By JERRY HARRIS

Race and Class

Abstract: The Russian invasion of the Ukraine is a powerful assertion of geopolitical power and conflict. But Russia’s nationalist and expansionary drive takes place within the context of transnational economic ties. Such ties help define the nature of the war, and both the Russian and western response. The contradictory pressures of nationalist desires conflicting with transnational integration is an underappreciated complexity of the war that this article will explore.

 Keywords: energy resources, finance capital, nationalism, oligarchy, Russian invasion, sanctions, transnational capitalist class, Ukraine.

 Introduction

The invasion of Ukraine is seen by most as a geopolitical conflict between the West and Russia. Nationalist ideologies and power competition do play a significant role, but such competition takes place within the context of transnational relations that also define the nature of the struggle. Unlike the invasion of Czechoslovakia, which took place during limited economic and cultural ties between the West and Soviet Union, the current war is deeply affected by mutual economic relationships between transnational capitalists and links between transnational corporations. Exploring how the contradictions between national and transnational elements structure the character of the war is the purpose of this article.

Global capitalism has gone through tremendous change over the past forty years, building a system of transnational integration characterised by global financial flows and production. This has profoundly changed a world built around nation-centric power. The emergence of the transnational capitalist class (TCC) reshaped domestic economies and social relations by restructuring state institutions and rules to serve the new forms of global accumulation. Major trade arrangements were ratified, banks bailed out, corporate taxes cut, transnational corporations promoted and social contracts undermined. And yet the old forms of power, habits, identities and privileges still fight to maintain their existence. This mixture of national structures overturned by transnational forces creates a powerful vortex of tensions.

In Russia, this process took place first under Yeltsin and then Putin, turning the country into a neoliberal state. As the new ruling class sought a capitalist identity outside the Soviet experience, it linked to its imperial past. As a result, Russian national concepts of power rooted in Tsarist imperialist expansion reasserted their influence, even as the oligarchy made use of transnational accumulation. Neither did Great Power concepts fully fade in the West, as NATO’s eastward expansion shows. As globalisation entered a sustained period of economic, environmental and social turmoil, transnational hegemony was opened to greater challenge, particularly from authoritarian state capitalism, which finds inspiration in fascism and empire. As the globalist project of a fully integrated economic world floundered under the weight of its own excess, nationalist ideology and power projections re-emerged.

Mike Davis hits home when he describes the Putin government as one that hates Lenin and the Bolshevik position on self-determination, a government drenched in Great Russian chauvinism and supported by the reactionary religious hierarchy of the Eastern Orthodox Church. A government that invites the backing of pan-Slavic neo-fascists, that idealises the Tsarist empire, with Putin himself an iconic hero of far-right nationalists throughout Europe and the US.[1]

And yet it is a government that has structured its economy to serve and benefit from transnational capitalism. That contradiction, between nationalist ideology and its transnational model of accumulation, is the Russian trap. And it works both ways, for Russia and for its global partners.

Global capitalism and Russia

In Russia, the creation of a TCC took place primarily through the privatisation of state assets, in combination with private/state ownership arrangements in energy and finance. The state did not represent a national capitalist class, nor was its primary concern building a modern industrial base. Rather, the state played a central role in integrating the key sectors of the Russian economy into global capitalism. Russian oligarchs also rushed to integrate into elite cultural and financial networks. They sent billions into offshore havens, spent hundreds of millions on London and New York real estate, lived on their yachts, and sent their children to elite western schools.

But the full political integration of the Russian state was stymied by the western architecture of power. NATO’s expansion eastward clashed with Russia’s intent to re-establish its own sphere of influence. This was an uneven process, unfolding over a period of three decades. The G7 became the G8 as Russia was given a seat at the elite table. But tensions never fully resolved. Political, social and environmental problems continued to sharpen, giving rise to security concerns and a renewal of nationalist rhetoric to regain state legitimacy. In turn, rivalries became more aggressive, and the balance between globalism and nationalism began to shift.

To explore the above process, we begin with Russia’s internal transformation and the creation of its transnational capitalist class.

Scholar Oleg Komolov describes the Russian economy primarily as a supplier of resources, with the TCC deeply integrated into global capitalism. He points out how the ruling class that emerged from the privatisation of state assets occupies primarily the role of an intermediate seller of Russian commodities on world markets and is not interested in improving the efficiency of the economy, developing competitive manufacturing industries and technological progress. [Moreover] the export economy was developed with large-scale participation of foreign capital in all sectors of the economy, the artificial devaluation of the ruble and net capital outflow to countries of the center.[2]

Between 1997 and 2017, the outflow of capital exceeded inflows, with offshore havens the destination for 70 per cent of capital exports. The two most prominent outflow years were during the global crash of 2008 and the Russian seizure of Crimea in 2014, with a combined total of $285 billion.[3] Outside the flight to offshore havens, Russian energy TNCs had made foreign direct investments of $335.7 billion by 2017.[4]

The Russian state and private oligarchy worked together in the outflow of capital, which reduces the amount of held dollars and keeps the value of the rouble low. In turn, this helps the export of fossil fuels and minerals. According to the World Bank, the rouble is one of the world’s most undervalued currencies.[5] Oil and gas make up 65 per cent of Russian exports, but minerals and wheat also play an important role. The state has supported this process by increasing its overseas holdings in US Treasury bonds from $8 billion to $164 billion between 2007 and 2013.[6]

Keeping the value of the rouble low meant undercutting investments in the modernisation of manufacturing. The results being high import prices for machinery and agricultural inputs, as well as high consumer prices for foreign goods. In 2017, machinery and equipment made up 47 per cent of imports, and chemical products 18 per cent.[7] Thus, a low-valued rouble drove up the cost of tractors, combines, transport and machine tools, fertilisers and chemicals – a typical pattern among transnational petro-states. Privileging globalist accumulation over the national market marked the Russian ruling class with a transnational character and strategy.

Another aspect of Russia’s integration was creating an attractive market for foreign speculative capital. During the 2005–08 financial frenzy, capital flowed into Russia, benefiting from liberalisation of currency regulations. During these years, transnational capitalists sank $325 billion into Russian corporations, with large amounts going to state-owned entities like Sberbank and the energy giant Gazprom. Among the biggest investors were financial giants JPMorgan, BlackRock and Pimco.[8] Loans were also made, reaching $400 billion from some of the biggest global banks including Citigroup, HSBC, BNP Paribas and Deutsche Bank. The benefits for finance capital were double: debt from loans and earnings from investments meant profits for transnational investors the world over. The outflow of profits over a twenty-year period reached $1.2 trillion, and taking on foreign liabilities certainly didn’t support the rouble.

Energy, transnational capital and sanctions

Key to the Russian economy, and indeed the world economy, are energy resources. Russia’s fossil fuel industry has been largely exempt from the sanctions in 2022, as it was in 2014. In both cases, transfer payments for energy continued to flow through the SWIFT computers, and in 2022 these were worth about $350 million per day. Between 24 February and 24 March 2022, Russia sold $19 billion in fossil fuels. The links between western oil majors and Russian TNCs deeply influences the limits and impacts of sanctions, and so deserves attention.

First, we can review the degree of joint ventures between Russian and transnational energy majors. Rosneft emerged as Russia’s largest oil producer when Putin dismantled Yukos, and sold its $90 billion in assets for just $2 billion. Western banks rushed to loan Rosneft $22 billion as it became Russia’s dominant energy company. Financial backing came from ABN Amro, Barclays, BNP Paribas, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley. Rosneft then raised $10.7 billion in an IPO on the London Stock Exchange with BP taking a 20 per cent stake. Other strategic investors included Petronas (Malaysia) and CNPC (China). Russian oligarchs joined in, with Roman Abramovich, Vladimir Lisin and Oleg Deripaska each investing $1 billion. As Hans-Joerg Rudloff, chairman of Barclays and Rosneft board member, noted, Russia was ‘on the track of international economic integration’.[9] In 2006 Rosneft turned east, joining with China’s Sinopec in a $13.7 billion buyout of TNK-BP’s Udmurtneft Oil. In a key deal after the 2014 imposition of sanctions, Rosneft signed a thirty-year contract with the state-owned China National Petroleum Corporation worth about $400 billion. Furthermore, Exxon had a $3.2 billion Arctic offshore drilling deal with Rosneft in which the Russian TNC obtained minority stakes in the Gulf of Mexico and oil fields in Texas. Rex Tillerson, chief executive of Exxon Mobile and future Secretary of State, received the Order of Friendship award from Putin in gratitude for Exxon’s commitment.[10]

Gazprom also has a significant level of transnational integration. In developing Shtokman, one of the world’s largest gas fields, Gazprom partnered with Total from France and StatoilHydro of Norway. Total has a close relationship with the Russians. The French oil major has investments in two other Russian oil fields, and a 16 per cent stake in Novatek, the country’s largest gas producer after Gazprom. The largest foreign investment project in Russia, the Sakhalin-2 oil field, involved the British and Japanese. Although Gazprom retains majority ownership, Shell held 27.5 per cent, Mitsui 15 per cent, and Mitsubishi 10 per cent.[11]

Overall, more than 400 foreign financial institutions have provided $130 billion to Russian energy companies, $52 billion in investments and $84 billion in credit. A total of 154 US financial companies hold almost half of these investments at $23.6 billion. JPMorgan is the largest with investments and loans of $10 billion. Other major investors include Qatar’s sovereign wealth fund with $15.3 billion invested in Rosneft. The UK was the third largest investor, where 32 financial institutions contributed $2.5 billion. Other important investors come from Italy, Netherlands, Norway, Switzerland, Japan and China.[12]

To understand how sanctions disrupted these transnational relations, we need to investigate sanctions from 2014 and 2022. In 2014, companies weren’t banned from conducting business with Russian state-owned energy giants, although banks were sanctioned from making loans. The policy allowed protection for transnational institutional investors. But the US did move to sanction Rosneft’s president, Igor Sechin. This prompted Jack Ma, founder of China’s Alibaba, and John J. Mack of Morgan Stanley, to resign from the Rosneft board; while Donald Humphreys, former chief financial officer of Exxon Mobil, and BP chief executive Bob Dudley continued to serve. As western sanctions tightened, they did cause some difficult problems, forcing Eni, Exxon and Statoil to withdraw from a $20 billion Rosneft Arctic exploration project. But to replace the loss of advance drilling technology, Rosneft took a 30 per cent stake in North Atlantic Drilling, a subsidiary of Seadrill, the world’s largest offshore driller controlled by Norway’s richest man, John Fredriksen. Rosneft also faced problems when sanctions cut access to foreign capital markets. To counteract the sanctions, it arranged a series of prepayment deals with some of the largest western oil traders including Glencore, Trafigura and BP. Furthermore, Rosneft bought Morgan Stanley’s global oil trading business, obtaining an international network of oil tank storage contracts, supply agreements and freight shipping contracts, as well as a 49 per cent stake in Heidmar, a manager of oil tankers. So, while the 2014 sanctions caused a number of real problems, Rosneft’s transnational relationships provided important avenues to avoid major disruptions.[13]

Overall, the 2014 sanctions did hurt Russia. FDI inflows fell from $69 billion in 2013 to $21 billion in 2014. But the Obama administration also faced stiff resistance not only across Europe, but in the US as well. Hostility to the sanctions came from the two most influential US business groups, the National Association of Manufacturers and the US Chamber of Commerce. Both lobbied and took out critical ads in national newspapers, insisting that sanctions should not hurt financial institutions that held significant Russian debt. Among the corporations who lobbied against the sanctions were Exxon Mobil, BP, American Petroleum Institute, Amway, Caterpillar, Chevron and GM.[14]

In implementing sanctions, the US believed Russia would view its global business ties as too valuable to lose, and so economic pressure would force a retreat from eastern Ukraine. But from the other side of the mirror, Putin believed global business’s ties to Russia were too valuable and would undercut western sanctions. In important ways both were right, and the same dynamic is at play in 2022. In the recent crisis the US Chamber of Commerce has again lobbied Congress arguing sanctions should be ‘as targeted as possible in order to limit potential harm to the competitiveness of U.S. companies’.[15]

The magnitude of the 2022 invasion has caused the current sanctions to be deeper and broader. What Russian Marxist Boris Kagarlitsky pointed out in 2014 is even more true today:

The situation confronting our elites … is more or less straightforward, they cannot enter actively into confrontation with the West without dealing crushing blows to their own interests, to their own capital holdings and to their own networks, methods of rule and way of life.[16]

But this is a two-way street – the West can’t sanction Russia without hurting itself, so the question becomes who hurts the most. For example, the world’s largest asset manager BlackRock took a loss of $17 billion on their Russian exposure.[17]

Because Russia is the main supplier of oil and gas to Europe, its energy industry is a major focus of new sanctions. ExxonMobil is beginning steps to exit the Sakhalin-1 project and cease operations it carries out on behalf of a consortium of Japanese, Indian and Russian companies. Shell also announced plans to leave Sakhalin and ‘withdraw all involvement in Russian hydrocarbons’.[18] BP has moved to offload its 20 per cent stake in Rosneft and may take a hit estimated at $25 billion. BP’s move comes after thirty years of joint venture. Additionally, the Singapore-based trading company Trafigura is threatening to opt out of its 10 per cent shareholding of Vostok Oil, a vast gas project led by Rosneft. And Norway’s Equinor will also begin to exit its joint ventures. But TotalEnergies, the large French transnational, while committing to no new investments, is holding on to its nearly 20 per cent of Novatek.

Yet none of these companies may end up leaving. Exxon, BP and Shell need to find someone to buy out their interests. That will not be easy in the present circumstances, and they may have to appeal to their Russian counterparts to take their shares. Furthermore, oil tankers continue to transport millions of barrels of oil from Russian ports, estimated to be worth $700 million per day. These include tankers from Greece, and those chartered by US oil giant Chevron.[19] And SWIFT payment transfers for energy continue at the above-mentioned $350 million per day. Consequently, for all the difficulties of the sanctions, global energy integration affords Russia significant amounts of capital, which helps to finance the war.

India’s case is yet another example of the complexity of transnational production. Obtaining about a 33 per cent discount from Russia, India’s oil imports have surged by 700 per cent.[20] Some of these imports go to Reliance Industries, which has the world’s largest refinery complex, and also to an affiliate of Rosneft, Nayara Energy. Using Russian crude, Indian refineries produce diesel and jet fuel, which is sold to Europe, whose imports from India have jumped. As Shell’s chief executive explained, oil substantially treated or changed loses it national origin. ‘We do not have systems in the world to trace back whether that particular molecule originated from a geological formation in Russia, [therefore] diesel going out of an Indian refinery that was fed with Russian crude is considered to be Indian diesel.’[21]

One particularly ironic aspect of transnational relations is that Russian gas flows through pipelines running through Ukraine to Italy, Austria and eastern Europe. Russia pays transport fees to the government, thus supplying funds to Ukraine even as the war raged. And, of course, gas reaching the EU means more money for Russia. It wasn’t until May 2022 that Ukraine stopped the Sokhranovka pipeline that operates from the Russian-controlled Luhansk region. The value of the gas is about $1 billion each month. But Sudzha, Russia’s main pipeline, is, at the time of writing, still in Ukrainian-held territory, allowed to operate, and expected to take on some of the lost capacity.

Another example of the complexity of transnational production is how the invasion impacted Rusal, the world’s second-largest aluminium producer, owned by Oleg Deripaska and listed on the Hong Kong market. Rusal has a joint venture with Australian mining giant Rio Tinto. But because of sanctions, their joint refinery, Queensland Alumina, will not ship products to Russia. The result is that Rusal had to halt production at its Nikolaev refinery located in Ukraine, which accounts for 23 per cent of its annual production. Nikolaev is one of the most modern refineries in the world and employs about 1,500 people. To make up the shortfall Rusal may divert production from its Aughinish refinery in Ireland to feed its Russian smelters.[22] In turn, that will reduce supplies in Europe where materials are already short. The end result is higher unemployment in Ukraine, higher prices in Europe, and a lower stock price for Rusal.

Data compiled by the Yale School of Management reported 253 TNCs are making a clean break with Russia, essentially leaving no operations behind. Some of these include Uber, Shell, Salesforce, Reebok, McKinsey, Nasdaq, eBay, Delta, Deloitte, BP, BlackRock, American Airlines and Alcoa. Another 248 companies have suspended their operations without permanently exiting or divesting. Among these are Adidas, American Express, Burger King, Chanel, Coca-Cola, Dell, Disney, GM, Hewlett Packard, Honeywell, Hyundai, IBM, McDonalds, Mastercard, Nike, Oracle, Starbucks, UPS, Visa and Xerox. Some seventy-five companies have suspended a significant portion of their business. These include Caterpillar, John Deere, Dow, GE, Goldman Sachs, JPMorgan, Kellogg’s, Pepsico and Whirlpool. Pausing new investments are ninety-six companies. This is different from JPMorgan and Goldman Sachs who, while suspending some operations, continue to snatch up depressed Russian securities at very low prices. Among those pausing new investments are Cargill, Colgate-Palmolive, Credit Suisse, Danone, Johnson & Johnson, Siemens and Unilever. The total so far is 672 companies taking various forms of action. Yale reported 162 companies staying the course, including Acer, Alibaba, International Paper, Koch, and Lenovo.[23]

Some funds not appearing in the Yale report include the important financial centres in Singapore, which has halted any new economic activity with four major Russian banks. And Singapore’s large sovereign wealth funds, which have about $6 billion invested in Russia, have also suspended activity.[24] Two of China’s largest state-owned banks are limiting loans for purchases of Russian commodities.[25] The New Development Bank, established by Russia, China, Brazil and South Africa, put new transactions on hold. And the Asian Infrastructure Investment Bank, whose major shareholder is China, stopped its projects in Russia and Belarus. As of the middle of March 2022, there were more than 3,600 sanctions on Russian individuals and companies.

Table 1: Estimated and potential losses of companies leaving Russia[26]

The rush to boycott Russia reminds one of the corporate rush to endorse Black Lives Matter; essentially a marketing strategy to stay in front of popular politics. And while the costs are disruptive, transnational corporations are large enough to swallow such losses. For example, as the price for oil rose, Shell increased its early quarterly profits by 300 per cent to $9.1 billion – already enough to cover its projected $5 billion loss. Most of these sanctions will only harm the Russian people without having any real effect on the ruling class or the invasion. Russian citizens are already experiencing a dramatic decline in purchasing power and may soon face growing unemployment and a lack of consumer goods. The larger developing crisis is in world food supplies as Russia and Ukraine export a significant amount of the world’s wheat, corn, barley and sunflower oil. Shortages and price increases will hit the poor in the Global South the hardest.

Financial institutions and the TCC

Because of the integration of the global financial system, Russian capital was exposed to severe sanctions in 2022 that constituted a geo-economic break. There has been a general belief in the sanctity of foreign reserves. The US often talks about a ‘rules-based world order’. This includes open capital markets and accounts, deeply integrated financial markets, and benchmark assets in US dollars. Putin counted on all of this to keep the Russian economy functioning during the invasion. But seven of the largest Russian banks have been removed from the SWIFT interbank system. This severely limits the ability to pay for imports or receive payment for exports, as SWIFT is used to link funds for transnational deals. Russia’s central bank also kept about half its $630 billion dollars and euro reserves in foreign institutions residing in London, New York, Paris and Tokyo, and from $86 to $140 billion in Chinese bonds. Except for the Chinese holdings, these funds are now frozen, causing the rouble to lose about 40 per cent of its value, although with capital controls the rouble regained most of its value. Moreover, the collapse of Russian corporate stocks triggered the multi-week closure of the Russian stock market. And both Moody and Fitch downgraded Russian sovereign debt to ‘junk’. Russia is moving towards its first foreign currency debt default in one hundred years, but, as of May 2022, was still making payments using money from energy exports.

The severity of the economic sanctions is a radical step. Even during the second world war, relations between the Bank of England and the Reichsbank continued into the 1940s. And the Bank of International Settlements continued to allow the German central bank access to its clearing and settlement facilities throughout the war.

As Dominik Leusder points out:

More than any armed conflict, the current international monetary system has laid bare the folly of this romantic liberal portrait of globalisation. The sanctions against Russia are the clearest manifestation yet of a distinct undercurrent of financial globalisation … the West’s ability to coerce states has only increased as a function of their integration [so] as Russia became a central node [of] the global economy, it became more vulnerable.[27]

And yet western investors and companies are also in danger, as sanctions over the transfer of funds may mean Russia defaults on billions in loans. Facing such problems, US authorities gave the okay to JPMorgan to process interest payments due on dollar bonds from the Russian government. Citigroup is another payment agent for about fifty corporate bonds tied to Russian TNCs like Gazprom and MMC Norilsk Nickel. [28] Furthermore, the important financial institution Gazprombank is spared from sanctions and continues to be a conduit for commodity transactions. For example, working with Citibank it helped Brazil purchase Russian fertiliser, which is not sanctioned. Thus, the flow of capital continues, at least in part, despite sanctions.

Again, Leusder provides insightful analysis:

As globalization underwrote Putin’s militarism and his increasingly hostile posture toward Russia’s neighbors, it simultaneously rendered the country’s economy fatally reliant: on the net demand from other countries such as Germany and China; on imports of crucial goods such as machinery, transportation equipment, pharmaceutical and electronics, mostly from Europe; on access to the global dollar system to finance and conduct trade … This is one way to construe the deceptively simple insight of Henry Farrell and Abraham L. Newman’s theory of weaponized interdependence: the logic of financial globalization that generated Russia’s trade surplus and gave Putin room to maneuver also provided the economic and financial weaponry that was turned against him.[29]

Thus, a nationalist strategy to reconstitute the Russian empire, using the profits and ties that come with globalisation, is undercut by the contradiction of those same ties and relationships.

Weaponised interdependence is a good description of the financial markets in metals. Alongside Russian fossil fuels are its exports of metals, including copper, alumina and nickel, which is used in making stainless steel and batteries for electric cars. Here are the complications of transnational capitalism. Tsingshan Holding Group in China is the world’s largest nickel producer, China’s second largest steel producer, and is involved in electric vehicle batteries. Tsingshan made an enormous $3 billion bet shorting the price of nickel, counting on its own increased production in creating an abundance of supplies. This bet was made on the London Metal Exchange (LME), which is a unit of Hong Kong Exchanges and Clearing Limited. With the Russian invasion, although nickel was not sanctioned, fear took hold of the market and prices jumped 250 per cent. The short bet based on lowering cost was a disaster. Trade chaos took hold, leaving Tsingshan with two choices. Either deliver tons of nickel or pay for margin calls, which means coming up with the cash or securities to cover potential losses. But Tsingshan only held 30,000 tons of its 150,000-ton bet. The remainder was held by JPMorgan, BNP Paribas, Standard Chartered and United Overseas Bank. On the cusp of a global financial disaster, LME suspended trading and retroactively cancelled $3.9 billion of trades, blaming banks for preventing efforts to create greater transparency that could have revealed the interconnected problem.[30] Consequently, the Russian invasion set off a financial crisis that punished transnational capitalists that have no part in the war.

Facing sanctions, oligarchs can’t be happy with the war, and a number have stated their opposition. Nevertheless, the global financial system has been built to safely hide their money, as well as the wealth of others in the TCC. It’s estimated that oligarchs have hidden about half their wealth offshore, amounting to some $200 billion. Somewhere between 10,000 to 20,000 Russians hold more than $10 million each in offshore assets and havens.[31] Still, that is significantly less than their American counterparts who have an estimated $1.2 trillion in offshore tax havens. Much of the Russian money is in US, UK and EU assets. Transparency International has estimated about $2 billion just in UK property.[32]

But much of this wealth is difficult to discover because the TCC has structured international laws to hide wealth in complex trusts and shell corporations.[33] Global accounting firms PwC, KPMG, Deloitte and EY helped oligarchs move money to offshore shell companies for years before currently withdrawing services. Rosneft, VTB, Alfa Bank, Gazprom and Sberbank have been represented by leading US law firms, including White & Case, DLA Piper, Dechert, Latham & Watkins and Baker Botts. And Baker McKenzie, one of the world’s largest law firms, continues to represent some of Russia’s largest companies, including Gazprom and VTB.[34] Concord Management specialised in serving ultra-wealthy Russians, helping them invest in hedge funds, private equity and real estate. Since 1999, Concord has channelled billions to BlackRock, Carlyle Group and others. Wall Street banks such as Credit Suisse, Goldman Sachs and Morgan Stanley often acted as intermediators, linking Concord to hedge funds.[35] Such well-worn networks tie the Russian TCC to global capitalists and financial institutions in a mutually beneficial relationship, and creates a shared culture that exalts the privileges of wealth and common ideas about how the world economic system works.

Capitalists the world over make use of sophisticated accountants, bankers and lawyers to hide their assets. An agent will set up an offshore shell company in a country with little transparency. This company then creates more shells in other low-transparency jurisdictions – about forty-two exist across the world, including the US states of Delaware and South Dakota. This allows the ‘ultimate beneficial owner’, often unknown, to have multiple bank accounts and the ability to move money and invest without any scrutiny. Government investigators in both the US and the UK regularly ignore suspicious banking activity. In 2018, the EU passed regulations demanding access to information on the ownership of European companies nested in shell companies. Yet in 2022 no such registry exists. Congress passed a transparency law in 2021 with a $63 million budget, but never provided the money to the Treasury Department. Consequently, the effort to sanction oligarchs is undercut by the global financial system built to the demands of the TCC, of which Russian capitalists are members. While some pressure is being directed on the oligarchs, the system of hidden cross-border capital flows is too valuable to end, allowing the Russian TCC to escape greater harm.

A good example of how shell corporations function is the effort to sanction Arcady Rotenberg. Rotenberg is worth about $3 billion with an estimated $91 million invested in the US and a $35 million mansion outside London, bought through an entity in the British Virgin Islands. He has at least 200 companies located across dozens of countries. Even after coming under sanctions in 2014, Rotenberg became the owner of two additional companies located in Luxembourg, well known as a haven for billionaires. Although senate investigators found countless bank filings on suspicious Rotenberg activities, none of them have been investigated by the Treasury Department.

As Cihan Tuğal reminds us, Putin and his cronies

are a solid part of world capitalism, and their apparently insane actions are intended to produce a better place at the table. They want to be recognized as legitimate imperialists in the new, post-Wilson and post-Lenin world of the 21st century … [Putin] is not only serving his ego, but a capitalist class fostered by post-1991 reforms, which were selective appropriations of free market ideas. The gang of cronies is not Putin’s creation alone. It is an outcome of transnational dynamics. This class is hungry for markets, and it cannot help but look for ways to burst out of Russia.[36]

German/Russian economic relations

Moving from a picture of transnational markets, industries and finance, we can explore the specific relationship between Germany and Russia. Germany as the largest European economy is also the most integrated with Russia. For Russia, it’s their most important economic partner alongside China. In 2021, German exports to Russia were worth more than $28.4 billion, and it invested a further €25 billion in operations.[37] Germany still depends on Russia for about 55 per cent of its natural gas, 35 per cent of its oil, and half its coal.

Before 2014, there were 7,000 German companies inside Russia representing some of the largest TNCs in the world, such as Adidas, BASF, Siemens, Volkswagen, Opel and Daimler. On the financial side, all major German commercial banks were active in Russia. In terms of oil and gas, Germany’s biggest energy group Eon was the largest foreign shareholder in Gazprom, which, alongside BASF, was building the $6.6 billion Baltic Sea pipeline. The Germans held 20 per cent of the Nord Stream joint venture, with former chancellor Gerhard Schröder as chairman and Matthias Warnig of Dresdner Bank its chief executive. Even after the seizure of Crimea, Siemens CEO Joe Kaeser confirmed its commitment to Russia to sell trains, energy infrastructure, medical technology and manufacturing automation technology. Cross-border deals also continued, with RWE selling its oil and gas subsidiary to Russia’s LetterOne for over $7.5 billion. But, with the 2014 sanctions, German trade with Russia dropped by 35 per cent, and German firms investing in Russia dropped to just under 4,000 by 2020.[38]

Now the invasion of Ukraine has shaken the German/Russian relationship in a very significant manner, particularly in the auto and energy industries. Wintershall Dea, an oil and gas TNC, will stop payments to Russia and write off its €1 billion investment in Nord Stream 2. Additionally, it will not receive revenues from its Russian operations, which accounted for about 20 per cent of its 2021 profits. The company issued a statement on the turmoil caused by the invasion lamenting,

What is happening now is shaking the very foundations of our cooperation. We have been working in Russia for over 30 years … We have built many personal relationships – including in our joint ventures with Gazprom. But the Russian war of aggression against Ukraine marks a turning point.[39]

Nord Stream 2 has been a contentious issue between the US and Germany for years. The pipeline running through the Baltic goes directly to Germany. The US has pressured Germany to end the project, but Angela Merkel refused to do so. The project, worth $11 billion, is registered as a Swiss firm whose parent company is Gazprom. Gazprom owns the pipeline and paid half the costs, the rest shared by Shell, Austria’s OMV, France’s Engie, and Germany’s Uniper and Wintershall DEA.[40] The invasion has prompted Germany to halt the project. The suspension of Nord Stream 2 may not be permanent, but even a temporary suspension is a huge shift.

Russia exports fifty-six billion cubic metres of liquefied natural gas to Germany yearly. Inside Germany, Gazprom owns and operates thousands of miles of pipeline, key storage facilities, and the largest underground storage tank for natural gas in western Europe. Russia also supplies German refineries with a third of their oil, a number with long-term contracts that Russia is not willing to cancel. Particularly ironic are the weapons sent by the German government to Ukraine that use steel produced in German factories powered by coal coming from Russia. As Putin has stated:

Let German citizens open their purses, have a look inside and ask themselves whether they are ready to pay three to five times more for electricity, for gas and for heating … You can’t isolate a country like Russia in the long run, neither politically nor economically. German industry needs the raw materials that Russia has. It’s not just oil and gas, it’s also rare earths. And these are raw materials that cannot simply be substituted.[41]

Turmoil has also hit the auto industry. Volkswagen, Mercedes-Benz and BMW halted production in Russia, and also suspended all vehicle exports. But the invasion has had an even bigger impact because of the coordination of production between Ukraine and European auto companies. With its low labour costs and educated workforce, Ukraine became a manufacturing centre of systems which connect electronic components, like tail lights and car entertainment systems. The work, done by hand, requires a large number of skilled workers. The fighting brought production to a sudden halt, and within days the lack of parts shut down European factories. BMW shut several plants in Germany, Austria and Britain, while VW was brought to a standstill at multiple locations, including its main site in Wolfsburg. Electric vehicle production at Zwickau stopped, including its SUV exports to the US, and Porsche idled manufacturing the Cayenne sport utility vehicle in Leipzig. As Jack Ewing noted:

No car can operate without wiring systems, which are often tailor-made to specific vehicles. So-called wiring harnesses are among the first components to be installed in a new vehicle, and their absence brings assembly lines to a standstill.[42]

Furthermore, Ukraine is also a major source of neon, a gas used for high-performance lasers required for production of scarce semiconductors, adding more woes to the industry.

None of these economic disruptions are welcomed by the TCC. But the German government has taken a major step away from its previous positions. At first opposed to banning Russia from SWIFT, and refusing to send arms to Ukraine, it has now reversed on both those issues. And the sizeable increase in its military budget surprised everyone. Although transnational links are deep, for now geopolitical tensions are riding roughshod over economic concerns. But such concerns have not gone away. The New York Times observes that ‘multiple cracks’ have already occurred over ‘lost trade, higher energy prices, slimmer profits and lower economic growth’, as well as lower employment.[43] As Martin Brudermüller, the chief executive of the chemical giant BASF stated, ‘Cheap Russian energy has been the basis of our industry’s competitiveness’.[44] And again, ‘Do we want to blindly destroy our entire national economy? What we have built up over decades?’[45] What is true for BASF is true for the German economy, whose success is built upon cheap gas from Russia and exports to China.

Conclusion

There are a number of questions not explored in this article. NATO’s eastward expansion, Great Russian chauvinism, fascist forces in both Russia and Ukraine, the meaning of independence and self-determination, US hypocrisy on foreign interventions, China’s role, and growing debates within the Left over the war. All these topics already have a growing and substantial body of literature. Also, events continue to rapidly develop and so the article has some time limitations. But the deeper issues on the intersections between national geopolitics and transnational economics, and how the resulting contradictions affect the war, will continue. What is clearly evident is that global capitalism has plunged the world into yet another crisis. A crisis that ignores a pandemic that threatens the health of every human on the planet, and an environmental crisis that threatens every species. The failure is staggering in its ignorance.

What the new global configuration will look like is difficult to tell. Much depends on how the conflict ends. A long-term occupation will freeze Russia’s transnational links, a rapid conclusion may mean the easing of sanctions. The invasion is a further deconstruction of the global capitalist system built over the past forty years of neoliberal hegemony. But there are still many trillions of dollars in cross-border accumulation, and global assembly lines continue to churn out commodities in a coordinated system of production and trade. The current problems in logistics and supplies are not because of too little demand, but because of too much, with the infrastructure of ports, shipping and transportation actually too limited. Such problems might call for an expansion of globalisation, which is at the heart of China’s Belt and Road strategy. But economic, political and social disruptions cause states to look to their own national security. As a result, the contradictions between national and transnational forces continue to be the nexus for world events, changing the balance of forces into new configurations of struggle.

This complex relationship between nationalism and globalism needs to be understood through historical materialism, which defines the world as a continual process of movement. Marx saw everything in motion – production, distribution, environmental metabolic relationships, the class struggle, and all human interactions. Change was driven by the balance between opposing forces, and the results were defined by the power between the aspects. How much of the old that remained, and how much of the new that was asserted, continually set the conditions for the movement to continue. This process of motion and change results in contradictions unfolding in many different forms. There is no historic queue in which socialism waits its turn to appear at the front of the line.

In the current capitalist world, neither nation-centric nor transnational relationships exist in isolation from the other. They exist in the same institutions and continually define and determine each other within a changing balance of forces. This unity of opposites in tension and conflict is what produces the historic transformation towards a new synthesis. No outcome is predetermined, but produced by the dynamic itself. Consequently, what aspects of nation-centric relationships survive or re-emerge depend on the agency of political struggle. Under pressure of globalist economic and environmental crisis, nationalist antagonisms have rematerialised, but within the context of transnational relationships. Globalisation didn’t create the ‘end of history’ because the past continues to exist in the present.[46]

We can see this contradiction in the balance between national and transnational forces in the Russian invasion. A balance in which nationalism and inter-state conflict has grown stronger as the forty-year hegemony of neoliberal globalisation has faced a series of economic, environmental and social crises. As the balance of power shifts, aspects of the old system reassert themselves, but deeply affected and redefined by the changes globalisation engendered. Old ideas and conflicts may re-emerge, yet they are never the same, but contextualised through the new forces that have asserted themselves. So, in analysing the Russia/Ukraine/NATO conflict, we must be careful not to place it in the world of the 1960s, but a world deeply restructured by transnational capitalism.

References

How Hegemony Ends: The Unraveling of American Power

By Alexander Cooley and Daniel H. Nexon
Foreign Affairs July/August 2020

Multiple signs point to a crisis in global order. The uncoordinated international response to the COVID-19 pandemic, the resulting economic downturns, the resurgence of nationalist politics, and the hardening of state borders all seem to herald the emergence of a less cooperative and more fragile international system. According to many observers, these developments underscore the dangers of U.S. President Donald Trump’s “America first” policies and his retreat from global leadership.

Even before the pandemic, Trump routinely criticized the value of alliances and institutions such as NATO, supported the breakup of the European Union, withdrew from a host of international agreements and organizations, and pandered to autocrats such as Russian President Vladimir Putin and the North Korean leader Kim Jong Un. He has questioned the merits of placing liberal values such as democracy and human rights at the heart of foreign policy. Trump’s clear preference for zero-sum, transactional politics further supports the notion that the United States is abandoning its commitment to promoting a liberal international order.

Some analysts believe that the United States can still turn this around, by restoring the strategies by which it, from the end of World War II to the aftermath of the Cold War, built and sustained a successful international order. If a post-Trump United States could reclaim the responsibilities of global power, then this era—including the pandemic that will define it—could stand as a temporary aberration rather than a step on the way to permanent disarray.

After all, predictions of American decline and a shift in international order are far from new—and they have been consistently wrong. In the middle of the 1980s, many analysts believed that U.S. leadership was on the way out. The Bretton Woods system had collapsed in the 1970s; the United States faced increasing competition from European and East Asian economies, notably West Germany and Japan; and the Soviet Union looked like an enduring feature of world politics. By the end of 1991, however, the Soviet Union had formally dissolved, Japan was entering its “lost decade” of economic stagnation, and the expensive task of integration consumed a reunified Germany. The United States experienced a decade of booming technological innovation and unexpectedly high economic growth. The result was what many hailed as a “unipolar moment” of American hegemony.

But this time really is different. The very forces that made U.S. hegemony so durable before are today driving its dissolution. Three developments enabled the post–Cold War U.S.-led order. First, with the defeat of communism, the United States faced no major global ideological project that could rival its own. Second, with the disintegration of the Soviet Union and its accompanying infrastructure of institutions and partnerships, weaker states lacked significant alternatives to the United States and its Western allies when it came to securing military, economic, and political support. And third, transnational activists and movements were spreading liberal values and norms that bolstered the liberal order.

Today, those same dynamics have turned against the United States: a vicious cycle that erodes U.S. power has replaced the virtuous cycles that once reinforced it. With the rise of great powers such as China and Russia, autocratic and illiberal projects rival the U.S.-led liberal international system. Developing countries—and even many developed ones—can seek alternative patrons rather than remain dependent on Western largess and support. And illiberal, often right-wing transnational networks are pressing against the norms and pieties of the liberal international order that once seemed so implacable. In short, U.S. global leadership is not simply in retreat; it is unraveling. And the decline is not cyclical but permanent.

THE VANISHING UNIPOLAR MOMENT

It may seem strange to talk of permanent decline when the United States spends more on its military than its next seven rivals combined and maintains an unparalleled network of overseas military bases. Military power played an important role in creating and maintaining U.S. preeminence in the 1990s and early years of this century; no other country could extend credible security guarantees across the entire international system. But U.S. military dominance was less a function of defense budgets—in real terms, U.S. military spending decreased during the 1990s and only ballooned after the September 11 attacks—than of several other factors: the disappearance of the Soviet Union as a competitor, the growing technological advantage enjoyed by the U.S. military, and the willingness of most of the world’s second-tier powers to rely on the United States rather than build up their own military forces. If the emergence of the United States as a unipolar power was mostly contingent on the dissolution of the Soviet Union, then the continuation of that unipolarity through the subsequent decade stemmed from the fact that Asian and European allies were content to subscribe to U.S. hegemony.

Talk of the unipolar moment obscures crucial features of world politics that formed the basis of U.S. dominance. The breakup of the Soviet Union finally closed the door on the only project of global ordering that could rival capitalism. Marxism-Leninism (and its offshoots) mostly disappeared as a source of ideological competition. Its associated transnational infrastructure—its institutions, practices, and networks, including the Warsaw Pact, the Council for Mutual Economic Assistance, and the Soviet Union itself—all imploded. Without Soviet support, most Moscow-affiliated countries, insurgent groups, and political movements decided it was better to either throw in the towel or get on the U.S. bandwagon. By the middle of the 1990s, there existed only one dominant framework for international norms and rules: the liberal international system of alliances and institutions anchored in Washington.

The United States and its allies—referred to in breezy shorthand as “the West”—together enjoyed a de facto patronage monopoly during the period of unipolarity. With some limited exceptions, they offered the only significant source of security, economic goods, and political support and legitimacy. Developing countries could no longer exert leverage over Washington by threatening to turn to Moscow or point to the risk of a communist takeover to shield themselves from having to make domestic reforms. The sweep of Western power and influence was so untrammeled that many policymakers came to believe in the permanent triumph of liberalism. Most governments saw no viable alternative.

During the 1990s, most governments saw no viable alternative to Western sources of support.
With no other source of support, countries were more likely to adhere to the conditions of the Western aid they received. Autocrats faced severe international criticism and heavy demands from Western-controlled international organizations. Yes, democratic powers continued to protect certain autocratic states (such as oil-rich Saudi Arabia) from such demands for strategic and economic reasons. And leading democracies, including the United States, themselves violated international norms concerning human, civil, and political rights, most dramatically in the form of torture and extraordinary renditions during the so-called war on terror. But even these hypocritical exceptions reinforced the hegemony of the liberal order, because they sparked widespread condemnation that reaffirmed liberal principles and because U.S. officials continued to voice commitment to liberal norms.

Meanwhile, an expanding number of transnational networks—often dubbed “international civil society”—propped up the emerging architecture of the post–Cold War international order. These groups and individuals served as the foot soldiers of U.S. hegemony by spreading broadly liberal norms and practices. The collapse of centrally planned economies in the postcommunist world invited waves of Western consultants and contractors to help usher in market reforms—sometimes with disastrous consequences, as in Russia and Ukraine, where Western-backed shock therapy impoverished tens of millions while creating a class of wealthy oligarchs who turned former state assets into personal empires. International financial institutions, government regulators, central bankers, and economists worked to build an elite consensus in favor of free trade and the movement of capital across borders.

Civil society groups also sought to steer postcommunist and developing countries toward Western models of liberal democracy. Teams of Western experts advised governments on the design of new constitutions, legal reforms, and multiparty systems. International observers, most of them from Western democracies, monitored elections in far-flung countries. Nongovernmental organizations (NGOs) advocating the expansion of human rights, gender equality, and environmental protections forged alliances with sympathetic states and media outlets. The work of transnational activists, scholarly communities, and social movements helped build an overarching liberal project of economic and political integration. Throughout the 1990s, these forces helped produce an illusion of an unassailable liberal order resting on durable U.S. global hegemony. That illusion is now in tatters.

THE GREAT-POWER COMEBACK

Today, other great powers offer rival conceptions of global order, often autocratic ones that appeal to many leaders of weaker states. The West no longer presides over a monopoly of patronage. New regional organizations and illiberal transnational networks contest U.S. influence. Long-term shifts in the global economy, particularly the rise of China, account for many of these developments. These changes have transformed the geopolitical landscape.

In April 1997, Chinese President Jiang Zemin and Russian President Boris Yeltsin pledged “to promote the multipolarization of the world and the establishment of a new international order.” For years, many Western scholars and policymakers downplayed or dismissed such challenges as wishful rhetoric. Beijing remained committed to the rules and norms of the U.S.-led order, they argued, pointing out that China continued to benefit from the current system. Even as Russia grew increasingly assertive in its condemnation of the United States in the first decade of this century and called for a more multipolar world, observers didn’t think that Moscow could muster support from any significant allies. Analysts in the West specifically doubted that Beijing and Moscow could overcome decades of mistrust and rivalry to cooperate against U.S. efforts to maintain and shape the international order.

Such skepticism made sense at the height of U.S. global hegemony in the 1990s and even remained plausible through much of the following decade. But the 1997 declaration now looks like a blueprint for how Beijing and Moscow have tried to reorder international politics in the last 20 years. China and Russia now directly contest liberal aspects of the international order from within that order’s institutions and forums; at the same time, they are building an alternative order through new institutions and venues in which they wield greater influence and can de-emphasize human rights and civil liberties.

At the United Nations, for example, the two countries routinely consult on votes and initiatives. As permanent members of the UN Security Council, they have coordinated their opposition to criticize Western interventions and calls for regime change; they have vetoed Western-sponsored proposals on Syria and efforts to impose sanctions on Venezuela and Yemen. In the UN General Assembly, between 2006 and 2018, China and Russia voted the same way 86 percent of the time, more frequently than during the 78 percent voting accord the two shared between 1991 and 2005. By contrast, since 2005, China and the United States have agreed only 21 percent of the time. Beijing and Moscow have also led UN initiatives to promote new norms, most notably in the arena of cyberspace, that privilege national sovereignty over individual rights, limit the doctrine of the responsibility to protect, and curtail the power of Western-sponsored human rights resolutions.

China and Russia have also been at the forefront of creating new international institutions and regional forums that exclude the United States and the West more broadly. Perhaps the most well known of these is the BRICS grouping, which includes Brazil, Russia, India, China, and South Africa. Since 2006, the group has presented itself as a dynamic setting for the discussion of matters of international order and global leadership, including building alternatives to Western-controlled institutions in the areas of Internet governance, international payment systems, and development assistance. In 2016, the BRICS countries created the New Development Bank, which is dedicated to financing infrastructure projects in the developing world.

China and Russia have each also pushed a plethora of new regional security organizations—including the Conference on Interaction and Confidence Building Measures in Asia, the Collective Security Treaty Organization, and the Quadrilateral Cooperation and Coordination Mechanism—and economic institutions, including the Chinese-run Asian Infrastructure Investment Bank (AIIB) and the Russian-backed Eurasian Economic Union (EAEU). The Shanghai Cooperation Organization (SCO)—a security organization that promotes cooperation among security services and oversees biennial military exercises—was founded in 2001 at the initiative of both Beijing and Moscow. It added India and Pakistan as full members in 2017. The net result is the emergence of parallel structures of global governance that are dominated by authoritarian states and that compete with older, more liberal structures.

China and Russia have been at the forefront of creating new forums that exclude the United States.
Critics often dismiss the BRICS, the EAEU, and the SCO as “talk shops” in which member states do little to actually resolve problems or otherwise engage in meaningful cooperation. But most other international institutions are no different. Even when they prove unable to solve collective problems, regional organizations allow their members to affirm common values and boost the stature of the powers that convene these forums. They generate denser diplomatic ties among their members, which, in turn, make it easier for those members to build military and political coalitions. In short, these organizations constitute a critical part of the infrastructure of international order, an infrastructure that was dominated by Western democracies after the end of the Cold War. Indeed, this new array of non-Western organizations has brought transnational governance mechanisms into regions such as Central Asia, which were previously disconnected from many institutions of global governance. Since 2001, most Central Asian states have joined the SCO, the Russian-led Collective Security Treaty Organization, the EAEU, the AIIB, and the Chinese infrastructure investment project known as the Belt and Road Initiative (BRI).

China and Russia are also now pushing into areas traditionally dominated by the United States and its allies; for example, China convenes the 17+1 group with states in central and eastern Europe and the China-CELAC (Community of Latin American and Caribbean States) Forum in Latin America. These groupings provide states in these regions with new arenas for partnership and support while also challenging the cohesion of traditional Western blocs; just days before the 16+1 group expanded to include the EU member Greece in April 2020, the European Commission moved to designate China a “systemic rival” amid concerns that BRI deals in Europe were undercutting EU regulations and standards.

Beijing and Moscow appear to be successfully managing their alliance of convenience, defying predictions that they would be unable to tolerate each other’s international projects. This has even been the case in areas in which their divergent interests could lead to significant tensions. Russia vocally supports China’s BRI, despite its inroads into Central Asia, which Moscow still considers its backyard. In fact, since 2017, the Kremlin’s rhetoric has shifted from talking about a clearly demarcated Russian “sphere of influence” in Eurasia to embracing a “Greater Eurasia” in which Chinese-led investment and integration dovetails with Russian efforts to shut out Western influence. Moscow followed a similar pattern when Beijing first proposed the formation of the AIIB in 2015. The Russian Ministry of Finance initially refused to back the bank, but the Kremlin changed course after seeing which way the wind was blowing; Russia formally joined the bank at the end of the year.

China has also proved willing to accommodate Russian concerns and sensitivities. China joined the other BRICS countries in abstaining from condemning Russia’s annexation of Crimea in 2014, even though doing so clearly contravened China’s long-standing opposition to separatism and violations of territorial integrity. Moreover, the Trump administration’s trade war with China has given Beijing additional incentives to support Russian efforts to develop alternatives to the Western-controlled SWIFT international payment system and dollar-denominated trade so as to undermine the global reach of U.S. sanctions regimes.

THE END OF THE PATRONAGE MONOPOLY

China and Russia are not the only states seeking to make world politics more favorable to nondemocratic regimes and less amenable to U.S. hegemony. As early as 2007, lending by “rogue donors” such as then oil-rich Venezuela raised the possibility that such no-strings-attached assistance might undermine Western aid initiatives designed to encourage governments to embrace liberal reforms.

Since then, Chinese state-affiliated lenders, such as the China Development Bank, have opened substantial lines of credit across Africa and the developing world. In the wake of the 2008 financial crisis, China became an important source of loans and emergency funding for countries that could not access, or were excluded from, Western financial institutions. During the financial crisis, China extended over $75 billion in loans for energy deals to countries in Latin America—Brazil, Ecuador, and Venezuela—and to Kazakhstan, Russia, and Turkmenistan in Eurasia.

China is not the only alternative patron. After the Arab Spring, Gulf states such as Qatar lent money to Egypt, allowing Cairo to avoid turning to the International Monetary Fund during a turbulent time. But China has been by far the most ambitious country in this regard. An AidData study found that total Chinese foreign aid assistance between 2000 and 2014 reached $354 billion, nearing the U.S. total of $395 billion. China has since surpassed annual U.S. aid disbursals. Moreover, Chinese aid undermines Western efforts to spread liberal norms. Several studies suggest that although Chinese funds have fueled development in many countries, they also have stoked blatant corruption and habits of regime patronage. In countries emerging from war, such as Nepal, Sri Lanka, Sudan, and South Sudan, Chinese development and reconstruction aid flowed to victorious governments, insulating them from international pressure to accommodate their domestic foes and adopt more liberal models of peacemaking and reconciliation.

Chinese state-affiliated lenders have opened substantial lines of credit across the developing world.
The end of the West’s monopoly on patronage has seen the concurrent rise of fiery populist nationalists even in countries that were firmly embedded in the United States’ economic and security orbit. The likes of Hungarian Prime Minister Viktor Orban, Turkish President Recep Tayyip Erdogan, and Philippine President Rodrigo Duterte have painted themselves as guardians of domestic sovereignty against liberal subversion. They dismiss Western concerns about democratic backsliding in their countries and emphasize the growing importance of their economic and security relationships with China and Russia. In the case of the Philippines, Duterte recently terminated a two-decade-old military treaty with the United States after Washington canceled the visa of the former national chief of police, who is accused of human rights violations in the Philippines’ bloody and controversial war on drugs.

Of course, some of these specific challenges to U.S. leadership will wax and wane since they stem from shifting political circumstances and the dispositions of individual leaders. But the expansion of “exit options”—of alternative patrons, institutions, and political models—now seems a permanent feature of international politics. Governments have much more room to maneuver. Even when states do not actively switch patrons, the possibility that they could provides them with greater leverage. As a result, China and Russia have the latitude to contest U.S. hegemony and construct alternative orders.

CENTRIFUGAL FORCES

Another important shift marks a break from the post–Cold War unipolar moment. The transnational civil society networks that stitched together the liberal international order no longer enjoy the power and influence they once had. Illiberal competitors now challenge them in many areas, including gender rights, multiculturalism, and the principles of liberal democratic governance. Some of these centrifugal forces have originated in the United States and western European countries themselves. For instance, the U.S. lobbying group the National Rifle Association worked transnationally to successfully defeat a proposed antigun referendum in Brazil in 2005, where it built an alliance with domestic right-wing political movements; over a decade later, the Brazilian political firebrand Jair Bolsonaro tapped into this same network to help propel himself to the presidency. The World Congress of Families, initially founded by U.S.-based Christian organizations in 1997, is now a transnational network, supported by Eurasian oligarchs, that convenes prominent social conservatives from dozens of countries to build global opposition to LGBTQ and reproductive rights.

Autocratic regimes have found ways to limit—or even eliminate—the influence of liberal transnational advocacy networks and reform-minded NGOs. The so-called color revolutions in the post-Soviet world in the first decade of this century and the 2010–11 Arab Spring in the Middle East played a key role in this process. They alarmed authoritarian and illiberal governments, which increasingly saw the protection of human rights and the promotion of democracy as threats to their survival. In response, such regimes curtailed the influence of NGOs with foreign connections. They imposed tight restrictions on receiving foreign funds, proscribed various political activities, and labeled certain activists “foreign agents.”

Some governments now sponsor their own NGOs both to suppress liberalizing pressures at home and to contest the liberal order abroad. For example, in response to Western support of young activists during the color revolutions, the Kremlin founded the youth group Nashi to mobilize young people in support of the state. The Red Cross Society of China, China’s oldest government-organized NGO, has delivered medical supplies to European countries in the midst of the COVID-19 pandemic as part of a carefully orchestrated public relations campaign. These regimes also use digital platforms and social media to disrupt antigovernment mobilization and advocacy. Russia has likewise deployed such tools abroad in its information operations and electoral meddling in democratic states.

Some of the forces driving the unraveling of the liberal order have originated in the United States itself.
Two developments helped accelerate the illiberal turn in the West: the Great Recession of 2008 and the refugee crisis in Europe in 2015. Over the last decade, illiberal networks—generally but not exclusively on the right—have challenged the establishment consensus within the West. Some groups and figures question the merits of continued membership in major institutions of the liberal order, such as the European Union and NATO. Many right-wing movements in the West receive both financial and moral support from Moscow, which backs “dark money” operations that promote narrow oligarchic interests in the United States and far-right political parties in Europe with the hope of weakening democratic governments and cultivating future allies. In Italy, the anti-immigrant party Lega is currently the most popular party despite revelations of its attempt to win illegal financial support from Moscow. In France, the National Rally, which also has a history of Russian backing, remains a powerful force in domestic politics.

These developments echo the ways in which “counter-order” movements have helped precipitate the decline of hegemonic powers in the past. Transnational networks played crucial roles in both upholding and challenging prior international orders. For example, Protestant networks helped erode Spanish power in early modern Europe, most notably by supporting the Dutch Revolt in the sixteenth century. Liberal and republican movements, especially in the context of the revolutions across Europe in 1848, played a part in undermining the Concert of Europe, which tried to manage international order on the continent in the first half of the nineteenth century. The rise of fascist and communist transnational networks helped produce the global power struggle of World War II. Counter-order movements achieved political power in countries such as Germany, Italy, and Japan, leading those nations to break from or try to assail existing structures of international order. But even less successful counter-order movements can still undermine the cohesion of hegemonic powers and their allies.

Not every illiberal or right-wing movement that opposes the U.S.-led order seeks to challenge U.S. leadership or turns to Russia as an exemplar of strong cultural conservatism. Nonetheless, such movements are helping polarize politics in advanced industrial democracies and weaken support for the order’s institutions. One of them has even captured the White House: Trumpism, which is best understood as a counter-order movement with a transnational reach that targets the alliances and partnerships central to U.S. hegemony.

CONSERVING THE U.S. SYSTEM

Great-power contestation, the end of the West’s monopoly on patronage, and the emergence of movements that oppose the liberal international system have all altered the global order over which Washington has presided since the end of the Cold War. In many respects, the COVID-19 pandemic seems to be further accelerating the erosion of U.S. hegemony. China has increased its influence in the World Health Organization and other global institutions in the wake of the Trump administration’s attempts to defund and scapegoat the public health body. Beijing and Moscow are portraying themselves as providers of emergency goods and medical supplies, including to European countries such as Italy, Serbia, and Spain, and even to the United States. Illiberal governments worldwide are using the pandemic as cover for restricting media freedom and cracking down on political opposition and civil society. Although the United States still enjoys military supremacy, that dimension of U.S. dominance is especially ill suited to deal with this global crisis and its ripple effects.

Even if the core of the U.S. hegemonic system—which consists mostly of long-standing Asian and European allies and rests on norms and institutions developed during the Cold War—remains robust, and even if, as many champions of the liberal order suggest will happen, the United States and the European Union can leverage their combined economic and military might to their advantage, the fact is that Washington will have to get used to an increasingly contested and complex international order. There is no easy fix for this. No amount of military spending can reverse the processes driving the unraveling of U.S. hegemony. Even if Joe Biden, the presumptive Democratic nominee, knocks out Trump in the presidential election later this year, or if the Republican Party repudiates Trumpism, the disintegration will continue.

The key questions now concern how far the unraveling will spread. Will core allies decouple from the U.S. hegemonic system? How long, and to what extent, can the United States maintain financial and monetary dominance? The most favorable outcome will require a clear repudiation of Trumpism in the United States and a commitment to rebuild liberal democratic institutions in the core. At both the domestic and the international level, such efforts will necessitate alliances among center-right, center-left, and progressive political parties and networks.

What U.S. policymakers can do is plan for the world after global hegemony. If they help preserve the core of the American system, U.S. officials can ensure that the United States leads the strongest military and economic coalition in a world of multiple centers of power, rather than finding itself on the losing side of most contests over the shape of the new international order. To this end, the United States should reinvigorate the beleaguered and understaffed State Department, rebuilding and more effectively using its diplomatic resources. Smart statecraft will allow a great power to navigate a world defined by competing interests and shifting alliances.

U.S. policymakers must plan for the world after global hegemony.

The United States lacks both the will and the resources to consistently outbid China and other emerging powers for the allegiance of governments. It will be impossible to secure the commitment of some countries to U.S. visions of international order. Many of those governments have come to view the U.S.-led order as a threat to their autonomy, if not their survival. And some governments that still welcome a U.S.-led liberal order now contend with populist and other illiberal movements that oppose it.

Even at the peak of the unipolar moment, Washington did not always get its way. Now, for the U.S. political and economic model to retain considerable appeal, the United States has to first get its own house in order. China will face its own obstacles in producing an alternative system; Beijing may irk partners and clients with its pressure tactics and its opaque and often corrupt deals. A reinvigorated U.S. foreign policy apparatus should be able to exercise significant influence on international order even in the absence of global hegemony. But to succeed, Washington must recognize that the world no longer resembles the historically anomalous period of the 1990s and the first decade of this century. The unipolar moment has passed, and it isn’t coming back.

ALEXANDER COOLEY is Claire Tow Professor of Political Science at Barnard College and Director of Columbia University’s Harriman Institute.

By Anton Barbashin and Hannah Thoburn
Foreign Affairs

Since the collapse of the Soviet Union, Russia has searched fruitlessly for a new grand strategy — something to define who Russians are and where they are going. “In Russian history during the 20th century, there have been various periods — monarchism, totalitarianism, perestroika, and finally, a democratic path of development,” Russian President Boris Yeltsin said a couple of years after the collapse of the Soviet Union, “Each stage has its own ideology,” he continued, but now “we have none.”

To fill that hole, in 1996 Yeltsin designated a team of scholars to work together to find what Russians call the Russkaya ideya (“Russian idea”), but they came up empty-handed. Around the same time, various other groups also took up the task, including a collection of conservative Russian politicians and thinkers who called themselves Soglasiye vo imya Rossiya (“Accord in the Name of Russia”). Along with many other Russian intellectuals of the day, they were deeply disturbed by the weakness of the Russian state, something that they believed needed to be fixed for Russia to return to its rightful glory. And for them, that entailed return to the Russian tradition of a powerful central government. How that could be accomplished was a question for another day.

Russian President Vladimir Putin, to whom many of the Soglasiye still have ties, happened to agree with their ideals and overall goals. He came to power in 1999 with a nationwide mandate to stabilize the Russian economy and political system. Thanks to rising world energy prices, he quickly achieved that goal. By the late 2000s, he had breathing room to return to the question of the Russian idea. Russia, he began to argue, was a unique civilization of its own. It could not be made to fit comfortably into European or Asian boxes and had to live by its own uniquely Russian rules and morals. And so, with the help of the Russian Orthodox Church, Putin began a battle against the liberal (Western) traits that some segments of Russian society had started to adopt. Moves of his that earned condemnation in the West — such as the criminalization of “homosexual propaganda” and the sentencing of members of Pussy Riot, a feminist punk-rock collective, to two years in prison for hooliganism — were popular in Russia.

True to Putin’s insistence that Russia cannot be judged in Western terms, Putin’s new conservatism does not fit U.S. and European definitions. In fact, the main trait they share is opposition to liberalism. Whereas conservatives in those parts of the world are fearful of big government and put the individual first, Russian conservatives advocate for state power and see individuals as serving that state. They draw on a long tradition of Russian imperial conservatism and, in particular, Eurasianism. That strain is authoritarian in essence, traditional, anti-American, and anti-European; it values religion and public submission. And more significant to today’s headlines, it is expansionist.

RUSSIAN ROOTS

The roots of Eurasianism lie in Russia’s Bolshevik Revolution, although many of the ideas that it contains have much longer histories in Russia. After the 1917 October Revolution and the civil war that followed, two million anti-Bolshevik Russians fled the country. From Sofia to Berlin and then Paris, some of these exiled Russian intellectuals worked to create an alternative to the Bolshevik project. One of those alternatives eventually became the Eurasianist ideology. Proponents of this idea posited that Russia’s Westernizers and Bolsheviks were both wrong: Westernizers for believing that Russia was a (lagging) part of European civilization and calling for democratic development; Bolsheviks for presuming that the whole country needed restructuring through class confrontation and a global revolution of the working class. Rather, Eurasianists stressed, Russia was a unique civilization with its own path and historical mission: To create a different center of power and culture that would be neither European nor Asian but have traits of both. Eurasianists believed in the eventual downfall of the West and that it was Russia’s time to be the world’s prime exemplar.

In 1921, the exiled thinkers Georges Florovsky, Nikolai Trubetzkoy, Petr Savitskii, and Petr Suvchinsky published a collection of articles titled Exodus to the East, which marked the official birth of the Eurasianist ideology. The book was centered on the idea that Russia’s geography is its fate and that there is nothing any ruler can do to unbind himself from the necessities of securing his lands. Given Russia’s vastness, they believed, its leaders must think imperially, consuming and assimilating dangerous populations on every border. Meanwhile, they regarded any form of democracy, open economy, local governance, or secular freedom as highly dangerous and unacceptable.

In that sense, Eurasianists considered Peter the Great — who tried to Europeanize Russia in the eighteenth century — an enemy and a traitor. Instead, they looked with favor on Tatar-Mongol rule, between the thirteenth and fifteenth centuries, when Genghis Khan’s empire had taught Russians crucial lessons about building a strong, centralized state and pyramid-like system of submission and control.

Eurasianist beliefs gained a strong following within the politically active part of the emigrant community, or White Russians, who were eager to promote any alternative to Bolshevism. However, the philosophy was utterly ignored, and even suppressed in the Soviet Union, and it practically died with its creators. That is, until the 1990s, when the Soviet Union collapsed and Russia’s ideological slate was wiped clean.

THE EVOLUTION OF A REVOLUTIONARY

After the collapse of the Soviet Union, ultranationalist ideologies were decidedly out of vogue. Rather, most Russians looked forward to Russia’s democratization and reintegration with the world. Still, a few hard-core patriotic elements remained that opposed de-Sovietization and believed — as Putin does today — that the collapse of the Soviet Union was the greatest geopolitical catastrophe of the century. Among them was the ideologist Alexander Dugin, who was a regular contributor to the ultranationalist analytic center and newspaper Den’ (later known as Zavtra). His earliest claim to fame was a 1991 pamphlet, “The War of the Continents,” in which he described an ongoing geopolitical struggle between the two types of global powers: land powers, or “Eternal Rome,” which are based on the principles of statehood, communality, idealism, and the superiority of the common good, and civilizations of the sea, or “Eternal Carthage,” which are based on individualism, trade, and materialism. In Dugin’s understanding, “Eternal Carthage,” was historically embodied by Athenian democracy and the Dutch and British Empires. Now, it is represented by the United States. “Eternal Rome” is embodied by Russia. For Dugin, the conflict between the two will last until one is destroyed completely — no type of political regime and no amount of trade can stop that. In order for the “good” (Russia) to eventually defeat the “bad” (United States), he wrote, a conservative revolution must take place.

His ideas of conservative revolution are adapted from German interwar thinkers who promoted the destruction of the individualistic liberal order and the commercial culture of industrial and urban civilization in favor of a new order based on conservative values such as the submission of individual needs and desires to the needs of the many, a state-organized economy, and traditional values for society based on a quasi-religious view of the world. For Dugin, the prime example of a conservative revolution was the radical, Nazi-sponsored north Italian Social Republic of Salò (1943–45). Indeed, Dugin continuously returned to what he saw as the virtues of Nazi practices and voiced appreciation for the SS and Herman Wirth’s occult Ahnenerbe group. In particular, Dugin praised the orthodox conservative-revolutionary projects that the SS and Ahnenerbe developed for postwar Europe, in which they envisioned a new, unified Europe regulated by a feudal system of ethnically separated regions that would serve as vassals to the German suzerain. It is worth noting that, among other projects, the Ahnenerbe was responsible for all the experiments on humans in the Auschwitz and Dachau concentration camps.

Between 1993 and 1998, Dugin joined the Russian nationalist legend Eduard Limonov in creating the now banned National-Bolshevik Movement (later the National-Bolshevik Party, or NBP), where he became the chief ideologist of a strange synthesis of socialism and ultra-right ideology. By the late 1990s, he was recognized as the intellectual leader of Russia’s entire ultra-right movement. He had his own publishing house, Arktogeya (“Northern Country”), several slick Web sites, a series of newspapers and magazines, and published The Foundation of Geopolitics, an immediate best seller that was particularly popular with the military.

Dugin’s introduction to the political mainstream came in 1999, when he became an adviser to the Russian parliamentarian Gennadii Seleznev, one of Russia’s most conservative politicians, a two-time chairman of the Russian parliament, a member of the Communist Party, and a founder of the Party of Russia’s Rebirth. That same year, with the help of Vladimir Zhirinovsky, leader of Russia’s nationalist and very misnamed Liberal Democratic Party of Russia, Dugin became the chairman of the geopolitical section of the Duma’s Advisory Council on National Security.

But his inclusion in politics did not necessarily translate to wider appeal among the politics of the elite. For that, Dugin had to transform his ideology into something else — something uniquely Russian. Namely, he dropped the most outrageous, esoteric, and radical elements of his ideology, including his mysticism, and drew instead on the classical Eurasianism of Trubetzkoy and Savitskii. He set to work creating the International Eurasian Movement, a group that would come to involve academics, politicians, parliamentarians, journalists, and intellectuals from Russia, its neighbors, and the West.

TO EUROPE AND BEYOND

Like the classical Eurasianists of the 1920s and 1930s, Dugin’s ideology is anti-Western, anti-liberal, totalitarian, ideocratic, and socially traditional. Its nationalism is not Slavic-oriented (although Russians have a special mission to unite and lead) but also applies to the other nations of Eurasia. And it labels rationalism as Western and thus promotes a mystical, spiritual, emotional, and messianic worldview.

But Dugin’s neo-Eurasianism differs significantly from previous Eurasianist thought. First, Dugin conceives of Eurasia as being much larger than his predecessors ever did. For example, whereas Savitskii believed that the Russian-Eurasian state should stretch from the Great Wall of China in the east to the Carpathian Mountains to the west, Dugin believes that the Eurasian state must incorporate all of the former Soviet states, members of the socialist block, and perhaps even establish a protectorate over all EU members. In the east, Dugin proposes to go as far as incorporating Manchuria, Xinxiang, Tibet, and Mongolia. He even proposes eventually turning southwest toward the Indian Ocean.

In order to include Europe in Eurasia, Dugin had to rework the enemy. In classical Eurasianist thought, the enemy was the Romano-Germanic Europe. In Dugin’s version, the enemy is the United States. As he writes: “The USA is a chimerical, anti-organic, transplanted culture which does not have sacral state traditions and cultural soil, but, nevertheless, tries to force upon the other continents its anti-ethnic, anti-traditional [and] “babylonic” model.” Classical Eurasianists, by contrast, favored the United States and even considered it to be a model, especially praising its economic nationalism, the Monroe Doctrine, and its non-membership in the League of Nations.

Another crucial point of difference is his attitude toward fascism and Nazi Germany. Even before World War II, classical Eurasianists opposed fascism and stood against racial anti-Semitism. Dugin has lauded the state of Israel for hewing to the principles of conservativism but has also spoken of a connection between Zionism and Nazism and implied that Jews only deserved their statehood because of the Holocaust. He also divides Jews into “bad” and “good.” The good are orthodox and live in Israel; the bad live outside of Israel and try to assimilate. Of course, these days, those are views to which he rarely alludes in public.

PUTIN’S PLAY

Since the early 2000s, Dugin’s ideas have only gained in popularity. Their rise mirrors Putin’s own transition from apparent democrat to authoritarian. In fact, Putin’s conservative turn has given Dugin a perfect chance to “help out” the Russian leader with proper historical, geopolitical, and cultural explanations for his policies. Recognizing how attractive Dugin’s ideas are to some Russians, Putin has seized on some of them to further his own goals.

Although Dugin has criticized Putin from time to time for his economic liberalism and cooperation with the West, he has generally been the president’s steadfast ally. In 2002, he created the Eurasia Party, which was welcomed by many in Putin’s administration. The Kremlin has long tolerated, and even encouraged, the creation of such smaller allied political parties, which give Russian voters the sense that they actually do live in a democracy. Dugin’s party, for example, provides an outlet for those with chauvinistic and nationalist leanings, even as the party remains controlled by the Kremlin. At the same time, Dugin built strong ties with Sergei Glazyev, who is a co-leader of the patriotic political bloc Rodina and currently Putin’s adviser on Eurasian integration. In 2003, Dugin tried to become a parliamentary deputy along with the Rodina bloc but failed.

Although his electoral foray was a bust, some voters’ positive reception to his anti-Western projects encouraged Dugin to forge ahead with the Eurasianist movement. After the shock of Ukraine’s Orange Revolution in 2004, he created the Eurasianist Youth Union, which promotes patriotic and anti-Western education. It has 47 coordination offices throughout Russia and nine in countries in the Commonwealth of Independent States, Poland, and Turkey. Its reach far exceeds that of any existing democratic-oriented movement.

In 2008, Dugin was made a professor at Russia’s top university, Moscow State University, and the head of the national sociological organization Center for Conservative Studies. He also appears regularly on all of Russia’s leading TV channels, commenting on both domestic and foreign issues. His profile has only increased since the pro-democracy protests of the winter of 2011–12 and Putin’s move around the same time to build a Eurasian Union. His outsized presence in Russian public life is a sign of Putin’s approval; Russian media, particularly television, is controlled almost entirely by the Kremlin. If the Kremlin disapproves of (or not longer has a use for) a particular personality, it will remove him or her from the airwaves.

Dugin and other like-minded thinkers have wholeheartedly endorsed the Russian government’s action in Ukraine, calling on him to go further and take the east and south of Ukraine, which, he writes, “welcomes Russia, waits for it, pleads for Russia to come.” The Russian people agree. Putin’s approval ratings have climbed over the past month, and 65 percent of Russians believe that Crimea and eastern regions of Ukraine are “essentially Russian territory” and that “Russia is right to use military force for the defense of the population.” Dugin, then, has proven to be a great asset to Putin. He has popularized the president’s position on such issues as limits on personal freedom, a traditional understanding of family, intolerance of homosexuality, and the centrality of Orthodox Christianity to Russia’s rebirth as a great power. But his greatest creation is neo-Eurasianism.

Dugin’s ideology has influenced a whole generation of conservative and radical activists and politicians, who, if given the chance, would fight to adapt its core principles as state policy. Considering the shabby state of Russian democracy, and the country’s continued move away from Western ideas and ideals, one might argue that the chances of seeing neo-Eurasianism conquer new ground are increasing. Although Dugin’s form of it is highly theoretical and deeply mystical, it is proving to be a strong contender for the role of Russia’s chief ideology. Whether Putin can control it as he has controlled so many others is a question that may determine his longevity.

Russian President Vladimir Putin chairs a meeting with members of the government at the Kremlin in Moscow, Russia, September 19, 2016. Alexei Nikolsky / Sputnik Photo Agency / Reuters

In boosting Trump and funding fringe parties in Europe, Russia has helped construct a new kind of ‘Comintern’—and it’s even more effective than the Cold War version.

By Mike Lofgren

The Atlantic

Oct 31, 2016 – One of the double-edged aspects of being a writer is that you can become known in all kinds of unlikely circles. That was what I was thinking when I pulled a large envelope out of my mailbox. The return address was Germany; the cover letter (in German) announced that I was the recipient of Compact magazine, and more oddly, requested that I should send an email confirming receipt.

The magazine itself, also in German, was about politics. A superficial look might suggest it was the anti-American manifesto of some fringe left-wing German group (“Heil Hillary! Candidate of US Fascism” reads one headline), but closer inspection revealed it came from the other end of the ideological spectrum.

A glance at a political profile of Jürgen Elsässer, Compact’s purported editor, discloses that he had been an extreme leftist who opposed German reunification and worked for Neues Deutschland, once the official newspaper of the East German Socialist Unity Party, the client Communist Party ruling East Germany in the interests of the USSR. Yet at some point in the 2000s, he migrated to the far right, and is now aligned with the new anti-immigrant party, Alternative für Deutschland. The prestigious newspaper die Zeit flat out calls Elsässer a Kremlin propagandist.

Elsässer’s shift from one political extreme to the other suggests that that he is an apparatchik whose first loyalty has likely always been to Moscow. When the USSR represented an authoritarian version of the left, he was a leftist; when the party line of the successor Russian state changed to right-wing authoritarianism, he obediently tacked right—a circumstance which shows that “left” and “right” are often arbitrary categories, particularly when considering the fringes.

This year, the German public television network ZDF produced a documentary tracing the ideological and financial ties between Russia and extreme right-wing elements; among those elements was Elsässer. His own blogs show an over-the-top enthusiasm for the Russian regime, such as comparing Putin’s bombing of Aleppo with the Russian defense of Stalingrad. Whatever the realities of the situation in Syria, Russian intervention in the conflict hardly merits comparison with the decisive turning point of the Second World War.

There were other suggestions of Russian fingerprints on Elsässer’s magazine. It was printed on coated stock, with lots of photos and fairly high production values. Fringe parties generally can’t afford the production costs of this sort of thing—unless they are getting a bit of financial help. The editorial tone was a kind of unholy marriage between Breitbart.com and the Russian-funded website Sputnik, with a little Völkischer Beobachter thrown in for good measure (there was generous use of the term “Lügenpresse”—the lying press, a term popularized by the Nazis.) More to the point, it was written in the breathless, apocalyptic manner of the Soviet anti-NATO propaganda I used to see as a national-security analyst in Congress in the 1980s—with one exception.

Classic Soviet propaganda always treated Democrats and Republicans as essentially indistinguishable and interchangeable components of the bourgeois power structure, both equally worthy of denunciation. Compact, however, had several articles explicitly endorsing Donald J. Trump as an all-around swell guy, with one explaining how a President Trump would improve U.S. relations with Russia.

The propaganda message of this magazine crossed a threshold of sorts. The hacking of the Democratic National Committee that has been attributed to the Russians by the U.S. government is obviously intended to damage the candidacy of Hillary Clinton, but the Russian government, and Vladimir Putin above all, have been careful to avoid being seen publicly praising or attacking either candidate.

Yet Putin, or at least his European allies, apparently see it as worth their while to spend money attacking Hillary and talking about Trump in terms so flattering that Caesar would have blushed, in a country whose citizens don’t have a vote in America’s election in any case. The Soviet Union’s goals in attempting to rouse the European (and above all, German) public against, say, NATO’s deployment of intermediate-range nuclear missiles in Europe in the early 1980s was straightforward and understandable, but why would an ideological ally of Russia puff up Donald Trump to a German public that cannot vote for him?

The strategy becomes more comprehensible when one acknowledges that Trump received the nomination of one of America’s two major parties, and, not long ago, was tied with Clinton in the polls. The message to nationalist and authoritarian-minded Germans is that Trump is a model: If, in the self-styled “greatest democracy in the world” the demagogic real estate mogul could have a decent shot at becoming president, then the right-wing fringe parties of Germany and the rest of Europe are not toiling in vain. If they work hard enough and employ the right themes, they can win.

Never in its wildest dreams could the old Soviet politburo have imagined it would get a U.S. major party candidate so congenial to its interests.

According to Igor Eidman, a sociologist and cousin of the murdered Russian opposition politician Boris Nemtsov, Putin’s policy objective in Germany is clear: The country is the keystone of Europe, and Chancellor Angela Merkel is by default the principal figure holding Europe together as a political entity. She is also the only Western leader to grow up under communist rule: She knows what the Stasi was like and also the KGB, Putin’s former employer (he was posted to East Germany before its collapse). Merkel is less than fond of Putin and the feeling is mutual.

When Merkel unwisely led with her chin at the height of the European refugee crisis, she provided an opening for right-wing parties in her own country and the rest of Europe to make electoral gains over the flood of refugees. She also granted Putin, smarting from Western sanctions over Ukraine, an opportunity for payback.

The amusing irony is that leaders of the nationalist-authoritarian right in Europe campaign on a platform of national sovereignty while rubles jingle in their pockets. Marine Le Pen’s National Front requested a 27-million euro loan from Russia, according to the party’s own treasurer. Nigel Farage, the former UK Independence Party leader and Brexit engineer, has appeared on RT, the Russian government-subsidized media empire (it spends more on foreign broadcasting than any other entity except the BBC). Farage may be better known to American political junkies for speaking at a Trump rally in Mississippi.

There is a fascinating historical parallel here: Throughout the Cold War, Moscow subsidized the leftist fringe in Western Europe. Now it does the same with right-wing parties there—same tactics, different ideological players.

* * *

One massive difference is this: If Trump’s own words are anything to go by, not to mention the activities of some of his former advisers like Paul Manafort and Carter Page, Moscow may have made inroads in the United States (Lieutenant General Michael Flynn, once mooted to become Trump’s vice-presidential candidate, remains an adviser; he has been a regular contributor to the Russian-funded news channel RT and was a paid guest at an RT gala where he was seated next to Putin—odd behavior for a former Defense Intelligence Agency director with the highest security clearances). Never in its wildest dreams could the old Soviet politburo have imagined it would get a U.S. major party candidate so congenial to its interests. All it had to work with was poor, old Gus Hall, the Communist Party USA’s perennial hapless candidate!

Compared to the Clinton emails or Trump’s Access Hollywood scandal, this has been an underplayed story, given the grave implications of foreign intervention in an American election. While an FBI investigation into improperly managed emails has already significantly influenced the presidential election (with the Bureau’s most recent lead growing from an investigation launched by revelations in a British tabloid article), the Department of Justice has been oddly passive, at least in public, in the face of substantial evidence of political subversion resulting from an adversarial foreign government’s spending resources to affect that same election.

FBI director James Comey has been publicly inert over the astounding spectacle of a presidential candidate encouraging the Russian government to release the content of emails stolen from American servers, with that government subsequently complying. In contrast to Comey’s unprecedented volubility over the Clinton emails (a case in which no one has been charged), the FBI has been unusually dilatory with timely information about potential Russian involvement in the election.

We are now witnessing a curious phenomenon: The resurgent far-right parties in numerous Western countries, which harp incessantly on the sovereignty, independence, and world-historical uniqueness of whichever country they happen to live in, have self-organized into a transnational alt-right “comintern” that appears to be more effective than the leftist comintern of the Soviet era. No doubt this development was inevitable in the age of digital communication, but it has undeniably received a boost from the Kremlin. It also bears emphasis not only that Russia is attempting to influence politics in Western nations, but that this influence comes prepackaged with a specific ideological content.

As is well known, Putin’s domestic political adversaries have a distressing tendency to end up dead, often from exotic radiological poisons like polonium-210, and even living in exile abroad does not always keep them safe, as Alexander Litvinenko found out. If this were the end of the tale, it would be a neat and tidy one with a storybook villain (Putin) and good guys (Americans). But things are never that simple, just as the Cold War was never quite a Manichean struggle between the forces of light and darkness.

* * *

When German reunification was being negotiated in 1990, the soon-to-be-defunct Soviet Union believed it had a deal: In return for reunification and the withdrawal of Soviet troops, the Western parties to the treaty (the United States, the United Kingdom, and France) would agree not to push NATO membership into the former Warsaw Pact territories.

But this would change as the result of a mindless search for issues during the otherwise vacuous 1996 U.S. presidential election campaign. First, Republican nominee Bob Dole proposed early deployment of a missile-defense scheme that would likely have Russia as the potential “threat.” This, in the minds of Dole’s handlers, would surely lock in the Eastern European ethnic vote in big Midwestern cities like Chicago, Milwaukee, and Cleveland.

Not to be outdone in vote pandering, the incumbent, Bill Clinton, countered with a proposal to expand NATO into Eastern Europe. By 1999, Poland, Hungary, and the Czech Republic had joined NATO. Continuing in the tradition of bipartisan foreign-policy overreach, Clinton’s successor, George W. Bush, invited additional countries to join the alliance, and by 2004, another seven countries joined, bringing NATO east of what had been the borders of the old Soviet Union.

It is too often forgotten that in late 2001, Bush withdrew from the Anti-Ballistic Missile Treaty, a gratuitous slap at Russia in view of the fact that in the aftermath of the September 11, 2001 terror attacks, Russia both shared intelligence on Islamic extremist groups with America, and also granted the U.S. military transit rights over Russian territory for deployment to Afghanistan.

NATO’s overtures to Georgia were clearly the limit, as Putin demonstrated when he sent military forces against that country in 2008. The move also clearly telegraphed what he would do if NATO accession were offered to Ukraine, a country far more integral to Russia’s security than Georgia. Parts of Ukraine extend east of Moscow’s longitude, a fact that would certainly be riveted in the minds of a government whose people have ancestral memories of devastating invasions from the West stretching back centuries.

The Russian response was perfectly predictable in February 2014, when the Ukrainian opposition, egged on by U.S. diplomatic personnel, overthrew the Russia-friendly regime of Viktor Yanukovych. The rough equivalent from the American perspective would be as if, hypothetically, a coup occurred in Ottawa that was assisted by Chinese “advisers.” Does anyone doubt that Washington would take drastic measures under the circumstances?

The infamous hack of the cell-phone conversation between Assistant Secretary of State Victoria Nuland and U.S. ambassador to Ukraine Geoffrey Pyatt, in which they speculated on who would be the “right” people to run Ukraine, was widely viewed in America as an unsporting trick perpetrated by Putin’s secret service. In reality, Nuland and Pyatt screwed up: When talking on unencrypted devices on territory adjacent to Russia amid intense civil strife, what did they expect would happen, anyway? The fact that they were treated back home as victims rather than punished as security risks and diplomatic loose cannons is evidence of the clannishness, naïve self-righteousness, and self-referentiality that often prevail among Washington’s national security elite.

Finally, Putin has begun to reciprocate against imprudent U.S. actions like Bush’s withdrawal from the ABM Treaty with impulsive and ill-considered symbolic measures of his own: In March 2015, Russia ceased participating in the Conventional Armed Forces in Europe Treaty, and, during the past month, the Kremlin withdrew from the U.S.-Russia agreement on the disposal of plutonium.

That is how we got to our present miserable state of U.S.-Russian relations. Washington has made numerous preventable errors as the result of sacrificing a stable long-term relationship with Russia on the altar either of domestic electoral expedience or empire-building by the NATO bureaucracy. But, as the Russian suspension of diplomatic agreements, stepping-up of computer hacking, and accelerated propaganda campaign show, the bill for two decades of ill-considered policy has come due.

Putin may not fully realize just how much he has raised the geopolitical stakes in the growing Cold War 2.0.

The Russia scholar Samuel Charap has pointed out that Russia’s use of coercion has, up to now, been a fairly carefully calibrated means of gaining rational, essentially defensive, political goals: in Ukraine, maintaining a territorial buffer against NATO; in Syria, assisting a friendly government (and it can at least claim it was invited by the Assad regime). Washington may not like these actions, but it also has to realize that they do not threaten vital U.S. interests.

But the increasing number of incidents of brinkmanship in international airspace and at sea introduces the vastly more dangerous possibility of a direct clash between NATO and Russian forces due to miscalculation. And now, beginning in earnest this year, direct Russian intervention into the electoral affairs of the United States and several NATO allies immeasurably raises the stakes.

The United States can’t very well not respond if evidence were to emerge of Russian attempts to disrupt the balloting on November 8. But with each side still possessing arsenals of roughly 7,000 nuclear weapons, and the Cold War era’s informal behavioral protocols between the two powers largely moribund, the risks have never been greater.

The dilemma is this: The Russian government chose to conduct propaganda and disinformation operations within the United States precisely during an unusually rancorous presidential election, with one of the candidates repeatedly and lavishly praising the Russian government’s leader. Even after the election, the bad feeling in the country over this activity will certainly linger. Putin may not fully realize just how much he has raised the geopolitical stakes in the growing Cold War 2.0 between the U.S. and Russia by taking sides in the most polarized domestic election since the Civil War. Climbing down from this confrontation will require restraint and enlightened self-interest on both sides. Unfortunately, during the last two decades, we have seen scant evidence of such far-sighted thinking.

Copyright © 2016 by The Atlantic Monthly Group. All Rights Reserved.

Editor’s Note: We are quite aware that the author below is no Marxist. But his views on world affairs are always interesting, and have recently been taken seriously by both Obama and Sanders, but not Clinton. So with more than a grain of salt, he’s worth a read.

By Zbigniew Brzezinski

The American Interest

April 17, 2016 – As its era of global dominance ends, the United States needs to take the lead in realigning the global power architecture.

Five basic verities regarding the emerging redistribution of global political power and the violent political awakening in the Middle East are signaling the coming of a new global realignment.

The first of these verities is that the United States is still the world’s politically, economically, and militarily most powerful entity but, given complex geopolitical shifts in regional balances, it is no longer the globally imperial power. But neither is any other major power.

The second verity is that Russia is experiencing the latest convulsive phase of its imperial devolution. A painful process, Russia is not fatally precluded – if it acts wisely – from becoming eventually a leading European nation-state. However, currently it is pointlessly alienating some of its former subjects in the Islamic southwest of its once extensive empire, as well as Ukraine, Belarus, and Georgia, not to mention the Baltic States.

The third verity is that China is rising steadily, if more slowly as of late, as America’s eventual coequal and likely rival; but for the time being it is careful not to pose an outright challenge to America. Militarily, it seems to be seeking a breakthrough in a new generation of weapons while patiently enhancing its still very limited naval power.

The fourth verity is that Europe is not now and is not likely to become a global power. But it can play a constructive role in taking the lead in regard to transnational threats to global wellbeing and even human survival. Additionally, Europe is politically and culturally aligned with and supportive of core U.S. interests in the Middle East, and European steadfastness within NATO is essential to an eventually constructive resolution of the Russia-Ukraine crisis.

The fifth verity is that the currently violent political awakening among post-colonial Muslims is, in part, a belated reaction to their occasionally brutal suppression mostly by European powers. It fuses a delayed but deeply felt sense of injustice with a religious motivation that is unifying large numbers of Muslims against the outside world; but at the same time, because of historic sectarian schisms within Islam that have nothing to do with the West, the recent welling up of historical grievances is also divisive within Islam.

Taken together as a unified framework, these five verities tell us that the United States must take the lead in realigning the global power architecture in such a way that the violence erupting within and occasionally projected beyond the Muslim world—and in the future possibly from other parts of what used to be called the Third World—can be contained without destroying the global order. We can sketch this new architecture by elaborating briefly each of the five foregoing verities.

First, America can only be effective in dealing with the current Middle Eastern violence if it forges a coalition that involves, in varying degrees, also Russia and China. To enable such a coalition to take shape, Russia must first be discouraged from its reliance on the unilateral use of force against its own neighbors—notably Ukraine, Georgia, the Baltic States—and China should be disabused of the idea that selfish passivity in the face of the rising regional crisis in the Middle East will prove to be politically and economically rewarding to its ambitions in the global arena. These shortsighted policy impulses need to be channeled into a more farsighted vision.

Second, Russia is becoming for the first time in its history a truly national state, a development that is as momentous as it is generally overlooked. The Czarist Empire, with its multinational but largely politically passive population, came to an end with World War I and the Bolshevik creation of an allegedly voluntary union of national republics (the USSR), with power resting effectively in Russian hands, took its place. The collapse of the Soviet Union at the end of 1991 led to the sudden emergence of a predominantly Russian state as its successor, and to the transformation of the former Soviet Union’s non-Russian “republics” into formally independent states. These states are now consolidating their independence, and both the West and China—in different areas and different ways—are exploiting that new reality to Russia’s disadvantage. In the meantime, Russia’s own future depends on its ability to become a major and influential nation-state that is part of a unifying Europe. Not to do so could have dramatically negative consequences for Russia’s ability to withstand growing territorial-demographic pressure from China, which is increasingly inclined as its power grows to recall the “unequal” treaties Moscow imposed on Beijing in times past.

Third, China’s dramatic economic success requires enduring patience and the country’s awareness that political haste will make for social waste. The best political prospect for China in the near future is to become America’s principal partner in containing global chaos of the sort that is spreading outward (including to the northeast) from the Middle East. If it is not contained, it will contaminate Russia’s southern and eastern territories as well as the western portions of China. Closer relations between China and the new republics in Central Asia, the post-British Muslim states in Southwest Asia (notably Pakistan) and especially with Iran (given its strategic assets and economic significance), are the natural targets of Chinese regional geopolitical outreach. But they should also be targets of global Sino-American accommodation.

Fourth, tolerable stability will not return to the Middle East as long as local armed military formations can calculate that they can be simultaneously the beneficiaries of a territorial realignment while selectively abetting extreme violence. Their ability to act in a savage manner can only be contained by increasingly effective—but also selective—pressure derived from a base of U.S.-Russian-Chinese cooperation that, in turn, enhances the prospects for the responsible use of force by the region’s more established states (namely, Iran, Turkey, Israel, and Egypt). The latter should also be the recipients of more selective European support. Under normal circumstances, Saudi Arabia would be a significant player on that list, but the current inclination of the Saudi government still to foster Wahhabi fanaticism, even while engaged in ambitious domestic modernization efforts, raises grave doubts regarding Saudi Arabia’s ability to play a regionally significant constructive role.

Fifth, special attention should be focused on the non-Western world’s newly politically aroused masses. Long-repressed political memories are fueling in large part the sudden and very explosive awakening energized by Islamic extremists in the Middle East, but what is happening in the Middle East today may be just the beginning of a wider phenomenon to come out of Africa, Asia, and even among the pre-colonial peoples of the Western Hemisphere in the years ahead.

Periodic massacres of their not-so-distant ancestors by colonists and associated wealth-seekers largely from western Europe (countries that today are, still tentatively at least, most open to multiethnic cohabitation) resulted within the past two or so centuries in the slaughter of colonized peoples on a scale comparable to Nazi World War II crimes: literally involving hundreds of thousands and even millions of victims. Political self-assertion enhanced by delayed outrage and grief is a powerful force that is now surfacing, thirsting for revenge, not just in the Muslim Middle East but also very likely beyond.

Much of the data cannot be precisely established, but taken collectively, they are shocking. Let just a few examples suffice. In the 16^th century, due largely to disease brought by Spanish explorers, the population of the native Aztec Empire in present-day Mexico declined from 25 million to approximately one million. Similarly, in North America, an estimated 90 percent of the native population died within the first five years of contact with European settlers, due primarily to diseases. In the 19^th century, various wars and forced resettlements killed an additional 100,000. In India from 1857-1867, the British are suspected of killing up to one million civilians in reprisals stemming from the Indian Rebellion of 1857. The British East India Company’s use of Indian agriculture to grow opium then essentially forced on China resulted in the premature deaths of millions, not including the directly inflicted Chinese casualties of the First and Second Opium Wars. In the Congo, which was the personal holding of Belgian King Leopold II, 10-15 million people were killed between 1890 and 1910. In Vietnam, recent estimates suggest that between one and three million civilians were killed from 1955 to 1975.

As to the Muslim world, in Russia’s Caucasus, from 1864 and 1867, 90 percent of the local Circassian population was forcibly relocated and between 300,000 and 1.5 million either starved to death or were killed. Between 1916 and 1918, tens of thousands of Muslims were killed when 300,000 Turkic Muslims were forced by Russian authorities through the mountains of Central Asia and into China. In Indonesia, between 1835 and 1840, the Dutch occupiers killed an estimated 300,000 civilians. In Algeria, following a 15-year civil war from 1830-1845, French brutality, famine, and disease killed 1.5 million Algerians, nearly half the population. In neighboring Libya, the Italians forced Cyrenaicans into concentration camps, where an estimated 80,000 to 500,000 died between 1927 and 1934.

More recently, in Afghanistan between 1979 and 1989 the Soviet Union is estimated to have killed around one million civilians; two decades later, the United States has killed 26,000 civilians during its 15-year war in Afghanistan. In Iraq, 165,000 civilians have been killed by the United States and its allies in the past 13 years. (The disparity between the reported number of deaths inflicted by European colonizers compared with the United States and its allies in Iraq and Afghanistan may be due in part to the technological advances that have led to the ability to use force more precisely, and in part as well to a shift in the world’s normative climate.) Just as shocking as the scale of these atrocities is how quickly the West forgot about them.

In today’s postcolonial world, a new historical narrative is emerging. A profound resentment against the West and its colonial legacy in Muslim countries and beyond is being used to justify their sense of deprivation and denial of self-dignity. A stark example of the experience and attitudes of colonial peoples is well summarized by the Senegalese poet David Diop in “Vultures”:

In those days,
When civilization kicked us in the face
The vultures built in the shadow of their talons
The blood stained monument of tutelage…

The growing evocation of these memories, in the Muslim world and increasingly beyond, shows how the past still influences the present, but it certainly does not justify the violent behaviors that are transpiring in the Middle East today.

Given all this, a long and painful road toward an initially limited regional accommodation is the only viable option for the United States, Russia, China, and the pertinent Middle Eastern entities. For the United States, that will require patient persistence in forging cooperative relationships with some new partners (particularly Russia and China) as well as joint efforts with more established and historically rooted Muslim states (Turkey, Iran, Egypt, and Saudi Arabia if it can detach its foreign policy from Wahhabi extremism) in shaping a wider framework of regional stability. Our European allies, previously dominant in the region, can still be helpful in that regard.

A comprehensive U.S. pullout from the Muslim world favored by domestic isolationists, could give rise to new wars (for example, Israel vs. Iran, Saudi Arabia vs. Iran, a major Egyptian intervention in Libya) and would generate an even deeper crisis of confidence in America’s globally stabilizing role. In different but dramatically unpredictable ways, Russia and China could be the geopolitical beneficiaries of such a development even as global order itself becomes the more immediate geopolitical casualty. Last but not least, in such circumstances a divided and fearful Europe would see its current member states searching for patrons and competing with one another in alternative but separate arrangements among the more powerful trio.

A constructive U.S. policy must be patiently guided by a long-range vision. It must seek outcomes that promote the gradual realization in Russia (probably post-Putin) that its only place as an influential world power is ultimately within Europe. China’s increasing role in the Middle East should reflect the reciprocal American and Chinese realization that a growing U.S.-PRC partnership in coping with the Middle Eastern crisis is an historically significant test of their ability to shape and enhance together wider global stability.

The alternative to a constructive vision, and especially the quest for a one-sided militarily and ideologically imposed outcome, can only result in prolonged and self-destructive futility. For America, that could entail enduring conflict, fatigue, and conceivably even a demoralizing withdrawal to its pre-20^th century isolationism. For Russia, it could mean major defeat, increasing the likelihood of subordination in some fashion to Chinese predominance. For China, it could portend war not only with the United States but also, perhaps separately, with either Japan or India or with both. And, in any case, a prolonged phase of sustained ethnic, quasi-religious wars pursued through the Middle East with self-righteous fanaticism would generate escalating bloodshed within and outside the region, and growing cruelty everywhere.

The fact is that there has never been a truly “dominant” global power until the emergence of America on the world scene. Imperial Great Britain came close to becoming one, but World War I and later World War II not only bankrupted it but also prompted the emergence of rival regional powers. The decisive new global reality was the appearance on the world scene of America as simultaneously the richest and militarily the most powerful player. During the latter part of the 20^th century no other power even came close.

That era is now ending. While no state is likely in the near future to match America’s economic-financial superiority, new weapons systems could suddenly endow some countries with the means to commit suicide in a joint tit-for-tat embrace with the United States, or even to prevail. Without going into speculative detail, the sudden acquisition by some state of the capacity to render the America militarily broadly inferior would spell the end of America’s global role. The result would most probably be global chaos. And that is why it behooves the United States to fashion a policy in which at least one of the two potentially threatening states becomes a partner in the quest for regional and then wider global stability, and thus in containing the least predictable but potentially the most likely rival to overreach. Currently, the more likely to overreach is Russia, but in the longer run it could be China.

Since the next twenty years may well be the last phase of the more traditional and familiar political alignments with which we have grown comfortable, the response needs to be shaped now. During the rest of this century, humanity will also have to be increasingly preoccupied with survival as such on account of a confluence of environmental challenges. Those challenges can only be addressed responsibly and effectively in a setting of increased international accommodation. And that accommodation has to be based on a strategic vision that recognizes the urgent need for a new geopolitical framework.

^*The author acknowledges the helpful contribution of his research assistant Paul Wasserman, and the scholarship on the subject of colonial brutality by Adam Hochschild, Richard Pierce, William Polk, and the Watson Institute at Brown University, among others.

Zbigniew Brzezinski is a counselor at the Center for Strategic and International Studies and was the National Security Advisor to President Jimmy Carter from 1977-81. He is the author, most recently, of Strategic Vision: America and the Crisis of Global Power.