Nord Stream as a reason for war by Florian Warweg

Only the blowing up of the Nord Stream pipelines ultimately cleared the way for the EU, and Germany in particular, to become long-term buyers of U.S. natural gas surpluses and to keep the price at a profitable level for U.S. fracked gas producers, even in the long term.

Nord Stream as a reason for war
by Florian Warweg
[This article posted on 4/16/2023 is translated from the German on the Internet, Nord Stream als Kriegsgrund.]

Nord Stream als Kriegsgrund

The blue-yellow flag stands for freedom, the ominous Russian sign “Z” for oppression. But the war over Ukraine cannot be explained that simply, although among European state chancelleries and leading media only this one narrative has taken root. The anthology “Kriegsfolgen – Wie der Kampf um die Ukraine die Welt verändert” (“Consequences of War – How the Battle for Ukraine is Changing the World”), published in early April 2023 by the Vienna-based ProMedia publishing house, claims to shed light on the motives and consequences of this world crisis, the most dangerous for generations, in 17 contributions by Ukrainian, Russian and German-language authors, beyond propaganda narratives. The NachDenkSeiten present the contribution of our editor Florian Warweg for the “War Consequences” volume, in which he devotes himself to the economic background of the Nord Stream blow-up. By Florian Warweg.

In the early morning hours of September 26, 2022, at 02:03 Central European Time, seismological institutes in Denmark, Sweden and Norway recorded tremors twelve nautical miles southwest of the Danish island of Bornholm that corresponded to those of a mild seaquake with a magnitude of 2.2 to 2.3 on the Richter scale. Shortly afterwards, a massive loss of pressure was detected in string A of the Nord Stream 2 pipeline at a depth of 70 meters. On the German side, the pressure dropped abruptly from 105 to about 7 bars. Almost exactly 17 hours later, at 7:04 p.m., severe tremors of identical strength were again recorded, this time northeast of Bornholm, followed by pressure loss in both strings of the Nord Stream 1 Baltic Sea pipeline, which has been in operation since 2011, at a depth of 88 meters.[1]

In response to the first recorded explosion (a natural quake had already been ruled out as the cause at this point), the Danish military dispatched F-16 fighter jets from Bornholm to photograph the affected area, according to its own account. The fighter jets are said to have first detected the large-scale methane bubbles rising from the water around midday. Around eight hours later, at 8:41 p.m., the Swedish Maritime Authority then issued a warning of further gas leaks after several ships reported carpets of bubbles also northeast of Bornholm. As a result, the Danish and Swedish maritime authorities imposed so-called nautical warnings within five nautical miles of the leaks. Air traffic below 1000 meters altitude was also prohibited in the area.[2]

“Targeted attack by a state actor.”

Further investigation revealed that there were four leaks in total, two involving the Nord Stream 1 pipeline, which had been destroyed over a length of 250 meters, and two involving string A of the Nord Stream 2 pipeline. An accident is considered to be ruled out; both NATO states and Russia assume a “targeted act of sabotage.” Russian head of government Vladimir Putin called the events “international terrorism.” In a joint letter dated September 29, 2022, to the United Nations Security Council, Sweden and Denmark spoke of using “an explosive charge of several hundred kilograms of TNT equivalent” – per leak, mind you. On October 7, 2022, in response to a parliamentary question, the German government stated that “against the background of the complexity of the execution of the crime,” it assumed a “state actor” as the perpetrator.[3] All four leaks are located, again an interesting detail, just outside territorial waters in the exclusive economic zones of Denmark and Sweden, which are considered international waters under international law. This means that whoever carried out the attacks was meticulous in making sure that these four explosions occurred in international territory. An attack within national territorial waters would have had even more far-reaching implications under international law.

One of the most expensive energy infrastructure projects of all time

The suspected attack by a state actor targeted one of Europe’s most expensive and largest energy infrastructure projects. The construction of Nord Stream 1 alone cost 7.4 billion euros, while the more recent Nord Stream 2 pipeline brother cost 10 billion. Both pipelines, each with two strings, stretch over 1224 kilometers. In the case of Nord Stream 1, around half of the construction investment (51 percent) was borne by the Russian natural gas company Gazprom and 24.5 percent each by the two German companies BASF (Wintershall) and E.ON (Ruhrgas). Nord Stream 1, at least, is thus considered a purely Russian-German project.[4]

In the case of Nord Stream 2, the shareholdings were somewhat more widely spread; here, in addition to the aforementioned groups, the Dutch-British Shell, the French Engie Group, and the Austrian gas group OMV were also involved, albeit with fewer shares. All of the aforementioned Western European groups have lost at least one billion euros each as a result of the end of Nord Stream, according to their own statements.[5]

With a transport capacity of up to 110 billion cubic meters of natural gas annually, the four strands of Nord Stream 1 and 2 alone would have been sufficient to secure Germany’s entire natural gas consumption as an industrial nation. In 2021, Germany’s total natural gas consumption was 90.5 billion cubic meters.

The importance of the Baltic Sea pipeline for Germany

When Nord Stream 1 became fully operational in October 2012, the Federal Republic of Germany already became a central transit country for the European gas trade. Since Germany also provided the two dominant private energy suppliers in Europe at the time, E.ON and BASF subsidiary Wintershall, Nord Stream 1 put the country in a position to exercise market power control over the security of supply of other European countries and the UK in particular. This, especially since it was a purely German-Russian project, led to strong disgruntlement, particularly in U.S. political and business circles. These were to intensify again with the planning and construction of Nord Stream 2. A September 2005 working paper by the government-affiliated think tank Stiftung Wissenschaft und Politik (SWP) openly explains how, with the help of the then chairman of the Committee on Eastern European Economic Relations (Ostausschuss der Deutschen Wirtschaft), Klaus Mangold, foreign competition for Nord Stream 1 was gradually eliminated.[6] The German government’s decision to build the Nord Stream 2 pipeline was based on the assumption that the German-Russian project would be completed by the end of 2005.

Previously, it should be recalled in the current hysteria, Gazprom had held talks with BP, Royal Dutch/Shell, Gasunie, Gaz de France, and Norsk Hydro, in addition to E.ON and Wintershall. Gazprom also negotiated directly with the Dutch government in 2002 to realize the project. London’s interest was expressed in a corresponding natural gas moratorium on cooperation, which was signed in June 2003 by then British Prime Minister Tony Blair and Russian President Putin. In other words, it was primarily German companies and the German government at the time that had a purely Russian-German pipeline project in mind, not the Russian side.

Displeasure with the situation on the U.S. side had even broader reasons. While the U.S. had virtually ended its energy dialogue with Russia and cut back on investments in the wake of the so-called Yukos affair (the breakup of the Yukos corporation and the imprisonment of its owner, oligarch Mikhail Khodorkovsky) and the dispute over the war in Iraq, German corporations were gaining strategic advantages over their U.S. competitors in the Russian market. [7] German companies thus gained both a privileged position in the rapidly growing Russian market and competitive advantages through access to cheap energy sources via the long-term, privileged and mutually lucrative cooperation in the gas and oil business. This manifested itself on September 7, 2005, ten days before the German parliamentary elections, with the signing of the contract for the construction of the Baltic Sea pipeline, which for the first time was to provide a gas connection between Russia and Germany without the possibility of direct intervention from the previous transit countries, such as Poland and Ukraine, which had strong ties to the USA.

The importance of Nord Stream for Russia

The advantages of the Baltic Sea pipeline project for Russia are obvious. With Nord Stream, the world’s largest and majority state-owned natural gas company Gazprom had for the first time a direct and undisturbed connection to the Western European and, in particular, German sales market. By eliminating transit fees for land pipelines, Russia solved two problems at once: First, transit fees significantly reduce profits; second, transit countries can use them as a political and economic weapon against Russia, as regularly practiced by Ukraine and Poland in particular. Likewise, one prevents illegal gratuitous extraction of gas, a problem often complained about by Gazprom when transferring through Ukraine. Nord Stream allowed Russia to become less dependent on existing land-based pipeline routes and subsequently to have a greater variety of transport routes to Western Europe, a classic approach to diversification. This diversification maxim, which is often forgotten today, was initially also followed by the EU, which in the early 2000s still unreservedly supported the construction of the Baltic Sea pipeline.[8]

Nord Stream stands in the way of vital US interests

Just a few years ago, the U.S. LNG industry was in a catastrophic mood. The fracking boom in the late 2010s had created a massive oversupply of natural gas. From the beginning of the 2020s, for example, the spot market price at the US hub Henry Hub was just under five euros per megawatt hour. The U.S. fracking industry, which had been endowed with many billions of OnU.S. dollars by the financial sector, and, as a logical consequence, significant parts of the U.S. financial system, were on the verge of bankruptcy in the face of this price development.[9] This was because, as is usual in big business in the U.S., the investments had been made with little equity and a lot of debt capital. To prevent the impending collapse, there was really only one option: expansion into the EU market and, in particular, into the largest importer of natural gas by far, with an annual demand of about 100 billion cubic meters: the Federal Republic of Germany.[10] But what interest should Germany and its industrial sector have in importing U.S. LNG gas, which (before the start of the war and sanctions) was 7 times more expensive than the Russian natural gas flowing into the country via pipeline? On a voluntary and rational decision-making basis, first of all none at all.

As Jens Berger, a journalist specializing in energy issues, among others, points out, it is only since the escalation of the Ukraine war and the associated EU sanctions against Russia that the price of fracked gas has reached a level that allows U.S. energy companies to earn money and not – as in previous years – lose massive amounts of money.

But even this development was still on a less than sustainable economic footing until the summer of 2022. Only the blowing up of the Nord Stream pipelines ultimately cleared the way for the EU, and Germany in particular, to become long-term buyers of U.S. natural gas surpluses and to keep the price at a profitable level for U.S. fracked gas producers, even in the long term. The associated new natural gas dependency of their EU “partner” undoubtedly also fits into the U.S. global strategic dominance concept. According to a study by the Energy Economics Institute at the University of Cologne (EWI), the U.S. will soon not only replace Russia as the most important energy supplier, but will then assume the same dominant role for the EU gas market as Russia did before the Ukraine war, with an anticipated import volume of around 40 percent.[11] So much for the alleged “reduction” of the EU’s energy dependency, which is supposedly so close to Washington’s heart.

Against this backdrop, much points to U.S. perpetration. The renowned U.S. investigative journalist Seymour Hersh, who among other things exposed the U.S. Army’s My Lai massacre in Vietnam, published a sensational article on February 8, 2023, entitled “How America Shut Down the Nord Stream Pipeline.” Citing a whistleblower, it detailed how the U.S. and Norway carried out the blowing up of the Nord Stream pipelines.[12] As expected, the U.S. foreign intelligence agency, the CIA, denied the allegation, stating, “This claim is completely and utterly false.”

Whether or not the U.S. claims responsibility for blowing up Nord Stream, it is demonstrably the largest economic beneficiary of the act. Against this backdrop, U.S. Secretary of State Anthony Blinken’s remark a few days after the attack takes on an entirely different relevance. Blinken had unapologetically declared the destruction of the Nord Stream pipelines a “tremendous strategic opportunity” for the U.S. at a press conference on September 30, 2022, during the visit of his Canadian counterpart Mélanie Joly.[13] Blinken said.

“We are now the leading supplier of liquefied natural gas to Europe […]. This is also a tremendous opportunity. It is a tremendous opportunity to eliminate dependence on Russian energy once and for all, thereby depriving Vladimir Putin of the opportunity to use energy as a weapon and a means to enforce his imperial plans. This is very significant and presents a tremendous strategic opportunity for years to come.”
What the “enormous strategic opportunity” for the U.S. consists of has, after all, already been stated.

Poland as eternal opponent of the pipeline

The decision to build Nord Stream 1 came at the beginning of the Polish election campaign in 2005 and was used accordingly, especially by the right-wing conservative Law and Justice Party (PiS). The ruling Catholic-National camp literally called the German-Russian pipeline project an “existential threat.” In this context, the Kaczy?ski brothers spoke of a “Schröder-Putin pact,” in direct allusion to the 1939 “Ribbentrop-Molotov pact.”[14]

In fact, the Polish rejection of the entire Nord Stream project was probably determined less by security policy considerations than by tangible financial interests – borne by the concern that the Baltic Sea pipeline would cause Warsaw to lose the millions in transit fees it received from Moscow year after year. After all, Warsaw only wants to become more independent of gas imports for its own consumption. When it comes to transit, Poland is very much interested in the highest possible gas volumes, because these generate the corresponding fee income. This also explains why Poland did everything in its power to prevent the Baltic Sea pipeline, but at the same time strongly supported the expansion of the Yamal I pipeline, which is fed with Russian gas, with a second line, which would of course run through Poland.

On the other hand, and probably even more relevant, are the plans that have been nurtured in Warsaw for years and have already been implemented in part, as the taz, for example, states in an article from the beginning of February 2022, to “roll up the Central European gas market anew together with the USA and to take over the previous transfer business from Germany”. [15] To this end, Poland bought extensive gas production fields in Norway years ago, had the “Baltic Pipe” built through the Baltic Sea, and built gigantic gas cisterns on the Baltic Sea coast for the conversion of US LNG, which is then to be exported. These immense investments in gas infrastructure, which Poland has been making for years with explicit U.S. support, actually only had economic prospects of success from the very beginning, if Nord Stream 2 does not get off the ground. And this project could only really yield a profit if Nord Stream 1 were also no longer in operation.

Significantly, representatives of the governments of Poland, Denmark and Norway opened the Baltic Pipe, which was explicitly designed as an alternative pipeline to Russian gas, on September 27, 2022, just one day after the sabotage of Nord Stream. On the occasion of the inauguration, Polish Prime Minister Mateusz Morawiecki said: “This gas pipeline means the end of the era of dependence on Russian gas. It is also a gas pipeline of security, sovereignty and freedom not only for Poland, but also for many others in the future.”?[16]
This probably reveals the core of the massive Polish opposition to the Nord Stream project.


While the German and Russian business and political communities had an understandable interest in strengthening their energy partnership from the early 2000s and, with Nord Stream, having a pipeline that would make them independent of unreliable transfer countries with their own agendas, the situation is exactly the reverse, especially in the case of the United States and Poland. Both Washington and Warsaw have been wary of increasing cooperation between Berlin and Moscow for decades and are doing everything they can to prevent it.

When threats did not help in the past, violence was resorted to. One need only recall the explosion of the Soviet Chelyabinsk pipeline in the summer of 1982 due to a CIA operation with manipulated software. This messed up the settings of pumps, turbines and valves of the gas supply in such a way that the pipeline exploded. The explosion is said to have had an explosive force of four kilotons.[17] Before that, starting in February 1982, the U.S. had massively threatened the Federal Republic of Germany with consequences if the industrial agreement concluded with the Soviet Union in November 1981 on the construction of pipelines and the supply of Siberian natural gas with a total annual volume of 16 billion marks was not terminated. In contrast to today, then-Chancellor Helmut Schmidt refused to be intimidated and said to the U.S.: “No matter how much others squawk, the deal is still on.” Also revealing was the U.S. Congress’s justification at the time for its displeasure with the deal: “Our businessmen will be out of the Eastern market.”?[18]

And this brings us back to one of the key outcomes of the destruction of Nord Stream and the sanctions regime against Russia. It is striking that both the whole business model for the US fracked gas and the extensive investments made on the Polish side in the course of the last few years in LNG infrastructure with the aim of further export only made economic sense if the relevant actors assumed at the planning stage that one would be able to win over the German as well as the wider EU gas market in a timely manner. However, this goal could only be achieved if Washington and Warsaw succeeded in squeezing Russia out of this market as a central and established exporter. What was recently considered a U.S. and Polish pipe dream in the eyes of many experts has become a fait accompli after the events of February 24 and September 26, 2022.

Excerpt from the anthology “Kriegsfolgen – Wie der Kampf um die Ukraine die Welt verändert”, edited by Hannes Hofbauer and Stefan Kraft, Promedia-Verlag, Vienna.
Who perpetrated Nord Stream attack? German government still stonewalling, citing “secrecy interest”

Fact check by “Faktenchecker”: What manipulative methods ZDF uses to defend the USA in the Nord Stream sabotage case

[“1] SVT Nyheter: Seismolog: Två explosioner intill Nord Stream, September 28, 2022,

[“2] Neue Zürcher Zeitung: Explosions at pipelines: The saboteurs probably blew up the pipes from the outside, Dec. 2, 2022,

[“3] German Bundestag, printed matter 20/3513

[“4] Detlef Bimboes: Natural Gas from the East and the New Cold War, in: AG-Friedensforschung, April 2, 2006,

[“5] Eva Brendel: So viel kostet die Energiekonzerne Nord Stream 2, in: Finance, April 14, 2022,

[“6] Roland Götz: Die Ostseegaspipeline, SWP-Aktuell 41, p. 2, Berlin September 2005.

[“7] Alexander Rahr: Berlin – Moscow 2005-2008, in: CISbarometer No. 39, p. 1, Berlin 2005.

[“8] EU Commission: Green Paper – Towards a European Strategy for the Security of Energy Supply, p. 42, European Communities, Luxembourg 2001.

[“9] Michael Mazengarb: Climate friend or carbon bomb? Global gas market faces $1.3trn stranded asset risk, in Renew Economy, July 3, 2019,

[“10] Jens Berger 2022: The U.S. has won the gas war against Russia, November 9, 2022.

[“11] EWI STUDY 2022: Developments in Global Gas Markets to 2030. Scenario Consideration of Restricted Trade with Russia,

[“12] Seymour Hersch: How America Took Out The Nord Stream Pipeline, in:, February 8, 2023.

[“13] U. S. Department of State, September 30, 2022,

[“14] Helmut Fehr: The Abuse of the Past – Political Campaigns and Power Strategies of the National Populists in Poland, in: Frankfurter Rundschau, p. 5, November 22, 2005.

[“15] Gabrielle Lesser: Poland hopes for business with gas, in: taz, February 2, 2022.

[“16] Wprost: Morawiecki o wybuchach w Nord Stream w dniu otwarcia Baltic Pipe: Bardzo dziwny zbieg okoliczno?ci, September 27, 2022:

[“17] Peter Welchering: Hacken im Kalten Krieg – Von den Anfängen des Cyberwars, in: DLF, February 13, 2019,

[“18] Werner Meyer-Larsen: Der unverziehene Strang nach Osten, in: Spiegel, March 21, 1982,

Posted in 2011 | Leave a comment

Nord Stream 1 and 2 by Peter Vonnahme

As is well known, in war the truth is the first casualty, and so it is in the Ukraine war. Since the beginning of the war in Ukraine, politics and the mainstream in the press, radio and TV have been conducting an unprecedented game of confusion, combined with disinformation and agitation.

Interjection of a judge – Nord Stream 1 and 2, the difficult fight for the truth

by Peter Vonnahme

[This article posted on March 23, 2023 is translated from the German on the Internet, Zwischenruf eines Richters – Nord Stream 1 und 2, der schwierige Kampf um die Wahrheit.]

Zwischenruf eines Richters – Nord Stream 1 und 2, der schwierige Kampf um die Wahrheit

If you, dear reader, expect a final answer to the question of who is responsible for the destruction of the gas pipelines in the Baltic Sea, then read no further. Because this question cannot be answered seriously at the moment. But already now, the example of the blowing up of Nord Stream 1 and 2 can be used to show how the search for truth is misguided. The basic evil is the one-eyedness of Western foreign policy. It is favored by the servile attitude of a large part of the German media. By Peter Vonnahme, former judge at the Bavarian Administrative Court.

When in doubt, always the Russian…

As is well known, in war the truth is the first casualty, and so it is in the Ukraine war. Since the beginning of the war in Ukraine, politics and the mainstream in the press, radio and TV have been conducting an unprecedented game of confusion, combined with disinformation and agitation. The scenario is based on a simple world view. In case of doubt, Putin is always the bad guy, or at least his country is to blame for the political crises of the present.

This was not always the case. There was a time when German hearts flew to the Russian Mikhail Gorbachev. People gratefully acknowledged that the Soviet Union had made German reunification possible. Outward signs of the political thaw were the withdrawal of Soviet occupation troops from the former East Germany and the beginning of fruitful economic cooperation. The crippling postwar period had not been forgotten, but the Soviet Union had become a respectable partner for the Germany of the fading Kohl era. For their part, Soviet citizens were willing not to hold against postwar Germany the crimes of the Nazi era, with 27 million dead. Under Chancellor Schröder, relations between the two countries were further deepened – much to the displeasure of the United States. The basic friendly mood between Germany and Russia did not last. Under American guidance, Russia was soon nagged again and old reservations were reactivated. However, Putin did not make it difficult for the critics either.

In the last decade, it was drilled into us Germans that the Russians were addicted to war and that they could be trusted with any outrage. Today, this image is deeply embedded in the minds of many people and influences their view – also of the Nord Stream 1 and 2 blow-ups. When it comes to the search for perpetrators, the gaze is involuntarily directed toward Russia. Conversely, this means that the Western states and their pet child Selenskyj are prematurely eliminated from the circle of suspects. Because – as we have learned – they stand for the good and the right, always and everywhere.

Finding the truth

But the world is not that simple. If you want to understand, you have to take the trouble to look a little closer. In the search for truth, it is helpful to follow established judicial review routines. First, it is important to gather as much and as widely dispersed information as possible. Then, these must be reviewed for plausibility and weighted according to their importance. It is essential that the same standards always be applied to evaluations. Example: If Russia’s invasion of Ukraine is measured against international law, it goes without saying that this also applies to all wars under American leadership. Otherwise, one becomes untrustworthy. Personal convictions naturally play a role in the search for truth. However, this does no harm if the seeker makes it clear where he stands on the basis of his life experience and values, because then the other participants can critically examine the persuasiveness of his arguments.

I have made my position in the conflict Ukraine/Russia/Germany/USA clear several times, especially in the essays “Schlussbilanz eines “Putin-Verstehers””, “Selenskyj – Held oder Zündler?” or most recently in “Zeitenwende – Das falsche Wort zur falschen Zeit vom falschen Mann”. These and other texts can be found easily on the Internet. I strive for objectivity and do not claim to know the last truth in all controversial questions. Because I am still on the search and accept that I make myself attackable with my today’s estimate.

What happened on September 26, 2022?

That night, near the Danish island of Bornholm in the Baltic Sea, three of four strands of the Nord Stream 1 and 2 gas pipelines running from Russia to Germany were destroyed by explosions. Nord Stream is a joint Russian-German project with significant participation by the Gazprom Group and German companies. The aim was to secure Germany’s long-term energy supply at a cost in the double-digit billions. Schröder and Merkel and the German business community stood for this. For years, this worked to the advantage of both countries (security of supply, quality, favorable price). Ukraine, Poland, the Baltic states and above all the USA followed this with growing unease.

Then Russia invaded Ukraine in violation of international law. This was followed by sanctions against Russia and finally, on September 26, the destruction of the pipelines in the Baltic Sea – perpetrators unknown. It is unclear whether a repair of the pipe system is possible. The gas shortage caused by the blast was covered in Germany with coal, expensive LNG gas from the U.S. and Qatar, and the extension of the operating lives of outdated nuclear power plants – an undertaking that was as damaging to the environment as it was costly.

Search for perpetrators

To date, no one has claimed responsibility for the attack. Swedish experts are certain that the act of sabotage required capabilities only available to states, such as submarines, large quantities of explosives, naval divers and expertise.

Version 1: Perpetrator Russia

When the gas flowing from the blasted pipe system was still churning up the Baltic Sea, Selenskyj immediately had it declared that the gas leak was the result of “a terrorist attack planned by Russia.” Evidence of this has not been provided to date. As was to be expected, the leading Western media also immediately blamed Russia for the attack. This was dubious, but it followed the tried and tested pattern of “the Russian did it.” A modicum of analytical thinking would have sufficed to recognize that this explanation is illogical: Why would Russia destroy its own pipelines, built at a cost of billions? This is absurd because Putin – if he had wanted to – could have cut off Germany from Russian gas much more quickly and easily by turning off the gas taps in Russia. And why should Moscow give up its option to revive the lucrative gas business without necessity?

Conclusion: Russia’s culpability is unlikely.

Version 2: Perpetrator USA

The search for the perpetrator must therefore continue. Anyone who watches “Tatort” on TV knows how this happens. Investigating authorities ask – as the ancient Romans did 2,000 years ago – in such a situation: Cui bono? Who benefits from the crime? If one does that tentatively here as well, it becomes clear that the U.S. is the big beneficiary of a destruction of Nord Stream. The U.S. administration’s thinking is obvious: First, it would deprive the Russian military budget of billions from the gas deal and increase the likelihood of a Russian defeat on the Ukrainian battlefield. The consequence of this would be that Russia would fall behind as a competitor in the strategic competition among the great powers.

In addition, economic interests play an important role. US Secretary of State Tony Blinken admitted it himself a few days after the blasts. Indeed, he said that the U.S. is now “the leading supplier of LNG gas to Europe” and that “there is a tremendous opportunity to end Europe’s dependence on Russian energy once and for all.” U.S. LNG exports to Europe, after all, have risen from 19 percent to 60 percent since 2021.

But basically, there is no need to speculate about the U.S. motives, because U.S. President Joe Biden spoke plainly on February 7, 2022, during Chancellor Olaf Scholz’s inaugural visit. He said in no uncertain terms that if Russia attacked Ukraine, Washington would put an end to Nord Stream 2. Asked by a journalist how he planned to do that, Biden replied tersely, “I assure you, we will be able to do it.” The German chancellor sat next to him and grinned. Whether he was privy to Biden’s plan to destroy the main artery of Germany’s energy supply is not known. This raises serious questions about the criminal responsibility of those named; significantly, these questions have not been raised by the Federal Prosecutor’s Office.

None of this, of course, is proof of U.S. perpetration or of Scholz’s complicity, but it does raise serious suspicions. Others were not so careful with their conclusions. Polish ex-Foreign Minister Radek Sikorski commented laconically on the news of the tubes’ detonation, “Thank you, America!” The British head of government at the time, Liz Truss, left it at a dry and meaningful “It’s done”.

Conclusion: There is a lot to be said for the responsibility of the USA, be it as perpetrator or instigator or accomplice.

The great silence

German politics kept a low profile. The media mainstream, which is usually quick to point the finger of blame at Russia, reacted with remarkable restraint. They invoked the presumption of innocence and agreed on the formula that they would have to wait for the results of the investigation. But the results were not forthcoming. Month after month passed until an event hit like a bomb.

On February 8, 2023, the legendary American investigative journalist Seymour Hersh (winner of the Pulitzer Prize, revelator of U.S. war crimes in the Vietnam War and the Iraq War) accused the U.S. of perpetration of the act of sabotage. According to Hersh’s account, the U.S. government wanted to prevent Germany from restarting the (blocked) pipelines in the event of an energy shortage, thereby stabbing Ukraine in the back. Therefore, he said, the government decided to “let [Germany] freeze.” Hersh backed up his crime accusation with Biden’s unequivocal announcement of destruction (see above).

According to Hersh, U.S. Navy divers secretly attached explosive devices to Nord Stream gas pipelines under the guise of a NATO Baltic Sea maneuver in June 2022. These were then detonated in a time-delayed, remote-controlled manner by means of a radio buoy dropped from a Norwegian reconnaissance aircraft, he said. In addition to Biden, his National Security Advisor Jake Sullivan, Secretary of State Tony Blinken, Department Director Victoria Nuland, and CIA Director William Burns were involved in the planning. In addition, he said, Denmark and officers from NATO candidate Sweden were aware of the planning. Hersh refers to a source “with direct knowledge of operational planning”; he understandably could not name names. American and Norwegian agencies rejected the Hersh report as a fabrication. They accuse Hersh of violating journalistic standards of care by relying on only one anonymous source. Western media were initially concerned and remained silent.

Whether Hersh’s revelation is true, I do not know. But I can judge that his report is factual, detailed and coherent, a strong indication of credibility. Given Hersh’s international reputation and the fact that his previous research on sensitive issues has proven to be reliable, there is no discernible reason to distrust him here.

The bottom line is that the U.S. is under suspicion and is under massive pressure to justify itself.

Newly kindled interest

While silence prevailed for months prior to the Hersh Report, it now came thick and fast. On February 21, Jeffrey D. Sachs, an economics professor at Columbia University, testified before the UN Security Council on the destruction of the Nord Stream pipeline. He called it an act of international terrorism and a threat to world peace. He said there were only a few actors with the technical capacity to commit such an act and the necessary access to the Baltic Sea, namely Russia, the United States, the United Kingdom, Poland, Norway, Germany, Denmark and Sweden; Ukraine was not among them. It is the responsibility of the UN Security Council to locate the perpetrator and bring him before international justice, he said.

According to reports, Denmark, Germany, and Sweden have conducted investigations into the attack. However, results have not been made public. Sweden refused to share its findings with Russia and to conduct a joint investigation with Denmark and Germany.

On March 7, German and U.S. media (“New York Times” and a research team from ARD, SWR, and “Zeit”) came up with an alternative crime version of the attack. The reports were based on anonymous U.S. government sources and on unconfirmed investigations by German authorities. According to them, a six-member “pro-Ukrainian group” is said to be responsible for the crime. The team – consisting of a captain, a doctor, two divers and two diving assistants – committed the crime single-handedly with the help of a sailing yacht rented in Rostock. The yacht belongs to a Ukrainian company based in Poland. Traces of explosives were found on the ship. It was explicitly emphasized that there were no indications of involvement of Ukrainian President Selenskyj and his close entourage, nor that any state had been involved.

Attempt at Classification

No evidence has been presented by Seymour Hersh or the research teams. So the guesswork must continue. The fact that the investigators themselves admitted that no evidence of state actors had been found takes much of the persuasiveness out of their version of the crime. For until now, experts have agreed that the act of sabotage requires capabilities that only states have. It is therefore not very plausible that the yacht crew indicated had these capabilities. Even if they did, the question would still remain as to whether or on what behalf they were acting. Therefore, the Hersh story is much more plausible. Somehow, the suspicion suggests itself that the alternative version of the crime served one purpose above all – to take the US government, which was under urgent suspicion, out of the fire. This is also supported by the chronological sequence: first a long, icy silence and then a transparent diversionary maneuver at exactly the right moment. It is also strange that while the media speculated about the possibilities of the technical execution of the blast, the usual reference to the fact that the deliberate destruction of other people’s property is a serious crime was completely omitted. The fact that the unknown perpetrators were obviously concerned with causing serious damage to Russia does not make them heroes. They are and remain criminals.

To sum up, we are still in the realm of conjecture. We would be further along if politicians and the media took seriously their task of seeking even uncomfortable truths. They have failed to do so. They probably feared that all too precise research would scratch the paint of the good guys.

Posted in 2011 | Leave a comment

Brazil’s Lula travels to China and calls to end US dollar dominance

Brazil’s Lula travels to China and calls to end US dollar dominance
by Ben Norton

“Why can’t a bank like that of the BRICS have a currency to finance trade relations between Brazil and China, between Brazil and other countries?” he continued. “It’s difficult because we are unaccustomed [to the idea]. Everyone depends on just one currency”. Lula made these remarks criticizing US dollar hegemony in a speech for the New Development Bank (NDB).

Brazil’s President Lula da Silva took a historic trip to China, where he signed many cooperation agreements and pledged to challenge the dominance of the US dollar.

Geopolitical Economy Report
by Ben Norton
Apr 16, 2023
Brazil’s President Lula da Silva with China’s President Xi Jinping in Beijing on April 14, 2023

Brazil’s left-wing President Luiz Inácio Lula da Silva, known popularly as Lula, took a historic trip to China this April.

There, the two countries deepened their comprehensive strategic partnership, signing 15 agreements involving trade, scientific research, technology, renewable energy, agriculture, meat production, finance, the digital economy, communications, the media, the fight against poverty and hunger, and even the joint development of satellites and space cooperation.

China pledged investments estimated at around $50 billion Brazilian reais. Symbolically, under one of the deals, a Brazilian factory previously run by US automaker Ford will instead by operated by the Chinese electric car manufacturer BYD.

Lula’s meeting with President Xi Jinping in Beijing came just weeks after China and Brazil reached a deal to use their local currencies in bilateral trade, excluding the US dollar.

While visiting China, Lula made it clear that de-dollarization is a top priority for his country.

“Every night I ask myself why all countries have to base their trade on the dollar”, Lula said, according to a report in the Financial Times.

“Why can’t we do trade based on our own currencies?” the Brazilian leader asked. “Who was it that decided that the dollar was the currency after the disappearance of the gold standard?”

Many US politicians were outraged by the historic de-dollarization agreement between China and Brazil.

Neoconservative Republican Senator Marco Rubio fumed on Fox News:

Today, Brazil – in our hemisphere, the largest country in the western hemisphere south of us – cut a trade deal with China. They’re going to, from now on, do trade in their own currencies, and get right around the dollar.

They’re creating a secondary economy in the world, totally independent of the United States.

We won’t have to talk sanctions in five years, because there will be so many countries transacting in currencies other than the dollar, that we won’t have the ability to sanction them.

Lula, now in his third term as president, was unfazed by the criticism in Washington.

The Brazilian leftist leader has already publicly pledged to create a new currency for trade in Latin America. He stated clearly that the goal is to weaken the region’s “dependence on the US dollar”.

“Who decided that our currencies were weak, that they didn’t have value in other countries?” Lula asked while in China.

“Why can’t a bank like that of the BRICS have a currency to finance trade relations between Brazil and China, between Brazil and other countries?” he continued. “It’s difficult because we are unaccustomed [to the idea]. Everyone depends on just one currency”.

Lula made these remarks criticizing US dollar hegemony in a speech for the New Development Bank (NDB), the financial institution birthed by the BRICS bloc of Brazil, Russia, India, China, and South Africa.

Lula was one of the creators of the BRICS, back when it was previously just the BRIC. The leftist Brazilian president co-founded the group during his first two terms in office, which ran from the beginning of 2003 to the end of 2010.

Lula among the founding members of the BRIC

The NDB was meant as an alternative to the US-dominated World Bank, which is notorious for imposing devastating austerity measures and neoliberal economic reforms on countries in the Global South.

On April 12, Lula flew into Shanghai, where the NDB is located. He was the first foreign head of state to visit the BRICS bank’s headquarters.

There, Lula was greeted by his successor, Brazil’s former President Dilma Rousseff, a fellow member of the left-wing Workers’ Party.

Dilma is now president of the New Development Bank. There, she has pledged to use the institution to fund high-quality “sustainable development” to fight climate change and “promote social inclusion”.

Dilma said the NDB plans to finance “critical and strategic infrastructure projects” like ports, airports, and highways, as well as “more modern models of transportation”, such as high-speed trains, in underdeveloped countries in the Global South.

Lula’s trip to China was his first state visit outside of the Americas in his third term.

The Brazilian president traveled to the United States in February, but only for one day. In contrast, Lula spent four days in China – a symbol of how important their alliance is.

“No one will prohibit Brazil from improving its relationship with China”, Lula said during his trip, in a clear message to the United States.

Lula also visited the research center of China’s tech giant Huawei, which has been unilaterally sanctioned by the US – another message to Washington.

Brazilian’s Minister of Finance Fernando Haddad, who joined Lula in China, explained that their goal is “reindustrializing Brazil in partnership with Chinese capital”.

Reporting on the historic trip, S&P Global Market Intelligence noted (emphasis added):

The 20 new agreements have a broad scope, indicating that the Lula administration is looking to prioritize deepening economic ties with China. Lula’s visit to mainland China, which was postponed due to illness, had been planned to last five days and would have included a delegation of around 200 business representatives, compared with the one day that Lula spent in the United States in February, with no clear agreements reached.

China is Brazil’s largest trading partner

When Lula ended his second term at the end of 2010, he was one of the most popular leaders in world history, with a staggering 87% approval rating.

Lula and his successor Dilma transformed the country. In a speech in China, Lula boasted that their Workers’ Party-led governments helped lift 36 million Brazilians out of extreme poverty, taking Brazil off of the UN Hunger Map for the first time in history.

In 2002, the year before Lula entered office, Brazil’s GDP PPP was $1.72 trillion; when he left, it was $2.8 trillion.

Today, Brazil has the eighth-biggest economy on Earth, when measured with purchasing power parity (PPP). It is even bigger than the economies of France and Britain.

When Lula was previously president, Brazil had become the sixth largest, but following a US-backed political coup, Brazil’s economy suffered from years of right-wing rule and aggressive neoliberal policies that devastated the country and fueled deindustrialization.
biggest economies countries 2023 IMF
The biggest economies in the world by GDP (PPP), according to 2023 IMF data

China has the world’s largest economy, when measured with purchasing power parity. It is also among the top two most populous countries (India’s population is expected to overtake China’s in 2023).

For its part, Brazil is the most populous country in Latin America, and the seventh-most populous on Earth.

China has been Brazil’s top trading partner since 2009. Commercial exchange between the two giants has skyrocketed in the past two decades.

The Brazilian government boasted that their bilateral trade increased by a staggering 21 times since Lula’s first visit to China in 2004.

In 2022, China and Brazil did US$150.4 billion in trade. From 2021 to 2022 alone, their bilateral trade grew by 10.1%.

What is unique about this relationship is that Brazil has a significant trade surplus with China, exporting roughly $90 billion in 2022 while importing approximately $60 billion.

In fact, Brazil exports three times more to China what it sells to the United States. (Brazil has a trade deficit with the US.)

Brazil is a commodities powerhouse.

The South American nation is the world’s second-biggest exporter of iron ore.

Brazil is also among the top 10 biggest oil producers. As of 2021, it produced more oil even than Iran, representing roughly 4% of global output.

US-backed political coups in 2016 and 2018 damaged Brazil’s economy

Under the rule of the Workers’ Party, Brazil had established itself as the sixth-largest economy on Earth.

But years of US meddling pushed the South American giant into recession and stagnation.

A huge drop in commodities prices in 2014 caused significant economic problems. This crash was intentionally pushed by the United States, which massively expanded its own shale production while pressuring Saudi Arabia to overproduce oil to collapse crude prices on the global market, in an effort to hurt the economies of major oil producers Russia, Iran, and Venezuela.

Dilma governed from 2011 until 2016, when she was overthrown in a political coup backed by the United States, impeached on an absurd budgetary technicality that far-right leader Jair Bolsonaro regularly engaged in.

Lula was subsequently imprisoned in 2018, on fraudulent charges overseen by the corrupt judge Sergio Moro, as part of the lawfare (judicial warfare) campaign known as Lava Jato (Operation Car Wash), which was closely supported by the US Justice Department and State Department.

Brazil’s top court later dropped all charges against Lula. Even the United Nations Human Rights Committee determined that Lula’s civil rights and due process guarantees had been violated.
UN Lula due process jail

But the imprisonment of Lula on false pretenses, under Washington’s watch, essentially handed the 2018 election to the fascistic Bolsonaro, who openly praised Brazil’s previous extreme-right, US-backed dictatorship, as well as the fascist junta of Augusto Pinochet in Chile.

Bolsonaro rewarded Moro, the judge who jailed Lula, by appointing him as his “super justice minister”. Bolsonaro and Moro then promptly visited CIA headquarters in Langley, Virginia, to thank the notorious US spy agency.

Under Bolsonaro, Brazil’s foreign policy was totally subordinated to Washington. He eagerly recognized US-appointed coup leader Juan Guaidó as the so-called “interim president” of Venezuela, and even supported cross-border terror attacks on the country’s leftist Chavista government.

The geopolitically motivated 2014 commodities crash, US-backed political coups in 2016 and 2018, and six subsequent years of right-wing rule devastated Brazil’s economy.

Brazil-based journalist Brian Mier also explained to Geopolitical Economy Report that “Lava Jato sabotaged the economy, causing a 2.5% drop in GDP by paralyzing and bankrupting Brazil’s five largest construction and engineering companies”.

He pointed to studies that found that the US-backed Lava Jato lawfare led to the loss of 4.4 million jobs.

“Lula and Dilma had quintupled the foreign reserves, and Brazil was prepared for a commodities bust cycle, so Lava Jato had a bigger effect on the recession than the commodities bust”, Mier said.

All of this led to what was essentially a lost decade. The country is only recovering today.
Brazil GDP PPP World Bank
Lula says the NDB offers “extraordinary hope” to “become the great bank of the Global South”

On April 13, Lula met with New Development Bank officials in Shanghai. The Brazilian government published an official transcript of his remarks.

Lula recalled that the 2008 financial crash was caused by “greed” and risky financial speculation. Today the crises continue, Lula noted, with large banks like Credit Suisse collapsing.

“I think the world has never needed an instrument to help in the world’s development as much as it needs it now”, he said of the NDB.

In light of this instability, the NDB offers “extraordinary hope”, Lula argued.

“We have to be more concerned with serving the countries that are most in need of money”, the Brazilian president said. He argued that their goal should be to “help the neediest and poorest countries”.

“I hope that this bank is able to lend money for the development of the African continent. I hope that this bank is able to have money to lend to the poorest countries in Latin America”, he urged.

While in China, Lula tweeted:

It is a dream of developing countries to have an instrument that invests in their development.

During the 8 years I was in the presidency, I tried to create a Bank in the South, which would allow investment in the necessary things in our region, without submitting to the rules of the IMF.

He added:

The BRICS Bank represents a lot for those who dream of a new world.

The dream of creating the BRICS was for an instrument of development, which will certainly be strong, with the goal of benefiting countries. If not, we will never have the poorest countries be able to develop themselves.

It would not be fair if we ended the 21st century as we started the 20th century, with those who were rich getting richer and those who were poor getting poorer.

As Dilma Rousseff was officially sworn in as director of the New Development Bank, Lula delivered another speech.

He said the NDB has potential to “become the great bank of the Global South”, praising it as a “tool for reducing inequalities between rich countries and emerging countries”, which could help prevent “social exclusion, hunger, extreme poverty, and forced migration”.

“Many developing countries are accumulating unpayable debts”, Lula warned

“The unmet financing needs of developing countries were and remain enormous”, he added.

Lula called the NDB a “milestone” in South-South cooperation.

“For the first time, a development bank with global reach was established without the participation of developed countries in its initial phase”, the Brazilian leader said.

The NDB is “free, therefore, from the shackles of conditionalities imposed by traditional institutions on emerging economies. And more: with the possibility of financing projects in local currency”, he continued.

Lula explained, “The creation of this Bank shows that the union of emerging countries is capable of generating relevant social and economic changes for the world. We don’t want to be better than anyone else. We want opportunities to expand our potential and guarantee dignity, citizenship and quality of life to our peoples”.

“The New Development Bank has great transformative potential, as it frees emerging countries from submission to traditional financial institutions, which try to govern us, without having a mandate to do so”, he added.

Lula noted that, in Brazil, the NDB has helped finance infrastructure projects, income support programs, sustainable transportation, climate change adaptation, sanitation services, and renewable energies.

Referring to the former Brazilian president affectionately as “comrade Dilma”, Lula emphasized that her new global leadership role is an important accomplishment for women’s representation.

He also noted Dilma’s revolutionary struggles in the 1970s “to put into practice the dream of a better world”. Dilma had been part of the leftist resistance against Brazil’s US-backed fascist dictatorship, and she was imprisoned and tortured.

Lula explained:

“The time when Brazil was absent from major world decisions is in the past. We are back on the international stage, after an inexplicable absence. We have a lot to contribute to key issues of our time, such as mitigating the climate crisis and fighting hunger and inequality.”

“It is intolerable that, on a planet that produces enough food to meet the needs of all humanity, hundreds of millions of men, women and children have nothing to eat.

It is inadmissible that the irresponsibility and greed of a small minority put the survival of the planet and of all humanity at risk.

Brazil is back. With the willingness to contribute again to the construction of a more developed, fairer and environmentally sustainable world.

In another Brazilian government statement, Lula stated:

We want the Brazil-China relationship to transcend the trade issue; we want to have a deep relationship in science and technology; partnerships between universities to have more Brazilian students in China, and more Chinese students in Brazil.

We count on China in our fight for the preservation of planet earth, defending a healthier climate policy. That is why an energy transition is extremely important, so that we can produce cleaner energy, especially wind, solar, and biomass energy.

Brazil is committed to achieving, by 2030, zero deforestation in the Amazon, and to making our contribution to preserving the planet.

We are convinced that the development of Brazilian agriculture does not need irresponsible deforestation, let alone fires. Brazil can practically double its agricultural production by recovering degraded land, without having to cut down a single tree.

For his part, Chinese President Xi said:

China has a strategic and far-reaching relationship with Brazil, which has a place of priority in our foreign relations. You are our longtime friend.

The Brazil-China relationship, in healthy and stable development, will play an important role for peace, stability, and mutual development, for both countries and the world.

Posted in 2011 | Leave a comment

Why the US Bank Crisis is Not Over by Michael Hudson, 3/13

Michael Hudson: Why the US bank crisis is not over

Economist Michael Hudson argues banks like Silicon Valley Bank have behaved in a selfish and greedy way, yet get de facto US government bailouts, while regulatory capture and campaign contributions prevent the systemic change needed to stop these crises.

By Michael Hudson

[This article posted on 3/13/2023 is available at]

Geopolitical Economy Report

Economist Michael Hudson, co-host of the program Geopolitical Economy Hour, first responded to the crash of California-based Silicon Valley Bank and Silvergate in another article here.

When interest rates rise, bond prices fall (and stock prices tend to follow).

However, banks don’t have to mark down the market price of their assets to reflect this declining valuation. They can simply hold on to their securities.

Banks only have to reveal the market-price decline when there is a run on the bank and they have to actually sell these bonds or packaged mortgages to raise the cash to enable the withdrawals to be made.

For Silicon Valley Bank (SVB), it turned out that they gambled to make a capital gain by buying long-term Treasury bonds, whose interest rates were being raised sharply by the Fed’s tightening.

The bank expected that the Fed couldn’t keep rates high without bringing on a serious recession – and indeed, Fed Chairman Powell said that a recession was indeed what he wanted.

But instead of lowering interest rates, Mr. Powell announced that not enough American workers were unemployed, so he planned to raise interest rates even more than he had expected to. Interest rates rose, and bond prices fell.

SVB “was left sitting on an unrealized loss of close to 3bn – more than its equity base. Deposit outflows then started to crystallize this into a realized loss,” as the Financial Times noted.

Banks across the country were losing deposits sharply. This was not a “run on the banks” resulting from fears of mismanagement.

This was because banks have behaved in so selfish and greedy way that, as they have made soaring profits on rising interest rates – the rates they charge borrowers, and the rates yielded by their investments – they have been paying depositors only about 0.2%.

Banks were acting as monopolies, together refusing to pay depositors a fair rate. But their monopoly did not extend to control of the U.S. Treasury.

The result is a widening gap between what investors can earn by buying risk-free Treasury securities – about 4% – and the pittance that banks pay their depositors. So depositors were taking their money away from the banks to earn a more fair market return elsewhere.

It would be wrong to call this a “bank run” or “panic.” The depositors withdrawing their money were not irrational. They were fed up with the bank’s selfishness.

And SVB was one of the worst offenders. That’s why its stock had soared so sharply in the last few years.

The threat of a “bank run” may apply more to foreign depositors. On March 13, the US dollar index fell by 1 percentage point. That actually is a lot for one day.

Europeans were selling US stocks. That is why the Dow Jones Industrial Average fell at the opening (9:30 AM EST was 3:30 in the afternoon continental European time, so the European sell orders had piled up).

Will Europeans withdraw from the US bank market? Are they losing trust?

President Biden has done everything that he could to confuse the public as to what is happening. His March 13 speech assured voters that the SVB “rescue” was not a bailout. But of course it was a bailout.

Uninsured SVB depositors who did not qualify for safety from losing a penny were rescued without losing a penny.

What Biden implied, correctly, was that it was not a taxpayer bailout. But then what was it?

It was a demonstration of how powerful Modern Monetary Theory (MMT) is. The banking assets sufficient to “make depositors whole” was simply created by the banking authorities.

The trillion in the Fed’s quantitative easing for the banks since 2008 was not money creation; it was a balance-sheet exercise – technically a kind of “swap” with offsets of good Federal Reserve credit for “bad” bank securities pledged as collateral – way above current market pricing.

That is what “rescued” the banks after 2009. Federal credit was created without taxation.

A few political considerations are appropriate here. For one thing, deregulatory corruption played a role.

SVB was overseen by the Federal Home Loan Bank (FHLB). The FHLB is notorious for regulatory capture by the banks who choose to operate under its supervision.

Yet SVB’s business was not mortgage lending. It was high-tech private equity entities being prepared for IPOs – to be issued at high prices and then talked up – and left to fall in the usual pump and dump ploy.

Another political consideration is that Silicon Valley is a Democratic Party stronghold – and a rich source of campaign financing. The Biden administration was not going to kill the goose that lays the golden eggs of campaign contributions.

Of course it was going to bail out the bank and its private-capital customers. The financial sector is the core of Democratic Party support, and it is loyal to its supporters.

As President Obama told the bankers who worried that he might follow through on his campaign promises to write down mortgage debts to realistic market valuations in order to enable exploited junk-mortgage clients to remain in their homes: “I’m the only one between you [the bankers visiting the White House] and the pitchforks” – that is, his characterization of voters who believed his “hope and change” patter talk.

The Biden administration’s plan is the usual one: kick the bank problem down the road, flood the economy with bailouts (for the bankers, not for student debtors) until election day in November 2024.

The Federal Reserve did indeed pull back on March 13, just as SVB had anticipated. That reduction of interest rates by the Plunge Protection Team did make huge gains for investors in the long-term government bonds that SVB had bought.

The problem was timing. That’s always the problem when there’s a crash.

And there must always be a financial crash at some point. That is because interest-bearing debt grows exponentially, but the economy follows an S-curve and then turns down.

And when the economy turns down – or is deliberately slowed down when labor’s wage rates tend to catch up with the price inflation caused by monopoly prices and U.S. anti-Russian sanctions that raise energy and food prices – the magnitude of financial claims on the economy exceeds the ability to pay.

That is the real financial crisis that the economy faces. And it goes beyond banking. The entire economy is saddled with debt deflation (of incomes), even in the face of Federal Reserve-backed asset-price inflation.

Economist Michael Hudson, co-host of the program Geopolitical Economy Hour, first responded to the crash of California-based Silicon Valley Bank and Silvergate in another article here.

When interest rates rise, bond prices fall (and stock prices tend to follow).

However, banks don’t have to mark down the market price of their assets to reflect this declining valuation. They can simply hold on to their securities.

Banks only have to reveal the market-price decline when there is a run on the bank and they have to actually sell these bonds or packaged mortgages to raise the cash to enable the withdrawals to be made.

For Silicon Valley Bank (SVB), it turned out that they gambled to make a capital gain by buying long-term Treasury bonds, whose interest rates were being raised sharply by the Fed’s tightening.

The bank expected that the Fed couldn’t keep rates high without bringing on a serious recession – and indeed, Fed Chairman Powell said that a recession was indeed what he wanted.

But instead of lowering interest rates, Mr. Powell announced that not enough American workers were unemployed, so he planned to raise interest rates even more than he had expected to. Interest rates rose, and bond prices fell.

SVB “was left sitting on an unrealized loss of close to 3bn – more than its equity base. Deposit outflows then started to crystallize this into a realized loss,” as the Financial Times noted.

Banks across the country were losing deposits sharply. This was not a “run on the banks” resulting from fears of mismanagement.

This was because banks have behaved in so selfish and greedy way that, as they have made soaring profits on rising interest rates – the rates they charge borrowers, and the rates yielded by their investments – they have been paying depositors only about 0.2%.

Banks were acting as monopolies, together refusing to pay depositors a fair rate. But their monopoly did not extend to control of the U.S. Treasury.

The result is a widening gap between what investors can earn by buying risk-free Treasury securities – about 4% – and the pittance that banks pay their depositors. So depositors were taking their money away from the banks to earn a more fair market return elsewhere.

It would be wrong to call this a “bank run” or “panic.” The depositors withdrawing their money were not irrational. They were fed up with the bank’s selfishness.

And SVB was one of the worst offenders. That’s why its stock had soared so sharply in the last few years.

The threat of a “bank run” may apply more to foreign depositors. On March 13, the US dollar index fell by 1 percentage point. That actually is a lot for one day.

Europeans were selling US stocks. That is why the Dow Jones Industrial Average fell at the opening (9:30 AM EST was 3:30 in the afternoon continental European time, so the European sell orders had piled up).

Will Europeans withdraw from the US bank market? Are they losing trust?

President Biden has done everything that he could to confuse the public as to what is happening. His March 13 speech assured voters that the SVB “rescue” was not a bailout. But of course it was a bailout.

Uninsured SVB depositors who did not qualify for safety from losing a penny were rescued without losing a penny.

What Biden implied, correctly, was that it was not a taxpayer bailout. But then what was it?

It was a demonstration of how powerful Modern Monetary Theory (MMT) is. The banking assets sufficient to “make depositors whole” was simply created by the banking authorities.

The trillion in the Fed’s quantitative easing for the banks since 2008 was not money creation; it was a balance-sheet exercise – technically a kind of “swap” with offsets of good Federal Reserve credit for “bad” bank securities pledged as collateral – way above current market pricing.

That is what “rescued” the banks after 2009. Federal credit was created without taxation.

A few political considerations are appropriate here. For one thing, deregulatory corruption played a role.

SVB was overseen by the Federal Home Loan Bank (FHLB). The FHLB is notorious for regulatory capture by the banks who choose to operate under its supervision.

Yet SVB’s business was not mortgage lending. It was high-tech private equity entities being prepared for IPOs – to be issued at high prices and then talked up – and left to fall in the usual pump and dump ploy.

Another political consideration is that Silicon Valley is a Democratic Party stronghold – and a rich source of campaign financing. The Biden administration was not going to kill the goose that lays the golden eggs of campaign contributions.

Of course it was going to bail out the bank and its private-capital customers. The financial sector is the core of Democratic Party support, and it is loyal to its supporters.

As President Obama told the bankers who worried that he might follow through on his campaign promises to write down mortgage debts to realistic market valuations in order to enable exploited junk-mortgage clients to remain in their homes: “I’m the only one between you [the bankers visiting the White House] and the pitchforks” – that is, his characterization of voters who believed his “hope and change” patter talk.

The Biden administration’s plan is the usual one: kick the bank problem down the road, flood the economy with bailouts (for the bankers, not for student debtors) until election day in November 2024.

The Federal Reserve did indeed pull back on March 13, just as SVB had anticipated. That reduction of interest rates by the Plunge Protection Team did make huge gains for investors in the long-term government bonds that SVB had bought.

The problem was timing. That’s always the problem when there’s a crash.

And there must always be a financial crash at some point. That is because interest-bearing debt grows exponentially, but the economy follows an S-curve and then turns down.

And when the economy turns down – or is deliberately slowed down when labor’s wage rates tend to catch up with the price inflation caused by monopoly prices and U.S. anti-Russian sanctions that raise energy and food prices – the magnitude of financial claims on the economy exceeds the ability to pay.

That is the real financial crisis that the economy faces. And it goes beyond banking. The entire economy is saddled with debt deflation (of incomes), even in the face of Federal Reserve-backed asset-price inflation.

Posted in 2011 | Leave a comment

Persons without a center

“They have their great, constantly changing I, but none of them has a self, a core, an experience of identity (…) Where there is no real self, there can be no identity” (1). Without awareness of and confidence in his own self, man, Fromm argues, is disconnected from both himself and his environment. He believes neither in what he is nor in what surrounds him.

Persons without a center

A solidified identity would be an effective protection against foreign interests that can harm us.
By Lilly Gebert
[This article posted on 4/1/2023 is translated from the German on the Internet,]

How do we develop a sense of self that provides identity, even when we live in a mass society and are weighed down by its pressures? Existential needs and the need to belong to a group all too often overshadow real engagement with this question – and thus prevent genuine becoming human. One thing is clear: the solution does not lie in materialism, because the possession of things can only ever fill the gap of a formed and consolidated identity in the short term and illusorily. Youth editor Lilly Gebert embarks on a philosophical search for the conditions of personal freedom with Erich Fromm.

“Everyone is the other and no one is himself. The Man, with which the question of the Who of everyday Dasein is answered, is the Nobody to whom all Dasein in Untereinanderein has ever already surrendered itself.”

– Martin Heidegger, Being and Time

Mass or man? While some perceive it as security, others perceive its presence as a threat. How can this be? Why does one side as well as the other feel threatened in its own knowing of the existence of the respective counterpart? Why can both – individual and mass – not exist without each other and yet perish from each other? Are there existentials, fundamental feelings of being human, which can only be lived in solitude? How can a human being be so little consolidated in himself that he feels attacked in his own being, when this stands even in the slightest contrast to that of his environment? When did we forget to grow from difference?

People without a center

The “identity crisis” of modern societies was already attributed by Erich Fromm in 1979 in Haben oder Sein (To Have or To Be) to the self-lessness of their members: “They have their great, constantly changing I, but none of them has a self, a core, an experience of identity (…) Where there is no real self, there can be no identity” (1). Without awareness of and confidence in his own self, man, Fromm argues, is disconnected from both himself and his environment. He believes neither in what he is nor in what surrounds him. Where once interest, love, and solidarity were present, now the desire “to have, to possess, and to dominate the world, and thus to become a slave to one’s own possessions” prevails, he said.

The human being oriented exclusively to having thus possesses “neither convictions nor real goals”. Unlike the being-oriented person, who lives out of “an inner activity” and whose “humanistic religiosity” is “directed against every kind of reification, calculability and idolatry of man”, the “having-oriented person is determined by a peculiar passivity”:

By seeking to realize his self-development, the meaning of his existence, no longer in difference but in conformity to his environment, he misses himself.

He “has become an enterprise, must function and allow himself to be exploited”. In the perpetual struggle against the threatening loss of self, he flees into a narcissistically shaped activism. Henceforth, his sense of identity no longer aims at entering into a lively, productive exchange between himself and his fellow world – the increasing experience of inner emptiness forces him to compensate for his lack of selfhood and subjecthood by having objects.

No matter how much he tries to repress it with this, however: Man has a panic fear of being alone. He cannot bear the isolation. As a social being, he depends on being related to the world outside himself. It is not his desire for cooperation but his compelling need to avoid mental as well as physical isolation that drives him into the arms of his fellow human beings (2). He needs at least the feeling of identity and belonging. But insofar as he is unable to locate this in himself, he has no choice but to escape the freedom he feels as a burden and to ground his sense of I in something that lies outside his own responsibility: the sense of we.

In the we, we believe we feel something “which in reality we do not feel at all – simply because we act according to what is suggested to us by public opinion or the like.” We stop being ourselves and become a reflection of what our environment tells us is “right” and “accepted.” The discrepancy between our “self” and the world disappears and with it the conscious fear of being alone (3).

“All our evil comes from the fact that we cannot be alone.”

– Arthur Schopenhauer

Between external determination and self-sacrifice

“We do not know, but we can guess, how many people, recognizing their growing inability to bear the burden of life under modern conditions, would willingly submit to a system that, along with self-determination, would relieve them of responsibility for their own lives.”

– Hannah Arendt, Elements and Origins

If one considers the increasing discord within and between people, the equally increasing power imbalance between citizen and state suggests that, contrary to what psychoanalysis long believed, it is not the contradictory nature of human beings that causes difficulties for society, but rather, the other way around, it is society that has learned to stabilize itself by not allowing the hidden inner selves of its members to emerge. Their newfound “individuation process” may have freed them from their traditional shackles and contributed to their independence and rationality; but it has also isolated them, making them fearful and powerless (4).

Erich Fromm first saw the conditions for the individual to rise and fall in the mass more or less voluntarily in Protestantism and the compensatory faith of Martin Luther and John Calvin: After medieval society, in which every citizen had his fixed role and all suffering and pain was compensated by the church, sometimes collapsed as a result of their theses, man not only ceased to see the church as a link between himself and God; he also no longer saw himself as a firmly integrated member within a structure of meaning.

As the ensuing existential hardship of the middle class (5) triggered feelings of insignificance and powerlessness in people, it seemed inevitable to the majority of the population – overwhelmed with their sudden exposure to God – to seek henceforth security and salvation in “eliminating their isolated selves and becoming a tool in the hands of an overwhelmingly powerful power outside themselves” (6).

In The Fear of Freedom, Fromm described this readiness of the individual “to want to be nothing but a means for the glorification of a God who represented neither justice nor love” (7) not only as preparation for “accepting the role of servant of an economic machinery” (8) – in the “despair of the automaton-like conformist” he saw at the same time the breeding ground for the political goals of fascism (9): Insofar as the self-denial and ascetic attitude anchored in Protestantism urged man “to subordinate his life exclusively to purposes that were not his own” (10), its religious “freedom” was for him nothing more than another precursor of that false sense of individuality that a few centuries later was once again fueled by capitalism, as well as its intensified form, totalitarianism:

“The individual man became even more lonely, even more isolated, and became a tool in the hands of overwhelmingly powerful forces outside himself; he became an ‘individual,’ but a confused and insecure individual. There were things that helped him get over the overt manifestations of this inner insecurity. Above all, possessions were a support of his self (…) The less he felt he was someone, the more urgently he needed possessions” (11).

In short, the inner non-being of modern societies is conditioned by their inversion into the outside. As long as man is able to be absorbed in the collective or to ascribe value to himself on the basis of things, he does not have to give meaning to his own life. But what if it is precisely “the presence of this void” (12) that ensures social cohesion?

The double face of freedom

The end of monarchist rule, the Enlightenment and its decentralization of knowledge and information: “modern” man is convinced that he has fought for his freedom. Yet he has only created new conditions for the same constraints: What was once due to open personal obedience to a leader is now due to submission to the organization. What changed was not the fact of dependence, but its form. Until today, man is not in the position to implement and use his freedom to develop his true self. And yet he lives in the belief that he is no longer subject to external authorities.

He is proud to be a responsible citizen. So proud that he fails to recognize the power that anonymous authorities such as public opinion or his “common sense” exercise over him.

Thoroughly willing to behave according to their expectations, he does not sense that in truth it is not an inner conviction but his own fear that prevents him from distinguishing himself from them.

This inability to recognize that the “self” for which he believes he is acting is ultimately the “social self,” which “essentially coincides with the role the person has to play according to what others expect of him and which is in reality only a subjective camouflage of his objective function in society” (13), is described by Erich Fromm as follows:

“We are excited by the increase of our freedom from powers outside ourselves and are blind to the inner constraints and fears that threaten to undermine the significance of the victories that freedom has won against its traditional enemies. Therefore, we tend to think that the problem of freedom is exclusively about acquiring even more of that freedom which we have already won in the course of modern history, and that we have nothing more to do than to defend freedom against all those powers which want to deny us this kind of freedom.

We forget that while any freedom already won must be defended with the utmost energy, the problem of freedom is not only a quantitative one but also a qualitative one; that we must not only preserve and extend traditional freedom, but also win for ourselves a new kind of freedom that will enable us to realize our individual selves and to have confidence in that self and in life” (14).

Despite his development of a more critical and responsible self, man, Fromm argues, has never reached the stage where he is able to recognize the gap between “freedom from something” and “freedom to something,” let alone overcome it. By never learning to emancipate himself from his primary attachments in a healthy way and, as a result, to calibrate his inner compass on the basis of his own values, he would remain susceptible throughout his life to foreign orientations, for example in the form of compulsive conformity or submission to a leader. For Fromm it was clear:

“The right of freedom of thought means something only if we are also capable of having our own thoughts. Freedom from an external authority is a lasting gain only if our inner psychological conditions are such that we are also able to assert our individuality” (15).

The dangers of meaningless self-indulgence.

“The serious danger to our democracy does not consist in the existence of totalitarian foreign states. It consists in the existence of conditions in our own personal attitudes and in our own institutions which help authority from without, discipline, uniformity, and dependence on the leader to triumph in these countries. Accordingly, the battlefield is here – within ourselves and within our institutions.”

– John Dewey, Freedom and Culture

For lack of a true sense of freedom, man flees from himself and submits to an external authority whose definition of “freedom” he then takes for his own. This is actually a very simple – if sad – game: A person who works only under the pressure of external necessities would too quickly reach the point of inner exhaustion. Because he still feels himself, he would rebel against the imposition of renunciation and resist his repressor. He would not be able to bear the inner contradiction in the long run and would find ways and means to put into practice what he believes would be more in line with his nature.

For the repressive system an inherent impossibility: If renunciation and obedience are indispensable structural elements for it, it is necessary – in order to maintain the necessity that is considered meaningful and its image of the lack of alternatives – to create an inner necessity in man. The latter must be induced to devote himself henceforth out of an inner dynamism to the “social requirements” and to “behave in accordance with the particular economic necessities. Such a person need no longer be forced to work as hard as possible: Having replaced his obedience to an external authority with “an inner authority in the form of conscience and duty,” he is henceforth driven to work by “an inner compulsion” that “keeps him more effectively under control than an external authority could ever do” (16).

It was Bruno Bettelheim who, like Erich Fromm, examined how the compulsion encompassing ever wider spheres of life and the modern “automation of the individual” not only increased his insecurity and helplessness, but at the same time contributed to his willingness to “submit to new authorities that offer him security and reduce his doubts” (17). Consequently, he saw the “feeling of not really knowing who one actually is, the sense of being limited in one’s autonomy” as being rooted in modern mass society in that

it makes it difficult for the individual to develop his own standards for his life and to live according to them, its multitude of possibilities arouse in him the feeling “that it is not so important which path he chooses, and that it is therefore not necessary to develop the ability to pursue this path consistently,” it suggests to him “the illusion of greater freedom,” and thus disappointment, failure or failure only cause greater harm, its array of possibilities represents not only the agony of choice but also its impossibility, it does not provide guiding principles that help individuals to recognize their own desires and needs and to fulfill them in their own way (18).

According to Bettelheim, a person socialized accordingly by mass society will never learn to recognize his problems independently, let alone solve them himself. He is “accustomed to being guided by society in almost everything he does.” The less he is able to recognize that his inner conflicts “arise from the opposition between his own desires and the demands of the environment, the more he expects society to supply him with their solution at the same time as it presents him with problems” (19). For Bettelheim, this is a vicious circle: those who have become accustomed to having external decisions made by others will soon extend this to their internal problems as well. And those who are no longer able to react spontaneously and autonomously to the whims of life are also prepared to “uncritically accept what others offer them as a solution” (20).

Confronted with his own existential fears, the “individual” has no choice but to hope “that the powerful will get it right.

Unable to orient his own conscience to his own self or reason, and prevented from participating in decision-making about matters of great importance to him, the sense of utter dependence not only undermines his self-respect, it also intensifies his powerlessness-the sense of being “at the mercy, for better or worse, of powers which man cannot understand or at least cannot influence in any way” (21). The mass triumphs over the individual. Again.

But for how much longer?

That is the question. Luther may have succeeded in silencing his doubts to some extent with his unqualified submission to God. However, he was apparently never able to eliminate the roots of his discord: Until the end of his life he fell again and again prey to new insecurities, which he then had to fight by renewed submission (22).

But what kind of faith is this that is able to keep one in the eternal struggle with oneself and the world? Can freedom also become a burden that weighs a person down so heavily that he tries to escape from it? Is there an inevitable vicious circle “that leads from freedom into a new dependence? Does freedom from all primary ties make man so lonely and isolated that he must inevitably flee into a new bondage? Are independence and freedom synonymous with isolation and fear?

Or is there a state of positive freedom in which the individual exists as an independent self and yet is not isolated, but is united with the world, with other people, and with nature?” (23). I wonder: when do we stop escaping “the burden of freedom” and move from negative to positive, in short, to our own freedom?

Posted in 2011 | Leave a comment

Inflation, Ukraine and China

What impresses me is China’s diplomatic engagement. And I say that also in terms of their role in restoring diplomatic relations between Iran and Saudi Arabia. Our diplomacy, American diplomacy, seems to me reactive, unimaginative, and ineffective.
Chinese diplomacy, on the other hand, seems to me to be more imaginative and potentially more effective. (Andrew Bacevich)

How the super-rich, fossil fuel corporations and war continue to fuel inflation
by David Goessmann
[This article posted on 3/10/2023 is translated from the German on the Internet, Wie Superreiche, fossile Konzerne und Krieg Inflation weiter anheizen.]

High wages and cheap money are drivers of price increases, he said. So wage restraint and interest rate hikes are called for. A new study in the U.S. dispels these myths and unearths some surprising facts.

In Germany, but also in other countries, white- and blue-collar workers are demanding more money. In Germany, employees at Deutsche Post and in local public transport are demanding significant pay rises of up to 15 percent in the face of sharp price increases.

In France and the UK, there are also strikes in response to the rising cost of living, against pension cuts and for better wages.

However, this is met with skepticism and rejection by the broader political public. The conservative business press and mainstream economists warn of a wage-price spiral. The pattern is that higher wage settlements make companies’ products and services more expensive, which in turn raises prices.

In the U.S., as in this country, economists and the major media such as the Washington Post and the Frankfurter Allgemeine Zeitung also speak of a “demand shock” driving inflation.

Aid packages such as the U.S. government’s American Resue Plan Act in the wake of the Corona pandemic of March 2021 would simply give normal citizen:s too much money, which they then spend with both hands – which in turn has driven inflation. The Handelsblatt states:

In addition [to supply shortages], there is high demand, driven primarily in the U.S. by government spending and everywhere else also by pent-up consumption.

For this reason, wage restraint and monetary taxation are being recommended from all sides as a remedy. Central banks everywhere have raised the key interest rate to counter inflation. The European Central Bank alone has raised its key interest rate to three percent since last year.

However, in a new study, economists Thomas Ferguson and Servaas Storm of the Institute for New Economic Thinking in the U.S. contradict the view that too high wages and cheap money are responsible for extreme inflation.

They point out that 90 percent of the Corona bailout money had already been spent by June 2021. Then, in the second half of 2021, the various tax and spending policies in the U.S. would have actually reduced economic demand. Inflation, however, did not take off until late 2021 and then increased to record levels during 2022.

Ferguson and Storm therefore do not see a demand boom among the average working population driving inflation. But in their opinion, there has certainly been a demand shock. However, it was triggered by the upper classes.

Between the first quarter of 2020 and the first quarter of 2022, total private wealth in the U.S. increased by $26.1 trillion, largely due to the exploding stock market. Forty percent of that went to the top one percent, and another 33.4 percent to the next nine percent – meaning about three-quarters of the increase went to the top tenth of Americans.

By the end of 2021, Ferguson and Storm write, “wealthy U.S. Americans entered the stage in droves and started a spending rally.” Indeed, the economy could not generate enough supply for what the rich wanted to buy. The best solution to this kind of lopsided demand would have been progressive consumption taxes, rather than a broad-based slowdown of the economy via the Federal Reserve, the U.S. central bank.

Elites, not ordinary citizen:s, are to blame

In Germany, during the Corona pandemic and after, the wealth and incomes of the rich also continued to rise. According to a study, the “millionaires’ club” in Germany continued to grow last year.

This was due to booming stock markets and rising real estate prices. In this country, 1.63 million people are now among those with investable assets of at least one million dollars. About 100,000 people rose into that range in 2021.

Of course, Ferguson and Storm also point to the supply side, or “supply shocks.” These include, first, fossil fuel shortages in the wake of the Ukraine war and sanctions against Russia.

Second, higher corporate profit margins drove prices. Third, the labor force shrank during the pandemic: people died, fell ill, retired in greater numbers, or had to care for their children.

Finally, higher prices were charged for imports, triggered in part by increased climate disasters and extreme weather. The study draws on calculations by Swiss Re, one of the world’s largest reinsurers, which provides insurance for insurance companies. Such reinsurers are the last financial backstop in the event of disasters and are therefore very concerned about the increasing costs of global warming.

Swiss Re estimates that total economic losses from natural catastrophes in 2021 and 2022 will be $292 billion and $260 billion, respectively – far more than the $207 billion average over the past decade.

Insured losses have “increased by an average of five to seven percent per year over the past decade,” the report said. In a report, Swiss Re sees global warming as one of the “key factors.” It poses “the greatest long-term risk to the global economy,” it said.

Ferguson and Storm warn that the world faces an “indefinite future with a variety of supply shocks.” As a result, they say, attention must be paid not only to the financial and monetary aspects in the short term, but to the underlying causes.

These include the threat of pandemics, lack of international cooperation, and fossil fuel combustion for energy production. Therefore, the scientists recommend taking action against war escalation like in Ukraine, preparing for further pandemics, and taking decisive action against global warming.

In the end, it means turning to the interests and needs of ordinary people and neglecting those of the elites. Something, however, that is hardly the focus of debates in the media commentary.


Ukraine war: China promotes negotiations
by Wolfgang Pomrehn
[This article posted on 3/27/2023 is translated from the German on the Internet, Ukraine-Krieg: China wirbt für Verhandlungen.]

People’s Republic wants EU to contribute to ceasefire and peace negotiations.

The Chinese government apparently wants to win the EU for a peace initiative in Ukraine war. This is according to a report in the Hong Kong-based South China Morning Post on a telephone conversation between China’s top diplomat Wang Yi and French presidential adviser Emmanuel Bonne.

According to the report, Wang stressed China’s position that the conflict must be resolved through talks and negotiations, and called on European countries to play their role in the process. The phone call came last Thursday at France’s request, after Chinese President Xi Jinping met with his Russian counterpart in Moscow earlier in the day.

Hope for strategic consensus between EU and China

China hopes that ceasefire, peace talks and a political solution can be the strategic consensus between the EU and the People’s Republic, the Hong Kong paper quoted Wang as saying.

In the next few days, Spain’s head of government Pedro Sánchez will travel to the Far East to meet with Xi Jinping. After that, France’s President Emmanuel Macron plans to join EU Commission President Ursula von der Leyen in Beijing in early April to seek talks.

In recent months, China has repeatedly underscored its neutrality in the Ukraine war and, like many other countries, refused to participate in the sanctions against Russia. While the People’s Republic is one of the most important trading partners and investors for Ukraine, Beijing has not been dissuaded from maintaining its good relations with Moscow.

In late February, the Chinese government had made its position clear in a 12-point paper in which, without directly criticizing Russia, it condemned the threat of nuclear weapons, emphasized the right to sovereignty, independence and territorial integrity of all countries, and promoted negotiations.

Meanwhile, against the backdrop of growing efforts to restrict economic relations with China, UN Secretary-General António Guterres has warned EU states against isolating the People’s Republic. He said China has an interest in good relations with the EU and its members, which should cooperate with Beijing not least on climate protection. (Wolfgang Pomrehn)


China’s rise as a superpower and the crumbling U.S. empire
by Andrew Bacevich
[This interview posted on 3/25/2023 is translated from the German on the Internet, Chinas Aufstieg zur Supermacht und das bröckelnde US-Imperium.]

U.S. President Joe Biden attends a virtual meeting with Chinese President Xi Jinping at the White House on Nov. 15, 2021.

From the Ukraine war to Saudi Arabia, China is overtaking the U.S. as a global mediator. The decline of US power goes back to the Iraq war crime. Why the U.S. hegemon can’t get back on its feet.

Chinese President Xi Jinping and Russian President Vladimir Putin proclaimed a “new era” in Sino-Russian relations after their meeting in Moscow earlier this week.

Andrew Bacevich is president of the Quincy Institute for Responsible Statecraft.

The two leaders reportedly discussed China’s twelve-point proposal to end the war in Ukraine, with Putin stating that China’s plan could be the basis for a peace agreement.

Ukrainian President Volodymyr Selenskyj also recently expressed willingness to consider China’s peace plan, although he has not yet met with Xi himself.

Amy Goodman and Juan González of the U.S. news program Democracy Now spoke with Andrew Bacevich, co-founder of the Quincy Institute for Responsible Statecraft, about the rise of China and the 20th anniversary of the U.S. invasion of Iraq.

Bacevich is professor emeritus of international relations and history at Boston University and author of “On Shedding an Obsolete Past: Bidding Farewell to the American Century.”

I want to talk to you about developments that go back to the events of twenty years ago, the U.S. invasion of Iraq, and continued all the way to the war in Ukraine. Let’s start in the present, with the news from the Xi-Putin summit, the Chinese peace plan that was offered, and Selenskyj’s reaction to it. Do you see a path for diplomacy at the moment? Talk first about the significance of the summit.

Andrew Bacevich: First of all, we shouldn’t take anything that the individual actors involved say at face value, whether it’s Russia, China, Ukraine, or the United States.

I think what impresses me is China’s diplomatic engagement. And I say that also in terms of their role in restoring diplomatic relations between Iran and Saudi Arabia. Our diplomacy, American diplomacy, seems to me reactive, unimaginative, and ineffective.

Chinese diplomacy, on the other hand, seems to me to be more imaginative and potentially more effective. That means that the world is changing in important and dramatic ways in terms of the distribution of power and influence around the world.

In a way, this confirms something that we’ve always been able to see, or have known for a long time, that China is actually emerging as a global superpower on a par with the United States of America.

Can you talk about the peace plan that China has offered? Selenskyj does reject it because it would mean that Russia would remain in the occupied territories in Ukraine, both in Crimea and in eastern Ukraine, and could allow them to invade at a later date. But it is quite striking when Selenskyj says, “I want to talk to the Chinese President,” and then puts forward his own peace plan. What do you make of that?

Andrew Bacevich: I haven’t analyzed it in detail, but I think you hit the key point that Selenskyj’s willingness to listen to China indicates an openness to Beijing as a mediator, which would make an agreement possible.

It is highly unlikely that there will be one side that wins and one that loses in this conflict, even though that seems to be the expectation of the Biden administration, which is that Ukraine wins and Russia loses. That is not going to happen. So there has to be a compromise.

My impression is that Selenskyj is signaling a willingness to compromise, while the United States is insisting on a very tough position.

The U.S. says it can’t trust China. Why do you think China and other countries could play an important role in brokering a peace agreement?

Andrew Bacevich: The larger context is the one that other commentators are putting forward, which is that the war between Ukraine and Russia is a proxy conflict. It is a proxy conflict that is part of a larger contest between the West, led by the United States (although the U.S. government is not entirely sure), and the People’s Republic of China. It shows an assertiveness, an imagination on the part of the People’s Republic that has not been responded to in a comparable way by the United States.

Andrew Bacevich, we have now witnessed the twentieth anniversary of the U.S. invasion of Iraq as the Ukraine war continues. The Iraq invasion is barely remembered by the media. And even when the mainstream media does go into it, the same people who drummed up publicity for the war, for the invasion, twenty years ago are allowed to talk about it – and I’m not just talking about the Fox News network. They copied the way political leaders – from Joe Biden to Hillary Clinton, who were in the Senate at the time – voted for the U.S. invasion that then-U.S. President George W. Bush was pushing. What has been the impact of this disastrous war, which – unlike Afghanistan – still has 2,500 U.S. troops stationed there?

Andrew Bacevich: One question is: Why did the United States invade Iraq in the first place? And there are several answers to that question. I think in many ways the most important answer is that the Iraq war was seen, both by the Bush administration and by proponents of the war – for example, in the media – as a way to demonstrate that the attacks of September 11, 2001, were in fact meaningless. The U.S., it was to be shown, is still the only global superpower

The message was that if we send U.S. troops into Iraq, if we beat up and overthrow Saddam Hussein, then we can use that to forget the obvious consequences of the Sept. 11 attacks. Because the attacks had shown that the U.S. was much more vulnerable, much weaker, than was claimed after the end of the Cold War with reference to the “indispensable nation.”

So it was an attempt to show that 9/11 really didn’t matter. The assumption was that the U.S. would win a major, decisive military victory without major cost in Iraq. And that, of course, did not happen.

Here we are twenty years later. You’re right: the establishment is really not prepared to deal honestly with the consequences of the war. And in some ways, ironically, the war in Ukraine provides the establishment with a convenient opportunity to change the subject.

We still have U.S. troops in the Middle East. We maintain the basic structure of national security policy, spend more money on the military than the next ten largest military powers in the world, maintain more than 800 bases around the world, operate regional command centers, like Central Command, NATO, and so on. We have learned nothing.

That is sad, to say the least, and I think we are going to repeat the mistakes. We are in this showdown, a proxy showdown, with Russia and Ukraine. We seem to assume that Putin’s war effort is going to be all conventional weapons, when of course Russia has a massive nuclear arsenal.

People also have illusory assumptions about how the war will unfold. In the end, we are then completely surprised when the war does not follow the desired script.

After Iraq: China’s stock prices flourish, those in the U.S. plummet

You recently wrote an article for The American Conservative, titled “And the winner is … Twenty years after the Iraq invasion: America’s humiliation was China’s gain.” (“And the winner is … Twenty years after the Iraq invasion: America’s humiliation is China’s gain”) What do you mean by that?

Andrew Bacevich: China’s stock price has risen and flourished, our stock price has crashed. We’ve given away our power. We’ve given away our influence. And I wouldn’t say that the Iraq war is the only explanation for America’s relative decline. But it was an essential contributing factor.

If one were interested in stopping that decline, it seems to me the right way to do it would be to start with an honest reappraisal of the Iraq war, its origins, its conduct, and its consequences. But there’s not a lot of evidence that that honest reappraisal is going to happen.

And what do you think of the right when it comes to questioning the Iraq war? It leads many to believe that sides have been switched. There are those in the peace movement who deeply question the war in Ukraine and say that negotiations are the only solution here. They fear that the conflict could lead to nuclear war. Right-wingers now say – even Florida Governor DeSantis, who could challenge Trump – it’s just a territorial dispute. A number of Republicans don’t want to continue funding the war in Ukraine.

Andrew Bacevich: Do politicians, when they speak in public, express a principled view? Or are they more likely to actually say things that reflect domestic political strategies? I have to say – and I don’t want to seem cynical – I tend to be in the latter camp.

Now that Biden is in charge of the Ukraine war, many Republicans are expressing restraint and caution about the use of force. I am not convinced that the positions taken today by Democrats and Republicans reflect principled positions, but rather what is politically convenient at the moment.

Back to Iraq. A well-known Iraqi-American who left Minneapolis when the U.S. invaded Iraq said, “I don’t care if I have to sweep the streets of my city of Najaf, I will be there with my people.” He has now returned. President Putin has recently been indicted by the International Criminal Court for war crimes. But there is also the question of what should have happened in the United States twenty years ago, or even ten years ago. President Obama is known to have said to always look forward. But when it comes to responsibility for the destruction of the Iraqi nation, what about George W. Bush? Just one day after Sept. 11 – when it had long been known that 15 of the 19 hijackers were from Saudi Arabia – Bush pressed Richard Clarke, who had been in charge of counterterrorism in his administration, on the Iraq question: “How can we make that connection?” Richard Clarke answered him, “There is no connection.” Shouldn’t Bush also be charged with war crimes? And should others be in the dock with him?

Andrew Bacevich: First of all, there’s no question in my mind that the Iraq war, which was instigated by the United States, is a crime, a really horrible crime. I am probably more lenient with President Bush than many other people. You know, I think he is a person of limited talent, to put it bluntly.

He became President because his last name was ”Bush.” He was an unimaginative figure and totally unprepared for what happened on September 11. His reaction, which I am not defending, I think is primarily due to the staff that he surrounded himself with.

In other words: When I look for bad guys, I don’t start with Bush. I start with Cheney, Rumsfeld, Wolfowitz, and Condoleezza Rice, people who imagined they were thinking strategically. They pretended to understand world politics and believed that American military power was so great that Saddam Hussein’s forces could be swept aside and great benefits derived.

They miscalculated. They were completely wrong. So when I look for somebody I would blame, I tend to blame those people more than Bush-without letting Bush get away with it, of course. He was the commander in chief. But again, I think in a sense his hands were not on the controls.

If Bush was so untalented, why couldn’t the biggest anti-war movement the world has ever seen stop him? This movement went far beyond the United States. On February 15, 2003, millions of people around the world protested to stop the U.S. invasion of Iraq.

Andrew Bacevich: I don’t think Bush or anyone in the Bush administration cared about world opinion. They were interested in getting certain allies, like Britain, to support the war. And they succeeded in doing that. Tony Blair should be ashamed of himself. I don’t think world opinion played much of a role in Washington, D.C.’s inner political circles.

I happened to be in New York City, in Manhattan, on February 15. It was moving, powerful, and amazing, but it had no political impact from my perspective.

And why? I think that says something about our democracy, that elites tend to gravitate toward the will of the people. But when they sit around the table and make decisions, decisions that have to do with war and peace, I don’t think they think very seriously about, “What do the people of the state of Indiana actually think about this?”

Their calculus is driven by power considerations. The Bush administration had an extremely misguided understanding of war, of the U.S. population, and of the potential of U.S. military power in 2003 when the war began. Our political leadership, elected and appointed, was just plain stupid. I think people have a better understanding of the dangers we took when we went to war against Iraq.

The interview appears in cooperation with the U.S. media Democracy Now.

Andrew Bacevich is president of the Quincy Institute for Responsible Statecraft and writes regularly for TomDispatch. His new book, co-edited with Danny Sjursen, is called Paths of Dissent: Soldiers Speak Out Against America’s Misguided Wars. His new book is called “On Shedding an Obsolete Past: Bidding Farewell to the American Century.”

Posted in 2011 | Leave a comment

Emancipation in Crisis

The contradictory capitalist mode of production is thus not only the driving force[11] behind the mounting debt and economic crises,[12] it is also the cause of the unfolding climate catastrophe. It goes without saying that “man-made” climate change is in large part the result of the social system – the way society is organized and reproduced – in which people are forced to live.

Emancipation in Crisis
by Tomasz Konicz
[This article posted on 2/23/2023 is available on the Internet,]

In the unfolding systemic crisis, a renewed plunge into barbarism seems preordained. But this need not be the case.

Communism is for us not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things.
Karl Marx and Friedrich Engels: The German Ideology[1]

There is a basic premise of emancipatory practice in the unfolding world crisis of capital that simply cannot be abandoned. It is necessary to tell people what is going on. What most people suspect or only vaguely feel must be clearly stated and become the basis of social movements and struggles: Capitalism is at its end – and in its agony it threatens to drag humanity with it into the abyss by depriving it of the social and ecological foundations of life.[2] The capitalist world system has reached its internal[3] and external[4] limits of development. The economic and climate crises[5] are only two moments of the same crisis process, in which capital’s drive for unlimited growth – the endeavor to make more money out of money by exploiting labor in commodity production – produces an ecologically devastated world and an economically superfluous humanity.


Consequently, it is necessary to consciously seek ways out of crisis and catastrophe capitalism in social struggle and discourse, as the world threatens to sink into barbarism. The overcoming of the capital relation is thus the guiding principle of all leftist practical efforts. Social struggles, protests and movements must therefore be understood and led as partial moments of a transformative struggle for a post-capitalist society. This, the overcoming of capital’s drive to valorize itself, which is running amok worldwide, is the absolute minimum, the sine qua non for any development of civilization in the 21st century. To tell it like it is, therefore, means to clearly name the overcoming of a collapsing capitalism as a necessity for the survival of civilization. All progressive practice must be oriented to this reality of system transformation. And it is precisely this insistence on the necessity of emancipatory system transformation[6] that distinguishes emancipatory practice from leftist opportunism, the attempt to make a quick career as crisis manager in the crisis by means of demagogy.[7]

The transformation of capital into history is the final capitalist imperative. Any group or party calling itself leftist that preaches incremental change without addressing the systemic crisis and emphasizing the need for systemic transformation is in fact opportunist, if not reactionary.[8] In the escalating systemic crisis, it’s no longer possible for incremental reforms to “succeed” because the distortions caused by the crisis, which are increasing in intensity, simply stand in the way of this endeavor. Progressive practice can only unfold on the basis of efforts to ensure that the inevitable systemic transformation follows a progressive course. This is not left-wing “radicalism,” but a realism born of insight into the nature of the crisis. The crisis runs through society as a fetishistic, uncontrollable process that unfolds through competition and market mediation, regardless of the views and calculations of the occupants of the capitalist treadmill.[9]

Even if the wage-earners do not want to admit it, even if all the relevant strata of the population cling to capitalism, the system will collapse because of its internal contradictions. What is open, however, is what comes after – and that is precisely why the struggle, the transformation struggle, must be waged. The agony of capital can be seen in the global mountains of debt under which many economies are threatening to collapse, as well as in the ever-increasing CO2 emissions produced by a capitalist world economy caught up in the irrational compulsion to grow.[10] However, an emancipatory movement can only prevent a plunge into barbarism during the now imminent, open-ended transformation process if it reflects on it socially, understands it and consciously shapes it within the framework of the equally inevitable transformation struggle. In order to be able to achieve this, the left, building on radical crisis theory, must tell people what’s what. Otherwise, the fetishistic dynamics of capital will make the world uninhabitable. These introductory theses will be elaborated and justified in the following.

Unconquered Nature

The contradictory capitalist mode of production is thus not only the driving force[11] behind the mounting debt and economic crises,[12] it is also the cause of the unfolding climate catastrophe. And it goes without saying that “man-made” climate change is in large part the result of the social system – the way society is organized and reproduced – in which people are forced to live. This fact is openly obvious. The climate crisis is a capitalist climate crisis, it is “capital-made climate change.” That it nevertheless seems blasphemous to speak this simple, uncomfortable truth is a result of the enormous ideological pressure that weighs on social discourse, and is also an expression of the increasing density and crisis-proneness of capitalist socialization, which seeks to stifle all oppositional thought and action through opportunism or repression.[13][14]

Since the Enlightenment, the core of capitalist ideology has consisted in ideologizing capitalism as a “natural” mode of production, without contradictions in itself and appropriate to human nature, as a social formation that is simply an expression of human nature and – at the latest since the rise of Social Darwinism – unfolds economically according to the same laws as “natural,” ecological systems. Consequently, this synthetic “capitalist nature” of the subjectless domination of capital,[15] with its mediating levels of market, politics, law, culture industry, etc. is always only the basis and never the object of the published discourse of late capitalist societies. And this is precisely why scapegoating, which quickly turns into fascism, gains such popularity in times of crisis,[16] because the “natural” market economy is literally thought of as natural, and free of almost any contradiction. Thus, capitalism appears to the “enlightened” person in bourgeois society as “natural” as feudalism appeared to the medieval person as God-given.

And yet the common ideology of the “natural essence of capitalism” contains a distorted grain of truth. There is a parallel between the processes of ecological and economic crisis that promotes their perception as “natural”: The element of “untamed nature” in society that promotes the illusion of a capitalist state of nature is the uncontrollable valorization process of capital, i.e., the social fetishism mentioned above. Capital’s destructive valorization dynamic, produced unconsciously by market subjects – “behind their backs,” since it is market-mediated – appears as a natural phenomenon running through society. This fetishism comes to the fore especially in episodes of crisis, when the “economy” suddenly runs amok and “waves of crisis” or “market quakes” wreak socio-economic havoc on entire regions – like extreme weather events. The feeling of being at the mercy of quasi-natural, anonymous and overpowering forces then becomes evident.

This irrational momentum of capital, unconsciously generated by market subjects in their seemingly rational pursuit of the greatest possible profit, thus represents the moment of unmastered pseudo-nature, which, due to its increasing internal contradictions, is destroying civilization and its ecological foundations. As long as capital blindly runs through society according to the formula M-C-M’ with ever increasing frictions, neither the climate crisis nor the social crisis can be overcome.
It is therefore necessary to overcome this fetishism, this capitalist pseudo-nature, in order to preserve the natural foundations of human society. In the end, the process of human civilization must be brought to a conclusion, so to speak. The unconscious reproduction of society by means of blindly running processes of valorization must be replaced, in a tremendous process of transformation, by the conscious discussion and organization of social reproduction, which no longer subordinates itself to the boundless, irrational accumulation of ever greater quanta of spent abstract labor in the form of capital, but has as its rational goal the direct satisfaction of needs beyond the commodity form.

What is Capital? What Must Be Overcome?

From these remarks on the social fetishism that seems “natural,” it also becomes clear what we mean by capital, which must be transformed into history. Capital is not just a thing, it is not just money, or the factory and the machinery. Nor is it simply a person, like the capitalist, the manager, or the speculator. This truncated view leads to the reification or personification of capital, which in turn is the basis of all ideology in capitalism.

Capital is a social relation that runs through society only as a transitory stage of its boundless surplus-making in commodity production. It is only within this movement of valorization – the burning of resources by means of labor for the purpose of maximizing profit – that people or things must become capital. The worker and the manager no longer function as capital after work. The same is true of the tools in their hobby cellars, which are simply commodities, whereas in the factory they function as (constant) capital. The capital relation is thus to be understood as this dynamic of valorization, calibrated for permanent growth and encompassing the whole of society. Capital, in all its social and ecological contradictions, is thus a real abstraction that in every cycle of valorization undergoes a change of form from money, to commodity, and finally to more money: concrete things and people are set in motion by it in the most efficient way possible, in order to accumulate ever greater quanta of abstract labor (the source and substance of capital) in an irrational end in itself.

This real-abstract growth compulsion of capital is thus in a sense totalitarian; the capital relation becomes a social totality. In its flight from its internal and external contradictions, it occupies all social spheres and niches – with the exception of the dissociated (femininely connoted) sphere of domestic reproduction – and leads them to valorization.[17] The state apparatus, the legal and political institutions, the political, economic, juridical and ideological levels of mediation of domination – they have all been produced and shaped by the capital relation in a blindly running historical process. Precisely in its agony, capital has thus subjugated the whole of society, as far as this was possible, right down to its subcultural impulses. The subjectless domination of capital is totalized at the historical moment when it suffocates under its own contradictions. And it is precisely all these institutions and levels of mediation produced or shaped by capital that are now collapsing along with the dynamics of capital.

What must be overcome is capital’s blindly running valorization process, which devastates human society and ecosystems. This destructive fetishism must be replaced by a conscious understanding by the members of society of the reproduction process of society, without the division of activities according to gender or the like. This is necessary for survival, precisely because this process of valorization, on whose drip all capitalist societies hang in the form of taxes and wages, is collapsing under the weight of its contradictions. With it, however, the institutions and social structures that capital has historically produced also perish. The post-capitalist reproduction of society cannot therefore take place in the form of “nationalization,” as imagined, for example, by orthodox leftists, since the state in its capacity as the “ideal total capitalist” is a historically developed, necessary institution of capitalism that must be financed by capital through taxes. This is why many over-indebted peripheral states collapsed into “failed states” as early as the 1990s, once the crisis process had exceeded a certain degree of maturity. The state is not the solution, it is part of the problem.

In a historical process that began with the debt crises of the “Third World” in the 1980s, the crisis is gradually moving from the periphery of the world system to the centers. Therefore, the future of the crisis can be predicted from the course of the crisis in the periphery. Without a conscious, emancipatory overcoming of the collapsing capital relation, it will fall into barbaric forms of anomie or crisis dictatorship, as in Somalia, Congo or Eritrea[18] – unless the process of civilization is brought to an end by a catastrophic nuclear war. Mad Max or 1984 – this is the system-immanent alternative that capitalism leaves open in its agony.

Motivation: There Is No Alternative to Transformation

The character of the crisis described here as a fetishistic process of increasing internal development of the contradictions of the capital relation thus leads to the necessity of the struggle for its emancipatory overcoming. As mentioned at the beginning, it is simply a question of the will to survive. Consequently, it is necessary to address people’s survival instinct, which is unconsciously activated in the crisis and contributes to the intensification of crisis competition. And this survival instinct, in its unreflective, quasi-reflexive form, has long been at work on a mass scale. Unconsciously, most of the inhabitants of late capitalism have long since reacted to the increasing crisis-related dislocations with a quasi-instinctive intensification of competition. The survival instinct unconsciously comes to fruition in the intensification of competition in that one’s own survival is to be ensured through the downfall of competitors at all levels (from mobbing to cutthroat competition to location competition to crisis imperialism). And it is precisely this crisis competition fueled by the naked survival instinct that causally contributes to the barbarization of capitalism and the rise of the New Right – which cloaks this crisis competition in racism, nationalism, anti-Semitism, religious fanaticism, and so on.

This unconsciously practiced survival instinct, caught up in the escalating everyday competition of late capitalism, would have to be “sublimated” within the framework of emancipatory practice. This is to be understood as the conscious, analytical reflection of the unconscious causes of social action, in this case the interaction of competitive behavior and the systemic crisis process, in which the fatal “barbarizing” effect of the individual competitive struggle would be illuminated. Just as the individual, “blind” survival instinct only accelerates the crisis dynamics and opens the door to barbarism, a reflective collective survival instinct, convinced that overcoming capital in society as a whole is necessary for survival, could be a powerful motivating factor for emancipatory forces in the struggle to transform late capitalism. And this is not a question that concerns only leftist “radicals.” Such a consciously established connection between – collective – survival and the necessity of overcoming the system can also very well become the concern of the philistine who wants to leave his children a future worth living.

And that is precisely why it is important to tell people what is going on. It is important to transform the broad masses’ “sense of crisis” into a reflective crisis consciousness – precisely because there is no “revolutionary subject,” the formation of a radical crisis consciousness with mass appeal is indispensable for an emancipatory course of the crisis. And this would not even be the central difficulty in spreading an emancipatory consciousness in the manifest crisis. It would be instilling belief in a viable systemic alternative to collapsing capitalism. The crisis-induced ideological shift, in which blind faith in capital as the natural precondition of human civilization suddenly mutates into fatalistic cultural pessimism, actually represents the standard ideological reaction in manifest crisis situations.

This late capitalist production of panic must therefore be contrasted with the insight, gained through radical theoretical reflection, into the necessity of system transformation, motivated by a sublimated survival instinct that has become aware of its own social and ecological preconditions. The right-wing “prepper” will not save himself; this can only be achieved collectively at the level of society as a whole. Averting the impending ecological and social catastrophe by means of system transformation thus amounts to “influencing” a crisis process that is driven by its fetishistic dynamics and ultimately represents only the crisis-like dialectical reversal of the contradictions inherent in capital. To be more precise: capital is in the process of dissolution; what matters is to steer this process of transformation, which is taking place blindly, in a progressive, emancipatory direction within the framework of a transformation struggle, in order to finally overcome fetishism and move on to the conscious shaping of social reproduction. This, this overcoming of the fetishistic prehistory of humanity, is, as I said, simply a question of survival. Once again: there is no alternative to the struggle for an emancipatory course of the inevitable systemic transformation.

Emancipation and Extremism in The Systemic Crisis

This also opens up the concept of emancipation – it is an emancipation from social fetishism, i.e. from the “alien determination” of the subjects by social dynamics that these subjects themselves unconsciously produce and that are mediated by the market. This can only be achieved by a movement that is aware of its own situation, that is aware of the crisis described above. Only in a conscious struggle for a post-capitalist future, resulting from an understanding of necessity, could moments of emancipation possibly emerge. Consequently, there is a maxim of political practice that emancipatory movements, groups or parties in the 21st century would have to follow if they still want to function as progressive social forces in the current epoch of upheaval and crisis. Capitalism must be transformed into history as quickly as possible, and the capital relation must be abolished. All leftist actions, all tactics, all reform proposals, all strategies should be oriented to this categorical imperative.

And the struggle for a livable post-capitalist future is not “radicalism.” It is precisely the opposite: clinging to the disintegrating forms of capitalist socialization, to the market and the state, leads to barbarism, to extremism of the center. The successes of the New Right in the crisis result precisely from its ability to push the ideology that is effective in the neoliberal center of late capitalist society further toward brutalization. Enriched with fantasies of envy against scapegoats, neoliberal competitive thinking has been taken to a racist-nationalist extreme by the right. The competition of market subjects and economic locations is ideologically exaggerated into a clash of nations, cultures, “races” or religions.

What is decisive here is that in this “racially,” religiously or nationally legitimized competition there is no break with neoliberalism and its implicitly nationalist thinking about location. In these ideological lines of continuity lies the open secret of the success of the conformist rebellion of the New Right. It does not break out of the capitalist thought-prison and its so-called constraints. Instead, the authoritarian characters remain in the well-worn ideological track that leads from the neoliberal center to the barbaric extreme. That’s why it’s mainly the right that benefits from the current crisis. It’s very easy to become a Nazi.

What is crucial, therefore, is precisely the aforementioned mental escape from the capitalist thought-prison, which must go hand in hand with emancipatory practice in order to prevent the drift into an extremism of the center. That’s why it’s important to tell people what’s what. In the face of the deadly crisis of capital, the struggle for a systemic alternative worth living for is the only reasonable, moderate thing to do. Progress can only be realized beyond capital. Once again: this is not necessary because of the will of the subjects or the moods and sensitivities of the population, but because capital as a global fetishistic totality is collapsing.

False Immediacy

And that is precisely why it is important to prevent this objectively ongoing transformation process from drifting into ideological delusion and fascist barbarism, as far as possible, by spreading an adequate crisis consciousness. Perhaps the consciousness of a viable alternative to the collapse of capitalism and the climate could only develop broadly in a struggling movement. There is no shortage of confrontations, uprisings and struggles in the accelerating systemic crisis. In Europe, apart from climate protests, it is often anti-fascist or labor and socio-political defensive struggles that serve as focal points of oppositional mass mobilization – but most of these don’t develop a transformative perspective.

These movements often get stuck in the false immediacy of their direct demands; for example, they want a better redistribution of abstract capitalist wealth, rather than its abolition. Increasing impoverishment leads to demands for a larger welfare state, while inflation is met with demands for its containment through subsidies and price caps. These immediately “plausible” demands are forcefully discredited by the reality of the crisis. Similarly, the discussion of measures to combat the climate crisis – such as carbon taxes, boycotts of airplanes, renunciation of meat or electric cars – is discouragingly inadequate in light of the dramatic acceleration of climate change and the steps that are actually necessary.

This contradiction between system-immanent social struggles and the social consequences of the systemic crisis was already pointed out by the crisis theorist Robert Kurz at the beginning of the 21st century:

“The critique of value is not simply opposed to social struggles that are immanent to capitalism. They are necessary starting points. Nevertheless, the question is to know what direction these struggles are taking. In this respect, their basis plays an important role. The trade unions are accustomed to presenting their demands not as derived from the needs of their members, but as so many contributions to improving the functioning of the system. Thus, they will say that higher wages are needed to strengthen the economy, and that they are possible because capital has high profits. Now, however, that capital valorization has obviously stagnated, this attitude is voluntarily transformed into a willingness to engage in the co-management of the crisis, to serve the “higher interest” of the entrepreneurial economy, of the laws of the market, of the nation, etc. This false consciousness exists not only among the trade union officials, but also among the so-called rank and file. If the wage workers identify with their own function in capitalism and demand what they need only in the name of this function, they transform themselves into “character masks” (Marx) of a particular component of capital, namely, labor power. Thus, they recognize that they only have the right to live if they can produce surplus-value. This gives rise to an embittered competition among the various categories of wage workers and a social-Darwinist ideology of exclusion. This is particularly evident in the defensive struggle for the preservation of jobs, which has no other perspective than the mere preservation of jobs. In this case there is often mutual competition for survival even between the employees of different branches of the same company. It is therefore essentially a good idea, and also much more realistic, besides, for the French workers to threaten to blow up the factories in order to force their employers to give them a reasonable severance package. These new forms of struggle are neither defensive nor positive, but can be combined with other demands, such as, for example, higher unemployment insurance payments. To the extent that such social demands give rise to a social movement, the latter will also be confronted by the experience of its practical limits, if it will confront the questions of a new “categorical critique” of the fetishistic end-in-itself of capital and its social forms. The crystallization of this advanced perspective is the task of our theoretical elaboration, which does not exist in some abstract Beyond, but is understood as a moment of social debate.”[19]

Given the advanced dynamics of the crisis, it seems counterproductive to launch a fundamental critique aimed at building a “new” transformative and emancipatory movement. Emancipatory movements would have to work with what still exists, because time is of the essence, and windows of opportunity are closing. Retreating into the ivory tower of “pure doctrine” in order to work towards a gradual “diffusion” of adequate crisis consciousness within the left is not a viable strategy. Instead, the only option is to use the crisis to try to bring an adequate crisis consciousness directly into the current struggles. As I said, building on crisis theory, people need to tell frightened people what is going on, so that the protest movements can develop in an emancipatory direction.

The chances of this happening are actually not bad, since even ideologically blinded left-wing associations –from the green, left-liberal or traditional Marxist spectrum, for example – can hardly overlook the consequences of the crisis.[20] The crisis is both the enemy and the friend of the progressive movement: it narrows the spaces of social discourse more and more, it causes panic to rise and right-wing extremist delusions to swell. But at the same time it compels all social forces that still have their wits about them to face up to the undeniable necessity of fundamentally overcoming the collapsing mode of socialization based on capital.

The attempt to bring into the current social confrontations and conflicts a crisis consciousness that corresponds to the objective crisis process ultimately amounts to a struggle against the false immediacy that characterizes these confrontations. False immediacy is understood as the tendency of social movements to unconsciously persist in forms of thinking that correspond to the social conditions and contradictions against which they are directed.

The people caught up in the growing crisis-related confrontations are not seized by a “revolutionary automatism” that would give them an anti-capitalist crisis consciousness. On the contrary. The fixation on concrete, seemingly achievable goals within the existing system reinforces its logic even in oppositional struggles. The struggle for the closure of lignite mines, against inflation and against social erosion, for a higher wage or against wage cuts, the windmill struggle of the helpless, social-democratized left against the blithely advancing dismantling of democracy and social welfare, all these solidify the corresponding capitalist social structures and forms of socialization in which and for whose will the struggle takes place. Work, bourgeois democracy, the capitalistically neutered notion of “civil rights,”[21] and the state as the “welfare state” thus become quasi-natural preconditions of human society, even within the movement caught up in social struggles.

The immediate goals pursued within the system are thus “wrong,” they lead to the formation of the aforementioned false immediacy, because firstly, they do not break with the crisis-ridden logic of the system, but further cement it, and secondly since their realization is completely illusory in a collapsing capitalist society. After the inevitable failure of the major social struggles in a wave of crisis – for example in Southern Europe after the outbreak of the euro crisis – resignation and apathy are widespread, since these movements lack the more far-reaching transformative perspective that can only emerge from a crisis consciousness adequate to the crisis process. The forces involved in the crisis-related increase in social protests for the most part want nothing more than what they postulate: Fighting against lignite mining, for jobs, for higher wages, against social cuts, against the destruction of jobs, against the constant erosion of “civil rights,” and so on.

It seems absurd: in the crisis, the left is fighting to maintain the capitalist forms of socialization, which are eroding as a result of the crisis. And at the same time, there is no realistic alternative to these very struggles, since they are mostly more or less open forms of the naked struggle for existence. Under capitalism, the reproduction of one’s own labor power is only possible by means of waged labor. The establishment of starvation wages, which are below the subsistence level, is also progressing in the centers. The loss of a job is increasingly accompanied by a fall into life-threatening poverty. The struggle against the dismantling of democracy and the omnipresent fascization of Europe is necessary in order to keep open as much room for maneuver as possible for emancipatory politics. As long as the capital relation continues to exist as the described social totality, oppositional forces are also chained to its forms of socialization.

This does not mean, however, that these forces have make the demands of the socio-ecological struggle only in these forms, let alone perceive it only in these forms. Thus, the consciousness with which the current protests and struggles are led is indeed decisive, even if their concrete course does not initially differ that much from the system-immanent, reformist struggles. The confrontation with crisis ideology, a truncated critique of capitalism and false immediacy ultimately aims at raising the transformation process into the “political consciousness” of the social movements, in order to understand the unconsciously led transformation struggle as such in the first place and to consciously shape it accordingly.

The focus, the goal of such a consciously led, apparently system-immanent confrontation (climate struggles, wage struggles, Antifa protests, demos against the dismantling of democracy, defensive struggles against social cuts) changes as soon as it is permeated by a transformative consciousness; that is, when it is understood and propagated as an early phase of the transformative struggle that is already raging in the periphery with all its mass-murderous brutality. To stay with the example of social protests: Instead of simply postulating that the rich should pay their fair share, it would instead be necessary to demand that the rich pay for this transformation – as long as money still has value and it makes any sense to make this demand at all. The path becomes the goal: the self-organization of the people in the opposition movements would thus already have to be supported by the effort to form moments of a post-capitalist socialization.

But questions beyond redistribution and expropriation will also be raised: How can health care, food, housing, etc. be organized without adequate funding or profitable jobs? At the latest when inflation devalues money and everything threatens to be closed down or thinned out for lack of profitability, the organization of social reproduction according to criteria other than capitalist ones is on the agenda. Not ‘How can pensions be financed?’ but ‘How can material and social wealth be organized so that old people can live with dignity?’ Not ‘How can jobs be created?’ but ‘How would people and resources have to be mobilized and what would have to be done so that people have access to food, housing, health care etc.?’ (and not just at the level of Hartz IV, a slum or a gulag). Either the left gets involved at this level, or it has to participate in the implementation of system-immanent solutions, which will amount to nothing more than shipping old people off to cheap care gulags or euthanizing them in a ‘socially acceptable’ manner.

The demands and forms of organization in resistance against the impending climate catastrophe, against the impositions of crisis management, must therefore already contain germinal forms of post-capitalist forms of socialization. Central to this should be the effort to shape the system-immanent opposition movements into open spaces for discourse and discussion. Discourse on the crisis, which is no longer possible at the level of society as a whole (and which is sabotaged by the Left Party for opportunistic reasons),[22] must at least be conducted in opposition. Moreover, the desired post-capitalist process of an understanding of the reproduction of society as a whole already emerges from an understanding of strategies for and forms of protest. The spaces of discourse must therefore be kept open as long as possible, even in the face of increasing repression. The open process of discussion, the organization and coordination of transformative resistance, could function as a prefiguration of the global, conscious self-understanding of world society with regard to its reproduction.

By the way, this is why the democratic struggle is so important for maintaining the remaining bourgeois-democratic freedoms as long as possible, in order to be able to influence the transformation process in forms of non-military conflicts for as long as possible. Moreover, the necessity of the transition between democratic struggle and militant-military confrontation is difficult to assess; it depends on the degree of fascization and the tendencies towards disintegration of the state in question and its society. However, such an armed struggle, which can be imposed on emancipatory forces in the course of a crisis, also represents a defeat. The open structure of discourse, the beginnings of self-management, which could form the germ of future societies, threaten to give way to the necessities of military organization. Then, in fact, the Leninist prescriptions of practice become inescapable – and, consequently, there is the danger of an authoritarian “sovietization” of the post-capitalist alternatives.

“The Real Movement Which Abolishes the Present State”

Ultimately, it is necessary to understand the various struggles and social movements as partial moments of one globally raging transformation struggle. The world has been undergoing a systemic transformation for a long time, but the crisis-blind left does not perceive it as such. As already explained several times: This blindly running transformation process is in principle open, it is not predestined, which is why the outcome of this system transformation (should it be completed without a nuclear holocaust) is also totally open. Moreover, because the system is in a state of upheaval, because the once concrete social fabric is in motion, because the formerly fixed social structures are in a sense becoming fluid, collective action has a far greater influence on shaping the future than in periods when capitalism seemed stable. However, these greater possibilities for intervention offered to emancipatory forces in the current systemic crisis have narrow windows of opportunity that may close irreversibly.

This is obvious in the case of climate change with its tipping points. But the unfolding of social crises is also not linear – it is not a gradual development. Within the transformation process there are decisive moments or situations of upheaval that determine the further course of the crisis. As soon as such a culmination point of the inner unfolding of contradictions has been passed without entailing catastrophic consequences (nuclear war, ecological collapse of entire regions, etc.), the further the crisis process proceeds along the lines laid down at this decisive moment – it seems hardly possible to change such a development by subsequent intervention.

“They don’t know it, but they do it.” This famous quote by Karl Marx, which sums up the fetishistic process of total social reproduction under capitalism, also aptly characterizes the process of dissolution of the capitalist world system that is now in full swing. The world system is already in a phase of chaotic upheaval, although the direction and outcome of this process cannot be predicted – simply because it is being shaped (unconsciously for the time being) by the actions of the subjects in the unfolding transformative struggle. Since there is no such thing as a “revolutionary subject,” the decisive factor is precisely whether the character of the crisis is reflected upon in the population on a sufficient scale to allow the corresponding tipping points to be passed here as well.

Emancipation and barbarism thus appear simultaneously in the full-blown global transformation struggle: On the one hand, the brutal late capitalist crisis competition is merging into a post-capitalist transformation struggle, partly overlapping with it, both moments of crisis sometimes interacting, with the late capitalist crisis ideology, which is subject to constant metamorphoses, trying to rationalize this process of dissolution. At the same time, uprisings and mass protests against late capitalism’s lack of prospects are breaking out more and more frequently, sometimes completely unexpectedly, a global environmental and climate movement is forming, spontaneous uprisings are breaking out in countries such as Iran, and so on. When social tipping points are crossed, uprisings can erupt as if out of the blue. As the intensity of the crisis increases, these contradictions and conflicts will intensify and the myriad struggles will turn into a global confrontation that may well lead to nuclear war.

This applies to the crisis imperialism of the eroding late capitalist state behemoths,[23] as well as to the various conflicts in crisis-ridden societies that are intensifying. However, it is important to avoid “ranking” the struggles in such a way that the class struggle becomes primary and all other struggles secondary. The class-struggle conflicts, exemplified by the demands for increased wages, can only serve, on an equal footing with the other social struggles (antifa, climate struggle, antimilitarism, feminism, defense of democracy, sexual self-determination, etc.) of a transformative movement, to overcome their false immediacy in the way indicated above. This would thereby transform the social struggles, protests or struggles for redistribution into moments of a transformative struggle by introducing a radical crisis consciousness.

As soon as the different movements are understood as partial moments of a struggle for an emancipatory transformation of the system, the emerging, destructive “movement competition” – for example between the climate movement and the social justice movement – which is being pushed by the reactionary parts of the Left Party in particular, could also be minimized.[24] Incidentally, with its “social campaign,” the Left Party is pursuing exactly the opposite of an emancipatory transformation movement: social movements are to be hijacked with social demagogy in order to prevent the emergence of a radical crisis consciousness through repressive movement and crisis management.[25] This opportunistic and right-wing friendly social demagogy, which despite the escalating systemic crisis wallows in a cartoonishly obvious false immediacy, must be confronted in all practice with the collective survival necessity of an emancipatory system transformation.

As it is, it does not remain. This insight from Brecht’s praise of the dialectic[26] could become the maxim for action of an emancipatory transformation movement, which would first have to learn how to influence the transformation process. The question always arises as to which political structures, which social configurations of power should prevail in the next wave of crises. After all, the crisis process that unfolds behind the backs of the subjects can encounter very differently structured late capitalist societies. They can be oligarchic, pre-fascist or bourgeois-democratic, more egalitarian or corporative, nationalist or cosmopolitan, secular or religious-fascist.

It is therefore ultimately a matter of thinking in processes, in developments, of perceiving the existing social structures as being in a state of decay, of locating the decisive contradictions and, in anticipation of the enormous shocks of the future, of creating the best social conditions, the optimal starting position for an emancipatory transformation, which can only happen through large-scale cooperation. The difficulty of such a policy of alliances now consists in locating the appropriate forces that would steer the further transformation process in an emancipatory direction, as well as in bringing the radical crisis consciousness described above into these movements.

In reality, it is only the fetishistic, blind movement of the automatic subject of unlimited capital valorization, that, when it breaks through its inner barrier, turns into the threat of ecological self-destruction and escalating social struggles – possibly even nuclear and world civil war. The late capitalist value society is disintegrating, but social fetishism – the powerless surrender of the subjects to the social dynamics they unconsciously produce – remains strong. The actors, especially on the German left, stagger unconcernedly into the impending world civil war as the vanishing point of the transformational conflicts.

So it really does exist, the “real movement which abolishes the present state of things,” that the young Marx, together with Engels, identified in his early work “The German Ideology” and imagined as a progressive movement.[27] Only it is not an automatism of civilization that leads humanity to communism. Marx, through whose entire work is characterized by the split between an outdated belief in progress and an important categorical critique, expresses here the fetishism of capital while at the same time succumbing to a belief in eternal progress, in the Hegelian world spirit. The real movement that shakes late capitalism to its foundations is that of capital’s valorization process blindly running over society, which is killing itself. It is the fetishism that Marx already suspected at that time.

Therefore, despite all the evidence, it is necessary to fight to form this inevitable transformation movement, which will certainly abolish the present state of things and which is still open in its course and outcome, into a consciously acting movement in the transformation struggle. The transformation of the system is inevitable; what matters is to steer it in a progressive, emancipatory direction – in the struggle against the forces of barbarism that capital is sweating out again in its crisis.

If there is one field of struggle that should be prioritized in the current phase of crisis, then it is an anti-fascism that seeks to build the broadest possible alliance, since fascism is already clearly emerging as the openly terrorist crisis form of capitalist rule. The Querfront, which has long been spreading on the German left,[28] the New Right, which is deeply intertwined with the German state apparatus,[29] and pre-fascism, which is on the rise,[30] are already sharpening their hooves in order to answer the crisis of capital with a renewed plunge into barbarism.

I finance my journalistic work largely through donations. If you like my texts, then you are welcome to contribute – either via Patreon, or Substack.

[17] See on this: Roswitha Scholz, Der Wert ist der Mann,
[21] Civil rights essentially recognize the human being as a subject capable of capital valorization, whereby recognition ceases if the ability to valorize is absent – as can be seen clearly in the case of refugees. See:
[27] “Communism is for us not a state of affairs to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things.” Source:
Originally published on on 10/12/2022

Posted in 2011 | Leave a comment

New old financial crisis

Since Silicon Valley Bank, Silvergate Corporation, and Signature Bank all toppled within a week in the U.S., and now First Republic Bank has also run into trouble, there are increasing signs that the next big financial crisis, which was only postponed in 2019 by tons of freshly printed central bank money, could now erupt with force. $9 trillion has been injected into the “U.S. market” since 2019.

New old financial crisis
by Klaus Wagener
[This article posted on 3/24/2023 is translated from the German on the Internet,]

1206 Silicon Valley Bank Temple Arizona – New old financial crisis – banking crisis, Credit Suisse, First Republic Bank, Signature Bank, Silicon Valley Bank, Silvergate Corporation – International

Silicon Valley Bank is not the only bank to stumble in the U.S. in recent weeks, either.

The US banking crisis has reached Europe. The old but less venerable Credit Suisse (CS), founded in 1856 as Schweizerische Kreditanstalt, then anglicized “Credit Suisse Group” in 1997, is in danger of toppling unless it is rescued as “systemically important.”

CS still had total assets of 787.2 billion Swiss francs in 2019. However, the bank’s share price had more than halved in the crisis since 2008, from 54.21 euros in 2007 to around 20 euros, and has now fallen to a meager 2.04 euros (as of March 17). CS securities are not far from being classified as junk bonds.

Since Silicon Valley Bank, Silvergate Corporation, and Signature Bank all toppled within a week in the U.S., and now First Republic Bank has also run into trouble, there are increasing signs that the next big financial crisis, which was only postponed in 2019 by tons of freshly printed central bank money, could now erupt with force. Some $9 trillion has been injected into the “U.S. market” since 2019. The rating agency Moody’s has rated the outlook of the entire U.S. banking sector as “negative.” The Swiss National Bank has announced its intention to bail out CS with a whopping 50 billion Swiss francs.

The neoliberal financial and banking system of the West, and especially that of the USA, fell into a deep structural crisis at the beginning of the century. The exclusive focus on the profit of the super-rich has so far produced three major outbreaks of crisis. The dotcom crisis of 2000, the financial crisis of 2008 ff. and the current crisis of 2019/2023. These crises are not simply a repetition of the previous crisis in each case, but they reach a much higher level because the bubble, the crisis level or the disproportion created by the central bank “bailout” becomes massively larger each time.

Between the two crises of 2008 onwards and 2023 onwards, there are 13 years of quantitative easing (QE), zero interest rate policies and an unprecedented monetary and debt explosion. This gigantic fattening of the rich had driven stock prices and thus the speculative fortunes of finance capital to astronomical heights – at the expense of gutted and exported industrial capital. Then last year, however, the U.S. Federal Reserve (Fed) and, in its wake, the ECB ended the party and began to creep interest rates to normal levels. Real inflation had easily exceeded the 10 percent mark. Fed Chairman Jerome Powell’s self-imposed task is now to prevent wages from rising to similar levels.

A similar task had already been set by then Fed Chairman Paul Volcker when he raised interest rates to as high as 20 percent in 1980. However, before the Volcker shock, the U.S. debt-to-GDP ratio was 31.6 percent. Today, that figure is 125 percent/GDP ($31.6 trillion).

A significant change in the level of interest rates now has serious economic consequences. The interest rate on a 30-year U.S. mortgage in November 2022 was a whopping 6.95 percent. If U.S. credit only reached that level, it would mean an interest burden of $6.57 trillion for U.S. society as a whole, or about 30 percent of total U.S. economic output. This is hardly likely to be representable. The neoliberal financial system has been maneuvered by its protagonists into a dead end in which the only choice is between plague and cholera.

In the crisis of 2008 onwards, there was fraud on a very large scale, covered by the Bush warriors. There were the subprime or NINJA loans (“No Income, No Job, No Assets”), the multiple repackaging of the credit junk, the triple-A ratings, the hawking of all the junk and so on. The current crisis shows that it can be done without. The current imbalances are not so much a consequence of criminal machinations, but rather the result of the gigantic securities and debt inflation that has been pursued by the major central banks for more than a decade and that is now preventing a return to “normality.”

The basic problem of neoliberally de-limited financial capitalism is that the growth curve of the real economy cannot keep up at all with the rapid growth of the financial economy, of debt as well as of enrichment. The periodic crash is programmed, so to speak. This time, however, it coincides with the wars of the U.S. empire for the preservation of its global domination and currency privilege. The West wanted to ruin Russia, now the banks are falling over here. What will happen if China is messed with? Moody’s rating is not so unfounded.


China’s peace plan

U.S. fears being cornered by Chinese proposal

While German media claim that the Chinese peace proposal for Ukraine is not taken seriously internationally, the truth is quite different.
[This article posted on 3/24/2023 is translated from the German on the Internet,]

German media like to call the peace plan presented by China an “alleged” peace plan, and they have continuously claimed during the Chinese president’s Moscow visit that the plan is not to be taken seriously and is “internationally controversial.” This formulation is only partly correct, because the fact that the plan is internationally controversial is mainly due to the fact that the West rejects it. However, the West is quite alone in this internationally.

The Chinese peace plan is reasonable because it also takes into account the past history of the conflict, which must be resolved if there is to be a negotiated peace that ends the bloodshed. And as we know, the West has played a major role in that back story by ignoring Russia’s security interests and arming Ukraine and pushing its NATO accession. That was the main reason for the escalation of the war a year ago.

There are legally valid agreements between the West and Russia, which state that no state may impose its security interests at the expense of the security interests of another state. It is precisely this agreement that the West violated when it pushed for Ukraine’s NATO accession. China’s peace plan envisions, among other things, that this provision will also be established worldwide, which the U.S.-led West does not like at all.

German media consumers, however, know nothing about this because the German media keep quiet about this and other details and background of the Chinese peace plan. But in the rest of the world they know all this very well, which is why China’s peace plan is not criticized outside the West, but welcomed as quite reasonable.

They know this in the U.S., too, as Bloomberg has now reported. According to Bloomberg, the U.S. government is very worried about the Chinese peace plan because the U.S. rejection of the plan openly shows the rest of the world that the U.S. is not interested in peace in Ukraine. I have translated the Bloomberg article so that German readers can make up their own minds.

Start of translation:

U.S. fears war-weary world may accept China’s peace offer for Ukraine

U.S. on sidelines as Sino-Russian “brotherly festival” solidifies ties

Some uncomfortable realities of Xi’s visit with Putin in Moscow

Xi Jinping’s meeting with Vladimir Putin in Moscow put the Biden administration in an uncomfortable position: standing on the sidelines as their two adversaries discussed a peace proposal for Ukraine that the United States found unacceptable.

U.S. officials have publicly expressed strong skepticism about the Chinese idea, claiming that calling for a cease-fire would reward Moscow’s invasion by cementing its territorial gains. Secretly, however, the meetings and the proposal have created a sense of unease within the government, which in turn has led to questions about the overall U.S. attitude toward the two countries.

According to one administration official, who asked not to be named because he is discussing internal deliberations, the U.S. fears being cornered by the Chinese proposal. Regardless of U.S. reservations, if it rejects the proposal outright, China could give the impression to other nations tired of the war – and the economic damage it is doing – that Washington is not interested in peace.

If the U.S. rejects the agreement, “China is likely to increasingly spread the message that the U.S. is against a cease-fire, that the U.S. is against ending the war,” said Bonny Lin, a fellow at the Center for Strategic and International Studies who formerly served in the Pentagon. “There will be many ways China will try to interpret the results of the China-Russia meeting in a way that portrays the U.S. in a negative light.”

The debate over China’s version of a peace plan is just one of the many unpleasant aspects of Xi’s three-day visit to Moscow this week, during which the Chinese leader was warmly welcomed by Putin. The two countries promised to deepen their partnership even further.

The Biden administration has tried to keep China on the sidelines since the invasion of Ukraine began, but the opposite seems to have happened. As Xi and Putin grow closer, China is finding a receptive audience for its broader diplomatic efforts around the globe.

At a Senate hearing Wednesday, Sen. Jeff Merkley asked Secretary of State Antony Blinken to comment on what the Oregon Democrat called a “three-day brotherfest with Putin and Xi celebrating their authoritarian power.” Blinken acknowledged that it was a continuation of the two nations’ pledge just before the war to maintain a “partnership without borders.”

“It’s not a surprise – both countries have very different world views than we do,” Blinken said. “They could find common cause in opposing the worldview that we and so many other countries around the world are trying to defend and advance.”

Blinken did not mention all the countries that have refused to take sides despite U.S. urging.

China has defied U.S. sanctions because of its companies’ partnership with Russia, bought oil from the Iranian regime despite Western warnings, and helped bring about a diplomatic détente between Saudi Arabia and Iran. Major global economic powers such as India and Brazil refuse to choose between China and the West, saying they do not want a new Cold War.

And a week ago, Honduras began abandoning diplomatic relations with Taiwan in favor of economic ties with China.

The move was “a sign of my determination to fulfill the government plan and freely expand borders in harmony with the nations of the world,” President Xiomara Castro said in a tweet.

Deteriorating ties

All of this comes at a time when U.S.-China relations, which began to crumble with former President Donald Trump’s trade war, continue to deteriorate. That was underscored by the furor over the alleged Chinese spy balloon, which sparked a national outcry in the U.S. and angry recriminations between Washington and Beijing.

The episode scuttled an attempt to stabilize relations late last year with a face-to-face summit between President Joe Biden and Xi in Indonesia. That led to a tense meeting between Secretary of State Antony Blinken and top Chinese diplomat Wang Yi in Munich, and Xi later warned of “comprehensive containment and repression by Western countries led by the United States.”

U.S. officials argue that their sharp words to Beijing are having an effect. They say that public U.S. warnings that China could provide lethal aid to Russia have made the Xi government think twice about the idea. The U.S. continues to supply Ukraine with weapons – it announced $325 million worth of new munitions this week – in coordination with European countries that are themselves drawing up new supply plans.

The Biden administration has tried to get China to confront the Ukraine crisis on U.S. terms, but “Xi is now interfering on his terms,” said Christopher K. Johnson, president of China Strategies Group, a political risk consulting firm. “And I think that’s likely to cause some confusion within the administration.”

With Washington constantly taking a hard line on China, some analysts believe China may have effectively given up on improving relations with the U.S. anytime soon.

The less China sees the possibility of working with the U.S., “the more likely it is to pursue these other avenues and options,” said Melanie Sisson, a foreign policy fellow at the Brookings Institution. “And in many ways and places, that’s going to mean they’re going to try to fray U.S. relations with other countries.”

End of translation

In my new book “”Putin’s Plan – With Europe and the U.S. the World Does Not End – How the Western System Is Just Destroying Itself “” I address the question of what the final battle of systems – which we are experiencing right now – is really about. We are witnessing nothing less than the battle of two systems in which Vladimir Putin is offering the world an alternative to neoliberal globalism. Have citizens in the West been asked if they want all this, if they want to give up their prosperity and freedoms in favor of neoliberal globalism?

Posted in 2011 | Leave a comment

War poker, China’s unknown thinkers and Imperial moralism

War poker
by Benoît Bréville
[This article posted in Le Monde diplomatique – March 2023 is translated from the German on the Internet, Kriegspoker.]

Arms aid to Ukraine must be limited to “defensive weapons,” he said. A “direct confrontation between NATO and Russia” must be prevented, because that would be tantamount to a “Third World War” – warned Joe Biden on March 12, 2022.

Once upon a time. A year after Russia’s invasion of Ukraine, the West is supplying Mi-17 helicopters, self-propelled howitzers, kamikaze drones, long-range missile launchers, and Abrams and Leopard main battle tanks. The red lines formulated today will be crossed tomorrow. When Biden now assured on January 31 that the U.S. will not deliver the fighter jets demanded by Kiev, one could already guess what will come next. In any case, military circles are already discussing the merits of the Swedish Gripen fighters over the U.S. F-16s.

Apparently, nothing can stop the military escalation that has taken the place of initial negotiations. On Feb. 8, U.S. Secretary of State Antony Blinken told a joint press conference with NATO Secretary General Jens Stoltenberg: “If we change the course of the war in Ukraine’s favor, that’s the best way to create a prospect for real diplomacy.” And President Biden throws the full weight of the U.S. into the mix when he declares that Ukraine will win. The country will be supported “for as long as it takes,” he said.

After the fiasco in Afghanistan, any retreat would be interpreted as a sign of weakness. It would also be a strategic humiliation for the EU, which is also heavily involved. On the other hand, Putin is mobilizing all available forces to win a conflict that he sees as being about the fate and survival of the Russian nation. The notion that a cornered Russia will acknowledge defeat rather than use even more destructive weapons is a poker game.

So soon, the question may be whether to send Western troops to Ukraine. So far, Washington has declined to do so. However, U.S. President Lyndon B. Johnson had also declared in October 1964: “We’re not going to deploy American boys 9,000 or 10,000 miles from home to do what Asian boys should do themselves.” Shortly thereafter, he changed his mind. Starting in 1965, 3 million “American boys” were sent to Vietnam. 58,300 of them never returned.

An impossible victory, a predictable stalemate, insisting on an aberration just to save face. But is this a historical aberration only for Putin and Russia? The U.S. has shown in Iraq and Afghanistan that it is incapable of learning lessons from the Vietnam War. Nguyen Chi Vinh, the former Vietnamese deputy defense minister, opined in mid-March 2022 to Kiev: “We should tell our Ukrainian friends that they are not well advised to let their country become an arena of power politics, to rely on military strength to oppose their big neighbor and to take sides in the competition of great powers.”

Kiev, with backing and massive weapons assistance from NATO, has set its mind on exaggerated war aims such as the reconquest of Crimea. Those who support this fight to the bitter end are helping to ensure that the war continues, expands, and grows ever fiercer.


China and its unknown thinkers

Le Monde diplomatique – January 2023

The lively – and quite intentional – debates of Chinese academics take place largely under the radar of the international public. Yet they are by no means aimed solely at a Chinese audience, and offer interesting insights into intra-party power struggles.
by David Ownby
[This article posted in January 2023 is translated from the German on the Internet,!QTQ81E29Q3AJ.]

Chinese New Year image with Confucius, Qing dynasty (1644-1911)

At the 20th Party Congress of the Chinese Communist Party (CCP) in October 2022, it became clear: President Xi Jinping wants to become like Mao Tse-tung, preferably to surpass him. Some even call him the “new Stalin”.1

For years, tensions have been growing between one of the world’s most powerful autocracies and the West. If the West’s main ideological adversary used to be the USSR, today it is China. Chinese intellectuals are equated with Soviet refuseniks, who were threatened with the gulag even for possessing banned books. From the perspective of the new Cold Warriors, the case is clear: there is no real intellectual life in China, except in private (or in prison). And so, in the West, only a few Chinese dissidents are really known – such as the artist Ai Weiwei or the jurist Xu Zhangrun.

If a historical comparison is to be made, however, today’s China, since Deng Xiaoping’s economic reforms, has less in common with Stalin’s empire than with Japan during the Meiji period (1868-1912). Both regimes opened their countries to the outside world and broke away from their feudal and Maoist traditions, respectively. In both nations, a flourishing, and to a certain point even pluralistic, intellectual scene emerged.

In China, this scene was very much alive in the years leading up to Xi’s term (as of March 2013). Despite all his efforts, Xi also never managed to completely tighten the ideological control screw; he had no choice but to tolerate the intellectuals. One can even say that these debates are partly intentional and still play a role – directly or indirectly – in the struggle for power and the political program.

Is China unique?

For the past ten years, I have been leading a research project on the “recognized Chinese intellectuals “2 who publish in China and play by the rules set by the state party without being mere mouthpieces of the regime. They form a kind of “scholars’ republic,” which, however, is hardly perceptible in the propagandistic din of the regime. And since exchanges take place exclusively in Chinese, their international perception suffers additionally from the language barrier.

Since about 2000, the most important discussions have revolved around three fundamental, interrelated questions: Is China unique, and if so, in what ways? What is its role in the world, or what should it be? And how is its story good to tell? Storytelling has become an important tool of Chinese soft power, especially under Xi.

Two recent events have been formative in this regard: the dissolution of the Soviet Union after 1991 and the apparent decline of the West – especially the United States – after the 2008 global financial crisis. As the “Middle Kingdom” (zhong guo) rose and its great rivals failed or faltered, the notion that China is unique and always has been has almost inevitably taken hold. After a century of humiliation and several revolutionary decades, the historical sense of superiority returned.

It is precisely here, however, that the difference between the Xi era and the presidency of his predecessor Hu Jintao (2003-2013) becomes apparent: Under Hu, a kind of historians’ dispute arose over the thesis of “national humiliation.” Many concluded that the buzzword had been put into circulation by the dynastic elite in the empire and later adopted and instrumentalized by Sun Yat-sen and Mao Tse-tung.3 This narrative has completely faded into the background since Xi took office in early 2013.

Among the proud defenders of the theory that China is superior to all other countries4 is, for example, the political scientist Zhang Weiwei, who published a trilogy on China between 2008 and 2016.5

For Zhang Weiwei, other countries are just “nation-states,” while China is both “civilization” and “nation-state,” which makes the country “unique.” The author is especially popular among the CCP top brass, and his books are bestsellers only because party members and government cadres are encouraged to buy them.

In the Chinese social sciences, on the other hand, he is not really considered a serious author: Firstly, he is a mouthpiece for Xi, and secondly, there are accusations of plagiarism. His last two books bear a striking resemblance to the book “When China Rules the World. The End of the Western World and the Birth of a New Global Order” by the British author Martin Jacques, published in 2009 and translated into 15 languages. A Chinese work about the uniqueness of China that cribs from a foreign book raises certain doubts.

Outstanding scholars such as Jiang Quing6 , a representative of classical Confucianism, or Chen Ming7 , who calls for an instrumental adaptation of Confucianism to the requirements of the present, are also enthusiastic about the idea of China’s uniqueness. But their conclusions are controversial. For example, Chen declares, “The republican revolution of 1911 was an unnecessary mistake because China was already on its way to becoming a constitutional monarchy.” Or, “Much of the 20th century was a tragic mistake because the government kept looking for Western solutions to Chinese problems.”

However artfully these new Confucians may compare the CCP to “benevolent monarchs” of the past, it will not have escaped the Communists’ notice that they condemn Marxism as something foreign-a highly sensitive point, since Xi is an apologist for the “Communist Manifesto.”

The Chinese New Left, which in the 2000s advocated tamed capitalism and the fight against inequality, is also convinced of China’s uniqueness. According to Wang Hui8 or Wang Shaoguang9 , China’s rise has proven that the supposedly “universal values” of the West are not so universal. Rather, the country owes its success to political innovations such as “reactive democracy” (the state party responds to the needs of the people), which is superior to the West’s “representative democracy,” crippled by clientelism, feminism, and multiculturalism. In contrast, China has further developed the “role of the state.”

This “reactive democracy” bears a striking resemblance to Mao Tse-tung’s “mass line,” counter liberals like the historian Xu Jinlin, warning that before World War II, Japan and Germany had also developed a very similar cult of the state, and that this had ended in war and defeat. But liberals also think that China must develop its own vision of modernity and thus contribute to the diversity of universal values. “China’s civilization tradition is not nationalistic, but rather based on universal and humanistic values,” Xu writes.10

The second related and much discussed issue concerns China’s international role. Having regained its status as a great power, he argues, it should resume its historical position in the “center of the world.” In this sense, the philosopher Zhao Tingyang has taken the 11th-century tianxia concept and jazzed it up.11 Translated, it means something like “all that is under heaven” – universalist thinking, in other words, that emerged long before the Western Enlightenment.

According to it, the center of civilization was in China. Its power diminished with distance from that center, but even the “barbarians” on the margins were able to civilize themselves by learning to “be Chinese.” Zhao’s recourse to the tianxia principle is also about a moral world order that is not primarily based on interests and power.

Many intellectuals concerned with China’s foreign policy and parroting Xi Jinping’s slogans of the “community of destiny” and “win-win agreements” are concerned with various concepts of what a multipolar world might look like. For example, Jiang Shigong,12 a legal theorist who teaches at Peking University, envisions a Chinese empire whose regions would be “united” by the New Silk Road (Belt and Road Initiative, BRI). In general, however, much more time and effort is spent criticizing various manifestations of U.S. hegemony than discussing China’s current behavior on the international stage.

Some in the debate believe the world was even better off when China was a minor player in a U.S.-dominated world – when it was “keeping a low profile,” as they like to say. They also challenge the widely held notion that high growth rates will be enough to overtake the United States. Sociologist Sun Liping even considers this fixation dangerous: “We need to understand that we face extremely difficult existential problems, the biggest being our extremely low birth rate. “13 He is not the only warner (see box following this text).

The young political scientist Shi Zhan has written an entire book14 on why “populist nationalism” should not be indulged and that the leadership must finally face the fact that China will never rule the seas. Even the nature of power is changing, Shi writes: Internet platforms and artificial intelligence, which will determine the economy of the future, are largely and everywhere beyond state control.

Let’s move on to the third question: how to tell the country’s story well? This is a topic that many are concerned with; and they do it not so much because the party is extremely interested in it for propaganda purposes, but in the hope of arriving at a true understanding of what their country means to locals as well as to foreigners.

Most of the topics of discussion among the intellectuals are obvious, because they are also issues for the general public, be it the desire for “prosperity for all” – a horror idea in the eyes of the rich -, the New Silk Road or the controversial Zero Covid policy (see the text on page 4 below). One strange-seeming question sparked particularly lively debate: Should we explain the history of the People’s Republic of China as “two periods of 30 years” or “one period of 60 years”? At the heart of these considerations is the big question of whether or not the Mao era was an aberration and whether Deng Xiaoping merely took corrective action when he unideologically and pragmatically opened China to international markets.

There are still communists who think it was a mistake that Maoism was abandoned, while many liberals think Deng did not turn decisively enough to the market economy. The majority is somewhere in between. The party has unsurprisingly decided that the history of the People’s Republic of China must be viewed as a whole. This worries some intellectuals, because Xi seems to be sticking too faithfully to the Maoist script for their taste.

Many liberals tell the story this way: The 1949 revolution was necessary to awaken the people from their thousand-year hibernation and generate the energy needed for change. Maoist China made many mistakes, they say, but the planned economy and forced modernization laid the groundwork for the upswing in the reform period beginning in 1979. These policies unleashed entrepreneurial skills, he said.

China is currently a rather rich country in a globalized world. And the message of class struggle preached during the revolution and under Mao has long been out of date. For radical liberals like Yuan Weishi, formerly a key adviser to Hu Jintao, it was nothing but an outdated legacy of Stalinism anyway.

Even intellectuals who defend the one-party state are now really embarrassed by the old-fashioned Marxist-Leninist-Maoist language that the CCP still uses. You can’t score points with it abroad anyway, but even at home, people go into overdrive when they hear this terminology. It is clear that Xi’s “Little Red App “5 will not help if the Chinese real estate market collapses as feared.

But there are exceptions: Jiang Shigong, for example, published a long essay16 in 2019 in which he portrays the president as a hero who saved China at the last minute and prevented it from suffering the same fate as the Soviet Union – chaos, relative poverty and irrelevance. Instead, thanks to Xi, China is the guiding star for the rest of the world to free itself from the clutches of U.S. neoliberalism. Jiang’s text is very ambitious; he wants to clarify all the current issues and reverse the de facto intellectual pluralism in China.

More recently, economist Yao Yang made an impressive effort to develop a “Confucian liberalism “17 as a solution to the country’s and the world’s problems. He argues that Western democratic systems, caught between the overvaluation of individualism and the demand for absolute equality, are dysfunctional and unsuitable as a source of inspiration.

In China, in turn, he says, there is a deadlock in economic and political reforms. Never before has the danger been so great, Yao Yang feared, that so-called leftist measures that harm entrepreneurs threaten the country’s wealth and power. At the same time, he said, the West’s refusal to recognize the legitimacy of China’s rise is prodding Beijing’s leadership to become even more “communist.”

Yao Yang’s Confucian liberalism tolerates a degree of social inequality deemed inevitable and a certain meritocratic elite. In such a system, he argues, a consensual government is able to “manage the affairs of the people properly.” Western states, Yao says, are too weak and infiltrated by populist currents, while in China, he says, they are too strong and pay too little attention to the needs of the people.

He knows, of course, that the Western world is not listening to him. He appeals mainly to Chinese liberals – and he has influence on society. That’s why he could afford to publish a long article on “The Challenges for the Chinese Communist Party and the Reshaping of Political Philosophy” in the prestigious Beijing Cultural Review on July 2, 2021, the day after the pompous celebrations of the CCP’s 100th birthday.

In it, he not only ignored the major themes of the anniversary and insisted on making Marxism more Chinese through Confucianism. He even managed not to mention the President or his famous “Thoughts” (in the little red app). This is unusual in such a journal. For Yao and numerous other well-known intellectuals, “telling China’s story well” also means integrating it with that of others. They consider themselves citizens of the world, able and responsible to stay in conversation with their peers everywhere.

1 Chloé Froissart, “Chine: la crispation totalitaire,” Esprit, Paris, no. 491, November 2022.

2 See Reading the China Dream,

3 See “It is entirely possible to tell the story of chinese politics in a more accurate and exciting way,” Reading the China Dream, June 20, 2021.

4 See Jean-Louis Rocca, “One Party, One Nation,” LMd, July 2021.

5 The titles translated into German are “China reaches the world” (2008), “The Chinese wave: the rise of a civilization state” (2011), and “The Chinese horizon: the glory and the dream of a civilization state” (2016); volumes 2 and 3 translated into English are “China Wave,” Shanghai (World Century Publishing Corporation) 2012 and “The China Horizon,” Shanghai (World Century Publishing Corporation) 2016.

6 See Jiang Qing, “A Confucian Constitutional Order,” Princeton (Princeton University Press) 2012.

7 See Chen Ming, “Transcend left and right, unite the three traditions, renew the party-State: A Confucian interpretation of the China dream,” Reading the China Dream, March 17, 2015.

8 See also Wang Hui, “China’s Twentieth Century: Revolution, Retreat and the Road to Equality,” London (Verso) 2016; “The Rise of Modern Chinese Thought,” Cambridge (Harvard University Press) forthcoming July 2023. cf. “The Absolute East,” LMd, February 2005.

9 Especially Wang Shaoguang, “China’s Rise and its Global Implications,” London (Palgrave Macmillan) 2021.

10 Xu Jilin, “The new tianxia: Rebuilding China’s internal and external order,” Reading the China Dream, 2015.

11 See Zhao Tingyang, “Everything under the sky: past and future of world order,” Berlin (suhrkamp taschenbuch wissenschaft) 2020.

12 Jiang Shigong, “The internal logic of super-sized political entities: ‘Empire’ and world order,” Reading the China Dream, April 6, 2019.

13 See Sun Liping, “2021: What Kind of World Will We Face?” Reading the China Dream, January 23, 2021.

14 Shi Zhan, “Leaving the Cocoon: Isolation, Trust, and the Future,” Hunan Wenyi Chubanshe, Changsha, 2021 (in Chinese).

15 The Xi variant of Mao’s Little Red Book is the “little red app” for smartphones, where Xi’s thoughts and favorite poems can be accessed, see Emilie Frenkiel, “Shaolin with Red App,” LMd, October 2015.

16 Jiang Shigong, “Philosophy and History,” Reading the China Dream, 2018.

17 SeeYao Yang, “Rebuilding China’s Political Philosophy,” Reading the China Dream, 2021.

Translated from the French by Claudia Steinitz.

David Ownby is a historian at the University of Montreal and co-author (with Timothy Cheek and Joshua A. Fogel) of Voices from the Chinese Century: Public Intellectual Debate from Contemporary China, New York (Columbia University Press) 2020.

Generation No Future

No one knows when exactly this video was taken in Shanghai, nor by whom. But that is not important. What matters is the day it went viral on social media, and that was May 11, 2022. It’s only a minute and a half long. A police officer in a white protective suit is about to lock a young couple in a quarantine camp. The young man resists. His Corona test results were all negative, he says. “If you don’t follow the instructions, you will be punished. You, your children and your grandchildren will be punished!” the policeman threatens. Before the door closes behind the young man, he can be heard saying, “Thank you, but I am already the last generation.”

This answer was shocking, because childlessness is considered the worst curse in China. “Deepest despair speaks from these words,” tweeted well-known human rights lawyer Zhang Xuezhong. He said those who voluntarily choose not to have children have no hope: “This is the harshest indictment a young person can make of their time.”

In China, the social consensus has long been that political interest only brings trouble. But now, with political intent, young Chinese are quoting a well-known phrase from a 1984 biopic about reformist politician Tan Sitong (1865-1898). Tan was executed at only 33 on the orders of Empress Dowager Cixi, who opposed modernization of the Qing dynasty. She ousted her nephew, Emperor Guangxu, who had pushed for reform. In the film, Tan’s wife, with whom he already has a son, says, “I want another child from you.” To which he replies, and this is the famous line, “In this China, another child who would be just another slave?”

The outcry of a stranger has encouraged ordinary young people in China to let out their frustrations. And their cue is a reformist politician who was executed 124 years ago: “Your rule ends with me,” the boys write on the Internet, without naming their addressee. “The suffering you inflict on us ends with me.”

China’s very efficient censorship system did, as usual, quickly ensure that the key word “last generation” was blocked on the Internet; but by then, the idea had long since entered the world. On May 12, 2022, writer Murong Xuecun, who emigrated to the U.S., quoted the tweet, “If children are born only to be subjugated, if our children must suffer the same as we do, we should all be sterilized.”

China’s birth rate is falling – even though the one-child policy was abolished in 2016 after 30 years. In 2021, there were 7.5 births per 1,000 people – the lowest figure since 1978. According to Zhang Zhiwei, chief economist at Shanghai-based investment advisor PinPoint Capital, “Chinese society is aging faster than predicted.” The oft-quoted formula “China will get old before it gets rich” may be coming true – and thwarting the goal of replacing the U.S. as the leading economic power for the foreseeable future.
There are, of course, many reasons for the demographic decline, but the pessimism of the young is accelerating this process. Their message came as a shock to everyone in China, explains sociologist Biao Xiang, who heads the “Anthropology of Economic Experimentation” department at the Max Planck Institute in Halle. The starting point for the uproar, however, was not politics in general, but “the administrative intervention in everyday life.” When Shanghai, a metropolis of 25 million people, was under strict quarantine between March and May 2022, many people suffered from shortages and even downright starved.


Imperial moralism
by Serge Halimi
[This article posted in December 2022 is translated from the German on the Internet,!Z91R6N5SQ3YG.]

U.S. foreign policy will not change fundamentally just because the majority in the Senate now belongs to Democrats, while in the House of Representatives it belongs to Republicans. Rather, the election results of November 8 demonstrate the extent to which the neoconservative militarism of many Republican congressmen and the moral neo-imperialism of many Democrats overlap.

To be sure, this is nothing new. Already the Democrat Woodrow Wilson had dragged the U.S. into the First World War, marked by imperial rivalries, ostensibly to “secure democracy on earth.” Which didn’t stop him from praising the Ku Klux Klan. In Cold War times, Republican and Democratic presidents alike were determined to defend the “free world” against the “evil empire,” that is, atheistic communism.

After the fall of the Soviet Union, the “war on terrorism” began, which, according to George W. Bush, would end “tyranny in the world.” Korea, Vietnam, Afghanistan, Iraq – the U.S. democratic crusades not only cost several million lives, they also brought the restriction of freedoms, McCarthyism, the hunt for whistleblowers. And a series of alliances with dictators and violent criminals to whom the separation of powers was a foreign word. But as long as they were on the side of the U.S., none of them – whether Suharto in Indonesia, the racists in South Africa or Pinochet in Chile – needed to fear the loss of power (or life) through military intervention by the West.

That a Democrat currently resides in the White House should even make it easier to mask the imperial claim to hegemony as a fight for democracy. Even in the face of an opponent as odious as Putin, the transatlantic left would have been hard pressed to go after a Richard Nixon, a George Bush, or a Donald Trump.

French colonialism, too, presented itself as the fulfillment of an Enlightenment-inspired mission, which won it the support of progressive intellectuals. Today, the West’s moral rearmament legitimizes itself in the fight against Russian, Iranian and Chinese authoritarianism.

On Oct. 24, 30 Democratic congressmen welcomed President Biden’s Ukraine policy but also called for negotiations to end the war. This rather banal plea triggered such a war frenzy on Twitter that almost all of the brave signatories immediately withdrew their signatures.

MP Jamie Raskin demonstrated the fine art of intellectual low-flight typical of times of intimidation: “Moscow is the global center for anti-feminist, anti-gay, and anti-trans hatred as well as the Great Exchange theory. We counter these fascist views by supporting Ukraine.”

The only thing missing from the list is the fight against global warming. Then we would have together the resourceful redefinition of U.S. war aims that the future imperialist left will pin on its chest.

Posted in 2011 | Leave a comment

Financial crisis – it’s crashing again and The time of change

Financial crisis – it’s crashing again and The time of change
by Thomas Walter & Gustav Viktor Smigielski

A utopian society will have learned to decentralize power, to keep it manageable and thus controllable, instead of creating supranational institutions and conglomerates whose size and financial power detach them from any democratic control. Just look at the European Union: In Brussels, an estimated 25,000 lobbyists besiege and work the deputies and commissioners.

Financial crisis – it’s crashing again
by Thomas Walter
[This article posted on 3/16/2023 is translated from the German on the Internet, Finanzkrise – es kracht schon wieder | marx21.]

Weather lightning in Silicon Valley: the crisis is lurking everywhere. Without the state, the financial system can no longer exist. This will have not only economic, but also political, social, possibly even military consequences. A commentary by Thomas Walter

What happened? To the multiple crisis (Corona, war, climate, inflation) now comes a financial crisis. The “Silicon Valley Bank” (SVB) is bankrupt. The state rescues the money that the customers – Silicon Valley companies – had invested there.

SVB had invested the savings of its clients (companies) in government bonds – with low interest rates at the time. Now with inflation, interest rates on the financial markets rose. There are now new government bonds on the market with higher interest rates. The old bonds with the still low interest rates that the SVB had therefore fell in value. The SVB could have sat this out. At the end of the term, it would have gotten the full value.

Silicon Valley in crisis

But corporate customers wanted to withdraw their savings now because of the general crisis. But Silicon Valley Bank couldn’t raise the money. After all, the bonds had fallen in value.

To raise the missing money, SVB wanted to sell new additional SVB shares. “Psychologically”, this led to panic. Now everyone wanted to withdraw all their savings. The SVB was broke.

Fraud is part of the business

Speculators had previously bet on a collapse of the SVB joint stock company and have now made over a billion dollars from these bets. Perhaps among those winners is super capitalist and Trump supporter Peter Thiel. He kindly warned SVB clients a few days ago: something could go wrong with SVB….

State as savior of the capitalists

U.S. President Biden has state-guaranteed savings deposits at Silicon Valley Bank and several other bust banks in hopes of stemming the panic. Before that, an “aggressive campaign by Silicon Valley billionaires and financial investors” (FAZ) had put on strong pressure. Silicon Valley is in California, and California is an important state in U.S. elections.

It is the usual ritual: politicians, experts and the media calm down. Suddenly, the markets are criticized as “irrational”. Pundits marvel at the “incredible recklessness.”

The elites argue about whether central banks should continue to raise their key interest rates despite teetering banks. On the one hand, higher interest rates flush higher profits onto banks’ balance sheets. On the other hand, the old securities that are still yielding the old low interest rates are losing value. Banks that have such securities, like the SVB, are in “trouble”.

The Solomonic solution of the central banks is currently to raise interest rates. This increases bank profits. The banks that get into trouble in this way are targeted by the central banks to be helped with money.

The U.S. government has also come to the rescue because SVB’s corporate clients were high-tech firms that are strategically important in the economic war with China. Central banks will do anything to reassure the financial world. But the financial and high-tech sectors are battered, weakening the U.S. and global economies.

European banks also teetering

In Europe, the major Swiss bank Credit Suisse has now had to be rescued by the Swiss central bank. This bank had attracted attention in the past for laundering money for the Bulgarian mafia and for money flowing to corrupt politicians in Mozambique.

There will be arguments about why only banks and companies are “saved”, but not the workers. If there are layoffs and lost wages, there will be social unrest. But there is also the danger that the U.S. government and its allies will militarily expand imperialist conflicts in order to divert attention from economic, political and social problems.


The time of change

Both dystopia and utopia are within reach.
By Gustav Viktor ?migielski
[This article posted on 3/16/2023 is translated from the German on the Internet,,]

The way we have lived together so far is on the verge of checkmate. Crises are coming at shorter and shorter intervals. To global excess mortality and the war in Ukraine are added earthquakes, government crises, chemical accidents, factory fires and extreme weather events. Which of these are genuine accidents or natural cataclysms and which are deliberately man-made is the subject of countless speculations. Gustav Viktor ?migielski himself has lost track. He does not know what is true and what is not, it has become far too complex, and he has no choice but to rely on his feeling and to guess. What technologies the rulers of this world have at their disposal and how they are used against us, which ruling class actors form interest groups, who cooperates, who fights each other, and where intrigues prevail, is what commentators on Telegram argue about in endless battles. In some discussion groups, unread messages accumulate in five figures within a few days. Interesting sources are often shared there, which is why our author tends to scroll through the news on the fly. Some of our fellows metamorphose into real information warriors, who have made it their mission to provide us with news by creating Telegram groups, which ?migielski calls “information slingers.” The amount of channels and the information they contain are so enormous that no ordinary person can encompass them all. A group name on Telegram sums it up: “Too much info – too little time.” Despite this confusion, or perhaps because of it, we can say one thing with certainty: The world is changing!

At the latest after writing something with the chatbot ChatGPT, you can get a sense of what Klaus Schwab means by the fourth industrial revolution and how serious the changes are that are coming to our society. The leaders and rulers of our planet are aware of the coming change in a big way and are trying to shape it according to their visions, which, simply put, provide: “More power, more rights, more resources for us, less for the rest.”

Klaus Schwab had a hard time hiding his excitement when, with a clenched fist and in his German-accented English, he told the audience at the 2022 WEF meeting during his opening speech, “The future doesn’t just happen, the future is built by us.”

“The future is built by us”: Klaus Schwab kicks off World Economic Forum 2022 Davos

And they are already busily shaping the rules of society cleverly in their favor: No registration of internal combustion cars from 2035 within the European Union. Small-series car manufacturers with a production volume of less than 10,000 new cars will be exempt – which can be understood as a backdoor for the production of exclusive automobiles. Similar exemptions exist in CO2 trading for luxury yachts and private aircraft, whose owners do not have to buy emission rights, even though their yachts and jets emit considerable CO2 and devour vast amounts of resources in general. It is the plebs who must learn to do without.

Everyone is now talking about the so-called “15-minute cities”. They are touted to us with the triviality that everything we need can be reached within a 15-minute radius on foot, by bicycle or by bus and train. While this is already the case in many cities, they cleverly conceal the fact that they ultimately want to limit freedom of movement. If you can already reach everything in close proximity, why would you want to leave your habitat? In Oxford, England, a pilot project was started last year and street barricades were erected to prevent car traffic. The residents, however, knew how to defend themselves against this and removed them without further ado in night-and-fog actions.

What are we actually fighting against?

Many rebels and freedom fighters see the attempt of the “elites” to take over world domination as a reflection of “communism” or “socialism”, which they have learned to hate. To be sure, they are right that world domination will be accompanied by a planned economy, and that the attempt made in the East to create a propertyless collective society has failed miserably. But do they also understand why this attempt failed? Indeed, this should be considered from two different points of view: On the one hand, from the point of view of the failure of a utopia, and on the other hand, from the point of view of the failure of a dystopia.


A centralized, totalitarian and thus dystopian society failed primarily because the technological means were lacking, especially within information technology and surveillance. Socialist rulers were unable to monitor the economy and its actors in real time and react quickly.

However, a turnaround took place within the last two decades that could now overcome these weaknesses. The surveillance of the Internet and the accumulation and processing of information scooped up by the economy and accumulated and analyzed via smartphones and other Internet-enabled devices now allow essential sectors of society to be monitored and controlled. It is reasonable to assume that advanced artificial intelligence could play a crucial role in this.

Today’s rulers now have the opportunity to achieve successes in a planned economy that the socialists of the time could only dream of.


The utopian goal could not be achieved because the socialist rulers did not want to hand over their power to the communes, which were ultimately supposed to administer themselves through democratic processes. They failed to make the transition from socialism to communism. The necessary decentralization never took place because the absolute power they had acquired was far too tempting to relinquish. It clouded the senses of the newly created ruling class and made them lose sight of the original goal. Unfortunately, this can be observed all too often: As soon as a person occupies a somewhat elevated social position, he tends to become arrogant, to speak to his subordinates “from above,” to demonstrate arrogance, and to use his power immorally.

“Power corrupts, absolute power corrupts absolutely” – Lord Acton.

A utopian society will have learned to decentralize power, to keep it manageable and thus controllable, instead of creating supranational institutions and conglomerates whose size and financial power detach them from any democratic control. Just look at the European Union and its institutions: In Brussels, an estimated 25,000 lobbyists besiege and work the deputies and commissioners, bribing them in many ways and presenting them with prefabricated laws, which only need to be waved through. We ordinary citizens have virtually no influence on the decisions made in Brussels.

In the municipality, life is different. Municipalities are levels of administration that are characterized by their limited number of people in a geographically defined local area. Besides self-government, self-sufficiency is the main characteristic of a commune. People know each other, respect and help each other, but – and this is important to mention – observe and control each other. In communes it is much more difficult to act out unvirtuous and immoral behavior patterns, as they would quickly lead to being excluded from the community.

Community, not hierarchy, is the concept around which a utopian society is built.

Interestingly, we experience similar things in spiritual teachings. It is not the “I” but the “we” that leads us to salvation. Jesus said in Matthew 18:19-20:

“Where two of you are made one on earth, why it is that they should ask, it shall be done for them of my Father which is in heaven. For where two or three are gathered together in my name, there am I in the midst of them.”

Another wise saying goes, “Heaven can only be entered together.”

There is also a parable worth mentioning about the difference between heaven and hell: for this, imagine a long, beautifully laid table at which all the people are seated together. The situation is such that the elbows of the people are stiffened and thus they cannot feed the delicacies that lie before them on the table to their mouths – that is hell. In heaven the same situation prevails, only that there people feed each other.

All these statements and parables are meant to draw our attention to the necessity of overcoming the ego, which has outgrown our divided mind and uncontrollably controls all our lives. Therein lies the key both to our personal salvation and to the long-awaited, social peace. How will we manifest this here on earth if it is not also anchored in the foundation of our society? It is indispensable to promote the spiritual training of man from an early age.

Helping to shape the change by creating clear rules

Resistance is growing, not only from ever-increasing discontent, but also from an ever-increasing number of people who feel alienated from society. High energy costs, a generally turbulent economic situation, and shady political decisions are now causing the middle class to stumble. It is a development that Klaus Schwab foresaw in an interview as early as 2016, and more than a few believe that it is wanted by the ruling class. After all, the middle class is the class that still has political power and uses it in its own interests.

Many of them are afraid of losing in the near future what they have built up over years, sometimes over generations, but refuse or do not think of getting to the root of the problem, for example by putting limits on private property.

It is a form of hypocrisy to cling to a liberal economic order based on private property, and then complain when you are displaced or taken over by the private property of others.

People want to build a business, they want to become employers, but they refuse to accept the consequence that there are bigger, better, faster, and above all more ruthless entrepreneurs than they. They build hierarchies in which clear authority to issue directives is established, but whine when they realize that they are subordinate to a much larger hierarchy in which they are at the mercy of others.

And so we manifest in our way of doing business the many small wars that we wage among ourselves, which always end up in a big war. So we have to give answers to the question how much private property is appropriate and at what point something can automatically no longer be private property. Is it okay to be the owner of more than one residential property? Is it okay to be the owner of more than one automobile? Is it okay to be the owner of something that several people have worked on together? Or does that something then automatically become common property? Is it okay to demand consideration based solely on a title of ownership? And if so, how often? Endlessly? These are questions to which we must provide new answers, offer fair solutions, and draw new boundaries.

Perhaps at some point we will learn to turn the tables and address the statement “You will own nothing and you will be happy” to Klaus Schwab, his consorts and superiors. Let’s make them tremble by no longer recognizing what they call their property and declaring it to be common property. The primary concern here is productive capital. But to do this, we ourselves must learn to rise above entrenched patterns of behavior by first naming them and then pointing out their insanity and ridiculousness. Here’s an example:

The hoarding of gold

It is tragic and at the same time highly interesting to take a closer look at some of our behavior patterns. For example, the hoarding of gold: How, other than insanity, can it be explained that man goes to so much trouble to get hold of this rare metal, only to bury it underground again afterwards?

Man builds machines with the help of which he moves tons of earth, he enslaves and inflicts considerable suffering on his own kind, even kills in small as well as large wars, in order to get this shiny metal, which finally ends up in large parts in the form of ingots in underground vaults. Storage, combined with protection, causes additional, immense expense that man takes upon himself, only to have another man not take these ingots from him to store in another vault buried deep underground. If there is a highly developed, extraterrestrial civilization, which could observe this madness, this behavior causes with it probably no more than head shaking and perhaps some pity.

It has been proven for 50 years now that we do not need gold to carry out barter transactions. The gold standard of the American dollar was lifted in 1971 after several countries decided to exchange their dollar reserves for gold at the previously fixed price of 35 dollars per troy ounce. The threat of a sell-off of U.S. gold reserves loomed, prompting then-President Nixon to pull the emergency brake and unceremoniously cancel the U.S. dollar’s gold peg. Since then, it has not been considered necessary to build a currency on the so-called gold standard. What for? Basically, both the precious metal and a banknote are just a tool for exchange. Gold, by virtue of its rarity and the impossibility of producing it, was suited to carry a function of preserving value. Nonetheless, we have proven that we don’t need gold to organize a monetary system; just a fair set of rules that are enforced.

Do not lose optimism

The phenomenon just described illustrates quite well the insanity that affects a large part of humanity and which – taken to its logical conclusion – will lead our society into the abyss. Whether it is the hoarding of gold or of something else, or whether it is the illusion of possessing something, plays only a subordinate role. If you look at the state of society like this, the struggle seems hopeless. However, I would like to assure everyone that it is not so.

We just have to be careful that in the fight against injustice we do not turn ourselves into what we have set out to fight. We must be careful not to let ourselves be controlled by the ego, whose goals are fixed and will always produce the same results as before. History teaches us how heroic resistance fighters often mutated into dictators when they were seduced by the power they had previously defied. However, let us preserve optimism, with the certainty that good can withstand any form of evil, just as light eradicates the forms of darkness.
Gustav Viktor ?migielski is a philosopher and author. He studied finance and accounting in Wroclaw and is on a quest to find answers to life’s existential questions – with success!Read more

The poisoned solidarity
The human reflex to show solidarity with those in need is systematically instrumentalized and ultimately perverted by politics and the media.

09.03.2023 by Björn Lerch
A sustainable humanity

Posted in 2011 | Leave a comment