ISHCHENKO: Coronavirus & the Collapse of the US Empire

By Rostislav Ishchenko


By Rostislav Ishchenko

It comes to be that empires collapse suddenly, after being quite sturdy (as was the Russian Empire in 1917). It comes to be that empires disappear after many decades even centuries of excruciating decline, like the Western Roman Empire in 476. But if the empire collapses, two conditions must always coincide: an acute global crisis, which the empire cannot resolve at the expense of domestic means alone, and the inability or unwillingness of imperial power to adapt to the crisis through the necessary reforms.

The West – the United States and its first-line vassals: Canada, Australia, New Zealand, Japan, South Korea, and the EU –  has long refused to recognize that the global imperial space it created is in systemic crisis. At worst, periodic economic crises were recognized, but the main thesis was that crisis events would pass quickly, growth would resume, and the results of the temporary recession would be quickly offset.

This was a lie. Since the mid-1980s, with Reagan’s administration (with his famous “Reaganomics”), US leaders have been well aware that the possibility of further expanding production through the development of new markets and the inclusion of new resources has been exhausted. Free markets and free resources on planet Earth are over. In fact, Reagan’s idea was to finance the current needs of the United States from the pocket of future generations through a monopoly on the printing of the dollar (already back then the currencies of international settlements).

It was assumed (by the way, quite rightly) that the United States and the USSR were equally exhausted by the Cold War and economic confrontation. The one who could last longer would win. The USSR could last longer. The US no longer had free resources for economic growth.

The money of future generations pumped into the economy has started to create bubbles that have been bursting since the beginning of the new century in front of us. But they were enough to last until Gorbachev and his perestroika. The leadership of the USSR then correctly defined the need for reforms, but they were carried out completely ineptly – it’s not by chance that people still call these reforms intentional sabotage.

Yes, it is hard to believe such an outstanding intellectual failure of a superpower’s top leadership.

Yes, there were clear traitors in Gorbachev’s entourage. But the primary things in the collapse of the USSR is still foolishness and unprofessional ways. Without the foolishness and unprofessional nature of the first persons, the traitors could do nothing.

Coming after an unexpected resounding victory over the USSR, America urgently needed to roll back “Reaganomics” and return to a normal economic model. But firstly, banks and exchanges had already tasted easy money. Household loans for household needs generated unprecedented demand that spurred sales and production. Everyone was living well, and no one wanted to give up their unearned benefits. Secondly, and most importantly, the Western economy of the 1950’s-1970’s still lacked free markets and free resources. It was necessary to start reforms ― reorganizing the West, but nobody knew how exactly to create a new steady global economic model without at the same time sacrificing western hegemony. In the event that reforms were abandoned, stimulating demand with cheap but unsecured credit remained the only way to prolong the existence of the cash model.

Perhaps such a model would even prove viable if money reached real production. But banks soon realized that speculation with securities generated significantly more income than investing in the real sector. As a result, more and more credit funds started to settle in the exchange-banking (financial) sector, and then almost all the money allocated for warming up the economy started to go there.

More and more funds were needed to continue this fictitious growth every time. As a result the public debt of the US started to grow exponentially, and the real purchasing power of the dollar fell just as quickly (the dollar of 1950, 1980, and 2010 are completely different dollars). The middle class in the United States started to erode rapidly.

For Europe, by moving defense spending and traditionally powerful social support programs to America, this process has been slowed down, but not stopped. Now in terms of the rate of erosion of the middle class, the EU is quickly catching up with the US. It’s just that Europe has its own features. Until recently, it managed to maintain an acceptable level of middle-class income in the “old EU” and in the rich north by the progressive impoverishment of the “new EU”, the poor south, and by attracting a mass of migrants.

As we can see, all the measures taken by the West delayed the onset of the crisis, or rather even made it less visible to the general population, but they were not only simply insufficient to solve the problem, they also only deepened it. Since the money of future generations became trivially not enough to maintain the appearance of well-being (contrary to conventional belief, the US was unable to print enough unsecured dollars, although it very much wanted to), the West tried to delay the crisis by appropriating the resources of the rest of the world. Hence the unresolved contradictions in the West’s relations with China, Iran, Russia, and the era of “wars for democracy” and “color revolutions” began.

All of this was just a method for transferring resources to the West. But the resources of all the states of the planet are not infinite, and since the needs of the West grew exponentially, they ended quickly. Especially since Russian, Chinese, Iranian, Venezuelan, and some other resources could not be reached. Under Obama and Trump, the United States tried to dispossess its European allies on several visits. So far, it’s been without success, but Washington continues to work on it.

Nevertheless, it was initially clear that recognition of the crisis could be delayed but could not be avoided. Moreover, the longer the crisis was not recognized and the exhausted global financial and economic mechanisms continued to operate, the more terrible (for the whole world) the collapse should have been. Not least because each next American administration refused to recognize the obvious, acting on the principle “for our century there will be enough, and there will be flood anyway” ― the next president will be responsible for it.

Crisis are like some diseases: the longer it stays in hidden form, the more devastating its effects are. Since 2016, its presence has become no longer possible to hide. Hence the phenomenon of Trump and the “new right” in Europe opposing globalism. In fact, they speak of the need to change an exhausted economic and political system. However, since Trump and the “new right” set two tasks for themselves at once – to reform the system and to overcome the crisis, without having renounced the western political and economic domination – it is possible to safely claim that they will not solve any of them.

Especially since their capabilities are limited by the division of the elites. While some of the West’s traditional elites have realized and accepted the need for reform (although trying to carry it out no more qualitatively than Gorbachev’s perestroika), strong positions in the ruling establishment still belong to the globalists, who do not want to change anything, hoping that they will be able to “outstay” Russia and China in the same way they “outstayed” the USSR, winning on an exhalation.

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The gradual destruction of the Western Empire (led by the United States) could have taken place for a long time. In the West, they would pretend that there is no crisis, and in the East they would pretend to believe that they are trying to provide the West with a “soft landing”, because in a collapse, the consequences would be tragic for the entire global economy and would hurt everyone more or less. History, as always happens, was changed by chance.

The coronavirus pandemic became a straw breaking the western empire’s back. I am surprised by people trying to explain what is happening within the framework of a conspiracy theory. According to some, “China covered up coronavirus exercises to deploy the civil defense system during a special period”. According to others, “the West has covered up a world crisis via the coronavirus”. None of the “whistleblowers” wonder what was covered there if the crisis has not been talked about for a year only by a lazy person, and it has been going on for 20 years? No one is interested in how the authorities of one and a half dozen warring countries could collude to promote the same narrative.

No one is afraid that trillions of dollars, not unnecessary to the world economy, have already been spent on the fight against the virus and quarantine measures, and the total losses will be by an order of magnitude more. And all of this to deceive the plumber, the journalist, and the suspiciously well-off Instagram girls? A costly deception is the result.

Quarantine measures will indeed have a serious impact on both the world economy and the economies of individual countries. If this were happening at the time of a development rise, they would count the losses, shake them off and forget, and start to increase production again. But the blow came at a time of sharp exacerbation of the global systemic crisis. Quarantine measures break traditional trade and economic ties, forcing various national and regional economies to enter a regime of partial or complete autarky.

This, in turn, hits most integration projects. Eurasian projects have not yet been seriously affected: China has quickly stopped the spread of the epidemic, and Russia has not yet crossed the epidemic threshold, namely, the sustainability of Eurasian integration projects depends on them. But with the EU everything is quite bad. Not only and not so much because the internal borders are closed. It’s just that the EU has shown itself to be helpless, the full weight of the fight against the virus has fallen on national governments, and they immediately started pursuing selfish policies, trying to isolate themselves from the worst-hit countries, leaving them one-on-one with an epidemic.

As a result, Italy has already stated that it is necessary to refuse hospitalization to elderly people who are sick in order to save the younger ones. The national health care system has been over-stressed and there are not enough places in hospitals.

What is happening in the United States is not clear at all.

There is no way they can decide when the epidemic started and how many people actually got sick. There is already speculation that many of the “flu deaths” in the United States were actually from coronavirus. But this, in principle, does not matter, the helplessness and incompetence of the “world hegemon” in the face of the epidemic is important. It is possible not to cope with a flow of patients, but not to manage to count them is beyond good and evil.

The West is atomizing, countries are closing off from each other. I think that proud Eastern European border states in the current conditions have almost no chance of securing the EU’s multi-billion dollar aid for their budgets. No one else has any extra money. And “European unity” is retreating to the background in the face of national problems.

I do not want to say that the European Union will soon collapse (although such a result is possible), but its political and economic coherence will significantly weaken and centrifugal forces will strengthen. The unity of the EU will weaken. Weaker member states may receive a knockout blow from which they will not die, but will remain permanently disabled.

“Euro-oriented” countries like Ukraine will lose much of the West’s attention and support. When the usual world order collapses, when resources are lacking for urgent needs, it’s not time for games in the backyard of the empire, and even more so in someone else’s backyard. Ukraine, like other weak links in the global system, is the first candidate for being dumped as ballast. The West won’t kill it on purpose. It just won’t be able to help it survive anymore.

As for Russia, difficult times are also waiting for us. After all, we were part of the West’s global empire from 1991 to 2005 (at least until 2008). Over the past ten years (especially since 2014), Russia has distanced itself from the Western system, but many ties have remained intact, and the well-being of the Russian economy is still directly dependent on the state of the world economy. We cope with the crisis easier, but it’s still a crisis, not a Sunday picnic. In addition, we do not yet know whether the coronavirus epidemic will cover us and how destructive it will be (if it is) to the national economy.

But it can be stated that Russia has the largest safety margin in the world. It is the only one with a self-sufficient economy to survive in a state of complete autarky. As is always the case during global systemic crises that destroy empires, the one who lasts longer will survive. The safety margin is very important for this. But the history of the collapse of the USSR has shown that it is equally important to realize the need to stand up. It is possible (although not always necessary) to make peace with a former enemy after it has surrendered to us, not after we have surrendered to it.

Resultant from the current systemic crisis, we will certainly see the end of an empire. There is every reason to believe that it will be the empire of the West. But nothing is done by itself, and in order not to be a “victim of circumstances”, there is still a lot of effort to be made.

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