November 20, 2022

By Stephen Gowans

This post examines the ongoing war between the United States (via Ukraine) and Russia, and the threat of war between the United States and China, with a view to identifying the cause of these conflicts, and, on this basis, to deduce the most effective way to oppose inter-State violence.

The War in Ukraine

The war in Ukraine following on the Russian invasion of that country is in its tenth month. The war pits an invading Russia against a Ukraine that is fully supported by, and is an instrument of, the United States. The end of the war is not in sight. But the war must end, if we are to have any chance of escaping the hardships the war imposes on all but a tiny fraction of humanity.

The crossing of an international frontier by Russian forces may be, in the deceptive language of Moscow, a “special military operation”, but it is, at the same time, an inexcusable invasion and an odious act of aggression. The impact is felt world-wide, outside Europe as much as within. Russia alone, however, is not solely to blame for the turmoil. Equally consequential have been the responses of the United States, its NATO satellites, and its cat’s paw, Ukraine. 

The invasion itself has disrupted the export of grain from Ukraine, with grim consequences for world food prices, made all the worse by US-organized sanctions on exports of Russian grain and fertilizer. US-led efforts to destroy the critical Russian oil and gas industry through sanctions, and Russian retaliation, have sent energy prices soaring.

Keen to protect the assets of the wealthy from the corrosive effects of inflation, monetary authorities have tightened credit, paving the way to recession, growing joblessness, and escalating mortgage rates. Climbing housing, food, and energy prices reduce expenditures on other goods, with effects that ripple through the world economy. As The New York Times notes: “Consumer spending is set to collapse as households’ disposable income vanishes to pay for larger mortgage payments on top of higher energy bills and rising food prices.” The upshot: disposable income adjusted for inflation is sinking. The outlook through 2023, according to the IMF and World Bank, is grim. The major cause: the war in Ukraine. “Large-scale war is simultaneously destructive of productive capacity, disruptive of trade, and destabilizing of fiscal and monetary policies,” Niall Ferguson reminds us. War, he notes, “is history’s most consistent driver of inflation, debt defaults — even famines.” 

People struggle to pay for groceries, heat their homes, fill their gas tanks, and pay their mortgages or landlords. People will lose their jobs as the recession bites. The citizens of low-income countries—hundreds of millions of them—teeter on the brink of starvation. A number of their governments will default on their debt as national currencies depreciate against a rising US dollar, buoyed by tight money.

Those with assets—the wealthy—have a vigorous defender in central banks, whose bourgeois masters are prepared to swell the ranks of the unemployed to curb inflation. Meanwhile, the demands of employees for higher wages and salaries to offset the rising cost of living are resisted by governments and businesses and reviled by the court philosophers of the bourgeois media. With the looming prospect of growing unemployment, workers’ demands for pay increases will soon yield to the fear of joblessness. Capitalism has so structured the existence of the employee class to offer it an unpalatable choice: declining real wages or no wages at all.

In contrast, governments and the bourgeois press heap no disdain upon businesses that hike prices under the lash of inflation. The burden of resolving economic crises in capitalist society is always borne disproportionally by labor. Workers will be forced to accept a reduced standard of living, in the interests of safeguarding the fortunes of shareholders, bondholders, and high-level corporate executives.

As a result of the fracking revolution, the United States now sits upon vast oceans of saleable natural gas. Under US pressure, Europe is re-orienting its energy supply from inexpensive Russian piped-gas to higher-priced US liquified natural gas (LNG). A bonanza of profits awaits the US energy industry, so long as the war can be dragged on long enough to completely wean Europe off Russian petroleum, and attach the continent to the US LNG teat. The war, on one level, is a fight for market share.

US arms-manufacturers are also set to make a killing, literally as well as figuratively. To date, Washington has committed $52 billion in military and financial aid to help Ukraine fight Russia. The White House is asking Congress for $40 billion more.  Further requests are likely to follow. A large part of the aid represents a transfer of dollars from the pockets of US workers to the pockets of the high-level executives and shareholders of Raytheon, Lockheed Martin, and other US weapons-manufacturers. The war is also a fight for arms industry market share.

Pressed by Washington to contribute to the war, Germany, the world’s fourth largest economy, has pledged to increase its military spending—it will soon spend more than Russia on arms and troops—starting with the purchase of US-manufactured F-35s. Germany has chosen the US-made aircraft over jet fighters made by its European partner, France. Here too the war is about market share, as well as making product markets grow.

Sweden and Finland, poised to join NATO, will contribute additional funds to the coffers of the US arms industry. NATO countries tend to source their equipment from US arms manufacturers in order to assure their militaries are able to “interoperate” with that of the United States. Anything that strengthens NATO, boosts the profits of Lockheed Martin, Raytheon, Boeing, Northrop Grumman, General Dynamics, and other US armorers.

Under pressure from France, Europe has increasingly explored the possibilities of strategic and military autonomy. i.e., independence from the United States in foreign and military affairs. This has been accompanied by a desire to do business with Russia and China to a degree Washington judges to be incompatible with the interests of its main client, corporate USA.

To combat Europe’s dalliance with the notion of independence, Washington has exploited Russia’s invasion of Ukraine to discredit any further talk of strategic autonomy and to bring Europe more firmly under US control, through a strengthened NATO organized around opposition to Russia (and China), and made dependent on North American energy. Much has been made in the US press about the so-called folly of Europe, Germany especially, allowing itself to become dependent on Russian natural gas, glossing over the reality that the proposed solution, reorientation to North America, simply shifts the dependency across the Atlantic Ocean, and puts Washington more firmly in control. By making Russia a pariah State, the integration of the vast European market with the vast land on Europe’s eastern periphery has not only been arrested, it is being reversed, with Europe now spurred to transition to a tighter economic integration with North America.

A territory teeming with natural resources, North America has always stood as a potential competitor with natural resources-abundant Russia for the raw materials and energy needs of a large and prosperous European market. But Russia has always had a distinct advantage: proximity. Natural resources can be transported to European manufacturers at a lower cost from nearby Russia than distant North America. Economically, it makes more sense for Europe to access its resources from the raw materials treasure trove on its eastern rim than from the natural resources-storehouse across the Atlantic.

The war has allowed Washington to negate the economic logic of Europe buying oil and gas from Russia. Washington has turned Russian aggression into a reason for Europe to eschew its neighbor as its natural-resources-supplier, to the greater glory of North American miners and energy producers.

The IMF and World Bank have sounded multiple alarms about how the war is slowing economic growth and sending prices spiralling. But, as we’ve seen, as a pretext to expel Russian businesses from the European market, the war promises a cornucopia of advantages to North American corporations and investors, whose returns will surely grow as Russian competitors are barred from the European arena. One way to win the cut-throat competition for customers is to eliminate the competition altogether.

From the vantage point of Wall Street and Bay Street, the war needs to continue for two reasons: (1) to weaken Russia economically, militarily, and diplomatically, in order to cripple the ability of Moscow to act on behalf of Russia’s profit-making enterprises on world markets in competition with their North America rivals; and (2) to consolidate Russia’s occlusion from European markets in favor of US and Canadian corporations.  Weaning Europe off Russian oil and gas, along with coal, fertilizer, and ammonia, and reorienting its energy markets to North America, is a project that cannot be accomplished overnight. The fillip of war must be maintained to ensure the project is carried to completion.

In fine, a protracted war benefits the US arms industry; strengthens NATO, and, in the process, generates more business for US weapons-makers; knocks Russia out of the European market, creating new opportunities for North American enterprises; and brings Europe more firmly under the US thumb. It also raises European energy costs, putting European manufacturers at a disadvantage relative to their North American competitors. Relatedly, it encourages European manufacturers to relocate to North America to take advantage of lower energy costs. 

From Moscow’s point of view, the war must continue in order to send a message to countries on Russia’s periphery that a Ukraine-style move to reorient their economies away from Russia toward one or more of its economic rivals will not be tolerated.

To be sure, Russia is fighting a defensive war, but not in the defense of the security of its territory. The war is fought in the defense of the profits of Russian investors and enterprises. The territory of Russia, a country equipped with a vast array of nuclear weapons, has never, for a second, faced a substantial security threat from Ukraine or even an expanding NATO; the threat posed by Ukraine is loss of economic territory. This threat has grown ever larger now that Moscow has handed Washington the gift of providing it a reason to organize Russia’s expulsion from the European market. The threat Ukraine and NATO pose to Russia remains one aimed directly at the owners of major Russian enterprises that do business in Europe, not the physical security of Russian citizens. To the contrary, it is Moscow itself that poses a more significant threat to the physical safety of Russians. The Kremlin has doubly placed its citizens in harms-way—first, by sacrificing some of them to the Moloch of war (an estimated 100,000 Russians have been killed or wounded in combat in Ukraine); and second, by exposing them to an escalating risk of becoming a direct target in a nuclear war.

While Russia’s naval base at Sevastopol on the Crimean Peninsula has strategic significance, its loss as a result of a complete victory by Ukraine would in no way be fatal to the security of the Russian State. It is highly unlikely in the extreme that any State or group of States would attempt an invasion of Russia; Moscow’s formidable nuclear force makes the country virtually unassailable. This key fact has been ignored in the rush of some to defend or at least falsely explain Russia’s inexcusable actions. The security threat posed to Russia of NATO’s expansion toward its western border, while not trivial, has been highly exaggerated.

The war in Ukraine is the elevation of the competition between North American and Russian profit-making enterprises for the European market to the level of violence between States. Firmly ensconced in a reticulation of capitalist pressures, neither Washington nor Moscow can, at the moment, abandon the war without abandoning something more fundamental—the capitalist nature of their societies. To be sure, at some point the war will have to be abandoned, but only when one side, bearing in mind a capitalist calculus, judges the prospects of gain relative to loss to be too unfavorable to continue. That point has yet to be reached.

Capitalist societies will always work on behalf of capitalist class interests at the expense of the working class. Hence, wars over the question of which country’s enterprises will dominate the world market will persist a tout prix, indifferent to the harm they cause working people, focussed only on the rewards they promise the working class’s exploiters.

The Threat of a Sino-American Conflagration

For a number of years now, lawmakers, analysts, and journalists in the United States have talked about a US war with China, as if a clash between the world’s two largest powers is as inevitable as the ebb and flow of the tides.

While some historians talk of the Great Powers sleep-walking into the First World War, as if the Grande Guerre was an accident, portents of that war were sounded well before it began. It was widely know in the years immediately preceding the Great War’s outbreak that the kindling of tensions and grievance in competition among countries for economic advantage attached to colonies, markets, and strategic territory, had piled high. All that remained was a spark to light a fire.

If you read major US newspapers today, it’s hard not to get the sense that, if history does not repeat itself, at least it rhymes. In press accounts, a second Sarajevo looms menacingly large on the horizon (Taiwan, perhaps?) For example, The Wall Street Journal has reported that “Chinese and U.S. officials” have conceded that “Beijing and Washington must work out how to coexist—and avoid, or at least postpone, a conflagration” (my emphasis).

If his Economic Interdependence and War, international relations scholar Dale C. Copeland argues that Germany supplied the spark that touched off WWI with the aim of weakening Russia before the Tsarist state grew strong enough to threaten Germany’s economic supremacy in Europe.

There’s little doubt that Washington’s concerns about China parallel those of Berlin in 1914 about its Tsarist rival. “Many lawmakers and analysts in Washington are convinced China poses a grave threat to U.S. interests,” observes The Wall Street Journal—those interests being manifestly economic, as evidenced by the steps Washington has already taken to “contain” China.

Here’s the Journal’s two-sentence summary of Washington’s anti-China containment efforts: “Mr. Trump imposed tariffs on Chinese goods in an effort to restore American industrial might. Mr. Biden has kept those tariffs in place and imposed new measures aimed at curbing exports of advanced semiconductors to China.”

On top of Trump’s efforts to restore US industrial might, the Biden administration is acting to freeze Chinese firms out of competition for emerging and lucrative profit-making opportunities in robotics, artificial intelligence, electronic vehicles, super-computing, 5G, and more, by denying them access to critical technology. US strategy, as articulated by national security advisor Jake Sullivan, is to maintain “’as large of a lead as possible’ over competitors like China in foundational technologies.” Washington also aims to shift supply chains (that is, low-wage manufacturing) from China to India and Vietnam while undermining leading Chinese firms, among them Huawei.

US efforts to “contain”, which is to say “hobble”, China – principally as an economic rival—prompted Chinese leader Xi Jinping to “chide” US president Joe Biden for introducing “a suite of economic policies that” he said “completely violate the principles of market economy and undermine the rules of international trade.”

Xi’s description of the Biden administration’s anti-China polices is accurate, but amusing. Xi, who leads a country that is said to be Communist and calls itself socialist, demands adherence to Hayekian principles. Rhetoric aside, Xi is no more a socialist than Biden is a Hayekian. Both are leaders of States whose mission is to obtain advantages for their major enterprises in the competition for world markets.

The rule here, followed by both leaders, is that market principles and free trade are great for other countries, but not your own. Political economy, the mystification of capitalism, may be about comparative advantage and laissez-faire, but the real world of capitalism is about making money whichever way you can. Often, if not almost always, the best way to help national firms accumulate capital is to intervene in markets and tilt the international playing field in their favor. In Washington, it’s called protecting US interests. In China, it’s called protecting Chinese interests. In either case, the interests of a country’s profit-making enterprises are (1) identified with the national interest and (2) antagonistic to those of other nations. In bourgeois ideology, the bourgeoisie is the nation. Conflict between nations is conflict between competing national groups of bourgeoisie.

Theory of War

Will the keen competition between the United States and China for world markets escalate to violence? Given that both US and Chinese officials talk of “at least postponing a conflagration”, the answer must be that economic competition between major States has a high-probability of escalating to war. “We’re going to compete vigorously,” Biden has said, adding that he “is looking to manage this competition responsibly.” If this sounds like a madman saying “I’m going to shake this bottle of nitroglycerine vigorously, but I’m going to do so responsibly,” it ought to.

How might a conflagration be avoided altogether, rather than simply postponed? It should be clear that if the roots of the conflict lie in capitalist competition among rival national groups of bourgeoisie for economic advantage in the world market, then preventing a conflagration unavoidably means changing the system that gives rise to capitalist competition. What begins as a competition between two sets of capitalists for the local market becomes a competition between states on behalf of their profit-making enterprises for the world market—a competition that may—and frequently has—led to war. It has, indeed, in Ukraine.

Capitalism is a society in which its material needs are met, to the extent they are met, as the unintended side-effect of the competition among private owners of capital for opportunities to exploit commodified labor in pursuit of capital accumulation.

The question of how to avoid a conflagration, or how to end the war in Ukraine, is, au fond, a question about where war comes from. Is it inherent in a system, like capitalism, as some Marxists argue, or in the anarchic nature of international relations, as the Realists argue? Or is it to be found in the failings, not of systems, but of individuals? These questions are important, because they dictate how best to bring war to an end and how prevent it.

Most antiwar activism is, unfortunately, inspired by the erroneous notion that war does not arise as the inevitable working out of the internal logic of a system, but in the flawed freely-made choices of political leaders. By this thinking, war is like crime, a departure from morality, international norms, or international law, freely chosen by high-level officials of the State. The job of the antiwar activist is to pressure political leaders to exercise their free will to act legally and morally.  War, thus, is seen as a choice, not an imperative, or high-probability-outcome of a system of competition for markets, natural resources, investment opportunities, and strategic territory, or for security in an anarchic system of international relations.

Contrast the approach of trying to catalyze pressure on leaders, or promote antiwar activists and peace candidates in elections, with one that views war as a high-probability-outcome of conflict among States, engendered by competition among profit-making enterprises on a world-scale to exploit commodified labor in pursuit of capital accumulation.

Political leaders, if they’re not members of the capitalist class themselves, have often risen to their positions in the State with the considerable assistance of the business elite. Not only do they owe their positions to wealthy contributors to their election campaigns, they know that if they serve the capitalist class ably while in power, it will ensure they enjoy a comfortable and rewarding post-political life.     

More significantly, to avoid crisis and instability, political leaders in capitalist societies have no option but to make capitalism work. The range of policies they can pursue without touching off a major economic crisis is limited. They must cater to the interests of capital to avoid precipitating an investment strike or capital flight. They cannot, for example, enact policies that reduce the degree to which labor is exploited so much that the incentive for future investment disappears.  Political leaders, thus, are not free, if they are to continue to preside over capitalist economies, to choose any policy they wish. They must, no matter their political stripe, pursue policies that are favorable to capitalism. In the realm of foreign affairs, that means implementing policies that aid owners of capital to compete in the world market against the owners of capital represented by other States.

Let us suppose that the Biden administration, in order to avoid war with Russia, decided that Russia’s oil and gas industry ought to continue to dominate Europe’s energy markets: despite the fracking revolution unlocking access to oceans of natural gas beneath US soil, creating a bonanza of potential profits if markets can be found; despite the fact that Washington could strengthen its hold over Europe by making the continent dependent on US LNG, giving Washington extra leverage to extract concessions from Europe favorable to corporate USA; despite the reality that a proxy war with Russia could hand the US arms industry a handsome source of profits. Despite all these toothsome delights, suppose the Biden administration, in order to live in a world of peace, declined to act as any government presiding over a capitalist economy must act, or be replaced—by creating conditions favorable to capital accumulation.  Avoiding a war that could bring tremendous benefit to investors and corporations out of a humanitarian devotion to peace is a dereliction of the duty of the capitalist State, one that will not long go unpunished.

The capitalist class exercises considerable sway over the State, through: campaign contributions; ownership and control of the media, giving it significant influence over public opinion; major lobbying efforts, far in excess of any that can be mustered by grass-root groups, popular organizations, and labor; funding of think-tanks, to recommend corporate policy preferences to government; the hiring of court philosophers, intellectuals who can present capitalist class interests as universal; the placement of capitalist class representatives in key positions in the State; and the vast over-representation of the millionaire class in elected positions, the judiciary, upper levels of the civil service, and journalism.  If that weren’t enough, the ability of investors, bondholders, and shareholders, to destabilize capitalist societies if bourgeois needs are not met, by simply refusing to invest, or taking their investments to other jurisdictions, virtually guarantees that the State will promote the interests of its major profit-making enterprises, even to the point of war.  

If Biden said, let Russian energy and natural resources companies profit at the expense of the potential future profits of their US competitors, in order to avoid war, and at the same time, let Chinese enterprises dominate the Eurasian market and the industries of tomorrow, at the expense of their US rivals, to avoid a future conflagration with China, he would be ushered into retirement by the State’s major shareholders, the capitalist class, as swiftly as a corporate CEO who decided he no longer had an appetite for the class war would be defenestrated by his company’s directors.  And yet, a sizable proportion of antiwar activists believe that through a combination of moral suasion, demonstrations, and the election of peace candidates to political office, that political leaders can be persuaded to negate the interests of the capitalist class in order to appease the demands of the people for peace. One might as well petition wolves to become vegetarians.

It could be argued that the foregoing has little relevance for understanding China, even if it is germane to Russia. Russia makes no pretense of being anything other than a capitalist society, even if certain “Marxist-Leninist” Russophiles find it comforting to believe otherwise. Vladimir Putin makes no secret of his contempt for Russia’s socialist past, and has made clear that as long as he remains president, socialism does not lie in Russia’s future.

But China does make a pretense of being Communist, and certain “Marxist-Leninist” supporters believe that China is socialist. China is socialist so far as words can be made to mean anything one wants them to mean. “Socialism with Chinese characteristics”—the qualification is a dead give-away that we’re talking about something other than socialism as it has been understood historically—is a capitalist society governed by the Communist Party of China (and ruled by capitalist imperatives), where the party’s principal goal is national rejuvenation through capitalist development, not the emancipation of the proletariat and elimination of class. This makes Communist China something like Japan under the Meiji emperor and Germany under Bismarck.  

To be sure, the mechanisms of capitalist class influence that characterize US society hardly seem to characterize China. Lay aside the fact that China’s Communist party admits capitalists and boasts not a few billionaires. But is this so odd? China is a People’s Republic, not a Workers’ Republic. The Communist party’s main newspaper is the People’s Daily, not the Workers’ Daily. Capitalists and billionaires, if they’re Chinese, are thus part of the Chinese people, the basic unit of analysis for the Chinese Communist Party, and therefore have a role to play—indeed, the principal one—in China’s economic development under the capitalist path the party has chosen. The party does not set as its goal the elimination of the wage system, the emancipation of the proletariat from the capitalist yoke, or an end to the exploitation of humans by humans—historical goals of socialism. It sets instead as its aim the economic development of China.   

Because the party has chosen economic development by capitalist means, the pressures that bear on any capitalist society bear equally on Beijing, just as they did on other countries that set State-led capitalist economic development at the top of their agendas (South Korea, and Germany and Japan from the late nineteenth century through the first half of the twentieth). If China is to achieve its goal of rising prosperity through capitalist development it cannot afford to absent itself from the industries of tomorrow anymore that it can be expected to yield profit-making opportunities to corporate USA. Capitalist development is impossible without capitalist competition for markets, raw materials, and investment opportunities. As we’ve seen, competition for these prizes, at least incubate the possibility of war, and often leads to it. So long as Beijing is committed to the continued division of humanity into nations, with the Chinese nation competing against other nations in the world capitalist market, it cannot avoid the friction between nations that increases the probability of inter-State violence.

Scientific Antiwar Activism

Central to the aim of socialism is the elimination of war: (1) war between classes, to be achieved by doing away with the division of humanity into classes; and (2) war between nations, to be achieved by abolishing the division of humanity into nations. From this perspective, opposing war and promoting peace, begins with education, specifically, instilling in the class of people who depend on wages and salaries for a living, awareness of the reality:

• That war between nations is a high-probability outcome of the competition for economic advantage that is an ineluctable feature of capitalism.
• On the basis of the above, that capitalism, as a breeder of war between nations, is a threat to humanity.
• That the employee class bears the greatest burden of war and is its greatest victim (evidenced today by the cost-of living crisis and the growing economic hardship created by disturbances to the world economy set in motion by the actions of the participants in the war in Ukraine).
• That the probability of war among States can be reduced by eliminating the division of humanity into classes, that is, by means of socialist revolution.
• That the probability of war can be eliminated altogether by eliminating the division of humanity into nations, the longer-term project of socialist revolution.

Opposing war and promoting peace becomes effective at the point it becomes a project of opposing capitalism and promoting socialism. It is feckless when it fails to:

• Show that capitalism creates conditions favorable to war between nations;
• Identify war as one of a number of morbid symptoms of modern capitalism;
• Promote socialism as the liberation of humanity from its war-promoting divisions. 

Antiwar rallies whose first aim is to pressure political leaders to take the peaceful path (to use moral suasion to discourage the wolves from eating the sheep) is bound to be ineffective. The idea that pickets waved in the face of velociraptors can deter the hunter from stalking its prey is Quixotic. The education of the working class about how capitalism conduces to war, not to speak of a whole suite of other social maladies, and the task of organizing the employee class to bring about a radical overhaul of society in favor of socialism, has a greater chance of success.

Lenin argued that modern war could not be understood without understanding “the economic essence of imperialism”, i.e., modern capitalism. Likewise, modern war cannot be overcome without overcoming its economic essence.

By overcoming the economic conditions that promote inter-State violence, socialism promises a significant reduction in the likelihood of war. Creating a world of peace, therefore, means, first and foremost, creating a world of socialism. An antiwar campaign that is not, first, a socialist campaign is futile. Peace activism, if it is to be effective, must be socialist activism above all else.

Follow-up

The Wall Street Journal, (“U.S.-Europe Trade Booms as Old Allies Draw Closer”, November 20, 2022), echoes some of the points made in the foregoing, namely:

• The U.S. is turning into one of Europe’s biggest energy and military suppliers, replacing Russia as a natural-gas purveyor and helping Europeans to beef up their defenses [my emphasis].
• Germany plans to buy 35 U.S. F-35 jet fighters, built by Lockheed Martin Corp.
• U.S. services exports to the European Union are surging, up 17% in 2021 year-over-year to 305 billion euros, equivalent to $315 billion, according to EU data.
• The burgeoning trans-Atlantic relationship is part of a reorganization of the global economy along East-West lines.
• The EU-U.S. economic relationship is stronger than it has been in quite some time.
• European foreign direct investment in the U.S. increased by 13.5% to about $3.2 trillion last year from a year earlier.
• FDI in Europe increased by about 10% last year to roughly $4 trillion. Those sums dwarf investment flows between the U.S. and China.
• Some of the rebound in European investments in the U.S. is driven by concerns among Europeans about the prospects of their economy. German chemical group Lanxess AG is focusing future investments in the U.S. … largely due to high energy prices.