Yesterday, SouthFront, Analysis & Intelligence released the appeal to volunteers, bloggers and media “Don’t succumb to illusions” to start a public unbiased discussion on the ongoing crisises and Russia’s role in them. Today, we are publishing the first article on this topic: David Hungerford debates with Pepe Escobar and provides a “left” look on the current situation in the world.
“Politics is the concentrated essence of economic forces in motion.” — Lenin
That’s true, but it doesn’t work the other way around. Crises of capitalism do not happen for political reasons. They happen for economic ones – overproduction, surfeit of capital, falling rates of profit, and so on.
We can say that political events come from economic motives, but economic developments do not come from political motives.
Workers and oppressed peoples need to understand these matters in a way that is scientific, objective, and correct. Then they will know what to do.
There are wars all over the world – Afghanistan, Ukraine, Iraq, Syria, on and on. They come from rivalries to control territories and natural resources, trade routes. At base the aggressors are out for profits. “War is the continuation of politics with the addition of other means,” as Clausewitz says.
There are so many wars because every developed country is teetering on the brink of economic collapse.
Financial markets in the United States, i.e., stock and bond markets, are only kept going by bailouts. The government and the Federal Reserve print up lots of money and give it to banks and other big financial companies to use as they see fit (guess who pulls the strings behind the scenes?) at little or no interest. TARP, QE, ZIRP, NIRP, BURP, who cares what they call them, they are all bailouts.
Pumped up on printed money, the financial players look like big tough guys. But it’s not muscle, it’s edema. When the crash comes, which won’t be long, the bailouts will only make it worse.
China’s financial system is if anything in worse shape. The People’s (what a joke!) Bank of China (PBoC) has done all the same things as the Fed, and more. It has spent huge amunts to purchas bad securities to rescue the markets. It has banned certain types of financial transactions and even arrested traders for making them. Etc.
As if the contradictions of capitalism could be eliminated by making them illegal! Good luck, fellas. Socialism with Chinese characteristics is really capitalism with capitalist characteristics.
Japan’s economy has been a basket case for a long time. The Euro Zone is breaking up. Other countries will soon fall into the same predicament as Greece. The Euro Zone forces them to absorb German overproduction. That was always a bad idea. It was clear from the start it would not work.
Right now there is a problem on the people’s side: some well known and generally pretty good commentators nonetheless give confused analyses of economic crises. They explain them as if they were political affairs. They aren’t.
To repeat: workers and oppressed people need objective knowledge. That’s not the way to get it.
Pepe Escobar is a brilliant political analyst. He is great at looking at a lot of moving parts and seeing how they all fit together. He recently published an article titled “Russia’s Ultimate Lethal Weapon.” His main point is that the development of a strategic alliance between Russia and China poses a basic challenge to U.S. world hegemony. He welcomes that as a good thing.
He is right on both counts. There is danger of war between the United States and Russia. The danger comes from the United States. At no time since the Ukraine crisis broke out has Russia taken aggressive action. Closer relations between Russia and China can help Washington restrain itself a bit.
The problems is, Escobar doesn’t always look at the inside of things. The article is almost completely wrong on economic developments, seeing them as politically motivated. He is not the only one to make that mistake.
For example, oil prices have fallen in recent months. Escobar sees that as political retaliation against Russia by means of “the twin Western manipulation of oil prices and the ruble. The manipulation involved unleashing on the oil market over five million barrels a day of excess reserve production that were held back by a few usual suspects, plus derivative manipulation at the NYMEX, crashing the price.”
The likelihood that the U.S. would cut oil prices to blackmail Russia is just about zero.
The United States would is the world’s largest energy producer. It hardly wants low prices. Actually, the drop in oil prices began in April of this year with Saudi dumping of cheap crude, aimed at undercutting higher-cost U.S. producers. Low prices have lasted long enough to put the princes in a very bad pinch. (Saudi policymakers are arguably a bunch of “f***ing morons“.)
The Saudis can manipulate oil prices because they are not set by the market. They have been set by a pricing mechanism run by a cabal of OPEC countries and the giant oil companies. The Saudis may well have wrecked the price rigging for good. The drop in oil pricing shows the danger of arbitrary market moves. As Obi-Wan Kenobi would say if he were an economist, “May the market be with you.” If it isn’t you won’t have much luck.
Escobar makes another wrong call when he says, “After Russia, Western financial ‘Masters of the Universe’ went after China for allying with Russia. The usual financial suspects rigged the Chinese stock market in an attempt to crash the economy, using Wall Street proxies manipulating cash settlement mechanisms to first raise up the prices of the Chinese A shares, creating a giant boom, and then reversing the cash settlement rig to crash the market.”
Shenanigans on financial markets go on all the time, but any U.S. attempt to crash China’s economy is MOST unlikely. The U.S. financial Masters of the Universe would not crash the Chinese economy even if they could. The two economies are highly interdependent. The U.S. economy would come crashing down as well.
Suppose two guys are in a locked room with a caged tiger. They get mad at each other. One lets the tiger out of the cage and says, “Eat the other guy up.”
But a tiger is a tiger. It will do what it wants. It will most likely eat both their asses up.
Escobar adds, “No wonder Beijing, very much aware of what was happening massively intervened; is actively studying cash settlement moves; and is carefully reviewing the records of major stock operators in China.”
Ho, ho, ho, that’s a good one. Are we supposed to believe it? No, capitalist-roaders, your economy is perfectly capable of crashing itself. Maybe you forgot that when you betrayed the people and restored capitalism.
Now we can see the basic problems with Escobar’s approach: he thinks capitalism is permanent. Thus he looks for a bunch of rich people – Chinese capitalists – as the only recourse against another bunch of rich people, the U.S. imperialists.
Once both Russia and China had a better society, proletarian socialism. The people remember their revolutions. They know they were people’s revolutions. They want them back. One day before too long they will have them back. But it won’t be by following around behind rich people.