Ian Welsh

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

Category: The Twilight of Neoliberalism Page 3 of 10

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

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On January 23, 2023

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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The Death Throes Of The World Europe Made

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On January 18, 2023

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

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

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

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

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

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

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

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

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

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

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

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

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

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A Map Showing The Two Main Geopolitical Blocs

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On December 28, 2022

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Yeah, it is mostly this simple:

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

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

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

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

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

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

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

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

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A New Age Of Vertical Integration

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On December 27, 2022

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

Well…

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

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

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

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

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

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

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

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The Rules Based International Order is the Minority

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On October 31, 2022

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

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

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

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

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

I find the next chunk predictable:

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

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

Eyeball those nations above and below the 50% mark.

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

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

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

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

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

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

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

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

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

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

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

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

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Understanding and Surviving the Post-Prosperity Era

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On September 16, 2022

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I don’t usually write about my personal life much, but today will be an exception.

The other day I had to go the hospital, to a cancer clinic (nothing to sweat, I have a type of cancer with a 98% survival rate) and the clinic I was at had only one doctor. It normally has three or four. I asked the nurse, and she told me that the others were out with Covid.

Emergency departments across Canada are having shut-downs because they don’t have enough nurses. Covid, either temporary, or nurses having quit because they can’t take the over-work any more.

Before Covid, at the same hospital I’m going to now, imaging tests for possible cancer got done in a month. After Covid, it was about 8 months, and treatment didn’t start until about 11 months. Before, 2 months.

As I say, I’ll probably live, but if I die of cancer, it will be because of, not Covid, but because of the way Covid was mishandled. For cancer, how fast you act matters. Taking an extra 9 months to start treatment isn’t a small thing: it’s a lot of dead people.

If I die, it’s a marginal (or excess) death. It doesn’t get put down as Covid, and it isn’t, but it is because of how Covid was mishandled.

And, of course, what is the government response to hospitals being slammed “we should get the private sector to do some of this stuff.” Classic neoliberalism: “make service shitty, then privatize.”

But this sort of thing is all across the spectrum. I’ve got friends on the edge, people who would have been OK ten years ago, who are now not OK. The cheap places for rent have mostly gone away; generally speaking rent at the bottom end in Greater Toronto is up about 80 to 100%, if you can find anything at all at the bottom price ranges.

More homeless people. More people paying most of their wage on rent and skimping on food and dental and medicines, because universal health care doesn’t cover dental, and Canadian drug prices are bad, just not completely “American whacked.”

As conditions get worse, people who would have made it, don’t: they get pushed off the edge, because there isn’t as much “safe” space. Homeless, sick, dead, poor.

I’m poor, have been for somewhat less than a decade now, and I’ve been poor in the past, particularly in the early 90s. (In the old days I didn’t ask readers to funds, because I didn’t need to.) I don’t use social support other than some help for cancer meds but when you’re poor, who you know includes other poor people

This period is far worse for people on the margins than the early 90s were, and they were, anecdotally and statistically, worse than the 70s.

So there are more homeless.  More dead people. People who under previous regimes would have made it, stayed housed, stayed healthy, stayed alive, aren’t.

It’s a trend, it’s been a trend for over 40 years now, but it’s an accelerating trend.

The rich are running out of money to take. In America and the UK they’ve shattered the middle and working classes, In Canada and much of the rest of the world they’re working on it. I’d guess Canada has 15 to 20 years before it reaches about where the UK is now, and where the UK is that they’re going to slide to 3rd world status. In principle it can be turned around, but in practice it’s unlikely to be. That’s why I supported Corbyn so hard, because he was the last chance they were going to get.

This trend is accelerated by climate change, and by the insistence on fighting a cold war with China and Russia. Right now the primary target is Russia, yes, but the real target in China. Breaking Russia would weaken China massively, and China is the actual threat to the current hegemonic structure, not Russia, which is not a superpower any more, just a great power (and a fairly weak great power in certain ways.)

The point here is that the way the elites are running the world, and most nations, and Canada where I live is a direct threat to my life at this point, and to many many other people. I have joked that I’m damn glad I got cancer now, because even though treatment is delayed, I’m getting it. In 10 years, I don’t know. I’m seeing stories in the UK of people who have to go private because the NHS is so overwhelmed.

To state what’s obvious private isn’t some miracle. It doesn’t create resources the society doesn’t have, it just distributes them differently: to those who can pay. In fact, generally speaking private uses more resources, because it has to make a profit.

Meanwhile the fact is that the world’s resources are actually shrinking. When climate change dries up rivers and burns up forests and increases bad weather and droughts; when aquifers go dry and glaciers and snow packs(resevoirs of water) diminish and die; when biodiversity crashes and fish stocks go away, the real resources we need to survive are being reduced, close to permanently, since recovery will take a long time even where it is possible.

With people having less resources, they can withstand less shocks, and with resources concentrated at the very top end, many people can’t take hits. More and more people are one hit away from homelessnes or death, and to top it all off Long Covid disablement is soaring and will soon be in the double digits in many Western nations.

This is, then, the culling. It’s been going on for a long time, but it’s speeding up. I wrote for a couple decades to warn other people, and now I can see my personal horizon: I can see when I’ll be on the edge. I’m already on the edge, really, as my emergency fundraiser (a first) and the delays in my cancer treatment show. I used to be able to keep other people out of poverty with help, now the aid I can give is restricted. I’m no longer much of a material resource for other (though I help with showers and food and sleep).

But this isn’t mostly about me, it’s about a lot of people being pushed towards the cliff. It’s about you and people you know. Even a lot of people in the middle class have no resiliency left: one bad bounce and off the cliff they go.

The next stage is the elites turning on each other. Having stolen all the fat and most of the muscle of the lower and middle class, they’re going to see no choice but start chewing on societies organs and to start seriously preying on each other, because there’s hardly any reserve left. In the UK, the NHS is the only major thing left worth selling. Once that’s gone, there’s nothing left to loot. All the stuff worth having will be held by other rich people.

Now, there are a few points here, and readers will have picked out some of them, but let’s state a couple clearly.

First, a lot of people, a hell of a lot of people, aren’t going to make it. If you want to not be one of them; if you want your friends and other people you care about not to be one of them, you’re going to need to do something. Probably the best thing is to organize in groups. Do what you can to help yourselves, and make it clear to the rich and powerful that  your problems are theirs: that if you get pushed off the cliff, you’re going to make it hurt them.

The second is that on the mass scale, it’s now us or our elites. They go, or we go, and they want it to be us.

Plan for this era. Climate change is now and it’s just going to get worse and our elites are going to become greater and greater predators, trying to liquidate everything they can find to keep themselves in power.

Remember that personal resilence has its limits: you need other people who care about you and have the ability to help. You need more than family, you need a community, a group and that group needs to take care of its prosperity and have a commitment to caring for its own people.

We did that thru government for a long time, but government isn’t going to hack it for a lot of people. When times like that happen, you form your own mini-governments to do what larger society won’t.

It’s sad, it’s bad, and it’s what millions of people, including myself, spent our lives fighting to avoid, but it’s here and that’s just how it is. Even if some societies turn it around and start doing the right thing, it’s unsure which ones those will be and by the time they get to it, if you aren’t caring for yourself and your chosen group, you may be dead or on the street.

And understand that everyone’s doing the wrong thing. No major society is taking this seriously. When they stop building suburbs and stop pushing cars and stop allowing planned obsolescence, you’ll know they’re serious. No government which has not done at least those three thing is serious, and since our entire economy is built around cars, real-estate expansion and throwing shit out which was designed to last only a few years, we haven’t even started.

Be well, take care of yourselves, and if you can, please organize and take care of others.

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The Trifecta+ Which Will Make The Next 100 Years Hell

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On August 19, 2022

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The Course of Empire by Thomas Cole

The Course of Empire by Thomas Cole

We have three major challenges all coming to peak close to each other.

Or possibly four, depending on how you define your terms.

First: the end of a sub-ideological era. Neoliberalism is on its last legs, just as New Deal liberalism was in the 70s. Ends of sub-ideologies tend to be tumultuous and it’s worse when it’s the end of a fundamentally extractive sub-ideology like neoliberalism, than it is with the end of a “building” ideology like the New Deal which worked to strengthen people, regulate companies and build vast human and inanimate infrastructure.

Neoliberalism was, fundamentally, the realization that all that build-up led to a huge looting opportunity. Get rid of the regulations, stop enforcing anti-oligopoly laws, force massive asset bubbles and those on the inside could get stinking rich.

The New Deal was a reaction to the problems created by a certain type of exploitative capitalism: a “we can’t allow this sort of abuse”, where neoliberalism was “man, abusing people, and destroying/privatizing institutions makes a lot of money.”

So, the 70s sucked, but they were nothing near as bad as the great depression and WWII.

But that’s also because the transition to neoliberalsim did not coincide with—

Second: the end of a hegemonic era. 1914 to 1945 is the end of not just British but European world hegemony. At the end WWII the USSR and US divide Europe in half, with the US controlling the Western half and the USSR the eastern. That the America glove was often velvet, did not change the fact that there was a steel gauntlet underneath (look up Gladio, as an example.)

The death tolls of WWI (21m), II(50m) and the Great Depression (uncounted), plus the anti-colonial wars, famines and the Japanese conquests(14m) and colonial wars is in excess of a 100 million. At the end of WWII, the world population was about 1.33 billion people. That’s a lot dead people and we aren’t counting all the people who were maimed, impoverished, made into refugees, raped or tortured. Nor are we counting the USSR pogroms (we probably should) or the colonial famines (we probably should.)

Hegemonic powers do not go easy into the sunset, and the more powerful they were, the harder they die.

But although there were some serious environmental problems in this era (the dust bowl, for example), the simultaneous end of the hegemonic and sub-ideological cycles which occurred in the early 20th century (which includes communism), didn’t have what we have coming—

Third: a worldwide environmental crisis which will reduce the Earth’s carrying capacity semi-permanently. At best reversal will take hundreds of years and be partial, because we aren’t going to be able to un-extinct all the species we’re killing and the depth and vibrancy of the ecological web is a huge part of Earth’s biological carrying capacity.

So, we can reasonably expect that a significantly greater proportion of the Earth’s human population will die during the upcoming period and more people will be impoverished, tortured, raped, turned into refugees and so on. It is not impossible to imagine a scenario where that didn’t happen, but it requires human social groups to act with decisiveness, wisdom, compassion and forethought which have no precedent in human history I am aware of.

These is what I’ve partially labelled in my categories as “The Age of War and Revolution” and “The Twilight of Neoliberalism”, but they are much larger than that.

Now there is also a larger cycle coming. You’ll note that I kept calling New Deal Capitalism and Neoliberalism sub-ideologies. They’re both capitalist ideologies, and the capitalist world-system has been around since the late 15th century, blossoming with the industrial revolution into a global world-system. Previous to this, contradicting the name, most world-systems didn’t cover the entire globe, but capitalism did. Even communism was part of the system (that’s an entire other article, but the USSR was not in autarchy and was forced to play the game by capitalist world rules.)

Capitalism is ending. There are a bunch of reasons (follow the prior link), but one big part of it is simply that it’s going to have been seen to have failed and be blamed by everyone for the environmental crisis (it’s not just a climate crisis, ecological collapse is at least as important). Democracy stands a chance of getting it in the neck too.

We aren’t just going to be changing sub-ideologies and swapping hegemonic powers and dealing with an enviro-collapse; we are going to be changing how we fundamentally run our societies, because it is almost certain that you can’t be capitalist and fix the environment, and in any case, again, capitalism will totally be discredited by all the deaths and catastrophes during this era.

Likewise, we are going to have to transition from the hydrocarbon era which has run since near the start of the industrial revolution because we cannot fix our environmental issues and have hydrocarbons be our primary energy source.

So, depending on whether you count the transition from capitalism to whatever, we’ve got the end of 5 eras or so. (WWI to II also saw a sub-transition in energy, from coal and steam engines to oil and internal combustion.)

This is compounded by the fact that end of sub-ideological and ideological eras always occurs with fanatically incompetent elites in charge. The classic western example is the fall of Rome, but look at the Weimar Republic, at Hoover, at Nixon/Ford/Carter and so on. The generations who created the previous system are dead or out of power and their heirs are boobs who don’t know how to repair their system. When the Lost generation, the last generation to remember the 20s, not just the great depression) died, a subset of the GI and Silent generations then destroyed the New Deal, both negatively (unable to deal with the oil shocks) and positively (Reagan/Thatcher/Friedman, etc..)

The people in charge now are radically incompetent at everything except internal power games. They are good at accumulating money and staying in charge and bad at everything else. They cannot fix any problems, at best they mitigate, and their mitigations (such as central banks printing money in response to the 2008 financial crisis) make underlying problems worse. On top of simple mechanical incompetence, they are also unimaginative: they cannot conceive of different ways of running society. Even when there are partial exceptions (Chinese leadership handling Covid semi-competently is an example) the elites can’t see their way to ending the ideology (capitalism, and yes, China is a capitalist mixed society) which is destroying the conditions for its own existence.

So this is where we are: the end of an ideological era; the end of a hegemonic era and a huge environmental crisis, all of which can’t be handled without fundamental ideological and leadership changes and which an reasonably be expected to kill billions of people while we “figure” or “fumble” it out.

Welcome to the fin de siecle. More than one. Enjoy the fruits of decadence while they still last.

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The European Position at the End of the Unipolar World

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On July 21, 2022

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It’s hard to remember now, but in the early 2000s, the EU appeared to be the onrushing power. It was gaining new members, who clamored to join, both its economy and the Euro were strong, and it had avoided entanglement in Iraq. Its prestige was high (having nations begging you to let them in their club tends to do that).

What I suggested the Europeans do, at the time, was try and make the Euro into an alternate reserve currency. They also should have increased their military, making them non-reliant on the US in the guise of NATO. Within the EU, steps needed to be taken to stop the abuse of the Euro by Germany as a subsidy for its manufacturing (because the Euro was lower than a pure-German currency would have been) and to allow genuine subsidies in other countries to make up for the disadvantages they would incur as a result of using a Euro — which was priced too high. Aggressive moves towards energy independence would also be necessary, as Europe was –and is — obviously resource deficient.

None of this was done. It appears that EU leaders were comfortable being US subjects, or at least, they didn’t want to challenge it. Germany’s policy towards Russia was trade, sold on the assumption that trade alone would make them good little Europeans, without offering them a path into either NATO or the EU, and with the added insult of allowing and participating in the looting of Russia during the 90s.

As for economic policies like subsidies and some counterweight to German exports, well, that would contravene the neoliberal, technocratic ideology that very much rules Eurocrat elites: the rules are the rules and if your economy gets trashed by them, as Finland and Italy, among others, found out.

In 2008, the Europeans followed the Fed (and, admittedly, everyone else) into a gigantic bank bailout, then spent most of their time since printing money for rich people (a reasonable description of central bank special operations during that era).

Meanwhile, anti-Russia sanctions proliferated, Russia-EU/US relations deteriorated (especially due to to the fight for influence over Ukraine — but that was definitely not the reason), and it all flared into crisis when Russia invaded Ukraine after years of Ukrainian military operations in the Donetsk and Luhansk Republics.

That led to sanctions, which have so far hurt Europe worse than Russia, as the European (and especially German) power grid needs Russia natural gas and coal which they can’t easily obtain elsewhere. Damage to industry has also occurred, and some observers expect it to cost entire German industries and millions of jobs; nor is the rest of Europe unaffected.

The problem now is that a fast move away from natural gas, oil, and coal isn’t possible. Heat exchangers work, but there aren’t enough available. Renewables are great, but transitioning takes time and anti-Xinjiang sanctions mean that 50 percent of the world’s silica supply, along with much of its solar panels, are no longer available.

Meanwhile there’s a heat wave, Europeans don’t have air-conditioning, and live in buildings largely designed for cold weather (with some southern exceptions), and, as everyone loves to say, “Winter is coming.”

Transition is not impossible, but it will take time. It is going to require restarting any nuclear plants which can still work (the numbers do not work without it) and probably building some new nuclear reactors, along with a buildout of various forms of renewable energy. Even moving to imported, and more expensive, US natural gas is not as easy as it seems: it requires infrastructure which does not exist.

Russia, meanwhile, as we’ve discussed before, is restricting natural gas supplies and threatening cutoffs. They can’t buy European goods, and they need the money less than Europe needs gas, coal, and minerals. They are diversifying to the East and South as fast as they can. Add to that to their position as one of the world’s largest grain producers is serendipitous at a time grain production comes under pressure from climate change, and consider that they are capturing a fair bit of Ukraine’s farmland, some of the most productive in the world.

Then there is China. Europe does a lot of business with China and there are massive trade ties. But Europe continues its anti-China rhetoric and keeps putting on additional sanctions against China. China wants the European market, and there are still some advanced items they need to buy from Europe, but political considerations, especially with regards to Taiwan and Xinjiang, may trump such considerations. In particular, it is not in China’s interest for Russia to be defeated or broken up as so many in Europe want, as Russia is a key supplier without which China cannot resist a US naval blockade.

Europe finds itself in a position where it’s scared of Russia and outraged. Eastern Europeans in particular want a complete hardline because they genuinely fear conquest or Finlandization. Without reliable access to Russian resource, Europe is forced to rely on the US and various unpleasant Middle Eastern states and to pay higher prices.

And meanwhile, the simple fact is that transitioning to energy and resources without Russia is hard and will take years. I’d think a full transition, even if done competently, will take a decade or so. Combined with the need for the US in order to stand up to Russia (EU militaries are a joke, Ukraine actually had the largest one), and the Europeans find themselves completely back in US satrapy mode. The US is sending more troops and building bases and that’s how it has to be, if hostility to Russia remains.

Which means that the EU has another task: it has to build its own military, capable of standing up to Russia. This is by no means impossible: Europe is technologically advanced and still has the necessary industry, including world leading aviation, but right now all that is happening is buying more US made weapons and hosting more US troops.

If Europe wants to be anything but a satrapy, it has to fix it energy and resource issues; it has to build a military and it needs to do something even harder—it needs to rethink its ideology, and allow proper industrial policy internally. This is hard to do when it’s dependent on outside resources from a hegemonic power, but if it refuses to do so, it will remain an American satrapy.

How much of this will be done is unclear. Exchanging reliance on Russia for the US may seem like an improvement, but it is still dependence and if Chinese relations sour, the Europeans become “locked in”, with few options.

It’s hard to imagine the current generation of European leadership managing this well, but perhaps they will surprise or, more hopefully, perhaps they will be replaced by more competent politicians.

But overall, it looks like Europe is slowly marching towards its historical norm, less and less important and powerful on the global stage.

A lot, of course, will depend on climate change and who gets hit the worst and handle it the best, but right now Europe looks to be in decline, with an opportunity, if they take it, to use this crisis to come out stronger and less dependent on outsiders.

I hope they take the opportunity.

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