Why do the media help?

On 23 October 2002, Chechen separatists took the audience of the Dubrovka Theatre in Moscow hostage. Russian security forces rushed there to punish the separatists. A total of 170 people were killed by gas, including 130 hostages. The world was stunned by the Russian brutality.

Now it is Western Europeans and North Americans who are brutal. There must be no talk of peace in Ukraine; no, Russia must be punished. Even if it requires hundreds of thousands of unintended casualties (mostly Ukrainans).

The US would benefit from losing the dollar as a world currency

Some suspect that NATO’s (i.e. the US) militancy on the Ukraine issue, plus military build-up in general, has to do with fears that control over world finance is slipping away. The renminbi is still a long way from replacing the dollar but is being used in more and more international financial transactions.

In many ways, the US has itself to blame. The fact that it arbitrarily steals countries’ dollar balances has made more and more people reluctant to hold dollar accounts. Not least China itself. But French President Macron has also expressed a desire to move away from dollar dependency. As have many other heads of state.

As uncomfortable as this may be for US self-confidence, it may still be a blessing in disguise. At least that’s the view of Per Lindvall, who (building on Zoltan Poszar at Credit Suisse) points out how access to easy credit has driven their industry out of the market. This is what is known as the ‘Dutch disease‘. Another historical example could be when Spain’s access to cheap South American silver meant that it did not invest in domestic production capacity and in a hundred years turned into a poor agricultural country.

Of course, such things hit unevenly. US rentiers probably benefit from not having to deal with complicated production processes, while the majority of the population suffers from unemployment and falling wages. As long as the rentiers are in power, the government will continue to defend the international status of the dollar. To the ruin of the country.

US loses also for energy reasons

A while ago I asked the question whether war in Ukraine was even worthwhile for the US and the answer was no. They may be upset that their position as the world’s Big Brother is being increasingly undermined, but gunplay doesn’t help at all. That position is always achieved, I said, referring to a book by George Modelski and William Thompson, by leading technological development and also having something to offer others.

However, Mr Thompson later completed the picture, together with Leila Zakhirova. The pretender to become the world’s Big Brother must also have access to a new, more efficient energy source in order to afford to do what it wants, plus use it in conjunction with technological innovations that make the pretender more efficient. Holland developed windmills and torrefaction and used this to mechanise shipyards, among other things. England developed coal in conjunction with steam engines. The USA developed oil in conjunction with internal combustion engines and assembly lines. Perhaps because of the failure to find such an energy-technology symbiosis, the brilliant developments in Song-era China eventually dried up.

So what will happen in the future?

Who will “win” in Ukraine?

To answer the headline question, we must first of all recognise that ‘winning’ means very different things to the states involved. For Russia and Ukraine, it means being left alone. Russia, too, is a poor, comparatively backward country with little ability to project much power beyond its borders and therefore cannot hope for much more than to be left alone, at least for the foreseeable future. For the state that has played a major role in the development of the crisis, namely the United States, it means preserving its global hegemony.

Does it have any chance of doing this? This question is not easy to answer, but it can be helped by studying the rise and fall of various hegemonic powers in the past.

This is what George Modelski and William R. Thompson did in their 1996 book Leading sectors and world powers. They start with the Song era in China a thousand years ago and continue until the end of the 20th century.

What they find is this.