Friday, January 13, 2023

Everything upside down | The Vineyard of the Saker

 by Hugo Dionísio for the Saker blog

8 years of fortified constructions, tunnels, bunkers and endless armament depots, two months of repositioning of reserves and military human losses, the structure finally begins to collapse. The human losses are in the tens of thousands of young people, not so young, national and foreign, and after all the inevitable happens. The comedian who is president, in his daily videos from some bunker or mansion, has always resisted in doing what the opponent does when he considers that the effort is too much for the gain: retreat to a more solid line of defense, saving men and equipment.

The official narrative, shared endlessly over and over again, about “the most important victories since the second great war” for the domestic side, will not be despising, for the decision to fight to the last man. After all, any decision, to call this major defensive fortification line as lost, implies a total reversal in the narrative propagated by the North Atlantic corporate press. It´s a must to first prepare the public who are the relentless followers of such narratives. Telling them the truth is not an option, as this would mean effectively saying the opposite of what has been said, namely regarding the inevitable outcome of the conflict.

In yet another war used as a cycle of capitalist accumulation, a fact that can be clearly stated in the reversal of the trend in the world arms market until 2014, which placed the two indirect contenders (US and Russian Federation) in direct competition and with very close numbers, this situation has, as it were, reversed, with the USA today being the undisputed leader in world arms sales, with around 2/3 more in sales value than its largest direct competitor (Russian Federation).

It doesn’t mean that they sell more quantity…. They mainly sell more expensive. The data at hand brings light about the use of war and the military industrial complex as an instrument of the capitalist accumulation cycle, or, on the contrary, as an instrument whose fundamental objective is national defense.

The “Global Fire Power 2023” which establishes the “Fire Power Index”, places the US in first with 0.0712, Russian Federation with 0.0714 and the RPC with 0.0722. In other words, the top two appear tied and the third is very close. The 4th place, India, is much further away, with 0.1025. What does this tell us about the role of each army?

The first question that comes to mind is, how is it that a country that spends $800 billion of its military budget (and we do not include here the “dark money” of the secret services, nor all the research paid for through federal programs that also goes to military ends), has practically the same firepower as a country that spends $65 billion, and little more than another that spends $290 billion?

The answer lies in several aspects: 1) the North American military-industrial complex is private, therefore, it aims to pursue profit, the enrichment of an elite and the concentration of wealth, with the state being an instrument of this accumulation; 2) the other two have a military-industrial complex that is essentially public – not exclusively – mainly in the most sensitive areas, and is not intended to do more than fulfill its public role, i.e., to guarantee an effective national defense capable of defending the country’s sovereignty.

This difference is paramount, because while the first makes weapons to sell, namely and as many specialists say, producing luxury “toys”, very sophisticated and complex, and therefore very expensive, both in the act of purchase, maintenance, training and technical requirements of personnel, and when in combat, usually very prone to breakdowns. On the contrary, the other two contenders try to produce, as cheaply as possible, effective, efficient and durable products. The fact that they are mostly public companies allows them to buy at cost price, and even when they are private companies, the price they demand is conditioned by a market dominated by the public business sector, whose accumulation dynamics are controlled by the state, in defense of what it understands to be the national interest. This, the US, they call it “lack of economic freedom”. For the richest 1%, of course!

To these two vectors we can also add other variables that will not fail to have great importance: any of the economies in the 2nd and 3rd places are less financialized and, in this sense, less speculative, especially in strategic sectors, which is reflected in lower prices and a lower weight of the rentier sector on industry; both countries have a very large installed industrial potential, which allows for almost exclusive national production, with production chains almost entirely in national currency and therefore very little vulnerable to speculative attacks or disruptions of other kinds (in the case of the Russian Federation, still has the advantage of having access to all raw materials in its territory); finally, both countries have closed capital accounts (at least in part, since the Russian Federation has been closing with the sanctions and the RPC only opens in certain areas and with many limits), which allows the establishment of production chains of high added value, but of low comparative cost, when their product is evaluated nominally, in $. The advantages we see here in defense are also visible in other areas such as space research and development, railroads and banking. This is the only way to withstand massive sanctions (as in the case of Russian Federation), and the only way to use the accumulated potential for a more rapid development of the country (as in the case of the RPC).

Let the defenders of neoliberalism and the “opening” of markets come out now and argue that countries defend their sovereignty better that way, and not through the aforementioned protectionist measures. Were it not for these measures, the two economies in question would already be absolutely devastated, either by sanctions or by speculative attacks, and their peoples would be in the most absolute poverty, from which they had such difficulty in escaping. It is no accident that the two major US demands for changes in the RPC are related to the privatization of its huge (about 30% of the country’s ownership) public corporate sector (mainly banking) and the full opening of the capital accounts. It is no accident, either, that the US has accused the Russian Federation of enhancing its currency through capital controls. This is why the White House says that a “regime change” is necessary. This is not in the interest of “their” democracy, it makes it more difficult for trojan horses to enter.

But if this is one of the most important factors in dispute, one of the others, energy, has already borne fruit, at least in the short term. According to Bloomberg, the US will become the world’s largest gas producer by 2022. All at the expense of the transition of the European purchase, from Russian Federation to the US. If, for the USA, this “opportunity” (as Blinken said) was fantastic, for Europe, it shows its overall fragility, in political, economic and cultural terms. To get an idea of the cost of “decoupling” from Russia and “coupling” in the US, in terms of energy dependence, just look at the trade balance data for November 2022, the period when these countries were engaged in filling up their reserves of natural gas and other fuels.

The data provided by Golden Sachs says that for France, last November was the most negative November in the last 20 years, in terms of trade deficit (- 15%). Sweden, like France, also had the worst November in 20 years, one of only 5 in 20 to have a deficit, and this year’s was much higher than last year’s, which was already negative and reflected Ursula’s “big” decision to start buying gas “on the spot” instead of conclude long-term contracts (the “decoupling” was already in preparation), as would be advisable. Germany, while remaining on positive ground, nevertheless had its worst November in 18 years. In terms of chemical and pharmaceutical industrial production (which require gas), it is in free fall, dropping to much lower levels than in 2010, in the midst of the subprime crisis. The sky-high price of American gas makes production unviable, and on the other hand, the lack of gas, due to the closure and destruction of the NStream by its “allies,” means that one has to choose between industrial production on the one hand, and maintaining the strategic gas reserves on the other, so necessary for heating in the middle of winter. Germany has opted for the closure and relocation of companies. Some to the RPC, others to the USA, which even has a competitive pharmaceutical sector (nothing happens by chance).

Japan is also in a complicated situation, also with the worst November in the last 20 years. This will not be unconnected to the decision to buy oil from Russia again, namely by returning to the Sahkalin project and without complying with the price ceiling that it had previously “contributed” in the G7 to set. This decision will certainly not make its Atlanticist masters very happy.

The conclusion of one of the Golden Sachs economists who released these data is that “the world export champions are no longer so”. This is what comes of giving up national sovereignty and letting the “allies” make the decisions that are up to each one of them.

The total submission of the G7 countries and the EU to the dictates of NATO, an organization created to groom them, which today is confused with the European Union itself; the blind application of all economic and financial sanctions and guidelines; the lack of protection mechanisms for the respective internal markets… All this has the effect that we are witnessing, which had been foreseen by so many silenced people throughout this time. How they must hate to be right.

And while everyone maintains such openness, the Atlantic “ally” adopts protectionist measures aimed precisely at capturing the best that the industry of its “friends” still has to offer.

After this and the announcement – as a diversion for the recent military defeats – by the European Union summit, all that remains is to see our prime minister, president and other Atlanticist left and far right-wingers come out to defend the rapid entry of Ukraine, Georgia and Moldova, in the European Union… All for solidarity, of course! I want to see when these people, who have so many companies that live off European structural funds, stop receiving them… I’m sure they will find fault where there is none. After all, that is their practice!

Do they want change? They must do everything upside down!

Hugo Dionísio