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Selwyn Manning and I focus the discussion of the internal and external power struggles that could ensue once the US military leaves. You can find it here.

Between appeasement and confrontation.

datePosted on 16:00, May 14th, 2021 by Pablo

The worm has turned when it comes to the relationship between the People’s Republic of China (PRC) and the West. Something has happened to sour the relationship beyond repair, and the strains are not limited to US-PRC, Australian-PRC or UK-PRC bilateral relations. Other countries, notably in the EU and Southeast Asia and including traditional rival India, have replaced two decades of offering warmth and goodwill with increasingly frosty and suspicious attitudes towards the PRC. That seems to be due to a combination of PRC militarism and belligerence in places like the South China Sea, Hong Kong, Taiwan and the Line of Control in the Himalayas separating it from India, but also as a result of Chinese sharp power influence operations in liberal democracies, its coercive trade diplomacy, ongoing Chinese cyber espionage, cyber theft and cyber warfare campaigns launched against a swathe of countries (including New Zealand), its dollar and debt diplomacy in Africa and South America where debt for equity swaps are accompanied by the colonisation by Chinese labor of critical infrastructure sites in countries lacking the resources to undertake large scale projects like port modernisation or power generation, and the adoption of “wolf warrior” diplomacy where insults and bullying have become mainstays of PRC diplomatic discourse, particularly but not limited to the issue of human rights and adherence to international norms.

With regards to the latter, in some cases Chinese behaviour is so egregious, such as stationing hundreds of fishing boats outside the marine reserve surrounding the Galapagos Islands or off the southeastern and southwestern coasts of South America and Southern Africa, often using the cover of night to poach in the Exclusive Economic Zones (when not territorial waters) of various countries, that countries otherwise prone to welcome the PRC as an antidote to traditional US or colonial power dominance have started to review their positions with regards to it.

The faith once placed in incorporating the PRC as a good global citizen into the community of advanced nations by admitting it into international organisations such as the World Trade Organisation and giving it leadership roles in others like the World Health Organisation and various UN agencies has not yielded the results that were hoped for. Instead, the errors of so-called modernisation theorists of the 1950s were repeated: rather than encouraging Chinese democracy by exposing it to “Western” values and helping expand its middle class on the back of increased international trade opportunities and the corresponding rise in material opportunities associated with it–something that was thought would lead to a better appreciation by and reproduction of democratic values by those emerging middle classes who would grow to see democracy as the political equivalent of the “free” economic market–under Xi Jinping the PRC has become more authoritarian, more state capitalist, more territorially expansionist, more normatively untrustworthy and more militarily bellicose. Instead of a global good citizen, it is now increasingly seen in the West as a very large bully on the world stage.

This does not absolve the US and various colonial powers of their histories. But it points to the fact that the thirty year period of relative inter-state peace after the end of the Cold War is coming to its conclusion. What lies ahead is unknown but it is likely to be marked by conflict of one sort or another or a combination thereof. The strategic postures of the US, UK, France and Australia all now explicitly identify the PRC as the primary military “peer competitor” (i.e. the enemy) that they must prepare to fight. Even NZ’s defense posture has shifted from unconventional warfare scenarios against irregular non-state actors to involvement in interstate conflicts (although the focus on peacekeeping operations remains). Reflected in defense procurement programs over the next ten years, the shift in war planning is answered by Chinese redoubling of its efforts to expand its fleet and improve the sophistication and size of its land and air-based forces. It also has renewed its bilateral military ties with Russia and courted the alliance of a variety of strategically important authoritarians regimes such as Iran and Turkey. It seems that it is only a matter of time before either by miscalculation, misperception or misadventure it will be involved in an armed engagement with a Western or Western-backed adversary, at which point the escalatory and expansionist potential of such conflict is limited only by the threat of nuclear war.

This puts small states like NZ between a rock and hard place. The diplomatic pressure is being felt in Wellington and Nanaia Mahuta’s speech to the China and New Zealand Business Council reflected the attempts to massage the stresses now apparent in its relationship with the PRC. The question is whether NZ can continue to employ its “softly-softly” approach in the face of the Western turn against the PRC and the latter’s increasingly acerbic responses to criticism of its actions at home and abroad. There can be little doubt that at this juncture if push comes to shove NZ will side with the West as a matter of values and principle. It has signalled as much and, with its commitment to diversifying its trade relations outside of the bilateral ties with the PRC, is setting the pragmatic grounds for doing so even if the short term costs of any deterioration in the relationship with the PRC proves onerous and wide-spread throughout the economy. But so long as the quarrel between Great Powers is limited to podiums and pens, then NZ can hope to finesse the contradictions in its strategic posture.

The answer on how to do so may lay in thinking of NZ’s position in the face of the US/West-PRC rivalry as a strategic balancing act in which the fixed points are appeasement versus confrontation and the slackline between the two is cooperation. The key is to find an equilibrium point along that line given specific issues and changing circumstances. There is plenty of common ground for NZ to serve as a honest broker and fair interlocutor when it comes to PRC-West relations even as it reaffirms its commitment to Western liberal values. Pragmatism and principle will undoubtably factor into the centre of gravity upon which to balance NZ foreign policy in that regard. The goal is to be nimble when demonstrating a desire to cooperate on selected issues given the competing demands by trade and security partners to appease or confront each other. Sometimes the equilibrium point may be closer to the PRC position, sometimes it will tilt in favour of the Western stance. They key to success lies in refraining from entering into broadly binding agreements or commitments and to adopt an issue-by-issue, case by case approach that serves to insulate any particular bilateral decision from the larger geopolitical struggles surrounding it.

That may turn out to not be feasible if the contending Great states do not accept NZ’s “siloed” approach and will not be a permanent foreign policy solution given the apparent inevitability of a Great Power stand-off in the medium term future. But it provides a means of finding the optimal equilibrium point on the diplomatic slackline that is NZs transitional position vis a vis China and the West until the new multipolar world system is firmly established.

Facing facts.

datePosted on 16:09, April 24th, 2021 by Pablo

The critical reaction of some conservative commentators and politicians about Nanaia Mahuta’s “Taniwha and Dragons” speech is focused on the double premise that NZ is “sucking up” to the PRC while it abandons its obligations to its 5 Eyes intelligence partners. Some have suggested that NZ is going to be kicked out of 5 Eyes because of its transgressions, and that the CCP is pulling the strings of the Labour government.

These views are unwarranted and seemingly born of partisan cynicism mixed with Sinophobia, racism and misogyny (because Mahuta is Maori and both Mahuta and PM Ardern are female and therefore singled out for specific types of derision and insult). Beyond the misinterpretations about what was contained in the speech, objections to Mahuta’s invocation of deities and mythological beasts misses the point. Metaphors are intrinsic to Pasifika identity (of which Maori are part) and serve to illustrate basic truths about the human condition, including those involved in international relations. As a wise friend said to me, imagine if a US Secretary of State was an indigenous person (such as Apache, Cherokee, Hopi, Mohican, Navaho, Sioux or Tohono O’odham). It is very possible that s/he would invoke ancestral myths in order to make a point on delicate foreign policy issues.

In any event, this post will clarify a few facts. First, on military and security issues covering the last two decades.

New Zealand has twin bilateral strategic and military agreements with the US, the first signed in 2010 (Wellington Declaration) and the second in 20012 (Washington Declaration). These committed the two countries to partnership in areas of mutual interest, particularly but not exclusively in the South Pacific. New Zealand sent troops to Afghanistan as part of the US-led and UN-mandated occupation after 9/11, a commitment that included NZSAS combat units as well as a Provincial Reconstruction Team (PRT) in Bamiyan Province that mixed humanitarian projects with infantry patrols. More than 3500 NZDF troops were deployed in Afghanistan, at a cost of ten lives and $300 million.

Similarly, NZ sent troops to Iraq after the US invasion, serving in Basra as combat engineers in the early phase of the occupation, then later as infantry trainers for Iraqi security forces at Camp Taji. More than 1000 NZDF personnel were involved in these deployments, to which can be aded the SAS operators who deployed to fight Saddam Hussein’s forces and then ISIS in Iraq and Syria after its emergence. There are a small number of NZDF personnel serving in various liaison roles in the region as well, to which can be added 26 NZDF serving as peacekeepers in on the Sinai Penninsula (there are slightly more than 200 NZDF personnel serving overseas at the moment). In all of these deployments the NZDF worked with and now serves closely with US, UK and Australian military units. The costs of these deployments are estimated to be well over $150 million.

The NZDF exercises regularly with US, Australian and other allied partners, including the US-led RimPac naval exercises and Australian-led bi- and multilateral air/land/sea exercises such as Talisman Saber. It regularly hosts contingents of allied troops for training in NZ and sends NZDF personnel for field as well as command and general staff training in the US, Australia and UK. RNZN frigates are being upgraded in Canada and have contributed to US-led freedom of navigation exercises in the South China Sea (against PRC maritime territory extension projects) and anti-piracy and international sanctions enforcement missions in the Persian Gulf. Among the equipment purchases undertaken during the last two decades, the NZDF has bought Light Armoured Vehicles, the infamous “LAVs” (or Strykers, as they are known in the US), Bushmaster armoured personnel carriers, C-130J “Hercules” transport aircraft, P-8 “Poseidon” anti-submarine warfare and maritime surveillance aircraft, Javelin anti-tank portable missiles and a range of other weapons from 5 Eyes defence contractors. In fact, the majority of the platforms and equipment used by the NZDF are 5 Eyes country in origin, and in return NZ suppliers (controversially) sell MFAT-approved weapons components to Australia, the US, UK , NATO members, regional partners and some unsavoury Western-leaning regimes in the Middle East.

After the estrangement caused by the dissolution of the ANZUS defence alliance as a result of NZ’s non-nuclear decision in the mid-1980s, a rapprochement with the US began in the aftermath of the 9/11 attacks. The 5th Labour government sought to capitalise on the moment and sent troops into Afghanistan and later Iraq using the cover of UN resolutions to deflect political attacks. That led to improved military-to-military relations between the US and NZ, something that has been deepened over the years by successive NZ governments. The intelligence relationship embodied in the Echelon/5 Eyes agreement was slightly curtailed but never ended even when ANZUS died, and gradually was restored as the main security partnership to which NZ was affiliated. Now the NZDF is considered a small but valued military and intelligence partner of the US and other 5 Eyes states, with the main complaints being (mostly from the Australians) that NZ does not spend enough on “defence’ (currently around 1.5 percent of GDP, up from 1.1 percent under the last National government, as opposed to 2.1 percent in Australia, up from 1.9 percent in 2019) or provide enough of its own strategic lift capability. The purchase of the C-130J’s will help on that score, and current plans are to replace the RNZAF 757 multirole aircraft in or around 2028.

The dispute over US warships visiting NZ because of the “neither confirm or deny” US policy regarding nuclear weapons on board in the face on NZ’s non-nuclear stance was put to rest when the Arleigh Burke-class destroyer USS Sampson (DDG-102) participated in the RNZN 75th anniversary celebrations in November 2016 after an agreement between the then National government and US Department of Defense on assurances that it was not carrying or using nukes as weapons or for propulsion. As if to prove the point of bilateral reconciliation, on the way to the celebrations in Auckland DDG-102 diverted to provide humanitarian support to Kaikura earthquake relief efforts after the tremor of November 14th (the week-long anniversary fleet review involving foreign naval vessels began on on November 17th). A Chinese PLAN warship also participated in the anniversary Fleet Review, so the message conveyed by the first official NZ port visit by a US warship in 30 years was made explicitly clear to the PRC.

The fact is this: the relations between NZ and its 5 Eyes partners in the broader field of military security is excellent, stable and ongoing. That will not change anytime soon.

As for intelligence gathering, NZ is a core part of the 5 Eyes signals intelligence collection and analysis network. Over the years it has moved into the field of military signals intelligence gathering as well as technical and electronic intelligence-gathering more broadly defined. More recently, in light of the emergence of non-state terrorism and cyber warfare/espionage threats, the role of 5 Eyes has been upgraded and expanded to counter them. To that end, in the last decade NZ has received multiple visits from high-ranking intelligence officials from its partners that have dovetailed with technological upgrades across the spectrum of technical and electronic signals intelligence gathering. This includes addressing issues that have commercial and diplomatic sensitivities attached to them, such as the NZ decision to not proceed with Huawei involvement in its 5G broadband rollout after high level consultations with its 5 Eyes partners. More recently, NZ has been integrated into latest generation space-based intelligence collection efforts while the focus of the network returns to more traditional inter-state espionage with great power rivals like China and Russia (we shall leave aside for the moment the benefits that the GCSB and NZDF receive from Rocket Lab launches of US military payloads but we can assume that they are significant).

As routine practice, NZSIS and GCSB officers rotate through the headquarters of 5 Eyes sister agencies for training and to serve as liaison agents. Officers from those agencies do the same in NZ, and signals engineers and technicians from 5 Eyes partners are stationed at the collection stations at Waihopa and Tangimoana. GCSB and SIS personnel also serve overseas alongside 5 Eyes employees in conflict zones like Afghanistan and Iraq. While less standardised then the regular rotations between headquarters, these type of deployments are ongoing.

5 Eyes also maintains a concentric ring of intelligence partners that include France, Germany, Japan, Israel, and Singapore. These first-tier partners in turn use their respective capabilities to direct tactical and strategic intelligence towards 5 Eyes, thereby serving as the intelligence version of a “force multiplier” in areas of common interest. One such area is the PRC, which is now a primary focus of Western intelligence agencies in and outside of the Anglophone world. This common threat perception and futures forecasting orientation is shared by the NZ intelligence community and is not going to change anytime soon unless the PRC changes its behaviour in significant ways.

For its part, the PRC has no such complex and sophisticated intelligence networks with which to avail itself. It has intelligence partners in North Korea, Russia, Iran and other small states, but nothing on the order of 5 Eyes. As a result, it is much more reliant on human intelligence collection than its rivals in the 5 Eyes, something that has become a source of concern for the 5 Eyes community and NZ in particular (as the supposed weak link in the network and because of its economic reliance on China, of which more below). While the PRC (and Russia, Israel and Iran, to name some others) are developing their cyber warfare and espionage capabilities, the fact is that the PRC continues to rely most heavily on old-fashioned covert espionage and influence operations as well as relatively low tech signals intercepts for most of its foreign intelligence gathering. If I read intelligence reports correctly, NZ’s counter-espionage and intelligence efforts are focused on this threat.

In a word: NZ is committed to the 5 Eyes and has a largely Western-centric world view when it comes to intelligence matters even when it professes foreign policy independence on a range of issues. That is accepted by its intelligence partners, so transmission (of intelligence) will continue uninterrupted. It is in this light that Mahuta’s comments about NZ’s reluctance to expand 5 Eyes original remit (as an intelligence network) into a diplomatic coalition must be understood. There are other avenues, multilateral and bilateral, public and private, through which diplomatic signaling and posturing can occur.

That brings up the issue of trade. Rather than “sucking up” to China, the foreign minister was doing the reverse–she was calling for increased economic distance from it. That is because New Zealand is now essentially trade dependent on the PRC. Approximately 30 percent of NZ’s trade is with China, with the value and percentage of trade between the two countries more than tripling since the signing of the bilateral Free Trade Agreement in 2008. In some export industries like logging and crayfish fisheries, more than 75 percent of all exports go to the PRC, while in others (dairy) the figure hovers around 40 percent. The top four types of export from NZ to the PRC are dairy, wood and meat products (primary goods), followed by travel services. To that can be added the international education industry (considered part of the export sector), where Chinese students represent 47 percent of total enrollees (and who are a suspected source of human intelligence gathering along with some PRC business visa holders).

In return, the PRC exports industrial machinery, electronics (cellphones and computers), textiles and plastics to NZ. China accounts for one in five dollars spent on NZ exports and the total amount of NZ exports to China more than doubles that of the next largest recipient (Australia) and is more than the total amount in value exported to the next five countries (Australia, US, Japan, UK and Indonesia) combined. Even with the emergence of the Covid pandemic, the trend of increased Chinese share of NZ’s export markets has continued to date and is expected to do so in the foreseeable future.

Although NZ has attempted to diversify its exports to China and elsewhere, it remains dependent on primary good production for the bulk of export revenues. This commodity concentration, especially when some of the demand for export commodities are for all intents and purposes monopolised by the Chinese market, makes the NZ economy particularly vulnerable to a loss of demand, blockages or supply chain bottlenecks involving these products. Although NZ generates surpluses from the balance of trade with the PRC, its reliance on highly elastic primary export commodities that are dependent on foreign income-led demand (say, for proteins and housing for a growing Chinese middle class) makes it a subordinate player in a global commodity chain dominated by value-added production. That exposes it to political-diplomatic as well as economic shocks not always tied to market competition. Given the reliance of the entire economy on primary good exports (which are destined mainly for Asia and within that region, the PRC), the negative flow-on effects of any disruption to the primary good export sector will have seriously damaging consequences for the entire NZ economy.

That is why the Foreign Minister spoke of diversifying NZ’s exports away from any single market. The only difference from previous governments is that the lip service paid to the “eggs in several baskets” trade mantra has now taken on urgency in light of the realities exposed by the pandemic within the larger geopolitical context.

Nothing that the Labour government has done since it assumed office has either increased subservience to China or distanced NZ from its “traditional” partners. In fact, the first Ardern government had an overtly pro-Western (and US) slant when coalition partners Winston Peters and Ron Mark of NZ First were Foreign Affairs and Defence ministers, respectively. Now that Labour governs alone and NZ First are out of parliament, it has reemphasised its Pacific small state multilateralist approach to international affairs, but without altering its specific approach to Great Power (US-PRC) competition.

The situation addressed by Mahuta’s speech is therefore as follows. NZ has not abandoned its security allies just because it refuses to accept the Trumpian premise that the 5 Eyes be used as a diplomatic blunt instrument rather than a discreet intelligence network (especially on the issue of human rights); and it is heavily dependent on China for its economic well-being, so needs to move away from that position of vulnerability by increasingly diversifying its trade partners as well as the nature of exports originating in Aotearoa. The issue is how to maintain present and future foreign policy independence given these factors.

With those facts in mind, the Taniwha and Dragon speech was neither an abandonment of allies or a genuflection to the Chinese. It was a diplomatic re-equilibration phrased in metaphorical and practical terms.

Nanaia Mahuta, NZ’s Minister of Foreign Affairs, gave a speech that was notable for two things. On the one hand she spoke of diversifying NZ’s trade relations away from the domination of one market (read: the PRC). On the other hand she expressed a desire to return the 5 Eyes signals intelligence collection and sharing network to its original charter rather than allow it to be used a diplomatic foil by the other partners in the network (which was brought about by a couple of critical 5 Eyes statements on events in the PRC). To be clear: the 5 Eyes is an intelligence network, not a diplomatic coalition or military-security alliance, so using it for diplomatic signalling and posturing is folly. Not only is NZ the most vulnerable of the 5 Eyes partners to Chinese retaliation, but the move to use 5 Eyes as a diplomatic tool was an initiative that came from a Trump administration that was uninterested in the complexities of the relations US partners maintained with China and very much interested in pressing the partners to bend a knee to Trump’s desire to squeeze China on all fronts.

In other words, it was an absurd and unnecessary initiative that complicated things for the spy agencies involved and undermined the positions of the diplomats who normally would conduct such types of public diplomacy. As it turns out, Winston Peters and Ron Mark of NZ First were the Ministers of Foreign Affairs and Defence at the time of the first US request to use the 5 Eyes to issue joint condemnatory statements about Chinese behaviour in Hong Kong and vis a vis the Uyghers in Xinjiang Province. They wanted to keep in the US good graces and so acceded to the request, something that Mahuta agreed to with regards to a second statement very early on in her tenure as Foreign Minister. But after very blunt warnings from the Chinese about NZ’s meddling in its internal affairs, it is clear that a more calibrated, balanced approach was required. Her speech delivered on that score.

It did so because it counterpoised the need to return to the original 5 Eyes charter with a declaration of intent with regard to diversifying trade away from the PRC. There is irony in the move because it was under the 5th Labour government where NZ’s trade dependence on the PRC was deepened and consolidated via the signing of a bilateral Free Trade Agreement (in 2008). Thus, while former PM Helen Clark may have played a role in getting NZ to push to restore the 5 Eyes charter due to her statement in September 2020 that NZ was losing its independence within it, she also was being rebuked for ignoring the concerns of many that the asymmetric nature of the NZ-PRC FTA would come back to haunt NZ on both the economic and diplomatic fronts.

The speech went on to reaffirms NZ’s foreign policy independence and its commitment to multilateralism, democratic values and a South Pacific orientation. Coming just before a visit by the Australian foreign minister, it served as a framing device for bilateral discussions. More generally, it helped re-frame how NZ proposes to approach the world over the next few years. The key issue will be how it implements, much less achieves, what is essentially a new balance in the conduct of NZ foreign affairs.

In any case, here is the podcast with Selwyn Manning on the subject.

Selwyn Manning and I dedicated this week’s video podcast to the potential emergence of rival blocs within the transitional process involved in the move from a unipolar to a multipolar international system currently underway. However one characterises the phenomenon–autocracies versus democracies, East versus West, colonial versus post-colonial–the global order is increasingly bifurcated and dichotomous. Although a move to multipolarity is seemingly beneficial because it is theoretically more stable over the long term (at least when compared to bi- and unipolar systems), the consequences of the orchestrated shift into adversarial alliance blocs may be detrimental to peace and stability over the short term. You can catch the show here.

In last week’s “A View from Afar” podcast Selwyn Manning and I discuss the failure of NZ’s security services to detect a local white supremacist openly describing on a well known on-line extremist forum how he would use car bombs to “commemorate” the March 15 terrorist attacks in Christchurch, and then we are joined by journalist Ollie Neas to hear more about the role Rocket Lab plays for the US military space program as well as some the regulatory issues surrounding that process by which military payloads are approved by the NZ government. You can find the video here.

In this week’s podcast Selwyn Manning and I discuss the ethics and practicalities involved in the so-called “conflict industry.” It includes a discussion of the who and what of the “kill chain” and the implications of Rocket Lab’s position as a major US military logistical provider. You can find it here.

US capitalists as political saviours.

datePosted on 14:19, March 2nd, 2021 by Pablo

Having watched and read about the Conference of the Paranoid, Angry and just plain Crazy (CPAC), including the Orange Merkin’s return to the political centre stage, I am more convinced then ever that if US conservatism, and indeed the US itself, is to find its way back to some semblance of stability, it is US capitalists who will have to lead the charge. This may seem odd for a left-leaning blog to say, but the logic underlying the rescue lies in some structural imperatives and some non-structural pathologies.

As has been written before in these pages, the State and Society in the US and places like NZ are capitalist because they depend on a profit-driven system of capital accumulation and distribution for the welfare of capitalists and workers alike. Capitalists invest and pay wages out of profits, so both overall economic and specific wage growth depend on the continuation of the profit-investment cycle. Capitalists borrow from other capitalists in order to grow their businesses, which in turn help expand the web of opportunity (measured in employment and/or higher wages) for wage-earners down the productive chain. In other words, the material welfare of everyone depends on the investment decisions of capitalists.

This is the structural imperative: the State and Society are capitalist because of their material dependence on a system of private accumulation and economic decision-making. Even state capitalist systems abide by the immutable laws of the profit-investment cycle, but in the US (and NZ) the vast majority of decisions about accumulation and distribution ultimately rest with capitalists. So long as capitalists invest and workers produce so that profitability is sustained, current welfare and future growth is safeguarded.

In order to maintain this cycle and encourage capitalists to re-invest in the domestic economy, the State uses tax and social policy to sustain economic growth and otherwise frame the investment “climate” in ways conducive to investor confidence. The ways in which it can do so and the effectiveness of what it does is influenced, when not determined, by the political and social climate of the current moment and the outlook for the future. That is because above all, capitalists want two things in tandem: stability and certainty over time. Socio-economic and political stability lends certainty to the investment environment, which encourages regular rates of investment and return on which to make future decisions on investment and wage-setting. The more this becomes a self-perpetuating cycle, the more a capitalist nation-state grows and prospers, thereby reaffirming the utility of the economic model under specific political conditions.

That is the notion that lies at the heart of classic liberalism: the combination of market-driven economies and democratic political institutions is considered to be the most preferable (or least bad) political-economic model because it places (theoretically at least) a premium on private choice and individual freedom. Within parameters broadly set by a State led and managed by a political bureaucracy, capitalists chose where to invest and workers chose where to work given where investment flows. Or at least that is the general idea.

Here is where the superstructural problem starts for the US. Under Trump, the Republican Party has increasingly become untethered from its pro-business bias and devolved into a national-populist cult of personality. The events of January 6 and sociopathic displays at CPAC–displays not isolated to Trump himself–clearly demonstrate that conservatism in the US is no longer based on pro-market ideologies and an understanding of the structural dependence of the State and Society on Capital. Instead, it is now the fevered product of a hodgepodge of conspiracy theories, religious opportunism, racism, bigotry, prejudice and xenophobia, with many of these inimical to maintaining business growth. Trump is the poster-boy of this collective derangement but the GOP is awash in it far beyond him.

That is bad for business. The threat of irrational political leadership and the distinct and ongoing possibility of civil unrest, including irregular collective violence, undermines the stability-certainty cycle because there is a mutual or co-dependence between the political superstructure and the economic base. Political and social instability can and often does lead to economic instability, something that is bad for all concerned.

Under such conditions overall demand drops, many businesses slow production, workers are laid off and investors hedge, sell and take profits rather than make long-term investment plays. Shorter investment horizons add to market uncertainties, which in the US is compounded by the practices of “shorting” stocks (whereby anticipating further value losses the investor borrows stock and sells it at current market value in anticipation of buying it back a future lower price before the loan expiration date) and stock buy-backs (where companies use profits to buy stocks in the company in order to reduce the number of stocks freely available and thereby squeeze the stock price upwards).

Both of these are forms of speculation rather than productive investment and are a hallmark of the US financial markets. They have also attracted the attention of so-called mom and pop “retail” or “day” traders and semi-organised small investor groups whose goals are individual self-enrichment rather than contributing to industry profitability, job creation, technological innovation or overall economic growth. These speculative practices by small and large investors have a negative impact on investment, employment and wage stability, further undermining popular faith in the economic system and the political edifice that serves and protects it.

The combination of anarchic (and self-serving) financial market behaviour and increasingly anti-business fanaticism in Republican/conservative ranks (think of the constant attacks on the techno-oligarchy for de-platforming extremist speech on social media) has attracted the negative attention of credit rating agencies, where debates about lowering the US government credit rating from AAA (outstanding) to something else, previously unthinkable for the global reserve currency issuer, are now common practice. When combined with the possibility of labour conflicts and industrial slowdowns tied to civil unrest, the rise of deranged demagogic politics within the US political Right is a threat to, literally, business as usual.

It is said that, according to the invisible hand of the market, economic actors are self-interested maximisers of opportunity and that the sum result of their self-interested actions clears the market at the collective level. That may or may not be true. What is true is that the “market” involves political as well as purely economic factors and agents, and when political actors interfere with the the profitability of self-interested maximisers of economic opportunity, then measures must be taken to mitigate or overcome those political obstacles.

For US capitalists the problem is not one of class struggle but about class survival. It is not about class war but about self-preservation. The threat to their status comes not from the working classes radicalised by anti-capitalist ideologies but by self-professed capitalist supporters. Not all supporters of capitalism are capitalists themselves or understand the relationship between capital accumulation and distribution at a macro level, and many do not add value and wealth to society but in fact subtract value and wealth from it (be it in their rent-seeking microeconomic behaviours or other forms of myopic malfeasance). Moreover, US capitalist classes are variegated and often in conflict, with ascendent and descendent class fractions competing for political as well as economic dominance (think high tech versus industrial manufacturing elites).

Trump and his supporters represent a large but descendent segment of the capitalist class constellation, but they are not the only or the dominant faction and are a clear threat to the interests of other (ascendent) capitalist class factions (again, think of the techno-oligarchy). Not all corporate elites in the US favour Trump’s behind-the-wall, low skill, low education, industrial-era blue collar form of economic nationalism, and many see it as a simple wave to the past in the face of (and impediment to) an automated and transnationalised productive future. The political fight is consequently as much more or within the capitalist classes as it is between them and the working/subaltern classes and, however couched in the language of cultural conflict and competing value systems, that fight is microcosmically distilled in the struggles over the direction of the Republican Party.

Let me be clear. This does not mean that anti-Trump capitalist elites are good people or interested in the overall welfare of the nation. People like Jeff Bezos and Elon Musk are as much innovative exploiters of the many as they are creators of wealth and opportunity for some. The entire financial industry is populated by selfish people and greedy logics and is in desperate need of major reform (since the post 2008 crash reforms were cosmetic at best). But the necessity of the situation dictates that these type of people be seen as tactical allies in the fight against neo-fascism at a time when progressive forces do not have the strength to help stem the deterioration of the American Right. In other words, desperate times require desperate measures, and the appeal to anti-Trump capitalists is one such thing. Nothing more.

In some countries, the military serves as the saviour of economic elites under stress. In the US that possibility used to be dismissed as laughable but in recent years became a topic of discussion. Although it continues to be seen as a remote option, the ongoing viability of national-populist sentiment in the Republican Party and emergence of an insurrectionist movement within broader political Right circles keep alive the issue of external intervention in the discussion about how to rescue that side of the political system from itself.

This is why US capitalists have to ride to the rescue of the Republican Party. If they do not do so then others may have to, and it will not be revolutionary workers or the peasantry who will be the ones to step up. Inviting military intervention could be catastrophic to the Nation, assuming for a second that the US military would even consider such a move. Social movements will not have the clout to impress Republicans into reform and change away from what they have become. It is therefore up to capitalists to undertake the task.

The Republican rescue involves tough love. In order to save it, the GOP must be broken from the grasp of the national-populists, cultists, MAGA morons and conspiracy theorists. The best way to do so is with the threat or use of a specific type of capital strike. The corporate elite need to threaten the Republican Party with a complete withdrawal of political funding if Trump and his acolytes are not purged. If that threat is not heeded then the funding should be withdrawn, preferably before the next election cycle begins.

The insurance policy to what otherwise would seem to be a risky strategy is the Democratic Party and Biden administration. For all the talk of socialists and radical Leftists, capitalists know that their bread is buttered by the structural dependence of the State and Society on Capital, and Democrats clearly understand this fact. US capitalists may have a more restrained partner in Democrats and may need to concede more on issues of accumulation versus distribution when they are in power, but at least the Democrats are not led by an irresponsible and utterly self-serving myopic cabal that no longer seems to understand the bread/butter relationship.

One gets the feeling that some of this may already be going on. But to be effective the capitalist political strike against the Republican MAGA wing must be public and comprehensive in scope. Winks, nods and quiet backhanders will not suffice. The move has to be out in the open, at least among the economic and political elites.

If that does not happen or does not work to kick the MAGA morons to the curb, then the possibility of a real capital strike must be considered. It can come in the form of a Wall Street sell-off/downturn manipulated by interests most closely associated with the Republican Party or industry slow-downs in regions where Republican support is strongest (say, places where the fossil fuel industry is dominant). Consumer and advertiser boycotts of and slowdowns in supply chain servicing of privately held companies affiliated with Trump are additional forms of capitalist strike.

Needless to say, however sector-specific any economic downturn will be seen over the short-term as a rebuke of the Biden administration, but if quiet assurances are made as to the real intent of the ploy, then both the administration and the productive sectors involved will survive the moment. After all, the goal is to send a message to the Republican political establishment that business will no longer tolerate the national-populist threat to making money, not to kill off profit-making entirely.

In a weird way, this ploy should come naturally to Corporate America. They sell on the future of a Republican Party dominated by Trump and other national-populists and they buy (short term) on Democrats buttering their bread while they bet long term on non-MAGA Republicans restoring the GOP to its status as preferred political interlocutor. There is risk in this strategy but for the private sector, the US as a society, the political system as a whole and the Republican Party as a political institution, the rewards of embracing it will be well worth the challenge.

After all, capitalism is all about risk-taking under conditions of limited information involving structural and super-structural constraints, so the field is open for private opportunity-taking in the national interest.

A self-mutilation ritual.

datePosted on 11:40, February 8th, 2021 by Pablo

It appears that rather than follow the not-so-sage advice offered here in KP a short time ago about how to save their future as a political party, the Republicans have decided to double-down on their Trumpist/MAGA bet. After the House Democratic majority stripped a recently elected QAnon freak from her committee assignments (I will not mention her name here) because of her deranged behaviour and speech (including calls to kill Democratic congresspeople and claims that the Rothschilds used a space laser beam to start California fires in order to make a profit and that the Sandy Hook and Parkland school shootings were faked), her GOP colleagues reaffirmed their support for her while rebuking the 11 of them who voted for Trump’s impeachment on grounds that he incited the January 6 insurrection in the Capitol building. The freak then held a press conference and announced that the Republican Party was “Trump’s party.” No Republican contradicted her and state Republicans in the home districts of the pro-impeachment GOP renegades voted to censure them.

This is going to end badly for the GOP. Corporate America and (prodded by lawsuits) even mainstream Rightwing media appear to realise the danger that the assault on Congress represents. Non-Republican rightwing extremists have infiltrated the MAGA ranks and exploited them for their own purposes. Conspiracy theory craziness has taken hold in the MAGA movement. Seeing this, some regretful MAGAites have defected once they realised that the Trump pipe dream was not going to become reality or that his claims about the stolen election were deliberate lies that cost taxpayers millions of dollars to refute (in the form of recounts and litigation). To be sure, there are still many who still worship the ground he walks on, but many more are glad to see the back of him and want it to stay that way.

Catering to the remaining MAGA base may solidify GOP support in hard Red states, but the rest of the country is turning Blue as demographics increasingly work against perpetuation of that base as a proportion of the population, much less as a cohesive voting bloc. Insurrectionists are bad for business as well as law and order, so for a party that claims that it is the champion of both, kowtowing to the violent maniac fringe is a losing proposition over the long term. The MAGA brand is turning to mud even if those loyal to it cannot see what is coming at them down the road.

There is the hitch. Most analysts now see the GOP as divided into three parts: a MAGA populist wing, a neo-con Reaganite wing and a bridge faction with feet in both wings that attempts to straddle the fence of specific policy issues (or want to have things both ways–conspiratorial crazy on the one hand and soberly responsible on the other). After the attack on the capitol, what many of the non-lunatic factions in the GOP fear is two things: being physically threatened or attacked by MAGA and QAnon extremists egged on by Trump and his acolytes if they do not accede to his wishes; and being “primaried” out of office by them with funding provided by the Trumpsters (“primaried” refers to the practice of putting up candidates against incumbents in party primaries so as to replace them with more ideologically aligned people).

The combination of physical and political threats has paralysed most of the GOP party leadership, who have opted for the default option of blaming Democrats for assorted ills while looking to them for the knock-out electoral blow on the lunatics in 2022. They understand that things have gone too far and they cannot prevent the MAGA wing from trying to take control of the party as a whole while Trump continues to agitate from the sidelines. So this is their state of play: hope that the Democrats win big in the congressional mid-terms so that they can purge the MAGAites from the party and return to some semblance of conservative normalcy. They know that the purge of moderate candidates in GOP primaries will likely lead to massive losses in the 2022 general election and the consolidation of Democratic control of the federal government for the near future. That allows the non-MAGA Republicans to clear house and get their affairs in order without the burden of having to govern, something that can set them up well for 2024 and beyond. People like Mitch McConnell, Mitt Romney and Liz Cheney understand this well.

Of course, many of those immediately involved in the fray may not see things in this light and may continue the internecine fights over the heart and soul of the GOP well after 2022. The MAGA wing certainly see their future as wedded to Trump, and the Senate impeachment trial will go a long way towards determining which of the GOP factions will prevail over both the short and the long term. But as long as they are divided and the Democrats coalesce while in power and restore some semblance of respect, normality and competence to governing (not a sure thing but more plausible today than in the past because of the stakes at play), then the Republican Party is going to increasingly be on the outside looking in when it comes to national policy-making. And that will suit the lunatic fringe just fine, as they have been exposed as being uninterested in democracy if such a thing involves compromise, toleration, transparency, equality and mutual consent in the policy-making process. That, however, will only increase their marginalisation as a political force. They had their moment during the last four years and soon they will pay a political (and in some cases, criminal) price for their sins.

In the meantime, watching the Republican in-fighting is like watching someone repeatedly cut themselves. The difference is that self-mutilation is most often not fatal to the person doing it, whereas what is going on in the GOP has the potential to be terminal to the party as a democracy-supportive political institution.

To kill a beast.

datePosted on 14:45, January 26th, 2021 by Pablo

Let’s be clear: if Trump is not politically killed off once and for all, he will become a MAGA Dracula, rising from the dead to haunt US politics for years to come and giving inspiration to his wretched family of grifters and thousands of deplorables well into the next decade. So what is needed now is a stake in his black heart, or a silver bullet, so long as whatever the means employed, it kills the beast.

The process of doing so is more akin to cancer surgery than supernatural intervention, but before proceeding to the discussion let me explain why Trump’s political death sentence is recognised as necessary.

The Democrats know what he is so I shall not discuss the logics by which they came to the conclusion that he needs to be extirpated from the body politic. It is the Republicans who are decisive here. They–by that I mean the Republican National Committee, US congressional delegations, state governments and legislatures, and the corporate interests that influence and fund Republican causes and candidates–have to come to grips with simple facts.

Trump was never a “true” Republican. Not only is he not a blue-blood old monied elite with stakes in traditional Republican ventures like oil, automobiles and finance. He was not a member of the party until he switched allegiance in 2010. From the get-go, his politics have been more of the George Wallace meets Barry Goldwater type rather than of the Nixon-Reagan-Rockefeller variant. His victory in the 2016 presidential primaries was a slap in the face by an upstart vulgarian to the Republican establishment, which he then proceeded to eviscerate by using their own opportunism against them. He offered the GOP “family” tax breaks, deregulation, a return to Anglo-Saxon heterosexist patrirachical Christian values and shirt-sleeve patriotism. They responded with political support. That support was contingent on his staying in his lane and understanding the limits on his authority and the boundaries of his power.

He did not. Instead, he picked needless fights at home and abroad over matters both inconsequential and important. He alienated allies and he cultivated American enemies. Rather than work to heal old wounds he picked the scab of racism and bigotry until it festered and burst into the public square in places like Charlottesville, Portland and Kenosha (the last two where he joined rightwing conspiracists in claiming that Black Lives Matter protests over the murder of unarmed black men by police were an Antifa-Socialist plot).

Meanwhile, he drove a wedge within the GOP by forcing out non-MAGA types and replacing them with national-populists who would do his bidding. That fractured the Republicans, and yet the marriage of convenience between the GOP establishment and Trump continued until 2020. However, at that point his erratic behaviour and incompetent, some might say delusional approach to the Covid-19 crisis turned a bad situation into a world-leading case study in governmental dysfunction. He turned a public health crisis into an internecine ideological war about masks and lockdowns. He refused to listen to scientists and increasingly relieved on conspiracy theorists for advice on the pandemic and more. In doing so he became bad for business even as the financial markets remained optimistic that at some point he would come to his senses.

He did not. He ran a dog-whistling re-election campaign marked by Covid super-spreader rallies. He impugned the integrity of the electoral process months before the vote was held. He tried to manipulate votes by filling the US Postal Service with partisan hacks who attempted to suppress absentee (mail-in) ballots by reducing collection points and sorting facilities. He urged Republican state election officials to challenge minority voting rights and to limit access to voting facilities in areas that traditionally went Democratic on Election Day. He did everything in his power to tip the scales, skew the results and delegitimise any outcome other than his win.

He lost anyway. Not by hundreds of thousands or a few million votes. He lost by nearly 8 million votes. It is true that he garnered 74 million votes himself, but that was on the back on the highest voter turn out in over a century (60.66 percent). Joe Biden won close to 82 million votes, so in the end even with those 74 million votes cast for Trump, the race was not close.

Rather than concede gracefully, Trump well and truly jumped out of his lane. He denounced without evidence fraud in the electoral system and specifically those in contested swing states. He spoke of dark forces operating behind the scenes to cheat him out of his rightful victory. He decried foreign (but non- Russian) interference. He mounted over sixty specious legal challenges to the results in several states, losing all but one of them. And then he crossed the biggest line of all: he incited a seditious insurrectionary attack on the US Capitol in order to prevent the Electoral College results from being certified by Congress. People were killed and injured in the mass assault and occupation of the Legislative branch. Politicians were forced to flee for their lives and take cover as the mob swarmed the debating chamber and halls baying for blood. And rather than appeal for calm, Trump watched it unfold on TV.

Whether they recognise it or not, that was the point when he crossed a Republican bridge too far. The assault on the Capitol was aimed not just at Democrats but at Republicans as well (people chanted “Hang Mike Pence,” among other niceties). In the days leading up to, during and after the siege, Republican lawmakers were harassed and threatened in public spaces, social media and via personal communications (including Mitt-Romney (R-UT) and Lyndsey Graham (R-SC), as were Democrats (House Speaker Nancy Pelosi (D-CA) and congresswoman Alexandria Ocasio Cortez (D-NY) were singled out for particularly violent misogynistic abuse). The attack may have been originally driven by partisan rage stoked by Trump and his minions, but became a broad-brushed assault on an institutional pillar of the American Republic.

Because many of the insurrectionists were wrapped in body armour and armed with blunt and other street-level weapons like Mace and bear spray (there were also firearms and explosives cached near the Capitol), which they used to fight sworn law enforcement officers defending the complex, the assault was an attack on the sovereignty of the US government itself. That is because one of the foundations of sovereignty–the core of what it is to be a “sovereign”–is legal monopoly over organised violence within defined territorial limits (the definition is from Max Weber but the origins of the notion of sovereignty as having a coercive core dates back to Thomas Hobbes).

It has now been established that, cloaked by the larger crowd who attended the Trump “Stop the Steal” rally and then walked to the capitol after Trump urged them to, members of various militias were acting in a coordinated fashion to the extent that some used walkie-talkies and their phones to organise aspects of the attack such as blocking the underground tunnels below the Capitol that are used as escape routes for congresspeople in times of crisis. Once they violently engaged the Capitol and DC Police on the steps and interior of the legislature, they challenged the sovereignty of the Federal Government and the components parts of its repressive apparatus.

For any nation-state, much less a supposed superpower, that cannot stand. Regardless of partisan orientation, no individual is above the Institution. As the saying goes, the Nation is one of laws, not people. Sovereignty cannot be contested because if it does, the Republic is at risk. The State is sacrosanct so long as it performs its core functions.

That is why Trump must be excised. He has undermined the basic foundations of the constitutional Republic and thereby challenged fundamental notions of the US as a sovereign State. He has divided the Nation and manipulated his supporters into becoming a riotous seditious mob. He has put himself before God, Flag and Country even while wrapping himself in them.

If not in public, in their hearts Republicans know this.

Removal of Trump’s malignant political presence is a three step process. One is via his Senate trial and banishment, one involves the prosecution and punishment of his seditious supporters, and one is a form of legal chemotherapy that will hopefully prevent him from returning to the political scene. This is what needs to happen. It does not mean that it will happen. We can only be hopeful.

Senate Minority Mitch McConnell (R-KY) seems to understand the situation. With his bleating about “rigged” elections in Georgia, Trump contributed to the GOP losing both Senate seats in that state (to a Jew and an African-American!). That cost McConnell his majority leadership. He now has an incentive to see Trump finished off because among other things it will pull the rug out from under and bring to heel would-be pretenders to the MAGA throne like Marco Rubio, Ted Cruz and Josh Hawley.

The impeachment charge against Trump is incitement of the attack. In asking for two extra weeks for Trump’s lawyers to “prepare, ” McConnell may in fact be giving Democrats more time to uncover irrefutable evidence that the Trump White House colluded with insurrectionists on how to storm the Capitol. The New York Times and Wall Street Journal have uncovered evidence that some of the “rioters” were paid staff on Trump’s campaign and were in contact with members of Trump’s entourage, including family members and people like Rudy Giuliani. With the articles of impeachment now tabled, more evidence may be uncovered before the Senate court proceedings begin. People can be subpoenaed to testify under oath or offered immunity in exchange for their testimony. Unlike his first impeachment, Trump cannot offer presidential protection to those called as witnesses (as he did when he ordered various officials not to testify). Things are about to get real and that reality is ugly for Trump.

17 Republicans need to cross the aisle and vote in favour of conviction in order for Trump to be impeached. McConnell has said that he has whatever numbers he needs to go either way. If the evidence is compelling then it will be easier to convict on “institutions over individuals” grounds. Doing so will be the start of the de-Trumpification process. Although that is necessary, it is not sufficient. More needs to be done by way of follow ups.

If Trump is convicted he then can be banned from political life by a simple majority vote in the Senate. The decision to vote on a lifetime ban is called by the Democratic majority. Given his long-standing repudiation of Trump, Mitt Romney will gladly provide the cross-over vote but there are others who will be willing to do so as well.

In order to make the ban stick, the second step is a form of legal chemotherapy. He needs to be sued and charged in civil and criminal courts at the state and federal levels, along with family members and others, like Giuliani, who conspired with him during his time in business and government. The constant barrage of lawsuits and prosecutions will exhaust him financially and perhaps mentally and will open space for people to turn on him in order to escape or receive lesser punishment themselves. So long as he is occupied in this fashion he will have relatively little resources, time or energy to try and mount some sort of political re-birth under different guise.

The final part of this process involves the prosecution and serious punishment of those charged with offences related to the assault on the Capitol. These include murder; conspiracy to commit murder; grievous bodily harm; conspiracy to commit grievous bodily harm; inter-state transport of weapons with the intention of committing crime; looting; vandalism; theft of government property; theft and distribution of classified material; rioting; affray; sedition; treason and more. The charges must be as serious as possible and the sentences must be as severe as legally permissible.

The reason for this hard line approach is not just the punitive value it has on those who perpetrated the attack on the Capitol. Its main value is deterrent. It provides a palpable indicator of the boundaries of the “no go” zone when it comes to political dissent and legitimate protest. Adopting a judicial hard-line will help deter copycats or those who think that just because some politicians, even the president, say it is OK, seditious insurrection in fact is not OK as far as the constitutional State is concerned.

The three-tiered approach to extirpating the Trump malignancy from US politics is the only way that we can be reasonably assured that the treatment will work (and yes, I recognise that I am borrowing some of that “organic” language used by the Argentina junta when referring to its victims. But if the shoe fits, then why not wear it?). In the end, Trump is an existential threat to the very notion of the US as a nation-state, and must be treated as the domestic terrorist inspiration and enabler that he is. Not to put too fine a point on it, but he is no better and more likely a bit worse than one of Osama bin-Laden’s drivers in Pakistan. If so, and those guys wound up in Guantanamo or dead for their efforts, why should he be treated appreciably differently than they were?

One can only hope that Mitch McConnell and the GOP recognise that Trump is just another data point on that anti-democratic continuum, but one that is far more dangerous to the US than any Islamicist chauffeur.

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