’s were. They found that as long as you can have identity politics front and center you can do whatever you want economically to crush the people that you pretend to be representing in identity politics.
Nobody can see really any way in which the American economy can recover. The stock market can recover because the Federal Reserve credit and quantitative easing has been going into supporting stocks and bonds, including junk bonds. Sheila Bair wrote a Wall Street Journal editorial on that. But the underlying economy is shrinking rapidly while the stock market’s going up. That’s what the American economists call a K-shaped recovery – up for the One Percent, down for the 99 Percent.
I’m going to ask one more question on the China topic and then talk a bit more about historical things you mentioned. China has been building up a network of support and trade deals to drive its expansion. You mentioned some of the policies. It’s also been growing its presence in the U.N. system and even putting together alternative international organizations like the Asian Infrastructure Investment Bank. Is there a line that the U.S. would not tolerate China crossing, after which the U.S. would start devoting much larger resources and spending to contain China, or is the U.S. already at full power?
The United States is muscle-bound. Despite its huge military budget it can’t field an army. It has a foreign legion. ISIS, for instance, is part of its foreign legion. The European NATO is part of its foreign legion. But there’s no way American can ever have a land war again, so you can never invade and conquer a country with a military army. All America has is the Atom bomb, and that’s muscle bound. It cannot go to wage any kind of war except atomic war. There’s nothing in between.
I think Russia and China know that, and Russia at least has taken steps to protect itself and said, “If the United States wants atomic war, we’ll be wiped out but it’ll be wiped out too, and Europe will be wiped out.” I think probably the first exchange would be to wipe out England and Europe, to say “We don’t want to go to war with you and really blow up the world, America. Let’s just show you what we can do. Let’s blow up England and Europe so at least you won’t have your colonies there.” If America persisted, it would be the end of the world. Will America really do that? There was worry that Donald Trump would do that so he could go down in history as the man who destroyed civilization, but I don’t think other people are going to do that.
Moving now into some of the historical things you mentioned, for example in the 19th century the most powerful European empire was the British Empire. I am trying to see if there’s a parallel between the UK and the American. Did the UK establish such currency dominance similar to the one the U.S. has today? Did it use similar methods to the U.S. to establish its dominance, for example creating international organizations in which it had an institutional advantage, or for example through the control of key energy deposits?
England thought that it was establishing currency dominance with the Sterling area. In other words it would spend money abroad and other countries would save their money in Sterling. All during the 1930s the surpluses earned by India and by other members of the Sterling area were basically kept in London, paid to England. But then England ran a deficit with the United States so ultimately the benefit of England’s Sterling area, the financial benefit, was all spent to the United States already in the 1930s. You can look up the balance of payments articles on that.
In 1945, as I mentioned, England thought, “We have 10 billion Pounds of all the savings of Argentina and India, countries that have been providing the raw materials for the World War that we fought, World War II. Now there is going to be a demand for English exports and we can recover by employing our labor to make exports.” But the terms of America’s British Loan said: “No, you have to open up the Sterling area and let these countries cancel their contracts with England.” England had long four-year and five-year capital purchase contracts from India, Argentina. “They can cancel them all and buy from the United States”. England went along with that. So the attempt to create a currency area was smashed by the United States.
Ever since the 19th century America looked at England as the great rival, not the Soviet Union. The Cold War in the 19th century was against England. The fight for protectionism in the United States went so far as to create state colleges and universities that would teach an alternative to Anglo-centered free-trade economics and Anglophile moral philosophy. There was a feeling in the late 19th century of America creating a new civilization and it would not be the religious-based, unscientific civilization of Europe. It would be a new secular civilization. That feeling of a new civilization in America is what led Americans to think, “We will never let other countries tell us what to do because they’re part of the decadent old world and we’re the new world. We’re going to make our own rules.”
You also discussed Bretton Woods. Would it be beneficial to recreate, very hypothetically, a system similar to the Bretton Woods one today? I think a key question that underlies that is, “Does the country that runs such a system reap a benefit from running it or are they just constrained?” Will there be an interest for China to set up such a system?
They realize that they cannot set up any system in which the United States is a member because the United States will insist on veto power. If it has veto power, then they can’t do the kind of economic system that I described. Bretton Woods was designed one-sidedly to give all the benefit to the United States, and to make other countries dependent on the U.S. economy, on U.S. exports – largely of agriculture, but also industry – and also on the U.S. dollar. Obviously, that’s not going to be done. The agreement that is being developed on an ad hoc spontaneous basis between China, Russia and neighboring countries is their own system of international payments that will be based on mutual benefit, of holding of each other’s currencies, of preventing any payment surplus country – and it could be China – any payment surplus country ending up with so much credit in a creditor position vis-a-vis debtors. The new system will not impoverish the debtors.
The IMF system was designed to impoverish debtors. The purpose of the IMF was to make other countries so poor and dependent on the United States so they could never be militarily independent. In the discussion of the British loan for instance, in the 1930s the discussion in the London Economic Conference was, “Yes, we’re bankrupting Europe, but if we give Europe enough money to avoid austerity, they’re just going to spend the money on the military.” That was said by the Americans in the State Department and the White House again and again, especially by Raymond Moley who was basically in charge of President Roosevelt’s foreign policy towards Europe.
The question is: how do you create an international financial system designed to promote prosperity, not austerity? The Bretton Woods perspective is for austerity for everybody except the United States, which will have a free ride forever. The question that I’m involved with in the work I’m doing in China and with other countries is how to create a system based on prosperity instead of austerity, with mutual support between creditors and debtors, without the kind of financial antagonism that has been built into the international financial system ever since World War I. Financial reform involves tax reform as well: how do we end up taxing economic rent instead of letting the rentiers take over society. That is what classical economics is all about: how do we revive it?
Final question: these austerity and anti-labor policies which the IMF imposes on countries of the global South seem to be well known practices from before the IMF was created, from what you’ve discussed. Did the IMF invent anything new? In addition, in the 19th century, was predatory lending something common, or was direct invasion always the go-to method for subjugating a territory?
The 19th century was really the golden age of industrial capitalism. Countries wanted to invest to make a profit. They didn’t want to invest in dismantling an existing industry, because there wasn’t much industry to dismantle. They wanted to make profit by creating industry. There was a lot of investment in infrastructure, and it almost always lost money. For instance, there was recently a criticism of China saying, “Doesn’t China know that the Panama Canal went bankrupt again and again, and that all the investments in canals and the railroads all went broke again and again?” Of course China knows that. The idea is that you make investment not to make a profit on basic large infrastructure. The 19th century was basically inter-state lending, inter-governmental lending, public sector lending. That’s where the money was made. The late 20th century was one of financialization, dismantling the industry that was already in place, not lending to create industry to make a profit. It’s asset-stripping, not profit-seeking
Thank you very much for joining us today. Our next event will be on February 4th and we look forward to seeing you all then. Thank you very much Prof. Hudson.
Michael Hudson is Professor of Economics at the University of Missouri-Kansas, former balance of payment economist at Chase Manhattan, political consultant, and has written on many topics relating to the history of debt and the international financial system.
US sanctions are part of a multi-front war on Syria, and its long-suffering civilians are the main target
The US is waging multiple fronts of war against Syria, including brutal sanctions, while claiming concern over the well-being of Syrian civilians – the vast majority of whom are suffering as a direct result of US policies.
On June 17, the US implemented the Caesar Act, America’s latest round of draconian sanctions against the Syrian people, to “protect” them, America claims. This, after years of bombing civilians and providing support to anti-government militants, leading to the proliferation of terrorists who kidnap, imprison, torture, maim, and murder the same Syrian civilians.
Just weeks after these barbaric sanctions were enforced, cue American crocodile tears about Syrian suffering, and claims that Moscow and Damascus are allegedly preventing the delivery of humanitarian aid. More hot air from American hypocritical talking heads who don’t actually care about Syrians’ well-being.
America trigger-happily sanctions many nations or entities that dare to stand up to its hegemonic dictates. The word “sanctions” sounds too soft – the reality is an all-out economic war against the people in targeted nations.
Sanctions have, as I wrote last December, impacted Syria’s ability to import medicines or the raw materials needed to manufacture them, medical equipment, and machines and materials needed to manufacture prosthetic limbs, among other things.
Syria reports that the latest sanctions are already preventing civilians from acquiring “imported drugs, especially antibiotics, as some companies have withdrawn their licenses granted to drug factories,” due to the sanctions.
In Damascus, pharmacies I’ve stopped into, when I ask what some of the most sought-after medications are, hypertension medications are at the top.
But sanctions have yet another brutal effect: they wreak havoc on the economy.
The destruction of Syria’s economy is something US envoy for Syria, James Jeffrey, boasted about, reportedly saying that the sanctions “contributed to the collapse of the value of the Syrian pound.”
The website Sanctions Kill notes:
“Currencies are devalued and inflated when sanctions are levied. Countries are pressured to stop doing business with targeted countries. Sanctions violate international law, the UN charter, Geneva and Nuremberg conventions because they target civilians by economic strangulation, creating famines, life-threatening shortages, and economic chaos.”
So youhave Western hypocritical talking heads pretending they want to get aid to Syrian civilians while literally cutting them off from medicine and the ability to purchase food.
Resource theft and arson
But these crimes against humanity don’t suffice for America. The US occupation troops and their Kurdish proxy forces (the SDF) are plundering Syria’s oil resources to the tune of $30 million a month as of last October, according to Russian military estimates.
In early July, SANA reported another convoy leaving Syria to Iraq, loaded with oil thieved from areas under US occupation.
Terrorists and US proxy groups are also thieving Syria’s cotton, olives, wheat, and flour.
Further, Syria accuses the US of deliberately setting fire to crops using Apache-dropped thermal balloons.
Civilians from affected areas near Turkish occupation posts likewise blame Turkish forces for setting fires and firing live ammunition upon those who attempt to extinguish the fires, farmers literally watching their livelihoods go up in flames. The Hasakah Agriculture Directorate director likewise blames Turkey for arson of the crops.
Turkish occupation forces are also accused of cutting water supplies at Alouk water pump station, depriving one million people in the Hasakah region of drinking and agricultural water, with no condemnation from the Securit Council.
The poverty and suffering Syrians are enduring these days is unbearable, with prices of basic goods doubled and tripled from just a few months ago, turning what were affordable items into luxuries, particularly for the 7.9 million food-insecure Syrians.
But alarmist Western media and representatives omit the context: the nearly 10 years of war on Syria; the deliberate targeting by terrorists and by US and Turkish occupation forces, and Israel, of Syria’s infrastructure; the looting of oil, wheat and cotton, even allegedly stealing parts of an Idlib power plant for scraps sale in Turkey.
Likewise, Aleppo’s heavy industry was thieved during the years when terrorists occupied the industrial zones of the city. Heavy machinery was reportedly trucked in broad daylight to Turkey.
With all of these factors, of course there is poverty and a chaotic economy.
A safe resolution rejected
Recently, the UNSC passed a resolution to maintain one humanitarian border crossing from Turkey into Syria, the Bab al-Hawa crossing.
Prior to that, Russia had proposed a resolution enabling the safe delivery of humanitarian aid from within Syria.
On July 11, Russia’s Permanent Mission to the UN issued a statement again noting the need to phase out cross-border deliveries, as the Syrian government has regained much of the territories previously occupied by terrorist factions, and deliveries must be made from within Syria.
The UNSC resolution that passed, however, continues the delivery of aid via Turkey, delivering to the hands of Al-Qaeda and other terrorist groups occupying Idlib. It is with these people the US aid ends up when delivered, from Turkey, not from Syrian territory.
Given that the US has supplied weapons to anti-government extremists in Syria before, it is not illogical to believe they hoped to funnel still more weapons in under the pretext of “aid” deliveries.
Russia’s statement also noted the lack of UN presence in the Idlib de-escalation zone, saying: “It’s not a secret that the terrorist groups, listed as such by the UN Security Council, control certain areas of the de-escalation zone and use the UN humanitarian aid as a tool to exert pressure on [the civilian] population and openly make profit from such deliveries.”
This is what Russia and China opposed, not the delivery of aid.
Those are details which US Ambassador Kelly Craft slyly omitted when she spoke of callousness and dishonesty being an established pattern. Her verbal guns were aimed at Syria and Russia, but her choice of words perfectly describes US policy towards Syrians.
One only needs to look at US policy towards displaced Syrians in Rukban Camp to see that the US has actively worked to prevent aid deliveries there and prevent Syrians from being evacuated from there. Or the lack of US outcry at Turkey’s prevention of humanitarian convoys from reaching Idlib areas, which while scheduled for last April still hasn’t been successful.
On the other hand, on July 4 the WHO acknowledged the Syrian-Russian delivery of 85 tons of medicines and medical supplies from Damascus to Al Hasakah. On July 9, the Russian Reconciliation Center noted that 500 food packages (2,424 tons) were delivered to Idlib province and Deir-ez-Zor province.
I wonder how many tons of actual aid the US would send…
In case it isn’t yet clear, America is weaponizing and politicizing aid, as it tried to do in Venezuela last year. American representatives posture and bellow, and Russia and Syria quietly go about actually delivering aid to needy Syrians.
The Russian post-resolution statement also critically noted the brutal impact of sanctions on Syria, which, as detrimental to Syrians’ wellbeing as they are, somehow don’t merit the feigned concern of representatives like Craft.
The statement said:
“These coercive measures seriously undermine not only the socio-economic situation in Syria, but also impede activities of many humanitarian NGOs that are ready to help the population in territories controlled by Syrian official authorities.”
If America truly wanted to alleviate the suffering of Syrians, all sanctions against the country and people would be immediately lifted.
Unless “the fundamental economic question, viz., the question of the economic essence of imperialism … is studied, it will be impossible to understand and appraise modern war and modern politics.” – Vladimir Ilyich Ulyanov (Lenin), 1917
March 15, 2020
By Stephen Gowans
I wrote a book in 2018 book titled, Patriots, Traitors, and Empires: The Story of Korea’s Fight for Freedom.
The word “patriots” in the title, refers to the people who founded the state of North Korea, and I argue that North Korea is a patriot state because it was founded by anti-Japanese resistance fighters guided by the mission of freeing Korea from foreign domination.
“Traitors” refers to the people who collaborated with the United States in founding the Republic of Korea, or what we informally call South Korea, and who collaborated before that with the Japanese, to enforce Japan’s colonial rule over Korea from 1910 to 1945. When the United States occupied the southern part of Korea in 1945 at the end of the Second World War, it established an administration in the southern half of Korea made up largely of Koreans who had collaborated with the Japanese.
“Empires” refers to two empires, the Japanese, which dominated Korea through much of the first half of the twentieth century, and the United States, which has dominated the southern part of Korea ever since.
The last part, “The Story of Korea’s Fight for Freedom,” refers to the struggle Koreans have waged for over a century to free themselves from the domination of these two empires. And when I say the struggle of Koreans, I mean all Koreans, of both north and south. It’s clear that North Koreans reject US domination and control, but what’s not so clear is that many South Koreans do, as well.
The Pentagon’s operational control of the South Korean military illustrates US hegemony over Seoul. The current South Korean government has asked the United States to transfer to it operational control of the South Korean armed forces. The reality that South Korea has to ask for operational control of its own military reveals that the United States is the de facto power in South Korea.
In response to South Korea’s request for operational control, the United States has temporized, saying that it’s prepared to talk about a possible transfer and has indeed held discussions with its South Korean subordinates. But the conditions under which the United States would transfer control would effectively make South Korean command of its own military a charade. Specifically, one of the conditions the United States proposes is that South Korean troops be placed under the command, not of South Korea’s head of its joint chiefs of staff, but of a lower-ranking South Korean general, who would be required to be headquartered at the main US military base in Korea, and would have a US general as deputy commander.
South Korea has a long tradition of US diplomats and military advisors operating in the background as the de facto governors of the state, with South Koreans as the state’s public face, creating the illusion of sovereignty. South Korea has been so decisively under US influence that throughout much of its history the South Korean government had been answerable to three people: the US ambassador, the head of the US military in Korea, and the CIA station chief.
There are a few facts which Washington is also hoping to use to block any meaningful transfer of operational control to its client state.
• The Korean War never ended in a peace treaty, and South Korea and the United States are still officially at war with North Korea.
• In this war, South Korean forces fight under the United Nations Command.
• The United Nations Command is officially led by a US general.
The corollary is that so long as a de jure war continues, South Korean forces remain under the UN (hence, US) Command. Therefore, in the absence of a formal peace on the Korean peninsula, South Korean troops remain assets of the Pentagon, even if the United States formally cedes operational control of South Korea’s military to Seoul, or to a South Korean general operating from a US military base with a US deputy nearby to ensure his actions remain within the framework of US power.
Washington has never evinced an interest in declaring a formal end to the war, despite North Korea urging Washington on multiple occasions to declare one. Colin Powell, when he was US Secretary of State, reacted to one North Korean request for a peace treaty by replying, “We don’t do non-aggression pacts or treaties, things of that nature.” That it could no longer use the UN Command as a pretext to control South Korean forces is one reason why the United States is averse to a peace treaty with North Korea.
To be sure, the United States is not entirely averse to peace on the Korean peninsula; it is only averse to a peace that isn’t on its own terms. And those terms are North Korea acceding to becoming a satellite of the US economy and outpost of the US military. If North Korea agreed to these terms, the United States would lift its sanctions, cease its military pressure, and declare a formal end to the war. But North Korea shows no sign of submitting to US demands, and therefore, peace on the Korean peninsula will have to be achieved by arriving at mutually agreeable terms. It’s important to note, however, that the respective objectives and worldviews of the two sides—one for empire and the other against—are so completely antithetical that the possibility of their arriving at mutually agreeable terms is approximately zero.
In any event, the United States pursues a negotiating strategy congruent with its overwhelming strength: it makes demands, and defines negotiation as the other side’s submission. Concessions from the US side (at least ones Washington doesn’t intend to revoke at some point in the future) are viewed in Washington as unthinkable, a sign of weakness, at odds with the gross imbalance of power in Washington’s favor that characterizes the US-DPRK relationship.
The question we need to ask, then, is why the US negotiating position is one of awaiting Pyongyang’s surrender, while dissimulating interest in genuine negotiations? The US historian William Appleman Williams once observed that the United States often rejects the give-and-take of negotiations in favor of the imperial dynamic of, we need, you give.
The first, and most important, answer to the question of why Washington has no genuine interest in negotiating a formal peace with North Korea, is that there is no reason for Washington to make concessions to the country. The Democratic People’s Republic of Korea is too small and too enfeebled to pose a threat. From the US perspective, the best strategy is to continue the enfeeblement process—to be achieved through unrelenting military pressure, diplomatic isolation, and economic strangulation—until North Korea surrenders. Pyongyang’s capitulation would represent peace on US terms.
Second, the South Korean military is a formidable asset. It is big, powerful, and equipped with advanced US military hardware. And it’s integrated into the US military, to the degree that it is, in reality, not a sovereign military, but an inter-operable component of the US Defense Department—what one US historian called an US Asian army in reserve. The continuation of an official state of war on the Korean peninsula affords the United States a pretext to maintain control of this formidable military asset, and to use it for its own purpose. We’ll see that the purpose is not the protection of South Korea from North Korean aggression—for North Korea is in no position to wage a war on its neighbor—but to threaten China.
South Korea sent over 300,000 troops to fight for the United States in Vietnam, and did so in return for significant injections of US economic aid—aid which was instrumental in triggering the take-off of the South Korean economy. This makes South Korea both a mercenary state and an accomplice of US imperialism. In return for military favors, Seoul received significant lucre from Uncle Sam. This arrangement was good for South Koreans (minus those who died or were disabled fighting for a US cause in a foreign land) but was detrimental to the Vietnamese, fellow East Asians with a common history of being raped by colonial powers, including the Japanese. South Korea, thus, helped the US empire do to the Vietnamese, what the French and Japanese empires had done before it.
Significantly, US troops were stationed on the Korean peninsula at the time. They had been there since 1945, and from 1950, it was said, to deter North Korean aggression. And yet, one would think that if the North Koreans were truly a threat to South Korea, Seoul could hardly have spared 300,000 troops.
Today, the pretext for the United States’ continued presence on the Korean peninsula is to defend South Korea from North Korea, but the argument is transparently false. South Korea, by any measure, is fully capable of defending itself against a North Korean attack. Its population is twice as large as North Korea’s and its economy is many times larger (partly as a consequence of the significant injections of US aid it received in return for its mercenary services.) South Korea spends $40 billion a year on its military (and its military spending is increasing robustly every year) while North Korea spends an estimated $5 billion, one-eighth of the South Korean level, and equal to the size of the budget of the New York City Police Department.
What’s more, South Korea is equipped with the latest US weapons systems, while North Korea relies on obsolete military equipment procured from the Soviet Union many decades ago, for which it cannot get spare parts and for which a fuel shortage prevents it from operating except infrequently. Part of the US playbook against North Korea is to create ambiguous military situations in which a US or South Korean invasion appears imminent, requiring the North Koreans to scramble their obsolete jet fighters, thus depleting their scarce stores of aviation fuel.
Also, the United States has 26,000 military personnel in South Korea, a trifle against the 625,000 South Korean troops. If North Korea attacked South Korea, who would be defending who?
In 1950, North Korea tried by military means to unify the country, and failed, at a point conditions were far more favorable to North Korean success than they are today. Back then, the South Korean government was weak and had little popular support. In contrast, veteran Korean fighters had returned to Korea from China, where they had taken part in China’s civil war on the side of Mao’s forces. They were ready to unify their country and overcome the collaborators in the south. What’s more, North Korea had the partial backing of the Soviet Union, and full support of Mao. If Pyongyang was incapable of bringing about a military success in 1950 when conditions were infinitely more favorable to its project, it’s unlikely in the extreme that the state would embark on the same project today, when it has no international support and South Korea is larger and many times stronger. Hence, the notion that the presence of US forces in Korea is necessary to deter North Korean aggression has no validity.
The truth of the matter is that the South Korean military is an extension of the 26,000 US troops in Korea, whose purpose couldn’t possibly be to deter North Korean aggression, since North Korea is too feeble and its military too obsolete to undertake any aggression. With its decaying military hardware and puny military budget, it’s barely able to defend itself, to say nothing of mounting an attack. Indeed, it is North Korean weakness that has compelled the country to develop nuclear weapons as a means of self-defense.
The purpose of the South Korean military under US command is to form part of the ring around China, which the United States has been building ever since it “lost China” to the Chinese. China, under the Chinese, has become, in the words of the official US Defense Strategy, a ‘great power’, something it never would have been allowed to have become under US leadership. Washington says it is engaged in a struggle with China, a country the US Secretary of State Mike Pompeo recently called ‘the greatest threat of our time’.
That’s the reason US troops continue to be deployed to South Korea; they are the nucleus around which 625,000 South Korean troops are organized for the projection of US power in East Asia against China. South Korea’s raison d’etre from the point of view of the US state is to serve as a US power projection platform, or a stationary, unsinkable aircraft carrier under US command, on China’s periphery, critical to the US foreign policy project of eclipsing China’s independent economic development. US decision-makers have been keen to make China available to US investors and corporations as a sphere for the exploitation of low-wage manufacturing labor, and a vast market for US goods and services, but object to Chinese firms, whether private or state-owned, challenging US free enterprise. In other words, China is coveted by US planners as a satellite economy, but opposed as an independent economic actor.
Another reason Washington refuses to sign a peace treaty with North Korea is that remaining in a perpetual state of war with the North Korean state is part of the pressure campaign Washington has waged against the country from the moment North Korea was founded in 1948. The objective then, as now, is to bring about the collapse of the independence-minded government in Pyongyang in order to replace it with a government acceptable to the United States. This would bring all of the Korean peninsula under the informal control of Washington.
Yet another reason for the United States to oppose a formal peace on the peninsula is to establish a pretext to allow Washington to maintain pressure on North Korea in order to prevent it from developing a successful counter-example to the US-approved model of economic development. Washington says that a country must integrate into the US superintended global economic order, in order to thrive economically. This is a lie. Nicaragua, Honduras, Guatemala, El Salvador, Panama, Costa Rica, and Mexico, all near neighbors of the United States, have long been integrated into the US economy—often at the point of a US gun—and still they wait, and wait, and wait for a promised prosperity that never arrives. Far from being a route to prosperity, an open door to US economic penetration has often been a route to unremitting poverty and permanent relegation to serving as a means to US prosperity and territory from which US businesses suck wealth, leaving the natives with subsistence-level existences.
The United States tells the same lies to North Korea. It must build a US business-friendly investment climate, it must cater to US investors, it must welcome US banks, and it must allow US investors unfettered access to every profit-making opportunity that is latent in the country’s labor, land, markets, and resources. It must put the interests of US investors ahead of the interests of its own citizens. That’s what empire means: that the interests of the mother country, in particular, the interests of the metropolitan rich, prevail over the interests of the metropolitan powers’ satellites. Even more than that, empire means that the metropolitan rich stand on the backs of the hinterland’s poor.
North Korea has always rejected the US lie. That’s a problem from the point of view of officials in Washington. If North Korea is allowed to pursue an alternative development strategy, one at odds with US prescriptions, which rejects Korea serving as a means to US ends and insists on Korea being an end in itself, and in pursuing its alternative development model it thrives, it becomes a model to be emulated by other countries—one that portends a diminishing set of profit-making opportunities for US investors and the growing courage of subordinate countries to reject their role as victims to be bled white.
Consequently, the United States has always, as a matter of policy, made it its task to ensure that any government that repudiates US lies, will be forced to live under a terrible burden of economic strangulation, isolation, and military threat. As the US campaign plays out, Washington attributes the poverty, chaos, and societal breakdown that ensue, not to the US campaign that caused them, but to the alleged failures of the target country’s alternative model of development.
The Wall Street Journal recently ran an op-ed by an estadounidense who had visited Cuba with his church group, and reported that he had witnessed widespread poverty in the Caribbean country. He said that Cubans deserve better, and declared that Cuban poverty is a consequence of the socialist policies of the Cuban government. This was offered as an object lesson to US citizens of what happens when socialists (Bernie Sanders’ name was mentioned) come to power. What he didn’t mention was that almost from the very first moments of the Cuban Revolution, the US government resolved to cripple Cuba economically. So, writing about Cuban poverty without mentioning US economic sanctions, was like writing about the devastation of Hiroshima without mentioning the atomic bombing that produced it.
William Blum wrote a number of books on US foreign policy, with particular emphasis on US interventions in the affairs of other countries. He also wrote a monthly report called the Anti-Empire Report, an allusion to the United States as an empire. Blum once used an analogy to describe the US practice of sabotaging alternative development models, in an essay he titled, “Will humans ever fly? Smashing socialism in the 20th century.”
Imagine that the Wright brothers’ first experiments with flying machines all failed because the automobile interests sabotaged each and every test flight. And then the good and god-fearing folk of the world looked upon this, took notice of the consequences, nodded their collective heads wisely, and intoned solemnly: Humans shall never fly.
Fact: Virtually every socialist experiment of any significance in the twentieth century has been either overthrown, invaded, or bombed … corrupted, perverted, or subverted … sanctioned, embargoed, or destabilized … or otherwise had life made impossible for it, by the United States. Not one of these socialist governments or movements – from the Russian Revolution to Fidel Castro in Cuba, from Communist China to the Sandinistas in Nicaragua – not one was permitted to rise or fall solely on its own merits; not one was left secure enough to drop its guard against the all-powerful enemy abroad and freely and fully relax control at home.
The US Empire
There are three reasons I describe the United States as an empire:
1. It acquired most of its North American territory by force, stealing it from the First Americans and Mexicans.
2. Beginning in the nineteenth century, it acquired formal colonies in the Pacific, the Atlantic, and the Caribbean, including Hawaii, Samoa, Guam, the Philippines, the US Virgin Islands, Wake Island, Midway Island, the Northern Mariana Islands, and Puerto Rico, some of which remain de facto colonies today.
3. Today, it uses its vast economic and military power, and its globe-girding network of military bases, to impose its will on all but the few countries large enough to resist it, or committed enough to a meaningful independence, to defy it.
The United States began as 13 British colonies on the Atlantic coast of North America which came together to declare independence from Britain, mainly because Britain was blocking the colonists’ expansion westward. What began as a very small country, within a very restricted area, became a vast territory stretching from one ocean to another. The process of continental expansion, of moving ever westward, of expropriating the territory of the First Americans, of annexing parts of Mexico, of settling on other people’s land, of driving First Americans into graves and reservations, was one of empire building.
Once this vast continental empire was acquired, the United States embarked on the project of extending its territory beyond the continent. But those parts of the empire that exist beyond the continent are largely hidden today through what the US historian Daniel Immerwahr calls “the logo map of the United States.”
The logo map is the usual cartographic representation of the United States as territory that falls exclusively within North America. That representation is what we understand the country to be, and not an empire, even though the territory includes vast tracks of land that were never part of the United States as originally established in the US War of Independence, and even though US power is present on every continent, a reality reflected in the vast network of US military bases and outposts that straddles the globe.
Immerwahr points out that the logo map is a misrepresentation of US territory in total, because US territory extends far beyond North America. The United States formally includes territory in the Caribbean, the Pacific, and the Atlantic. US territories are properly called colonies, and were openly called colonies by US presidents as recently as the first half of the 20th century. Nowadays, they’re euphemized as territories, if they’re even recognized as US possessions. Often these places are misunderstood to be, not colonies of the United States, but foreign countries.
Puerto Rico, for example, is a colony of the United States. It was acquired by the United States in the Spanish-American War at the end of the nineteenth century. Puerto Ricans have no voting representation in the US Congress. They cannot vote in US presidential elections. The same is true of the US colonies of Guam, American Samoa, the US Virgin Islands, and the Northern Marianas—all US territories in which the residents have no voice in Congress and no say over who will be their head of state. Their status is the same as India’s was under British rule.
Stalin once observed that the United States’ record in world affairs is exactly the opposite of its view of itself. That the United States could exist as a formal colonial empire—indeed, can continue to exist as one today—while persuading the world that it has always been an anti-colonial power, untainted by the sin of colonialism, as its rivals Britain, France, Germany, Japan, Italy, and Russia were, affirms the point. By one account, Puerto Rico is the world’s oldest colony. This means that the United States, which understands itself to be anti-colonial to its core—or at least wants the world to believe this—is in reality the most enduring colonial empire of all.
Hawaii is a state, not a colony, but it was a colony (as the other colony turned state, Alaska was) until 1959. How and why was it acquired? The United States was looking for an island on which to park a few battleships, as the author Sarah Vowell memorably put it—battleships that would be useful in projecting US power into East Asia, and Hawaii fit the bill. Before Korea, Hawaii was the principal US power projection platform aimed at East Asia.
The Philippines served a similar role. The territory was a formal colony of the United States from 1898 to 1946, half a century. And when Washington relinquished its formal control of the country, it insisted on receiving ninety-nine year leases on select military sites, so that the Philippines could continue to act as a US power projection platform important to the US project of dominating East Asia. At the same time, Washington could boast falsely (for it hung on to its colonies of Hawaii, Alaska, Puerto Rico, Guam and so on) that granting the Philippines independence proved that it was an anti-colonial power. By the same reasoning, Britain’s granting India independence must have proved that Britain too was an anti-colonial power.
US experts in casuistry, as William Appleman Williams called them, have frequently tried to turn US vices into virtues. For example, it has been argued that a US commitment to liberty is evinced in the manumission of the slaves, a sophistical maneuvering that requires us to forget the very existence of the institution that invalidates the point. In short, if the United States was committed to liberty, it never would have tolerated slavery; if it abhors the enslavement of colonial peoples, it would have never enslaved them. Nor would it tolerate holding residents of its euphemized territorial possessions in colonial subjection today.
Interestingly, there is an event called Pearl Harbor. Pearl Harbor, the event, was the Japanese attack on Pearl Harbor, the place. Pearl Harbor, the place, is a US naval base in Hawaii. The Japanese attacked the base in December 1941—an attack which brought the United States formally into the Second World War. When Pearl Harbor was attacked, Hawaii was a US colony. The attack was part of what the Japanese called the Greater East Asian War, which, from their perspective, was a campaign to liberate the territories of East Asia that had been colonized by the West, and to fold them into what the Japanese called a Greater East Asian Co-Prosperity Sphere, a high-sounding term for an expanded Japanese empire.
The Greater East Asian Co-Prosperity Sphere had a parallel: the Monroe Doctrine. The Monroe Doctrine was a US declaration that the Western Hemisphere, the Americas, would be an exclusive US sphere of influence, closed to European powers. Indeed, William Appleman Williams wrote that Japan saw itself as the United States of Asia whose goal was to impose its own Monroe Doctrine on the Far East.
I mention this because on the day the Japanese attacked the US colony of Hawaii, they also attacked the US colonies of the Philippines, Guam, Midway Island, and Wake Island. Additionally, attacks were launched on the British colonies of Malaya, Singapore, and Hong Kong. In other words, what is now called ‘Pearl Harbor’ marks the beginning of a campaign to transfer the Asia-Pacific colonies of the British and US empires to the Japanese empire. But if the Japanese attacked eight Western colonies on that day, why is it that the event is commemorated by the attack on only one of them?
Immerwahr argues that omitting US colonies from historical memory serves the purpose of hiding the US empire, of concealing the reality that in 1941 the United States was a formal empire with colonial possessions in East Asia and the Pacific that were coveted by a competing empire, and that the war between these two empires was not a war of democracy against militarism, but a war over who East Asia belonged to. Would it belong to the Japanese, or would it belong to the United States? Of course, there was a third possibility: it could belong to the peoples of East Asia. Korea could belong to the Koreans (a possibility that would have obviated the Korean War), China could belong to the Chinese (rendering the US question “Who lost China?” meaningless), and Vietnam could belong to the Vietnamese (sparing us the Vietnam War.) This was the model—a fundamentally democratic one—that the guerillas who founded North Korea espoused.
Incidentally, the US colonization of the Philippines played an important role in shaping the thinking of Kim Il Sung, who would become the first leader of North Korea. In 1905, Japan declared Korea a protectorate, essentially announcing formally that Korea would fall under Japanese rule. Seeking international recognition for this move, Japan approached the United States and said: “Look, if you recognize our control of Korea, we’ll return the favor by recognizing US control of the Philippines.” Washington readily accepted and the two empires signed an agreement to formalize their division of East Asia.
Five years later Japan formally integrated Korea into its empire, and Koreans began to work in various ways to free themselves from Japanese tyranny. One such Korean was a man named Syngman Rhee, who would become the first president of South Korea. Rhee spent much of his life in the United States, collecting degrees from Ivy League universities, and lobbying the US government to help free Korea from Japanese rule.
Kim Il Sung chose another route. He went to Manchuria, a part of China which abuts Korea, to fight a guerilla war against the Japanese. Kim thought that Koreans, like Syngman Rhee, who were petitioning Washington to help free Korea from Japanese rule were naïve, since the United States was an empire, with colonies in East Asia and the Pacific, and had, as Kim put it, sold Korea into colonial slavery through its agreement with Japan to recognize Japan’s colonization of Korea in return for Japan recognizing US colonization of the Philippines. Kim regarded Rhee as a fool for begging and pleading for help from a colonial power, reasoning that a colonial power would be more interested in dominating Korea than liberating it.
In his autobiography, Kim described the US and Japanese empires as armed robbers: “An armed robber in your house will not spare your life, just because you plead for your life. Other armed robbers standing outside will not rush inside to help you no matter how loud you scream. If you want to live, you must fight off the armed robber yourself.”
So, in Kim’s view, appealing to one empire to help free oneself from another, was like asking an armed robber waiting outside your door to help you eject the armed robber inside your house.
The Korean War, 1932-Present
To understand Korea today, the division between north and south, and the hostility between the two states, one needs to understand the Korean War. The overt hostilities of the war ended, not in a peace treaty, but an armistice. The war is still nominally in progress.
In the conventional account, the Korean War began in 1950 and ended in 1953. On one side was the UN Command, which included US forces, South Korean forces, and token representations from US allies, all under the command of the United States. On the other side was North Korea initially, and very quickly thereafter, China, which took command of joint Chinese-North Korean forces. The Korean War is sometimes called the Sino-America War, or a war between the United States and China, which, in one respect, it was.
1950-1953 is the conventional dating of the war. But as mentioned earlier, the war didn’t officially end in 1953. US forces haven’t left the peninsula. The UN Command has not been dissolved. And a peace treaty has never been signed. So the war, while in a dormant phase, continues. We ought to date it, 1950 to present.
But even the conventionally understood 1950 start-date is wrong. June 1950 was the month North Korean forces crossed the 38th parallel, a dividing line drawn by the United States in 1945, and accepted by the Soviets, for separating the US and Soviet occupation forces, who, by agreement, committed to quit the peninsula within five years. The parallel was never an international border; never the border between two countries; and only ever a temporary informal border between two occupation forces. Soviet troops exited the peninsula at the end of 1948. The US occupation has never ended. The latter point underscores a simile. US troops deployed to foreign countries are like cockroaches. Once they move in, it’s nearly impossible to get rid of them. Many US citizens find the simile offensive, but to people who endure occupation, the occupiers are, like cockroaches, unwelcome pests.
In the conventional US dating, June 1950, not June 1949, marks the start of the war, but from June 1949 to June 1950 North Korea and South Korea fought along this imaginary line. June 1950 is the point at which North Korean forces, in the conventional US account, committed an act of international aggression by moving across the 38th parallel. The problem with this view is that, for the reasons explained above, the 38th parallel wasn’t an international border. Indeed, no one recognized it as such—not the South Koreans, not the North Koreans, and not the US government.
In June 1950, the South Korean government regarded itself as the sole legitimate government in all of Korea and viewed North Korea as a criminal organization illegally occupying territory north of the 38th parallel. At the same time, the North Korean government regarded itself as the sole legitimate government of all of Korea and saw South Korea as a criminal organization illegally occupying territory south of the 38th parallel. Both states declared Seoul to be their capital, and both claimed exclusive jurisdiction over the entire Korean peninsula.
The model of the Korean War as a conflict between two countries does not fit. Two countries didn’t exist. One country, Korea, did, but it was claimed by two separate states. It’s more accurate to think of the conflict as a civil war between two groups of Koreans for control of a single country. One group comprised traitors who collaborated with the Japanese, while the other was made up of patriots who fought the Japanese. From the perspective of civil war, no invasion occurred in June of 1950, since it was impossible for Koreans to invade their own country. What happened was that the army of one group of Koreans (the patriots) moved into the territory occupied by the army of another group of Koreans (the traitors), with the aim of liberating their country from the traitors and the traitors’ patron, the United States.
A parallel can be glimpsed in imagining a conflict between Free France and Vichy France during the Second World War. Could Free French forces invade Vichy France? Would crossing into the territory under the control of the Vichy regime, be an act of international aggression, or simply French patriots trying to liberate their country from traitors collaborating with a foreign invader?
The UN Command operated under a UN Security Council Resolution which authorized the use force to compel the North Koreans to withdraw to the 38th parallel. This, the patriots were forced to do, but the empire-commanded forces quickly proceeded to violate the resolution by moving north beyond the 38th parallel toward the Chinese border. When it was pointed out that if North Korea had committed an act of international aggression by invading across the 38th parallel, then so too had US forces by crossing the parallel in the other direction, the US ambassador to the United Nations countered that the 38th parallel was not an international border but an imaginary line, thus invalidating the initial charge against North Korea. The United States was seeking to have matters both ways, defining the crossing on an imaginary line as an invasion when North Korea did it but not an invasion when by the United States did it.
The double standard reflected the ideology underlying US foreign policy. As explained by the US historian Marilyn B. Young, US foreign policy insists that the intentions of the United States are always good and the intentions of the enemies of the United States are always bad. Therefore, North Korea’s crossing the 38th parallel must have been bad, because it was an act of a US enemy, while the United States’ crossing of the same parallel must have been good, because it was an act of the United States.
Bruce Cumings, a leading US historian of twentieth century Korea, argues that the civil war between Koreans began, not in 1950, when Kim Il Sung set out to liberate, unify, and revolutionize his country, and not in 1949, when patriot and traitor forces began to fight along the 38th parallel, but in 1932, when Kim Il Sung formed his first patriot guerrilla unit to fight the Japanese, and collaborators, who would become central figures in the South Korean government, chose another route, joining the Japanese army to enforce Japan’s colonial tyranny over Korea.
One of those traitors was Park Chung-hee, who was for many years, the military dictator of South Korea. While Kim Il Sung was fighting the Japanese in the mountains of Manchuria, Park was serving voluntarily as an officer in the Japanese Imperial Army, in a counter-insurgency unit in Manchuria, hunting down Korean guerillas, like Kim Il Sung, and the patriots who would later found the North Korean state.
In South Korea, Kim Il Sung is demonized, just as he is in the West. But Cumings reports than in 1989, South Korea’s leading scholar of Korean communism was allowed to tell the true story of Kim Il Sung. When it was explained to a group of South Korean students who Kim really was, namely, a patriot hero of the guerilla struggle for Korean independence, the students broke out in loud applause.
Cumings points out that the descendants of Koreans who fought each other beginning in the 1930s as anti-Japanese guerillas versus pro-Japanese collaborators, continue to struggle today against each other as the leaders of North and South Korea. The current leader of North Korea, Kim Jong Un, is the grandson of the guerilla leader Kim Il Sung. The president of South Korea, prior to the current one, Park Geung-hye, is the daughter of Park Chung-hee, the military dictator who, as an officer in the Japanese Imperial Army, hunted down guerillas like Kim Il Sung. Thus, as Cumings has argued, the civil war that began in 1932 between patriots and traitors has never ended and is carried on today by their descendants.
Health Care and the Empire’s Economic War Against Korean Patriots
The most significant determinant of the quality and level of health care available to North Koreans today is their government’s rejection of empire. This rejection has led to the United States, and its allies, and finally the UN Security Council, imposing punitive sanctions on North Korea, intended to destroy its economy and as a corollary to coerce the government and people of North Korea to surrender their independence and become part of the informal US empire (as their compatriots in the south are.)
No country has been subjected to a campaign of economic warfare as long as North Korea has, and I use the term economic warfare as a synonym for sanctions, sanctions being an anodyne term for what in international law are called coercive economic measures. If the aim of warfare is for one state to impose its will on another—that is, to engage in international coercion to work its will—then we can think of coercive economic measures as warfare conducted through economic means.
The United States has waged economic warfare on North Korea from the very first moments of North Korea’s birth in 1948, and the burden on the country of the US-pursued war by economic means has increased since 2006, when the United Nations Security Council passed a resolution enjoining all members of the United Nations to participate in this campaign. Today, North Korea is facing a near-comprehensive sanctions program—an almost complete blockade of trade and its total isolation from the global financial system.
The sanctions have banned the export of coal, of iron ore, and of other key North Korean products, as well as drastically cut oil imports. The amount of refined petroleum North Korea is allowed to import has been cut by almost 90 percent. How is it possible to operate a modern economy under these conditions? Of course, it isn’t possible, which is the point.
The sanctions have also undercut North Korea’s ability to import food, necessary to alleviate an already existing chronic food shortage, the consequence of previously-imposed sanctions. Food-insecurity has obvious implications for public health.
Sanctions programs often provide exemptions for the importation of drugs and other humanitarian goods, subject to approval. Those approvals are often denied on the grounds that the requested imports go beyond fulfilling a basic humanitarian function, which is regularly defined as the prevention of famine. That’s the idea, or at least, that’s the way the United States interprets humanitarian exemptions: exemptions should do no more than prevent mass starvation. In other words, under the US definition, sanctions which create enormous suffering and misery are humanitarian, so long as the people subjected to them, don’t starve to death. By this definition, locking up people in concentration camps and feeding them a diet only sufficient to prevent organ failure constitutes humane treatment.
But even if North Korea were allowed to import all the food and drugs it requires—that is, even if humanitarian exemptions were truly humanitarian—food and drugs alone would hardly be sufficient to address the public health care needs of North Koreans. Public health requires more than access to food and medicine. It requires access to clean water and ways of transporting drugs, food, and medical equipment to where they’re needed. It requires electricity to power medical equipment, to provide lighting in hospitals and clinics, and to provide refrigeration to prevent drugs and food from spoiling.
If you prevent a country from importing trucks, tires, spare parts, and fuel, how can it distribute drugs, food, and medical supplies? How can it run hospitals and ambulances? If you prevent a country from importing machinery and industrial equipment, how can it maintain its sewage and water treatment facilities? How can it maintain its power plants?
In Iraq in the 1990s, UN sanctions prevented the Iraqi government from rebuilding its water treatment and sewage facilities, which the United States had damaged in the Gulf War. This led to outbreaks of water-borne illness, including typhus and cholera. During the Gulf War the United States deliberately bombed water treatment and sewage facilities, with full knowledge of the probable public health consequences. The Pentagon acknowledged in advance of the bombing that there would be outbreaks of water-borne illness.
UN sanctions complemented the effects of the bombing campaign by preventing the Iraqi government from importing the goods it needed to repair the infrastructure the United States had destroyed or damaged. The intent, then, of the Gulf War and the sanctions program that accompanied it, was not only to damage the health of Iraqis but to return their country to the middle-ages—which is precisely what happened. Today, Iraqis suffer the consequences; basic civilian infrastructure remains in ruins; life is one preventable misery piled atop another. A country that had enjoyed during the 1970s what one former US State Department official had called a golden age is now a crucible of human misery, thanks to the war, both military and economic, waged by the United States, and participated in, if not on the military side, then on the economic side, by numerous countries throughout the world, which delude themselves that they are morally above the war-obsessed United States, because they dropped no bombs on Iraq. But they did contribute to the economic war which, as we’ll seen in a moment, was very likely more deadly than the bombing war.
Returning to North Korea, the US Treasury Department has effectively blocked the transfer of funds to and from the country, isolating it from the world banking system, so that on top of the prohibitions on goods that can be imported from or exported to North Korea, the US government makes it virtually impossible for North Korea to pay foreign suppliers. The United States does this by refusing to deal with any bank that deals with North Korea, and since no bank cares to be shut out of the US market, banks steer clear of the US-designated pariah state. For example, the World Health Organization has an office in North Korea. To pay its local staff, it needs to procure funds through a foreign bank. The bank is in India. But the bank refuses to transfer funds to North Korea, fearing that if it does so, it will be cut off from the US banking system.
This happens in all the countries the United States embargoes. Few companies or organizations want to transact business with a sanctioned country. The bureaucratic hurdles that must be overcome to get approvals to export goods to a pariah state are so steep that they act as a deterrent It’s just not worth the effort to complete all the paper work necessary to trade with North Korea. Additionally, and more importantly, organizations don’t want to run the risk of running afoul of the US Treasury Department and becoming the target of secondary sanctions. Accordingly, sanctioned countries have difficulty finding partners to transact business with, even when the business to be transacted is not formally prohibited.
Why have sanctions been imposed on North Korea?
Ostensibly the sanctions were imposed to pressure North Korea to dismantle its nuclear weapons and ballistic missile programs, and that’s true of the multilateral UN Security Council sanctions that have been in effect since 2006, but the United States and its allies have maintained sanctions on North Korea from the moment of North Korea’s birth, long before North Korea ever had nuclear weapons.
Some of the reasons for imposing the sanctions are really quite deplorable. One set of US sanctions was imposed because, as the framers of the legislation imposing the sanctions wrote, North Korea maintains a Marxist-Leninist economy. The fact that the United States feels it is legitimate to use coercive economic measures to pressure a foreign country to change the way it organizes its economy is indefensible. It is not within the legitimate remit of the US government to decide how another people organizes its economy. Meddling in the internal affairs of other countries is an affront to both the concepts of geography and democracy. US politicians behave as if North Korea is part of the United States, and that Washington has the right to impose US economic preferences on North Korea’s citizens. It does not.
Even if North Korea dismantled its nuclear and ballistic missile programs, it would still be sanctioned, because nuclear weapons and ballistic missiles aren’t at the heart of why sanctions were imposed. Sanctions were imposed because North Korea has refused to allow its territory to become a satellite of the US economy and outpost of the US military.
Let’s consider the casual sequence. North Korea refuses to be absorbed into the US empire. Unwilling to take no for an answer, the United States uses various methods to coerce North Korea into surrendering its sovereignty. To deter the United States, and to defend its independence, North Korea develops nuclear weapons.
Let me draw your attention to the work of Kenneth M. Waltz. Waltz was a high-profile US political scientist, the president of the American Political Science Association, and founder of what is called the neo-realistic or structural realistic school of international relations. Waltz wrote:
Like any dominant power, [the United States] is a looming threat in the minds of many international leaders. When President George W. Bush identified Iraq, Iran, and North Korea as forming an axis of evil in January of 2002, and when he then ordered the invasion of one of them, what were the other two to think? It would make sense for them to believe that they might be next, and in that case to take steps to deter the United States from invading. But how can any state hope to deter a world-dominant power? Conventional defense and deterrence strategies have historically proven ineffective against the United States, so, logically, nuclear weapons are the only weapons capable of dissuading the United States from working its will on other nations.
Waltz was saying, if you’re a small and weak country, and you’re threatened with invasion by the United States—which, elsewhere, Waltz had pointed out has a penchant for beating up on weak countries—what are your options? The only option is to acquire the one class of weapons capable of deterring the United States: nuclear weapons. Waltz went on to argue that North Korea’s interests in nuclear weapons stem from “serious security concerns.”
North Korea began thinking about acquiring nuclear weapons in the early 1990s, following the dissolution of the Soviet Union. When the Soviet Union dissolved, North Korea was no longer under the Soviet nuclear umbrella. It was exposed, terribly insecure, and at risk of invasion by the United States.
It’s easy to deplore North Korea’s decision to acquire nuclear weapons as we in Canada, or South Korea, or Japan, or Germany, sit under the US nuclear umbrella. Countries that live under the US nuclear umbrella feel secure. Since these countries rely on US nuclear weapons for protection, they have no need to develop their own.
Insecure countries, on the other hand, have very compelling reasons to develop nuclear weapons. North Korea found itself in the early 1990s directly targeted for nuclear strike by the United States. The US Strategic Command, the body that operated the US nuclear force, announced that it was retargeting some of its strategic nuclear missiles from the now defunct Soviet Union to North Korea. Shortly thereafter, North Korea announced that it was withdrawing from the Nuclear Non-Proliferation Treaty. The message was: If you threaten us with nuclear annihilation, we have no option but to find a deterrent to your threat.
In 2002, a Pentagon list was leaked of seven countries deemed possible targets of a US nuclear strike. The list included North Korea. Russia, China, Syria, Libya, Iran, and Iraq were also on the list.
The central tenet of nuclear non-proliferation is: don’t threaten non-nuclear countries. If you’re genuinely concerned about nuclear non-proliferation, you painstakingly avoid creating the conditions that encourage countries to arm themselves with nuclear weapons in order to achieve security. And yet the United States has acted in ways, and continues to act in ways, that virtually guarantee the spread of nuclear weapons from one threatened insecure country to another. The United States is the world’s major cause of the spread of nuclear weapons.
Muammar Gaddafi, the former leader of oil-rich Libya, overthrown by Islamist rebels backed by NATO warplanes, had also found himself in a very insecure position after the dissolution of the Soviet Union. The US government didn’t like Gaddafi’s policies. They were too nationalist for the tastes of US oil companies. Gaddafi tried to rectify his precarious security condition by developing a nuclear weapons program. Gaddafi’s program never really got off the ground, but if it had, and had succeeded, it may have provided Libya with the security the radical economic nationalist sought.
However, instead of pursuing the development of nuclear weapons, Gaddafi struck a deal with the West. He was offered concessions, and in return, he abandoned his nuclear weapons program. But before long, he found himself double-crossed. Effectively disarmed, he became an easy target, and was overthrown—indeed, gruesomely murdered—by radical Islamists backed by the United States and its allies.
The North Koreans pointed to the Libyan example as confirmation that they had made the right decision in building nuclear weapons, vowing that they would never let themselves be double crossed the way Gaddafi had.
The Arab nationalist leader of Iraq, Saddam—I call him Saddam because that’s how he was referred to in Iraq and how he wanted to be referred to, and also because Hussein wasn’t his family name but his father’s name—Saddam, also embarked on the development of nuclear weapons, as a means of making his country secure from the growing threats of the United States. To deny him nuclear weapons that would effectively make him invulnerable to US attack, and for other reasons related to the US goal of completely dominating West Asia and its oil resources, the United Nations Security Council, under US pressure, imposed a comprehensive sanctions program on Iraq from 1990 to 2003, much like the one we see today on North Korea.
The sanctions program generated a lot of controversy because there was plenty of evidence it was killing hundreds of thousands of Iraqis through malnutrition and disease. In the controversy surrounding the sanctions, a paper was written by two US academics, John Mueller and Karl Mueller, that appeared in Foreign Affairs (the informal journal of the US State Department.) In their article the two political scientists pointed out that in the twentieth century, sanctions had killed more people than all the weapons of mass destruction in history, including all the chemical weapons used in World War I and the atomic bombs used at the end of World War II.
This was notable, because the Iraq sanctions were ostensibly aimed at pressuring the Iraqi government into giving up its weapons of mass destruction. I say ostensibly because Washington had made clear that the sanctions wouldn’t be lifted until the government in Iraq was replaced by one acceptable to the United States. Hence, the goal of the sanctions program went well beyond denying Iraq its weapons programs. In announcing that the sanctions would not be lifted until the Iraqi government was ousted in favor of a US-approved replacement, the United States removed any incentive for Baghdad to relinquish its weapons.
If sanctions were killing more people than all the weapons of mass destruction in history, not only was this a cruel irony, but the sanctions deserved the label ‘sanctions of mass destruction’ — because that’s what they were doing: producing the mass destruction of human life. This was a case of the cure being worse than the disease.
In making this argument, Mueller and Mueller pointed out that the Allied blockade of Germany in World War I had killed over 750,000 people through disease and malnutrition, far more people than were killed in the atomic bombings of Hiroshima and Nagasaki.
The Allied blockade of Germany, then, is one example of mass destruction of human life that exceeds the use of atom bombs. There is also the mass destruction brought about by fire-bombing, that is, through the use of incendiary weapons, including jellied gasoline and napalm, to incinerate cities and cremate the people inside them. The British and US air forces in World War II discovered that it was easier to burn cities to the ground than to blow them apart, and they burned a number of cities to the ground—Hamburg and Dresden in Germany, and over 100 Japanese cities, including Tokyo.
Let’s consider the fire-bombing of Hamburg. As Sven Lindqvist recounts in his book A History of Bombing, when the rescue teams made their way into Hamburg’s bomb shelters, they were faced with scenes reminiscent of those encountered at the same time by Jews forced to clear the bodies of other Jews out of the gas chambers. What they found was ‘intertwined piles of people, killed by fumes and pressed against the vents of the barricaded doors.’ Hence, as some have pointed out—the US historian Lewis Mumford, for example—the difference between incinerating civilians in a fire-bombing raid and incinerating civilians in deathcamp ovens are too trivial to mention. Mumford wrote: “In principle, the extermination camps where the Nazis incinerated … helpless Jews were no different from the urban crematoria our air force improvised in its attack by napalm bombs on Tokyo,” a reference to the March 9-10, 1945 US fire-bombing of Tokyo, which scorched, boiled and baked to death 100,000 Japanese civilians, as Curtis LeMay, the US general who planned the raid, put it.
After learning to incinerate Japanese cities, LeMay applied what he learned to the project of incinerating all of North Korea, destroying the country so thoroughly that there were only two modern buildings left standing in North Korea’s capital, Pyongyang, when the air raids were brought to a halt in 1953. LeMay recounted that “over a period three years or so…we burned down every town in North Korea and South Korea too.”
Returning to Iraq, sanctions on the country during the 1990s killed perhaps well over one million people. We know that by 1995 they had killed over 500,000 Iraqi children under the age of five through disease and malnutrition, according to a UN agency, and the sanctions would last another eight years. This was an atrocity the US Secretary of State at the time, Madeline Albright, did not deny. Instead she said it was a tough decision to impose the sanctions that produced death on this scale, but “it was worth it.”
Over a half a million children dead as a result of sanctions is more than the combined fatalities of Hiroshima and Nagasaki. This has led some people to equate sanctions to economic atom bombs, recognizing that the effects of sanctions in the destruction of human life can be as great as, if not greater, than a nuclear attack.
Or we can look at this another way. Combined, the fire-bombing of over 100 Japanese cities in World War II and the atomic bombing of two more, produced 500,000 fatalities. Thus, the number of deaths produced by the sanctions of mass destruction inflicted on Iraq in the first five years was greater than the number of deaths produced by the fire- and atom-bombings of Japan during World War II.
Economic atom bombs have been denotated not only over Iraq and North Korea, but over Syria, Iran, Cuba, Venezuela, and Zimbabwe.
Ten years ago, Amnesty International released a report on what it called the crumbling state of health care in North Korea, which the organization blamed on what it said was North Korea’s mismanagement of its economy. Misattributing economic breakdown to a country’s alleged mismanagement, rather than to the economic warfare that produced it, is a standard practice of Western governments and their non-governmental allies.
Here’s what happens: Economic atom bombs are dropped on a country. Its economy collapses. People go hungry. Public health care suffers. And organizations like Amnesty International blame the collapse, not on the sanctions, but on the economic policies of the country under attack. The mainstream media are no different. Read Western newspaper accounts of the economic troubles experienced by sanctioned countries and you will invariably see that those troubles are attributed to mismanagement. Because the ravages of US sanctions are almost invariably inflicted on communist, socialist, and radical nationalist governments— and not on the pro-imperialist, pro-capitalist human rights horror shows of Saudi Arabia, Israel, the India of the Islamophobic BJP, Egypt, Qatar, Bahrain, and the United Arab Emirates, all of which Washington cherishes as allies—US politicians, Amnesty International, and the mainstream news media, are able to intone that socialism or any program intended to uplift the poor, the underdeveloped, or the historically oppressed, is unrealistic, impractical, and bound to produce failure. This is a way to strengthen profit-centered ideology and attack its people-centered challengers.
I wrote a criticism of the Amnesty International report which began with a quotation from a 1997 article in the New England Journal of Medicine. The article was titled, “The sleep of reason produces monsters—human costs of economic sanctions,” and the quote I chose was this: “Economic sanctions are, at their core, a war against public health.”
Consider that recently economists Mark Weisbrot and Jeffrey Sachs found that sanctions on Venezuela “have inflicted, and increasingly inflict, very serious harm to human life and health, including an estimated more than 40,000 deaths from 2017–2018.” That’s more deaths than produced by the US-British fire-bombing of Hamburg during the Second World War.
US Secretary of State Mike Pompeo says the Iranian government—whose citizens are being crushed by the burden of massive US sanctions—must do what the United States says “if they want their people to eat.” That’s called, “Do as we say, or starve.” And that’s why under international law, sanctions are not called sanctions but coercive economic measures. Sanctions have adversely affected health care in Iran. The Wall Street Journal reported that Iran’s “health care system has … been depleted after the U.S. imposed economic sanctions in 2018… hindering imports of certain medicines and medical equipment.”
Is Killing Hundreds of Thousands of Iraqis, North Koreans, and Others Worth It?
One might be of the view that no matter how much sanctions are, at their core, a war against public health, that waging a war against the public health of North Koreans is worth it, to protect us from the possibility of a North Korean nuclear strike.
There are a number of problems with this view. No serious commentator believes that North Korea’s nuclear weapons pose an offensive threat to the United States, or to South Korea, or to any other country. North Korea’s nuclear arsenal is strictly defensive. The country is not in a position to launch a first strike attack on the United States or its allies and survive a retaliatory strike. North Korea would be completely vaporized and the leadership knows it. What’s more, no one of consequence in the US state seriously believes that the North Korean leadership is suicidal.
Additionally, as I’ve already pointed out, Western sanctions on North Korea began decades before the North Koreans ever had nuclear weapons. From this we can conclude that sanctions weren’t imposed to punish North Korea for developing nuclear weapons. They were imposed for other reasons. It is meaningless, then, to talk of waging a war against the public health of North Koreans to protect us from the possibility of a North Korean nuclear strike, when an offensive North Korea nuclear strike is not in the cards, and deterring a North Korean nuclear strike has never been the reason for the sanctions.
What, then, is the reason?
It’s not difficult to find out. The Congressional Research Service, a think-tank and information service of the US Congress, published a paper on US sanctions on North Korea. Look through the list of sanctions, which is extensive, and you’ll find that one of the stated reasons for inflicting economic hardship on North Korea is to punish the state for running, as I mentioned earlier, what the US government calls “a Marxist-Leninist” economy, and for failing to operate what it calls a “market economy.”
In other words, the goal of many of the sanctions inflicted by Washington on North Korea (not all of them, but many of them) has been to coerce the North Koreans into opening their economy to US exports and investments. Indeed, at the turn of the twentieth century, the United States adopted what it called the Open Door Policy as the basis for its foreign policy; that is, US foreign policy would promote an open door throughout the world for US businesses. Woodrow Wilson, the US president in the years immediately before and during the First World War argued that those countries that refused to open their doors—either because they rejected free enterprise in favor of public ownership or were radical nationalist and wanted to develop their own industry internally and therefore needed to shut out foreign competition—these countries would have to be coerced to open their doors, to accept free trade, and US free enterprise, even if it meant “outraging their sovereignty.” This might mean invasion, or sanctions, or the overthrow of governments—whatever it took to bring about a change that would allow US business people to do business in a previously closed economy.
What this means is that the United States is waging a war on the public health of North Koreans because North Koreans have decided—as they have every right to do—to organize their economy in a manner they believe is most suited to their own needs and interests rather than the needs and interests of US corporations and investors.
So, here’s the message: Unless you organize your affairs in the manner we say—in a manner conducive to the interests of the US billionaire class—we will undertake an economic war on you, which, at its core, will be a war against public health.
It’s not widely known, but the United States has imposed sanctions on Syria since 1979, and escalated its sanctions in 2003, and then later in 2011. But why 2003?
That was the year the United States and Britain invaded Iraq. And the plan, revealed by the US Congressional Research Service, was for US forces to follow up their invasion of Iraq with an invasion of neighboring Syria to replace the government of Bashar al-Assad with one acceptable to the United States. The year before, Washington had added Syria to its so-called Axis of Evil list, which included initially Iraq, Iran, and North Korea, and then was expanded to include Syria, Cuba, and Libya.
That Washington was planning to invade Syria in 2003 was confirmed recently by Lawrence Wilkerson, who had been chief of staff to Colin Powell, the US Secretary of State at the time. Wilkerson told Aaron Maté of the investigative news organization, The Grayzone, that
“The next plans were for Syria. Syria just fell right in line with Iraq, because we thought it was going to be swift, quick, roses in the street, candy in the bars, and so forth, everything was going to be over very quickly. Rumsfeld [the Secretary of Defense] thought we were going to be out of Iraq by August  and we’d bounce right over into Syria. And we thought that Syria would be sufficiently cowed by how fast we did Iraq, and it wouldn’t be very hard in Syria. And then we’d move on from there. I actually saw the contingency planning for that, the classified contingency planning.”
Assad has the same commitment to political and economic independence that Saddam had, one based on economic and foreign policies that stress Arab independence. Washington disapproves. If you read US government documents on Syria, you’ll see that they’re teeming with complaints about Syria being insufficiently accommodating of foreign investment and US free enterprise. Damascus is also denounced for supporting independence movements.
When the Pentagon discovered that Iraqis were resisting their occupation, the generals decided that a follow-up invasion of Syria was a bridge too far, whereupon the US political leadership concluded that the goal of replacing the Assad government with one acceptable to the United States—one which would implement the open door policy in Syria and renounce Syria’s support for liberation movements—would have to be brought about by other means.
One of those means would be sanctions. Hence, coercive economic measures were stepped up in 2003, and by the spring of 2012, The Washington Post would report that sanctions had “forced Syrian officials to stop providing education, health care and other essential services in some parts of the country.”
Thus, long before the outbreak of the so-called Arab Spring in 2011, the United States was waging an economic war on Syria’s education, on its health care, and on its other essential services.
In 2011, the EU, Turkey, the Arab League, Canada and Australia joined the US assault on the essential services of Syrians, including their health care.
In May of last year, the UN’s Special Rapporteur on Syria described the sanctions as effectively a total blockade.
And while exceptions are theoretically constructed to allow the flow of humanitarian relief into Syria, a report prepared for a UN commission pointed out that there is “perilous reluctance among western suppliers and banks to offer humanitarian goods and related finance, in part, for fear of sanctions issues, such as fines for inadvertent technical violations.”
The Special Rapporteur also observed that
“The uncertainty around what transactions do, or do not violate the unilateral coercive measures, have created a ‘chilling effect’ on international banks and companies, which as a result are unwilling or unable to do business with Syria.”
Thus, the entry points through which humanitarian aid is supposed to flow exist in theory alone and not in reality.
Sanctions have severely limited the Syrian government’s ability to purchase the drugs and medical equipment it needs. As a consequence, Syria’s public health care system—once one of the best in Arab Asia—is in a state of virtual collapse, as is North Korea’s. Significantly, both countries refuse to become economic and military satellites of the United States.
Commenting on the sanctions, the veteran foreign affairs correspondent Patrick Cockburn observed that the US, EU, and Canadian sanctions resemble the sanctions the UN imposed on Iraq—the ones that killed over 500,000 Iraqi children under the age of five in the first five years of the 13-year-long economic strangulation campaign. The de facto total blockade of Syria also calls to mind the Allied blockade of Germany, which killed over 750,000 German civilians during World War I.
Madeline Albright said that killing 500,000 Iraqi children through sanctions-related disease and malnutrition was worth it. Worth what? What did the United States gain in exchange for the lives of over half a million Iraqi children under the age of five?
It gained opportunities for major US investors. Washington expanded its control over a West Asia pullulating with profit-making opportunities and rife with strategic significance. The profit-making opportunities of West Asia’s petroleum resources are obvious. But there’s also a strategic significance that’s less obvious. Western Europe and East Asia are dependent on West Asian oil. If you control West Asian oil and its transportation routes, you control Western Europe and East Asia, and control of these regions translates into profit-making opportunities for US businesses.
Recently, US Secretary of State Mike Pompeo was in Belarus, trying to persuade Belarus to move out of the orbit of Russia and into the orbit of the United States. Russia is Belarus’s major source of oil and natural gas, so severing ties with Russia can’t be accomplished without complications. But Pompeo assured the Belarussian president that if his country joined the US empire that “Our energy producers stand ready to deliver 100 percent of the oil you need at competitive prices.” And that’s what US control of West Asia means. It means leverage over countries that have no internal sources of petroleum—countries such as Japan, Germany, France, South Korea, China, and Belarus.
There are a few countries that were standing or continue to stand in the way of total US domination of the stupendous material and strategic prize of West Asian oil and natural gas, as a US State Department official once called it: Gaddafi’s Libya, Syria, Saddam’s Iraq, and Iran.
Soon after the demise of the Soviet Union, Paul Wolfowitz, who was then the US under-secretary of defense for policy, informed US General Wesley Clark that:
With the end of the Cold War, we can now use our military with impunity. The Soviets won’t come in to block us. And we’ve got five, maybe 10, years to clean up these old Soviet surrogate regimes like Iraq and Syria.
He could have added North Korea.
How has the United States been cleaning up those old Soviet surrogate regimes? Partly by sanctions. In other words, the public health of a number of countries abroad is adversely affected by the foreign policy of the United States and its allies.
US foreign policy is shaped by the profiting-making imperatives of the most politically consequential sector of Western society, namely, corporations and major investors operating within the context of a capitalist system, who insist on open doors abroad, and access to every profit-making opportunity the world has to offer.
The implication is that the public health care systems of North Korea, Cuba, Iran, Syria, and Venezuela, are profoundly affected in a very adverse way by the profit-making imperatives that condition and guide the foreign policy choices of Western states.
Sanctions are intended to cripple economies and undermine public health for three reasons:
First, to create enough misery that the population of the crippled country attempts to relieve its misery by overthrowing its government. This ends the sanctions and relieves the people’s misery but also clears the way for the installation of a government acceptable to the United States which will open the country’s doors to US business and allow the US military access to the country’s territory.
Second, to make an example of what will happen to any government that defies the US open door policy and chooses to implement communist, socialist, or radical nationalist policies.
Third, to turn public opinion against economic programs that reject free trade, free markets, and US free enterprise, by sabotaging them and then misattributing their sanctions-induced failures to the rejection of US free enterprise, rather than to the sanctions which were imposed with the deliberate aim of undermining them.
Sanctions are a weapon of US foreign policy for destroying any way of living that does not comport with the profit-making imperatives of the US business community. They destroy economies by design, gut public health care, create hunger, spread disease, and kill silently in numbers that regularly exceed the fatality rate produced by military means. Sanctions are not an alternative to war; they are war.
The Empire That Worships Mars
All empires worship Mars, the god of war, but the United States stands apart, not in the usual ways its experts in casuistry profess, but in warranting the status of being perhaps the most bellicose empire in modern history. Harry Stout estimates that over a period of 233 years, from 1776 to 2009, the United States engaged in 309 military interventions or nuclear standoffs, an average of 1.3 per year. This does not include covert activities, blockades, proxy wars, assassinations, or threats of war. A country with a record of aggressiveness this egregious cannot be expected to be interested in peace anywhere, let alone on the Korean peninsula.
US bellicosity is a means to the end of US expansionism. From its birth, the United States has unremittingly expanded, first territorially, and then informally. In only four cases of the 309 military interventions Stout identified were US actions taken in response to an attack on US soil. These were the War of 1812, the December 1941 Japanese attack on US colonial possessions in the Pacific, and the Al-Qaeda attacks on the World Trade Centre attack in 1993 and 2001. Significantly, all of these attacks were related to US expansion. The War of 1812 was a struggle between an established empire, the British, and a nascent one, the United States. The 1941 Japanese attack occurred as part of the struggle between the US and Japanese empires for control of East Asia, while the Al-Qaeda attacks were part of a struggle between the United States and the Islamist organization for control of Arab West Asia. In over 98 percent of the interventions, US forces attacked foreign soil.
The engine of US expansionism is the need of US businesses for new markets and fields for investment, and the fear of US planners that if US businesses cannot expand unchecked, that the US economy will settle into a secular stagnation, and demands will arise for major economic reforms, if not revolutionary change. There are few territories remaining in the world that have not been folded into the US economy (often at the point of a US gun), and Washington acts vigorously to absorb the hold outs. Among them is North Korea. Also, Cuba, Iran, Syria, and Venezuela. And more significantly, Russia and China.
The US war on Korea began not in 1945 but in 1871, when US forces invaded Korea, to punish the natives for refusing to trade with US businesses. Today, Washington continues to punish North Korea for the same reason. Washington deplores Pyongyang’s refusal to accommodate US free enterprise. It also punishes North Koreans for insisting that their country not to be used as territory for US military bases.
In light of US bellicosity and US expansionism, it’s difficult to accept that peace between the United States and North Korea, on terms agreeable to both sides, is even remotely possible. The one condition that might make the United States consider such an agreement—the need to deter a genuine North Korean threat to US security—is not even remotely present. North Korea, a small, enfeebled country, poses not the slightest threat to the United States. The DPRK is, unfortunately, the only interlocuter genuinely committed to arrive at a mutually agreeable peace. That’s because peace serves North Korea’s interests. As we’ve seen, it doesn’t serve Washington’s, unless it’s achieved on Washington’s terms.
A US-DPRK peace depends on the United States turning its back on its worship of Mars. Reversing centuries of US bellicosity depends on the United States radically re-engineering its economy so that it’s no longer dependent on global expansion. Removing the US economy’s dependence on global expansion means removing profit-making as the economy’s engine and replacing it with a consciously guided plan to satisfy the material, social, and psychological needs of US citizens at home, and practicing what the leading US historian of the first half of the twentieth century, Charles Austin Beard, called self-containment. Whereas today labor is but a means to create profits, the work people do needs to become the means to widen, to enrich, and to promote the existence of all who work. Not only would a radical re-engineering of this type improve the lives of the many (though not of all—billionaires would no longer live in the lap of luxury on the backs of others), it would significantly reduce (though not eliminate) the reasons for conflict among states. At that point, peace between the United States and North Korea would become an achievable reality rather than what it is today: a pleasant fantasy for dreamers.
As to South Korea, its liberation depends, ultimately, on economics. Slavery ended when its economic logic was no longer supportable. Colonialism ended (where it ended) when the revolt of the natives made the economic logic of colonialism indefensible. US neocolonialism in Korea will end when one or both of the following conditions are met: (1) The revolt of the natives undermines the economic logic of neo-colonialism. (2) US citizens revolt and change the expansionary logic of their economy.
Stephen Gowans is the author of Israel, A Beachhead in the Middle East: From European Colony to US Power Projection Platform (2019); Patriots, Traitors, and Empires: The Story of Korea’s Fight for Freedom (2018); and Washington’s Long War on Syria (2017). All are published by Baraka Books, Montreal.
U.S. sanctions are supposed to strike at the Venezuelan government, but they have predictably bludgeoned the people as they always do. Modern famines are typically man-made, and this one would certainly qualify as that. Famines today are created by governments and other political actors that choose to put their agenda ahead of the welfare of suffering people. If there is mass starvation in Venezuela, it will be because the people have been made to starve.
In this case, the U.S. would bear a significant portion of the responsibility for a famine in Venezuela. The administration’s decision to strangle Venezuela doesn’t seem to be having any effect on the government, but it is having and will continue to have a deadly effect on ordinary people. As Alex de Waal said in his book Mass Starvation, “Today, acts of commission–political decisions–are needed to turn a disaster into mass starvation.” Venezuela was already suffering from a serious economic and humanitarian crisis. Interventionists then chose to make things much, much worse in their destructive pursuit of regime change. Regime change appears to be far off, and famine is much closer.
Since the failed would-be coup at the end of April, the Trump administration has largely moved on and forgotten about the country that their sanctions are starving to death. If the administration were the least bit concerned about the welfare of the Venezuelan people that they claim to want to help, they would lift sanctions on Venezuela’s oil sector immediately. Enormous harm has already been done, but the U.S. can at least stop contributing to the disaster. That is what this former U.S. official recommends:
Thomas Shannon, formerly the top-ranking career diplomat at the US state department and now a senior policy adviser at the law firm Arnold & Porter, believes Washington should change its stance.
“Keeping these sanctions in place, with no mediating action, will have a profoundly negative impact on the Venezuela people,” he said. “It is amazing that some people deny this, but it highlights first the enormity of their miscalculation when they advocated the oil and gas sanctions, and second their willingness to cause great damage to Venezuela to drive Maduro from power. Kind of like the fire bombing of Dresden or Tokyo.”
The Washington Post World page summarizes a piece about consequences of Trump's ban on the Chinese telecom equipment manufacturer Huawei:
A key chip designer and British telecom companies suspended some dealings with the Chinese tech giant over security concerns.￼
However, nothing in the actual piece talks about security concerns. (I point this out because I perceive a trend towards such misleading summaries and headlines which contradict what the actual reporting says.)
The British processor company ARM, which licenses its design to Huawei, cites U.S. export controls as the reason to stop cooperation with Huawei:
The conflict is putting companies and governments around the world in a tough spot, forcing them to choose between alienating the United States or China.
Arm Holdings issued its statement after the BBC reported the firm had told staff to suspend dealings with Huawei.
An Arm spokesman said some of the company’s intellectual property is designed in the United States and is therefore ^“subject to U.S. export controls.”*
Additionally two British telecom providers quote U.S. restrictions as reason for no longer buying Huawei smartphones:
BT Group’s EE division, which is preparing to launch 5G service in six British cities later this month, said Wednesday it would no longer offer a new Huawei smartphone as part of that service. Vodafone also said it would drop a Huawei smartphone from its lineup. Both companies appeared to tie that decision to Google‘s move to withhold licenses for its Android operating software from future Huawei phones.
These companies do not have security concerns over Huawei. But the casual reader, who does not dive down into the actual piece, is left with a false impression that such concerns are valid and shared.
That the Trump administration says it has security reasons for its Huawei ban does not mean that the claim is true. Huawei equipment is as good or bad as any other telecommunication equipment, be it from Cisco or Apple. The National Security Agency and other secret services will try to infiltrate all types of such equipment.
After the sudden ban on U.S. entities to export to Huawei, chipmakers like Qualcomm temporarily stopped their relations with Huawei. Google said that it would no longer allow access to the Google Play store for new Huawei smartphones. That will diminish their utility for many users.
The public reaction in China to this move was quite negative. There were many calls for counter boycotts of Apple's i-phones on social media and a general anti-American sentiment.
The founder and CEO of Huawei, Ren Zhengfei, tried to counter that. He gave a two hour interview (vid, 3 min excerpt with subtitles) directed at the Chinese public. Ren sounds very conciliatory and relaxed. The Global Times and the South China Morning Post only have short excerpts of what he said. They empathize that Huawei is well prepared and can master the challenge:
Ren said that Huawei will not easily give up on US chips but has a backup. The company is able to make American-quality semiconductors but does not mean it will not buy them, he said.
Huawei is nevertheless “very grateful” to American companies, who have contributed a lot to Huawei. Many of Huawei’s consultants are from American companies such as IBM, Ren said.
Asked how long the crisis will last for Huawei, Ren said the question should be directed at Trump instead.
But Ren said much more than that. Yiqin Fu, a PhD candidate at Stanford University, translated other parts of the interview which are more interesting then the English media reports:
Yiqin Fu @yiqinfu - 11:43 utc- 22 May 2019
Remarkable that Huawei's CEO never appealed to patriotism in his two-hour interview with the Chinese press yesterday. Instead, he said
- nationalism is bad for the country;
- China's future hinges on reform and opening up, and
- China should honor its promises at the WTO.
Re innovation, Huawei's CEO said that China wouldn't be able to innovate given the state of its education. "China is used to throwing money at things. This strategy works for roads and bridges but won't work for chips. How much scholarship is there in our doctoral theses?"
Huawei CEO: China should incentivize foreign talent to migrate -- Israel and the U.S. became innovation hubs because they were able to attract migrants from the Soviet Union and Eastern Europe. China will waste lots of time trying to innovate with closed doors.
Ren's tone stands in stark contrast to that of state media and official responses from Chinese ministries re Huawei. He even explicitly said, "Huawei products are only commodities. The only basis for using them is if you like them. Politics has nothing to do with it."
Also interesting that Chinese and English-language media focused on entirely different things when reporting the two-hour interview. Chinese intellectuals mostly seized on Ren's comment re innovation and nationalism, while the English-language press ran with headlines like these: Huawei CEO says U.S. ‘underestimates’ the company’s strength
U.S. media often portrait China as tight dictatorship where no one can speak his mind. But these public statements by Ren are nearly all in contradiction to China's current official policies.
Since Juan Guaido declared himself Venezuela’s interim president, rhetoric emanating from Washington has grown increasingly familiar. It echoes the bombastic & hollow humanitarian-crisis type of war propaganda which has been used repeatedly in resource-rich nations, from Afghanistan to Iraq to Libya to Syria. And now we’re seeing it in Venezuela.
The regime-change recipe is straightforward: demonize the leadership and those who defend the country; support an opposition that is inevitably violent and whitewash their crimes; sanction the country & attack the infrastructure to create unbearable conditions; create fake news about humanitarian issues; possibly wage false flag incidents to incriminate the government; control the narrative; and insist that intervention is necessary for the well-being of the people.
In Libya,black Africans are being sold as slaves in a country devastated by Western fake humanitarianism and bombings.
Venezuela has for years been defiantly resisting the economic and propaganda wars, led by the US and Canada, as well as coup d’état and assassination attempts, only to see the anti-Venezuela rhetoric once again ramped up in recent months.
In spite of the wreckage trail that America’s regime change efforts have left over the decades throughout Latin America and the world, when comparing tactics against these countries and now again against Venezuela, some people surprisingly insist that this time it is different.
Venezuela isn’t Syria, they say. This time, they argue, it really is about a ‘corrupt regime,’ and ‘human rights’ — or in the case of Venezuela, a ‘humanitarian crisis’… as if the US has ever had the best interests of any people, including their own, at heart.
They ignore the West’s murderous sanctions against Venezuela and the propping up of the violent ‘opposition’ — an opposition that has burned civilians alive — as well as the millions of dollars spent supporting it.
Then there’s the more recent violent actions against Venezuela, like the February 23 attempt to ram aid trucks into Venezuela, and the April 30 US-backed coup attempt by Guaido and Leopoldo Lopez (a violent right-wing opposition leader) — an attempt clearly rejected by masses of Venezuelans.
Colectivos, the new ‘Shabiha’
Prior to 2011, the Western corporate media actually had many positive things to say about Syria’s leadership, praising President Assad as an open-minded reformer. When the regime-change operation kicked off, Assad and allies were number one enemies. In both Venezuela and Syria, presidents Maduro and Assad were legitimately elected and retain wide support among the population.
Yet, the Western corporate media and the politicians they echo routinely deem both countries to be “dictatorships” and the elected presidents illegitimate — while backing unpopular and undemocratic puppets they seek to put in place.
But demonizing the government isn’t enough; supporters of the government likewise are targeted, or simply disappeared. In Syria, supporters are called shabiha, inferring they — yes, millions of them! — are paid thugs of the government, and thus negating their voices.
It is an utterly disingenuous tactic used to silence the voices of the masses — along the lines of Western corporate media calling those of us who actually question, let alone go to the places in question, ‘conspiracy theorists.’
Venezuela’s shabiha are the colectivos, and are likewise depicted as government-backed thugs, and designated by the US’ actual thugs as ‘terrorists.’
These collectives are organized, grassroots groups of people who come together as educators, feminists, pensioners, farmers, environmentalists, to provide healthcare in their communities, among other things, or in defense of their nation.
18 December 2014: Under the pretext of cracking down on protesters during opposition rallies in February, the US Congress passes Public Law 113-278 to outline the blueprint for sanctioning Venezuela, including the Central Bank of Venezuela (BCV) and state oil firm Petróleos de Venezuela SA (PDVSA), which generates 90 percent of revenues for the South American country.
The bill unilaterally blocks and freezes assets, funds, goods and properties owned by Caracas, as well as suspends entry to or revoked visas and documentation for Venezuelan public, military and diplomatic officials, sparking the current economic, financial and commercial embargo on the Latin American country.
8 March 2015: Former US president Barack Obama converts Public Law 113-278 into Executive Order 13692, also known as the "Obama Decree", which designated Caracas as an "unusual and extraordinary threat to US national security", increasing his power to implement coercive measures used to intervene in Venezuela's internal affairs, and was renewed in March 2016.
May 2016: German financial firm Commerzbank concedes to pressure from the US and closes accounts for the PDVSA and other Venezuelan public banks and institutions.
July 2016: US bank Citibank stops issuing foreign currency accounts to Venezuelan institutions in the US, affecting the Central Bank of Venezuela (BCV), placing Venezuela with the highest financial risk in the world at 2640 points, despite Caracas paying off 63.6bn in external debt obligations.
August 2016: Portuguese bank Novo Banco ceases dollar operations with Venezuelan banks amid pressure from the US. The Portuguese bank would later suspend $1.2bn in funds transferred by the US in February 2019, at the request of US-backed opposition figure Juan Guaidó.
September 2016: The Venezuelan government agrees to exchange 7.1bn USD in PDVSA bonds to restructure its finances, with three major US risk rating agencies later announcing they will default Caracas if investors enter Venezuelan markets.
November 2016: US finance firm JP Morgan alleges that Venezuela failed to make payments on PDVSA debt of roughly $404m, which was instead caused by a "technical mistake", according to Torino Capital.
July 2017: Delaware Trust, the PDVSA's bonds payment agent, states that US-based PNC Bank refused to take funds from Caracas, with Citibank later refusing to receive funds used to import 300,000 insulin doses. Swiss bank Credit Suisse would later ban clients from conducting financial transactions in August on behalf of National Assembly president Julio Borges.
24 August 2017: The US imposed additional sanctions on Caracas via EO 13808 which prohibits direct or indirect purchases of securities from the Venezuelan government, including bonds, loans, credit extensions, and others, officially legalising the blockade.
August 2017: Bank of China in Panama announces that it cannot conduct financial transactions in foreign currencies for Venezuela amid pressure from the US Treasury Department and Panama government. The news comes amid a China-Venezuelan oil-for-loans deal struck in May aimed at restructuring the country's finances. Russian banks issue warnings for similar reasons.
October 2017: The US blockade prevents Swiss bank UBS, Pfizer, Novartis and others from accepting Venezuela money deposits used for vaccines and medicines by the Revolving and Strategic Fund of the Pan-American Health Organisation, causing a four-month delay in receiving vaccines.
The block follows a 2015 US probe into alleged ties to Venezuelan "money laundering" schemes, forcing 18 Swiss banks to turn over records to the US Department of Justice, despite Venezuela arresting five Citgo officials accused of funnelling money to accounts in the US.
November 2017: Deutsche Bank, the Venezuelan BCV's main correspondent, closes its account. 23 Venezuelan financial operations used for food, medicines and supplies totalling $39m are blocked by international banks. Standard and Poor (S&P) later declares a "selective default" after accusing Venezuela of missing a payment. As the blockade further damages Venezuela's economy, US bond manager Wilmington Trust alleges state electric company Corpoelec of not cancelling $27m in debt interests.
December 2017: European banks return $29.7m in transactions used by the Local Committees for Supply and Production (CLAP) food programme, with JP Morgan delaying $28.1m in funds used to pay for food vessels transporting supplies to Venezuela. Product shortages surface in several states across Venezuela after US banks close a further 19 bank accounts, causing 471,000 vehicle tyres to be retained abroad.
February 2018: The US Treasury Department extends powers of EO 13808, blocking the restructuring of state and PDVSA debts issued on 25 August 2017.
March 2018:0. The Trump Administration renews Obama-era EO 13692 and EO 13808 for a year, and imposes six new measures aimed at blocking use of the Petro via EO 13827, Venezuela's state cryptocurrency, aimed at blocking the repatriation of dividends from Citgo Petroleum. The order would also prohibit citizens or institutions from using the Petro.
April 2018:0. The Peruvian Foreign Ministry, acting on behalf of the pro-US Lima Group, announces during the Summit of the Americas that it would launch a group aimed at studying political and economic measures against Venezuela (original statement in Spanish). The US and Colombia agree to increase measures against Caracas.
21 May 2018:0. The US issues EO 13835 after Venezuelan president Nicholas Maduro is re-elected by 67 percent of the electorate (9m citizens). The order expands the blockade against Caracas and sanctions 20 Venezuelan companies for alleged drug trafficking ties, and blocks the purchase of debt of Venezuelan companies, including the sale, transfer, or granting guarantees to shares of capital owned 50 percent or more by the Venezuelan government, in the US.
The Trump Administration later blocks $9m in supplies for 15,000 hemodialysis patients, with Bogota blocking shipments of 400,000 kilos of food for Caracas' Clap food subsidy programme.
￼November 2018: US president Donald Trump issues a measure blocking US citizens from trading Venezuelan gold.
January 2019: President Trump approves sanctions against PDVSA which freezes $7bn in Citgo assets, in addition to roughly $11bn in exports. The UK's Bank of England later announces the extrajudicial seizure of $1.4bn in gold deposited in London as reported by Bloomberg, four days after Venezuelan gold holdings spiked following a swap deal with Deutsche Bank.
January — April 2019: The US blocks Venezuela's MINERVEN gold production and seller via EO 13850, targeting operations in Bandes, including Uruguay Banco Bandes Uruguay SA, Banco de Venezuela SA and others. The measure also blocks PDVSA and over 30 of its oil tankers from 28 January to 12 April, legalising the seizure of assets from Caracas in nations friendly to the US.
17 April 2019: The US Treasury Department blocks dollar operations abroad from Venezuela's BCV, preventing the institution from obtaining funds used to buy medicines and food for its citizens.
Even if true, The New York Times’ secret torture prison allegations hardly make Syria a rogue state | what's left
Reporter Anne Barnard has written a long piece in The New York Times titled Inside Syria’s Secret Torture Prisons: How Bashar al-Assad Crushed Dissent. The undoubted effect of the article—which accuses the Syrian government of running “a sprawling system of secret prisons” in which opponents of the Syrian state are maltreated, even raped and tortured—is to cast Syria as a rogue state operating outside the bounds of international norms.
It’s difficult to assess whether Barnard’s accusations are true. Exaggerated and even false atrocity stories are the norm in times of war, and the United States is unquestionably at war with Syria, and has been since the 1950s. This doesn’t mean that Barnard’s story is, ipso facto, false or exaggerated, only that it must be treated with scepticism appropriate to the context in which the story has been published, i.e., by a US newspaper, interlocked with the US state, reporting on an officially designated enemy.
Barnard relies on the work of an outfit called The Syrian Network for Human Rights (SNHR). It is a civil society organization, likely reliant on funding from Western and allied governments and wealthy individuals. Judging by its partnership with The International Coalition for the Responsibility to Protect, the SNHR is part of the civil society apparatus of human rights imperialism, a movement which accepts a view, at odds with international norms, that Washington has a unilateral right—indeed, an obligation—to abridge the sovereignty of foreign states in response to major violations of human rights. In practice, the responsibility to protect movement gives license to the United States to intervene against whichever of Washington’s adversaries it can prepare a human rights case against, but never against its allies, many of which, by the US State Department’s own accounting, are major human rights violators. Expecting the United States—long a de jure white supremacist state, now a de facto one, which boasts the world’s greatest per capita incarceration rate, and which, until recently, ran a sprawling network of CIA secret torture prisons and continues to carry out targeted assassinations of political opponents—to act as the world’s champion of human rights, makes as much sense as asking Al Capone to protect banks from robbery.
All the same, the basic accusation levelled by Barnard and the SNHR—that the Syrian government jails its opponents—is beyond dispute. Imprisoning political opponents, especially during times of war, is hardly a departure from international norms. A fundamental characteristic of all states is to deny the freedom of state opponents who seek to organize the state’s demise.
It is also likely that some opponents of the Syrian government have been maltreated, even tortured, by state authorities. Maltreatment of prisoners appears to be an invariable characteristic of states, across time and place.
Barnard’s accusations do not demonstrate that Syria is a rogue state, or that it is in violation of international norms.
- Syrian government actions toward its opponents, principally jihadists, including those belonging to, or affiliated with Al Qaeda, are not out of line with the accustomed practice of states facing existential emergencies.
- Indeed, the United States itself ran a sprawling system of secret prisons, in which Al Qaeda and other jihadists were imprisoned and tortured, many to death.
- Human rights issues including allegations of torture by security officials are hardly unique to Syria, but are typical of the United States’s closest allies in the Middle East, including Saudi Arabia, Egypt, Jordan, and Turkey.
The US State Department has long viewed Middle East oil as “a stupendous source of strategic power, and one of the greatest material prizes in world history.”  But in order to seize this prize, Washington has had to overcome an obstacle—the Arab and Persian peoples. The people of the Middle East have formed, or backed, what one State Department official called “local forces of independence and national assertiveness.” These forces have sought to control the great material prize of Middle East oil for their own development. The Arab nationalist movement has been counted among local forces opposed to US control of the region’s resources, and Syria has been a principal state representative of the movement. Indeed, it remains the sole state representative today.
From the 1950s, Washington sought to undermine, degrade and eventually destroy Arab and Persian nationalist opposition to US control of the Middle East. In addition to intervening directly in Arab Asia, Washington has worked through three proxies to crush Arab nationalist opposition to US hegemony: the Muslim Brotherhood and its Sunni political Islamist offshoots, Israel, and local British-imposed Arab monarchies, which depend on US protection to survive. (As US president Donald Trump recently reminded Saudi King Salman: “King – we’re protecting you – you might not be there for two weeks without us.” )
Syria has been at war with Israel since 1948. The Jewish settler state currently occupies part the Syrian Golan. Israeli warplanes regularly bomb Syrian territory. Israel is immeasurably stronger militarily than Syria, largely owing to generous subsidies it receives from Washington. These subsidies are provided for the purpose of weakening local forces of independence and national assertiveness which resist US control of the Middle East.
Since the 1960s, Washington has worked with the Muslim Brotherhood to overthrow Arab nationalism in Damascus. Recently, Israel armed, equipped, and healed, Islamist fighters operating in south Syria against the Arab nationalist government.
A detailed plan from “UNITED STATES SOUTHERN COMMAND” dated “23 FEBRUARY 2018” was issued with the title “PLAN TO OVERTHROW THE VENEZUELAN DICTATORSHIP ‘MASTERSTROKE’” and is here presented complete.
This document was personally signed by Admiral Kurt W. Tidd, who was the Commander (the chief), at SOUTHCOM, and he was thus the top U.S. military official handling Venezuela. But this was far more than just a military plan. It was comprehensive — directing military, diplomatic, and propaganda, policies — regarding the Trump Administration’s planned “Overthrow” of Venezuela’s Government. His plan has since guided the Administration’s entire operation, including “the capacities of the psychological war,” regarding Venezuela.
It instructed SOUTHCOM:
- Encouraging popular dissatisfaction by increasing scarcity and rise in price of the foodstuffs, medicines and other essential goods for the inhabitants. Making more harrowing and painful the scarcities of the main basic merchandises.” …
- intensifying the undercapitalization of the country, the leaking out of foreign currency and the deterioration of its monetary base, bringing about the application of new inflationary measures.” …
- Fully obstruct imports, and at the same time discouraging potential foreign investors in order to make the situation more critical for the population.” …
- compelling him to fall into mistakes that generate greater distrust and rejection domestically” …
- To besiege him, to ridicule him and to pose him as symbol of awkwardness and incompetence. To expose him as a puppet of Cuba.” …
- Appealing to domestic allies as well as other people inserted from abroad in the national scenario in order to generate protests, riots and insecurity, plunders, thefts, assaults and highjacking of vessels as well as other means of transportation, with the intention of deserting this country in crisis through all borderlands and other possible ways, jeopardizing in such a way the National Security of neighboring frontier nations. Causing victims and holding the Government responsible for them. Magnifying, in front of the world, the humanitarian crisis in which the country has been submitted to.”
- Structuring a plan to get the profuse desertion of the most qualified professionals from the country, in order ‘to leave it with no professionals at all’, which will aggravate even more the internal situation and along these lines putting the blame on of Government.”
- the presence of combat units from the United States of America and the other named countries, under the command of a Joint General Staff led by the USA.”
It was posted online at the Voltairenet site, and was first copied to a web archive on 14 May 2018. So, it has been online since at least that date. However, because the photo in it of the document wasn’t made available via software which includes the individual symbols, but presented only the full visual image of the paper document, it still hasn’t yet gone viral on the Web.
Here, therefore, is the first appearance, on the Web, of the full document, that’s manually copied, character-by-character, so that each phrase in this document becomes, for the first time, web-searchable, and thereby conveniently available for journalists and historians to quote from. This prophetic document — the source for what has happened afterward in and to Venezuela — might therefore finally receive the public attention that it so clearly merits.
The document starts with propaganda against Venezuela’s existing Government (and it totally ignores the extent to which the pre-existing U.S. economic sanctions against Venezuela had actually caused these problems), and it then proceeds to present the U.S. plan to overthrow the ‘dictatorship’. (Tidd refers to Maduro only as “the Dictator,” except at the very start and very end.
At the end, he commands “the denouncement toward Maduro’s regimen” and he also uses the phrase “the enemy” to refer to him — as if there had been the U.S. Constitutionally required authorization, by the U.S. Congress, of this “war.” The close urges “the dispatch of a UNO military force for the imposition of peace, once Nicolas Maduro’s corrupt dictatorship is defeated.” The U.N. is militarily to “impose” “peace,” after the U.S. and its allies have conquered Venezuela.)
Although Tidd placed 100% of the blame for Venezuela’s problems upon Maduro, and ignored the crucial extent to which U.S. economic sanctions had caused them, his plan emphasized that the U.S. must actively make things even worse for the Venezuelan public than America’s economic sanctions had yet done.
Original leak, posted on Voltairenet as images (without commentary.)
Why Ukrainian Parliamentarians Started Talking About the Possibility of a Repeat of the Chernobyl Catastrophe
Problems in the work of a number of Ukrainian enterprises threaten an environmental catastrophe. This was stated on the air of the “NewsOne” TV channel by the deputy of the Verkhovna Rada of Ukraine Sergey Shakhov. According to him, he regularly receives messages from the employees of enterprises, in particular the Zaporozhye nuclear power plant concerning the dangerous situations that arise due to the lack of control of inspection bodies.
“Thus, they become a mini-Chernobyl, a time bomb. Environmental catastrophe with every step in Ukraine,” said the deputy.
The member of the Council on International Relations under the President of Russia Bogdan Bezpalko in a conversation with RT noted that “this question should be carefully studied, however the danger of a repetition of large technogenic catastrophes in Ukraine indeed exists”.
In turn, the senior research associate of the Center for European Research of the Institute of World Economy and International Relations at the Russian Academy of Sciences Vladimir Olenchenko noted that Sergey Shakhov’s statement speaks about the strong wear of infrastructure in Ukraine.
“Zaporozhye is a densely populated area, a catastrophe at the nuclear power plant will affect not only infrastructure, but also the population. In general, any technological catastrophe will have serious effects on the territory of all Ukraine,” explained the expert in a conversation with RT.
￼Over the past few years there have been regularly emergency situations in Ukrainian nuclear power plants, which lead to shutdowns and the stoppage of power units.
Thus, on July 16th 2016 at the first block of the Khmelnitsky nuclear power plant there was the depressurisation of the first circuit of the block and radioactive coolant entered the steam generator, which led to an abnormal stoppage in the enterprise. This was reported by the deputy from the “Radical Party” of Ukraine Andrey Artemenko.
Later the work of the second generator stopped several times because of failures in the management system and the protection of the nuclear reactor. In September 2018 the second power unit was switched-off for a scheduled repair (according to the operator of the Ukrainian nuclear power plants of the “Energoatom” company) because of damage sustained by the transformer, but after activation it did not work for weeks. The operation of the block was resumed only on December 14th 2018.
Faults the power plant could have been avoided if in 2017 Kiev did not terminate the Russian-Ukrainian inter-governmental agreement on the construction of the third and fourth power units of the Khmelnitsky nuclear power plant. Now Ukraine continues to search for partners for their construction.
Repeated accidents also happened at the Zaporozhye nuclear power plant that Shakhov mentioned in his speech. Thus, in September 2018 there was an abnormal stoppage at the second power unit, which had to be switched-off in order to repair the main circulation pump. The stoppage of the block caused panic among the population, which the leadership of nuclear power plant blamed the local media for.
Soon after this incident one more power unit at the nuclear power plant – the sixth – was closed. According to the plan of repair work, it should’ve started to work again in January 2019, however is is still deactivated. And in March of this year one more block – the fourth – was switched-off.
In 2016 the academic publication “Energy Research & Social Science” reported that “during many years accidents at Ukrainian nuclear power plants were not registered in the database, despite information about them being available in the state media”.
As a result, the authors of the research came to the conclusion that the probability of a major atomic catastrophe in Ukraine in the upcoming years will reach 80%.
The authorities of Ukraine are not involved in restoring the energy infrastructure because they are incompetent, noted Vladimir Olenchenko.
“In addition, infrastructure needs to be supported financially, but it is necessary to ascertain the fact that the money that was given to Ukraine by the EU and IMF, including for these needs, dissolved in the air. The new government should find out what they were spent on,” said the expert.
The problem of a lack of financing is aggravated also by the refusal of the Ukrainian authorities to use Russian component parts and fuel.
According to Bogdan Bezpalko, over the last five years Kiev has methodically reduced the volume of cooperation with Russia, including in the field of supplying Ukrainian nuclear power plants with the necessary fuel elements.
“In order to cause damage to Russia and to deprive it of the Ukrainian market, Kiev severed all ties with our country and turned to the bankrupt Westinghouse instead. But the components delivered by this American company are not suitable for the nuclear power plants that were constructed in Ukraine,” said Bezpalko.
As a reminder, in 2008 the Ukrainian “Energoatom” and the American company “Westinghouse” signed a contract on providing from three to six power units of Ukrainian nuclear power plants with VVER-1000 reactors in with nuclear fuel for 2011-2015.
Experts in the field of nuclear power repeatedly criticised such a decision made by the Ukrainian authorities, specifying that the American fuel elements (TVEL) are incompatible with the reactors of Soviet construction. The fuel elements assembled in the US differ in terms of their configuration from the Soviet and Russian analogs. Russia manufactures six-sided elements, and in the US – quadrangular.
Speaking about the use of Westinghouse fuel in Soviet reactors, experts pointed to the experience of the Czech Republic, where such practice also led to regular failures of fuel assemblies, created threats of a catastrophe, and raised energy production costs because of extraordinary stoppages in power units.
In 2016 the use of American fuel at Ukrainian nuclear power plants was also criticised by Mikhail Umanets – the former director of the Chernobyl nuclear power plant.
American fuel is put in our power units without the approval of their chief designer. How safe it is, it is difficult for me to judge, only the chief designer has this information. But we all the same have no right to play with nuclear power plant safety, one Chernobyl will be enough for us
As a reminder, on April 26th 1986 at the fourth power unit of the Chernobyl nuclear power plant there was a catastrophe that led to a reactor explosion. The emission of a huge amount of radioactive materials resulted — in Ukraine 50,000 sq.km in 12 regions, in Belarus – 46,500 sq.km, and in Russia – 60,000 sq.km were contaminated. Radioactive emissions also reached Europe. The remaining three power units gradually stopped, and in December 2000 the station completely stopped its work.
The first sarcophagus was constructed around the fourth power unit for environment protection with the efforts of about 90,000 people in November 1986. It represented a simple concrete box. It became soon clear that such protection requires replacement.
The construction of a new sarcophagus began only in 2007 and was completed in November 2016.
The donors – among which there were Germany, Russia, Canada, and other countries – spent about €2 billion for the sarcophagus project. In April 2015 the government of the Russian Federation agreed to allocate about €10 million more in addition for the construction of a sarcophagus
The former adviser of the president of Ukraine Leonid Kuchma, the political scientist Oleg Soskin, in a conversation with RT said that Ukrainian deputies are concerned more by the language issue than the subject of environmental and technogenic safety.
“The Ukrainian population is unaware of the existence of an infrastructure threat. After the war in the East of Ukraine began, the subject of an environmental catastrophe became confidential. Earlier this issue was constantly discussed at environmental, economic, and technological forums. Today there is simply no exact information about the status of the atomic blocks of power plants,” noted the expert.
According to him, in Ukraine there are still zones with non-scrapped radiation and chemical waste from the Soviet period. But the public isn’t aware of the real threat of a technogenic catastrophe with a scale that can be more than the effects of the Chernobyl catastrophe, added Soskin.
“There is nobody in Ukraine to deal with the issue of restoring the energy infrastructure. Poroshenko had no desire to deal with these issues – he only cared about personal enrichment and his Roshen candy factory. In addition, in Ukraine there are simply no professionals who could deal with this problem,” considers the political scientist.
Soskin added that with the administration of Poroshenko leaving office there is hope that the situation concerning the condition of the nuclear power plants in Ukraine will change, however for this purpose it is necessary to wait for real actions from the new president.
“The current situation, perhaps, will change with the coming to power of Vladimir Zelensky. But only if a team that thinks in a new way and understands the scale of a future environmental catastrophe is formed”concluded the expert.
With the US decision to end the eight waivers issued in respect to the import of oil and gas from Iran on 2 May, the Trump Administration effectively is taking its first steps along the path of undeclared war on Iran: An attempt to break the morale of the Iranian people (by pushing a greater proportion of the population towards absolute poverty), and to acquiesce to terms (Pompeo’s 12 conditions), which would amount to abject (and improbable) Iranian capitulation. It is a narrow path, bordered on all sides by lurking unforeseen, unforeseeable disasters – thorny thickets, in which Bolton and Pompeo may well find themselves painfully entangled. Will these steps then inevitably lead to grave escalation? They might; but also, Iran knows that if it can wriggle around these formidable impediments, and still remain standing, then Iran will stand victorious. To survive is to win. To survive will turn from Iran’s to America’s hurt.
Why should they take these steps? Why take the risk? All American foreign policy ultimately is domestic politics. Vice-President Pence at the Munich Security Conference earlier this year lauded Trump’s hard-nosed, shoot-from-the-hip decision-making. He commended ‘tough government’ as a quality that the EU too should try to emulate. This clearly will be the Trump platform for 2020: ‘I am the man who makes tough decisions and who then just ‘does it’’. The entrepreneur translated into politics.
But this is not what US Iran policy is about. It may be true that Washington is disappointed that its pressures on Iran, so far, have achieved no results – in terms of changing the Iranian polity. But this waiver declaration is more about attending to Trump’s Evangelical base. It is a particularly loyal base which wholly concurs with the Israeli Right that Revolutionary Iran stands as an impediment to the coming into being of the prophesied ‘Greater Israel’ – and concomitantly, with the return of the Messiah. This ‘base’ (25% of Americans profess Evangelism), has turned a collective blind eye to all Trump’s moral failings, and totally disdained the Russiagate allegations. Unmoved by either, they just have come to believe that Trump is the amoral, secular, flawed – yet somehow ‘chosen’ – instrument who can lead Christians in the Cosmic war of good versus evil – with Iran cast as the cosmic evil. And, behind in the shadows, lies ring-master, Sheldon Adelson and his billions, fusing together the (non-Evangelical) Bolton to Netanyahu’s Greater Israel project with the whole sitting atop Trump’s extraordinary loyal Evangelical base on which his continuance in office beyond 2020 may one day hang. The point here, is that this base is pressing for progress towards Rapture; the Bolton neoconservative base is pressing to settle old scores with Revolutionary Iran; the Israeli Right is pressing to take advantage of the ‘serendipidity’ of the Trump Presidency – and Trump wants to project his political muscularity as a campaign platform.
The most dense thicket into which the hikers may stumble is that by ending waivers for the major current importers of some one million barrels per day of Iranian oil – with China taking some half million, and India and Turkey most of the balance – the US is setting itself up for very troubled bilateral relations with key states: states with whom the US already has tense and finely balanced relations. India may cave to US pressure; but will China and Turkey? Iran says that it has other buyers waiting in the wings as well.
What will the US do if China ignores sanctions? Under the 2012 National Defense Authorization Act, non-US ‘significant’ transactions with the Iranian Central Bank are sanctionable (US transactions are criminal). The point here is that it is the Iranian Central Bank that is the receiver of all oil and gas monetary proceeds. Will the US attempt to sanction China’s Central bank? Or, will it look the other way as China sets up non-dollar work-arounds that defy US sanctions? How will that mesh with US-China Trade negotiations? How will these issues too, play out in America’s bilateral relations with Turkey and India?
In fact, the issues go wider: Iran is the pivot to both Russia’s energy heartland strategy and China’s Belt and Road initiative. Why should these states quietly acquiesce as Washington tries to knock-out the ‘key stone’ to their economic architecture? China needs security of energy supply, and is acutely aware of its vulnerability to naval blockade via the Malacca Strait. Russia and China jointly have just stuck a small, yet psychologically significant, spanner into the US’s Venezuela regime-change project, as if to say, ‘We have had enough of these US games’. It is hard to imagine then that they would let the strategic prize of Iran be cast down by similar forces of chaos. We shall have to see.
Though the waivers are declared by Pompeo to be ‘over’ and ‘no more’, in fact it is the structure of economic attrition that is mutating. Instead of ‘waivers’ that are publicly announced, and specific, the State Department is adopting a new form of economic warfare: They will henceforth only issue licences. Each will be issued only on an individual, application-by-application basis. There will be no framework to permissions, no guidance; only by making the application will the applicant know whether it will be granted – or not. The outcomes will not be made public.
It is the full weaponsiation of ambiguity – and recall that the following sanctions still apply to Iran: All US laws regarding sanctions on Iran permit national security waivers, usually temporary; some laws allow permanent exemptions, and of course the US President can modify any executive order. During President Trump’s term, the State Department appears to have granted waivers for the following sanctions:
- The Iran Freedom and Counter-Proliferation Act of 2012, specifically sections 1244 (covering energy, shipping, shipbuilding, and ports), 1245 (adding specially designated nationals and any sector of Iran’s economy determined to be “controlled directly or indirectly by Iran’s Revolutionary Guard Corps”), 1246 (“nuclear, military, or ballistic missile” items and precious metals), and 1247 (insurance for the previously cited activities). These sanctions can be waived for up to 180 days.
- The Iran Threat Reduction and Syria Human Rights Act of 2012, sections 212(a) (covering insurance for Iranian oil shipments) and 213(a) (government borrowing), which can be waived for up to 180 days.
- The Iran Sanctions Act of 1996, section 5(a) (covering oil and gas investment), which can be waived for up to 180 days.
- The National Defense Authorization Act for fiscal year 2012, section 1245(d)(1) (covering foreign banks involved with Iran’s oil trade), which can be waived for up to 120 days.
With the move away from ‘waivers’ to unpublicized, specific ‘licences’, the US effectively sets itself up as the global trade governance, arbitrating on a truly wide range of trade – if one includes all the Russia sanctions, CAATSA legislation and entire cosmos of US global sanctions. Henceforth, the US Treasury will increasingly sculpt global trade toward US interests, in the dark, and with no public announcement. It seems hard to see how major trading nations can passively acquiesce to such a ‘sanctions architecture’. China, in particular, must be expecting that it will, one day, be an US sanctions target (beyond Iran).
Back in December 2008, WikiLeaks released a relatively little-noted document "US Army Special Operations Forces Unconventional Warfare". This 248-page, nine chapter publication was the September 2008 revision of the U.S. Army Field Manual 3-05.130, the keystone doctrine for Army special operations forces operations in unconventional warfare.
This document defines unconventional warfare as:
"Operations conducted by, with or through irregular forces against a variety of state and no-state opponents."
These operations are conducted:
"...in support of a resistance movement, an insurgency, and ongoing or pending conventional military operations"
Such operations have the following common conceptual core:
"...working by, with, or through irregular surrogates in a clandestine and/or covert manner against opposing actors."
In Chapter 2, the document outlines the instruments of United States national power which help the United States to achieve its national strategic objectives. These instruments of national power include diplomacy, information, intelligence, economic, financial, law enforcement and military. For the purposes of this posting, let's focus on one of these instruments as follows, the Financial Instrument of National Power . Here's how the document describes this instrument:
"The financial instrument of national power promotes the conditions for prosperity and stability in the United States and encourages prosperity and stability in the rest of the world. The Department of the Treasury (Treasury) is the primary federal agency responsible for the economic and financial prosperity and security of the United States and as such is responsible for a wide range of activities, including advising the President on economic and financial issues, promoting the President’s growth agenda, and enhancing corporate governance in financial institutions. In the international arena, the Treasury works with other federal agencies, the governments of other nations, and the international financial institutions to encourage economic growth; raise standards of living; and predict and prevent, to the extent possible, economic and financial crises."
"The application of economic or financial incentives is among the most powerful ideas in the U.S. arsenal of power. Although some U.S. adversaries are irreconcilable to accommodation with U.S. interests and must be engaged in other ways, many declared or potential adversaries can be persuaded or dissuaded by economic or financial means to become declared or potential allies (or at least neutralized)…the ability of the United States government to affect the economic environment is enormous, and it has economic weapons at its disposal. Unconventional warfare planners must carefully coordinate the introduction and withholding of economic and financial assets into the Unconventional Warfare Operational Area (UWOA) with their interagency partners. For example, direct application of USAID grants to specific human groups can alter negative behaviors or cement positive affiliations. At the highest levels of diplomatic and financial interaction, the United States Government’s ability to influence international financial institutions—with corresponding effects to exchange rates, interest rates, credit availability, and money supplies—can cement multinational coalitions for unconventional warfare campaigns or dissuade adversary nation-state governments from supporting specific actors in the UWOA."
As you can see, the United States is willing to use financial blackmail including exchange and interest rate manipulation, credit availability and the supply of money to either persuade certain nations to join its unconventional warfare campaign or to dissuade adversarial nations from supporting the "other side" of an unconventional warfare strategy.
Here is a screen capture of page 2-8 of the document outlining how the United States can use financial incentives to manipulate other nations (ARSOF = Army Special Operations Forces and UW = Unconventional Warfare, DOS = Department of State, IC = Intelligence Community):
Note this sentence:
"Government can apply unilateral and indirect financial power through persuasive influence to international and domestic financial institutions regarding availability and terms of loans, grants, or other financial assistance to foreign state and nonstate actors."
It is also interesting to note that the document clearly states that the World Bank, International Monetary Fund, Organization for Economic Cooperation and Development and Bank for International Settlements are basically functioning as organizations that Washington can use to drive its global agenda and as yet another tool in America's quest for global hegemony. This isn't terribly surprising in the case of the World Bank since we find the following on its website.
In addition, the Treasury Department's Office of Foreign Assets Control whose sole responsibility is as follows:
"...to administer and enforce economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction and other threats the national security..."
...has a "long history of conducting economic warfare valuation to any Army Special Operations Forces unconventional warfare.".
This Army manual, leaked over a decade ago by WikiLeaks, gives us a very clear view of how Washington uses financial manipulation through its influence on the World Bank, IMF, OECD and other "global" groups to wage unconventional warfare on any nation that doesn't share its view of how the world should function and that threatens America's control of the globe. The use of financial blackmail to bend countries to America's narrative and overthrow nations who do not succumb to America's wishes is not terribly surprising, however, it is interesting to actually see one key aspect of Washington's unconventional warfare methodology in print.