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    March 19, 2015

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


    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.

    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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