Russian oil cap? No EU-turn in Brussels!

From the centre-left Politico, December 4, 2022

*

Why do the political elites of a nation or bloc of nations pursue courses of action they know will bring great harm to their citizens?

Usually for at least two of the following reasons:

• they fear the wrath of a greater power (or its elites) whose interests are better served by said course of action, and whose capacity to punish disobedience they hold in awe;
• their interests are more tightly bound with those of a greater power (or its elites) than with those of their compatriots;
• the full catastrophic extent of said course of action was less clear to them at the outset, and now they’d lose face – and office – were they to admit even tacitly the magnitude of their folly;
• decision-making, even within a single nation let alone a bloc, is too cumbersome – and the balance of factional interests too precarious – to allow a u-turn when those self-same political elites have oversold the said course of action through propaganda blitzkrieg;
• they are personally insulated from the consequences of their cowardice and stupidity.

All apply to the EU’s disastrous economic war against Russia, on which it shows every sign of doubling down, while some apply to Britain’s car-crash exit from the EU. But today my concern is with the former, not the latter, and the discussion I’m about to link to addresses one aspect of the more general case so cogently made by Seshadri Kumar in my post of December 2: Europe cannot win this economic war.

But before I hand over to Alex Christoforou and Alexander Mercurius at The Duran, let me draw together the reasons for the US-led West’s visceral hostility to Russia and China:

• A freedom loving Washington opposes on principle their authoritarianism
• Russia’s attempts to enter the Western fold on a peer footing, after the shock therapy/ disaster capitalism of the Yeltsin years, met with rebuff after rebuff because Washington would only grant it club membership as a subaltern nation; ¹
• after fifteen years of lies, insults and provocations, above all the eastward expansion of Nato and constant meddling on her borders, Russia has given up on trying to placate the West and now looks east and south: most worryingly, for Washington and Wall Street, to China;
• decades of Western outsourcing of manufacturing to the global south – especially but not exclusively by USA and Britain – have hollowed out economies to leave them acutely dependent on the south’s pools of cheap labour: a dependency disguised by GDP book-cookery which obscures the value-chain precarity of FIRE-dominated economies while undervaluing the economic resilience of a country as vast, as resource rich and, under Vladimir Putin’s stewardship, as fiercely protective of its national interests as Russia; ²

That last is why the EU had thought sanctions of unprecedented severity would bring Russia to her knees. Now that Brussels knows they haven’t, won’t and never could, the factors I listed at the outset apply. But is there a category confusion here? A mixing of why with how? Doesn’t any assessment of the economic health of Europe relative to Russia come after  the fact of hostility? If so, including an essentially strategic factor in a list of motives is invalid, no?

No – and here’s why I placed it as I did.

• the rise of a Eurasia with its east and west centres of gravity united – and too powerful to be intimidated – has for five centuries been feared as a threat to Western supremacy: a threat now more potent thanks to the latter’s hyper-financialisation. The consignment of industry to globalised ‘market forces’, for the short-term gain of a rentier  class which has captured Western governments, has enfeebled its economies. This did not much matter (other than to the burgeoning ranks of unemployed and underemployed workers as jobs literally went south) so long as grossly unfair trade relations with Africa, Asia and Latin America kept the profits flowing northward. But China rising calls into question the long and even medium-term future of those relations of exploitation. ³

To the above we can add the frighteningly underappreciated truth that, as Europe’s businesses go to the wall (and its citizens eye their fuel meters with mounting apprehension) a second and more covert goal of Washington’s war in Ukraine – that of weakening its transatlantic rival and dragging that behemoth more deeply into empire dependence – is furthered even as the prime and better advertised goal eludes it. See my post of February 13 – Can Europe break free of a dying empire?

And this, I think, is sufficient background to that Duran discussion between Mr Christoforou and Mr Mercurius. It comes in at 27:26 but if pushed for time you can fast forward to 09:00. This will spare you a worthy but for current purposes non-essential discussion of Ursula von der Leyen’s lawless moves to freeze more Russian assets, to take you directly to the folly of the EU oil price cap which began yesterday. Alexander Mercurius, with that trademark schoolmaster’s lucidity of his, lays it all out with unerring accuracy and flawless logic.

* * *

1. For the when and why of President Putin growing horns in the eyes of Washington and its satellites, see Why the West hates Putin.
2. The Alice-in chicanery of FIRE (finance, insurance, real estate) accountancy piles absurdity on absurdity to deceive the deceivers. Not only is exploitation of the global south hidden by attributing ten times more value to Western marketing and insuring of an i-Phone than to its manufacture in China; ditto a t-shirt made in Bangladesh. So too does the litigatory tourism for which my own country is renowned boost Britain’s GDP, while the millions of hours of free childcare donated by grandparents do not. Such voodoo book-keeping led the late and unlamented Senator John McCain, blindsided by GDP metrics, to describe Russia as “a gas station with nukes” – and Brussels to underestimate catastrophically the adversary it had thought to cripple economically in a matter of weeks.
3. Though still stumbling in the half light of the dawn of awakening, as early as my Perilous days post six years ago I was glimpsing a truth now in sharper focus. A renascent Russia, and China’s Belt & Road, open up the possibility (for now I’ll put it no more forcefully) of a prosperity denied the global south for centuries under colonial rule, and for decades under the debt-trap controls of modern imperialism. IMF conditionality makes development loans (to bring recipients into the global value chain as semi-colonies) subject to ‘market reforms’ which open up nationalised sectors to the investors of Frankfurt, London and New York. And should such financial discipline not suffice? Or, in the oil rich Ba’athist economies of the Middle East, be inapplicable? Then other means may be called for: infanticidal sanctions and, ultimately, the casus belli  by which armed intervention is given a veneer of ‘humanitarian’ or ‘self defence’ legitimacy. But the rise of a multipolar world, led for now by a China whose approach to prosperity rests on a very different model – see Why read Michael Hudson? – to that of Wall Street offers a ray of hope to the global south even as it threatens to call time on the West’s larceny.