By Simon Korner

PART 1 - THE US FIGHTS FOR HEGEMONY 

One view of the Ukraine war is that it is a struggle between two imperialist poles. But that suggests the US and Russia are evenly matched adversaries as Germany and Britain were in 1914 whereas America is clearly the world’s military hegemon, with all of NATO’s power under its sole command, while Russia is a regional capitalist power, challenging the US, but with nothing like the same reach or influence.

Because America is the main danger to world peace, it should be our main focus. This is not to overlook Russia’s capitalist nature, nor the fact that capitalist competition necessarily produces wars. But our period differs from Lenin’s in that American imperialism has no historical equal in terms of strength and global reach. Reducing the war to contesting imperialist camps obscures this fact. If attention is distracted away from the principal warmonger and dominant ideological manipulator, it takes the pressure off it. And Marxists have always made tactical use of contradictions between capitalist powers. In World War 2 (WW2), the USSR allied with Britain and the US to defeat the more immediate Nazi danger. Today, world peace requires the hindering, at the very least, of US imperialism. Whether this war will do that, as Russian airpower clearly did in Syria – is not yet clear. But certainly, rhetorically condemning Russia is not the job of the British left, while cheerleading for Russia is neither necessary nor effective. 

MILITARY THREAT

America’s expansion of NATO eastward since 1991 was designed to weaken and provoke Russia. Russia represents a problem for the US because it is not only a non-compliant rival that was drawing Europe closer to itself, and thus away from US control, but is nuclear-armed and a potential ally of China – the US’s main rival and future target. Yes, Russian capitalism must seek to expand, but the current Ukraine war is not about capitalist empire-building, whatever Putin’s expressed nationalist views, rather an aggressive defence against America’s aim of dismantling Russia. Even the pro-western Yeltsin warned President Clinton that he could never allow NATO to expand eastwards.

After the western-backed overthrow of Ukraine’s democratically elected president in 2014, the Russian-speaking eastern regions of the Donbas, a largely industrial working-class area, rebelled against the illegitimate government and seceded from Ukraine. Since then, almost 14,000 people have been killed in Ukraine’s 8-year war to retake the Donbas. The high death toll, as well as the placing of NATO nuclear missiles in eastern Europe and the massive arming of Ukraine’s military, were sufficient evidence to convince Russia of NATO’s warlike intent. Ukraine’s history as part of the USSR has given it nuclear know-how and over 50 tons of plutonium. Emeritus Professor of Peace Studies, Paul Rogers, says putting new anti-ballistic missiles into Poland and Romania was a game-changer because the new Aegis system can evade Russia’s sophisticated missile defence and strike first. So when President Zelensky announced in Munich (19/2/22) that Ukraine – already one of NATO’s Enhanced Opportunity Partners – had the right to disregard the Budapest Memorandum of 1994 between the US and Russia, under which Ukraine gave up its nuclear weapons, the threat was taken seriously. The threat was made more potent by the US having torn up the 1987 Intermediate-Range Nuclear Forces Treaty as well as the agreements made under the Organisation for Security and Co-operation in Europe (OSCE). Liberal commentator Jonathan Steele said: “Convinced that NATO will never reject Ukraine’s membership, Putin has now taken his own steps to block it.”

Along with the push to join NATO, Ukraine’s army trebled in size between 2014 and the start of this year, trained by the Americans and the British under a longstanding programme, effectively binding Ukraine into NATO structures. The SAS and US Delta special forces have long been active on the ground in Ukraine, according to Le Figaro, with all foreign recruits in Ukraine co-ordinated by the US. Up to 40% of the most combat-ready Ukrainian units are reportedly composed of soldiers from NATO countries. Apart from its billion-dollar weapons supplies to Ukraine – whose defence budget rose from $1.7 billion in 2014 to $8.9 billion in 2019, and is now far higher – America has been running biolabs, as Victoria Nuland, the hawkish US Under Secretary of State for Political Affairs, has admitted. These biological weapons facilities could “assert Ukraine's cultural and economic independence from Russia”, according to a Daily Mail report – so they’re hardly conducting harmless civilian research.

FASCIST GRIP

A further threat, one frequently airbrushed out by the western media, is Ukraine’s significant fascist element. This is not confined to the Azov regiment; there are around 30 other groups including Aidar, Right Sector and Svoboda, totalling over 100,000 members, according to Reuters. These fascists act as violent enforcers throughout the whole Ukrainian army. Fascist ideology dominates the largest Ukrainian military training centre, the National Army Academy, where US and Canadian forces have been training members of Centuria, a wing of the Azov battalion, into an elite corps, according to a George Washington University study (IERES-Papers-no-11-September-2021-FINAL.pdf). The most prominent fascist leader Dmytro Yarosh is officially advisor to the Commander-in-Chief of the Army of Ukraine, an indication of the high level of fascist integration into the state machine. The banning of Communist and other opposition parties, the anti-trade union laws – developed under British tutelage – and the violent threats that destroyed a proposed deal between Ukraine and the Donbas in 2019, show the fascists’ continuing and powerful grip. Ukraine was rated a hybrid Authoritarian-Democratic state by The Economist in 2020, a state that, according to The Times of Israel (27/12/18) “designated as a national holiday the birthday of a Nazi collaborator”. Not that you’d know it from the western media whitewash of Stepan Bandera and other Ukrainian WW2 fascists – reminiscent of the whitewashing given to jihadi terrorists in Syria, rebranded as ‘moderate’ rebels.

The rebranding of Ukrainian fascism is part and parcel of the propaganda that calls the Ukraine war the first use of force to change territorial borders in Europe since WW2, ignoring NATO’s violent detaching of Kosovo from Serbia in 1999. The Serbia war was a testing ground for NATO in the post-Soviet era, targeting a non-belligerent country outside the NATO area. 78 days of bombing left 3,500 civilians dead.

RUSSIA'S RESPONSE

Why couldn’t Russia restrict itself to a tactical defence of the Donbas rather than intervening strategically? Russia argues that this would have left Ukrainian weapons supply lines open from the west and most of the airspace in Ukrainian hands. Russia had been caught off guard in 2014 by the rapidity with which Ukrainian ethno-nationalism had led to war in the Donbas, and so this time moved far more quickly and decisively. Up to 130,000 Ukrainian troops, placed on the border with Donbas in December 2021, were preparing for an imminent attack in late February, according to military documents found in a captured Ukrainian military HQ (Telegram, 25/3/22, Russian Ministry of Defence). OSCE observers recorded increased heavy artillery fire from 16 February 2022 onward, leading to the flight of 100,000 refugees to Russia. Moreover, Zelensky had decreed the previous year that Ukraine would retake Crimea, a majority-Russian region whose people had voted overwhelmingly to join Russia in 2014 and who remained happy with that decision 6 years later (including the Tatar minority), according to the Washington Post (18/3/20). Russia felt that it had the choice of waiting for war to come to it, or acting.

IMPACT AND OUTCOMES

Overall, the volatile and highly unstable situation in Ukraine could become even more dangerous if a NATO No Fly Zone were established, as many western hawks are calling for, or if there is a significant direct intervention by NATO forces (in addition to the existing western ‘volunteers’). The worst case scenario, apart from nuclear war between NATO and Russia, would be a long war of attrition in Ukraine – precisely what the US and UK are engineering. The US State Department foresees the conflict continuing throughout 2022. Imperial historian Neil Ferguson (March 22) says Biden wants to “lock Russia in a quagmire…” The best case scenario would be successful peace talks based on a declaration of Ukrainian neutrality, that is, NATO expansion halted; Crimea officially ceded; Donbas recognised, and the fascist stranglehold on Ukraine destroyed.

Russia’s intervention has sacrificed a great deal. Russia now faces an even more aggressive NATO, Finland and Sweden considering joining, and the latter, like Germany, already breaking its taboo on sending arms to a country at war. Ukrainian nationalism has grown, Russophobia in Ukraine and the West has risen to unprecedented levels and, on a human level, millions of people have been displaced and traumatised.

The severing of Russia from Europe has been a major US victory. The war has corralled Europe into line. It’s forced Germany to ditch Nord Stream 2 and kill off trade with Russia, at a stroke giving the US a far bigger share of the European energy market. This year it will sell 15 billion cubic meters of liquefied natural gas (LNG) to EU markets and plans to double this by 2030. The US market for LNG infrastructure – pipelines, terminals and so on – is set to grow by $1.12 billion over the next 4 years. This is, among other things, an American energy war.

The US military industrial complex has also benefited massively. The CEOs of Raytheon and Lockheed have both welcomed the opportunity for future weapons sales. The US government’s promise of $13.6 billion of arms to Ukraine will ensure their profits and those of Northrop Grumman, Boeing, General Dynamics and other arms-makers for years to come. The green light for Germany to militarise – with a defence budget of $110 billion, twice what it spent last year, including buying American F-35 fighter planes – will also benefit American and German arms companies. Britain’s BAE Systems, France’s Thales and other European weapons producers have all seen their shares rise sharply since the war began.

Ukraine could well end up the Syria of Europe, with ongoing war, and flooded with ‘lethal aid’ – much of it going straight to Nazi terrorists. Ukraine had a booming economy in the USSR. By 2020, 45% of the population were categorised as poor, victims of mass privatisation. Last year Ukraine’s growth rate was 5^th lowest in the world. Even before the war, 10 million Ukrainians had moved abroad for work. The World Bank estimates that Ukraine’s GDP has fallen 45% since the war began.

Another major loser is the Global South. Russia and Ukraine account for over 25% of global wheat exports, 33% of barley and 20% corn. Twenty-five African countries depend on Russia for more than a third of their wheat imports, which Russia supplies at concession prices. Now food prices, at their highest level ever, according to the UN’s Food and Agriculture Organisation (8/4/22), will hit them hard. A separate UN report on 16 March 2022 warned of civil unrest, food shortages and recession. Russia and Ukraine also provide about 40% of the global supply of fertilizer: shortages will damage local agriculture. Combined with energy price rises, the effect is that people are going to starve, and many countries will turn back to coal as they’re shut off from Russian resources.

Here at home, anti-NATO voices have been muffled. Labour is out-hawking the Tories on increased British arms spending. Trade unionists have been blacking Russian oil tankers rather than arms shipments to Ukraine. Overall, we’re in the worst situation we’ve ever been in in terms of the dangers of world war, increased state and big-tech authoritarianism and censorship, and ideological weakness and division. We are still free to publish – but that freedom is uncertain. Information sources are disappearing every day, banned by Twitter and Facebook and the government. The American tech industry’s near-total domination of the narrative has encouraged support for war in western populations, with liberals calling for more weapons for Ukraine, taken in by the myth that this is doing good.

The cost of living crisis has nowhere near reached its peak – and is being blamed solely on the war.

PART 2 RESISTANCE TO US PRESSURE AND EMERGING CONTRADICTIONS

On the other hand, there are several contradictions emerging.

The war has highlighted differences between the West and the Global South, which has almost universally refused to impose sanctions on Russia – with a good number, particularly of African nations, abstaining on two UN anti-Russia votes, a higher number on the second vote. Brazil’s Dilma Rousseff said Russia had had no choice but to make itself heard. South Africa’s Cyril Ramaphosa blamed NATO for the war, though neither leader condoned Russia’s intervention. The 57-nation Organisation of Islamic Conference rejected sanctions, as did the ASEAN countries and India. Even a NATO member like Turkey refused to sanction Russia. The same goes for the Gulf States, normally obedient American puppets. While we should be careful not to exaggerate its significance, this refusal to kowtow to a policy the Americans regard as a dividing line – you’re either with us or against us ­– is something new and represents an objective challenge to US supremacy.

Other contradictions. In America, the oil industry has successfully argued for sanctions to be softened so they don’t harm US companies. The US government has removed Russian fertiliser from the sanctions list as American agribusiness depends on it. American firms like Boeing that rely on Russian titanium are being hit. Prices for other vital metals used in electronics have risen, because Russia controls 50% of the world market. The same goes for noble gases such as neon, argon, helium, essential for the production of microchips.

GERMANY, FRANCE AND THE EU

Germany has been humiliated by the US. It was Biden, not Germany, who on 8 February 2022 unilaterally announced the ending of Nord Stream 2 if Russia invaded Ukraine, saying, “There will no longer be a Nord Stream 2. We will bring an end to it” (France 24). Gazprom, part German owned, will lose $4.5 billion from the abandonment of the pipeline. The Federation of German Industries says an energy embargo “threatens to punish Germany and the EU more severely than the aggressor.” High food and energy prices combined with low growth are leading to stagflation, and not just in Germany. Germany’s energy minister has predicted “mass unemployment, poverty” if his country stops using Russian oil and gas. Inevitably, as Bloomberg has pointed out (9/3/22), “Germany has emerged as the main roadblock to broaden European Union sanctions against Russia…” Once it has the military means to resist the US – after its rapid militarisation – Germany will once more become the biggest military power in Europe and potentially the third biggest in the world, threatening Russia directly, but also eventually a potential rival to the US itself.

Both Germany and the US want a weakened Russia they can exploit. Both actively stirred up the Maidan protests using their secret services. But these two competing powers have different interests and use different methods. Germany has traditionally preferred to use economic means to wield its influence and guarantee its supply of cheap labour in eastern Europe, and thus its domination over the EU. The US has dominated Europe above all through its military presence, and now through proxy war. 

As for France, Macron’s mediation attempts have shown French imperialism’s equivocal position, both allied with, and seeking autonomy from, the US. France faces the loss of an estimated $17 billion from the sanctions. Macron said on 7 March 2022 “It is impossible to build a lasting peace if Russia doesn’t participate in building a comprehensive security architecture on our continent... Our responsibility is to preserve all the ties that we can preserve.” Not quite the US line. Tellingly, Total is the only western oil company to have stayed in Russia, unlike Shell and BP. Renault has continued production – along with other French firms. France, which is using the war to increase its defence spending – by 25% this year – wants to lead an enlarged EU army, something it’s been moving towards for years, under NATO’s auspices, but actually to further its own ambitions. Now, with Germany on the way to becoming a great military power, France will have to fight for its military leadership of Europe. The Franco-German inter-imperialist struggle will play out within the EU.

Meanwhile, the EU as an entity has sent weapons to Ukraine – the first time it has armed a country outside the bloc – and seized the chance to speed up its own militarisation with its new 5,000 strong rapid reaction force. It is also developing a new €5bn European Peace Facility, which allows the EU to export arms and training to other countries, alongside its €40 billion European Defence Fund which is establishing a European military-industrial complex, whose centrepiece is a new European jet fighter.

RUSSIA AND SANCTIONS

Turning to Russia, the West has defaulted on its debts and frozen Russia’s gold and currency reserves. The US has banned the supply of dollar banknotes, to damage Russia’s oil exports which are traded in dollars. The EU has done the same with the Euro. The rouble’s value plunged 40% initially but has since recovered. Trade has fallen, although the rise in energy revenues is at the moment offsetting those falls – the oil price has risen and valuable metals have shot up in price too. While not all Russian banks have been targeted, Sberbank, one of the biggest, and publicly owned, has been shut out of the US banking network, unable to make or receive international dollar payments – the first time a major bank has been targeted like this. Its stock market value has crashed.

Import restrictions will damage Russia’s productive capacity. Factories could have to stop production without foreign components. 5 million workers in foreign and mixed-ownership firms – 10% of the workforce – face potential unemployment.

To protect itself, Russia is controlling the outflow of capital and may start paying its external debts in roubles – effectively a default. It has around $600 billion of foreign exchange reserves, plus large gold reserves. In a conventional financial crisis these reserves would give it autonomy in the face of limited sanctions, as happened in 2014. But now, if it can’t access them, it may be in trouble, even though a big portion of its reserves are not in dollars. Russia could be reduced to bartering gold for imports if it can’t exchange gold for dollars. Altogether, the freezing of Russia’s foreign gold and foreign-exchange reserves represents a huge escalation by the West. It is also the punishment being meted out to Venezuela, Iran and Afghanistan. Having to defend the rouble’s value could quickly drain the country's reserves. The last time it had to do it, during the 2008 financial crisis, it cost it $200 billion.

Russia could nationalise foreign companies that pull out. But nationalisation doesn’t guarantee production, if essential parts are missing. And Russia has appeared to want to keep economics separate from war to a degree – so far even keeping the gas pipeline through Ukraine to Europe flowing throughout the conflict. “Russia’s monetary authorities are still playing by western rules, even after Russian foreign exchange reserves were captured by the West,” according to Sergey Glazyev (The Cradle, 14/4/22).

RELATIONS WITH CHINA

Trade with China may not plug Russia’s economic gap in the short term. Meanwhile, sanctions are giving China leverage over Russia in terms of prices for Russia’s energy supplies and other exports.

So far, Russia says it will ensure pensions, benefits and salaries are protected, but that might not prevent mass immiseration, as inflation kicks in.

More broadly, sanctions are speeding up the development of a non-western Russia-China bloc. Bloomberg comments, “Russia's exclusion from the critical global system… could backfire, drive up inflation, bring Russia closer to China and shield financial transactions from Western scrutiny. It could also encourage the development of a SWIFT alternative that could ultimately undermine the supremacy of the US dollar.”

Russia has already set up an alternative payment system. Sberbank is issuing Mir bank cards in conjunction with China’s UnionPay system. 40% of Russians already have a Mir card and will now be able to use it outside Russia. Russia’s largest private bank, Alfa Bank, will also issue Chinese UnionPay cards instead of Visa or Mastercard. Russian transactions using the Chinese renminbi have risen exponentially. Perhaps most importantly, Russia and its trade bloc, the Eurasian Economic Union last month agreed to develop a monetary and financial system with China. This marks a clear move away from the dollar.

For China, Russia’s decoupling from the West could prove beneficial, so long as the war in Ukraine doesn’t escalate. China can now buy up Russian assets too toxic for Western investors, particularly energy. China has relaxed restrictions on imports of Russian wheat, addressing its own food insecurity, while also alleviating the impact of sanctions on Russia. In the future, the new overland Power of Siberia 2 pipeline will allow Russian energy to flow to China, out of reach of the US navy. Right now, though, China may not rush to embrace Russia, for fear of US sanctions. Sinopec, one of China’s state-owned energy companies, has suspended a $500 deal with Russia for that reason. Huawei, too, reportedly halted sales in Russia and furloughed some staff for fear of sanctions (Telecoms, 13/4/22l).

Meanwhile, the US is trying to bully China into distancing itself from Russia. So far these attempts have been rebuffed – China has called the US “the culprit and leading instigator of the Ukraine crisis” and criticised the arming of Ukraine. But Chinese capitalists – especially those susceptible to US sanctions – are putting the pressure on. One prominent western-oriented academic, Professor Hu Wei, has argued, for instance, that China shouldn’t end up tied to Putin on the wrong side of a new Iron Curtain.

WEAKER DOLLAR

De-dollarisation could gather momentum if other countries with big dollar holdings begin exchanging dollars for gold to evade American punishment for flouting sanctions. As the economic commentator Wolfgang Münchau warned, “For a central bank to freeze the accounts of another central bank is a really big deal… As a direct result of these decisions, we have turned the dollar and the euro, and everything that is denominated in those currencies, into de facto risky assets”. India is already setting up a direct rupee-rouble payments system for its trade with Russia. Saudi Arabia is pricing its Chinese oil sales in renminbi rather than dollars.

This de-dollarisation is at an early stage, and the dollar’s dominance remains huge, with the euro in second place. But the change points to something significant. If an alternative, non-western bloc does develop, the effect will be to shrink the area of exploitation available to western capital. Martin Wolf in The Financial Times said: “What might emerge are two monetary systems — a western and a Chinese one — operating in different ways and overlapping uncomfortably.”

In conclusion, the war has, at least in the short term, united the West and divided Russia from Europe, as part of the American strategy to prepare for war on China. Taiwan will be America’s next target. The US has been winning the propaganda war against China just as it has with Russia. It’s tearing up its long-held One China policy and the post-WW2 peace treaties – by framing Taiwanese secession as a fight for freedom from tyrannical China – just as it’s torn up the agreements made with Russia at the end of the Cold War, provoking the current crisis. Influential US neo-cons are already calling for full recognition of Taiwan and military guarantees if it declares independence, while the US is arming Taiwan and is threatening to station troops there. Meanwhile, Japan is re-militarising too. The influential former Japanese Prime Minister, Shinzo Abe, is calling for American nuclear weapons to be stationed on Japanese soil, and Japan could potentially join the AUKUS alliance of the USA, UK and Australia.

While America has benefited from the Ukraine war in the short term, its longer term credibility as the world’s superpower has been damaged. The war – coming after failures in Syria, Iraq and Afghanistan – has highlighted the limits of US rule. This will only make it more dangerous. We should take Biden seriously when he says: “We are in a competition to win the 21st century, and the starting gun has gone off.” A recent article from the influential Atlantic Council (Washington Must Prepare for War with Both Russia and China) made US strategy clear: “The use of Ukraine as a battleground against Russia is part of the US’s full-out siege and containment of China.” Biden’s recent announcement that the US is prepared to use nuclear weapons first is a worrying sign. After 30 years of unipolarity, American global pre-eminence is no longer assured. Which means it will soon fight for it head-on.

PRACTICAL DEMANDS

In practical terms, most immediately we should be demanding that Britain stop sending weapons to Ukraine – stop pouring petrol on the flames. In Italy the trade union movement has refused to handle arms shipments – that would be a great advance here. We should also be calling for the restoration of nuclear and pan-European security treaties torn up by the US. Last but not least, we should campaign for Britain to leave NATO and establish an independent peace-oriented foreign policy.

One final point: Ilan Pappe’s 4 ironic comments cut through the sanctimonious hypocrisy of the West: “White refugees are welcome; others less so. You can invade Iraq, but not the Ukraine. Sometimes neo-Nazism can be tolerated. Hitting high-rises is only a war crime in Europe.”

 

Part of Lockheed Martin Aegis system bound for Romania - Photo by Missile Defence Agency

Boris Yeltsin and Bill Clinton promises broken - Bob McNeelyphoto by

On the other hand there are several contradictions emerging...

Sberbank sanctioned - photo by Zssen

Xi Jinping and Vladimir Putin closer allies? - photo by Kremlin