World Politics-Economics Right Now

EDITORIAL, 20 March 2017

#473 | Johan Galtung

The Cold War ended by an agreement that the USSR leaves Eastern Europe and the USA does not enter the area. What the USA did is treason, like Sykes-Picot. NATO expanded from 16 to 28: Bill Clinton added Poland, Czech Republic and Hungary; George W. Bush the Baltic Slovakia, Slovenia, Romania and Bulgaria; Obama attached Croatia and Albania. In 1999, 2004 and 2009, respectively.  However, did those countries want it? They could have made their own pacts with neither USSR nor USA. The Soviet empire, and the Soviet Union itself, had collapsed.

With NATO at the border, Russia took back its 1954 Crimea gift to Ukraine within the Soviet Union.  Kiev with US help fought in Eastern Ukraine to make ethnic Russians escape to Russia.  Maybe 60% did.

Enters world history: The Pope and the Patriarch declare their Christianities one and the same (Havana Airport, VIP Lounge, 14 Feb 2016).  EU will no longer fight US wars (Bratislava, 6 Nov 2016). Protestant-Evangelical Christianity is marginalized. So is the USA.

Denmark and Norway were with Anglo-America fighting US wars in Libya; and with prime ministers as NATO’s secretary general. “Cold War jitters arise in Norway–arrival of US Marines stoke fears of being in cross hairs of Russia–a more likely bomb target” (NYT 18 Jan 2017).  But they are low on the US “Ranking American Allies” (NYT 7 Feb 2017); the top three are Canada, Britain and Australia (top three enemies: North Korea, Iran, Russia). And “US Threatens to Penalize Allies on UN Voting (IPS 7 Feb 2017). Given that and US marginalization, how long will they remain “allies”?

Charles Glass, “How Assad Is Winning” (NYRB 23 Feb 2017): solving national conflict is a sum of local solutions, using local superiority to offer security for local opponents laying down arms; government and opponents both benefiting from fees from road controls.  Israel will not get Syria cut into small pieces; USA will not get Sunni rule; Turkey will not control the Kurds; Russia keeps its air-navy base. Colombia, watch out; this may also be your alternative to US bombing. Politically the world is multi-polar, not run by superpowers. The West wants power-over-others and loses power-over-self; others have more Self-control, not Other-control. How does that work economically?

As debt. The debt/GDP ratio is: USA 98.3%, China 8.2%, India 23.0%, Russia 29.2%, and above 100% for many (Wikipedia “World Debt Clock”). The US 2016 trade balance was -$0.7 trillion, with China -$349 billion, with Mexico -$64 billion (Fortune, 1 Mar 2017).  The 2016 US annual interest was $241 billion; the 2027 projection is $768 billion. Will Trump cancel the debt unilaterally? Or bomb creditors to cancel?

Another key factor is finance economy speculation–as opposed to real economy investment–in derivative chains with super-commissions. If drug chains are illegal and boycotted, why not also derivatives?

China’s 8.2% debt/GDP ratio is the lowest of the 30 states listed. How does Chinese economic policy differ from the West? A first simple formulation: qualitative, focused on “revolutions”, not quantitative focused on “growth”.  The Economist Intelligence Unit, The World in 2017 fails to capture new qualities, too obsessed with quantitative growth.

Less simplistic: this difference follows from basics. The West has a creation myth, setting things right, with quantitative change, China has a never ceasing dialectics, new holons, with new realities. The two ways of thinking become self-fulfilling prophecies.

This author had a theory of China changing from distribution to growth and back every nine years from 1949 till 1989; with a 1976-1980 break after Mao’s death and before Deng launched the capitalist revolution.

That theory no longer holds.  From 1989 the ethos has been distribution oriented: lifting a sector up–now under Xi Jinping the lagging countryside–or a part, the West; or simply more consumption.  6% growth does not even put China among the ten “Top growers”.

China Daily (27 Feb 2017): President Xi Jinping uses his village level experience for policies lifting them up, “stunned that there was still a place with such poor and difficult conditions after so many years of reform and opening up”. Problems: health, education.  The typical reporting on Xi in the West, however, is on power struggle in the Communist Party, failing to catch processes involving millions.

USA: The Economist (p. 99) reports that “Americans–including those at the very bottom–have enjoyed surprisingly robust income gains of late.”  Better distribution, great; but “8 richest men match wealth of half the world” (NYT 18 Jan 2017), 6 of them are Americans (one is Spanish, Ortega; one is Mexican, Slim); 3 of the 6 are the founders of Microsoft-Amazon-Facebook, like Internet changing the world we live in.

But USA has economic power-over-others: Lex americana extracted 40 billion dollars from European companies as fines to US authorities (Le Monde Diplomatique Jan 2017). The 1977 US Foreign Corrupt Practices Act was extended to foreign companies in 1998; laws forbidding trade with states under US embargo likewise.  US law is extra-territorial, so are US judges-courts, CIA-FBI-NSA at US embassies are the police. States that deviate from US norms when using boycott and trade for foreign policy risk their interests in the USA and prefer not to challenge it.

The net conclusion?  The enormous US imbalance: no longer winning wars, less political clout, economically bankrupt but still powerful, shaping the world culturally.  Wise US policy would celebrate the last two; unwise policy would Make America Great Again-military-political, as Trump wants.  Drop “Again” Mr. Trump, Make America Great! Will do.

And wise world policy? Celebrate the military-political decline of the last superpower, fight lex americana, treat US$ like any other currency–in baskets with others or not–and the US federal reserve bank like other central banks.  Normalize the USA from the outside.

And create world, UN, equivalents of Internet etc. as parts of the common human heritage, like oceans and space–beyond state ownership. In deep gratitude to the US–all immigrants–creative, innovative talent.

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Johan Galtung, a professor of peace studies, dr hc mult, is founder of the TRANSCEND Network for Peace, Development and Environment and rector of the TRANSCEND Peace University-TPU. Prof. Galtung has published 1670 articles and book chapters, over 470 Editorials for TRANSCEND Media Service, and 167 books on peace and related issues, of which 41 have been translated into 35 languages, for a total of 135 book translations, including ‘50 Years-100 Peace and Conflict Perspectives,’ published by the TRANSCEND University Press-TUP.

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6 Responses to “World Politics-Economics Right Now”

  1. rosemerry says:

    Thank you. If only the USA would consider itself one of many normal nations, would enter into voluntary friendly relationships, not threats, bribes and invasions, would use diplomatic methods not military might, what a pleasant world would be possible.

  2. Thomas Hgork says:

    Galtung

    “NATO expanded from 16 to 28: Bill Clinton added Poland, Czech Republic and Hungary; George W. Bush the Baltics, Slovakia, Slovenia, Romania and Bulgaria; Obama attached Croatia and Albania. In 1999, 2004 and 2009, respectively. However, did those countries want it? They could have made their own pacts with neither USSR nor USA. The Soviet empire, and the Soviet Union itself, had collapsed.”

    Becasue these countries understood the risk. A Russia that gained in strength would look to dominate and invade its neighbors if it so wished. What did they understand you don’t?

    “With NATO at the border, Russia took back its 1954 Crimea gift to Ukraine within the Soviet Union.”

    Ah yes. Now that you have answered you own question, you might want to revisit the point above.

    Hint: What you – with a disgusting euphemism – call “taking back a gift” was, and is, naked aggression and a war crime. And Russia’s neighbors know. Even Belarus.

    “And “US Threatens to Penalize Allies on UN Voting (IPS 7 Feb 2017). Given that and US marginalization, how long will they remain “allies”?

    As long as we need. Among other things because we also understand the implications of the Galtung-supported Russian annexation of Crimea.

    “Charles Glass, “How Assad Is Winning” (NYRB 23 Feb 2017): solving national conflict is a sum of local solutions, using local superiority to offer security for local opponents laying down arms; government and opponents both benefiting from fees from road controls. Israel will not get Syria cut into small pieces; USA will not get Sunni rule; Turkey will not control the Kurds; Russia keeps its air-navy base. Colombia, watch out; this may also be your alternative to US bombing. Politically the world is multi-polar, not run by superpowers. The West wants power-over-others and loses power-over-self; others have more Self-control, not Other-control. How does that work economically?”

    The Iranian and Russian “self-control” has assisted the Syrian fascist dictatorship to persue a loosing war with indiscriminate killings. Without an end in sight. A wart that is draining the paymasters in Moscos and Teheran. A few days ago the “static and quite front” exploded between the hands of the dictatorship in Damascus and put a lie to the proclaimed control.

    http://www.aljazeera.com/news/2017/03/rebels-launch-damascus-attack-days-170321091435374.html

    “As debt. The debt/GDP ratio is: USA 98.3%, China 8.2%, India 23.0%, Russia 29.2%, and above 100% for many (Wikipedia “World Debt Clock”). The US 2016 trade balance was -$0.7 trillion, with China -$349 billion, with Mexico -$64 billion (Fortune, 1 Mar 2017). The 2016 US annual interest was $241 billion; the 2027 projection is $768 billion. Will Trump cancel the debt unilaterally? Or bomb creditors to cancel?”

    Oh, but the reality is much, much more complicated. Debt is composed of many different components, and if you add them all, the picture is somewhat different:

    https://www.ft.com/content/acd3f2fc-084a-11e6-876d-b823056b209b

    China’s government debt is relatively small, but this is misleading as most debt is accumulated by the Chinese corporate sector. Out-“debting” even the notoriously indebted Japanese mega-tycoons.

    Even with a GDP growth at a sprint, China managed to overtake (!) the US’ debt-to-GDP figure last year. In raw numbers the Chinese debt-accumulation since 2009 is unmatched by any nation in any period of history. And that is even ignoring indications that the Chinese debt problem may be much – much! – worse.

    “China’s 8.2% debt/GDP ratio is the lowest of the 30 states listed. How does Chinese economic policy differ from the West? A first simple formulation: qualitative, focused on “revolutions”, not quantitative focused on “growth”. The Economist Intelligence Unit, The World in 2017 fails to capture new qualities, too obsessed with quantitative growth.”

    Its ironic. The exact same words would be spelled out about the Japanese miracle some 20-25 years ago. You are making the same – exaxtly the same – mistakes as Wolferen et al, did in their “manufacturing-and-qualitative-revolutions-will-propel-Japan-ahead-of-USA” back in the 1980’s.

    “Less simplistic: this difference follows from basics. The West has a creation myth, setting things right, with quantitative change, China has a never ceasing dialectics, new holons, with new realities. The two ways of thinking become self-fulfilling prophecies.”

    No, *Galtung* has a myth about these myths. But – as for the “US-will-collapse-by-2020” nonsense – the Galtung-myth is driven by wishful thinking. Not realities.

    “USA: The Economist (p. 99) reports that “Americans–including those at the very bottom–have enjoyed surprisingly robust income gains of late.””

    Not really surprising, no. The US’ economic growth has been robust for a long while now. And unlike the Chinese counterparts, American businesses have relatively low debt (less than half the ratio), so there is much more room to expand.

    Which is also seen in the $/Yuan rate:

    http://www.xe.com/currencycharts/?from=USD&to=CNY&view=5Y

    What happened to the predicted collapse of the $ Galtung??? :-D

    “And wise world policy? Celebrate the military-political decline of the last superpower, fight lex americana, treat US$ like any other currency–in baskets with others or not–and the US federal reserve bank like other central banks. Normalize the USA from the outside.”

    Normalize your view of the USA first Galtung. Then you may – slowly – begin to understand and appreciate the world as being much, much nuanced that your blind-folded US-hate has led you the last decades.

    Just a suggestion. :-)

    • Theo Alham says:

      Thomas

      I share your points that prof galtung is miscalculating the us and chinese economies badly. However i will disagree with your first points. Russia is no real threat to any of the listed countries. Russia’s interest in Europe from a territorial pov is only where there are signifiant Russian minorities. Slovenia, slovakia, bulgaria and so on has in reality nothing to fear from any Russian armoured divisions or bombers. Crimea was a horrible mistake and crime from Russia but is closely correlated with the very specific russian interests with regard to russian-speaking crimeans and the critical naval base.

    • Peter Rossling says:

      @Thomas

      The Chinese debt problem is indeed huge (and much worse than most understand) but it is still different from the American. I may be cynical but a country can survive a private/corporate debt crush easier than a government ditto. Yes a widespread private/corporate default will hit the economy hard but still with less impact than a government default.

      The Chinese picture is a bit more murky however. Some of the companies are in reality semi-public and the debt therefore also. Interesting times ahead…

  3. Peter Rossling says:

    @Werner

    I think most of us are capable of deciding who we read and who we don’t. I don’t agree with most of what Mr Thomas Krogh is writing here, but at least he is asking questions and provoke discussions. I don’t recall anything from you in that respect.

    Respectfully/Peter