Hiking Interest Rates Protects Financial Assets Of The 1% At Workers’ Expense

Gerald Epstein is Professor of Economics and a founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst.

High inflation has returned after more than two decades of very low and stable inflation rates. While in the past, central banks were struggling to bring inflation up to a target of 2 percent, they are now confronted with the opposite task. Raising the interest rate is one way to combat inflation, which is why the Federal Reserve announced in mid-June its largest interest rate since 1994.

Will a hike in interest rates fix the real reason behind today’s inflation, which is now a global problem? What does the Fed rate hike mean for average workers and the poor? What other ways are there to combat surging inflation? And why do capitalist governments worry more about inflation than they do about unemployment or inequality? Progressive economist Gerald Epstein sheds light on these and other questions about today’s inflationary economy. Epstein is professor of economics and founding co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst and a leading authority in the areas of central banking and international finance. He is the author of many books, including, most recently, The Political Economy of Central Banking and What’s Wrong with Modern Money Theory? A Policy Critique.

C.J. Polychroniou: In an attempt to combat high inflation, which rose in the U.S. by 8.6 percent in May, the Fed hiked its interest rate by three-quarters of a point. This is the highest interest rate hike in decades, but it wouldn’t be surprising if the Fed took even more aggressive actions in the months ahead as part of its war against inflation. How much of an impact can higher interest rates expect to have on inflation?

Gerald Epstein: It partly depends on how high interest rates are jacked up and how long they are kept up. In general, moderate increases in interest rates — say, 1 or 2 or even 3 percentage point increases — cause only small reductions in the inflation rate, which is defined as the percentage rate of increase of the price of a market basket (collection) of goods and services over a period of time. There are many reasons for this. For one thing, in the first instance, as Wright Patman, the populist congressperson from Texas in the 1950s repeatedly pointed out, increases in interest rates actually increase prices! The reason is that interest costs are, among other things, a cost of doing business for companies that borrow money to fund their operations. So, like wages, or gas or other costs, increased interest costs are likely to be passed onto customers by businesses that rely heavily on credit.

As for the price reducing impacts of interest rate increases — these occur only indirectly. The main channels are by raising the cost of borrowing by families for houses (mortgages), or credit card purchases, and by raising the cost of borrowing by companies that are planning to build new factories or buy new capital equipment. These reduce the demand for goods and services — houses, appliances, cars, new factories and capital equipment — and the workers that produce them.

It is the next step where possible reductions in prices and the rate of inflation comes in. Companies and workers are very reluctant to lower prices, or even to reduce the rate of increase of their prices and wages. So, what happens next depends on the power that workers and capitalists have to keep their wages and prices up — to wait out the reduced demand for their products and services until demand goes back up.

Typically, firms have a lot of ability to wait out the cutbacks without greatly reducing their prices. This is especially true when firms have a lot of pricing power if they are monopolies or have a big share of the market, as mega corporations often do. Workers, much less so. So as demand for products go down and unemployment goes up, we typically begin to see wages either go down or stop going up. Perhaps housing prices begin to slide or soften. Over time the inflationary pressures might subside.

But this can take a substantial amount of time. Estimates by well-known Yale economist Ray Fair, for example, indicate that a 1-percentage point increase in short-term interest rates reduce the inflation rate by one-half percentage point, but only after 15 months. So, as estimated by macroeconomist Servaas Storm, it would take a 4-percentage point increase in the Fed’s interest rate to reduce the inflation rate by only 2.5 percentage points — say from 6 percent to 3.5 percent — far above the Fed’s target of 2 percent. And the price tag for this modest drop in inflation would be an increase in the unemployment rate by 1.5 percentage points and a significant fall of GDP.

Even these weak anti-inflation impacts are probably an overestimate of the impact of interest rate increases on current inflation. The reason is that so much of this inflation is due to production disruptions outside the U.S. that increases in U.S. interest rates will have, at best, weak effects.

The libertarian economist Milton Friedman famously said that inflation is caused by “too much money chasing too few goods.” He assumed that the culprit here was “too much money” — typically printed by the Central Bank (the Federal Reserve in the U.S. case).

But, historically, most really serious inflations are caused by “too few goods,” not too much money: that is, serious disruptions in the supply of goods. Typically, these are associated with wars, droughts and political instability. And this is largely true with our current inflation.

Most of the drivers of our current inflation come from disruption in the supply of key commodities such as oil, gas and food, and other key parts of the “supply-chain” such as microchips for automobiles. Some of these disruptions are still resulting from the COVID pandemic and the shutdowns associated with that disaster; and now, added on are the sharp increases in fuel and food prices stemming from the Russian invasion of Ukraine and the Russian blockage of Ukraine food exports to the world.

According to Servaas Storm, increased prices of imported products to the U.S. account for upwards of one-third of the increased inflation we are experiencing.

In addition to the external sources of production and distribution (i.e., “supply-side”) disruptions, the U.S. has domestic disruptions as well. Some of the better-known ones include shortages of truckers, inefficient ports and a decline in the labor force relative to pre-COVID trends. The latter is very important but is poorly understood. It could be a combination of COVID health issues, poor pay and working conditions, more family obligations, and other factors.

The point, though, is that interest rate increases will do nothing to solve these problems, and might even exacerbate them by making it more difficult for families to get the health care, child care, etc. that would allow them to go back to work.

In short, even when we are experiencing “plain vanilla” inflation due to too much demand (“demand-pull” inflation), interest rates must be raised significantly and for a long period of time to reduce it, at considerable cost in lower economic growth and higher unemployment. But when the main causes of inflation are supply side factors and, especially, those occurring abroad, the potency of interest rate increases to fight inflation are much, much weakened. This means much more pain needs to be foisted on workers to extract the same gains in terms of lower inflation.

Who wins and who loses from the Fed’s interest rate hike?

The current inflation, which is caused by significant disruptions in the supply of key commodities, such as gasoline and food, among other goods, is very negatively impacting poor and working-class people in the U.S. These price increases are like a big hike in sales taxes, which is a “regressive” tax: That is, it most negatively impacts those groups who spend a high percentage of their incomes on these goods. And given that these are necessities, these represent a high percentage of the purchases of these groups. Very rich people spend more on these goods than do working-class people, but this represents a much smaller percentage of their incomes. So, bringing down the cost of these necessities would certainly help poor and working-class people and families.

However, as we have seen, increases in interest rates will not do this, at least not without hurting these very same groups. Raising interest rates will increase unemployment, reduce economic growth and raise mortgage interest rates, which makes housing even more expensive for these people.

The increase in interest rates will primarily help two groups: those with significant amounts of financial wealth, and financial institutions that lend money and will now be able to charge higher amounts of interest and whose financial assets will retain more of their value if inflation falls.

Now, those who have seen the stock market drop in recent years will question whether wealthy investors will benefit from higher interest rates. It is true that one impact will be a reduction in the value of financial assets like stocks; at the same time, the rates of return on newly invested income will be higher. Moreover, to the extent that, in the longer run, the higher interest rates limit inflation, it will reduce the possible erosion of the real value of the wealthy’s considerable wealth.

There is another group that potentially benefits from the high interest rates that will raise the unemployment rate: the capitalists who employ workers.

The Fed and capitalist governments in general worry more about inflation than they do about unemployment, poverty and economic inequality. Why is that?

The simple answer to this question is that capitalists of various stripes tend to be harmed by substantial inflation, and they tend to benefit from unemployment, poverty and economic inequality. All of these reduce the power of workers and increase the power and wealth of capitalists. The Fed and capitalist governments, who tend to be disproportionately influenced by (if not controlled by) various capitalist segments, conduct policies that reflect these preferences. An (overly) simple way to think about this is to think of capitalists as being divided between two groups: financial capitalists (bankers, rentiers, financial operatives) and non-financial capitalists (auto producers, internet, agrobusiness, etc.). Of course, this is overly simple since there is often a big overlap among these groups.

But to continue: The financial capitalists and rentiers are especially phobic about inflation because unexpected increases in inflation erode the purchasing power of their financial assets. The non-financial capitalists, for their part, are phobic about their workers having too much power which they can wield to get higher pay, better working conditions and even more control over the decisions of the firms. Karl Marx noted the fact that capitalists adore the ability to “discipline” workers so they can’t exercise their power, and the main mechanism that capitalism has to do this is to throw workers out of work — that is, create unemployment. Marx called this the “Reserve Army” of the unemployed. In Das Kapital, Marx noted that capitalism requires the periodic replenishment of the reserve army of the unemployed to keep the workers in line.

The non-financial and financial capitalists typically are united with respect to monetary policy when unemployment is low and inflation is high: the Fed should raise interest rates to throw workers out of work, prevent them from raising wages, and thereby put downward pressure of prices and inflation in order to protect the real value of their wealth and increase capitalists’ profits.

So, the previous question asked who benefited from higher interest rates in this current situation? The bankers and the non-financial capitalists.

What does today’s inflation and Fed policy teach us about capitalism?

The bankers, banker-friendly economists such as Larry Summers and his associates, and pundits in the press are all pressing the Fed to take extreme measures to reduce inflation, even if those measures will significantly injure those that they purportedly are designed to help by throwing them out of work. Summers, among others, has been claiming that the Fed must raise interest rates dramatically in order to stem a “wage-price spiral,” blaming workers’ wage increases for sustaining the higher inflation rates. This is false since workers’ average wage increases have only been a small fraction of the increases in prices.

The implication of this is that workers in the U.S., who have basically had a very little if any pay raise in 40 years, cannot be allowed to have any pay raise now, despite the fact that the incomes and wealth of the top 1 percent has gone up more than 10-fold in the last several decades. This call for higher interest rates is particularly damaging to African Americans and other people of color who only are able to get ahead during periods of very low unemployment. These calls are taking place in the context of what economists at the Roosevelt Institute, Economic Policy Institute, and elsewhere have identified as a significant “profit push” component to our current inflation: Mega companies with substantial pricing power are using the supply chain shocks and Russian war in Ukraine as excuses to flex their pricing muscles and raise their profit margins to 70-year highs.

In other words: this says that American capitalism seems incapable of delivering increases in the standard of living to the bulk of its population. Critics often refer U.S. capitalism as “neoliberal capitalism.” I think of it as “rapacious capitalism.”

Now, this is a statement in particular about U.S. capitalism, not necessarily all capitalist countries. Capitalist countries, such as the Nordic countries (Norway, Sweden, Denmark) where workers, unions and social democratic parties have had significant power in the aftermath of the Second World War, have, for a number of decades, been able to “tame capitalism” to the extent that income distribution was more equal and real gains have been made by the working class and poor. To some extent, these gains have been recently eroded, but they nonetheless remain.

But this drive to have the Federal Reserve raise interest rates to bring down this inflation no matter what the cost reflects the “rapacious capitalist chorus” which has far too many powerful members.

What other methods are available to fight inflation besides contractionary monetary policy?

There are numerous other tools which are available to fight this mostly supply- and profit-driven inflation, but most require some coordination between the Federal Reserve and the government overall. Clearly, something must be done. This supply-driven disruption is having significant negative impacts on the standards of living of millions of people — in the United States and around the world — because it is raising the cost of a number of key goods that people need to live and thrive: fuel, food, housing, transportation.

So, what to do? I have already noted what the Fed should not be doing: raising interest rates sky high. To figure out what the Federal Reserve can contribute is to identify what the goal of policy should be. The goals of Federal Reserve Policy should be three-fold:

1. To protect the standard of living of the bulk of the population, and especially those who are most vulnerable, not primarily the bankers or the non-financial capitalists.
2. To help where possible to relieve the supply-side problems, and certainly not do anything to make them worse.
3. To facilitate where possible the needed transition to a non-fossil fuel-based economy, and not do anything that makes that transition slower or more difficult. This will help deal with the longer-term causes of inflation, namely climate change.

To achieve these goals, the Fed will not be able to operate on its own. Just as it did during the great financial crisis and then, even more so, in the wake of the COVID pandemic, the Fed should cooperate with a general government plan to deal with this cost-of-living problem. In those instances, the Fed developed multiple new and creative mechanisms primarily to bail out the banks and financial markets.

This time, the Fed should use the same effort and creativity to control inflation without imposing the costs on workers or the future possibility of controlling catastrophic climate change.

The Biden administration has attempted to lower the cost of fossil fuels. A better approach, suggested by Jim Boyce and Bob Pollin, among others, is to tax oil profits and return the receipts to people. This will retain the incentive to switch from fossil fuels to green energy, while helping workers and the poor with the hit to their standard of living.

The government should tax excessive corporate profits and use the returns to expand subsidies for food and other necessities for the poor and working class.

Isabella Weber and James Galbraith, among others, have suggested temporary price controls on key commodities to break the inflationary dynamics in these commodities.

Among the pressures affecting these dynamics has been an increase in financial speculation that has driven up these prices faster and higher than would be the case from simple supply and demand. Here the Federal Reserve, along with other financial regulators, should monitor and enforce rules to limit such speculation that is helping to drive some of this commodity inflation.

As I indicated before, the Fed allocated billions of dollars to bail out the banks and financial markets in 2008-2009, and again in the spring and summer of 2020. Now the Fed should devise special credit facilities to provide financing for the expansion of green energy, credit to expand day care and community health facilities, to help expand the effective labor force, and new initiatives for ecologically appropriate farming to provide foodstuffs. All of these would help to reduce bottlenecks. The Fed could do this by providing lines of credit, insurance and other facilities from community banks, special agricultural loan funds, affordable housing institutions and other similar financial institutions that have experience and a track record in funding these key goods… all of which are implicated in the current inflation.

In other words, since this is primarily a supply-side problem, the Fed should focus on helping to expand the supply, rather than on throwing workers out of work to limit demand at their expense.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over DespairNoam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the LeftInterviews with Progressive Economists (2021).




Deutsche Bank, Amsterdam. May 24, 2022. On Friendship / (Collateral Damage) IV

On Friendship / (Collateral Damage) IV
How to Explain Hare Hunting to a Dead German Artist
[The usefulness of continuous measurement of the distance between Nostalgia and Melancholia]

(September 2021 – December 2022)
A critical project concerning post-war artist Joseph Beuys.
Created by Joseph Sassoon Semah, curator Linda Bouws
May 24 2022, Deutsche Bank Amsterdam
De entree 195, 1101 HE Amsterdam

כיצד להסביר ציד ארנבות לאמן גרמני מת
[The usefulness of continuous measurement of the distance between Nostalgia and Melancholia]

Please remember, ‘Hare Hunting’ was a [codeword] euphemism for killing Jews by the Nazi troops during the Holocaust.
According to Jewish tradition, the hare is among mammals deemed not kosher, and therefore not eaten by (observant) Jews.

As will be clear, Jose[f]ph Beuys who always already surrounded himself by old Nazis has managed to promote himself as the (symbolic) Victim of the Third Reich in the (extended) territory of Post-Nazi West Germany.
Jose[f]ph Beuys who volunteered to sacrifice himself for the ideology of the Third Reich – succeeded to transform himself symbolically as it were, into the great healer of post-Nazi-Era, and with him, West Germany will cure itself.

Therefore, as a consequence of the need to further the authentic status of The Guest – The Guest was forced on 24 February 1986,
to correct the statement of Jose[f]ph Beuys’: “Wie man dem toten Hasen die Bilder erklärt / How to Explain Pictures to a Dead Hare” 26 November 1965. Since then, it should be read as follows –
” כיצד להסביר ציד ארנבות לאמן גרמני מת / How to Explain Hare Hunting to a Dead German Artist / Wie man einem toten deutschen Künstler die Hasenjagd erklärt”.

Finally, if the Guest is the symbolic Dead Hare, he may in the [end] has a Voice – in such a context obviously, the Guest’s conversation with the Dead German Artist changes in significance – because the words of the Guest already shifted to a certain power; That is the Guest’s / the Jew’s power to transform Jose[f]ph Beuys the ex-Nazi soldier from a self-made Victim to his original status i.e. the Victimizer.
Basically, we should remember that the actual transformation from a Victimizer to a Victim takes place in radical circumstances.
In our context, this implies that the transformation of post-war Jose[f]ph Beuys into a Victim took place in Post-Nazi West Germany;
Eventually, it would be tempting to say that the authentic Victim ‘The Guest’ i.e., The Jew, cannot be defined by his Victimizer.

Performance

Joseph Sassoon Semah with friends:

Baruch Abraham
Masja Austen
Peter Baren
Bülent Evren
Jom Semah

Camera & editing: Bob Schoo, http://www.n-p-n.info

© Stichting Metropool Internationale Kunstprojecten 2022




Noam Chomsky: The “Historic” NATO Summit In Madrid Shored Up US Militarism

Noam Chomsky

On June 28-30, 2022, NATO leaders gathered in Madrid, Spain, to discuss the major issues and challenges facing the alliance. The summit ended with far-reaching decisions that will have a dire impact on global peace and security. Hailed as “historic,” the summit was indeed transformative: NATO produced a new Strategic Concept and identified what it says are the key threats to western security, interests, and values — none other than Russia and China.

“The empire doesn’t rest,” quips Noam Chomsky, a public intellectual regarded by millions of people as a national and international treasure, in his assessment of NATO’s “historic” summit in the exclusive interview for Truthout that follows. Chomsky is one of the most widely cited scholars in modern history. He is institute professor emeritus at MIT and currently laureate professor of linguistics at the University of Arizona, and has published more than 150 books in linguistics, political and social thought, political economy, media studies, U.S. foreign policy and world affairs.

C.J. Polychroniou: Noam, as was expected, the war in Ukraine dominated the recent NATO summit in Madrid and produced some extraordinary decisions which will lead to the “NATO-ization of Europe,” as Russia was declared “the most significant and direct threat” to its members’ peace and security. Turkey dropped its objections to Finland and Sweden joining the alliance after it managed to extract major concessions, NATO’s eastern flank will receive massive reinforcement, additional defense systems will be stationed in Germany, Italy, and elsewhere, and the U.S. will boost its military presence all across European soil. Given all of this, is it Russia that represents a threat to Europe, or NATO to Russia? And what does the “NATO-ization” of Europe mean for global peace and security? Is it a prelude to World War III?

We can dismiss the obligatory boilerplate about high principles and noble goals, and the rank hypocrisy: for example, the lament about the fate of the arms control regime because of Russian-Chinese disruption, with no mention of the fact it is the U.S. that has torn it to shreds under W. Bush and particularly Trump. All of that is to be expected in “historic” pronouncements of a new Strategic Concept for NATO.

The Ukraine war did indeed provide the backdrop for the meeting of NATO powers — with bitter irony, just after the conclusion of the first meeting of the states that signed the Treaty on the Prohibition of Nuclear Weapons (TPNW), which passed unnoticed.

The NATO summit was expanded for the first time to include the Asian “sentinel states” that the U.S. has established and provided with advanced high-precision weapons to “encircle” China. Accordingly, the North Atlantic was officially expanded to include the newly created Indo-Pacific region, a vast area where security concerns for the Atlanticist powers of NATO are held to arise. The imperial implications should be clear enough. There’s a good deal more to say about this. I will return to it.

U.S. policy toward Ukraine and Russia was strongly affirmed in the Strategic Concept: no negotiations, only war to “weaken Russia.”

This has been steady policy since George W. Bush’s 2008 invitation to Ukraine to join NATO, vetoed by France and Germany, who agreed with high-level U.S. diplomats for the past 30 years that no Russian government could tolerate that, for reasons too obvious to review. The offer remained on the agenda in deference to U.S. power.

After the Maidan uprising in 2014, the U.S. began openly to move to integrate Ukraine into the NATO military command, policies extended under Biden, accompanied by official acknowledgment after the invasion that Russian security concerns, meaning NATO membership, had not been taken into consideration. The plans have not been concealed. The goals are to ensure full compatibility of the Ukrainian military with NATO forces in order to “integrate Ukraine into NATO de facto.”

Zelensky’s efforts to implement a diplomatic settlement were ignored, including his proposals last March to accept Austrian-style neutralization for the indefinite future. The proposals, which had indications of Russian support, were termed a “real breakthrough” by UN Secretary-General António Guterres, but never pursued.

The official Russian stance at the time (March 2022) was that its military operations would end if Ukraine too were to “cease military action, change its constitution to enshrine neutrality, acknowledge Crimea as Russian territory, and recognize the separatist republics of Donetsk and Lugansk as independent states.”

There was a considerable gap between the Ukrainian and Russian positions on a diplomatic settlement, but they might have been narrowed in negotiations. Even after the invasion, it appears that there may have remained some space for a way to end the horrors.

France and Germany continued to make overtures toward diplomatic settlement. These are completely dropped in the recent Strategic Concept, which simply “reaffirms” all plans to move toward incorporating Ukraine (and Georgia) into NATO, formally dismissing Russian concerns.

The shifts in the European stance reflect Europe’s increasing subordination to the U.S. The shift was accelerated by Putin’s choice of aggression after refusing to consider European initiatives that might have averted the crime and possibly even opened a path toward Europe-Russia accommodation that would be highly beneficial to all — and highly beneficial to the world, which may not survive great power confrontation.

That is not a throw-away line. It is reality. The great powers will either find a way to cooperate, to work together in confronting imminent global threats, or the future will be too grim to contemplate. These elementary facts should be kept firmly in mind while discussing particular issues.

We should also be clear about the import of the new Strategic Concept. Reaffirming the U.S. program of de facto incorporation of Ukraine within NATO is also reaffirming, unambiguously, the refusal to contemplate a diplomatic settlement. It is reaffirming the Ramstein declarations a few weeks ago that the war in Ukraine must be fought to weaken Russia, in fact to weaken it more severely than the Versailles treaty weakened Germany, if we assume that U.S. officials mean what they say — and we can expect that adversaries take them at their words.

The Ramstein declarations were accompanied by assurances that Ukraine would drive Russia out of all Ukrainian territory. In assessing the credibility of these assurances, we may recall that they come from the sources that confidently predicted that the U.S.-created Iraqi and Afghan armies would resist ISIS [also known as Daesh] and the Taliban, instead of collapsing immediately, as they did; and that the Russian invasion would conquer Kyiv and occupy Ukraine in three days.

The message to Russia is: You have no escape. Either surrender, or continue your slow and brutal advance, or, in the event that defeat threatens, go for broke and destroy Ukraine, as of course you can.

The logic is quite clear. So is the import beyond Ukraine itself. Millions will face starvation, the world will continue to march toward environmental destruction, the likelihood of nuclear war will increase.

But we must pursue this course to punish Russia severely enough so that it cannot undertake further aggression.

We might pause for a moment to look at the crucial underlying premise: Russia is bent on further aggression, and must be stopped now, or else. Munich 1938. By now this has become a Fundamental Truth, beyond challenge or inquiry. With so much at stake, perhaps we may be forgiven for breaking the rules and raising a few questions.

Inquiry at once faces a difficulty. There has been little effort to establish the Fundamental Truth. As good a version as any is presented by Peter Dickinson, editor of the prestigious Atlantic Council’s UkraineAlert Service. The heart of Dickinson’s argument is this:

Putin has never made any secret of the fact that he views the territory of modern Ukraine as historically Russian land. For years, he has denied Ukraine’s right to exist while claiming that all Ukrainians are in fact Russians (“one people”). The real question is which other sovereign nations might also fit Putin’s definition. He recently set off alarm bells by commenting that the entire former Soviet Union was historically Russian territory.

Nor is it clear if Putin’s appetite for reclaiming Russian lands is limited to the 14 non-Russian post-Soviet states. Imperial Russia once also ruled Finland and Poland, while the Soviet Empire after WWII stretched deep into Central Europe and included East Germany. One thing is clear: unless he is stopped in Ukraine, Putin’s imperial ambitions are certain to expand.

That is clear, requiring no further argument.

The totality of evidence is given in the linked article. But now another problem arises. In it, Putin says nothing remotely like what set off the dramatic alarm bells. More like the opposite.

Putin says that the old Soviet Union “ceased to exist,” and he wants “to emphasise that in recent history we have always treated the processes of sovereignisation that have occurred in the post-Soviet area with respect.” As for Ukraine, “If we had had good allied relations, or at least a partnership between us, it would never have occurred to anybody [to resort to force]. And, by the way, there would have been no Crimea problem. Because if the rights of the people who live there, the Russian-speaking population, had been respected, if the Russian language and culture had been treated with respect, it would never have occurred to anybody to start all this.”

Nothing more is quoted. That’s the totality of evidence Dickinson presents, apart from what has become the last resort of proponents of the thesis that unless “stopped in Ukraine, Putin’s imperial ambitions are certain to expand”: musings of no clear import about Peter the Great.

This is no minor matter. On this basis, so our leaders instruct us, we must ensure that the war continues in order to weaken Russia; and beyond Ukraine itself, to drive millions to starvation while we march on triumphantly toward an unlivable earth and face increasing risk of terminal nuclear war.

Perhaps there is some better evidence for what is so “clear” that we must assume these incredible risks. If so, it would be good to hear it.

Putin’s cited remarks, as distinct from the fevered constructions, are consistent with the historical and diplomatic record, including the post-invasion Russian official stance just quoted, but much farther back.

The core issue for 30 years has been Ukraine’s entry into NATO. That has always been understood by high U.S. officials, who have warned Washington against the reckless and provocative acts it has been taking. It has also been understood by Washington’s most favored Russian diplomats. Clinton’s friend Boris Yeltsin objected strenuously when Clinton began the process of NATO expansion in violation of firm promises to Gorbachev when the Soviet Union collapsed. The same is true of Gorbachev himself, who accused the West and NATO of destroying the structure of European security by expanding its alliance. “No head of the Kremlin can ignore such a thing,” he said, adding that the U.S. was unfortunately starting to establish a “mega empire,” words echoed by Putin and other Russian officials.

I am unaware of a word in the record about plans to invade anyone outside the long-familiar red lines: Ukraine and Georgia. The only Russian threats that have been cited are that if NATO advances to its borders, Russia will strengthen its defenses in response.

With specific regard to Ukraine, until recently Putin was calling publicly for implementation of the Minsk II agreement: neutralization of Ukraine and a federal arrangement with a degree of autonomy for the Donbass region. It is always reasonable to suspect dark motives in great power posturing, but it is the official positions that offer a basis for diplomacy if there is any interest in that course.

On Crimea, Russia had made no moves until it was about to lose its sole warm water naval base, in the Crimean Peninsula. The background is reviewed by John Quigley, the U.S. State department representative in the OSCE [Organization for Security and Co-operation in Europe] delegation that considered the problem of Ukraine after the collapse of the Soviet Union.

Crimea, he reports, was a particular focus of attention. His intensive efforts to find a solution for the problem of Crimea faced a “dilemma.” Crimea’s population “was majority Russian and saw no reason to be part of Ukraine.” Crimea had been Russian until 1954, when, for unknown reasons, Soviet Communist Party Chair Nikita Khrushchev decided to switch Crimea from the Soviet Russian republic to the Soviet Ukrainian republic. As Quigley notes,

Even after 1954, Crimea was effectively governed more from Moscow than from Kyiv. When the Soviet Union was dissolved, Crimea’s population suddenly found itself a minority in a foreign country. Ukraine accepted a need for a certain degree of self-rule, but Crimea declared independence as what it called the Crimean Republic. Over Ukraine’s objection, an election for president was called in the declared Crimean Republic, and a candidate was elected on a platform of merger with Russia. At the time, however, the Russian government was not prepared to back the Crimeans.

Quigley sought a compromise that would provide autonomy for Crimea under a Ukraine-Crimea treaty, with international guarantees to protect Crimea from Ukrainian infringement. The “treaty went nowhere, however…. Ukraine cracked down on the Crimean Republic, and the conflict remained unresolved. Tension simmered until 2014, by which time Russia was prepared to act to take Crimea back. Crimea was then formally merged into the Russian Federation.”

It’s not a simple matter of unprovoked Russian aggression, as in the received U.S. version.

Like many others familiar with the region, Quigley now calls for a diplomatic settlement and wonders whether the current U.S. goal “is less to force Russia out of Ukraine than to fight Russia to the last Ukrainian.”

Is there still an option for diplomacy? No one can know unless the possibility is explored. That will not happen if it is an established Fundamental Truth that Putin’s ambitions are insatiable.

Apart from the question of Putin’s ambitions, there is a small matter of capability. While trembling in fear of the new Peter the Great, western powers are also gloating over the demonstration that their firm convictions about Russia’s enormous military power were quickly dispelled with the Russian debacle in its attack on Kyiv. U.S. intelligence had predicted victory in a few days. Instead, tenacious Ukrainian resistance revealed that Russia could not conquer cities a few miles from its border defended by a mostly citizens’ army.

But no matter: The new Peter the Great is on the march. Lack of evidence of intention and official proposals to the contrary are as irrelevant to Fundamental Truth as lack of military capacity.

What we are observing is nothing new. Russian devils of incomparable might aiming to conquer the world and destroy civilization have been a staple of official rhetoric, and obedient commentary, for 75 years. The rhetoric of the critical internal document NSC-68 (1950) is a striking illustration, almost unbelievable in its infantile crudity.

At times, the method has been acknowledged. From his position as “present at the creation” of the Cold War, the distinguished statesman Dean Acheson recognized that it was necessary to be “clearer than truth” in exercises (like NSC-68) to “bludgeon the mass mind” of government into obedience with elite plans. That was in fact “NSC-68’s purpose.”

Scholarship has also occasionally recorded the fact. Harvard Professor of Government and long-time government adviser Samuel Huntington observed that “you may have to sell [intervention or other military action] in such a way as to create the misimpression that it is the Soviet Union that you are fighting. That is what the United States has been doing ever since the Truman Doctrine,”

Today’s formula is no innovation.

We often tend to forget that the U.S. is a global power. Planning is global: What is happening in one part of the world is often replicated elsewhere. By focusing on one particular manifestation, we often miss the global tapestry in which it is one strand.

When the U.S. took over global hegemony from Britain after World War II, it kept the same guiding geopolitical concepts, now greatly expanded by a far more powerful hegemon.

Britain is an island off the coast of Europe. A primary goal of British imperial rule was to prevent a unified hostile Europe.

The U.S.-run western hemisphere is an “island” off the coast of the Eurasian land mass, with far grander imperial objectives (or “responsibilities,” as they are politely termed). It must therefore make sure to control it from all directions, North being a new arena of conflict as global warming opens it up to exploitation and commerce. The NATO-based Atlanticist system is the Western bulwark. The Strategic Concept and its ongoing implementation places this bulwark more firmly in Washington’s hands, thanks to Putin.

With virtually no notice, there are similar developments on the Eastern flank of the Eurasian land mass as NATO extends its reach to the Indo-Pacific region under the new Concept. NATO is deepening its relations with its island partners off the coast of China — Japan, Australia, South Korea, New Zealand — even inviting them to the NATO summit, but much more significant, enlisting them in the “encirclement” of China that is a key element of current bipartisan U.S. strategy.

While the U.S. is firming up its control of the western flank of the Eurasian landmass at the NATO Summit, it is carrying out related exercises at the eastern flank: the Rim of the Pacific (RIMPAC) programs now underway. Under the direction of the U.S. Navy, these are “the grandest of all war games,” Australian political scientist Gavan McCormack writes, “the largest air, land, and sea war manoeuvres in the world. They would assemble a staggering 238 ships, 170 aircraft, 4 submarines and 25,000 military personnel from 26 countries.… To China, scarcely surprisingly these exercises are seen as expression of an anti-China ‘Asian NATO design.’ They are war games, and they are to include various simulations engaging ‘enemy forces,’ attacking targets and conducting amphibious landings on Hawaii Island and in Hawaiian waters.”

RIMPAC is supplemented by regular U.S. naval missions in China’s Exclusive Economic Zone (EEZ). These are merely “innocent passage” in accord with the principle of “freedom of navigation;” the U.S. protests when China objects, as does India, Indonesia, and many others. The U.S. appeals to the Law of the Sea – which bars threat or use of force in these zones. Quietly, the U.S. client state Australia, of course, in coordination with Washington, is engaged in “military espionage” in the EEZ, installing highly sophisticated sensing devices “so that the U.S. can more effectively destroy Chinese vessels as quickly as possible at the start of any conflict.”

These exercises on the Eastern Flank are accompanied by others in the Pacific Northeast region and, in part, in the Baltic region, with participation of new NATO members Finland and Sweden. Over the years, they have been slowly integrated into the NATO military system and have now taken the final step, pleading “security concerns” that are scarcely even laughable but do benefit their substantial military industries and help drive the societies to the right.

The empire doesn’t rest. The stakes are too high.

In official rhetoric, as always, these programs are undertaken for benign purposes: to enforce “the rules-based international order.” The term appears repeatedly in the Strategic Concept of the NATO Summit. Missing from the document is a different phrase: “UN-based international order.” That is no accidental omission: The two concepts are crucially different.

The UN-based international order is enshrined in the UN Charter, the foundation of modern international law. Under the U.S. Constitution (Article VI), the UN Charter is also “the supreme law of the land.” But it is unacceptable to U.S. elite opinion and is violated freely, with no notice, by U.S. presidents.

The Charter has two primary flaws. One is that it bans “the threat or use of force” in international affairs, apart from designated circumstances that almost never arise. That means that it bans U.S. foreign policy, obviously an unacceptable outcome. Consequently, the revered Constitution can be put aside. If, unimaginably, the question of observing the Constitution ever reached the Supreme Court, it would be dismissed as a “political question.”

The rules-based international order overcomes this flaw. It permits the threat and use of force freely by the Master, and those he authorizes. Illustrations are so dramatically obvious that one might think that they would be difficult to ignore. That would be a mistake: they are routinely ignored. Take one of the major international crimes: annexation of conquered territory in violation of international law. There are two examples: Morocco’s annexation of Western Sahara in violation of the ruling of the International Court of Justice, and Israel’s annexation of the Golan Heights in Syria and Greater Jerusalem in violation of unanimous Security Council orders. All have been supported by the U.S. for many years, and were formally authorized by the Trump administration, now by Biden. One will have to search hard for expressions of concern, even notice.

The second flaw is that the UN Security Council and other international institutions, like the World Court, set the rules. That flaw is also overcome in the rules-based international order, in which the U.S. sets the rules and others obey.

It is, then, easy to understand Washington’s preference for the rules-based international order, now forcefully affirmed in the NATO Strategic Concept, and adopted in U.S. commentary and scholarship.

Turning elsewhere, we do find serious commentary and analysis. Australian strategic analyst Clinton Fernandes discusses the matter in some depth in his book Sub-Imperial Power (Melbourne 2022).

Tracing the concept to its western origins in British imperial rule, Fernandes shows that

the rules-based order differs sharply from the United Nations–centred international system and the international order underpinned by international law. The United States sits at the apex of the system, exercising control over the sovereignty of many countries. The United Kingdom, a lieutenant with nuclear weapons and far-flung territories, supports the United States. So do subimperial powers like Australia and Israel. The rules-based international order involves control of the effective political sovereignty of other countries, a belief in imperial benevolence and the economics of comparative advantage. Since policy planners and media commentators cannot bring themselves to say ‘empire’, the ‘rules-based international order’ serves as the euphemism.

“The economics of comparative advantage,” as Fernandes discusses, is another euphemism. Its meaning is “stay in your place,” for the benefit of all. It is often advised with the best of intentions. Surely that was the case when Adam Smith advised the American colonies to keep to their comparative advantage in agriculture and import British manufactured goods, thus “promoting the progress of their country toward real wealth and greatness.”

Having overthrown British rule, the colonies were free to reject this kind advice and to resort to the same kinds of radical violation of orthodox free trade principles that Britain used in becoming the world’s great center of manufacturing and global power. That pattern has been replicated with impressive consistency. Those that adopted the favored principle, usually under force, became the third world. Those that violated it became the wealthy first world, including the one country of the South that resisted colonization, Japan, and thus was able to violate the rules and develop, with its former colonies in tow.

The consistency of the record is close to axiomatic. After all, development means changing comparative advantage.

In short, the rules-based order confers many advantages on the powerful. One can easily understand why it is viewed so favorably in their domains, while the UN-based order is dismissed except when it can be invoked to punish enemies.

Turkey continues to resist joining sanctions against Russia and acts, in fact, as a sanctions “safe haven” for Russian oligarchs. Yet it is treated by the U.S. and the NATO alliance in general as a reliable strategic ally, and everyone ignores the fact that Erdoğan’s regime is as blatantly authoritarian and oppressive as that of Putin. In fact, following his somersault vis-a-vis Saudi Arabia, the Biden administration is now warming up to Erdoğan and wants to upgrade Turkey’s fleet of American-made F-16 fighter jets. How should we interpret this anomalous situation within the NATO alliance? Yet another instance of western hypocrisy or the dictates of Realpolitik?

What is anomalous is that Erdoğan is playing his own game instead of just obeying orders. There’s nothing anomalous about his being “blatantly authoritarian and oppressive.” That’s not a concern [for the U.S.], as in numerous other cases. What is a concern is that he’s not entirely a “reliable strategic ally.” Turkey was actually sanctioned by the U.S. for purchasing Russian missile defense system. And even after the invasion of Ukraine, Erdoğan left open whether he would purchase Russian arms or depart from his “friendship” with Mr. Putin. In this particular regard, Turkey is acting more like the Global South than like NATO.

Turkey has departed from strict obedience in other ways. It delayed the accession of Sweden and Finland into NATO. The reason, it seems, is Turkey’s commitment to intensify its murderous repression of its Kurdish population. Sweden had been granting asylum to Kurds fleeing Turkish state violence — “terrorists” in Turkish official lingo. There are legitimate concerns that an ugly underground bargain may have been struck when Turkey dropped its opposition to full Swedish entry into NATO.

The background should not be overlooked. Brutal repression of the Kurds in Turkey has a long history. It reached a crescendo in the 1990s, with a state terror campaign that killed tens of thousands of Kurds, destroyed thousands of towns and villages, and drove hundreds of thousands from their homes, many to hideous slums in barely survivable corners of Istanbul. Some were offered the opportunity to return to what was left of their homes, but only if they publicly blamed Kurdish PKK guerrillas. With the amazing courage that has been the hallmark of the Kurdish struggles for justice, they refused.

These terrible crimes, some of the worst of the decade, were strongly supported by the U.S., which poured arms into Turkey to expedite the atrocities. The flow increased under Clinton as the crimes escalated. Turkey became the leading recipient of U.S. arms (apart from Israel-Egypt, a separate category), replacing Colombia, the leading violator of human rights in the Western hemisphere. That extends a long and well-established pattern. As usual, the media cooperated by ignoring the Turkish horrors and crucial U.S. support for them.

By 2000, the crimes were abating, and an astonishing period began in Turkey. There was remarkable progress in opening up the society, condemning state crimes, advancing freedom and justice. For me personally, it was a great privilege to be able to witness it first-hand, even to participate in limited ways. Prominent in this democratic revolution were Turkish intellectuals, who put their western counterparts to shame. They not only protested state crimes but carried out regular civil disobedience, risking and often enduring harsh punishment, and returning to the fray. One striking example was Ismail Beşikçi, who as a young historian was the first non-Kurdish academic to document the horrific repression of the Kurds. Repeatedly imprisoned, tortured, abused, he refused to stop his work, continuing to document the escalating crimes. There were many others.

By the early 2000s it seemed that a new era was dawning. There were some thrilling moments. One unforgettable experience was at the editorial offices of Hrant Dink, the courageous journalist who was assassinated with state complicity for his defense of human rights, particularly the rights of the Armenian community that had been subjected to genocidal slaughter, still officially denied. With his widow, I was standing on the balcony of the office, observing an enormous demonstration honoring Hrant Dink and his work, and calling for an end to ongoing crimes of state, no small act of courage and dedication in the harshly repressive Turkish state.

The hopes were soon to wane as Erdoğan instituted his increasingly brutal rule, moving to restore the nightmare from which Turkey had begun to emerge. All similar to what happened a few years later in the Arab Spring.

Turkey is also extending its aggression in Syria, aimed at the Kurdish population who, in the midst of the horrendous chaos of the Syrian conflicts, had managed to carve out an island of flourishing democracy and rights (Rojava). The Kurds had also provided the ground troops for Washington’s war against ISIS in Syria, suffering over 10,000 casualties. In thanks for their service in this successful war, President Trump withdrew the small U.S. force that served as a deterrent to the Turkish onslaught, leaving them at its mercy.

There is an old Kurdish proverb that the Kurds have no friends but the mountains. There is just concern that Turkish-Swedish NATO maneuverings might confirm it.

The NATO summit reached the interesting conclusion that China represents a “security challenge” to the interests and security of its member states, but it is not to be treated as an adversary. Semantics aside, can the West really stop China from exercising an ever-increasing role in global affairs? Indeed, is a unipolar power system a safer alternative to world peace than a bipolar or multipolar system?

The U.S. is quite openly seeking to restrict China’s role in global affairs and to impede its development. These are what constitute the “security challenge.” The challenge thus has two dimensions, roughly what is called “soft power” and “hard power.”

The former is internal development of industry, education, science and technology. This provides the basis for the expansion of China’s arena of influence through such projects as the Belt-and-Road (BRI) initiative, a massive multidimensional project that integrates much of Eurasia within a Chinese-based economic and technological system, reaching to the Middle East and Africa, and even to U.S. Latin American domains.

The U.S. complains, correctly, that Chinese internal development violates the rules-based international order. It does, radically. China is following the practices that the U.S. did, as did England before it and all other developed societies since. China is rejecting the policy of “kicking away the ladder”: First climb the ladder of development by any means available, including robbery of higher technology and ample violence and deceit, then impose a “rules-based order” that bars others from doing the same. That is a staple of modern economic history, now formalized in the highly protectionist investor-rights agreements that are masked under the cynical pretense of “free trade.”

The “security challenge” also has a military dimension. This is countered by the program of “encircling” China by heavily-armed “sentinel states,” and by such projects as the massive RIMPAC exercises now underway, defending the U.S. off the coasts of China. No infringement on U.S. domination of the “Indo-Pacific” region can be tolerated, even a threat that China might set up its second overseas military base in the Pacific Solomon Islands (the first is in Djibouti).

Digressing briefly to criminal “whataboutism,” we might mention that the U.S. has 800 bases worldwide, which, along with their very prominent role in “defense” (aka imperial domination), enable hundreds of “low-profile proxy wars” in Africa, the greater Middle East, and Asia.

Washington, along with concurring commentary in the media and journals of opinion, are quite correct in charging China with violation of the rules-based order that the U.S. upholds, now with even more firm European support than before. They are also correct in deploring severe human rights violations in China, but that is not a concern of the rules-based order, which easily accommodates and commonly vigorously supports such violations.

The question of how best to enhance world peace does not arise in this connection. Everyone is in favor of “peace,” even Hitler: on their own terms. For the U.S., the terms are the rules-based international order. Others have their own ideas. Most of the world is the proverbial grass on which the elephants trample.

The climate crisis was also on the agenda at the three-day summit in Madrid. In fact, it was recognized as “a defining challenge of our time” and NATO General-Secretary Jens Stoltenberg informed the world that the organization will “set the gold standard on addressing the security implications of climate change.” Personally, I sure feel better now knowing that militarism can be added to the methods of tackling the climate crisis. How about you?

How encouraging that NATO will address “the security implications of climate change,” where “security” has the usual meaning that excludes the security of people.

The issues raised here are the most important of all and are the most easily summarized. The human species is advancing toward a precipice. Soon irreversible tipping points will be reached, and we will be falling over the precipice to a “hothouse earth” in which life will be intolerable for those remnants that survive.

Military expenses make a double contribution to this impending disaster: first, in their enormous contribution to destroying the conditions for tolerable existence, and second, in the opportunity costs — what isn’tbeing done with the huge resources devoted to undermining any hope for the future.

Putin’s aggression in Ukraine made the same double contribution: destruction and robbery of the resources that must be used to avert environmental destruction. All of this couldn’t have happened at a worse time. The window for constructive action is closing while humanity persists on this mad course.

All else pales into insignificance. We will find ways to cooperate to avert disaster and create a better world, as we still can. Or we will bring the human experiment to an inglorious end.

It’s as simple as that.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over DespairNoam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New DealThe Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The PrecipiceNeoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the LeftInterviews with Progressive Economists (2021).




DJDEBOERHUISARTS- Balth. Floriszoonstraat 23, Amsterdam

July – September

10 July 2022, 17.00 hrs.

A talk between David de Boer and Joseph Sassoon Semah –  A performance ‘Display of the Wound’, Joseph & Friends

Excerpt – from a letter written by Joseph Sassoon Semah to Albrecht Dürer 1986 …Please remember, such an order – [ Jose[f]ph Beuys “Show Your Wound ] “Zeige Deine Wunde  – from a German [ex] Nazi soldier to a certain Guest is not innocent, and the Guest always knows what will become of this quest;
Because as it is, there is always a risk following the showing of the wound of BRIT – MILaH, בְּרִית מִילָה [Covenant of circumcision] in the Extended Territory of Jose[f]ph Beuys;
After all, one cannot forget the devastating actions of Nazi Germany upon the Guest’s בְּרִית מִילָה [Covenant of circumcision] – There is no secret here, the Guest’s authentic healed wound is already buried, in the ground of the extended territory of Jose[f]ph Beuys…

 




Vol vertrouwen

‘Heb jij ook een goed weekeinde gehad?’, vraag ik het meisje bij de bakker.
Ze lacht wat verlegen.
‘Ja’, zegt ze, ‘misschien een beetje een stom verhaal. Een paar vriendinnen lachten me uit toen ik het vertelde.’
Ze aarzelt even.
‘Zaterdag zag ik een lieveheersbeestje drijven in het waterbakje van mijn katten. Toen ik goed keek, zag ik ineens een pootje bewegen. Ik heb het beestje er voorzichtig uitgehaald. En heb wat suikerwater gemaakt en op mijn arm gesmeerd. Al vlug begon ze ervan te eten. Om de paar uur heb ik haar zo gevoerd. Ze bleef heel rustig zitten, ook als ze genoeg had gehad.
Zondag zag ik dat een vleugeltje gebroken is. Dus blijf ik haar maar voeren. Tot ze weer kan vliegen. Zij slaapt nu zelfs op mijn arm.’
Ze glimlacht bij de gedachte.
‘Toen ik gisteravond thuiskwam, leek het wel of ze blij was dat ik er weer was. Ging heel rustig op mijn hand zitten. Of liggen. Vol vertrouwen.’




NATO’s Expansion And New Strategic Concept Broaden The Prospect Of Armageddon

CJ Polychroniou

A bleak future lies ahead.

The 2022 NATO (North Atlantic Treaty Organization) summit, which was held in Madrid, Spain, from June 28-30, has produced a new strategic concept for an alliance which only a few years ago was declared “brain-dead” by French President Emmanuel Macron that will define its future for the next ten years.

Indeed, thanks to Russian President Vladimir Putin, the world’s largest military alliance has made a comeback, and with a vengeance. Russia has once again become its main target. The new strategic concept names it as the “most significant and direct threat to the security of allies and to the peace and stability of the Euro-Atlantic area.”

Countries with a long history of neutrality, such as Finland and Sweden, will soon be joining NATO after Turkey dropped its opposition. NATO will add 1300 kilometers more of border with Russia. Since 2016, NATO also has an “enhanced forward presence” in Estonia, Latvia, Lithuania, and Poland.

The western encirclement of Russia, which loomed large both before and after the 1917 Bolshevik revolution and has continued with the same zeal even after communism had collapsed, is now virtually complete.

This is a development with staggering implications for international peace and security. NATO was of course a source of instability and a threat to international peace and security throughout the Cold War as it was a central instrument to the US imperial project. With its eastward expansion following the dissolution of the Soviet Union, NATO’s role in restoring America’s unipolar world hegemony sowed the seeds of mistrust between Russia and the western powers and set the stage for the renewal of a protracted conflict, reminiscent of the Cold War.

The U.S.-led and western-centric alliance bears a great deal of responsibility for the ongoing tragedy in Ukraine. Many top foreign relations experts had predicted that NATO’s eastward expansion was a move that would eventually provoke a hostile Russian reaction. Russia had been warning the west about NATO expansion for decades.

In September 1993 Boris Yeltsin send a letter to Bill Clinton in which he warned that an enlargement of NATO might be interpreted by Russia as a national security threat.

“We believe that the eastward expansion of NATO is a mistake and a serious one at that,” Boris Yeltsin, Russia’s first post-Soviet president, told reporters at a 1997 news conference with US President Bill Clinton in Helsinki, where the two signed a statement on arms control.

At the Madrid summit, NATO leaders agreed to a new strategic concept for the alliance that will make the world even more dangerous than it is now. But before we delve into what NATO’s new strategy means for world order, let’s briefly recall the history of the U.S.-led military alliance.

NATO was created in 1949 by the United States and 11 other western nations with the stated objective of acting as a deterrent to an invasion of western Europe by the Soviet Union.

Of course, there was no Soviet military threat. Stalin had no intention of invading western Europe. He was a ruthless tyrant in charge of a police state that he had built, almost single-handedly, but his approach to foreign policy was not driven by ideology but rather by the dictates of Realpolitik. He was an ultra-realist, having no desire for a military confrontation with the Americans and the British on the continent.

“I can deal with Stalin. He is honest—but smart as hell,” Harry Truman wrote in his diary entry dated July 17, 1945, the first day of the Potsdam Conference in Germany.

Indeed, Stalin’s geostrategic approach was not geared towards the export of a revolutionary ideology. “The export of a revolution is nonsense,” he pointed out in a 1936 interview given to Roy Howard, president of the Scripps-Howard Newspapers. Stalin’s primary concern was the security of the Soviet Union. His interest in having Eastern Europe under his thumb was for the purpose of creating a buffer zone between the West and the Soviet Union.

The Soviet Union lost as many as 27 million lives during the Second World War, half of her industry, and thousands of villages, towns, and cities were destroyed. That’s the price that it paid for saving the world from Nazi Germany. To be sure, it would be good to remind western readers that “four-fifths of the fighting in Europe took place on the Eastern front, and that’s where Germans suffered virtually all of its casualties,” as Rodric Braithwaite, former British Ambassador to the Soviet Union/Russian Federation accurately stated during the course of a lecture that he delivered on June 13, 2005, at Kennan Institute.

For all the above reasons, the mere suggestion that Stalin might have any intention of embarking on wild military adventures to conquer Paris or London should have been rejected as utterly ridiculous by any rational policymaker at the time, but obviously that wasn’t the case. Take, for instance, the attitude of an anticommunist reactionary like Winston Churchill. His pathological hatred toward the Soviet Union was so intense that even with Operation Barbarossa well under way, and the Soviet Union on the verge of collapse, it was communist Russia, not Nazi Germany, that he considered as the barbaric antithesis of western civilization. “It would be a measureless disaster if Russian barbarism overlaid the culture and independence of the ancient states of Europe” he wrote to Anthony Eden in late 1942.

As stated earlier, NATO’s explicit purpose was to “deter Soviet aggression.” But the creation of NATO had another goal, though it was never mentioned either by NATO leaders or foreign policy experts and commentators. The goal was to cement western Europe’s position in the capitalist world economy with the U.S. at the helm. A year earlier, the Marshall Plan had been introduced, whose purpose was to prevent the spread of communism in western Europe, stabilize the international economic order, and provide markets for U.S. goods. By integrating European countries into NATO, the U.S. was seeking to safeguard its investments in the European economies. In other words, NATO was also seen as a bulwark against radical political change inside different European countries. It was a way to ensure that their future is tied to the capitalist world order.

NATO began to expand only a few years after its creation. Two countries with proclivity for authoritarianism but avowedly anti-communist political establishments, namely Greece and Turkey, joined NATO in 1952. Of course, both countries had already felt the presence of the U.S. in their domestic political affairs long before they were formally accepted into the transatlantic alliance. When the British informed the United States on February 24, 1947, that Great Britain “….feels itself unable, in view of the economic situation in Great Britain, any longer to bear the major share of the burden of rendering assistance in the form of money and military assistance which Greece and Turkey should have if they are to preserve their territorial integrity and political independence,” a piece of news that undoubtedly made senior level officials at the State Department jump with excitement, Truman appeared before a joint session of Congress less than a month later to request $400 million of economic and military assistance to both the Greek and Turkish governments.

At that time, Greece was in the midst of the second stage of a civil war (1946-49) and the communists were on the verge of proclaiming a provisional government in the northern mountains. Local conditions and geopolitics would eventually play a role in the defeat of the communists, but U.S. assistance to the Greek army was as instrumental in the crushing of the second communist insurgency as was British support to the Greek government for the defeat of the communists in the first stage of the civil war (December 1944-January 1945).

“It must be the policy of the United States to support free peoples who are resisting attempted subjugation by armed minorities or outside pressures,” proclaimed Harry S. Truman on March 12, 1947. By “free peoples,” of course, Truman meant the forces fighting against communism. It didn’t make a difference if, as in the case of Greece, those forces happened to be fascists. Great Britain had also sided with Nazi collaborators and the most reactionary elements inside Greece in its noble attempt to deprive those political groups that had fought against the Axis powers during the Second World War from having any role in the future governance of the country.

In the case of Turkey, the Truman Doctrine served as a tool of influence in the making of Turkish foreign policy and by linking the country with western states. Only a handful of critics inside the U.S. were concerned over the fact that Turkey was governed by military regimes with no respect for human rights and freedom and that it had actually signed a treaty of friendship with Hitler in the summer of 1941.

Unlike Switzerland, whose neutrality toward warring nations originates with the Congress of Vienna in1815 and was confirmed by the League of Nations in 1920, Turkey remained neutral during the Second World War for purely pragmatic reasons. It did not severe its relations with Nazi Germany until early August 1944, when it was quite evident by then that Germany was going to lose the war and that the Soviet Union was a rising power. And when it finally declared war on Germany in late February 1945, it did so under pressure and in exchange for a seat in the future United Nations. At the Yalta Conference, held from February 4-11, 1945, Roosevelt, Churchill, and Stalin had issued a call for a United Nations conference at San Fransisco on April 24. Only nations that had declared war on Germany and Japan before March 1945 would be invited to the San Francisco Conference.

The Truman Doctrine changed U.S. foreign policy and created a new world (dis)order. It launched the Cold War and made the U.S. the world’s policeman. Europe was, of course, the most geographically important region for the United States, which is why NATO was founded. The alliance’s first secretary general, Baron Hastings Ismay, was right on the mark when he described its purpose as follows: “to keep the Soviet Union out, the Americans in, and the Germans down.”

It took several years for the Soviet Union to create a rival organization, and it did so only when NATO failed to keep the Germans down. Indeed, the Warsaw Pact was created in response to the integration of West Germany into NATO in 1955. In the early 1950s, the Soviet government considered joining NATO, but the idea was met with silence at first and later rejected on the grounds that Soviet membership was incomparable with NATO’s promotion of democratic values. In fact, the Soviets seemed to have been quite sincere when they expressed interest in the establishment of pan-European security structures. They were deeply concerned about the prospect of a Third World War which, as far as they were concerned, would have meant the end of human civilization due to the existence of nuclear weapons. The west, however, had no interest in any European security treaty that involved the Soviets.

From the perspective of the Soviet Union and its Eastern allies, NATO became a security threat when West Germany was allowed to join the U.S-led military alliance.

The last country to join NATO before the collapse of the Soviet Union was Spain in 1982. The structure of NATO evolved throughout the Cold War and so did its approach towards defense and deterrence, though nuclear weapons remained a key component of the alliance’s collective defense policy.

The fall of the Berlin Wall in 1989 marked the end of the Cold War, and Soviet leader Mikhail Gorbachev played a pivotal role not only in the events that led to the Berlin wall coming down and the subsequent unification of Germany but also in the political transformation of Eastern Europe and the dissolution of the Soviet Union on Christmas Day 1991.

However, the end of the Cold War did not lead to the disappearance of NATO. Margaret Thatcher, who, incidentally, strongly opposed the reunification of Germany following the dismantling of the Berlin Wall, undoubtedly spoke for all Cold War warriors when she addressed the question of whether NATO should disappear now that the Cold War was over by stating: “You do not cancel your home insurance policy just because there have been fewer burglaries in your street in the last twelve months.”

But expansion? No one spoke openly of a NATO expansion eastward in the immediate aftermath of the dismantling of the Berlin Wall. In fact, during discussions over the process of German reunification in 1990 and on into 1991, “not one inch eastward” assurances about NATO expansion were given by western leaders to Mikhail Gorbachev. On different occasions throughout this time period, President George H. W. Bush and scores of other western leaders (Kohl, Mitterrand, Thatcher, Major and others) offered assurances to the Soviets about “protecting Soviet security interests and including the USSR in future European security systems.”

NATO’s enlargement in the post-Cold War era, which began to take shape in the mid-1990s with the advent of the Partnership for Peace program, had two key objectives: first, to reshape the European order, and second, to marginalize Russia. Eastern European countries, especially the Baltic states, were of course more than eager to join NATO not simply for security purposes but also as a quicker path to European Union (EU) membership.

NATO made its first post-Cold War enlargement in 1999 when the Czech Republic, Hungary, and Poland became members. There was no reaction on the part of the Kremlin, even with regard to Poland. First, because Russia was in the midst of political and economic chaos, and second, because all political groups in Poland were supportive of both NATO and EU membership. But Russian opposition to NATO expansion was already on the record. In fact, in the autumn of 1996, the Russian State Duma unanimously adopted a resolution which condemned NATO expansion and warned that it would lead to a crisis.

NATO went through several other rounds of enlargement since the end of the Cold War. In 2004, seven countries became members of the alliance: Bulgaria, Romania, Slovenia, Slovakia, Estonia, Latvia, and Lithuania; in 2009, Albania and Croatia joined NATO, while the most recent members to join the alliance were Montenegro in 2017 and the Republic of North Macedonia in 2020.

At the NATO Summit in Bucharest on April 2008, the U.S. also pushed for an immediate Membership Action Plan (MAP) to Georgia and Ukraine, but Germany, France and smaller NATO states balked at the idea. The case of Georgia and Ukraine was regarded by key European leaders as highly controversial because they knew that such a move would risk provoking a hostile reaction by Russia. On several occasions Vladimir Putin had warned NATO and U.S. leaders that offering NATO membership to Georgia and Ukraine are “red lines” for Russia. Nonetheless, in order to placate Washington, European leaders made a vague pledge to invite Georgia and Ukraine to join NATO at some point in the future.

“We agreed today that these countries will become members of NATO,” NATO Secretary-General Jaap de Hoop Scheffer told a news conference during the NATO summit in Bucharest after leaders had failed to include Georgia and Ukraine at the present time in its MAP.

On August 8, 2008, Putin gave Russian forces a green light to invade Georgia. The conflict was over in a matter of days, but Human Rights Watch said that forces on all sides “committed numerous violations of the laws of war” during the conflict. The conflict was over South Ossetia. Georgian President Mikhail Saakashvili made the tragic mistake of ordering a military assault on the pro-Russian breakaway region, but there is little doubt that Russia’s invasion of Georgia was also a signal to NATO to keep away from its borders.

Russia’s military invasion into Ukraine on February 24, 2022, is unjustified and in gross violation of international law. Noam Chomsky ranks the Russian invasion of Ukraine alongside the U.S. invasion of Iraq and the Hitler-Stalin invasion of Poland. Yet, no one can overlook the fact that Russian leaders had been warning the west for decades about NATO’s expansion eastward. No one can honestly say that the US was not in fact deliberately provoking the Russian bear throughout the post-Cold War era. As John Mearsheimer has pointed out in connection with the current invasion of Ukraine, the trouble actually started at the NATO Summit in Bucharest in April 2008.

Yet, none of this seems to matter to NATO and U.S. leaders. On the contrary, they are determined to double down on provocation and aggression. At the Madrid summit, NATO leaders took far-reaching decisions that could trigger global instability, and much worse.

NATO branded Russia “a direct threat” to its members’ peace and security. This is a wild idea, because by doing so, NATO is implying that Russia has plans to attack western capitals.

The idea that Russia poses a military threat to the west is as ludicrous as Marjorie Taylor Greene saying that “children should be trained with firearms.”

In fact, it is NATO that poses a direct threat to Russian security.

With the adoption of the new strategic concept, the U.S. will significantly expand its military presence (with more troops, warplanes, and ships) on European soil. As such, Europe’s existential dilemma of whether to be or not to be a U.S. vassal has finally been resolved.

With the accession of Finland and Sweden, the NATO-ization of Europe is almost complete. The only EU member states who are not yet part of NATO are Austria, Cyprus, Ireland, and Malta.

For clearly defensive purposes, naturally, NATO will also increase massively the number of troops on the eastern flank nearest Russia, and the number of troops on high alert will soar well over 300,000, compared to 40,000 troops that make up the alliance’s current quick response force.

There should be no mistake about it. The new strategic concept amounts to the revival and resurgence of an old NATO vision, which is none other than assuring the conditions for the reproduction of U.S. global hegemony.

This is why NATO’s regional partners—Australia, Japan, New Zealand, and South Korea—were invited to participate in a NATO summit for the first time. The Indo-Pacific has emerged as one of the most dynamic regions in the world and it is home to China. The quest for global hegemony on the part of the U.S-led, western-centric military mandates that steps be taken to address existing, new, and future threats and challenges.

Accordingly, NATO leaders declared China a security challenge for the first time. They shied away from labelling it an “adversary” for various reasons, even though the U.S-China relationship is in fact quite adversarial.

Firstly, the economies of China and the United States are intricately linked. Cutting China out of the global supply chain and key industries is a nearly impossible task for the United States at the present stage. China is also the European Union’s biggest trading partner. Therefore, neither Europe nor the United States have a strong wish to treat China as an adversary.

Secondly, while Russia can be contained in the military realm, China cannot. Only direct military confrontation with China may halt the growth of its military predominance in east Asia. But China is outside NATO’s sphere of interest, and while the U.S. will seek to bridge Euro-Atlantic and Indo-Pacific alliances, it cannot be taken as a given that European states will align themselves with the perspective of the U.S. regarding the Indo-Pacific region.

Indeed, one should not expect European citizens to offer support to military adventures abroad. A recent survey released by the European Council of Foreign Affairs reveals that, although in the first 100 days of Russia’s war on Ukraine, European citizens supported western intervention and the economic sanctions, “now in all countries, apart from Poland,” the public mood is in favor of peace. Indeed, “The survey reveals a growing gap between the stated positions of many European governments and the public mood in their countries” and “only in Poland, Germany, Sweden, and Finland is there substantial public support for boosting military spending.”

NATO’s new strategic concept comes at a critical juncture in the evolution of the post-Cold War international system where insecurity reigns supreme and the dominant actors are nuclear superpowers. It is indeed a reckless and highly dangerous initiative that will lead to greater animosity between Russia and the West, to greater mistrust between U.S. and China, and will most likely solidify the authoritarian Russia-China axis. All the needed prerequisites for the eruption of total war.

Unsurprisingly, Beijing already slammed NATO over its so-called new strategic concept, and Chinese President Xi Jinping, perhaps in anticipation of the far-reaching decisions made by NATO leaders at the Madrid summit, assured Putin in mid-June of China’s support on Russian “sovereignty and security.”

Putin, for his part, warned Finland and Sweden that there would be symmetric responses on the part of Russia in the event that “military contingents and military infrastructure were deployed there,” which would include the deployment of nuclear weapons in the Baltic Sea region.

To be sure, a bleak future lies ahead. NATO took decisions at the Madrid summit that may very well lead to the eruption of a global Cold War. In this sense, NATO continues to follow the same path of conflict escalation, except that its endless expansion policy is now broadening the prospect of Armageddon.

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C.J. Polychroniou is a political economist/political scientist who has taught and worked in numerous universities and research centers in Europe and the United States. His latest books are The Precipice: Neoliberalism, the Pandemic and the Urgent Need for Social Change (A collection of interviews with Noam Chomsky; Haymarket Books, 2021), and Economics and the Left: Interviews with Progressive Economists (Verso, 2021).