Ukraine's Ongoing Geopolitical Quandary

January 31, 2014

About four years ago I have written a post on the tense geopolitical situation affecting the internal affairs of Romania and Ukraine. I provide readers with its link below because I believe it is as relevant today as it was then, and also because a high-ranking White House official freely admits that the US and Russia have the bad habit of using Ukraine as a ‘theatre of war’ in their rivalry.

http://florianpantazi.blogspot.fr/2010/01/despre-neamestecul-in-treburile-interne.html

 

And here is a link to Mark Medish’s original article on Ukraine from International Herald Tribune :

http://www.nytimes.com/2009/12/23/opinion/23iht-edmedish.html?pagewanted=all&_r=0

Davos in the Age of Geopolitics

 January 26, 2014

The 2014 annual gathering of the world’s business and financial elite in Davos was initially supposed to consider major issues of our time, such as inequality and climate change. I say consider and not debate because one cannot rationally expect a serious discussion of possible ways to tackle inequality at a conference which reunites its chief promoters.

At least equally important would have been a debate about the threat of secular (or great) stagnation, whose specter is hovering over Japan, USA and Western Europe and seriously harming the export potential of emerging countries’ economies. The polichinelle secret is that the West’s insistence on plunging the world into fully-fledged economic and political liberalization has backfired badly. It is now in the process of spewing instability, revolutions and regional armed conflicts around the world. Sadly, the global liberalization agenda looks today every bit as utopic as the communist blueprint had been in its time.

Instead of global economics, Davos guests have had to busy themselves with current geopolitical developments. Of course it isn’t easy to talk about a global economic recovery when only profits and share prices are on the rebound, when middle class incomes have at best remained stagnant or have at worst been drastically reduced (as in Italy, Spain, Greece, Portugal or Ireland) and unemployment is high. Global demand remains stubbornly sluggish, a sure sign that Adam Smith’s “trickle-down” effect has failed to work, yet again, in the absence of resolute government-led redistribution policies. This is why leading economists are as yet loath to call this a full economic recovery. Progressive economists concentrate their attention on recommendations for diminishing inequality, alleviating poverty and boosting aggregate demand. As always, the orthodox ones are engaged in defending austerity and low taxes, however disastrous the consequences.

The center stage at the Davos conference, therefore, was taken up by political leaders hard-pressed to deal with intricate geopolitical developments in their respective regions. The Ukrainian prime minister thus took pains to explain why the two-month unrest that followed President Yanukovych’s refusal to sign a trade deal with the European Union was about to turn ugly in Kyiv. Shinzo Abe, “the troublemaker”, did not miss the opportunity to blast China’s bellicose stance – and vice versa from the Chinese delegation’s side. In a CNN interview, the Egyptian prime minister defended the brutal repression of the Muslim Brotherhood and even had the cheek to compare General Al-Sissi’s potential candidacy to the presidency with those of General De Gaulle’s or Eisenhower’s. (Following his incredible televised performance, one is left wondering just when did the latter order the army to open fire on their own citizens in order to qualify for the top job ?) Syria’s elusive peace talks and potential political future were discussed by newly-elected President Rouhani of Iran, even as the peace negotiations next door in Geneva were apparently leading nowhere. Meanwhile, the civil war raging in Syria is spreading to Lebanon and Iraq. Ethnic and tribal conflicts are engulfing chunks of Africa, from Mali and Central Africa to South Sudan. For the first time in a long while, the West seems neither willing nor able to foster peace in all these regions, diplomatic and military efforts notwithstanding.

Alas, this is a far cry from the rosy “one-world ecstasy” scenario from Francis Fukuyama’s End of History best seller. For over a decade now, both history and geopolitics have been back with a vengeance to interpret how old, new or hitherto frozen conflicts are tearing countries and societies apart.

 

Fukuyama's "End of Democracy"

 November 25, 2013

The political gridlock in Washington DC gave Francis Fukuyama the opportunity to attack as unworkable one of the pillars the American democracy, namely the priciple of separation of powers . According to one of his recent articles ( republished by Courrier International) Obamacare has no real chance of success because the American political system is designed in a way that gives too much veto power to the opposition, thus depriving the Administration of real clout. He calls this “vetocracy“.

In actual fact, the crisis experienced by the American political system has very little to do with the way power is allocated within it and everything to do with the economic and social difficulties experienced since the 2008 financial crisis onwards. The spillover effect has now reached the political system, which itself cannot function in the absence of a minimal bipartisan political consensus . (no democratic system could)

Montesquieu’s principle of separation of powers and checks and balances was criticised as early as the XVIII century by, among others, the physiocrats . Their leader, Quesnay, nicknamed ” Confucius of Europe ” by his admirers, believed that ” the system of checks and balances within a government is a dismal one ” ( Quesnay, Maximes générales du guvernement économoque d’un royaume agricole). Condorcet considered that ” in matters of government ,every complication is scary” ( Réflexions sur le commerce des blés ) , and the list could go on. Undaunted, the framers of the American constitution, which served the US well for over two hundred years, adopted the principle.

To be sure, the US badly needs to extend universal medical coverage to some forty million Americans in order to be considered a truly civilised Western country. The timing of the reform does seem rather unfortunate, as the US federal deficit is one of the largest in America’s history. In truth, the US politicians lost a golden opportunity to adopt such a reform during the sixities, when the country’s economic circumstances were excellent and when the political leaders were less ideological and more pragmatic than it is the case today. In other words, Obamacare is some fifty years too late to be adopted quickly and without much resistance from vested interests.

When a democracy ceases to function the way it has been intended to, that usually happens because leading political players fail to reach consensus on major issues. It would therefore be wrong to blame the malfunctioning on the core principles – like that of the separation of powers – on which the American system has been built upon. Fukuyama even argues that the Westminster system is better equipped to prevent gridlock, although it does not seem to help David Cameron be a more powerful and/or succesful leader of Britain . Moreover, the Westminster system could lead to an ” elective dictatorship“, as the development is known among political scientists. This is exactly the outcome the American framers tried to avoid when they adopted the separation of powers principle.. Nor is the French presidential system, in which the Socialist executive has more power than the American president does and the Socialist party controls both the Parliament AND the regions, in a better position to solve the country’s economic or social problems . Unemployment in France is much higher than in the States or Germany, whilst economic growth has all but stalled. Germany, a federal state, does not seem to be affected by the way power is distributed within the system. Clearly, Fukuyama’s theoretical approach to US’s political problems is not only flawed, but it is also misleading .

Geography and Geopolitics During the Cold War

 November 16, 2013

Since the onset of the sovereign debt crisis, it has again become fashionable to explain southern Europe’s economic troubles in the light of the Mediterranean countries’s natural habitat, climate and lifestyle. The people of Greece, Spain and Italy, for example, are regularly portrayed in the popular press as less productive and laid back, in contrast with northern EU nationals. The latter are presented as industrious, thrifty and unlucky enough to be part of a union which makes them dip into their hard-earned savings to pay for the excesses and profligacy of southern EU members.

A heightened interest among philosophers, historians, economists and geopoliticians in the influence of geography/natural habitat over the course taken by human history or economic development is quite normal, especially during major crises. This type of intellectual inquiry happened to be the object of my research for my licence thesis in 1979 at Iasi University. Trouble was, during the bi-polar world both superpowers shared a common dislike of Geography and its potential role in human history and economic affairs. Their respective satellite-countries largely fell into line during that period, with the shining exception of France, where the research and study of Human Geography continued regardless.

Indeed, for decades both Russians and Americans all but banned academic research along these lines. The very mention of geopolitics was regarded as subversive. In a book written at the end of the ‘90s (« The Wealth and Poverty of Nations »), Harvard historian David S. Landes explains how after 1945 US authorities actually closed down the geography departments at Harvard, Yale, Princeton and Columbia, to mention but a few academic establishments. The Soviet Union also developed a powerful aversion to geography, probably because during the 1930s Stalin fell for Mackinder’s well-known Heartland theory, which had led him to conclude the Molotov-Ribbentrop Pact with the Nazis (Pascal Lorot).

This is the reason why it took me a long time, as an undergraduate, to convince one of my gutsier professors to supervise my thesis. To make matters worse, documentation behind the Iron Curtain was painfully scarce, especially from American sources. In the background, the dean of the faculy was constantly at pains to impress upon me that we were only 25km away from the Soviet border. What would we do if my thesis incurred the wrath of the Russians ?

These days, when both geographers and experts in geopolitics are back in vogue, I think it is worthwhile remembering how detrimental the Soviet-American duopoly really was for the development of social sciences in general and that of geography and geopolitics in particular.

US Foreign Policy in the Post-Unipolar World

 October 12, 2013

Superficially at least, the ongoing civil war in Syria appears to highlight the West’s inability, unprecedented for decades, to put a stop to it. Adverse to direct military intervention, President Obama has even ruled out Kosovo-style punitive strikes without the endorsement of Congress. Premier David Cameron’s strident advocacy of military action against Syria has been silenced by a negative vote – the first such occurrence in centuries – in the British Parliament. The West’s economy is weaker than at any time in the past save the Great Depression and the increasingly assertive members of the UN’s Security Council are blocking any efforts to outlaw the slaughter of Syria’s own citizens by the Assad regime. This is surely not the unipolar world we got used to during the Clinton – Bush Jr. years.

By placing domestic concerns above military entanglements in far away places around the world, President Obama is in sync with the mood of the majority of his countrymen. Even if his foreign policy could appear to outsiders as indecisive, it is nevertheless popular at home. Like in the times that preceded the 1938 Munich conference, the West is economically distressed, tired of fighting, as well as challenged by a rising power – China – and an increasingly resurgent Russia.

The preference for diplomacy over the use of military force has become the hallmark of Barack Obama’s approach to international affairs.(During my masteral studies in international relations, I qualified Obama’s foreign policy as « Jeffersonian with Wilsonian trappings », an assessment that I maintain today). Taking into account Iran’s dire economic situation, for instance, diplomacy is seen by Obama strategists as having a chance of succeeding where sanctions and threats of military action have not.

In Asia, the US is currently shying away from endorsing the bellicose stance of the Japanese and the Philippine leadership against China over the Diaoyu/Senkaku islands or the Scarborough Shoal. Given the mayhem in the Middle East, the « pivot » strategy for Asia is being quietly put on the backburner.

A well-framed foreign policy could, however, be judged only in the light of its practical results. If the US succeeds in destroying the Assad regime’s stock of chemical weapons and finds a way of determining the Iranians to drastically reduce their nuclear ambitions, Obama’s foreign policy might just be remembered as a worthwhile contribution towards reducing international instability and ultimately to world peace.

Not the Clintons Again !

 September 27, 2013

Joe Klein of Time Magazine has recently published an editorial about the Clintons’ renewed presidential ambitions. (“The Clintons need a restart“, Time, September 9, 2013, p.21). According to him, there is a real danger for the Democrats – not to mention for the rest of us – that coming 2016 H. Clinton might just get back into the Oval Office, courtesy of corrupt Democrat politicians and of the “ morbid state” of the Republican party.

Klein is careful to remind readers the Clintons’ past and present excesses, such as the renting of the Lincoln bedroom, the Clinton Foundation’s “fancy conferences” and fees to match ( between 200,000 dollars for H. Clinton going up to 700,000 dollars charged by W.J.Clinton for a speech in … Nigeria), lobbying on behalf of the plutocracy through Teneo and Clinton Global Initiative, closeness to Wall Street bankers and the list could go on.

The real danger here is that such leading representatives of the “ gauche-caviar”,-as the French call Socialist leaders that sold out to the plutocrats – do lasting damage both to the party propelling them to power and to the society as a whole ( remember the Clinton’s attitude to financial deregulation, which brought about the Great Stagnation ?) In Germany, since the Volkswagen-Schroeder labor market “reforms” , the SPD has lost two consecutive elections and the “working poor” numbers have increased dramatically.

In truth, candidates to the gauche-caviar status ( which can on occasion include conservative leaders such as France’s former president Sarkozy) still lurk around and do not seem to have learned anything from their older peers, nor apparently did their parties. This is reason enough for the Bilderberg bosses – the ones who selected and financially supported Clinton’s first bid for the presidency back in 1991, when he was but an obscure Arkansas politician – to rejoice and to continue through their meddling to put at risk the normal functioning of Western economies and/or democracies.

Economic Science and the EU

June 22, 2013

Every few decades or so we are brutally reminded that the global economic system can experience serious dysfunctions and that the science called upon to find the necessary remedies is rarely, if ever, up to the task. The latest controversies among economists regarding austerity policies or possible solutions for dealing with sovereign debt are a case in point.

The head of the IMF’s research unit and potential Nobel-prize recipient, Mr Olivier Blanchard, has recently revealed that his institution is partly responsible for botching the rescue of Greece and, by miscalculating the impact of austerity policies, for plunging Spain, Portugal, Italy, Ireland and even the Netherlands into recession (Alternatives économiques).

In a parallel development, a 2010 study by former IMF chief economist Kenneth Rogoff and Carmen Reinhart of Harvard University has stirred up a huge controversy involving three economists from Amherst University and Nobel-prize laureate Paul Krugman. The study claimed to have found a connection between economic growth and public borrowing: whenever government debt rises above 90 percent of GDP, the data available seems to indicate that growth slows down, although the authors freely admit that they are not entirely sure if higher debt leads to slow growth or whether it is the other way around (The Economist).

Almost as influential among EU finance ministers is a second Harvard study, “Large Changes in Fiscal Policy : Taxes vs. Spending “, authored by Alberto Alesina and Silvia Ardagna. According to it, deep cuts in public spending generally lead to economic expansion, not to contraction. As the two have explained during a meeting in the spring of 2010 with Ecofin ministers, austerity policies give the private sector the confidence it needs to increase their investments, which compensate for the budget cuts . The study found a convert in Jean-Claude Trichet, who claimed the same year that

[…] the ideea that the austerity measures could bring about stagnation is incorrect […] I am firmly convinced that in the current circumstances such policies that inspire confidence would reinforce, not affect the economic recovery because today’s essential factor is confidance.” (as quoted by P. Krugman in New York Times)

This is all academic, one might say. Only, in an unfortunate turn of events, Mr Rogoff’s or Alesina’s studies determined the European Union’s neoliberal-leaning politicians to adopt stringent austerity policies aimed at reducing public debt, thus bringing about the current recession on the continent. As Mr Rogoff argues, however, his recipe for debt reduction involved not austerity, but writing down bank debt, allowing for some inflation and using “financial repression” techniques.

This, of course, is not the first time that the IMF’s policies have gone tragically wrong, or that macroeconomists’ advice has fallen short of expectations. The ‘dismal science’ – a nickname for economics that many Asian, Latin American and European nations would readily approve as appropriate – is after all relatively young and imperfect.

In fact, during the discipline’s two and a half centuries of evolution, the most influential theorists were actually members of entirely different professions. As we know, Adam Smith was initially a customs agent and a professor of moral philosophy; David Ricardo – a stockbroker; Thomas Malthus – a pastor; Quesnay and Juglar – medical doctors; Marx – a philosopher; and Leon Walras – a mining engineer and journalist. As a rule of thumb, policy recommendations by economists have not been consistently successful to date, when they were not ignored by governments on ideological grounds. Even well-known policies such as Roosevelt’s New Deal were discontinued before they could produce their full effects, such as solving mass unemployment in the US. The latter, as J.K. Galbraith pointed out, was solved not by the adoption of macroeconomic policies, but inadvertently by Hitler, who decided to wage war on the West.

The current economic climate tends to lend full credibility to Keynes’ stagnationist thesis, as it bears many similarities to the long period of stagnation following the 1929 crash. His thesis is again influencing business people and social scientists alike, making economic recovery a distant and uncertain prospect, especially within the EU.