by Michael Hudson at Naked Capitalism
Yves here. I must confess to remaining mystified about America’s obviously disproportionate interest in and belligerence over Ukraine. Germany needs Russian heating fuel, like it or not. Is it that there are too many Galicians in position of influence? That the military profiteers are upset about the loss of Afghanistan as a source of revenues and need a new hot or at least hottish theater? Or is there long-simmering upset about how Russia outplayed us in the Maidan coup by winding up with Crimea? And then they also checkmated us with Syria despite having a theoretically weaker hand?
Hudson’s argument about the bigger interests at play makes perfect sense. But there’s also a great deal of misplaced emotion that I wish I could fathom.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year
The Iron Curtain of the 1940s and ‘50s was ostensibly designed to isolate the Soviet Union from Western Europe – to keep out Communist ideology and military penetration. Today’s sanctions regime is aimed inward, to prevent America’s NATO and other Western allies from opening up more trade and investment with Russia and China. The aim is not so much to isolate Russia and China as to hold these allies firmly within America’s own economic orbit. Allies are to forego the benefits of importing Russian gas and Chinese products, buying much higher-priced U.S. LNG and other exports, capped by more U.S. arms.
The sanctions that U.S. diplomats are insisting that their allies impose against trade with Russia and China are aimed ostensibly at deterring a military buildup. But such a buildup cannot really be the main Russian and Chinese concern. They have much more to gain by offering mutual economic benefits to the West. So the underlying question is whether Europe will find its advantage in replacing U.S. exports with Russian and Chinese supplies and the associated mutual economic linkages.
What worries American diplomats is that Germany, other NATO nations and countries along the Belt and Road route understand the gains that can be made by opening up peaceful trade and investment. If there is no Russian or Chinese plan to invade or bomb them, what is the need for NATO? And if there is no inherently adversarial relationship, why do foreign countries need to sacrifice their own trade and financial interests by relying exclusively on U.S. exporters and investors?
These are the concerns that have prompted French President Macron to call forth the ghost of Charles de Gaulle and urge Europe to turn away from what he calls NATO’s “brain-dead” Cold War and beak with the pro-U.S. trade arrangements that are imposing rising costs on Europe while denying it potential gains from trade with Eurasia. Even Germany is balking at demands that it freeze by this coming March by going without Russian gas.
Instead of a real military threat from Russia and China,…
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