China: The Game Is Up

BRICS, 1 Jul 2024

Jeremy Kuzmarov | CovertAction Magazine – TRANSCEND Media Service

[Source: tunnelwall.blogspot.com]

Does China deserve more respect? However much Western commentators want to sustain the age of empire, a new multipolar world order has already begun to take root.

18 Jun 2024 – In September, I attended a talk sponsored by the Tulsa Committee on Foreign Relations by an inside-the-beltway pundit named Ali Wyne,[1] a former senior fellow at the pro-NATO Atlantic Council and David Rockefeller fellow at the elitist Trilateral Commission.

Wyne told the audience in so many words that the sun had not yet set on the American empire; that the Biden administration was outmaneuvering the evil Putin in Ukraine; and that the U.S. was still a beacon of hope for the rest of humanity.

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Ali Wyne [Source: tulsacfr.org]

Toward the end, Wyne personalized the talk, discussing how his family had migrated to the U.S. from Pakistan with nothing, and that through hard work he was able to achieve the American dream.

But Wyne seemed oblivious to the fact that that dream is increasingly unreachable for the majority of people in an increasingly stratified society marred by a decline in civilian manufacturing and public services and skyrocketing education costs.

Wyne also failed to point out that the American dream historically was achieved at the expense of Third World nations that were looted by U.S. corporations, and by endless wars that killed millions of people.

Wyne’s delusional worldview is underscored in a new book by Fadi Lama, Why the West Can’t Win: From Bretton Woods to a Multipolar World (Atlanta: Clarity Press, 2023), which shows that the American Century has ended and that a new multipolar world order has been established in which economic dynamism lies primarily in the East.

Lama is an international adviser for the European Bank for Reconstruction and Development (EBRD) and geopolitical consultant with a Ph.D. in mechanical engineering from the Georgia Institute of Technology (Georgia Tech).

He points out at the beginning of his book that in 1500, prior to the era of Western colonialism, there was a relatively fair political-economic world order with a close equilibrium between population and wealth generation. But by the end of World War II, the West accounted for only 30% of global population but 60% of global Gross Domestic Product (GDP).[2]

When many colonized nations gained their independence, the West imposed a neo-colonial framework that enabled their resources to be exploited by Western multinational corporations.

Some countries on the front lines of the Cold War, such as West Germany, Japan and South Korea, were allowed unhindered development as part of a geopolitical strategy designed to keep them within the Western orbit and curb the advance of Communism. However, being pseudo-independent states, when the political necessity was removed, they were cut back to size.

The liberation of China in the 1949 Communist-led revolution (an event known in the U.S. as the “loss of China”) was a historical turning point that began to reverse the Western monopolization of wealth and power and set the stage for the re-empowerment of the Global South.

By 2017, China—known as the “sick man of Asia” in the 19th century following its de facto colonization of Great Britain following the Opium War—was the world’s number one economy with its real goods production amounting to 24% of global real goods production.

Under Chinese Communist Party (CCP) leadership, China regained its sovereignty and lifted 770 million people out of poverty, with homelessness now being practically non-existent.[3]

According to Lama, China’s staggering economic success resulted from a centralized political system in which commercial banking was dominated by the public sector. Central bank financial and monetary policies were further put under the control of the Chinese government, which implemented policies serving the national interest rather than those of the Western financial oligarchy.[4]

China’s economic success contrasts markedly with the growing economic stagnation in Western countries and the U.S. resulting from the neo-liberal economic model in which the private sector is elevated above the public sector.

By 2014, the top 0.1% in the U.S. owned as many assets as the bottom 90%, an obscene inequality ratio accompanied by a dramatic rise in poverty, which had been reduced massively in China under more socialist-oriented policies.[5]

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[Source: depts.washington.edu]

China’s superior state-centric economic model is currently being followed by Russia which has withstood record U.S. sanctions under Vladimir Putin’s leadership through a renewed commitment to economic autarky (self-sufficiency) and investment in local industries and technologies.

Following the collapse of the Soviet Union, U.S. strategic planners saw a golden opportunity to reduce Russia’s status to that of a fourth-rate power and to enable the plunder of its bountiful natural resources.

The overzealous policies backfired, however, pushing Russia into alliance with China that signifies the birth of a new multi-polar world order that holds the potential to restore the global economic parity from 1500—before Western colonization took root.

Lama emphasizes the fact that Russia now provides food aid in Afghanistan and Africa and fertilizer to poor countries, and has forged growing relations with both China and Iran, the latter having gained independence from Western colonial tutelage in 1979 when the Shah was overthrown.[6]

Lama finds significant economic synergy and growing win-win cooperation in the economic, cultural, scientific and military fields between China, Russia and Iran, which he says are “de facto allies in the struggle for a ‘Fair World.’”[7]

Russia and China today are leading the way in space exploration, clean energy technologies as well as cutting-edge missile technologies at a time that U.S. weapons systems are proving to be extraordinarily costly and inefficient owing to a Byzantine Pentagon contracting system and under-skilled workforce due to the skyrocketing costs of higher education.

Today’s shifting power balance can be compared with 1997 when “‘the empire’ had control over three of the top four energy reserves: Venezuela was a U.S. vassal, Russian energy resources were under control of the Money Powers (Western financial oligarchs) via their proxy Russian oligarchs, and Saudi Arabia was a compliant U.S. tributary. Of the top four, only Iranian reserves were out of the Money Powers’ control.”

By 2022, Lama writes, “the Empire had lost control of the top three reserves, Venezuela, Iran and Russia, while Saudi Arabia is no longer as compliant as it was in 1997.”[8]

What happened in the interim was a period of heightened military intervention and imperial overreach resulting in a counter-mobilization that signifies the end of the era of Western empires dating back to the 16th century.

Bretton Woods: From Military to Financial Colonialism

The imperial framework after World War II was established through the Bretton Woods economic system, which Lama says was designed to “lock countries into a financial structure controlled by the West.”

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[Source: azcoinnews.com]

Lama writes that this structure “requires central bank governors be independent of their governments, but dependent on rules established by the Bank for International Settlements (BIS), at the top of the pyramid in the Bretton Woods system.[9]

Established in 1930 to handle reparations payments imposed on Germany at the Versailles Conference after World War I, BIS had helped finance Hitler’s rise to power and was owned by central banks, setting policies for them that directly influenced the global economy.

Franklin D. Roosevelt had proposed liquidating the BIS due to its cooperation with Nazi Germany, though the resolution that he sponsored to that effect at the July 1944 Bretton Woods Conference at which the post-World War II monetary and political global structure was being set, was revoked after Roosevelt’s death.

A person standing in front of a microphone Description automatically generated
John Maynard Keynes addressing the July 1944 Bretton Woods Conference in New Hampshire. [Source: centerforfinancialstability.org]

According to Lama, when some newly decolonized countries tried to adopt an alternative economic arrangement to Bretton Woods, their leaders (Togo’s Sylvanus Olympio, Egypt’s Nasser; Indonesia’s Sukarno; Democratic Republic of Congo’s Lumumba; Iran’s Mossadegh; Ecuador’s Jaime Roldos; Panama’s Omar Torrijos) were eliminated by wars, coups or assassinations [over a 25-year span].[10]

Economic hit men would descend on developing countries offering loans for infrastructure projects whose real purpose was to plunge these countries into debt so they would become dependent on foreign creditors and their economies could be restructured along neo-liberal lines and in the service of multi-national corporations.

A pillar of the Bretton Woods system was that the U.S. dollar was established as the international trade currency, which was convertible into gold at the fixed rate of $35 per ounce of gold.

With the decline of U.S. competitiveness in the 1960s, the Nixon administration froze the convertibility of the U.S. dollar in gold and, instead, made it convertible to oil, provided that oil was sold only in U.S. dollars.

This led to a dramatic increase in the price of oil and petrodollar arrangement with Saudi Arabia by which the U.S. provided military protection and weapons to the Saudis in exchange for the promise of them trading their oil in U.S. dollars and using income from oil to buy U.S. Treasury bills. Interest on these sales was then spent by the U.S. Department of the Treasury on infrastructure projects in Saudi Arabia to be executed by U.S. companies.

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[Source: ethers.news]

The fact that other countries had to hold reserves in U.S. dollars to cover their oil imports allowed the U.S. to incur high trade deficits bred by deindustrialization in the neo-liberal era without causing a depreciation of the U.S. dollar.[11]

However, this is no longer sustainable in the long term and Russia and China are spearheading a shift in the global economy by which oil and other commodities are no longer being traded in U.S. dollars, ushering in the end of the American Century.

The Money Power

Lama’s book includes discussion of the growth of the Western financial oligarchy, or what he calls the Money Power, who are the major shareholders of the leading hedge funds (BlackRock, Vanguard and State Street) and have become the absolute rulers over society.

According to Lama, the Money Power is well placed to control elections in Western democracies and control mass media in all its forms, print, TV and social media platforms.

They support free trade agreements designed to usurp what little is left of national sovereignty and a neo-liberal vulture economy in which all aspects of the economy are privatized in order to maximize corporate profits.

The U.S. decline has been fueled by the Money Power’s recognition that maintaining a strong manufacturing base was no longer necessary when trade deficits could be offset by currency manipulation owing to Nixon’s convertibility of the U.S. dollar to oil and the trade in oil around the world in U.S. dollars.

The U.S. economy is increasingly dominated by the financial sector which flourishes at the expense of other vital economic sectors, leading to the high wealth concentration and impoverishment of society made worse by austerity measures entailing cutbacks in social and other government services.

A cartoon of a person standing in front of a factory Description automatically generated
[Source: politicalcartoons.com]

Russophobia, Sinophobia and the End of an Era

The intense Russophobia cultivated in the U.S. media over the last decade is the result of the Money Power’s lust for Russia’s immense wealth, which it was starting to gain access to in the 1990s before Vladimir Putin reasserted national control over Russia’s economy.

The anti-Russia propaganda has had the greatest impact on the educated classes, as 77% of Americans with post-graduate degrees considered Russia an enemy in a March 2022 poll, compared to 66% with high school education or less.[12]

Russophobia has been combined with an ascendant Islamophobia and Sinophobia, whose purpose is to mobilize public support for confronting the troika of powers (Russia, Iran and China), which threaten Western hegemony.

According to Lama, if a date were to be identified for the end of the U.S. empire, it would be January 8, 2020, when Iran avenged the assassination of General Qasem Soleimani by attacking a U.S. air base in Iraq and displaying Iran’s weapons capability.

Afterwards, the U.S. Central Command (Centcom) significantly relocated its headquarters from Doha, Qatar, just 125 miles from Iranian shores, to safety in Tampa, Florida.

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Satellite image, showing the damage to at least five structures at Ain al-Asad Air Base in Iraq in a series of precision missile strikes launched by Iran. [Source: wikipedia.org]

While the current U.S.-Israeli war in Gaza has created a renewed pretext for expanded U.S. military intervention in the Middle East, Lama’s book makes clear that the U.S. could not win a war against Iran for regime change.

Contrary to Wyne’s analysis, the U.S. has also been outmaneuvered in Ukraine, whose army is in a state of disrepair after a failed counteroffensive. It is further being outmaneuvered by China, which is winning hearts and minds through the Belt and Road Initiative (BRI) that provides low-interest loans to countries for infrastructural development with no strings attached.

In sum, the Great Game for world domination appears to be up and the Money Power has lost. That is why they are behaving so erratically in manufacturing crisis after crisis as they desperately attempt to sustain a fading world order defined by profound inequality and injustice.

NOTES:

  1. Wyne is author of the 2022 book, America’s Great-Power Opportunity: Revitalizing U.S. Foreign Policy to Meet the Challenges of Strategic Competition (Cambridge: Polity, 2022).
  2. Fadi Lama, Why the West Can’t Win: From Bretton Woods to a Multipolar World (Atlanta: Clarity Press, 2023), 2.
  3. Lama, Why the West Can’t Win, 189.
  4. Lama, Why the West Can’t Win, 6, 7.
  5. Lama, Why the West Can’t Win, 14, 16, 17.
  6. Lama, Why the West Can’t Win, 245.
  7. Lama, Why the West Can’t Win, 240.
  8. Lama, Why the West Can’t Win, 238.
  9. Lama, Why the West Can’t Win, 3.
  10. Lama, Why the West Can’t Win, 4.
  11. Lama, Why the West Can’t Win, 32, 33.
  12. Lama, Why the West Can’t Win, 210.

______________________________________________

Jeremy Kuzmarov is Managing Editor of CovertAction Magazine and author of four books on U.S. foreign policy, including Obama’s Unending Wars (Clarity Press, 2019) and The Russians Are Coming, Again, with John Marciano (Monthly Review Press, 2018). He can be reached at: jkuzmarov2@gmail.com

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