Cooking the Books 1 – Mutual Assured Downturn
Since Russia invaded Ukraine at the end of February, the response of the West (ie, the US and those states protected by its nuclear weapons) has been to declare economic war on Russia.
Might being right under capitalism, sanctions are a weapon that powerful states can use to try to impose their will on states that they come into particular conflict with in the struggle built into capitalism over sources of raw materials, trade routes, investment outlets, markets, and strategic points and areas to protect these.
Oil is an obvious example. Who controls the Middle East oilfields and the pipelines and trade routes to export it has been the cause of the many wars that have taken place there since the end of the last world war. Currently the West is particularly concerned that the leading power there should not be Iran and has imposed sanctions on it to try to stop it increasing its might by acquiring nuclear weapons.
As an alternative to actual war, sanctions are quite attractive to the sanctioning power. At a small sacrifice of depriving itself of a market and an investment outlet, they weaken the rival state without having to fire a shot or drop a bomb. Even though they increase the premature death rates amongst the civilian population, especially children, this is not regarded as a war crime.
Russia, however, is not Iran. It has much more might at its disposal, in particular an arsenal of nuclear bombs and the missiles to deliver them to the US itself. Here the strategic policy of ‘mutual assured destruction’ (MAD) comes into play – both the US and Russia built up an arsenal of nuclear weapons not with the intention of using them, but to prevent them being used as each knows that if they did they would be destroyed too. Instead, the West has decided to wage economic war, with some effect:
‘Russia is reportedly set for its deepest recession since the fall of the Soviet Union. The country is facing a growing number of sanctions over the invasion of Ukraine, with the European Union dealing a further blow this week as it vowed to ban nearly all oil imports’ (Independent, 1 June).
But this ‘success’ has come at a price:
‘The head of the World Bank sounded the alarm over an impending global recession on Wednesday, warning it was difficult to envision a future where a worldwide downturn could be avoided. Speaking at an event hosted by the U.S. Chamber of Commerce (USCC), World Bank president David Malpass said the war in Ukraine—and its impact on food and energy costs—could spark a global recession. “As we look at global GDP… it’s hard right now to see how we avoid a recession,” he said. “The idea of energy prices doubling is enough to trigger a recession by itself.”’ (Fortune, 26 May, bit.ly/3xs5VoG).
And Russia has yet to use its economic nuclear bomb: cutting off gas supplies to Europe. ‘That would result in industrial blackouts this winter and a substantial hit on consumer incomes caused by spiralling inflation’ (Times, 1 June).
So, it is not just workers in Russia who will be collateral damage in this economic war but the workers in the sanctioning states too, not to mention those in the rest of the world.
As usual when capitalist states fall out, it is ordinary people who suffer.