It’s Not About the Economics

In which we see, once more, that those who believe material elements, such as greed or individual ambition, are the primary driver of all human action, have no capacity for understanding or anticipating future events.

Economic logic provides that the U.S. (and European) economy would be better off by avoiding a conflict with Russia and China. But, as Micheal Hudson explains, this now gets overwritten by national security preferences which have remarkable conseqences:

Instead of isolating Russia and China and making them dependent on U.S. economic control, U.S. unipolar diplomacy has isolated itself and its NATO satellites from the rest of the world – the Global Majority that is growing while NATO economies are rushing ahead along their Road to Deindustrialization. The remarkable thing is that while NATO warns of the “risk” of trade with Russia and China, it does not see its loss of industrial viability and economic sovereignty to the United States as a risk.

This is not what the “economic interpretation of history” would have forecast. Governments are expected to support their economy’s leading business interests. So we are brought back to the question of whether economic factors will determine the shape of world trade, investment and diplomacy. Is it really possible to create a set of post-economic NATO economies whose members will come to look much like the rapidly depopulating and de-industrializing Baltic states and post-Soviet Ukraine?

This would be a strange kind of “national security” indeed. In economic terms it seems that the U.S. and European strategy of self-isolation from the rest of the world is so massive and far-reaching an error that its effects are the equivalent of a world war.

The question is really why the U.S. is doing this harm to itself instead of following Brzezinski’s and Kissinger’s advice. As Yves Smith says in her preface to Hudson’s piece, it is a quite bizarre spectacle:

One of the subthemes of the latest offering from Michael Hudson on the bizarre spectacle of the US escalating against China is puzzlement that the West is not operating in its best interest. Lambert has been chewing over this conundrum too. Perhaps it’s that they really do believe their propaganda, and still don’t recognize that the military and economic clout of the US/EU bloc on a relative basis isn’t anywhere near substantial enough for them to push the rest of the world around. But you think their self-delusion would have started to crack with the failure in their efforts to pressure many countries, such as India and South Africa, to side with the US and condemn Russia’s actions in Ukraine, and now with the supposedly superior US/NATO war machine not performing too well.

Another possibility is the so-called Iron Law of Institutions, that individuals and interests are operating to maximize their own position, with little/no concern to the impact on the system.

I have come to the conclusion that the main actors in this game, the Bindens, Blinkens, Sullivans and their bipartisan supporters, are driven by a blind ideology that has dismissed or replaced global realities with wishful thinking.

The failure of their sanctions against Russia should have demonstrated to them that the real word is by far not the one in which they believe to be living. They however are now repeating their errors by waging a similar war against China.

The U.S. Wars Against Russia And China Have No Economic Logic Attached To Them, 22 July 2023

It’s fascinating how the material mind reaches out in every direction but the correct one. But Sherlock Holmes had it backwards. Once you have eliminated all of the probabilities, the appropriate action is to conclude that what you hitherto believed to be impossible may be the truth.