Why does Financial Capitalism Hate Sovereign States?

The semantic and symbolic ambivalence of the term “Globalization” is what, de facto, makes possible the transformation of the process of unification of the global sphere of economy and toxic finance, of lifestyles and expressive and linguistic modes, into “an ineluctable destiny and a political project of universal liberation at the end of a natural evolution, into a civic and ethical ideal that, in the name of the supposed link between democracy and market, promises a political emancipation to the peoples of all countries.”

Indeed, the persuasive “ideology of globalization” openly promises emancipation and access to modernization, in an overcoming of trivial forms of existence, but also of political forms judged as “pre-modern,” i.e., incompatible with the new globalized order; and, secretly, it aims exclusively at the destruction of cultural and linguistic differences, of production and relationship with the world, so that all the peoples of the planet are subsumed under the depoliticized and borderless ordo oeconomicus, without States and without any dimension of meaning superior to the sovereign market.

It promises the full implementation of “global democracy” in the same act with which it eliminates the still perfectible democracies that existed during the second half of the nineteenth century, in the spaces of sovereign nation-states; in their place, it establishes the dictatorship of the cosmopolitan ruling class, hidden under the mask of the sacra voluntas of the Stateless markets. Returning to Marx’s grammar in his On the Questionn of Free Trade (Discours sur la question du libre-échange), (1848), the dominant pole returns once again to “designate with the name of universal fraternity exploitation in its cosmopolitan form (Désigner par le nom de fraternité universelle l’exploitation à son état cosmopolite).”

The “Inglobalization,” that is to say, the Westoxication linked to the neutralizing inclusion of all the peoples of the planet within the armored walls of the New World Order, entails at the same time the “Glebalization” of the peoples, condemned to capitalist polarization and the associated forms of super-exploitation; it thus favors the “passage to the West” of every area of the planet under the glamorous dictatorship of “Globalitarianism;” that is to say of the totalitarianism of the class civilization of the market. To the latter—which is all the more totalitarian, the more it manages to smuggle as freedom the slavery it generates on a planetary scale—Adorno’s words fit: “the new world is a single concentration camp that believes itself to be a paradise because there is nothing to compare it with.”

This occurs simultaneously with the reduction of humanity as a whole to the condition of a post-bourgeois and post-proletarian replebeianized mass, without Identity and without Culture. The whole world is redefined as a single depoliticized market, as a smooth and borderless plane for the unlimited flow of commodities and commodified human beings. The co-essential logic of technocapitalist globalism lies in its tendency to make all human beings “encompassed in the flow of globality.”

In this scenario of refeudalization of the capitalist bond, the most modest and elementary demands for a dignified existence acquire the appearance of luxuries inaccessible in the present, typical of those who for a time were accustomed to “living beyond their means.”

Consequently, the globalist ideology represents, to all intents and purposes, the most emblematic superstructural culmination of the de-eticized and absolute “system of needs.” The dialectical phase of capitalism was still governed by the State as a power at the service of economic mechanisms. And it is for this reason that Marx and his epigones, in the concrete historical framework in which they worked and acted, raised, by contrast, the issue of the internationalist way as a moment of conflict and counterposition with respect to the historically determined capitalist relation of force.

In its logic of development, which leads it from the antithetical-dialectical to the synthetic-speculative phase, capital enters into conflict with the State, just as it does with the bourgeoisie, with which it had coexisted and of which it had availed itself for a good part of the time of the modern adventure. It must overcome them in order to be able to impose itself absolutely. Technocapitalism absolutus is, for this very reason, post-bourgeois and anti-bourgeois.

More precisely, it must de-sovereignize the States in order to impose as the only sovereign reality the depoliticized and borderless capitalist market, with the annexed redefinition of the bourgeois pole and the proletarian pole as the new polychromatic, consumerist and unified plebs.

The dialectical character of the nation-state has been emphasized, among others, by Ralf Dahrendorf of The Modern Social Conflict (1988): “Historically at least, the nation-state has been a necessary condition of progress when unfortunately it has become a source of regression and inhumanity.” On the one hand, it guaranteed the rights associated with citizenship, the general democratic and social conquests of the subaltern classes: it generated “domesticity” connected to an immunological structure that protected its inhabitants. And on the other hand, it provoked the pathologies of imperialism and nationalism as instruments of the dominant pole. It is Engels himself who lets emerge this contradiction embedded in the figure of the national state, which guarantees its dialectical character:

The State, since it was born of the need to curb class antagonisms, but at the same time arose in the midst of the conflict of these classes, is as a rule the State of the most powerful class which, through it, also becomes politically dominant.

In short, the State is ultimately an instrument of the ruling class, but it arises to “curb” class antagonisms, to allow the dominated not to be disintegrated and (at least from the point of view of the figure of the citoyen) to have equal rights.

Even as Dahrendorf has pointed out, “no less important benefit of the nation-state was that it generalized the ancient idea of citizenship,” transforming it into a universal right for all the inhabitants of the nation-state. On this same basis, “constitutional norms were introduced to prevent wealth from being translated into the power to deny citizenship rights to others.”

In other words, the nation-state, which originally favored the genesis of modern capitalism and later also figured on multiple occasions as its protector, also dialectically became the locus of the rights and conquests of the oppressed classes. Therefore, it also ended up being a brake against the unstoppable voracity of capital, delimiting a space of rights and protections inaccessible to the purely undemocratic logic of the market.

In this perspective, Marx’s analysis according to which “modern state power is nothing more than a committee that administers the common affairs of the entire bourgeois class (ein Ausschuß, der die gemeinschaftlichen Geschäfte der ganzen Bourgeoisklasse verwaltet),” becomes true only in the context of inverted Keynesianism and the absolute primacy of the economic.

Hegel’s interpretation is more well-founded: the State was essentially the guarantor of the primacy of the political and of the solidary protection of the community, the wall that knew how to discipline the “wild beast” of the market and the “ethical tragedies” of the system of needs. And it ended, in congruence, by entering into conflict with that capitalism which had also originally found in it its own locus naturalis. In its fundamental lines, this explains the enmity between the national state and globalist capital, which has become the central figure of the post-1989 era.

The de-sovereignization of the nation-states is presented, within the framework of the New World Order, as a fundamental moment of the depoliticization of the economy and of the aggression against the State form as a compendium of eticity and the possibility of regulating the market.

Diego Fusaro is professor of History of Philosophy at the IASSP in Milan (Institute for Advanced Strategic and Political Studies) where he is also scientific director. He is a scholar of the Philosophy of History, specializing in the thought of Fichte, Hegel, and Marx. His interest is oriented towards German idealism, its precursors (Spinoza) and its followers (Marx), with a particular emphasis on Italian thought (Gramsci or Gentile, among others). he is the author of many books, including Fichte and the Vocation of the Intellectual, The Place of Possibility: Toward a New Philosophy of Praxis, and Marx, again!: The Spectre Returns. This article appears courtesy of Posmodernia.

Africa: New Powers and a New Scramble?

The decomposition (or re-composition) of the international community always follows new paths and not all of them are coherent and/or (still) clear. It is a matter of fact that various actors, whose capabilities and reliability (and their own stability) are not yet known, appear on the scene and bring new elements to specific areas. One of these is Africa, where those of the ‘Scramble for Africa’ reappear in new terms, a phase which for about eighty years, approximately 1830 and 1911, saw the powers, all European, compete to grab territories and wealth of that continent.

While much is known (or assumed to know) about the ambitions of Russia, China, but also about the aspirations and ambitions of France, USA, Turkey, India, EU and others, little is known about those of the Gulf nations. These, within the multiple area of the Arab-Islamic world, due to peculiar circumstances, starting with the enormous financial resources, represent a world apart from that jagged community that goes from the Atlantic to Mesopotamia.Till now deployed in the so-called Western world, these nations have been trying for some time to find an autonomous way from the cumbersome partnership with the USA and Europe, also trying to increase their influence in Africa and also placing themselves in competition with Washington and Brussels. This analysis refers more to the member states of the Gulf Cooperation Council (GCC) than to the organization as such, which beyond the sumptuous and unrealistic meetings, is little more than a box of fictional cigarettes “Morley.”

Historically, Saudi Arabia and the UAE have had the most interactions with sub-Saharan Africa (defined as those areas of the continent south of the Arabic-speaking North African states located on the Mediterranean) while Bahrain has the least of all. Oman has historical ties to the east coast of Africa, while Qatar has become more active on the continent especially since its rivalry with Saudi Arabia and the UAE heated up in 2017, due to the military ties of the Qatar with Turkey, too much lining with Iran and Islamist terrorist organizations. Saudi Arabia, Kuwait and the UAE became active on the African continent during the 1970s, particularly after the 1973 Arab-Israeli war, when many African countries severed diplomatic ties with Israel due to the arrival of Israeli troops across the Suez Canal.

During the 1970s and 1980s, Saudi Arabia, Kuwait and the UAE launched development aid policies in Africa and even worked towards the same purpose as Libyan leader Muammar Gaddafi on the continent, where he had big plans, when the activities were aimed at garnering support for the Arab world in its conflict against Israel. Since then, investment and trade policies, as well as countering the activities of the Islamic Republic of Iran in Africa, have become more important to Saudi Arabia and, in more recent years, the UAE and Qatar rival the Saudis in these efforts and in considering Turkey and Iran as direct rivals for influence on the African continent, despite an (apparent) improvement in relations.

In the last fifteen years, Saudi Arabia, the UAE and Qatar have strengthened economic and security ties with the African continent, primarily in the Horn of Africa region and progressively extending them towards sub-Saharan Africa. Saudis, Qataris, Emirates are working in this region with the aim of building the status of their international status by acting as protagonists in the affairs and conflicts of the continent, but it is essential to underline this not in the framework of cooperation between them, rather of more or less open rivalry and the understandings that have been registered are due to tactical necessity, as in the case of Sudan. As mentioned above, although Saudi Arabia, the UAE and Qatar have a tradition of contacts with African realities, the 2007 global financial crisis was the booster to redirect their investments towards Africa. As Western economies slow down, rapidly growing African economies have become attractive bait.

The Gulf monarchies, always in competition and never in solidarity, have strengthened their strategies of economic diversification and reduction of dependence on hydrocarbons by investing in African markets, especially when oil prices collapsed in 2014. The Gulf companies’ experience in the energy sector makes them particularly attractive to African states seeking to develop their energy industries. Furthermore, the ability of these Arab countries to carry out large-scale infrastructure projects is also a powerful attraction for African states, always in search of rapidly developing. The common religious heritage has also favored the strengthening of ties.

When Western economies went into crisis, some African leaders asked the Gulf monarchies for economic help, and they did so by appealing to their religious ties. The expansion of development aid on the continent also serves to strengthen their reputation among African Muslims, while promoting their own economic interests. As their economic interests in Africa have grown, Saudi Arabia, the UAE and Qatar have also expanded their military presence, primarily in the neighboring Horn of Africa.

Indeed, in addition to supporting anti-piracy efforts in Somali waters, they boosted their military capabilities by building their first bases in the Horn of Africa. The trigger element in this case was participation in the war in Yemen, a particularly significant nation in the context of the new global order, in which maritime traffic is strategic and from where maritime traffic to and from the Red Sea, the Suez Canal (and, consequently, the Mediterranean), and the Arabian Sea can be controlled. It is also the Asian guardian of the Bab el Mandeb Strait. In both sections of the strait, between Yemen’s Perim Island and the port of Djibouti, as well as between Yemen’s Hanish Islands and the Eritrean strip of islands, it is less than 10 miles wide. This implies that maritime traffic through the strait can be easily controlled (and/or threatened).

In the case of the Emiratis and the Saudis, despite their substantial differences and oppositions, they have also intensified military cooperation with the aim of playing a leading role in international operations to combat terrorism in the Sahel. In this sense, the Islamic Military Coalition against Terrorism (IMCTC) was launched in 2015 under Saudi patronage. This platform has greatly enhanced military cooperation and intelligence sharing between Gulf monarchies and African states. In this context, Saudi Arabia and the UAE contributed $100 million and $30 million respectively to the multinational G5Sahel force in 2017.
In recent years, the Gulf countries have opened dozens of embassies in sub-Saharan Africa and have intervened diplomatically in African conflicts with the aim of increasing their international prestige. The most recent is Sudan, where once again Saudi Arabia and the UAE support each of the warring factions, not to mention Libya, where the UAE openly supports the de facto government of Cyrenaica.

The perception of the uncertainties and weaknesses of US policies from the continent partly motivated these interventions. With Washington in an unclear position, the Arab monarchies seem determined to find a space. What appears different in the action of these nations is the availability to complete the peace agreements with important economic incentives, while other ‘honest brokers’ have failed, also because they did not have the availability/or the will (or the souk mentality, more openly) as in the case of the 2018 Jeddah Peace Agreement between Ethiopia and Eritrea, sponsored by the Saudis and the Emirates and accompanied by investment promises.
There is a line of thought which sees positively that diplomacy is also based on the principle of peace for money. In fact, without funds, in the aforementioned case, peace would have been impossible and that its fragility lies precisely in this condition. In the case of the peace agreement between Ethiopia and Eritrea, in addition to the economic opening to the interests of the Gulf, there is, among other things, the construction of an oil pipeline between the two countries by the UAE and a railway that connects the ‘Ethiopia with the port of Assab in Eritrea. It should also be noted that since 2021, the emirate of Abu Dhabi has been working as a mediator in the dispute between Egypt, Ethiopia and Sudan over the partition of the Nile River.

In the case of the crisis still afflicting Sudan, when it exploded closer to General Abdel Fattah al Burhan (while the UAE is openly supportive of General Mohamed Hamdan Dagalo, “Hemeti” commander of the former Janjaweed), Saudi Arabia, together with the USA, he launched a diplomatic initiative by bringing together the representatives of the two opposing groups in Jeddah, even if without results. It also participated in the evacuation of foreign civilians on its ships by disembarking them at its bases on the eastern coast of the Red Sea.

Saudi Arabia

With the ascension of Mohamed bin Salman to crown prince and actually ruler of the country, Saudi politics is undergoing a gradual transformation, not only in foreign policy but also in issues that seemed untouchable, such as individual freedoms and the rights of women and an initial opening to tourism. In the case of sub-Saharan Africa, until recently Saudi Arabia had not had a specific, coherent and long-term projected foreign policy, other than the promotion, dating back to the 1960s, of the Wahabi rite among the Islamic populations of the continent and this with the aim of sabotaging the Nasserian, secular and socialist propaganda. But for about ten years, the instability of Yemen and Sudan, the fragility of Egypt have been the drivers of Riyadh’s new approach and dynamism. In this, profound differences emerge with the approach and perception (and therefore in the modus operandi) of Saudi Arabia, compared to that of its major competitors UAE and Qatar and geographical issues are prevalent.

Against the background of the war in Yemen, currently in a situation of fragile ceasefire, the Horn of Africa region has assumed an exceptional geostrategic relevance for Saudi Arabia, since the countries of this area have become an important element for the security of Riyadh, which has also maintained links of a historical nature with that region. The strategic uncertainties of Washington which, having achieved energy autonomy, has a less strong interest in the events of the region, leave a gap and Saudi Arabia has found itself forced to adopt a different approach in the Horn of ‘Africa (and on the continent) to protect their national interests.

Unlike the UAE and Qatar, Saudi Arabia is geographically close to the Horn and directly overlooks the Red Sea and any instability phenomenon in those areas can impact the security of Riyadh which must act with greater caution. Riyadh sees a link between Yemen and the Horn of Africa and since it launched military operations against the Houthis in March 2015 the importance of the region for Saudi national security is central. Therefore, Saudi Arabia has lobbied the various governments of the Horn countries to forge an alliance and join the anti-Houthi coalition in Yemen. Sudan, Eritrea and Somalia then joined the Saudi Arabian-led military axis, sending contingents of infantry (which lacks Riyadh’s ground force structure) albeit intermittently. Obviously, this contribution has been generously compensated, as in the case of Sudan.

The priority in Saudi regional policy is the resolution of the conflict in Yemen, as this has become an economic and security disaster for Riyadh in recent years. The recent improved contacts with Iran, although still in their infancy, are a reflection of Saudi Arabia’s political will to diplomatically overcome this conflict, since a military solution has become unlikely. But the conflict with the Houtis is not the only source of concern for Saudi Arabia regarding the overall security of the area between the Red Sea and the Horn of Africa.

There are flows of irregular migrants, smuggling and drug trafficking, illegal fishing and piracy and Riyadh, in 2016, signed an agreement with Djibouti to build a military base and to strengthen the control of maritime and oil traffic to and from the Red Sea, which however weakened when the UAE took control, not agreed with the Yemeni authorities, of the island of Socotra and subsequently of other islets of that archipelago. Like the UAE, given the same geographical and meteorological situation, Saudi Arabia also aims at massive purchases of land for agricultural use, both in the Horn of Africa and in other parts of the African continent, in light of the expected population growth.

The tool of the Saudi penetration and influence policy is the Saudi Development Fund, a gigantic institution which finances almost everything and which has made over 4 billion euros available for Africa alone (almost half of which, however, goes to Egypt) but the Maghreb states (Morocco and Mauritania) and the Horn of Africa and East Africa stand out which also records significant losses, ultimately representing a political problem for Riyadh’s expansion projects as with financial support and humanitarian aid, Saudi leaders seek to forge political alliances, presenting themselves as reliable guarantors of support for development policy and as generous partners and donors.

In its policy of building an overall security framework, Riyadh is also interested in membership and the creation of multilateral forums. An example of this policy is the Council of Arab and African States Bordering the Red Sea and the Gulf of Aden (known as the Red Sea Council). It originated in January 2020 on a Saudi initiative and includes Egypt, Yemen, Jordan, Sudan, Eritrea, Djibouti and Somalia. The goal of this association is to improve trade and safety along this waterway, through which approximately 13 percent of world trade flows. The forum has so far failed to achieve significant results, but it serves as a platform for the Saudis to pursue common security interests, cultivate regional loyalties and solidify anti-Iranian ties.

Finally, it should be noted that Saudi Arabia does not enjoy a dominant role as a creator of maritime networks and depends in part on the infrastructure of the UAE and in the meantime pushes hard for the strengthening of its naval forces. However, Riyadh plans to invest more in the logistics sector, especially in the Horn of Africa, with the aim of lightening its dependence on the UAE and also to be able to compete with China in the region, in fact for Beijing the Horn of Africa is a strategic center of the BRI (Belt and Road Initiative), which has a military base in Djibouti and major interests in Kenya.

Qatar

Over the past two decades, Qatar has become a major international player due to its position as the world’s leading producer of liquefied natural gas. Its reserves, the third largest in the world after Russia and Iran, have made it possible for its rapid economic take-off. But Qatar is not satisfied with the status of energy power and from a geopolitical point of view it seeks to emerge as a regional power and above all to escape Saudi hegemony and rivalry with the UAE. It is precisely these parameters, i.e., the search for strategic independence, that Qatar has launched into an unscrupulous foreign policy, dissociating itself as much as possible from Saudi initiatives, as in Yemen, from whose anti-Houti stance Doha emerged in 2017, making public its distance from Saudi Arabia, approaching Turkey (and hosting important military installations or, still being not very hostile towards Iran and developing mediation initiatives such as sending interposition forces to patrol a disputed area between Eritrea and Djibouti, later withdrawn due to the alignment of these two states with Saudi Arabia and against Qatar itself.

In addition, Qatar uses the financial instrument of the Qatar Investment Authority, which together with Qatar Airways, Al Jazeera are important influence drivers, however Qatar’s diplomatic action in Africa, such as the opening of embassies (Qatar has opened more embassies in sub-Saharan Africa in recent years than any other state except Turkey) and the promotion of negotiations collides with the problem of the numerical and qualitative insufficiency of personnel (not yet sufficiently experienced), as in the cases of the negotiations between Eritrea and Sudan, Chad and Sudan, Eritrea and Djibouti (all with poor results also for the Saudi influence which led all these countries to side with Riyadh).

But Somalia (together with Libya) remains one of the pillars of diplomatic action, and not only, of Qatar in Africa. While relations with the Maghreb (Algeria, Morocco and Mauritania) are ancient and consolidated with sub-Saharan Africa, with the notable exceptions of Sudan and Eritrea, they are recent and in the process of further development, primarily with hydrocarbon producing nations such as Nigeria and Congo or solid economic realities like South Africa. In the area of food security, like its neighbors, Qatar is heavily dependent on food imports and has developed large agribusiness programs both in the Horn and in East Africa. As a provider of official development aid, the sub-Saharan African countries from which Qatar has benefited the most are Burkina Faso, Ethiopia, Somalia, Sudan, Guinea, Mozambique, Congo, Senegal, Comoros and Djibouti.

Qatar has had a very significant influence on conflicts in Yemen, Syria, Iraq or recently Afghanistan, hosting talks and negotiations. All this has meant that the Qataris have become attractive and, despite a normalization with its regional competitors, the differences remain and can arise again. The Qataris maintain important discrepancies with the Saudis and the Emiratis. One of the main reasons is the rapprochement of the former with political Islam in general and with the Muslim Brotherhood in particular.
The Saudis and UAE, for their part, believe that this group intends to destabilize the established order in the region. In the scenarios shaken by the Arab Spring uprisings, Saudi Arabia and Qatar found themselves supporting opposing or competing factions, and the UAE sided with the Saudis (at least in this one) and the pressure on Qatar increased. Thus, in June 2017 there was a diplomatic crisis: Saudi Arabia, the UAE, Bahrain, Egypt and Jordan severed their diplomatic relations with Qatar, which they accused of interfering in their internal politics and supporting terrorist groups (actually Qatar’s support for the Muslim Brotherhood is anything but ideological but instrumental, given the objective of subverting the models of these states, all close to Riyadh).

The closure of the borders and the restrictions on air and sea traffic have caused a crisis in Qatar which has also affected the food supply. Iran and Turkey have supported Qatar, creating a worrying system of alliances and hostilities that has led to an imbalance in the region’s already complicated set-up. Thus, Qatar began to build a progressive rapprochement with Turkey, one of the main contestants of Saudi Arabia’s attempts to affirm its regional leadership, and with Iran, (at the time) the main enemy of the Saudis. This rivalry has transferred to the neighboring Horn of Africa; Sudan, Djibouti, Eritrea, Ethiopia and Somaliland have been closer to Saudi Arabia and the UAE during the 2017 diplomatic crisis, while Somalia has adopted a neutral stance not to put its good economic relations with Qatar and Turkey are in danger. During the four years that the blockade has been in place, Saudi Arabia and the UAE have obtained lukewarm support in African countries (certainly not in proportion to the aid given by Riyadh and Dubai) and the choice of neutrality has been seen as a support of made of Qatar.

In the highly sensitive Somalia, the rivalry between Qatar and the UAE negatively impacted the already difficult relations between Mogadishu and the autonomous regions of Somaliland and Puntland due to the growing economic and military presence of the UAE in those de facto independent regions, and which Somalia is trying to reabsorb in the federal structure. In any case, the rapprochement between Qatar, Saudi Arabia and the UAE in January 2021, which triggered the end of the blockade and the return to diplomatic relations, has allowed African countries to improve relations with both sides and rescue them from the unpleasant situation of having to choose between two (actually) lines of funding (as was the case in Morocco).

United Arab Emirates

The will to develop a real African policy was initiated by the UAE after the 2008 financial crisis, decided to refocus your international investment strategy. The push has been such that several Western companies, already operating in Dubai, have reconfirmed it as a base from which to operate in African countries due to the advantageous tax conditions and direct connections with the main African capitals. Furthermore, Dubai has attracted a growing number of African businessmen, who have chosen this emirate as their base for investment. The number of African companies registered with the Dubai Chamber of Commerce and Investments has increased exponentially in the last decade and the UAE is firmly betting on Angola, a fast-growing country as a hub for continental expansion.

However, alongside economic interests, the UAE has important security drivers, such as the fight against religious extremism in particular that carried out by the Muslim Brotherhood galaxy. The widespread instability in the Middle East – the rise of the Islamic State, the collapse of Libya, the conflict in Syria, the never-ending crisis of Lebanon and Iraq, the ever-shaky Egypt and the growing influence of Iran (and the related Yemeni problems) has sparked paranoid fears in Gulf nation leaderships, but the threat from groups affiliated with the Muslim Brotherhood, it is considered existential, also have a presence, albeit limited, within the Emirates. Its rise alarmed UAE leaders, especially as conflicts in the Arab world seemed increasingly intertwined, with events in one country spilling over into others.

The UAE has implemented with many African countries what some have called its “Egyptian model” diplomatic, military and financial support to stable political actors who are seen as the most capable of containing Islamist movements. This is how it acted, as well as in Egypt, in Yemen and Sudan. In this sense, the UAE conditions its development aid and investments on the African authorities showing support for their strategic orientations, i.e. adhering to their agenda against political Islamism.
The UAE is the fourth largest investor country on the African continent globally — after China, the United States and France — and the largest overall among the Gulf states. Between 2016 and 2021, the UAE invested approximately $1.2 billion in sub-Saharan Africa and is among the continent’s top ten importers of goods and commodities. Non-oil trade between the UAE and Africa is estimated at $25 billion a year. In the last fifteen years the volume of trade between the UAE and the African continent of products other than hydrocarbons has grown by 700 percent.

Investments from the Emirates are directed towards telecommunications, energy, mining (gold and coltan) agriculture, port infrastructures, where the presence of Dubai Ports (DP) stands out, currently managing some of the most important port terminals in sub-Saharan Africa: Dakar (Senegal), Berbera (Somalia), Maputo (Mozambique) and Luanda (Angola), Bosaso (Puntland [Somalia). In Djibouti, DP also managed the port of Doraleh until the contract was terminated by the local government in 2018. DP has also obtained a concession for the construction of a logistics center in Kigali (Rwanda) In addition, new projects are being negotiated in Sudan and Madagascar For its part, Abu Dhabi Ports manages the port of Kamsar (Guinea) Port investments and agricultural land acquisition are part of the food security strategy, as the UAE imports 90 percent of domestic consumption.

As with Saudi Arabia, the conflict in Yemen has made the Horn of Africa region the main strategic area where the UAE has deployed its own military mission, whose performance has solidified the myth (much mythologized, indeed, even due to the poor results obtained by the Saudi forces) of the ‘little Sparta of the Middle East’. At the outset of the conflict in Yemen, the UAE was alarmed by the advance of Houthi rebels near the Bab Al Mandeb Strait, as the possibility arose that an Iranian allied group would control that vital trading point of the Emirates. But in addition to the aforementioned Angola, the UAE is also extending its presence in West Africa, and in the Sahel: in Senegal and Guinea, as already mentioned, they manage port infrastructures in Dakar or Kamsar; in Morocco, Mali, Mauritania, Chad and Burkina Faso investments were made in civil and military infrastructure. In their strategy to fight Islamist forces and financing of the G5 Sahel and there are signs for further expansion and penetrations in coastal areas of Atlantic Africa.
Conclusions

The expansion of existing rivalries in the Gulf to the Horn of Africa, where there are already many, is not a good thing and risks spreading to the rest of the continent, as Saudi Arabia, the UAE and Qatar progressively consolidate their presence. In this scenario, the rivalries between these actors will be more heated in the belt that goes from Egypt to the Horn of Africa, where the control of the security and navigation of the Red Sea and the Gulf of Aden is fundamental internal stability, commercial interests and their food security, and this is only possible if there is a presence on both sides.

The Elusive Liberal Category of “Totalitarianism”

Among the philosophical-political categories that enjoy the greatest success in the order of neoliberal discourse, both Right and Left, is that of “Totalitarianism,” especially in the sense conceptualized by Hannah Arendt in her work, The Origins of Totalitarianism (1951). Through this category, the entire history of the “short century” is reinterpreted teratomorphically as a succession of despotic and genocidal governments, red and black, enemies of the open society advocated by Popper. The horror of the short century would be determined, however, by the capitalist happy ending of the End of History (patented by Fukuyama) and the triumph of universal freedom (translated in real terms as that of the planetary free market). All of human history would thus unfold in the neoliberal order, assumed in a way that is anything but ideologically neutral, as the end (final) and as the end (finality) of history as such—according to the double meaning of the Greek motto τέλος.

The high ideological content of this narrative emerges from whatever perspective it is observed. First of all, the entire twentieth century, which—as Badiou reminds us—was the “century of political passion,” resolves itself entirely in the gloomy reign of terror and genocide, of the gulags and the barbed wire of the extermination camps; horrors that were very much present, ça va sans dire, but that certainly cannot lead to ignoring all that was different and better produced during the “short century.” Thanks to the far from neutral identification between Novecento and Totalitarianism, there is in fact no trace left of the utopian passion for the overcoming of the prose of capitalism, nor of the social conquests of the working classes, nor even of the achievements in terms of democratic rights and practices obtained, thanks to the framework of sovereign nation-states. According to the “advertising” theorem of the nouveaux philosophes—themselves celebrated in their time as a commercial product of the culture industry—the Gulag becomes the truth of any authentically socialist aspiration. And, synergistically, the barbed-wire netting of Auschwitz becomes the truth of all defense of the national state, of sovereignty and of tradition.

In addition to mortgaging the utopian dimension open to the projection of better futures, anti-totalitarian rhetoric fulfills an apologetic function with respect to the present itself. In fact, it suggests that, although replete with contradictions and injustices, the neoliberal order remains preferable to the red and black totalitarian horrors that traversed the “short century.” In this way, the reified present ceases to be fought against because of the contradictions that innervate it (exploitation and misery, inequality and the constant hemorrhaging of rights); on the contrary, it is defended against the possible return of fascism and communism.

The victory of the capitalist power relation (Berlin, 1989) can thus be ideologically elevated to a definitive fact of Weltgeschichte. The latter, after the “immense power of the negative,” carried out its own autotelic process of implementing the free circulation of commodities and marketized persons. Anyone who unthinkingly fails to recognize the identification between freedom and the free market, between democracy and capitalism, perhaps even trying to bring back to life the waking dream of better freedoms and of an exodus from the steel cage of non-border techno-capital, will for that very reason be ostracized and vilified as “totalitarian,” as “anti-democratic” and as “illiberal;” or, Popper would say, as the “enemy of the open society” which, by the way, is among the most closed societies in history, considering the degree of socio-economic exclusion, in terms of fundamental rights and basic goods, to which an increasing number of human beings are condemned.

The anti-totalitarian rhetoric works at full capacity, thanks to its symmetrical activation from the liberal Right and the champagne Left. The former accuses the Left—in all its degrees and in any of its colors—of being in collusion with the “red totalitarian madness” of Maoism and Stalinism. And thus it ensures that it remains tied to neoliberal dogma, without possible openings to greater political control of the market and possible extensions of social rights; practices that in themselves are immediately pointed out as a return to red totalitarianism. In analogous terms, the champagne Left accuses the liberalish Right of being permanently tempted by the “black or black totalitarian madness,” Mussolinian or Hitlerian. And thus it ensures that the liberal neo-right remains at all times equally tied to the neo-liberal creed, immediately delegitimizing as “fascism” any attempt to re-sovereignize the national state, to resist market globalization and to protect the cultural and traditional identities of peoples. This reveals, once again, how Right and Left have introjected the core of neoliberal fundamentalism, according to which—with von Hayek’s syntax—any political attempt to counteract free competition and the deregulated market leads inexorably to the “road to serfdom.”

By virtue of this logic-illogic of reciprocal neoliberal vigilance (reconfirming the function deployed today by the right-left cleavage as a mere ideological simulacrum for the benefit of the ruling class), the liberal Right and the champagne Left mutually guarantee their own stable permanence within the perimeters of the Politically Correct Unique Thought of the liberal matrix. This focuses the supreme enemy on the Keynesian sovereign state and regulator of the economy, automatically identifying it with red and black totalitarianism or, not infrequently, with the ens imaginationis of “red and black totalitarianism.” And as a result of the entire process, capitalism itself re-emerges again, more and more ennobled and ideologically legitimized: In fact, today it is presented—both from the Right and from the Left—as the kingdom of freedom, as the best of all possible worlds; or, in any case, as the only possible one in the time of disenchantment that remains after the red and black totalitarian atrocities.

Diego Fusaro is professor of History of Philosophy at the IASSP in Milan (Institute for Advanced Strategic and Political Studies) where he is also scientific director. He is a scholar of the Philosophy of History, specializing in the thought of Fichte, Hegel, and Marx. His interest is oriented towards German idealism, its precursors (Spinoza) and its followers (Marx), with a particular emphasis on Italian thought (Gramsci or Gentile, among others). he is the author of many books, including Fichte and the Vocation of the Intellectual, The Place of Possibility: Toward a New Philosophy of Praxis, and Marx, again!: The Spectre Returns. This article appears courtesy of Posmodernia.

Featured: Don Quixote de la Left, by Jordan Henderson; painted in 2022.

Where does Crypto Money Donated to Ukraine Go?

With the outbreak of hostilities in Ukraine, the authorities in Kyiv began to actively raise funds for the country’s defense. Foreign states responded to the call, as well as individuals and companies. Almost every European who sympathized with Ukraine started sending donations; and cryptocurrencies have become one of the most convenient means of doing this.

The anonymity and ease of transactions of Bitcoin, Ethereum and other digital assets have made cryptocurrencies an ideal means for citizens of various countries willing to assist Ukraine.

Four months later, Ukraine had already received more than $100 million sent in from all over the world. However, the government has not yet reported on how this money has been spent, and will hardly do this any time soon.

On March 2, 2023, the National Bank of Ukraine (NBU) issued a nationwide ban on the withdrawal of money from crypto wallets. On July 31, 2023, the NBU sent out an internal letter to this effect to the country’s banks. Taking seriously the situation with the payment systems and operators of the cryptocurrency market, the regulator is collecting information about the transfers and transactions made through them.

Back in 2021, Ukraine tried to become a center of attraction for cryptocurrencies, with Deputy Minister of Digital Transformation, Oleksiy Bornyakov saying: “We have a large talent pool in Ukraine and a strong community of blockchain developers. They picked up the cryptocurrency trend faster than people in many other countries, and most importantly, they understood how to build a business based on it.” Touted as it was, however, the “cryptocurrency trend” has actually become a “gray zone” for corruption and money laundering.
In 2022, President Volodymyr Zelensky tried to rectify the situation and signed the law “On Virtual Assets,” which was supposed to set the stage for the launch of a legal cryptocurrency market in Ukraine. The National Securities and Stock Market Commission became the regulator.

“The signing of this law by the president is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine,” the Ministry of Digital Transformation emphasized. Formally, citizens can now legally store their assets on crypto exchanges. The law sets the amount of the exchanges’ minimum authorized capital from $42,000 for residents to $210,000 for non-residents. Exchanges can open bank accounts, but must obtain a separate license for each type of activity (storage and administration, exchange, transfer, brokerage). Cryptocurrencies will not become a means of payment, but acquiring operations are acceptable. In other words, in Ukraine it is now quite legal to pay with cryptocurrencies, albeit through an intermediary.

At the same time, Ukrainians are among the most avid users of cryptocurrencies around, ranking fourth on the Global Crypto Adoption Index. The annual turnover exceeded $8 billion, the daily volume of transactions with cryptocurrency was in the ballpark of $150 million, and every eighth Ukrainian citizen (approximately 5.5 million people) owned cryptocurrency. And how much remains in the shadow?

On February 24, 2023, Elliptic, the world’s leading provider of crypto-currency compliance and blockchain analytics solutions in the field of combating financial crime, released an analytical report, Crypto in Conflict Report. The authors were particularly interested in operators that receive, store and convert crypto assets aimed at supporting Ukraine. On February 26, 2022, the Ukrainian government launched a new website for collecting cryptocurrency donations in cooperation with FTX and Everstake and the Ukrainian exchange Kuna. The project also involves the Ministry of Digital Transformation of Ukraine. The Aid for Ukraine website was supposed to send donated cryptocurrencies to the National Bank of Ukraine, Vlad Likhuta, Head of Growth at Everstake, told CoinDesk.

On November 11, 2022, the world’s second largest cryptocurrency exchange FTX went bankrupt, just two days after the midterm elections to the US Congress. FTX founder Sam Bankman-Fried (one of the main sponsors of the US Democratic Party and a close friend of Bill Clinton) immediately stepped down as its CEO, with a personal fortune of $17 billion. In addition to the exchange itself, its subsidiary cryptocurrency trading fund Alameda Research and 130 other partner companies also went bust. The overall shortage of funds ranges from $8 billion to $16 billion. The resource was gone now. On the day of the FTX bankruptcy, Fox News commentator Jesse Watters told his 2.7 million followers that Ukraine had used US aid money and “invested” in FTX, pointing to the existence of a “money laundering” scheme in the interests of the Democratic Party. Watters cited a graph that depicted a circular flow of money that began and ended with President Joe Biden. This is the largest corruption scheme for the theft of crypto assets in Ukraine, but similar cases abound.

On May 9, 2023, the Estonian State Prosecutor’s Office opened a criminal case against the Slava Ukraini NGO (Glory to Ukraine NGO). The probe was initiated by the prosecutor’s office in early May to investigate the use of funds collected from donors to support the activities of Glory to Ukraine, while a separate investigation is underway in Ukraine against Glory to Ukraine’s partners.

Another participant in the “gray crypt business” was the Azov Foundation. According to the report, there were three major charitable actions held in support of Azov. The “Support Azov” organization has received over $23,000 in cryptocurrencies to help Azov fighters.
The Azov-linked volunteer battalion, the Boatsman Boys, received just under $6,000 in cryptocurrency donations.

The website contains information about the amount of receipts, which at first glance tallies with the Elliptic report, save for manipulations with crypto wallet addresses.

Before address change:

After address change:

The addresses of crypto wallets on the “Support AZOV” website have been changed and can be changed again at any time at the request of the Azov Foundation’s management, after which it would be impossible to know where the crypto donations actually went. Such manipulations allow one to redirect funds to another crypto wallet, hide the fact of fraud and complicate the collection of analytics by the regulatory authority. If you look at the amount of proceeds, it becomes clear that the $23,000 mentioned in the Elliptic report is dwarfed by the real amount of donated money collected by the Azov management. Fees are collected from different accounts, speaking on behalf of different persons, masking addresses of crypto wallets and wiping up traces.

The NBU and other regulatory authorities are unable to assess the real flow of cryptocurrency going through the foundations, personal wallets of representatives of these foundations, of leaders of Azov and of fighters. Part of the money goes to the upkeep of the organizations, and the rest ends up in the personal wallets of specific individuals: the commanders of the “Azov” brigade set up the Azov One NGO, which organizes fundraising, covers the priority needs of the unit and cooperates with Azov’s partner foundations, as per their website. In fact, they do not buy anything, and simply store the crypt.

There is reason to believe that Ukrainian recipients spend crypto donations by naive citizens at their own discretion, organizing a well-oiled crypto business. It is no secret that Ukrainian elites, government officials and battalion commanders roll in dough, their children live and study abroad, their wives dress in high-end fashion houses clothes and they buy expensive real estate. It looks like no matter how much Western partners urge Kyiv to root out corruption, it remains very much alive and kicking.

Slavisha Batko Milacic is an historian and analyst from Montenegro.

Geopolitics of Lithium

Among critical minerals, some occupy a special place. For example, it is difficult to imagine the normal functioning of a large metropolitan city without salt. In the Middle Ages, many countries experienced so-called salt riots due to salt shortages or tax increases. The situation is similar with petroleum products, on which the transportation system of any state is heavily dependent. Some rare-earth or other metals are not so prominent in the list of critical resources, but they are necessary for the production and uninterrupted operation of a country’s infrastructure system.

For example, we use lithium-ion batteries in our daily lives. From ordinary “finger” batteries, cell phones, laptops and home appliances to electric vehicles, drones and specialty equipment like submarines—and all of these devices require lithium. Lithium and its derivatives have other industrial uses as well. Lithium carbonate (Li2CO3) is used in the production of glass and ceramics, as well as in pharmaceuticals. Lithium chloride (LiCl) is used in the air conditioning industry, while lithium hydroxide (LiOH) is now the preferred cathode material for lithium-ion batteries in electric vehicles.

Lithium is valuable as a recharging material because it stores more energy in proportion to its weight than other battery materials.

It is a toxic metal that is difficult to mine (100 tons of ore must be processed to produce one ton of lithium) and to dispose of, but nevertheless, its reserves are being hunted around the world.

Globally, lithium is considered to be a strategic but not scarce resource. It occurs in nature in a wide range of forms, mostly in low concentrations. Today, it is economically feasible to extract lithium from two sources—brines (continental and geothermal), or “hard rock” (pegmatites, hectorite and jadarite). Brines account for approximately 50% of the world’s reserves (source).

Manufacturers use more than 160,000 tons of this material annually. Global lithium consumption is expected to be at least 200,000 tons by 2025, and is expected to grow nearly 10-fold further over the next decade.

But there is a geographical nuance—its deposits are limited to a small number of countries, so the issues of its extraction automatically acquire geopolitical significance.

According to the U.S. Geological Survey (USGS), the largest lithium resources in the world as of last year were located in Bolivia, where they were estimated at 21 million tons, Argentina (19 million tons), Chile (9.8 million tons), the United States (9.1 million tons), Australia (7.3 million tons), and China (5.1 million tons). The Service estimates Russia’s projected lithium reserves at 1 million tons (source).

Bolivia, Argentina and Chile represent the so-called lithium triangle. It is considered to be of increasing strategic importance as countries seek to gain a technological advantage by controlling the lithium industry. This triangle uses the vaporization method, so the cost of lithium there is lower than in mining. It is estimated that the lithium triangle in the salt marshes of Bolivia, Chile and Argentina accounted for 56% of global resources, 52% of global reserves and one-third of global production in 2021.

In Chile, lithium is considered a strategic resource. Decree No. 2886 (Ministerio de Minería, 1979) declared it reserved for the state and excluded it from all mining concession regimes, except for those entities that held mining concessions (pertenecias mineras) prior to 1979. As a result, two private companies have been mining lithium for more than 25 years—the U.S. company Albemarle and Chemical & Mining Co. of Chile Inc, both operating in concession areas of the Chilean Corporation for the Development of Production (CORFO) in the Atacama Salt Plain.

In Argentina, the situation is somewhat different. US companies have been mining lithium there for more than 20 years, and now Canadian, Australian, Chinese and Japanese companies have joined them. Over the past decade, Argentina has been the most dynamic country in terms of lithium production expansion, with some 38 projects in various stages of preliminary implementation. Nevertheless, the national government does not consider lithium a strategic resource (with the exception of the province of Jujuy, which has declared it strategic). As with any other mining activity, the regulatory framework is based on the National Constitution, the Mining Code and the Mining Law. The management of mining resources is delegated to the provinces. The federal framework grants the provinces the rights to determine concessions to private and public entities and the norms for regulating mining activities within their jurisdiction.

To date, there are two main production sites in Argentina:

• a public-private partnership in Salar de Olaroz (Jujuy Province) operated by Sales de Jujuy S.A., owned by Orocobre Limited, in a joint venture with Toyota Tsusho Corporation (TTC) and Jujuy Energía y Minería Sociedad del Estado (JEMSE—a company owned by the Jujuy Provincial Government);
• a private company (Minera del Altiplano S.A.), owned by Livent (formerly FMC Corporation) operating in Salar del Hombre Muerto (Catamarca province).

Bolivia is a special case; although it has the world’s largest lithium deposit, it has not entered the global lithium market in any meaningful way. The governance structure defines lithium’s strategic status and centralized state management through the state-owned mining company, Yacimientos del Litio Boliviano (YLB). For over a decade, with a public investment of approximately US $1 billion, the government strategy has focused on building infrastructure for the LIB value chain, but has had extremely modest results in terms of lithium carbonate production.

Only during the industrialization phase of cathode and battery production is space created for public-private partnerships, with the government retaining at least 55% of net profits. In December 2018, YLB formally registered a joint venture (YLB-ACISA) with Germany’s ACI Systems GmbH for a lithium hydroxide industrial complex, but the Evo Morales government canceled the contract amid protests in Potosí against the terms of the agreement. Earlier that year, the Morales government also signed a joint venture agreement with Chinese consortium Xinjiang TBEA Group-Baocheng to explore and extract resources in the Coipas and Pastos Grandes salt marshes.

Recently, Bolivian state-owned YLB and China’s CATL BRUNP & CMOC (CBC) signed an agreement under which the Bolivian side will oversee the entire soft metal industrialization process, from mining to commercialization. The Chinese partners will invest more than $1 billion in the costs of commissioning and construction of industrial complexes.

The agreement includes the creation of two industrial complexes with direct lithium extraction technology in Potosí and Oruro.

Brazilian professor Bruno Lima believes that “if other countries copy Bolivia’s model of industrializing lithium production and enter into profitable partnerships for technology transfer, they will succeed.”

In his opinion, “[Bolivia] will not limit itself to selling to the international market, but will create a complete cycle. Part of the lithium is sold to the international market, such as China, but the other part goes to processing, transfer and technological development.”

He adds, however, that “if these operations were conducted outside the dollar standard, that would be ideal. We are really talking about a qualitative leap for Latin American presence in the market and in the international system” (source).

It should be noted that Bolivia deliberately keeps US companies out of Bolivia, understanding their intentions and goals. In 2022, the US company EnergyX was disqualified there. The aforementioned German ACI has also run into problems.

Since in the case of ACI, the key decision involved recognizing the rights of local communities to benefits and compensation in their territories, as well as the risk of environmental damage, these interrelated trends will only intensify.

However, environmental aspects are directly related to lithium extraction in one way or another, regardless of who is involved. While there is a wide range of lithium extraction methods available, the main ones, including hard rock mining and the extraction of lithium from seawater, require large amounts of energy. These processes disrupt natural groundwater levels, local biodiversity and the ecosystems of nearby communities. For example, nickel mining and refining practices have already resulted in documented damage to freshwater and marine ecosystems in Australia, the Philippines, Indonesia, Papua New Guinea and New Caledonia.

Pollution from this work not only impacts oceans and ecosystems, but also creates environmental hazards throughout the life cycle of batteries, from the extraction of raw materials for their production to the disposal of old batteries in landfills, creating health risks for workers and impacting nearby communities due to the toxicity of heavy metals such as lithium (source).

Therefore, environmental requirements will become stricter and new extraction and recycling technologies will be welcomed.

It would seem that seawater could solve the problems of supplying lithium to markets, because the world’s oceans contain 180 billion tons of lithium. But its percentage lithium content is about 0.2 parts per million. Existing evaporation technologies are time-consuming and require special areas, so they are not economically feasible.

A new approach is to create special electrodes that act more selectively. Such experiments are being conducted at Stanford University, where the electrode is coated with a thin layer of titanium dioxide as a barrier. Since lithium ions are smaller than sodium ions, it is easier for them to squeeze through the multilayer electrode. In addition, the way in which the electrical voltage is controlled has been changed to improve efficiency, although this method is still quite expensive (source).

In terms of corporate structure, the world’s lithium suppliers are five major companies—Albemarle (USA), Ganfeng (China), SQM (Chile), Tianqi (China) and Livent Corp (USA) (source).

Battery production has a slightly different geography. In 2021, Australia, Chile, and China accounted for 94% of global lithium-ion battery production. But in recent years, Chile has lost its leading role in the global lithium market as Australia has rapidly expanded its hard rock mining operations.

It should be noted that lithium is fully recyclable, so it is not a consumable commodity like oil. Accordingly, even if lithium batteries do begin to significantly displace internal combustion engines, we will not necessarily see a “lithium policy” replace today’s “oil policy.” Nevertheless, if demand for electric vehicles increases dramatically in the coming years (projected to reach $985 billion by 2027), countries with large lithium reserves will wield far more power than they have in today’s economic and geopolitical hierarchy (source).

Because of this, the U.S. fears that “because lithium supply chains will be critical to the future of technology and clean energy, lithium will play an important role in the competition between the United States and its rivals, mainly China, in the coming years. China currently leads the world in electric vehicle production. This is largely due to the fact that it has acquired 55% of the chemical lithium reserves needed for electric car batteries, mainly through its early investments in major mining operations in Australia.” (source).

The EU is also concerned about its dependence on lithium supplies. In the upstream segment of the value chain, Chile provides more than 70% of the EU’s lithium supply. Since other minerals are also needed to make batteries, the dependence extends to other countries in the big picture.

The Democratic Republic of Congo supplies more than 60% of the cobalt processed in the EU. China, for its part, meets about half of the Union’s total demand for natural graphite. Moreover, the EU’s international dependence in the low-carbon sector also stems from the fact that its own battery cell production capacity is still relatively weak. In 2020, EU battery production accounted for just 9% of global battery production (source).

It is only natural that the EU is trying to prioritize high-risk investments in battery designs that are less dependent on scarce natural resources such as cobalt, nickel or lithium.

Geopolitical tensions and possible lithium supply disruptions are not only being highlighted in the West.

In May 2023, Asia Times noted that the top three producing countries process more than 80% of the most important minerals used in lithium batteries. China dominates the processing of almost all minerals, holding more than 50% of the total market share, with the exception of nickel and copper, of which China controls 35% and 40% respectively.

Technology-intensive industries rely on interdependencies between countries with different endowments. This works well during periods of geopolitical stability and cooperation but the high concentration of processing in the lithium battery supply chain means that it is vulnerable to disruption by war, global pandemics, natural disasters or geopolitical tensions.

Australia has the world’s largest battery-grade lithium deposits, and export revenues have skyrocketed, with lithium becoming Australia’s sixth most valuable commodity export. Australia needs to consider how to profit from the boom and what role it can play in the lithium race.

Australia and China complement each other in this supply chain. Australia supplies 46% of lithium chemicals and a large proportion goes to Chinese processing facilities and then to Chinese battery and EV makers.

China produces 60% of the world’s lithium products and 75% of all lithium-ion batteries, primarily powering its rapidly growing EV market, which accounts for 60% of the world’s total.

Australia moving up the value chain would require investment and technology, and bear a significant environmental cost. Without scale advantages, Australian-made products will fail to achieve global competitiveness. Australia must consider long-term industrial policies that enable the country to play a role in fighting against climate change rather than being caught between the superpower competition.

Australia is entangled in the superpower competition between China and the United States over the control of lithium.” (source).

And the US still lags behind China in lithium mining and battery production. An estimated 3.6% of the world’s lithium reserves are concentrated there, with a single lithium mine in Nevada (although others are planned), and only 2.1% of the world’s lithium is processed.

But in the 1990s, the U.S. was the leader in lithium production. The industry was undermined by a combination of cheaper production overseas, strict environmental regulations and the empowerment of indigenous peoples, who often own property where there are lithium mines. The big push for clean technology has changed U.S. priorities—unless the United States develops domestic sources of lithium or secures additional sources abroad, it faces a threat to its national security as China expands its own access to the resource (source).

The current situation also raises the issue of control over lithium supplies, as the West is trying to impose all sorts of sanctions on unwanted states that pursue independent policies. And, according to the author of the RAND Corporation, it is not so easy to do this. “The special requirements for suppliers of critical minerals to receive credit for clean vehicles are designed to encourage increased production outside of China, which dominates global supply chains for electric vehicle batteries. A certain percentage of the minerals must be domestic or from a country with which the United States has a free trade agreement, and none can come from a “foreign interested party,” which includes China. The dominance of any one source of supply leaves the rest of the world vulnerable to disruption, and the fact that that source is China only heightens the fears of the United States and its allies” (source).

Another RAND publication noted that China has a huge share of lithium-ion battery production. Today, it produces 91% and 78% of all battery anodes and cathodes, respectively, and 70% of the world’s battery production. China has also demonstrated that it is willing to restrict exports of critical minerals, such as rare earth elements, to coerce trading partners. Such export restrictions could negatively impact the entire U.S. economy and, in particular, the growing market for electric vehicles. But they could also undermine the defense industry’s ability to support the U.S. military (source).

After all, there are certain indicators by which technological superiority in geopolitical competition can be determined. And in our case, gigafactories are a key indicator of who and where will dominate electric vehicle platform technology (and beyond). The term, originally coined by Tesla, refers to large-scale electric battery manufacturing capacity (for electric vehicles and energy storage). Capacity is measured in gigawatt hours (GWh). The relevance of these gigafactories has increased dramatically over time as this resource has become a major source of foreign direct investment and has become necessary to support battery-related industries, vehicle manufacturers, and supply chains. According to the Automotive database (2021), Europe has only 25% of gigafactories, while Asia has 71% (China owns 69% of capacity). As China leads in gigafactory capacity at the speed and scale required by global demand, gigafactories could become a “geopolitical hotspot” beyond purely geographic concentration of infrastructure (source).

At the same time, China’s expansion into other markets is noticeable. For example, China’s Contemporary Amperex Technology Co. Limited (CATL) not only had 22% of the total global gigafactory capacity of 500 GWh in 2021, but is now expanding its operations in Europe and is likely to increase its presence in the United States and other key regions.

In 2022, there are 92 gigafactories in Asia, 23 in Europe, and 13 in North America. So the percentages are as follows – 72, 18 and 10. Paradoxically, Latin America, which accounts for the bulk of lithium production, has no gigafactories at all. Neither does Africa.

As for Russia, the lithium boom is just beginning. During SPIEF-2023, an agreement was signed on the development of the Kolmozersky lithium deposit in the Murmansk region. The development of the deposit will make it possible to create Russia’s first production of lithium-containing raw materials, which will make it possible to supply advanced Russian enterprises with lithium. Among them is a factory for the production of lithium-ion batteries in the Kaliningrad Region, which is scheduled to be launched in 2025. The deposit itself contains about 19% of Russia’s lithium reserves. Its ore also contains valuable strategic materials—beryllium, niobium and tantalum (source).

We can only hope that the experience of other countries will be taken into account and Russia will have at least a little more domestic gigafactories.

Leonid Savin is Editor-in-Chief of the Geopolitika.ru Analytical Center, General Director of the Cultural and Territorial Spaces Monitoring and Forecasting Foundation and Head of the International Eurasia Movement Administration. This article appears through the kind courtesy of Geopolitika.

We Don’t Need to Save the EU. We Need to Save Ourselves from the EU!

The European Union appears as the negation of the history of the European continent, which over time has always been an archipelago of cultural and linguistic particularities and pluralities; the same ones that, following a topos that tenaciously runs from Machiavelli to the Montesquieu of The Spirit of the Laws, constitute the specific difference that distinguishes the Europe of multiple states and freedoms in the plural from Asian “despotism.”

From this perspective, the European Union is nothing more than the post-1989 implementation of the globalization project, based on the autocratic primacy of the market, on the homologation of humanity under the banner of the commodity form and on the moralistic imperialism of Atlantist traction deployed against governments not yet globalized. Thus understood, the European Union is the implementation in the old continent of the McDonaldization of society described by George Ritzer.

This project—which in essence is posed as the “suicide of Europe”—aims at the integral Americanization of the European space through the unconditional imposition of the transoceanic subculture of unlimited consumption, the deconstruction of the social model of economy with state intervention, the individualistic privatization of society, and the eradication of any identity other than the free-market creed of the financialized economy.

The repeatedly claimed possibility of a “sovereign Europe” cannot become a reality through the European Union which, as it is designed, is governed by the double fundamentum of the de-sovereignization of the economy and socio-political Americanization. In this light, the various theses of those—such as Antonio Negri and Etienne Balibar, among others—who have sought to see in the European Union a means of developing an alternative democratic policy to American global neoliberalism (it was precisely in order to imitate and implement it that the so-called “European integration” took place under the tutelage of the ECB) reveal its true nature as a mirage.

By its essence, the European Union as “passive revolution” (Gramsci), as “neutralization” (Schmitt) and as the triumph of capital after the strife of the twentieth century, is presented as the victory of the transatlantic monocultural project of a Europe inserted into the global market without borders, without nations, without traditions, without cultures, without limitations, in which the intrinsic reification of “the American way of life” is destined to be replicated also in a new “European way of life.”

Depoliticization, mediated by the annihilation of democratic sovereign states, advances in parallel with the Americanization of the old continent, that is to say, with the imposition on the peoples of Europe of the atomized model of unlimited competitiveness, typical of the imperialist thalassocracy of the Stars and Stripes of the Atlantic Leviathan.

There is nothing strange, then, that what Hegel, in his Lectures on the Philosophy of History, related to the American reality, where the state, already at that time, acted as “an external institution for the protection of property” and moved by the purpose of fostering “a society having its origin in individuals understood as atoms” similar and competitive, is increasingly occurring in the old continent.

The secret of the “European dictatorship” is hidden in the private and transnational currency called the Euro—true and authentic pillar of liberalism as a method of government—which makes devaluations and public investments impossible, with the obvious consequence that the only way to recover competitiveness is the “internal devaluation;” that is, the devaluation of wages (a measure entirely consistent with the massacre of classes typical of the post-1989 scenario). The latter, complemented by the persistent policies developed under the slogan of cuts in public spending and “waste”—that is how social rights are contemptuously apostrophized in the liberal neo-liberal language—provokes social genocides to the detriment of the peoples, the workers and the middleclass, and to the benefit of the unintelligent expertocracy and the unelected technocrats coming from the mists of Brussels and the International Monetary Fund.

Once again, far from being a neutral mediator of commercial exchange, the Euro acts as a method of liberal government; or, if Luciano Gallino’s image is preferred, as a “straitjacket” to prevent social policies in favor of the classes that live from their work. In other words, it emerges as a deflationary mechanism devised ad hoc to prevent nation-states from financing themselves by minting money or issuing bonds guaranteed by a State Bank—weighed down by such restrictions, states are forced to bow to the market, de facto recognizing its superiority.

As Carlo Galli states, “the Euro was an objective openly pursued by the elites as an ‘external support’ to limit the economic sovereignty of Parliament, preventing ‘social drift.'” Its aim is, in all respects, the destruction of the old European model of state-moderated capitalism, replaced by the American type of savage privatizations and the suppression of any residue of the welfare state. Herein lies the essence of the Euro as a “threat to the future of Europe,” according to Joseph Stiglitz’s icastic (and unequivocal) formula.

In this respect, it is not at all surprising that among the most fervent supporters of the subtraction of the monopoly of currency from the national states appears von Hayek, the tutelary numen of liberalism, the champion of the ruling class. The latter, in view of the triumph of the Market over the State, of Capital over Labor and of Economics over Politics, expressly proposes the denationalization of currency. More specifically, he suggests “withdrawing from the state the monopoly on currency and replacing it by a competition between private banks supplying money in exactly the same way as any other enterprise supplies goods or services.”

Hayek’s teleological orientation is well known. It coincides with the neutralization of democratic control of the capitalist economy by the state. In a rigorously syllogistic way, if it is necessary to annul democratic control, and the latter is based on the sovereignty of the state, which in turn implies national sovereignty over the currency as its essential moment, the consequence is very clear: it is necessary to de-sovereignize the currency in order to be able, in this way, to proceed to the de-democratization of control over the economy.

A miniature paradigm of the liberal open society, the European Union has turned into reality this syllogism developed, moreover with commendable clarity, by von Hayek. And in order to conceal its own profoundly anti-democratic status (marktkonforme Demokratie, according to the oxymoronic expression used by the German ex-Chancellor Angela Merkel), it must continually devise, using the intellectual class mediating consensus, formulas and narratives to reassure the European peoples and the dominated classes, so that the latter, more solito, will meekly accept their own subordination.

In this, the rhetoric of the everlasting fight against red and black totalitarianisms, elevated by the order of discourse to ever latent threats to the “democratic” space of the European Union as totalitarian management, plays a leading role—as a non plus ultra of mass distraction: with the not too subtle consequence of the recurrent appeal to the logical fallacy, hegemonic in the public discourse (journalistic, academic, television and radio), according to which any critic of the European integration would be, by the mere fact of being so, a Nazi in pectore. Applying Orwell’s prophecy, “the past is whatever the Party chooses to make it” for the sake of the sanctification of the existing order.

To put this whole process into practice, the new mental order, managed by the administrators of consensus and the masters of discourse, is essential—with the extravagant “verbal hygiene” they impose, it becomes impossible even to name the contradictions that surface everywhere. Following the teachings of Jacques Ellul’s Histoire de la propagande, “propaganda must be total” and must employ all the means at its disposal, assuming also the cynical assertion, difficult to refute, that it is always easier to deceive man than to make him understand that he has been deceived.

As Gustave Le Bon had already shown in his The Crowd: A Study of the Popular Mind (1895)—initiating a line of thought destined to be developed by Freud in Group Psychology and the Analysis of the Ego (1921)—the power of words does not depend on their meaning, but on the images they are capable of arousing. They dispense the user from the fatigue of reflection and, with a limited stock of formulas, prefigure the order of thought, discourse and imagination.

Le Bon ventures to argue that the men of power rename with popular, or at any rate inoffensive, names, realities that with their original denominations were detested by the multitudes. And he insists on the premises of repetition and contagion. On the one hand, infinitely repeated, falsehood passes for truth and infiltrates the minds of the masses, reshaping them. On the other hand, ideas exert a power of contagion over the masses, analogous to that of “microbes”—the image is Le Bon’s. These considerations can, by extension, be applied to the new mental order of the politically correct and ethically corrupt single thought, which has turned the European Union into a monotheistic religion—the Europeanist cosmopolitanism which, with its specific “anti-religion of the single currency,” considers any possible return to the state dimension a “capital sin.” With Nietzsche’s syntax, through the integral mediatization of the real managed by the hegemonic pole, “the real world ended up becoming a fable” (die wahre Welt endlich zur Fabel wurde).

In this way transformed, thanks to the intellectual priesthood, into an unreflective automatism of thought, even the welfare function, developed during the late twentieth century by the sovereign and democratic national state, which was the concrete arena in which the class conflict took place and the instrument through which social policies for the benefit of the working classes were made possible, is irresponsibly omitted once again. Also forgotten is the fact that, paradoxical as it may seem at first sight, the intuition of an integration of the European nations within the framework of a supranational union of German traction was conceived, in one of its earliest and most emphatic formulations, by the National Socialists themselves; that is, by the authors of the totalitarianism from which, by the irony of history, the Eurocrats in Brussels claim to protect the old continent.

In 1943, for example, Hitler himself aspired to overcome the disorder of the divided small nations which is what he expressly defined as “the anachronistic division of Europe into individual states,” in order to bring about the creation of the Grossraum of a united Europe with German hegemony. And even Hermann Göring, president of the Reichstag, had presented, in 1940, a plan for “the large-scale economic unification of Europe;” and this “with a view to the creation of a European monetary union” (sic!).

Naturally, the above is not intended to support the absurd and unfounded thesis that the Brussels bureaucrats are today the direct continuators of the Nazi project. They are, sic et simpliciter, the leaders of the new glamorous totalitarianism of the markets, concentrated on the figure of economic violence. It is simply a matter of challenging the locus communis according to which anyone who does not adhere, unthinkingly and immediately, to the ideal of European integration under the sign of the single currency is automatically considered a Nazi.

As we have already stressed on other occasions, the rejection of the European Union model starts, at least in our case, from the Marxian perspective of the emancipation of the universal human from capitalist contradictions, of which the European Union itself constitutes one of its maximum expressions.

Diego Fusaro is professor of History of Philosophy at the IASSP in Milan (Institute for Advanced Strategic and Political Studies) where he is also scientific director. He is a scholar of the Philosophy of History, specializing in the thought of Fichte, Hegel, and Marx. His interest is oriented towards German idealism, its precursors (Spinoza) and its followers (Marx), with a particular emphasis on Italian thought (Gramsci or Gentile, among others). he is the author of many books, including Fichte and the Vocation of the Intellectual, The Place of Possibility: Toward a New Philosophy of Praxis, and Marx, again!: The Spectre Returns. [This article appears courtesy of Posmodernia].

Featured: Deserter, by Tomasz Alen Kopera; painted in 2004.

Ukraine Falls into the Hands of Blackrock

In May 2023 the Government of Ukraine and Vice-President Philipp Hildebrand of the US company BlackRock Financial Market Advisory signed an agreement, on the creation of the Ukrainian Development Fund (UDF), a financial institution for the reconstruction of the country.

Together with Vanguard, Black-Rock is the world’s leading firm. Both investment funds manage a total of 17 trillion (in the European sense of the term, i.e., $17 trillion), a sum equivalent to the entire GDP of the European Union.

The collaboration of Zelensky’s government with BlackRock began in September 2022, when The New York Times reported on the negotiations of the Ukrainian president with the head of the company, Larry Fink, on the creation of a certain reconstruction fund.

The signing parties followed the provisions of the Memorandum of Understanding (MoU) signed in November 2022 by the Ministry of Economy of Ukraine and BlackRock. Specifically, the fund will mobilize capital to carry out the reconstruction of the country focusing on sectors such as energy, infrastructure, agriculture, industry and information technology (IT).

Some experts believe that Kiev intends to repay its debts in this way, making Ukraine the property of transnational capital. In reality, it will put an end to the total sale of the Ukrainian state’s main assets: from its black lands to its electricity grids, including international aid funds. The list of Ukrainian assets includes securities of the following companies: Metinvest, DTEK (energy), MJP (agriculture), Naftogaz, Ukrainian Railways, Ukravtodor and Ukrenergo.

It will also manage the Ukrainian public debt which, according to the country’s Ministry of Finance, at the end of March reached $119.9 billion, or 78% of its GDP at the end of 2022.

As Vladimir Vasilyev points out, BlackRock’s involvement seems logical:

In the event of Ukraine’s bankruptcy, the problem of debt servicing and management of remaining assets will arise, and then BlackRock’s functions will come to the fore. At present, reliance on financial leverage is probably the most effective method of external management. This practice even served as the basis for the Marshall Plan in terms of Germany’s debt obligations.

BlackRock, Inc. is the first company in the world to lead a new, more monopolistic and long-term capitalism. Its value as of January 1, 2023 reached 8.594 trillion dollars, which is approximately equivalent to the sum of the GDP of Germany and France.

BlackRock is an effect of the tendencies of capitalism: tendency to capital accumulation, financialization and monopoly. It was selected by the US Federal Reserve (central bank) for the financial stimulus program and to manage the system of bailouts—which means QE4 (quantitative easing) and to “help” the Fed to buy billions of dollars in bonds and securities to sustain the companies that dominate the world capitalist economy, as well as to “stabilize the bond market,” one of the most important instruments of monetary policy.

“Quantitative easing” is the label used when the Federal Reserve buys debt directly issued by the U.S. Treasury or mortgage-backed debt that is secured in some way against default by the federal government.

This is not the only peculiarity, however, as BlackRock wields immense political influence around the world. It is the leading creditor of the debt of the Global South—for example, its role in the Argentine debt crisis and its heavy hand in renegotiating it.

Not only is it a shareholder in major financial and pharmaceutical companies, military-industrial giants and media corporations, former top BlackRock officials often move on to positions in the White House. In the Joe Biden administration, there are now three: Deputy Treasury Secretary Wally Adeyemo, Treasury’s senior advisor on economic issues related to Russia and Ukraine, Eric van Nostrand, and Mike Pyle, senior economic advisor to Vice President Kamala Harris.

Brian Deese served as director of the U.S. National Economic Council until February 2023. Thomas Donilon, president of BlackRock’s research arm, was a longtime national security advisor to Barack Obama, while his brother Mike was chief strategist on Joe Biden’s presidential campaign and was later named a senior advisor in his administration. BlackRock’s senior executives include several retired CIA officers; and the company itself finances the In-Q-Tel venture capital fund set up by the Central Intelligence Agency.

Corruption in Ukraine Matters

According to reports from Kiev, the implementation of the agreement involves officials accused of corruption on several occasions: the former head of the National Bank of Ukraine, Valeria Gontareva, the former head of the Ministry of Finance of Ukraine (a US citizen), Natalia Yaresko and, of course, the promoter of George Soros’ interests in Ukraine, Viktor Pinchuk, a billionaire who has managed to avoid “de-oligarchization,” son-in-law of the second Ukrainian president, Leonid Kuchma.

The piece that completes the puzzle is the origin of the money with which the Ukrainian government will pay to BlackRock for advisory service—whose globalist agenda is not that of the Missionaries of Charity. The answer—from the taxes of the Western democracies: from the American taxpayers, who already in 2022 have defrayed the Ukrainian military effort by 13 billion dollars, and from the increase of military spending to 2% of GDP in the general budgets of the EU countries.

Juan López Páez writes from Spain. This article appears through the kind courtesy of El Manifiesto.

The West is Dancing on a Volcano—and Turning up the Volume

France is in a bad way: inflation is out of control, credit rates are soaring, real estate is at a standstill, and, as if to rub our noses in our negligence, our financial rating has just been downgraded to AA- by a major American agency. This downgrade is not anecdotal. It reflects the reality of the deterioration of our public accounts, further increases our dependence on the United States and the threat of a default on our abysmal debt, and deepens our credibility deficit, and therefore our international usefulness. This warning shot can only paralyze even more our residual capacity to push the boundaries, by using a discourse of reason and intelligence in the face of the disaster of the Western attitude in the conflict in Ukraine. I will be told that this is a false problem because we will still have to have the courage.

In the United States, the insanity of the self-enclosure of American neoconservatives in a permanent military escalation against Moscow has precipitated the total destruction of the Ukrainian state and territory and increased the risk of a slippery slope, threatening the whole of Europe. However, the open hatred of Russia, the successful daydream of its annihilation and dismemberment are openly expressed.

Western media, confined in ignorance and arrogance, have become the pathetic echo chambers of a delirious propaganda, and have no credibility. We have returned to the worst hours of McCarthyism or worse, of fascism of thought, of slander and denunciation. This bouquet of indignity stinks, but it is constantly thrown in our faces, certainly in an increasingly ridiculous and desperate way—because the curtain and the masks are falling before recalcitrant reality.

However, American rage and now panic still seek to perpetuate the fantasy of a coming “victory,” the contours of which we have obviously never bothered to define. What does it mean to “win” the war in Ukraine? No Clue. No vision in this area. As for winning the peace, we don’t want it. What a horror! How to make peace with Vladimir Putin?!!! it seems impossible to voluntary hemiplegics stuck in their sandbox rhetoric who only think of humiliating a “systemic enemy” and are doing rain dances (or rather against the rain and the mud that make their last-chance tanks get stuck) to ward off the inevitable. It is thus the headlong rush in the inexpiable hatred of the Russian… until the last Ukrainian.

The dizziness is so great in the face of the abyss that we no longer know what to do but to press the gas pedal of the military and strategic rout and sink into a hateful and hopeless insanity. This hatred is spreading and infusing everywhere in Europe, especially among our vassalized and/or stipendiary “elites,” who are also caught up in this tragic trap that they pretend to ignore. However, the military fiasco has been unequivocal for months already. Even the “Mainstream media” are beginning, by order or via opportune leaks, to let the implacable truth filter through—about the military reality on the ground, about the chain of desertions of the unfortunate young Ukrainians picked up in the streets and thrown by force into the “Russian meat grinder,” about the real losses, about the structural incapacity of the NATO forces to provide Ukraine with the quantity, rhythm and quality to be able to pretend to withhold the shock, and even less to reverse the balance of power against Russia.

Certainly, in the Pentagon as well as among the European staffs, it has been known for months that the die is cast and the bet is lost. Only the Poles and the Baltic states are left to push the issue. But they don’t want to wake up, and they continue to flood Ukraine with weapons (most of them diverted) and heaps of money to ensure the “great counter-offensive”—in summer… or in autumn—with the appearance of a last stand, the anticipated failure of which will serve to demonstrate that “the camp of the Good” has done everything it could, but that Ukraine has not been able to defeat Russia (as if it could!) and that it is necessary “to get rid of Russia”) and that “to save Ukraine and its people” (amply sacrificed for two years) we must finally resolve to negotiate with Moscow. No doubt, not with a president Zelensky charred by his extremism and more and more threatened by his ultra-right entourage with openly fascist overtones. Our moral dereliction is total but here again, we deny it. We support at arm’s length (since 2014), with an unabashed cynicism, a clique at the antipodes of the values we crow about, to foment and lead this superfluous “proxy war.”

Unfortunately, it is still the “Neocons” in the White House, the CIA, the NSA and the State Department who are calling the shots in Washington. And they will not admit that Russia has won and will not collapse, either militarily or economically. On the contrary. Its hypersonic weapons are unrivalled at the moment; it has been able to anticipate and avoid the sanctions trap; its economy has held up; its people still overwhelmingly support the military response to the NATO military threat on its borders. Above all, it now makes common cause with China. Admittedly, this is an alliance that is at least apparently unbalanced. But it is a vital alliance, no matter what. A tactical and strategic convergence of interests.

President Xi is rubbing his hands, setting himself up as a substitute pole of financial and political stability and even offering himself as a peacemaker (Iran-Saudi Arabia rapprochement, 12-point plan, etc.). He gathers his new flock, a disparate herd of strays in need of protection who can no longer stand the American Master and his cowboy practices. A massive gathering. No less than 19 countries are now crowding at the door of the BRICS+, a real “counter-G7.” A gigantic integration process is taking shape from this welcomed and variable geographical core, around the Commonwealth of Independent States (CIS), the Eurasian Economic Union (EAEU), the Shanghai Cooperation Organization (SCO), OPEC+ and by extension, the Gulf Cooperation Council (GCC). All of this is for the benefit of China’s Belt and Road Initiative (BRI), the imperative fortification of its Central and West Asian Economic Corridor, but also the International North-South Transport Corridor (INSTC) that will link Russia and Iran to India. The financial instruments of this gigantic integration, the AIIB (Asian Infrastructure Investment Bank) and the Shanghai Petroleum and Natural Gas Exchange, are already very active.

It is tragic but perfectly clear: we are our own gravediggers. It is our pathological anti-Russianism and our warmongering in Ukraine, to provoke Moscow in the hope of bogging it down and separating it from Europe forever, which have accelerated the great seesaw of the world, the emergence of an all-embracing and reassuring multilateral structure capable of bringing down the hegemony of the dollar, and which threaten Europe with an even more serious financial economic crisis than that of 2008.

In France, of course, people are acting as if nothing has happened. We are “surprised” by the downgrading of our financial rating, while all the indicators have been glaring red on both sides of the Atlantic for months already, and the first banking shocks in the United States as well as in Germany and Switzerland were hastily suppressed. Can we avoid a major and systemic crisis by treating it with contempt? This seems doubtful. In any case, the 2024 presidential election in Washington is looking bad for the Democratic camp. Donald Trump may well win again, despite the wall of cases and accusations against him. He has a thick hide. And then, Bill Clinton’s famous 1992 advisor James Carville’s verdict will kick in again: “It’s the economy, stupid!” Americans are not so much concerned about the “unprovoked” aggression of Ukraine or the victory of democracy in the world as they are about their wallets and the increasing fragility of their dollar, whose dominance is eroding at a rapid rate. In its anti-Russian curse, Washington indeed committed a cardinal error by freezing, in a totally arbitrary way, once again, the $300 billion of Russian assets in the spring of 2022. A bad decision. Many nations understood right away that it could be their turn tomorrow. This demonstration of power was the last straw in an already full burden of resentment and fury at Washington’s leonine methods of sanctions and the legal extraterritoriality of “American rules.” This is far more than Russia, Iran or unfortunate Syria, whose ordeal is never ending.

No one can stand this “Rules based World Order” any longer. Everyone has understood that only America decrees these famous “rules” and modifies them according to its own interests. The principles contained in the imperfect United Nations Charter are much more protective. The dollar is no longer what it once was, a guarantee of stability. It now embodies uncertainty and pure domination. Yet international trade cannot do without security and stability. The freezing of Russian assets has given the signal for a chain of defiance in many countries, which have understood that they must now protect themselves from Washington’s dictates and therefore look to the new Sino-Russian pole. Not to align themselves, but to balance their dependencies according to subjects or sectors. This is the era of “poly-alignment”—that is, the end of Cold War-style alignment and the return to grace of non-alignment—of which France should know how to be the leader.

The figures are indisputable: the dollar’s share of global reserves has fallen from 73% in 2001 to 55% in 2021 and—47% in 2022. The acceleration over the last 20 years has been considerable. Without an urgent correction, which presupposes a drastic change of foot on the part of the United States in its behavior towards the rest of the world, the fall is likely to continue. 70% of trade between Russia and China is now conducted in Yuan or Rubles. Russia and India trade in rupees, the CIPS (Chinese interbank system which is an alternative to SWIFT) is working at full speed. Total Energies and its Chinese counterpart CNOOC have just signed a gas agreement—in Yuan! Not for love of China. Because it is a question of survival for the company, because pragmatism is better for business than dogmatism, and because ideology is bringing down the Western economy.

The world is multipolar and we can no longer pretend to ignore it. The IMF recognizes that the five BRICS alone contribute 32.1% of world growth, compared to 29.9% for the G7 countries. And there are still 19 candidates waiting to join BRICS. The close cooperation between Moscow and Riyadh is also a bad omen for America. It allows Russia to balance its strategic cooperation with Iran, and strengthens the hand of Vladimir Putin and that of MBS in their battle against Washington on oil prices. The BRICS have on their side all the commodities and natural resources of the world and are now openly challenging the only domination left to the G7 countries—that of finance.

Behind all these facts, there is a “subtext,” a reality that we should grasp before the boomerang hits our European economies too hard and China, beyond its effort to escape, thanks to the BIS, from the American domination of the seas and maritime transport routes to Europe, comes to nurture a more offensive dream of power. This reality is that the current revolution in world geopolitics corresponds to a necessary rebalancing of relations between states. There will be clashes, crises and conflicts in the coming years, but we are in a phase of restoration after the decline of the American hegemon, which has become unsustainable and no longer corresponds to the reality of the geopolitical and geo-economic field of forces.

Our planet needs appeasement, stability, respect, the re-establishment of a form of formal equality and in any case of real equity between its members, large or small. People will say that I am angelic. I think that this is the primary motivation of countries and entire regions of the globe that want to develop and refuse this zero-sum game that America thought it could impose ad vitam aeternam. This is true for the powers of the Middle East (Iran, Syria, Libya), which must emerge from the doldrums, for Africa, which sees vast opportunities in this opening of the game, and for Latin America, which is in the process of relegating the Monroe Doctrine to oblivion. Finally, this is true for Asia itself, which is showing signs of fear and circumspection in the face of the new Chinese target of American bellicosity, provoked by martial declarations (Taiwan). Only the EU seems to live in a bubble—which no longer protects it. It does not seem to see that everything has changed, that it is located on the Eurasian continent which is a land of opportunities towards which it must project itself with vigilance but without fear.

Europe’s future does not lie in a radical break with Russia or an alignment with Beijing. It is not even more in a consented vassalization to Washington, which after Ukraine, already has the ambition to throw NATO (which really has nothing left of a regional defensive alliance) into the waters of the China Sea. What for? To feed the American military-industrial complex? To further the destabilization and fragmentation of the world? How do these objectives serve our national, economic and security interests? Europe must, as I have been saying for years, finally emerge from its strategic infancy and learn to walk with its head held high. Without crutches or leashes.

The American neoconservatives have put not only America but also Europe in great danger. It is high time to put an end to this madness and to hasten the conclusion of a ceasefire in Ukraine and a lasting rebuilding of security in Europe. The Ukrainian people, the security of the whole of Europe, the Western economy and our peoples deserve it. It is in everyone’s interest. What are we waiting for?

Caroline Galactéros is the creator and director of the think tank GéoPragma, which is dedicated to realistic geopolitics. She has a PhD in political science and is seminar head at the Ecole de guerre. She also holds the rank of colonel in the operational reserves of the French army. This article comes to us through the kind courtesy of GéoPragma.

Neoliberalism, Or Governing for the Markets

The foundation of turbo-capitalism is consistent with the neo-liberal vision that Foucault condensed in the formula of government not “of the markets” but “for the markets”. In von Hayek’s language, the government and the state have properly only one task, which is not to “produce certain services or goods for the consumption of citizens, but rather to control that the mechanism regulating the production of goods and services is kept in operation.”

Right and left, subsumed under capital, now share the same neoliberal economic vision, following the banner of free market fundamentalism, consisting in the simultaneous reduction of the state and government to the status of mere servants of the market. Adherence to the dogma of free cannibalism, as the free market might best be defined, is the claim of the economic right that has become so widespread that it has been transfigured into Weltbild, the ubiquitously shared “image of the world.” Essentially it coincides with the “freedom to send each other to ruin”—according to Fichte’s definition in The Closed Commercial State—and with the suppression of any external limitation to the power of the strongest (ius sive potentia).

If Keynesianism can be understood lato sensu as the attempt to place capitalism at the service of the social ends established by politics, it can be rightly affirmed that, on the contrary, neoliberalism marks the historical epochal transition from an economic policy with a Keynesian basis to one with a Hayekian matrix: social justice and market justice will no longer coexist, for the only one that will survive is market justice, converted—in fulfillment of Thrasymachus’ theorem expressed in the Republic (338c)—into “the right of the strongest,” τὸ τοῦ κρείτττονος συμφέρον. According to Hayek’s canonical view, the concept of social justice is, from the neoliberal point of view, a mere “empty and meaningless” ens imaginationis.

As Harvey points out in his Brief History of Neoliberalism (2005), this perspective originates in the right quadrant and particularly in theorists such as von Hayek and von Mises, later finding its operational strongholds in Reagan and Thatcher. The general idea, explains Harvey, is that of a deregulation of the market, judged capable of regulating itself; a deregulation through which the economy becomes superiorem non recognoscens and the de-sovereignized State becomes a mere “policeman” who watches over the markets and defends them when necessary. The neoliberal ordo has reinvented the State with an anti-Keynesian function, as an “armed guard” of the disorderly order of competitiveness and as the ultimate guarantor of the interests of the borderless neoliberal oligarchic bloc and its hegemony.

The neoliberal State intervenes in the economy; but—this is the novelty—it is structured in such a way that it can be managed unidirectionally by the cosmopolitan elite for its own benefit, thanks to the overturning of the relationship between politics and economics; and this, in a range that extends from the bailouts with public money of banks and private companies (with the redefinition of the State as an immense insurance company, issuing policies for the benefit of the cynical wolves of Wall Street) to the police repression of protest movements led by the national-popular Servant against the globalist order (from the G8 of Genoa in 2001, to the French plazas with the yellow vests in 2019).

The disavowal of politics by the market is being completed by the gradual erosion of the basis of legitimacy of the democratic state and its social foundations, which were the result of the Keynesian compromise between the political and the economic: politics must now be subjected to a subordinate role, unable to interfere in the economy, acting exclusively as its servant and its “bodyguard.” This is what we propose to call “the neoliberal depoliticization of the economy.” In its essence, the Keynesian compromise was the delicate device constructed to redistribute wealth from top to bottom and thus guarantee an acceptable balance between democracy and capitalism. Since the end of real socialism and with the absolute subsumption of the left under capital, the gradual decomposition of the welfare state has continued in its main determinations (from pensions to compensation, from pregnancy to illness), all evidently incompatible with the “challenges” of competitiveness without borders, id est, with the requirement to produce as much as possible, at the lowest possible price.

Connected with the vertical reorganization of the balance of power made possible by the triumph of the techno-capitalist paradigm in 1989, de-democratization is based, as noted above, on de-sovereignization and, together, on supra-nationalization, that is, on the displacement of the center of power from the dimension of democratic sovereign states to post-democratic transnational entities. As Costanzo Preve emphasizes, “the ‘public’ political decision is emptied and rendered marginal through its ‘private’ transfer to the great centers of the financial oligarchies,” with the consequent transition from national parliaments to private boards of directors. By this route, which is legitimized as a liberation from the belligerence of national States and which, in reality, aims at the neutralization of democratic sovereignty (which implies citizenship and representation) and the convergent strengthening of the cosmopolitan financial oligarchy “for superfluous peoples,” the disjunction between the devices of popular representation and decisions of a macroeconomic nature is achieved. The economy becomes depoliticized as it is increasingly freed from democratic control, just as politics—or what we continue to call it—becomes “economicized,” insofar as it becomes simple followership of the economic interests of the dominant groups (“business committee of the dominant classes”, to borrow Marx’s formula). L’etat c’est moi is today the formula no longer pronounced by the king, but by the neoliberal oligarchic class as a whole.

The tax reliefs implemented by the liberal governance for the benefit of the lords of capital are also inscribed in this horizon of meaning, among others, in coherence with the undemonstrated motivation, according to which they originate generalized increases in the levels of employment and income. The stateless “hoods of finance”—as Federico Caffè called them—and the borderless capital giants are, in fact, tax evaders according to the law—the e-commerce giants, for example, pay a tax of about 3%–while the middle and working classes suffer a fiscal hyper-pressure that, in fact, represents a permanent expropriation.

From an examination of the balances of power of turbo-capitalism it is clear that “market” not only does not rhyme with “democracy,” but proceeds by emptying its content and eroding its spaces. Herein lies the true essence of the post-1989 “Second Restoration,” as Badiou called it in The Century: victorious capital takes all. And it goes on the offensive, de-sovereignizing the national states as the last bastions of resistance to the domination of the global economy, attacking the middle and working classes and deconstructing the spaces of the still perfectible noucentische democracies.

Increasingly, especially since the 1990s, neoliberal governance has debased electoral democracy in the name of expertise—and that “expertise” to which they refer is never that of the workers and the national-popular masses, but, on the contrary, coincides with the exclusive expertise of the “technicians,” as they are piously called, using an anodyne and falsely super partes term, the bankers and top managers. This was pioneered by Frank Fischer in Technocracy and the Politics of Expertise (1990). According to the order of liberal discourse, the power to decide will not be vested in the sovereign people (which is, after all, another way of saying “democracy”), but in the “committee”—or task force—of “experts,” i.e., bankers and top managers. In other words, beyond the glassy theater of appearances, it is the economy, the market and the ruling class who really decide, and in a way that is anything but democratic. And it is also for this reason that neoliberalism can also be understood as the hijacking of common experience through expertise.

As has already been recalled, even with regard to the aversion to the people as a sovereign subject (crystallized in the category of “populism”), the new left and the neoliberal oligarchic bloc create a system. And such an involution is synthesized in the following formula—since the people do not have the capacity to decide and choose, it is necessary to annul them, so that without the people—and here comes the paradox—democracy can function better. It was as a result of the conclusions drawn in The Crisis of Democracy: Report On the Governability of Democracies, the 1975 study jointly prepared by Michel Crozier, Samuel Huntington and Joji Watanuki, commissioned by the “Trilateral Commission”—that the dominant groups have been searching for new conceptual tools to govern the people by regenerating the “just distance” between above and below, threatened at that stage by the growing democratic participation and by the not yet fully anesthetized critical capacity of the subaltern classes.

The reduction of trade union power, the piloted reduction of popular participation in political life and the spread of generalized apathy, openly appeared as some of the privileged strategies for the vertical readjustment of the balance of power. The very devaluation of the people as an essential part of democratic life has been, to an ever-increasing extent after 1989, the high point of this post-democratic reorganization characteristic of neoliberalism.

Diego Fusaro is professor of History of Philosophy at the IASSP in Milan (Institute for Advanced Strategic and Political Studies) where he is also scientific director. He is a scholar of the Philosophy of History, specializing in the thought of Fichte, Hegel, and Marx. His interest is oriented towards German idealism, its precursors (Spinoza) and its followers (Marx), with a particular emphasis on Italian thought (Gramsci or Gentile, among others). he is the author of many books, including Fichte and the Vocation of the Intellectual, The Place of Possibility: Toward a New Philosophy of Praxis, and Marx, again!: The Spectre Returns. [This article appears courtesy of Posmodernia].

Featured: Capitalism, by Jack Andriano; painted in 2020.

The Second Death of the World of Yesterday

Although it is puerile to try to predict the long-term effects of the Russian military operation in Ukraine, it seems reasonable to presume that we are at the doorstep of a different reality, which will transform international politics to extremes that we can barely intuit, but from which we cannot exclude an “every man for himself” in Europe, as soon as the shock waves of war reach the voter’s pocketbook.

All in all, the lack of unity of Western societies, and the disorientation and lack of purpose conveyed by their leaders contrast with the will to power and international affirmation shown by the new international players, so that, even if we are able to avoid a warlike conflagration that could well be the last, it makes it very difficult to shake off the suspicion that we are crossing the threshold of a new era, which is the second death of the world of yesterday.

Few things symbolized that world better than the dominance of the US dollar, which even in these days of change more than a currency, continues to be the axis around which US commercial, security and cultural affairs revolve at the global level, to the point that there has been a direct cardinality between the financial and military leadership of America at the global level over the last 100 years, but especially since the time of Richard Nixon’s presidency.

In order to understand this better, and at the same time to understand the incentives of the emerging powers to undermine this monetary hegemony, it is necessary to review the chronology that has led to the US dollar having a dominant role in the world economy, for which it is necessary to go back to the Bretton Woods fixed exchange rate system, agreed upon by the Allies, shortly before the end of the Second World War, whereby most Western and assimilated economies fixed their exchange rates to the value of the US dollar, whose value was backed by its parity with US gold reserves, thus putting an end to the Gold Standard, which had been in force since the 19th century, more or less as conceived by David Hume in 1752.

The Bretton Woods system was a transitional formula to allow a certain degree of financial openness at world level, providing greater accessibility and exchange rate certainty to the foreign exchange market, dominated by the large international banks.  However, at the beginning of the 1970s, the system showed its limitations because of the fact that the economic expansion of the incipient globalization demanded more dollars than the US gold reserves could support.

Faced with this situation, the Smithsonian Agreement was put in place, under the umbrella of the OECD, creating a system in which currencies could operate freely, floating within a 2% tolerance margin, both up and down.  In other words, the widespread adoption of fiat money took place, i.e., backed by faith in the stability and strength of the economy of the issuing bank’s country.

For decades, and by far the only one with the depth and liquidity of its capital markets, supported by the robustness of its political institutions and its economic weight, the US dollar became the safe haven currency for all purposes, which led to the enormous US capacity to finance itself through the placement of sovereign bonds—or, in other words, to borrow in a currency whose issue and exchange rate it controls: the US finances its astronomical deficit thanks to the demand for dollars by other countries—in which third countries deposit part of their foreign investment and the central banks their foreign exchange reserves. The US finances its astronomical deficit thanks to the demand for dollars by other countries, in which third countries deposit part of their foreign investment and central banks their foreign exchange reserves. No other nation has this capacity, which enables the US to use financial sanctions (e.g., seizure of dollar-denominated financial assets) against other states asymmetrically, i.e., without the slightest possibility of the affected country responding reciprocally to the punitive measures inflicted on it. Similarly, the United States has at its disposal tools such as the Foreign Assets Control Act of the Treasury Office, with which it imposes sanctions on individuals and legal entities that are not under US jurisdiction, something which, at the very least, calls into consideration questions of legitimacy, sovereignty and legal security.

These sanctions have a scope that goes beyond the mere direct damage caused to the sanctioned party, since their effect extends indirectly as a consequence of the reluctance of third parties to do business with sanctioned entities and countries for fear of being sanctioned or hindered in turn when dealing with US financial entities, which makes the US dollar a powerful instrument of international economic coercion. It is not surprising then that the emerging powers of the new order in the making are struggling to mitigate the US ability to use its monetary muscle as an instrument of foreign policy.

After all, the dominance of the US dollar as a reserve currency is ultimately more a symptom than a cause, since if the central banks of third countries had fewer US dollar assets, the differences in the exchange rate or interest rates of the US dollar would be marginal. Nevertheless, the percentage of national reserves in US dollars and their preponderance in foreign exchange trade has hardly shown any signs of erosion, despite the emergence of the euro and the substantial growth of China in this century, even in spite of the exorbitant US current account and fiscal deficit already mentioned, so that the coercive capacity of the US currency remains intact.

Although attempts by other economic powers to rid themselves of this sword of Damocles have yielded modest results to date (e.g., the creation by France, Germany and the United Kingdom of INSTEX, an alternative to SWIFT, the American electronic banking system; the launch by China of the Shanghai hydrocarbon futures market, the redenomination in euros of the intergovernmental contracts of the partners of the European Union, or the aforementioned purchase and sale agreement without dollars between Russia and India), the realities of the new polycentric world scenario make it inevitable that the relative weight of each of the emerging blocs will achieve strategic autonomy in the financial arena, so that a sustained increase in multilateral efforts to erode the hegemony of the US dollar, and with it, the monopoly of unarmed coercion, is to be expected. All this, in short, will be the epitaph of the prosperity that liberal democracies enjoyed since the end of World War II, being the fruit of the analysis carried out by Western political elites in the face of the communist threat, which concluded that the main threat to liberal democracy was unemployment.

This led to the promotion of common policies orchestrated to keep unemployment levels below 5%. In practice, this meant virtually full employment and a providential welfare state capable of combining Keynesian policies with the beneficial inclusion in the system of the remaining five percent of the population that could not be integrated into the labor market. And it is here that internal contradictions begin to develop.

As argued by Michał Kalecki in the 1940s, once a situation of full employment is reached, the incentives for workers to stay in the same job are drastically reduced, forcing the recruitment and retention of employees to be incentivized through wage increases.

This, in turn, leads companies to raise the prices of their products and services. In other words, creating inflation and contracting debt in order to grow. This is precisely the dynamic into which the advanced democracies entered—the higher the levels of employment, the higher the levels of inflation. This was evident in the 1950s and 1960s, a period in which a scenario was reached in which inequality levels were at historic lows, thanks to the containment of corporate profits and the cushioning of the burden of debt through inflation.

Of course, this induced inflation actually meant a tax on the returns of investors and lenders who saw their returns restricted and thus diminished. To all this, both companies and financial institutions reacted by promoting a new economic paradigm in which full employment took a back seat to the benefit of price stability, which inevitably led to the induction of unemployment as a corrective measure to the inflationary dynamics described above.

This led to strict wage control, resulting in the dominance of a creditor’s market, creating the fiction of inflationary stagnation, coupled with investment-stimulated, debt-based productivity growth that in real terms only benefited the providers of capital. Of course, this model was not sustainable, and so the 2008 crisis forced central banks to turn the printing presses on full blast to inject paper money into an economy that once again suffered from internal contradictions, accentuated by a lack of monetary liquidity. Once again, returns on capital were at rock bottom, but this time due to deflation caused by virtually negative interest rates, placing working people in an unsustainable situation in the face of a precarious and volatile labor market, disproportionate levels of incremental indebtedness and systemic wage restraint.

All this brings us to 2017, a time when citizens inadvertently discovered the power that the vote gives them to kick monetarism in the shin of liberal democracy, a symptom of the disaffection of large sectors of the working population, which suffers from a limited formal education and resents the effects of globalization on their way of life at work, forcing them into a de facto alienation that is easily exploited by populist movements which pick up on the loss of social dignity and respect that is perceived by those who do not benefit from globalization. For several decades, there was the illusion that such frameworks as Giddens’ Third Way could achieve a political equilibrium based on a mixed economy, and thus take the initiative to overcome the crisis into which Western social democracy was plunged by the implosion of the Soviet bloc.

In practice, this attempt ended up being the West’s swan song, embodied by Clinton and Blair’s devil’s bargain with the capital markets and financial products, such as subprime mortgages that catalyzed the collapse of the banking system in 2007, and served to incubate the popular response that emerged from the ideological collapse of the social democratic parties that should have known how to contain the desperation of the victims of the crisis by channeling, in a positive way, the disaffection with a system that they no longer found relevant beyond a welfare function that tends to paternalism and manipulation, thus eroding the dignity of workers who abhor not being useful to society. These social sectors end up, in the absence of suggestive alternatives, withdrawing from the labor market and from social life in general, subsisting on public aid that only succeeds in cementing their conviction of being a burden on a society that does without them. Few tears will be shed at the funeral of the American dollar.

Santiago Mondejar Flores is a consultant, lecturer and columnist on geopolitics and international political economy. This article appears courtesy of Posmodernia.

Featured: Peace, by J.S. Pughe, illustration published in Puck, v. 57, no. 1465 (March 29, 1905).