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     Jun 9, '14

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A world war between classes, not countries
by Ismael Hossein-Zadeh

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Most pundits of historical developments tend to perceive another global war as large scale deployment of military means in pursuit of defeat, destruction or subjugation of contending opponents. While prospects of such an ominous scenario certainly cannot be ruled out, there is reason to believe, however, that the much talked-about World War III may be of a different type: more interclass than international.

Viewed in this light, World War III is already here; it has indeed

been raging on for years: the unilateral, cross-border neoliberal war of austerity economics that is waged by the transnational class of financial oligarchy against the overwhelming majority of world citizens, the global 99%.

Globalization of capital and interdependence of world markets has reached a point where large-scale military clashes of the magnitude of World Wars I and II could lead to financial catastrophe for all. Not surprisingly, the network of transnational financial elites, who often elect politicians and run governments from behind the scenes, seem to be averse to another wholesale international war that could paralyze worldwide financial markets.

This explains why imperialistic aggressions of late have often taken the form of "soft-power" interventions: color-coded revolutions, "democratic" coups d'etat, manufactured civil wars, economic sanctions, and the like. Of course, military option always lurks in the background to be employed when/if "soft-power" strategies of regime change fail or prove insufficient.

Even then, however, all efforts are made (by the major capitalist powers) to make such military interventions "controlled" or "manageable", that is, limited to local or national levels. While "controlled" wars tend to safeguard the fortunes of war profiteers and beneficiaries of military spending (mainly the military-security-industrial complex and major banks), they would not cause paralysis of international financial markets.

This also explains why major world powers such as China, Russia, India, and Brazil tend to shy away from standing up more robustly to the bullying policies of the United States. Wealthy oligarchic circles in these countries have more in common with their elite counterparts in the US and other core capitalist countries than their fellow countrymen at home. "Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today's super-rich are increasingly a nation unto themselves", points out Chrystia Freeland, global editor of Reuters, who travels with the elites to many parts of the world.

It is therefore only logical to believe that a de facto alliance exists between members of this global "nation" of the super-rich, which helps facilitate the operations of imperialist schemes of regime change. For example, when/if Russia is threatened by the United States and its European allies, Russian oligarchs tend to clandestinely collaborate with their class counterparts in the West, thereby undermining Russia's resistance to such interference from Western powers.

A brief look at recent schemes of regime change in countries like Iraq and Libya, on the one hand, and Ukraine and Iran, on the other, can help an understanding of when or where the imperialist powers resort to direct military action to bring about regime change (as in Iraq and Libya), and where or when they resort to "soft-power" tactics to achieve the same goal, as in Ukraine and Iran. Two major reasons or considerations can be identified in this context, that is, in regard with the imperialist choice of the means or tactics of regime change.

The first is related to the level of class differentiation within countries targeted for regime change. Due to extensive (and often scandalous) privatization of public property in both Ukraine and Iran, there have emerged quite wealthy circles of financial oligarchs in both of these countries.

These Western-oriented money magnates tend to collaborate with the interventionist forces of regime change from abroad; they are essentially agents of regime change from within, in collaboration with imperialist forces from without. This explains (at least partially) why schemes of regime change in these two countries have relied primarily on "soft-power" and color revolutions instead of direct military intervention.

By contrast, Saddam Hussein's Iraq and Muammar Gaddafi's Libya lacked such influential and internationally connected wealthy classes. While neither Saddam nor Gaddafi were paragons of virtue or champions of democracy, they played the role of what is sometimes called "enlightened dictators": they implemented extensive welfare state programs, maintained strong public-sector economies, opposed privatization of public services such as health and education, and kept major or "strategic" industries such as energy and banking/financial system under state ownership and control.

Combined, these policies prevented the rise of powerful financial elites such as those that emerged and developed in Iran or Ukraine. This meant, among other things, that "soft-power" and/or color revolution tactics of regime change, which heavily rely on native or local allies, the so-called comprador bourgeoisie, did not have a good chance of success in these countries - hence the use of "hard-power" or direct military intervention/occupation of both Iraq and Libya.

The second imperialist consideration in the choice of soft- versus hard-power tactics of regime change is related to whether a war to be waged in pursuit of regime change can be controlled and managed at the local or national level, or whether it may spin out of control and become regional and/or global.

In the case of Ukraine, for example, a direct military aggression would certainly have involved Russia, very likely become global, with disastrous economic/financial consequences beyond the control of imperialist powers - hence the choice of soft-power and/or "democratic" coup d'etat in Ukraine.

A similar concern that an all-out war against Iran may get out of control likewise explains why schemes of regime change in that country have (so far) also focused primarily on economic sanctions and other soft-power tactics, including the color-coded "green revolution" of 2009.

By contrast, "hard power" or sheer military force was used for regime change in Iraq and Libya out of the near-certain knowledge that the wars of regime change against these countries could be controlled fairly successfully, that is, prevented from becoming regional or global.

The case of Ukraine
The recent and ongoing crisis in Ukraine serves as a clear case of how transnational financial elites tend to avoid cataclysmic international wars of the scale of World War I or II in favor of controllable and often interclass wars by means of economic sanctions and other types of "soft-power" tactics.

In the immediate aftermath of the February 22 putsch in Kiev, which ousted the duly elected president Viktor Yanukovych and brought to power the US-backed coup regime, tensions between Russia and Western powers ran so high that many observers warned of "the impending World War III".

While those earlier tensions and the concomitant danger of major military clashes between the two sides still exist, they have subsided considerably since early May when President Vladimir Putin of Russia effectively blinked in the standoff with Western powers and announced on May 7 that Russia would respect the presidential election in Ukraine, and work with whomever is elected - which turned out to be the billionaire oligarch Petro Proshenko.

Despite the fact that the brutal crackdown on the autonomy-seeking activists in Ukraine's eastern/south-eastern provinces continues unabated, diplomatic maneuvers spearheaded by the representatives of the financial elites from the US, Europe, Ukraine and Russia have nonetheless succeeded in averting a military clash between the US and Russian sides.

So, what changed all the earlier threats of wholesale sanctions and/or military actions against Russia to the somewhat diffused tensions and "diplomatic solutions" of today?

The answer, in a nutshell, is that the powerful economic interests vested in international finance, trade and investment (that is, the financial elites in Russia, Ukraine and the core capitalist countries) simply could not risk another uncontrollable world war. Surely, big banks and the influential military-security-industrial complexes tend to flourish on perpetual wars and international tensions. But they also tend to prefer "manageable" or "controllable" wars at the local or national levels (such those waged against Iraq or Libya, for example) to cataclysmic large scale wars on a regional or global level.

It is no secret that as Russia's economy has become increasingly intertwined with Western economies (largely due to economic power and behavior of its transnational oligarchs), it has also become increasingly vulnerable to global market fluctuations and threats of economic sanctions. This explains, to a large extent, President Putin's conciliatory gestures and accommodating policies to diffuse hostilities over Ukraine crisis diplomatically.

What is less known, however, is that Western economies too are vulnerable to sanctions from Russia, should Russia decide to retaliate. In fact, Russia has in its possession some powerful economic weapons with which to retaliate if necessary. Economic wounds from such reciprocal sanctions could be very painful to a number of European countries. Due to the interconnection of most economies and financial markets, tit-for-tat sanctions could significantly exacerbate the already fragile European and, indeed, world economy:
Sanctions on Russian exports would greatly expose the EU. Europe imports 30% of its gas from the Russian state-owned company Gazprom. Russia is also Europe's biggest customer. The EU is, by far, Russia's leading trade partner and accounts for about 50% of all Russian exports and imports.

In 2014, EU-Russia overall trade stands at around 360 billion euros (US$491 billion) per year. Russia's total export to the EU, which is principally raw materials such as gas and oil, stands at around 230 billion euros, while Russia's imports from the EU amount to around 130 billion euros of mainly manufactured products as well as foodstuff. The EU is also the largest investor in the Russian economy and accounts for 75% of all foreign investments in Russia. [1]
Russia could also retaliate against Western powers' policies and threats of freezing the assets of Russian individuals and companies by freezing the assets of Western companies and investors:
In case of Western economic sanctions, Russian lawmakers have announced that they would pass a bill to freeze the assets of European and American companies that operate in Russia. On the other side, more than 100 Russian businessmen and politicians are allegedly targeted by the EU for a freeze of their European assets.

Besides Alexey Miller, head of the state-owned Gazprom, the CEO of Rosneft, Igor Sechin, is also apparently on the sanction hit list. Rosneft is the largest listed oil company in the world and, as such, has partners worldwide, including in the West. For example, the US-based company Exxon-Mobil has a $500 million oil-exploration project with Rosneft in Siberia, and Exxon-Mobil is already in partnership with the Russian giant oil company to exploit Black Sea oil reserves. [2]
Russia has at its disposal additional economic weapons to inflict damage to the US and European economies. For example, in reaction to threats to its assets being frozen by the US and its European allies, Russia liquidated (in late February and early March 2014) more than $100 billion of its holdings in US Treasury Bonds.

Escalation of such reckless threats of freezing the assets of "unfriendly" governments could well involve China with disastrous consequences for the US dollar, as "China owns an estimated $1.3 trillion in US Treasury Bonds and is the number one investor amongst foreign governments". [3]

This high degree of economic/financial interconnection explains why - with the backing of Washington and the nodding of Moscow - European diplomats from Berlin and Brussels rushed to Kiev, engineered the establishment of the so-called Round Table Discussions and paved the way for the bogus May 25 presidential election, thereby giving legitimacy to the regime of coup d'etat and averting the prospect of a mutually destructive escalation of economic sanctions and/or military actions.

Comparison with Iraq and Libya
Regime change in Libya (2011) and Iraq (2003) by means of "hard-power" military interventions (as opposed to "soft-power" schemes of regime change) tend to support the main argument of this essay that, in pursuit of regime change, imperialist powers resort to direct military action where (a) such military involvements can be controlled or restricted to the targeted country, and (b) there is an absence of significant or powerful local allies in the targeted country, that is, local forces of wealthy oligarchs with ties to global markets and, therefore, to external forces of regime change.

Although both Gaddafi and Saddam ruled their countries heavy handedly, they maintained strong public-sector economies and widely nationalized industries and services. This was especially true in the case of strategic industries such as energy, banking, transportation and communications, as well as vital social services such as health, education and utilities.

They did this not so much out of socialist convictions (although they occasionally claimed to be champions of "Arab Socialism"), but because, in their struggles against earlier rival regimes of tribal and landed aristocracies, they had learned that control of national economies through bureaucratic state management, along with a strong welfare state, was more beneficial to the cause of stability and continuity of their rule than allowing the development of unbridled market forces and/or the emergence of powerful industrialists and financiers in the private sector.

Continued 1 2

Reflections on the Iran nuclear deal (Dec 11, '13)



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