By Michae Hudson
November 07, 2022:
Information Clearing House
-- Germany has
become an economic satellite of America’s New
Cold War with Russia, China and the rest of
Eurasia.
Germany and other NATO countries have been
told to impose trade and investment sanctions
upon themselves that will outlast today’s proxy
war in Ukraine. U.S. President Biden and his
State Department spokesmen have explained that
Ukraine is just the opening arena in a much
broader dynamic that is splitting the world into
two opposing sets of economic alliances. This
global fracture promises to be a ten- or
twenty-year struggle to determine whether the
world economy will be a unipolar U.S.-centered
dollarized economy, or a multipolar,
multi-currency world centered on the Eurasian
heartland with mixed public/private economies.
President Biden has characterized this split
as being between democracies and autocracies.
The terminology is typical Orwellian
double-speak. By “democracies” he means the U.S.
and allied Western financial oligarchies. Their
aim is to shift economic planning out of the
hands of elected governments to Wall Street and
other financial centers under U.S. control. U.S.
diplomats use the International Monetary Fund
and World Bank to demand privatization of the
world’s infrastructure and dependency on U.S.
technology, oil and food exports.
By “autocracy,” Biden means countries
resisting this financialization and
privatization takeover. In practice, U.S.
rhetoric means promoting its own economic growth
and living standards, keeping finance and
banking as public utilities. What basically is
at issue is whether economies will be planned by
banking centers to create financial wealth – by
privatizing basic infrastructure, public
utilities and social services such as health
care into monopolies – or by raising living
standards and prosperity by keeping banking and
money creation, public health, education,
transportation and communications in public
hands.
The country suffering the most “collateral
damage” in this global fracture is Germany. As
Europe’s most advanced industrial economy,
German steel, chemicals, machinery, automotives
and other consumer goods are the most highly
dependent on imports of Russian gas, oil and
metals from aluminum to titanium and palladium.
Yet despite two Nord Stream pipelines built to
provide Germany with low-priced energy, Germany
has been told to cut itself off from Russian gas
and de-industrialize. This means the end of its
economic preeminence. The key to GDP growth in
Germany, as in other countries, is energy
consumption per worker.
These anti-Russian sanctions make today’s New
Cold War inherently anti-German. U.S. Secretary
of State Anthony Blinken has said that Germany
should replace low-priced Russian pipeline gas
with high-priced U.S. LNG gas. To import this
gas, Germany will have to spend over $5 billion
quickly to build port capacity to handle LNG
tankers. The effect will be to make German
industry uncompetitive. Bankruptcies will
spread, employment will decline, and Germany’s
pro-NATO leaders will impose a chronic
depression and falling living standards.
Most political theory assumes that nations
will act in their own self-interest. Otherwise
they are satellite countries, not in control of
their own fate. Germany is subordinating its
industry and living standards to the dictates of
U.S. diplomacy and the self-interest of
America’s oil and gas sector. It is doing this
voluntarily – not because of military force but
out of an ideological belief that the world
economy should be run by U.S. Cold War planners.
Sometimes it is easier to understand today’s
dynamics by stepping away from one’s own
immediate situation to look at historical
examples of the kind of political diplomacy that
one sees splitting today’s world. The closest
parallel that I can find is medieval Europe’s
fight by the Roman papacy against German kings –
the Holy Roman Emperors – in the 13th century.
That conflict split Europe along lines much like
those of today. A series of popes excommunicated
Frederick II and other German kings and
mobilized allies to fight against Germany and
its control of southern Italy and Sicily.
Western antagonism against the East was
incited by the Crusades (1095-1291), just as
today’s Cold War is a crusade against economies
threatening U.S. dominance of the world. The
medieval war against Germany was over who should
control Christian Europe: the papacy, with the
popes becoming worldly emperors, or secular
rulers of individual kingdoms by claiming the
power to morally legitimize and accept them.
Medieval Europe’s analogue to America’s New
Cold War against China and Russia was the Great
Schism in 1054. Demanding unipolar control over
Christendom, Leo IX excommunicated the Orthodox
Church centered in Constantinople and the entire
Christian population that belonged to it. A
single bishopric, Rome, cut itself off from the
entire Christian world of the time, including
the ancient Patriarchates of Alexandria,
Antioch, Constantinople and Jerusalem.
This break-away created a political problem
for Roman diplomacy: How to hold all the Western
European kingdoms under its control and claim
the right for financial subsidy from them. That
aim required subordinating secular kings to
papal religious authority. In 1074, Gregory VII,
Hildebrand, announced 27 Papal Dictates
outlining the administrative strategy for Rome
to lock in its power over Europe.
These papal demands are in striking parallel
to today’s U.S. diplomacy. In both cases
military and worldly interests require a
sublimation in the form of an ideological
crusading spirit to cement the sense of
solidarity that any system of imperial
domination requires. The logic is timeless and
universal.
The Papal Dictates were radical in two major
ways. First of all, they elevated the bishop of
Rome above all other bishoprics, creating the
modern papacy. Clause 3 ruled that the pope
alone had the power of investiture to appoint
bishops or to depose or reinstate them.
Reinforcing this, Clause 25 gave the right of
appointing (or deposing) bishops to the pope,
not to local rulers. And Clause 12 gave the pope
the right to depose emperors, following Clause
9, obliging “all princes to kiss the feet of the
Pope alone” in order to be deemed legitimate
rulers.
Likewise today, U.S. diplomats claim the
right to name who should be recognized as a
nation’s head of state. In 1953 they overthrew
Iran’s elected leader and replaced him with the
Shah’s military dictatorship. That principle
gives U.S. diplomats the right to sponsor “color
revolutions” for regime-change, such as their
sponsorship of Latin American military
dictatorships creating client oligarchies to
serve U.S. corporate and financial interests.
The 2014 coup in Ukraine is just the latest
exercise of this U.S. right to appoint and
depose leaders.
More recently, U.S. diplomats have appointed
Juan Guaidó as Venezuela’s head of state instead
of its elected president, and turned over that
country’s gold reserves to him. President Biden
has insisted that Russia must remove Putin and
put a more pro-U.S. leader in his place. This
“right” to select heads of state has been a
constant in U.S. policy spanning its long
history of political meddling in European
political affairs since World War II.
The second radical feature of the Papal
Dictates was their exclusion of all ideology and
policy that diverged from papal authority.
Clause 2 stated that only the Pope could be
called “Universal.” Any disagreement was, by
definition, heretical. Clause 17 stated that no
chapter or book could be considered canonical
without papal authority.
A similar demand as is being made by today’s
U.S.-sponsored ideology of financialized and
privatized “free markets,” meaning deregulation
of government power to shape economies in
interests other than those of U.S.-centered
financial and corporate elites.
The demand for universality in today’s New
Cold War is cloaked in the language of
“democracy.” But the definition of democracy in
today’s New Cold War is simply “pro-U.S.,” and
specifically neoliberal privatization as the
U.S.-sponsored new economic religion. This ethic
is deemed to be “science,” as in the quasi-Nobel
Memorial Prize in the Economic Sciences. That is
the modern euphemism for neoliberal
Chicago-School junk economics, IMF austerity
programs and tax favoritism for the wealthy.
The Papal Dictates spelt out a strategy for
locking in unipolar control over secular realms.
They asserted papal precedence over worldly
kings, above all over Germany’s Holy Roman
Emperors. Clause 26 gave popes authority to
excommunicate whomever was “not at peace with
the Roman Church.” That principle implied the
concluding Clause 27, enabling the pope to
“absolve subjects from their fealty to wicked
men.” This encouraged the medieval version of
“color revolutions” to bring about regime
change.
What united countries in this solidarity was
an antagonism to societies not subject to
centralized papal control – the Moslem Infidels
who held Jerusalem, and also the French Cathars
and anyone else deemed to be a heretic. Above
all there was hostility toward regions strong
enough to resist papal demands for financial
tribute.
Today’s counterpart to such ideological power
to excommunicate heretics resisting demands for
obedience and tribute would be the World Trade
Organization, World Bank and IMF dictating
economic practices and setting
“conditionalities” for all member governments to
follow, on pain of U.S. sanctions – the modern
version of excommunication of countries not
accepting U.S. suzerainty. Clause 19 of the
Dictates ruled that the pope could be judged by
no one – just as today, the United States
refuses to subject its actions to rulings by the
World Court. Likewise today, U.S. dictates via
NATO and other arms (such as the IMF and World
Bank) are expected to be followed by U.S.
satellites without question. As Margaret
Thatcher said of her neoliberal privatization
that destroyed Britain’s public sector, There Is
No Alternative (TINA).
My point is to emphasize the analogy with
today’s U.S. sanctions against all countries not
following its own diplomatic demands. Trade
sanctions are a form of excommunication. They
reverse the 1648 Treaty of Westphalia’s
principle that made each country and its rulers
independent from foreign meddling. President
Biden characterizes U.S. interference as
ensuring his new antithesis between “democracy”
and “autocracy.” By democracy he means a client
oligarchy under U.S. control, creating financial
wealth by reducing living standards for labor,
as opposed to mixed public/private economies
aiming at promoting living standards and social
solidarity.
As I have mentioned, by excommunicating the
Orthodox Church centered in Constantinople and
its Christian population, the Great Schism
created the fateful religious dividing line that
has split “the West” from the East for the past
millennium. That split was so important that
Vladimir Putin cited it as part of his September
30, 2022 speech describing today’s break away
from the U.S. and NATO centered Western
economies.
The 12th and 13th centuries saw Norman
conquerors of England, France and other
countries, along with German kings, protest
repeatedly, be excommunicated repeatedly, yet
ultimately succumb to papal demands. It took
until the 16th century for Martin Luther,
Zwingli and Henry VIII finally to create a
Protestant alternative to Rome, making Western
Christianity multi-polar.
Why did it take so long? The answer is that
the Crusades provided an organizing ideological
gravity. That was the medieval analogy to
today’s New Cold War between East and West. The
Crusades created a spiritual focus of “moral
reform” by mobilizing hatred against “the other”
– the Moslem East, and increasingly Jews and
European Christian dissenters from Roman
control. That was the medieval analogy to
today’s neoliberal “free market” doctrines of
America’s financial oligarchy and its hostility
to China, Russia and other nations not following
that ideology.
In today’s New Cold War, the West’s
neoliberal ideology is mobilizing fear and
hatred of “the other,” demonizing nations that
follow an independent path as “autocratic
regimes.” Outright racism is fostered toward
entire peoples, as evident in the Russophobia
and Cancel Culture currently sweeping the West.
Just as Western Christianity’s multi-polar
transition required the 16th century’s
Protestant alternative, the Eurasian heartland’s
break from the bank-centered NATO West must be
consolidated by an alternative ideology
regarding how to organize mixed public/private
economies and their financial infrastructure.
Medieval churches in the West were drained of
their alms and endowments to contribute Peter’s
Pence and other subsidy to the papacy for the
wars it was fighting against rulers who resisted
papal demands. England played the role of major
victim that Germany plays today. Enormous
English taxes were levied ostensibly to finance
the Crusades were diverted to fight Frederick
II, Conrad and Manfred in Sicily. That diversion
was financed by papal bankers from northern
Italy (Lombards and Cahorsins), and became royal
debts passed down throughout the economy.
England’s barons waged a civil war against
Henry II in the 1260s, ending his complicity in
sacrificing the economy to papal demands.
What ended the papacy’s power over other
countries was the ending of its war against the
East. When the Crusaders lost Acre, the capital
of Jerusalem in 1291, the papacy lost its
control over Christendom. There was no more
“evil” to fight, and the “good” had lost its
center of gravity and coherence. In 1307,
France’s Philip IV (“the Fair”) seized the
Church’s great military banking order’s wealth,
that of the Templars in the Paris Temple. Other
rulers also nationalized the Templars, and
monetary systems were taken out of the hands of
the Church. Without a common enemy defined and
mobilized by Rome, the papacy lost its unipolar
ideological power over Western Europe.
The modern equivalent to the rejection of the
Templars and papal finance would be for
countries to withdraw from America’s New Cold
War. They would reject the dollar standard and
the U.S. banking and financial system that is
happening as more and more countries see Russia
and China not as adversaries but as presenting
great opportunities for mutual economic
advantage.
The broken promise of mutual gain between
Germany and Russia
The dissolution of the Soviet Union in 1991
promised an end to the Cold War. The Warsaw Pact
was disbanded, Germany was reunified, and
American diplomats promised an end to NATO,
because a Soviet military threat no longer
existed. Russian leaders indulged in the hope
that, as President Putin expressed it, a new
pan-European economy would be created from
Lisbon to Vladivostok. Germany in particular was
expected to take the lead in investing in Russia
and restructuring its industry along more
efficient lines. Russia would pay for this
technology transfer by supplying gas and oil,
along with nickel, aluminium, titanium and
palladium.
There was no anticipation that NATO would be
expanded to threaten a New Cold War, much less
that it would back Ukraine, recognized as the
most corrupt kleptocracy in Europe, into being
led by extremist parties identifying themselves
by German Nazi insignia.
How do we explain why the seemingly logical
potential of mutual gain between Western Europe
and the former Soviet economies turned into a
sponsorship of oligarchic kleptocracies. The
Nord Stream pipeline’s destruction capsulizes
the dynamics in a nutshell. For almost a decade
a constant U.S. demand has been for Germany to
reject its reliance on Russian energy. These
demands were opposed by Gerhardt Schroeder,
Angela Merkel and German business leaders. They
pointed to the obvious economic logic of mutual
trade of German manufactures for Russian raw
materials.
The U.S. problem was how to stop Germany from
approving the Nord Stream 2 pipeline.
Victoria Nuland, President Biden and other
U.S. diplomats demonstrated that the way to do
that was to incite a hatred of Russia. The New
Cold War was framed as a new Crusade. That was
how George W. Bush had described America’s
attack on Iraq to seize its oil wells. The
U.S.-sponsored 2014 coup created a puppet
Ukrainian regime that has spent eight years
bombing of the Russian-speaking Eastern
provinces. NATO thus incited a Russian military
response. The incitement was successful, and the
desired Russian response was duly labeled an
unprovoked atrocity. Its protection of civilians
was depicted in the NATO-sponsored media as
being so offensive as to deserve the trade and
investment sanctions that have been imposed
since February. That is what a Crusade means.
The result is that the world is splitting in
two camps: the U.S.-centered NATO, and the
emerging Eurasian coalition. One byproduct of
this dynamic has been to leave Germany unable to
pursue the economic policy of mutually
advantageous trade and investment relations with
Russia (and perhaps also China). German
Chancellor Olaf Sholz is going to China this
week to demand that it dismantle is public
sector and stops subsidizing its economy, or
else Germany and Europe will impose sanctions on
trade with China. There is no way that China
could meet this ridiculous demand, any more than
the United States or any other industrial
economy would stop subsidizing their own
computer-chip and other key sectors. The German
Council on Foreign Relations is a neoliberal
“libertarian” arm of NATO demanding German
de-industrialization and dependency on the
United States for its trade, excluding China,
Russia and their allies. This promises to be the
final nail in Germany’s economic coffin.
Another byproduct of America’s New Cold War
has been to end any international plan to stem
global warming. A keystone of U.S. economic
diplomacy is for its oil companies and those of
its NATO allies to control the world’s oil and
gas supply – that is, to reduce dependence on
carbon-based fuels. That is what the NATO war in
Iraq, Libya, Syria, Afghanistan and Ukraine was
about. It is not as abstract as “Democracies vs.
Autocracies.” It is about the U.S. ability to
harm other countries by disrupting their access
to energy and other basic needs.
Without the New Cold War’s “good vs. evil”
narrative, U.S. sanctions will lose their raison
d’etre in this U.S. attack on environmental
protection, and on mutual trade between Western
Europe and Russia and China. That is the context
for today’s fight in Ukraine, which is to be
merely the first step in the anticipated 20 year
fight by the US to prevent the world from
becoming multipolar. This process will lock
Germany and Europe into dependence on the U.S.
supplies of LNG.
The trick is to try and convince Germany that
it is dependent on the United States for its
military security. What Germany really needs
protection from is the U.S. war against China
and Russia that is marginalizing and
“Ukrainianizing” Europe.
There have been no calls by Western
governments for a negotiated end to this war,
because no war has been declared in Ukraine. The
United States does not declare war anywhere,
because that would require a Congressional
declaration under the U.S. Constitution. So U.S.
and NATO armies bomb, organize color
revolutions, meddle in domestic politics
(rendering the 1648 Westphalia agreements
obsolete), and impose the sanctions that are
tearing Germany and its European neighbors
apart.
How can negotiations “end” a war that either
has no declaration of war, or is a long-term
strategy of total unipolar world domination?
The answer is that no ending can come until
an alternative to the present U.S.-centered set
of international institutions is replaced. That
requires the creation of new institutions
reflecting an alternative to the neoliberal
bank-centered view that economies should be
privatized with central planning by financial
centers. Rosa Luxemburg characterized the choice
as being between socialism and barbarism. I have
sketched out the political dynamics of an
alternative in my recent book, The Destiny of
Civilization.
This paper was presented on November 1,
2022 on the German e-site
https://braveneweurope.com/michael-hudson-germanys-position-in-americas-new-world-order.
A video of my talk will be available on YouTube
in about ten days.
Michael Hudson is an American economist,
Professor of Economics at the University of
Missouri–Kansas City and a researcher at the
Levy Economics Institute at Bard College, former
Wall Street analyst, political consultant,
commentator and journalist.
Views expressed in this article are
solely those of the author and do not necessarily
reflect the opinions of Information Clearing House.
in this article are
solely those of the author and do not necessarily
reflect the opinions of Information Clearing House.
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