The End of History, the Third Way, and the Ukrainian Civil War

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3/19/2015

The End of History, the Third Way, and the Ukrainian Civil
War

By J.Hawk

When one looks back on the future as it was supposed to be
in the early 1990s, one can hardly believe just how badly the situation had
deteriorated. The End of History was not supposed to be like that. Where is the
mixture of democracy, interdependence, and respect for international law that
was supposed to deliver peace and prosperity? What had gone wrong? Why is
Ukraine only one of many bleeding spots on the face of the planet that appeared
only in the last few years? And, most importantly, where do we go from here?
What does it mean for the future of the relationship between the West and
Russia? Given the sheer level of deception, mendacity, and outright lying by
Western media surrounding the civil war in Ukraine, it’s clear that what’s at
stake is more than just Ukraine. It’s something far more fundamental. But what?

To answer this question, we need to look at the basic flaws
in the design of the post-Cold War system, flaws that were not immediately
evident, but which are now coming to the fore.

In general, a political economy of a country can be compared
to a Monopoly game. For people to play along with the rules of the game, they
have to have a reasonable assurance that at some point they, too, will have a
part of the board to their name. The government can provide that assurance
through a variety of means. First, redistribution: those who already own many
of the pieces of the board will lose some of them through taxation or other
means. If that is not possible due to the political power of the board owners
and the resulting legal codes that sanctify private property, the government
must make the board bigger through territorial expansion, colonialism, or breaking
into new markets (the so-called “frontier thesis”). If all else fails, if the
unwillingness to redistribute is combined with the inability to expand, the
government will have to exclude certain demographics (often defined in ethnic
terms, as in the case of slavery) from owning any square on the game board.
Usually these exclusionary policies are backed by considerable state-violence,
as demonstrated by fascist regimes.

During the Cold War the ability to pursue expansion was
limited—colonial empires were collapsing and, if anything, seeking Soviet
protection against their erstwhile masters. The prospect of the Cold War going
spectacularly hot on the Intra-German Frontier moreover implied the need to
maintain large standing armies with a sizable mobilization potential. Therefore
virtually all Western powers embraced redistribution in the form of Keynesian
economic policy, progressive taxation, generous social programs, and public
investment.

Alas, the Western powers’ tolerance for distribution proved
limited, and as soon the likelihood of a major conventional war began to wane
in the late 1960s, when both sides’ nuclear arsenals r have reached guaranteed
Mutually Assured Destruction, the need to maintain a “nation in arms” fell
away, and with it did the Western welfare state. One could already see the
drift in the direction of lower levels of redistribution and higher internal
political repression (e.g., “War on Drugs”) in the 1970s, policies which picked
up steam in the 1980s.

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And then the Cold War ended. The West’s Left, having
abandoned social policies in favor of a slightly less extreme version of
economic neo-liberalism, tried to reinvent itself by adopting the so-called
“Third Way,” which amounted to little more than a policy of economic expansion into
the “emerging markets”, many of which were the post-Soviet states making a
difficult transition to capitalism. However, while Globalization was marketed
as a win-win proposition for both the global North and South, in reality the
developing states have gotten the losing side of the bargain. The same is
unfortunately true for the post-Communist states. A study recently published in
the Polish journal Polityka argued that as a result of Western integration,
Poland no longer has a single internationally recognizable brand. Even most of
its historical domestic brands have been taken over by Western giants. It is
giant assembly line for European mega-corporations with home offices in other
countries, a supplier of labor to other EU countries, and not much else.

However, in view of the EU’s “cannibalization” of Greece, a
fate that probably awaits all of its other less-well-developed members, it’s
difficult to imagine how the EU would have survived in the absence of
expansion. Its export-driven model requires finding and opening new markets.
Whether that expansion is good for the new member states is another question.

Since it’s been over a decade since the big post-Soviet wave
of EU accessions, it’s not surprising the EU has been casting its covetous eye
on Ukraine, whose acquisition through the much less financially demanding
process of association, rather than full membership, would provide the EU with
yet another captive export markets, to stave off difficult choices for a little
while. The West’s conflict with Russia is driven by the same need to expand
into new markets in order to save the EU and US from its own unsustainable
economic policies. Russia’s response, which amounted to limiting EU’s access to
a range of Russian markets, appears to have been crafted with the correct
understanding this was the EU’s main weakness. The question is, where do Russia
and the West go from here?

What makes the situation dangerous is that the West is in a
systemic crisis that could well end international capitalism as we know it.
It’s been nearly seven years since the financial crash of 2008, and the Western
economies still have not recovered in spite of multiple rounds of quantitative
easing whose main, if so far largely underappreciated, impact may have been the
inflation of yet another stock and/or asset bubble. Nothing says “desperation”
as a central bank zero interest policy or, in a growing number of cases, a
negative interest policy! This is the reason why we are seeing so  many “humanitarian interventions” and regime
changes around the world. Ukraine is one of many similar cases in which the
West went to extraordinary lengths to overthrow a legitimate government in the
hopes of replacing it with a more pliable one.

That’s why the EU and the US are in a difficult spot. They
are reaching the limits of post-Cold War economic expansion. About the only
sizable economies that have not been penetrated by Western capital and taken
over by Western corporations are…nuclear weapons states like Russia and China
which are too powerful for the West to attempt a direct military confrontation,
though a proxy war is not entirely out of the realm of the possible, in spite
of the obvious danger of escalation.

 So there are two ways
by which the current stand-off will play out. The first one, and arguably the
less likely one, is that Russia backs down and ultimately, under continued
economic pressure, agrees to privatize its national monopolies or even sell
them directly to Western firms, and thus become a sort of Saudi Arabia of the North.
The second one is that Russia fends off this latest Western encroachment,
forcing the West to re-examine the structure of its post-Cold War political
economy. With economic expansion no longer on the table, the West will have a
choice of rediscovering the benefits of redistributive policies, or embark on
exclusionary policies that would have to be backed by a police state.

Unfortunately, redistribution is no longer on the table. No
Western leftist party seriously advocates returning to tax rates and social
programs on the scale they existed in the 1960s or even 1970s. In the US the
political contest is between a party that favors continued economic expansion
even at the risk of war (the Democrats, still true to their “Third Way”
approach of economic expansion) and a party of economic exclusion (the
Republicans, whose seem perfectly willing to return the country to the era of
Jim Crow and greatly increase the ranks of the poor of all ethnicities). The
next US presidential election will turn on the preferences of the US elites. Do
they still want to continue the policy of expansion which is now threatening to
boil over into a genuinely global conflict, or will they turn inward? Because Shaknazarov’s “White Tiger” need not prey only on non-Western targets. That
apparatus of violence can be turned against targets within the West, and we
have seen plenty of examples of it in the past: slavery, Jim Crow, Fascism, the
Holocaust. And there is plenty more where that came from…with the state of “permanent war” into which the West is immersing itself serving as an excuse to create a 1984-style total surveillance and repression state, whose construction is already well advanced.

George Orwell wrote in his famous novel 1984: “If you want a
picture of the future, imagine a boot stamping on a human face—forever.” That
prediction is becoming more and more prescient as one looks at where the
international system seems to be going. The only question is whose faces will the
boot stamp on, our own, or the beneficiaries’ of more “humanitarian
interventions” around the world.

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