Time for Choice

October 8, 2014

Confrontation between two worlds

One of the most important books published over the past years about the crisis and the evolution taking place at economic and geo-political level if definitely “The Path to the World Afterwards” by the much regretted Franck Biancheri, published in 2010. It explains in many details the trends developing in front of us since many years now. In short, what we see is the end of the system that ruled the world since the end of WW II, and the slow but regular move of the economic power from west to east.

 

 

Franck’s book, and in general his work at LEAP2020 was not always recognized by the main stream “economists”, if not completely ignored. LEAP’s early prediction and analysis of the 2008 crisis were not relayed in the mass media. Such a refusal to see the reality was not limited to Franck’s work, and all early warnings were considered at best as isolated pessimistic individuals (remember the nickname of Dr Doom given to Nuriel Rubini in New York), at worst as incompetent fools.

Indeed the situation at the end of 2014 did not change radically but the mainstream media is still talking about recovery, growth to come soon, good signs on the markets and the like. But on the other side many things have changed and while Franck was still hoping in his book that the world powers can manage to organize a controlled and peaceful transition from the world of before inherited from the 1945 period to the world of tomorrow, that hope if now fading away day after day. On the contrary we see more and more tension and aggressive behavior between the various stakeholders, and the fear to see the change happening in a chaotic way is now real.

Like in all periods of big changes, people can be classified in several groups, depending on their reaction to change. Change theories are many, but all come to roughly the same conclusion. Some people see the change as a good thing and support it with enthusiasm, others are strongly opposed to the change, others cannot really decide and swing from one side to the other, and finally a relatively large amount of people are simply not aware of the coming changes or feel totally unconcerned. Being in contact and talking to many people in different countries and with very different backgrounds, I was very puzzled by the reaction of many and got very interested in trying to define who are those groups of people and why they react in this or that way.

The end of History?

Coming back to Franck’s book, I would like to compare it to an almost symmetrical work published by Francis Fukuyama in 1992 : “The End of History and the Last Man”.

 

 


As a matter of fact, the collapse of the 1945 world order started with the end of the Soviet Union and of the Warsaw Pack, culminated with the reunification of Germany. For a number of thinkers in the 90’s, the “victory” against Communism defined the end of history, in short the start of a new era, where the liberal Western World under US leadership would dominate the whole world, economically, politically and military. The almost unchallenged actions taken by the West in Yugoslavia and later in Afghanistan or even Iraq tended to prove that this was indeed true.

China at that time was still far from being an economical giant, and traditionally kept a very low profile on international matters, while Russia was sinking in vodka and corruption with Boris Yeltsin. The road was free for the new world order and the end of history! Difficulties of all kinds were easily solved using the Dollar as the ultimate weapon, the US military could spend billions of dollars to ensure the new world order would not be challenged, and the traditional industrial capitalism could be further demolished and replaced by a pure financial capitalism, production and “dirty jobs” being delocalized to the so called “emerging” countries. Jobless people in the West would be kept happy with more credit based consumerism, more entertainment and more sport TV channels or reality shows.

A turning point in economy: 2008

The dream started to turn badly in 2007 and 2008 with the financial crisis, but the fire could be extinguished with more dollars once again. However, anxiety started to replace euphoric mood within the elite and all attempts by Russia or China to achieve a negotiated and organized exit of the crisis were turned down, notably during the G20 meetings that took place in 2009 or 2010. The denial was total on the US and Western side. This indeed reinforced the camp of change, basically the BRIC countries and a larger group of countries around them.

This group of “new world” countries is now quite large and represents the majority of the earth population, territory, mineral resources and are the place where almost all economic growth is taking place now (let’s call them the BRIC+).

The equation seems therefore quite simple, with on one side the US and Western Europe representing the declining camp trying to maintain its position and its advantages as long as possible, and on the other side the group of BRIC+ willing to reform the system and gain the level of influence on international affair and world order that they believe they deserve. 

The old world camp, often called the pro-system camp is definitely on the defensive since 2008, the year that I would call a key milestone date and indeed the starting point of the confrontation between the two camps, a confrontation that could have been solved through diplomacy if the old world camp had demonstrated a more realistic behavior.

The three key forces supporting the old world

There is here an important point to make. The rhetoric about two camps is indeed implying that the two sides are coherent and that a vast majority on the two sides are moving in the same direction. This is however not the case and the fracture is not only geographic but also exists within the two sides.

Before digging deeper in that, let’s look at the main drivers defending the old world.

Here the main driving forces can be identified in several areas. The first one is mostly limited to the US and this is the Military Industrial Complex, a very strong lobbying force producing large profits and weighting big time now in the employment statistics of the US. A more tense and nervous situation on the geopolitical level is good for that Complex and justifies large spending in development and production of weaponry. Any peaceful evolution to the new world would translate into a decrease in influence and profit, something unacceptable for them.

The second driving force is the international Financial world, and this time not only US based but really multi-national, with strong footholds in Europe, and to some extend also in the financial centers of most of the BRIC+ countries. Maintaining the status-quo as long as possible allows them to continue making big profits and bonuses. For them, too much tension, in particular military, is counter-productive, as it can bring a financial crash. They have little hope to survive very long, probably the reason for the recent increase in depression and even suicides in US banks. Within that Financial cloud, we also should separate the active group of elite financial bosses, and the millions of individuals who simply wish to preserve their savings or their pension fund the best they can, and are afraid of any change that could ruin them. This key force in favor of the old world is sustained by an ideology still dominant in the West, that we can call "ultra-liberalism", where markets' interests are undisputable and are allowed to rule all aspects of the economic and social life.

Another pillar of the old world has been developed actively by the mass media and cultivated by a number of intellectuals, although this time mostly in Europe. Those are all people ready to defend the old world because it is where individual freedoms are guaranteed, in particular freedom in speech, sexuality, religion etc. Although some of that freedom has been largely eroded over the past 10 years, it has remained unnoticed and a lot of people honestly believe that the old world is the line of defense against the authoritarian regimes they perceive at the head of most countries of the BRIC+.

In short I believe the old world has three main engines to work on its preservation. The Military engine in the US only, the Financial dual cloud with a happy few on one side and the large group of small investors on the other side, at large believing in the ultraliberal ideology, and finally the numerous and diverse crowds, mostly in Western Europe who consider individual freedom as a decisive geo-political criteria. Ultra liberalism in economic and moral aspects of life have indeed been developed to the level of pure ideology, almost a religion, where anybody not totally complying is treated as an iconoclast and parasite. Ironically the old world looks quite similar to the USSR, that was surviving based on two pillars only, the military complex and its ideology.

A turning point in geopolitics: 2008 (again)

Those three forces of the old world have been very active over the past years, while BRIC+ countries have maintained a low profile in international affairs, and if they tried to get their voice heard, quickly retreated in front of the powerful old world. Things however started to change in 2008, with events in South Ossetia and the confrontation between Georgia and Russia. For the first time since the end of the Soviet Union, Russia showed it could protect its interests and the interests of friendly regions with a decisive and efficient tactical move. It came to a surprise to an old world used to the indecisive, corrupted and weak Russia of the Yeltsin era. Since that time Russia confirmed that new position of an influential player on the international scene.

It was again the case with Iran and the success of Russia to reach a diplomatic resolution of the crisis on nuclear fuel, then with Syria when Russia helped Obama to get out of a conflict situation with his law makers and finally avoided a military intervention in Syria, of course adding to the frustration of the US Military Industrial Complex. The Ukrainian crisis in 2014 confirmed that new attitude of Russia, as a country willing and able to drive its own agenda on the international scene.

History is back big time!

We see a strong return of history, proving that Fukuyama was wrong (by the way he admits it today himself), and Russia is very much the one behind this, a good reason for the old world elite to consider Russia as the worst evil on earth. Russia is taking the international policy leadership of the BRICs+ countries, a position it should develop and improve over the next months and years.

 

                                         News Week in Polish : Imperium of Evil


It does not mean Russia shall be the leader and the decision maker for all the BRIC+, but it should help other major countries in the group to be better aware of their forces and possibilities to make things different all over the planet. China should play a larger political role internationally and not limit itself to the economic giant it is today. It should take its real place on the international playground, and the same goes for Brazil, India, and other BRIC+ countries based on their economic, military and cultural contribution. 

It also implies that Russia, India and China, as the largest countries of the new world should be more assertive and critical than they have been over the past years against the old world. The fight is for survival and strengths should be developed to win.

Now that the old world brought its stance against Russia in the open, the consequences are that Russia is getting much closer to the new world and to China. On my views this has indeed sealed the destiny of the old world and shall accelerate its dismiss.

With Russia in a neutral position, the old world and the US could have handled China and India even at military level. In case of nuclear conflict with them, the US dominance was so big that chances were good to win. But with Russia now a close ally of China and the emergence of an extended SCO (Shanghai Cooperation Organization) group to associate countries like India and Iran, the situation looks much more like the cold war against the USSR, only much worst for the US and the West. New world countries are not only at par on the nuclear weapon level, but also can use their leverage on the US dollar, based on the huge amount of dollar denominated reserve they have accumulated over the years. Military dominance is lost because of Russia and economic blackmail is coming from China. There is no military way out, outside of mutual atomic destruction – not a bad revanche for dear old History!

No surprise to see old world leaders close to hysteria and unable to articulate a meaningful strategy, be against Donbas fighters or against the ISIL monster.

 


The fracture between Old and New is also within each of us

But confusion also raises at all levels of our societies, both in the old and new world, thus my interest in looking at where the fracture lies within social groups. The level of confusion is indeed very high, as many individuals may feel part of the old world one day, part of the new world the next day, depending of the news they get on TV.

Young people in Europe are victims of the financial crisis and many have no jobs with little chance to get one. This makes them hostile to the old world. But when they also may be hostile to the new world because of the press coverage of how individual freedoms are limited in emerging countries, although this may not be true in many cases. Other people in Europe on the opposite side may be fighting against what they believe is an amoral expansion of individual freedom in western Europe, for example with same sex marriage, and envy the moral posture of the Russian government, but on the other side cannot consider the US as something else than the example to follow and the savior against Nazis in 1945. A number of countries are in the same confused state of mind, like Israel, still a close ally of the US who is responsible for a severe deterioration of the security level in the Middle-East, while indeed many more common interests should get Israel closer to Russia.

Communities are in the same situation. Some Jews in Ukraine are openly flirting and cooperating with extreme right parties that are listed as anti-Semite by the Wiesenthal organization.

Political parties in the old world have lost their specificities and all major “power” parties essentially serve the forces of the old world, in this case the Financial force, while extreme parties tend to use the opportunity and get closer to BRIC+ counterparts in their fight against the old world, sometimes in contradiction with some of their traditional principles and ideals.

In the new world itself, although a small minority, some forces tend to support the old world, either because of their belief in the ultraliberal ideology, or because of their financial connections with the old world. The recent declaration of Khodorkovsky claiming he is ready to run for President in Russia, much publicized by the western media, is an example of such forces. For sure he shall contribute to the old world’s victory as much as Iraqi emigrants contributed to the US win in Iraq, explaining that US troops would be welcomed with flowers!



Even more at stake than you believe

Looking back in history, it is also interesting to note that most old world countries have prospered in the past due to their colonial empires (UK, France, Spain, Netherlands, Portugal) or at least are associated to the “white dominance” over the world based on those colonial years. On the opposite, most of new world countries used to be colonies itself, like India, China, South America and many others.

Everybody talk about the end of a period started in 1945, but we must be clear. This is indeed the end of the colonial era started in the 15th century, and the end of the white predominance on world affairs, nothing less than that! The US shall have to learn to be one of the players only, and Europe shall lose most of its influence, having missed the boat and failed to reach a timely association with the BRIC+ as suggested by think tanks like LEAP 2020 as early as 2006. An interesting pendulum swing indeed! 



But it is now time to make a choice

The stakeholders of the old world are now like a hurt animal in panic, very dangerous, inconsistent and unpredictable, a good cocktail for a disaster. But the vast majority of the world population has interest in a faster transition to the new world. Populations in the old world also have to win from it, and in fact have even more to win than the new world population! They are the ones on the downhill path to poverty, joblessness, failing education and health systems. They are the ones who should make the difference, but they need to wake up, as the battle between the old and new worlds may well not lead to military war between countries, but rather to social and civil conflicts within a number of countries.

This is the role of Internet sites or News Letters like the one you are reading now. The fact that you read it makes you better informed, but the propagation of such information in general is very key for the future evolution of the world. Political structures in the old world have to be changed, hopefully through a democratic process. The way old world leaders and media close their eyes on what happened in Eastern Ukraine is however a bad precedent. They did nothing to avoid the civil war there, on the contrary,  and ignore massacres of civilians on European territory. Everybody should understand they may very well behave the same if one EU country had to use force against its own population!

 

 

 

 

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