Disaster capitalism: war, crisis and hunger for planet earth

Translation of article posted on Xekinima.org on 04.07.2022. Thus, not all of the facts and figures presented here are fully up to date – eg the recent resignation of British PM Boris Johnson. 

Andrοs Payiatsos

The developments around the war in Ukraine are very negative for Ukraine and its Western allies. After the capture of important cities like Severodonetsk and Lysychansk, Russia is consolidating its advance in Εastern Ukraine and continuing southwards. The Russian advance is slow but steady and, in its path, turns everything to ashes. The Russian army does not want to risk heavy casualties, so the infantry only advances when the artillery and planes have devastated everything. They surround the Ukrainian army, creating hellish conditions for it, forcing it to flee or surrender. Ukraine, according to the Ukrainian Government, is losing 1,000 soldiers every day – who are either killed or wounded. According to Zelensky himself, one month ago, 20% of Ukrainian territory was in Russian hands. Despite this situation, Ukraine refuses negotiations. It insists that it can defeat the Russian troops. Then and only then will it be willing to return to diplomacy – but what would be the meaning of diplomacy then? The Western alliance (NATO, US, EU etc) are encouraging Ukraine to keep the tough stance despite the carnage and devastation that is taking place.

The West cannot hide its deadlock in Ukraine 

The fact that things are not going at all as the West and the Zelensky government had hoped for, is something that cannot be hidden anymore. Reports in the international media and even statements by officials on this are published on a daily basis. 

For example, speaking at a US Department of Commerce conference, Avril Haines, the Director of National Intelligence (DNI) explained, according to the BBC:

“Intelligence agencies see three scenarios of how the war could play out, the most likely being a slow moving conflict with Russia making ‘incremental gains, with no breakthrough’.

The other, less likely possibilities include a major Russian breakthrough, or a stabilisation of the frontlines with Ukraine achieving small gains.”

 In all three scenarios mentioned by Haynes, none refers to a defeat for Russia. 

Even the most hawkish generals, like Britain’s new Chief of Staff Sir Patrick Sanders, do not appear optimistic that after the war in Ukraine Russia will have suffered any kind of major defeat – even though British Prime Minister Boris Johnson repeats that aim over and over. Speaking at the Royal United Services Institute’s conference, the British Chief of Staff said, according to The Times,

“Russia will most likely emerge from the war in Ukraine as an ‘even greater threat’ to European security… Russia’s resilience meant it could suffer the loss of any number of campaigns, battles and engagements but then ‘regenerate and still ultimately prevail’.”

The Greek financial news website capital.gr, in an article on June 29, describes the concerns of the economic and political establishment about the situation as it is shaped today. Under the headline Europe’s suicide” it writes: 

“Europe is being driven into an unprecedented recession which may trigger social upheavals and political turmoil… The West and Europe are subject to a geopolitical defeat and humiliation since they are unable to effectively punish Russia…”.

Under a similar headline, Is Europe committing suicide?”, Naftenporiki, another important journal of the Greek financial sector, describes the situation as follows:

“Unfortunately, all the expectations of the West for this war have proved to be wrong…”.

World economy – the nightmare ahead

All of the above are of course linked to the situation in the world economy. After two harsh years due to the crisis triggered by the pandemic and the lockdowns, and while the capitalist world was hoping for a period of economic recovery, the war in Ukraine has blown those hopes away. 

The slowdown in production (lockdowns, problems in supply chains, etc.), the energy crisis and inflation that were already evident in the course of 2021, got a major new boost after the war, as the West’s economic and trade sanctions against Russia sent the prices of energy, industrial metals, fertilisers and food soaring. 

Inflation, which in 2021 looked like it might be brought under control in a relatively short space of time, is proving extremely persistent and governments around the globe are raising interest rates to decrease liquidity and are cutting spending. 

Capitalism has only one way to contain inflation and that is austerity. These policies are pushing the international economy deeper into recession, but despite this they cannot easily and quickly reduce inflation.

Storming season in the stock markets – but not only 

As Naftemporiki reports,  

“For the global equity MSCI [Morgan Stanley Capital International] index, the first half of 2022 was the worst year since its creation in 1990. The 20% drop was far greater than that of the first half of 2001 and 2002, when everything was in the shadow of terrorism, or of 2008 when the global financial crisis was plunging the world economy into recession… or of 2010 … or of 2020.”

The Eurozone Stoxx Index was down 23% between January and June of this year, the S&P 500 (which is the most representative of the US stock market) 20%. The new tech giants FAANG (Facebook, Apple, Amazon, Netflix and Google) lost 32% in the same period. 

Since the beginning of the year, stock market values of $13 trillion have been wiped out. The decline has not yet bottomed out, it is still continuing.   

Economist Nouriel Roubini, who established himself internationally for having predicted the 2008-9 financial crisis, estimates that the fall in stock markets in the US and Europe could be far worse than in similar crises in the past, losing up to 50% of their value.  

German Federal Minister for Economic Affairs, Robert Habeck, warned on June 22 that the continuation of the energy crisis could lead to a domino effect similar to the failure of the US bank Lehman Brothers in 2008 that led to the global crisis of 2008-9 (which brought the “Memoranda” to the European South, sparked the Arab “Spring” of 2011, etc.).

JP Morgan-Chase, the largest US investment bank, sees “apocalyptic” scenarios in the event that the war in Ukraine and the energy crisis continue. If in the next six months Moscow cuts oil supply by 3 million barrels a day, JP Morgan estimate that the price of oil could reach $190 a barrel (in the first days of July it was hovering at $110 a barrel). If, however, the reduction in Russian oil supply reaches 5 million barrels a day, then the price could reach $380 a barrel. This is unpresented, of course. 

According to Bloomberg,  

“Given Moscow’s robust fiscal position, the nation can afford to slash daily crude production by 5 million barrels without excessively damaging the economy, JPMorgan analysts including Natasha Kaneva wrote in a note to clients.”

The neoliberal Greek media outlet Liberal.gr wrote on June 24, summarizing the situation: 

“When [the European governments] obeyed America’s all-out embargo on Russia, did they not expect retaliation? … The West’s nightmare is beginning to reveal itself. ‘Russia is having more revenue than before the invasion,’ Reuters wrote ten days ago. In May, the International Energy Agency said that Russia’s oil revenues had increased by 50% this year. Already as early as April, Bloomberg Analytics wrote that the Russian economy remains in good shape and will earn $321 million this year, while the IIF Financial Institute wrote that Russia is heading for a $240 billion surplus.”

Social consequences 

The world is facing a new food crisis, as the price of grain has risen by 30% this year, added to another 30% during 2021; 40 countries are threatened with famine. Inflation is eating into workers’ incomes – real wages are losing value even if they are increased in nominal terms. Rising interest rates are pushing many countries in the direction of default. Some 70 countries around the world are facing this risk. 

Among them are the countries of the European South. Greek public debt stood at 193% of GDP at the end of 2021, Italian at 151%, Portuguese at 127% and Spanish at 118%. Since the 2008-9 crisis, the European South has managed to control the debt problem due to the policy of constant interest rate cuts, which in recent years have been close to 0%. In the past few weeks interest rates on Greek and Italian bonds rose to 4-5%. With interest rates at these levels and with debts so high a new debt crisis is simply unavoidable, in the long term.

New arms race – including nuclear 

As unbelievable as it may sound in light of these facts, NATO hawks cannot hide their enthusiasm. James Stavridis, former NATO commander general, had, in fact, expressed his satisfaction with the fact that Russia had invaded Ukraine… Since then, NATO decision-makers have lost no opportunity to explain how the Russian danger must be countered, NATO expand to new countries and the military spending of all NATO members increased. 

Even in Germany, public opinion on the issue of nuclear weapons has been changed through massive government propaganda. In a recent survey conducted by the public broadcaster RD, 52% said they were in favour of keeping US nuclear weapons in Germany – a year ago the figure was only 14%. 

Currently, the main nuclear competition is between Russia and the US, with about 4,500 and 3,700 nuclear warheads respectively. China, which has only 350 nuclear warheads at the moment, is poised to get into the race, while European powers France (290) and Britain (180) and regional powers such as Pakistan (165), India (160) and Israel (90) will also accelerate nuclear weapon production. Even North Korea, with 20 nuclear warheads, will enter the race even more energetically. 

NATO Secretary General Jens Stoltenberg does not hide his satisfaction at the fact that country after country is increasing its arms spending, to match the 2% (of GDP) goal that the US is asking of its NATO allies. 

At the NATO summit in Madrid at the end of June, the “alliance” changed its strategic doctrine and declared that Russia is no longer an allied country, but the main adversary “in a more dangerous and unpredictable world”. We are clearly going through a second cold war, in its full dimension, both economically and militarily. The hawks of militarism and war are swimming in a sea of happiness… 

Among other things, NATO will increase its “rapid reaction force” from 40,000 troops today to over 300,000. A few years ago, it was only 13,000. 

They absolutely do not want the war in Ukraine to end. The British Chief of Staff, Patrick Sanders, quoted above, even said: 

“This is our 1937 moment” implying that this is the beginning of a period equivalent to that which led to WWII against the German Nazis. 

This analogy is completely out of touch with reality. But it reveals the mood of the military hawks and their governments: massive spending in armaments, terrorizing the people, invoking nationalism, a hysterical arms race, etc.

The G7 meeting 

Faced with the storms sweeping the planet, the G7 leaders met in Germany, on the Bavarian Alps, between June 26 and 28. As the Greek bourgeois media flagship Kathimerini reported,  

“The G7 meeting venue was turned into a fortress: A 16-kilometre-long fence, 18,000 police officers, border controls to prevent protesters from entering, airspace surveillance… are just some of the measures planned, which will cost more than 180 million euros…”

180 million euros for three days… not bad. Clearly the rulers had a good time. And they made no attempt to hide it.

This photo will go down in history as the hallmark of the G7 meeting. The G7 are none other than the “7 powerful economies” that decide the future of the planet: USA, Japan, Germany, Germany, Britain, France, Italy, Canada. Together with them in the photo are Ursula von der Leyen and Charles Michel on behalf of the EU. The G7 is in fact a caricature from the past, as it is no longer representing the most powerful economies, nor can it decide for the planet. No serious decision can be taken when countries such as China, India and Russia are absent from the table. 

This silly commemorative photo from the meeting, which the G7 themselves released, caused an international reaction on social media. “These guys resemble drunken middle-aged uncles having just come out of a wedding party”, as some people wrote on social media. Not a bad analogy… 

German Chancellor Olaf Scholz who hosted the summit said at the start of it: 

“All members are concerned about the crisis we are confronting – falling growth rates in some countries, rising inflation, raw material shortages, disrupted supply changes – these aren’t small challenges”

The reality is that in this photo, the “great” leaders don’t seem to show any concern for any of the above at. And when combined with the fact that international media have been buzzing about the “jokes” that the G7 leaders were making between them, the picture gets even worse. They were jokingly discussing whether they should take off their shirts to be photographed half-naked to show to Putin that they are more muscular than him (in the famous photo of him riding a horse half-naked). 

At this meeting they decided to fund and equip Ukraine to deal with the Russian invasion and to give $600 billion to developing countries for “green infrastructure” (this can only be described as a bad joke) to counter Chinese expansion via the “Belt and Road Initiative”.

The clown of clowns, Britain’s Prime Minister, aka BoJo, boasted (through an official statement of the PM’s office) that he was the one to pressurize Macron not to attempt any kind of negotiated settlement. As TimesNow wrote,  

“British Prime Minister Boris Johnson warned Sunday in talks with French President Emmanuel Macron that ‘any attempt to settle’ the Ukraine conflict now risked prolonging instability and emboldening Russian leader Vladimir Putin.”

Macron, you see, is soft. Because he is discussing with Putin and wants to leave some doors open for a compromise at some point. But BoJo is a “tough guy”, he doesn’t negotiate with the enemy. He wants the war to go on, hoping that the facts of the war, as they are at present, will be reversed at some point – which is quite doubtful (see “Is the West trapped in Ukraine?”

These are the individuals who determine the future of the planet by their decisions! Irresponsible and ridiculous, with only one thing on their minds: how to maintain their global domination against the challenge they face from Russia and especially China. The cost to humanity leaves them unconcerned – they are, you see, fighting for peace, justice, freedom and democracy… This is capitalism. 

This deadly tango is being led by BoJo and Biden – the representatives of the two empires that in the past two centuries have been responsible for the greatest massacres and disasters on the planet, with the sole exception of WWII sparked by Hitler. No coincidence here either.

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