Category: The Twilight of Neoliberalism Page 4 of 13

On February 23, 2024

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Is breathtaking. Brzezinski was Carter’s National Security Adviser. In 1997 he wrote, not long after the fall of USSR, that:

Potentially the most dangerous scenario would be a grand coalition of China, Russia and perhaps Iran, an ‘anti-hegemonic’ coalition, united not by ideology but by complementary grievances. . . . Averting this contingency . . . will require a display of US geostrategic skill on the western, eastern and southern perimeters of Eurasia simultaneously.” — Zbigniew Brzezinski

It’s sort of hard to do commentary on this, because of the jaw dropping, head-banging stupidity of it all.

I don’t like US foreign policy after WWII thru the late 60s, but it wasn’t brain-dead. Evil, often, but not stunningly stupid. Nixon was a terrible person, but his “opening of China” was smart and policy after him thru to Bush the Elder was, while not good, or smart, was at least not always stupid.

But since then American policy has been brain-dead. Making Russia into an enemy. Making Iran into an enemy. Shipping America’s industry to China so that a few oligarchs could get richer for maybe two generations. None of this was necessary, for decades polls in Iran showed that Iranians had positive views of America. Russia was so enamored of the West that Putin, in his early years, begged to be let in.

But the US had greed and grudges. The Russkies were always bad and the Iranians had humiliated America, so there could never truly be cooperation and peace and trade which was designed to benefit both side.

And so America lost its global hegemony, precisely by doing what it was repeatedly warned not to do: unite the greatest Asian powers against it.

American and Western elites in general aren’t suited to run lemonade stand, let alone countries or an Empire.

Imbeciles, specialized only in self-promotion and accumulated money which will be worth one-tenth what it used to be when the Empire collapses.

The Sun Sets Slowly—Then Quickly

On January 14, 2024

The American and UK navies both have manpower shortages. When the aircraft Carrier Gerald Ford left the region, it was already vastly undermanned:

And there are moments when you realize it is setting:

The Houthis have now banned US and UK ships from transiting the Red Sea.

"Previously, we focused only on maritime shipping associated with Israel. Today, US and British ships will no longer dare to cross the Red Sea – Yemen Council member Muhammad Al-Buhaiti pic.twitter.com/pSpRLP3okP

— LogKa (@LogKa11) January 14, 2024

The people of the mountain have checkmated the people of the sea. As commenter VietnamVet wrote:

The Five-eyes Oceanic Empire is dying before our eyes. UK, Canada, Australia, and the USA (let alone New Zealand) simply do not have armament or manpower to occupy Yemen to push the Houthi back far enough from the Gate of Grief at the mouth of the Red Sea to reopen the Suez Canal to western shipping. A global logistic choke point has closed. The second, the Panama Canal, is limiting ships due to the drought.

In the face of a massive shortage of Navy sailors, America’s newest aircraft carrier, the USS Gerald R. Ford (CVN-78), has downsized, cutting the crew aboard by hundreds of sailors.

The cuts appear to be deep and dramatic. Over the past six months to a year, some 500 to 600 sailors have left the USS Ford and not been replaced. In fact, the USS Ford has shed so many crew members that the ship’s company (core crew members that operate the vessel) is now below the Ford-class Carrier Program’s original Acquisition Program Baseline objective of 2,391 billets—a goal set back in 2004 that many observers considered unrealistic.

On top of this, ships can only store so many missiles. Every missile salvo reduces the amount of time before they have to return to base. America and Britain have been sending vast numbers of missiles to Israel and Ukraine and western manufacturing capacity is vastly below what is needed to refill stocks.

Meanwhile the Yemenis live in a mountainous country and their missiles are all mobile. It is impossible to take them out just with naval power: boots on the ground are necessary: a full invasion and occupation, in fact and that just isn’t happening: the US might be able to do it by going all out, but it would have nothing left for anywhere else.

So fundamentally, the US can’t invade and it can’t stop the Yemenis from shooting missiles. It might be able to bomb a lot, but that won’t stop the Yemenis: the endured one of the longest and most brutal bombing campaigns of the last hundred years just recently.

The US — the West, doesn’t have deterrence. We can’t do anything to the Ansar Allah which will make them back down and we don’t have the ability stop them by main force.

Trying to stop them by main force has made the situation worse: now even more vessels can’t enter the Red Sea—commercial cargo lines are not going to chance being shot up.

America is a naval empire. It, like the old British empire, rests on being able to keep the shipping lines open and on using naval power (and air power) to hurt nations while those nations can’t fight back. In the 19th century the Brits would park ironclads off the coast and just pound cities, and there was nothing those cities could do in return.

This is, then, one of the key moments in the end of Western hegemony. The point at which we no longer have deterrence; at which we can no longer “big foot” other nations.

The end of Western dominance is close, very close. I can taste it, like a hint of salt on a sea breeze. The Chinese are only behind in a few technological areas. Once other nations can get everything they need from China/Russia and other lesser nations they will be free to throw off the Western order, because the new and improved missiles make “stand off and bomb” far less effective than it used to be.

They don’t have to be scared of us, and soon they won’t need us.

The Anti-China Chip Jeremiad Is The Stupidest Policy Imaginable

On January 4, 2024

So, if at first, or second, or third, or tenth you don’t succeed, try try again. The Netherlands, under heavy pressure, has canceled already approved sales of ASML lithography machines to China.

The leadership of ASML had resisted these sanctions because they said it wouldn’t work: what would happen is that China would learn how to make the machines themselves.

What he didn’t say, but it is true, is that ASML would not just lose the Chinese market, they would eventually lose the world market anywhere that didn’t put high tariffs on China or ban Chinese ASML machines, because when China learns how to make their own they will inevitably be cheaper, and the quality will catch up at some point.

Sanctions work on weak nations. They do not work on strong nations, or on nations which have strong friends. Russia sanctions might have worked if China and India and most of the South had gone along, but since China was never going to let Russia be destroyed, and since Russia produces all the fuel and food and most of the minerals it needs, plus still has a fair bit of advanced and heavy industry, especially arms manufacturing, it was never going to happen.

Sanctions against China are insanity. All they do is accelerate local production.

The thing is that before the sanctions most Chinese majors preferred US or South Korean designed chips. They were considered better and more reliable. Executives would not buy Chinese chips, even when they were available.

But when the US first launched its chip sanctions they were clearly trying to take out Huawei, one of China’s largest companies.

Being reliant on western chips went from the safe choice to the insanely risky choice and China, both private and public, spent vast sums and made huge efforts to build their own chip industry (including lithography machines are alternatives.)

There was a small window to turn this around when Biden was elected, but he doubled down on sanctions.

This needs, I think, some unpacking.

I don’t like to reach for arguments are about racism, but there’s a weird assumption in the Western ruling class that the West is just superior to everyone else: that our technological lead was somehow innate and inevitable and eternal.

Given that China had the tech lead over the entire world for a couple thousand years (or may 1,500 before which it was India or Ancient Greece and before that it was always Mesopotamia or Egypt) this seems strange. Europe took the tech lead for complicated reasons, both China screwing up and European events which were historically contingent and mostly not planned.

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A full discussion is beyond the scope of this article (and fills many many books) but “Why Europe and not China” is its own genre.

But nobody with any sense thought it was because Europeans or those of European descent are innately superior to Chinese.

I’m a broken record on this, but where the industrial base goes, the tech lead goes, at least in the industrial era. Pre-industrial it’s a bit more complicated, but it’s not an awful guideline, the exceptions tend to be transient, but they do exist (the ancient Greeks were insanely advanced) and they tend to occur where there are is a group of constantly competing small nations, which is the over-simplified explanation for European pre-industrial revolution technological advancement and also explains the massive leaps China took during warring states periods.

But if you don’t have a forced competition between near equals who know they can’t sit still or a genuine breakthrough (the industrial revolution) or both, then the more normal processes mean that where the industrial base is, so goes the tech.

Now, sanctions against China would make sense IF and only IF, you were going to take advantage of them immediately. In other words, go to war or make really radical changes to try and re-industrialized.

How radical? Well, my estimate is that if the US wants to re-industrialize it needs to drop housing and rental prices by about two-thirds, and forbid all excess profits on any product which isn’t new, say less than ten years old (and a new model is not new. Smarthone producers should have been allowed to gouge on smartphone prices for ten years after the first iPhone, for example.) No food gouging, no pharma-price gouging on medicines decades old, and so on.

The US (and Europe) need a crash, not in living standards, but in price structures. That means the people at the top need to become a lot less rich, very very fast. Social welfare isn’t a problem, actually, letting ordinary people have a backup so they can take risks and start new companies is a good thing, and so is forcing companies to really compete for employees. Tech advancement and economic growth was far better in periods with when the US had more generous welfare systems.

Obviously these policies are extremely radical, and equally obviously, America isn’t going to pursue them, so anti-China sanctions are basically pointless and actually accelerate their tech progress.

China now has the lead in more techs than not. That’s not going to change: it’s going to get worse. When the US sent its industrial base to China that became inevitable because all “end of history” bullshit was, in fact, bullshit. Capitalism doesn’t require representative democracy and neither does fast technological progress. (It doesn’t need capitalism, per se, either, but that’s the only solution we know and it was necessary for China to do capitalism to get the industrial base transfer. Also, again, another book sized topic.)

Anyway, again, anti-China or Russia sanctions increase the speed with which they catch up in tech, not decrease it. The Russia sanctions could have been justified if they let Ukraine win, but obviously they didn’t, and it should have been obvious at the time they wouldn’t because of China’s very good reason for not allowing them to work.

Our leaders, still only good at making themselves richer, worthless for all other purposes. And, in the end, the policies they pursued to make themselves rich will just turn them into the people running shithole countries which don’t much matter.

What Was Important In 2023

On January 2, 2024

From most to least.

Climate Change Tipping Point

2023 is the year when climate change appears to have moved from linear to self-reinforcing in a big way. This was the tipping point many of us have been waiting for. Because of how movement between points of stability works, it may flip back and forth a few times, but this is the future. We had 30C weather in the middle of southern winter. Droughts. Vast forest fires. Way less ice in the arctic than their should have been, and so on.

I suspect that the point where we could stop climate change with anything short of massive geo-engineering (and I am not endorsing geo-engineering) is now past. Before, the problem was politics. Now it’s physics, chemistry and biology.

As I always note, environmental collapse is just as important, and 2023 also so a collapse of Alaska fisheries and continued degradation of coral reefs, insects, birds, and pretty much everything else.

Climate change and environmental collapse, when historians look back at this period, will be seen to outweigh everything else by a couple magnitudes, at least. Everything else is a footnote, except in in in understanding how it contributed.

Covid Continues And Long Covid Numbers Keep Moving Up

Yeah, almost no one’s paying attention, but a pandemic which is also mass disabling event and which we’ve given up even trying is one of those brute facts which matters whether you believe it does or not.

Huawei and China Handle the US/Euro Sanctions

All those chip sanctions didn’t stop Huawei in the end. They made a top end phone. China became better and better at making their own chips, and even the US forcing an end to exports of the best chip lithography machines won’t matter. China is now ahead of the US and Europe in more fields of science and engineering than it is behind in, and catching up fast in those few.

Russia Sanctions didn’t work

Notice a theme here? With the support of China, India, Iran, and the Global “South” Russia did just fine. In fact, sanctions have lead, as they did in China, to increased industrial progress and “teching-up”. Western sanctions also finally forced Russia’s oligarchs to stay at home and invest in Russia.

Russia Sanctions Did Hurt Europe / Europe’s Continued Decline

Lots of energy intensive industry had to move out of Europe over the last couple years, since replacements of Russian energy cost a lot more. Meanwhile the EU is no longer a scientific leader: China, the US, Japan and South Korea are all moving much faster. Europe’s in decline, probably terminal decline, in the sense that there’s no effort being made to do the right things to reverse it. Africa’s rebelling and kicking the French out, since they don’t need France any more as they have China.

BRIC Expansion

The BRICS are now the most important trading bloc. It isn’t close, actually.

Movement Away From the US Dollar

As everyone with half a brain has expected for a long time. Slowly, then quickly. The US dollar is still number one, but a lot of deals are now being cut in other currencies, including for petroleum products. This will continue, and you can discount all the garbage about how it’s impossible. Once it was impossible that the British Pound would be replaced. This will still take some time.

This is, almost 100%, happening so soon because of US sanctions, especially freezing so much Russian money. Money that the US can and will just take away whenever it feels like makes other countries twitchy.

Ukraine Lost The War

Yes, there’s still a lot of shooting to go, but the failure of the counter-offensive and the fact that Russia has more manpower, and that it and its allies can produce far more weapons and munitions than Ukraine and NATO mean the war is lost. It may go one for another couple years, but peace will made on Russian terms at the end. This was predictable day one (and I did) but now it should be obvious to everyone whose job or emotional integrity doesn’t require them to ignore the obvious.

The Gaza War

What’s interesting about this is that Israel isn’t winning. Oh, it’s committing genocide, but it’s not winning. What’s also interesting is that the US can’t bigfoot Yemen, because as I pointed out over a decade ago, the new generation of weapons are cheap and can easily be afforded by and made by third tier powers. A movement as fundamentally weak as the Houthis can tell America to bugger off. Missiles and drones aren’t just weapons of the rich and powerful any more.

Continued Collapse Of American Elite Consensus

The various prosecutions of Trump, all by Democrats, and the efforts to keep him off the ballot indicate America’s elite consensus is breaking down. This is low on the list because it’s just a continuation of previous trends. And no, it wasn’t actually started by Democrats: the theft of the 2000 election (and yes, it was stolen), and the attempted insurrection at the capitol were Republican.

In a way what’s happened is that the Democratic party is finally fighting back. They are no longer willing to just let Republicans do what they want. but Republicans aren’t backing down either, and so the elite is splitting. We’ll see how it plays out, but historically it’s either resolved by someone winning resoundingly and creating a solid new coalition around a shared ideology (FDR, for example) or by civil war.

***

Welcome to 2024. It’s unlikely to be a better year than 2023.

National Futures In The Age of China & Collapse

On December 19, 2023

The baseline is that China is now the dominant economic power: the greatest great power. This is not evident to everyone yet, it will be soon. They produce more science, are ahead in most technological areas and have the largest industrial base. I’ve written about this plenty, so I’ll leave it at that.

The next baseline is that we have three onrushing issues: climate change, ecological collapse and running out of various resources. The third isn’t obvious to most people yet, but it will be. China has won the lead horse position on a style of life and economy which is genuinely unsustainable, in the sense that continuing to run our economies on planned obsolesence: building lots of stuff to just throw it out in a few years, cannot be sustained because it’s destroying the conditions which allow for human life and a predictable economy.

This doesn’t mean that taking lead horse isn’t useful to China: if they have sense they can use all that industrial capacity and scientific and engineering expertise to speed thru the necessary transition. So far they aren’t, beyond some steps towards the renewable electrical economy, which is necessary but insufficient.

To put it simply, civilization collapse is on the way. Everyone is going to be hit by it, even China and America. I’d expect China to hold on longer than most, unless there’s an early inundation of their croplands in the North, but by 2070 to 80 at the latest, China will be in warlordism again.

However, let’s run thru some shorter term notes about various nations.

Europe is in terminal decline. Maybe a few parts will avoid this, but they are no longer leaders in new science and engineering (China, the US, Japan and South Korea are all ahead of them) and are losing their industrial base because of their high input costs, primarily energy. Making Russia their enemy is costing them their legacy heavy industry, since American energy costs much more than Russian.

Of the major European countries, the UK is in fastest decline, since they sold all their industry long ago and decided to try and live off finance but the entire subcontinent is moving back to its usual place in Eureasian affairs: a backwater.

India isn’t going to make it. Sorry, too many internal problems, too little time. To much corruption and the authoritarianism is clumsy and stupid (there is smart authoritarianism, India is not practicing it) and climate change is going to hit India fairly hard and early. But overall, the signs of takeoff aren’t there, and there isn’t enough time. India will be broken up by 2050 to 2060 and 2035 to 40 is entirely possible: when they have real crop failure, they will have famines which kill hundreds of millions and cause vast violence and displacements. And they are going to have vast crop failure.

South Korea and Japan are the American allies which actually matter. Everyone else is meaningless. These two countries still have industrial bases and fast scientific and engineering advancement. In per capita terms South Korea is first in the world, Japan is second. For now they’re fairly firmly on the US side, but if China is smart and willing to cut them a good deal and they’re smart, they make their peace with the other side. The sooner they do this, the better deal they’ll get.

Russia was done a vast favor by western sanctions, which have forced its oligarchs to actually spend money at home and which has allowed Putin to create new oligarchs based on seized western assets. No more wasting money on British football teams. The Russians are working hard on civilian aviation, they’ve vastly increased their military industrial output and in general sanctions have forced them into industrial policy. Their risk is being swamped by China, and they will have to be smart and cut deals where China lets them keep and extend certain industries.

Saudi Arabia and the oilarchies are screwed. They’ll have their little days in the sun, but they have no real industry or research and aren’t going to be able to ramp up enough. As the age of oil ends, and it is, they will fall into well-earned obscurity and meaninglessness. The only one which stands a chance is Iran, since sanctions forced it to create its own industries. As with Russia and pretty much everyone else, they’ll have to cut a deal with China to keep and extend that industry, but as early allies, that’s easily doable if neither they nor the Chinese get too stupid.

The Developing Nations have a window in which to cut good deals with China. I wrote an entire article on how to cut good deals with China, so I’ll leave it at that. If they don’t, well, the new order will still be more friendly than the late neoliberal order, but most such nations are not in a position to handle climate change and ecological collapse well. It’s going to be ugly. That said, for a few, there will be an opportunity to come out the other side comparatively much better off.

Overall we are moving into a period like that from 1914 to 45 or any other major power reset: the old power is falling, the new power has risen. America was actually ahead of Britain by 1890, and it took quite a while for the British to fall, but this isn’t an exact analogy, because in this case the old and new powers are in conflict and there is an onrushing global near-apocalypse.

There’s only so much time left before everything starts falling apart in ways which can’t be ignored. Smart nations and smart people will use that time to prepare.

Notes On The Structure Of American Imperial Collapse (State of the World 2023, #1)

On October 31, 2023

The American empire is now in essentially unstoppable decline. Certainly there are things that could be done to stop it, but they will not be done, much as the British had to avoid WWI and not take profits by sending industry to the US.

(This is the first article on the state of the world, as promised in last year’s fundraiser.)

Everyone knows about comparative advantage, but what doesn’t get talked about is absolute advantage. In absolute advantage you have something people need that they can only get from you.

This can be weapons. It can be jets. It can be advanced computers. It can be the capital equipment (like lithography machines used to create semiconductors) used to make other things. Sometimes it can be a resource, like oil.

The USSR was competitive with the America and its satrapies when it could still offer most of what other nations wanted. They could shop at the West store or the USSR store and get jets and weapons and dams and electrical networks and so on. By the 70s this had started to come apart, and in the 80s their failure at microcomputers was starting to really hurt, plus their domestic economy was in serious trouble.

So from somewhere in the late 70s to early 80s, and certainly after the collapse of the USSR, if you wanted jets, good weapons, computers, internet and so on, you had to go to the US and its allies: or rather, its satraps. There were American jets, or there were European (Airbus) jets, and so on.

Starting in the 80s, but really taking off in the 90s, China began to really industrialize in the standard way: start at the bottom of the chain and sell to the West. They moved up the chain very fast.

For example:

Huawei and ZTE are both Chinese.

The numbers above are worse than they look, because Huawei 5G is banned in much of the West. So really, Huawei is dominant in much of the developing world (the South.)

China now has a domestic jet industry. It isn’t quite up to snuff, but within ten years it will be. The latest Huawei phone, post sanctions, was made with domestic chips and outperforms Apple and Samsung on some important metrics.

So, let’s move to the important charts. The world in 1990, right after the collapse of the USSR.

The world in 2020:

China is more dominant than the US was in its prime. (Well maybe not in 1946.)

Now this sort of thing is a leading indicator. Countries who were dominant are able to control more of the world’s resources than they deserve for some time after they lose their dominance.

Be clear, the US has LOST its dominance already. It’s all over except for the shooting. It doesn’t look or feel like that because of generations of accumulation and because the dollar is used for most world trade.

But those are lagging indicators. Britain’s pound was the main instrument of trade for decades after the US had overtaken it industrially.

This time it’s going to happen faster, because the US has abused its central position in financial networks in ways other countries, like Russia and China won’t tolerate.

Now, understand clearly, Western prosperity is based on commanding more of the world’s resources because everyone had to get what they needed from the US and its satrap (well, and the whole imperialism and military thing, but that’s another article.)

Since China now offers almost everything the West does, at better terms, they will come to command those resources. It’s that simple, though that doesn’t mean the road will be smooth. This will be an Age of War and Revolution, and civilization collapse, especially as this isn’t a normal changeover because of climate change and ecological collapse.

Within the West we are already seeing the US cannibalizing its satrapies. Germany had to have cheap oil and natural gas to run its industry and European patents are lagging, badly. Europe’s garden will go, and go relatively quickly. The Chinese will dominate the EV market, eat Airbus and Boeing alive and bypass European control of the machines which make semiconductors.

The main industry the West seems to still have a dominant lead in is biotech, but the Chinese will get there.

Japan and South Korea will do better because both are keeping up in scientific innovation, but my bet is that South Korea will peel off into the Chinese sphere at some point, economically they already have. I’m less sure about Japan, but they’d be wise to do so.

As for Europe, well, for twenty years I’ve been warning them they had to regain their independence and forge their own path. Most of Eastern Europe should never have been allowed into the EU or NATO. The EU should have built its own army and left NATO. And yeah, they should have done everything necessary to keep good ties with Russia, which would have been easy, because until fairly recently Russia wanted to be a European nation.

They did none of this, their rate of scientific advancement is abysmal outside of a few areas and they’re toast.

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The End Of The Post-War & Post-Soviet Eras

On August 25, 2023