Translate

Showing posts with label reserve currency. Show all posts
Showing posts with label reserve currency. Show all posts

Friday, 25 March 2022

Foreign Policy Realism: Can an Agreement on Ukrainian Neutrality End the War?

The USA and NATO are to blame . . .

In his 2015 lecture at the University of Chicago, Professor John Mearsheimer argued that expanding NATO  to Russia's borders was a mistake.  In 2022, Mearsheimer has continued to reiterate his position that a neutral Ukraine serving as a bridge between Russia and Europe would serve everyone's best interests:  the Russians', the EU's, the USA's, the West's and especially and most importantly, the Ukranians'. As early as 1998, George Kennan, author of "The Long Telegram" and "architect of America's successful containment of the Soviet Union" also decried the reckless and ill-advised expansion of NATO to Russia's borders. The expansion of NATO was a mistake, they argued, for two basic reasons:  1) it would eventually goad Russia into a hostile response and 2) it offered a false promise of military intervention to new member states (the USA was highly unlikely to engage in a nuclear war with Russia in defence of Latvia, Lithuania or Estonia, for example, when they had no strategic or economic value for the Americans).  

 

The "Historical pattern" counterargument

In a New Yorker interview, Stephen Kotkin, a scholar of Russian history, declares:

In a Globe and Mail article entitled "To understand why Ukraine is under attack today, we need to look at Russia's actions over the last 70 years," Michael Ignatieff adopts a similar "historical pattern" argument.  Ignatieff writes:  "This story of four Eastern European capitals, all under attack from Russia, over the past 70 years makes nonsense of the claim that NATO expansion eastward caused this crisis." 

 

 Foreign Policy Realism

Perhaps because I have become so familiar with the aphorism which always accompanies financial advice--"Past performance is no guarantee of future results"--I find the "historical pattern" argument unconvincing.  Additionally, a close focus on Russia's historical pattern of behaviour tells, at best, only half the story.  Any attempt to analyze a global conflict would, logically, have to consider the American historical pattern of behaviour over the last 70 years:  a 20-year war in Afghanistan, two wars in Iraq, the war in Yugoslavia, bombings in Syria, targeted assignations throughout the Middle East, interventions in Granada, Panama, Chile, Nicaragua, etc, etc, all the way back to the Vietnam War. Imagining, on behalf of the Russians, that they had nothing to fear from the US expansion of NATO and that what is happening can be completely explained by Russian imperialism and nostalgia for the Soviet Union strikes me as willful blindness. 


Reading Ezra Klein's NYT interview with defence and foreign policy analyst Emma Ashford, I discovered that my thinking had a name:  "foreign policy realism."  As Klein explains:

Realism is a political framework that understands international relations as a contest between relatively rational states for power and security. It’s pretty structural in that way. It sees the actions and activities of states as quite predictable, given their role and needs in the international security hierarchy.

[ . . . .]  It wants to be structural, not personal or individualistic.

In this case, there’s a particular realist analysis that has caught a lot of people’s attention, which is John Mearsheimer’s model of the conflict.

Realism, Neo-classical realism, game theory and chaos theory

Emma Ashford is, according to Klein, "what’s called a neo-classical realist. She begins with a structural, state-based, power-based analysis of realism, but then opens it up to more influence from domestic politics — the psychology of individual leaders, the messiness of reality."  We've been here before in another context.  My post "The Market, the State and the Monkey in the Middle" highlighted economist Jean Tirol's "game theory" which, like neo-classical realism in strategic studies, proposed that the traditional models based on the assumption that all agents would act in rational self-interest were inadequate because they failed to take into account the cognitive bias and ideology of individuals.  I must also admit that I believe in "chaos theory" (see "The Chaos Theory of International Trade"), the idea that individual actions can unleash global consequences, as in the case of Gavrilo Principthe Bosnian teenager whose assassination of Archduke Ferdinand is said to have started World War I. 

 

The Danger of melodrama

In the current crisis, I retreat to realism because being rational and crediting our enemies with being rational is the only way to de-escalate and to avoid the worst possible of all catastrophes.  As I have reviewed Western media coverage of the war, I have noted the high frequency of images of desperate women and children.  The intent is to call upon our compassion and, of course, compassion is called for.  But compassion over time and with increased intensity can become simply passion, overwhelming emotions which have no real objective but create an irrational antagonism towards Russia, Russians and all things Russian.


I have long observed that a story "has legs" in Western media if it manages to copy the structure of melodrama:  strict moral justice,  a courageous hero, an evil villain, innocent victims,  suspense, and surprising happy ending--all the features which dominate our TV and film entertainment.  The word "melodrama" is synonymous with heightened emotions and derives from the practice of playing music during a character's speech to raise the emotional intensity.  An emotional response to the war in Ukraine is appropriate but the substitution of a melodramatic narrative for a clearheaded, rational awareness of what is going on is dangerous.


Consider Michael Ignatieff's recent article in the Globe and Mail ( O1, 06, 9 March 2022).  Ignatieff writes:

The Russians need to understand that if they stage a military incursion across the NATO border--Lenin's bayonet probing--they will be met by force, and if that fails to hold them, they will be met with nuclear weapons, at first tactical, and then as necessary, strategic, too.

As a Harvard University professor, Ignatieff was a supporter of George W. Bush's invasion of Iraq.  He was leader of the federal Liberal Party and, were it not for his impatience, forcing an early election that no one wanted, he might have become Prime Minister of Canada.  In case you missed the gist of his halting prose, he is advocating a nuclear war against the country which holds the largest stockpile of nuclear weapons on the planet.  

 

Claims of Putin's insanity make him more dangerous not less

Ashford, like Mearsheimer, is categorical that "Putin is a rational person [and] that he’s making rational decisions."  However, Ashford contends that Putin is being ill-advised because he is surrounded by sycophants determined to tell him what they think he wants to hear.  Western foreign policy and strategic analyses all too often prove to be pseudo-psychological speculations on Putin's innermost dreams, fears and ambitions.  Ruthless, autocratic and amoral as Putin might be, melodramatic depictions of him as an insane, evil villain, protagonist to courageous, heroic Zelensky, the movie star who became president of Ukraine in fiction before he became President of Ukraine in fact, move us in only one possible direction:  escalation, with the hope that the hero will save the day as he always does in the movies.  If Putin really is the mad megalomaniac we have been encouraged to believe he is, then we should be showing much greater fear of him than we have so far.

 

Are We the centre of the universe?

The Globe and Mail article entitled "UN General Assembly deals Russia overwhelming diplomatic defeat over Ukraine invasion" displayed this map:



Blue indicates the 141 countries which voted in favour of the resolution condemning the Russian invasion.  Red indicates the 5 countries which voted against the resolution.  Yellow and grey indicate the 35 countries which abstained and 12 which did not vote, respectively.  Considering, as a block, the 52 countries which failed to condemn the invasion, including China, India, Pakistan, Iran, Iraq, Kazakhstan and 17 African countries, a division of the globe between East and West begins to appear.

 

Noting this division reminded me of Peter Frankopan's The Silk Roads: A New History of the World. For me, the book was, in fact, a "new history of the world." Throughout my studies and my career as a professor, the world began in Greece, spread to Europe and the UK, and eventually crossed the Atlantic to the USA and Canada--there was barely anything else worth knowing about. Awareness of the East changes the entire world narrative that we call history. Western imaginings that the West is the centre of the world are not unlike that time before Galileo when we thought the Earth was the centre of the universe. Our imaginings are not easy to give up. When the Inquisition showed Galileo the instruments of torture he recanted his claims that the earth and planets revolved around the sun. It would take the Catholic Church 350 years to admit, in 1992, that Galileo was right all along while absolving the Inquisition of any blame for their justified, well-intentioned error.

We, in the West, imagine that "we are the world" at our peril.  Without paying much attention, our self-absorption has made enemies and forged alliances against us among countries that have been erstwhile enemies to one another:  Russia and China, India and Pakistan, China and India, Iraq and Iran.  For much of recorded history, the East (not the West), as Frankopan elaborates, has been the centre of wealth, progress, civilization and empires.  It is Western orientalist folly to imagine that the East can never rise again.


The USA sanctions China and Russia at the same time

In his 2015 lecture, Meirsheimer argued that the USA would need Russia, as an ally, to compete against the growing power and influence of China.  The opposite has, of course, been happening, as the USA practically forces Russia and China to ally with one another by imposing sanctions on both countries at the same time.  Only a few short weeks ago, the USA was accusing China of genocide and passed into law the Uyghur Forced Labor Act which, if Border Security Agents enforced the letter of the law, would ban virtually all imports from China. The Canada-United States-Mexico Agreement free trade agreement would compel Canada and Mexico to do the same. (See What if China Isn't Using Forced Labour?)


Joe Biden's recent State of the Union, which focused on Russia, Ukraine, and NATO adopted a distinctly different tone toward China.  In fact, China was only mentioned in the context in the new US infrastructure bill:

In tone, this State of the Union downgrades China from "evil empire" to one of many friendly competitors and Xi from an aggressive dictator to a "good ol' boy" confident.  


However, as reported in Politico, the more recent two-hour-long call between Xi and Biden indicated that the China-US relationship had turned "profoundly negative."  As reported in Politico:

 Russian Tanks versus a weaponized US dollar

Since President Biden has already signed into law a ban on the importation of goods from China, further sanctions would have to be the kind of weaponized financial sanctions that the USA has already imposed on Russia, Iran, Cuba, North Korea and Venezuela.  Weaponizing the USD (US dollar) against China has been much discussed in recent years. (See Analyzing the Discourse.) Canadians got a small taste of how that process functions when we were called upon to arrest the Huawei CFO on a charge of bank fraud for allegedly misleading HSBC about Huawei's financial transactions in Iran. The current American weaponization of the dollar against Russia is of such a scale that in addition to claims that it will destroy the Russian economy, it is raising questions about the survival of the USD as the highly privileged global reserve currency.


In "Ukraine and Dollar Weaponization," George Pearkes writes: "America has responded by threatening Russia with an unconventional weapon: the dollar. However, deploying the dollar may actually undermine its power, and hasten its departure from the US arsenal."  Discussions of how long the USD can remain the global reserve currency and what might happen as it declines have been around for a long time.  Historically, six countries--Portugal, Spain, France, Netherlands, Britain and now the USA--have held the coveted status of "global reserve currency" (i.e., being the country which produces the money that other countries must use for international trade).  On average, countries have maintained the privilege of being the global reserve currency for 94 years.  The USD has been the global reserve currency for 101 years.  Both the Chinese yuan and Bitcoin have been discussed as candidates to replace the USD as the dominant global reserve currency.

 

What Happens next?

To state the obvious, we have never been here before.  Many may predict but no one knows how these never-before-seen variables will play out.  For those who might have thought of the "weaponized dollar" as an esoteric myth, the current circumstances make plain that a weaponized dollar is a real-world strategy.  The question remains as to how strong and effective a weapon it is.  David Frum, in The Atlantic, claims that financial sanctions will cause the collapse of the Russian economy.  In the State of the Union, President Biden announced that 

Some commentators have pointed out that the sanctions and seizures might be largely symbolic.  Seized yachts, planes and apartments remain the property of the Russian oligarchs until such time as it can be proved in court that they are connected to criminal activity or support for the Ukrainian invasion.  Many of the Russian oligarchs are finding sanctuary in Israel which has shown muted support for Ukraine's Jewish president.

 

Of the states which have been the target of US financial sanctions:

Can an Agreement on Ukrainian Neutrality End the War?

In recent days, President Zelensky has announced that Ukraine will not join NATO.  Ezra Klein cites this fact as evidence that NATO expansion was not the cause of the invasion.  History has proven over and over again that wars are easier to start than to end. For those who embrace a melodramatic vision of the war in Ukraine, Zelensky's declaration might seem a setback for the hero and a victory for the villain, but it is also a step toward ending the war without escalating the destruction and bloodshed.  At least one of Putin's claimed justifications for the invasion has been removed.  We might ask why it took twenty days of warfare to get to this point.  Putin's other conditions, sovereignty over Crimea, which he has held since 2014 and is dominantly Russian in terms of ethnicity and language, and the lifting of sanctions, seem not unreasonable concessions compared to the risk of a nuclear war.  It might grate that we would be rewarding Putin's bad behaviour but this isn't kindergarten; it's the real world with lives at stake.

 

Interviewed on "Going Underground," John Bolton claimed that Putin's real interest in Ukraine is the eastern and southern provinces--sites of the Ukrainian civil war and ports on the Black Sea, respectively.  (I cannot link to the interview because internet access to Russia Today is now being blocked.)  The hard negotiations will likely centre on these territories. 


Russian forces overrunning Ukraine sites where the USA has established bio-weapons labs have sparked new areas of concern.  The claims of US bio-weapons labs in Ukraine have been broadly dismissed, but Glenn Greenwald offers a convincing argument that such facilities do exist even as US officials manage to deny their existence.  However unsavoury and unpalatable a negotiated peace might seem, it pales in comparison to the alternatives.  Consider: What would a Ukrainian victory look like?  What would a Russian victory look like?  In the end, there isn't much difference between the two:  everyone loses in a lengthy war of attrition--likely lasting longer than the major players will be alive--guaranteeing more destruction and loss of life, and the potential escalation and expansion of the war beyond any measurable limit. 


 

How We Train University Students to Write Poorly (with Addendum)

When I was in the hunt for a tenure-track university position, I attended a mentoring session on how to publish led by Linda Hutcheon, who w...