The Art of War and Geopolitics

In Sun Tzu’s military classic from ancient China The Art of War we get an early work of geopolitics. The text is well known for providing insights into commanding a military, maintaining discipline within ranks, and emphasizing the right mind-set for victory but a large part of it is devoted to classifying and evaluating terrain. The relationship an army has with the earth upon which it travels is one of the key aspects that leads it to victory or defeat, perhaps the key. The word geopolitics evokes control of resources, topographical access routes and choke points, and alliance-building amongst nations and states (or lords and chiefdoms) – all of which are discussed in the Art of War, only in the context of war in the ancient world instead of economics.

Modern warfare has grown far more complex and broadened its scope to include every vital component of a nation’s industrial output, with economics and international trade flows entering the military picture. What Sun Tzu’s famous work does in its military exposition of terrain is foster the image of the earth as a place or ground upon which forces both human and non-human are moved in certain predictable ways. It is in properly adapting one’s forces to the formations of the earth’s surface that victory is assured. A general’s success requires correct decisions but a great deal of the preparation for making those decisions is in analyzing the earth’s terrain. This mindset allows the reader to more easily imagine how power is established on earth and become primed to understand what is called in modernity geopolitics.

The meaning of Earth in The Art of War is contrasted with Heaven, although the two do not constitute different worlds as they historically have in the Christian West. Earth is typically used when referring to the ground that is walked on while Heaven refers to the greater constraints surrounding the earth up in the sky but also the state and its rule by the despot. Much of Chinese history is a succession of divine emperors with a special relationship to Heaven and from which the state derives its authority. The contrast is stark in the case of China: the emperor rules the earthly kingdom down below from the center of the state and with the authority of Heaven from up above. According to Sun Tzu, what unites them into a harmonious state is the Tao (Way):

“The Tao causes the people to be fully in accord with the ruler. Thus will die with him; they will live with him and not fear death.

Heaven encompasses yin and yang, cold and heat, and the constraints of the seasons.

Earth encompasses far or near, difficult or easy, expansive or confronted, fatal or tenable terrain.” (Chapter 1, Initial Estimations)

The ever-important and always sought after Tao is the unifying glue that keeps ruler and people, general and soldier together. It also ensures that warriors and aristocracy are bound together in a common cause, but warfare is conducted under different circumstances than state administration. The state is stationary and is located on a fixed territory whose borders can expand or shrink so long as it doesn’t dissolve or become subsumed. It’s duty is administration and it is from here that the decisions to go to war are made that the military then carries out. The military, on the other hand, is mobile and ruled by the generals orders as they maneuver through the terrain of the earth. These are two different and opposed organizations of a social body that have allied, or we could say, with Deleuze and Guattari, that the military’s war machine is captured by the state apparatus. The Tao in all of its glory and prestige is here viewed as a tool for capture. As Sun Tzu makes clear at the beginning of chapter seven, the despot is in control but then let loose: “[From the time] the general receives his commands from the ruler, unites the armies, and assembles the masses, to confronting the enemy and encamping, there is nothing more difficult than military combat.” He also notes at the end of chapter three that the general’s military is on a campaign it should be left alone: “One whose general is capable and not interfered with by the ruler will be victorious.”

Heaven is also not merely invoked as a province of the state but denotes the sky and wind which are not so far above the ground. When the army moves and strikes with fury, Sun Tzu often describes this as the force whose “speed is like the wind” (ch.7) or that crashes down “from above with the greatest heights of Heaven.” (ch.4). This is to say that the Heaven of Sun Tzu and his time is above the ground and soars high but doesn’t constitute another world unto itself. Earth and Heaven are natural forces that can be manipulated by the army and the state. It is something greater (not higher) than Heaven in the Tao that brings with it the unity of military and state, ruler and people, and general and soldier – the glue that creates cohesion. In a way, the army seeks Heaven by gaining the high ground from which it can attack using less energy and with the force of gravity on its side. Obviously high ground is still ground and so part of the earth but the meaning is clear: the strategic advantage is gained by properly utilizing the elemental forces of both Earth and Heaven.

While an irresistible attack force bears down from Heaven high above, good military strategy is built from the ground-up. As the general plans the movement and positioning of his troops he must master surveying the terrain. It is the earth that dictates the right decisions for the military; though the general must ultimately make the decision, he must observe the configurations of the terrain and plan in accordance with it or perish. This is made clear in chapter 4, ‘Military Dispositions’:

“As for military methods: … Terrain gives birth to measurement; measurement produces the estimation [of forces]. Estimation [of forces] gives rise to calculating [the numbers of men]. Calculating [the numbers of men] gives rise to weighing [strength]. Weighing [strength] gives birth to victory.” (ch.4)

So the general begins with assessing the terrain, which then leads to measurement, then estimation, then calculation, then weighing, then victory. Going backwards in this logical series, the stronger army will be victorious, but this (weighted) strength requires men. Attaining a superior number of men requires calculation. This calculation (dealing with numbers) relies on estimation, which is further distinguished from calculation in a footnote as follows: “‘Estimation’ is variously described as referring to types of forces suitable for segments of the terrain, such as crossbowmen for the hills, or the quantities of materials required to sustain the battle.” (p.312) Estimation, or matching the type of forces with the corresponding advantageous terrain comes from measurement of the terrain where the general should begin. In another footnote, we learn that “‘Measurement’ is generally understood by the commentators as referring not only to the extent and dimensions of the terrain but also its classification according to the categories advanced in the various chapters that follow.” (p.312) So measurement, like estimation, does not involve numbers but is like surveying the terrain to best determine how to deploy ones army. It comes down to the terrain, or the varieties of the earth, with regards to “military disposition” and “method.” Excepting the last two chapters on incendiary attacks and spies, respectively, the last part of The Art of War is about how to deal with the variety of terrains and the army.

In chapter 11, ‘Nine Terrains’ we learn the classification of terrains and gain advice on what actions to take with respect to them.

“When the feudal lords fight in their own territory, it is ‘dispersive terrain.’

When thy enter someone else’s territory, but not deeply, it is ‘light terrain.’

If when we occupy it, it will be advantageous to us while if they occupy it, it will be advantageous to them, it is ‘contentious terrain.’

When we can go and they can also come, it is ‘traversable terrain.’

Land of the feudal lords surrounded on three sides such that whoever arrives first will gain the masses of All under Heaven is ‘focal terrain.’

“When one penetrates deeply into enemy territory, bypassing numerous cities, it is ‘heavy terrain.’

Where there are mountains and forests, ravines and defiles, wetlands and marshes, wherever the road is difficult to negotiate, it is ‘entrapping terrain.’

“Where the entrance is constricted, the return is circuitous, and with a small number they can strike out masses, it is ‘encircled terrain.’

Where if one fights with intensity he will survive but if he does not fight with intensity he will perish, it is ‘fatal terrain.’” (my emphasis)

The main goal for an army is to seize the focal terrain. This is to seize the enemy’s capital and gain control of all of the people in the state, their resources, administration, and, to use Sun Tzu’s parlance, “the masses of All under Heaven”. This being a text written for generals of state-deployed armies (and it is hard to imagine a text written by barbarians for the purpose of military strategy as opposed to oral stories), the objective is to acquire another state’s territory and assume rule for one’s army’s ruler. Focal terrain takes on a geopolitical significance when it is seen as the central node in the network of state distribution. It is terrain without which one could not rule and administer a great many people in the largest territory possible – the territory within the borders of the state. This is ground where the concentration of power is the greatest.

The location of focal terrain and so the state capital is not arbitrary but a matter of defense and accessibility. It too is predetermined by the shape of the earth in terms of being such an important location that one must choose a spot that will be difficult to overtake by an invading army. But it is easy to see why focal terrain is associated with Heaven in that it is the place where the ruler can rule over all his subjects. It is a state-decision made by men that determines focal terrain and its purpose is to allow for the state to endure as long as possible. A state is meant to persist as long as possible and its borders must retain integrity. It’s capture is then a long-term goal of a captured military (by the state) and redirected by the state to follow its dictates. Focal terrain is the nexus that connects a mobile military force with a territorial state: the military flows towards the focal terrain with this alliance and receives the glory bestowed by the state for its services.

Light terrain and heavy terrain are both defined with respect to the borders of the state. Sun Tzu’s advice on light terrain is to “not stop” and “have [the troops] group together”, presumably because the opposing army will quickly reinforce their border’s integrity and troops will be inclined to return to the safety of their own home territory. His advice for heavy terrain is to “ensure a continuous supply of provisions” though “plunder.” “When the troops have penetrated deeply, they will be unified, but where only shallowly, they will [be inclined to] scatter.” To be deep inside an enemy’s territory is to be in a hostile environment and that common experience pulls the troops together in fear. From here on to the focal terrain it is a matter of not falling into entrapping terrain, encircled terrain, and, of course, fatal terrain. An army must occupy and hold contentious terrain first and then is told “do not attack”, on traversable terrain “focus on defense”, because the field is open on all sides.

Sun Tzu’s advice for entrapping terrain is to move quickly, not to encamp or do battle. These places are the marshes, forests, mountains and so forth that restrict movement. A very important principle is to not become trapped, channeled into a narrow space where the enemy can attack you with a small force (encircled terrain), or otherwise be forced into restricted spaces. It is here on encircled terrain that a general’s strategic prowess is most put to test, for Sun Tzu simply says “use strategy.” Here is where the complex configurations of flanking, surrounding, and holding lines comes into play, that is, as long as one general hasn’t thoroughly out-prepared the other. When you are on fatal terrain, it is win or die. This should of course be avoided, but it is also an opportunity to demonstrate to the troops that they must to battle with the utmost ferocity – leave it all out on the battlefield. A fatal battle is not necessary in a war but is the worst case scenario. This is roughly how to “[r]ealize the appropriate employment of the hard and soft through the patterns of terrain.”

Since a general cannot have a superior knowledge of a foreign territory, he must gain that knowledge with help. Sun Tzu advises using the locals to explain their terrain, for this information is paramount. “One who does not know the topography of mountains and forests, ravines and defiles, wetlands and marshes cannot maneuver the army. One who does not employ local guides will not secure advantages of terrain.” So again geographical tactics are the way to keep one’s army moving and successful. It is rather interesting to note that Sun Tzu seems to be speaking to the generals of invading armies rather than ones in defense, although one could easily reverse these principles and try to restrict a foreign army invading ones home territory with entrapping, encircling, and disrupting their alliances.

In the preceding chapter, ‘The Configurations of Terrain’, we get another category of terrains that are even more specific to the relationship between two armies confronting each other. These terms operate as simple directives so I will only touch on them briefly:

“If we can go forth and the enemy can also advance, it is termed ‘accessible.’ In an accessible configuration, first occupy the heights and yang [sunny] [side], and improve the routes for transporting provisions. Then when we engage in battle, it will be advantageous.

If we can go forth but it will be difficult to return, it is termed ‘suspended.’ In a suspended configuration, if they are unprepared go forth and conquer them…

If it is not advantageous for us to go forth nor advantageous for the enemy to come forward, it is termed “stalemated.”…

As for constricted configurations, if we occupy them first we must fully deploy throughout them in order to await the enemy. If the enemy occupies them first and fully deploys in them, do not follow them in…

As for precipitous configurations, if we occupy them we must hold the heights and yang [sunny] side to await the enemy. If the enemy occupies them first, withdraw [our forces] and depart…

As for expansive configurations, if our strategic power is equal, it will be difficult to provoke them to combat. Engaging them in combat will not be advantageous.” (ch.10)

It is maneuvering within these configurations and terrains that the advantage is gained, with a preparing eye always focused on the moves ahead. It is important to add that even when the advantage is lost or one is under-prepared, the soldiers can also overtake the opposing soldiers with better training or the simple and unpredictable element of battlefield luck.

As testified by the still present popularity of The Art of War, the conduct of war has not changed in its most fundamental aspects. War is fought by the proper control of the flow of humans and goods over the diversity of the surface of the earth. An army is an easy to distinguish force of humans who must act in a disciplined and hierarchical manner. Ancient warfare is conducted at a much different scale than modern warfare, but the close attachment to the earth remains. War has changed its shape drastically over the recent centuries with the invention of guns and explosives, production of greater vehicles, ships and so forth with steel, and the greater complexity of forces of economic production. Colonies have long been an objective of military might but the increase in technological innovation has enlarged the scale of resource extraction, leading empire to become something different in form and justifying the new word imperialism. British imperial control of sea-routes for its mercantile trade and subsequent American control of petroleum and international finance are examples of warfare taken to new heights. These developments extend the earth-dependent theater of war into politics with the aptly termed geopolitics.

Modern war is less delineated between military and civilian, with the twentieth and early twenty-first century seeing unprecedented civilian deaths and tactics that blur the line. The theater of war seems to have spread throughout the globe along with the ever refined image of the map, which is strangely enough the view of the earth from the Heavens. With these new tools like the map, and a standard mass education with which to read them, a great many more people are able to think and understand the strategies and tactics of war and geopolitics. The state is, at least in theory or through struggle, capable of fulfilling its modern quality as a nation-state and allow the people to have more decision-making power than the despotic rulers of “All under Heaven” of the past. In this way, through nations and international bodies, people ought to be able to influence the actions of the state in a way that only a ruler and his court could before. Just as the operations of war have expanded into civilian and economic realms, so those realms can influence the decisions to engage in war or not – provided political power is actually attained.

To better influence the right course of action (or Tao if you will), a public would be advised to use the achievements of the nation and become educated in the ways of geopolitics. Adding the earth to political opinions is not only a better way to predict and impose one’s will within the political but has been emphasized in the methods of warfare since at least ancient times.


I used Ralph D. Sawyer’s 1994 Basic Books edition of Sun Tzu’s The Art of War for all quotes.  The image is the book cover.

Not just Geography but Money also

The Geopolitics of the US’ Global Decline: Washington vs. China in the 21st Century

Summary of the Article: “Geography determines destiny” without exception  – unless stupidity creeps into the decision-maker’s minds.

In all seriousness though, what this good read fails to mention is the strategic need for the US’ apparent stupidity: ensuring the continued demand for dollars around the world.  The need for other countries to borrow dollars to buy oil (the “petrodollar recycling system“) and protect their foreign reserve accounts from speculative raids has allowed the US to go into astronomical amounts of debt and not have to pay it off.  The US doubled-down on its status as the purported “leader of the free world” in the mid-seventies and their is no going back now that they have run up an amount of debt that could never and will never be payed back.

The irony of the situation is that the US uses debt as its primary way to control other nations aside from military force but does not feel obliged to pay its own.  The tragedy of the situation is that the transition away from this system is what will determine a large portion of the how world nations are made up in the coming century (as well as the fate of earth’s biosphere for the next 100,000 years), yet very few people understand it in a country that claims for itself the label ‘democracy’.

Most important for determining destiny is not just geography but the systemic movement of oil and money (be it in cash form or bits in electrical computer networks) on top of the earth.  Oil comes from underneath the earth though and nations have their borders to look after, which are determined by oceans, mountains and other geographical barriers, (together of course with competing militaries and unruly subjects).  Geopolitics brings international politics to mind and the ‘flows’ of oil and money that course through nations borders deserve to be included.

Someone or some body of people will have to persuade the US to not to unleash its war machine on other nations when the petrodollar system collapses, so that oil can be decoupled from money and renewable forms of energy (including less of it) can abound.  Nations will not be able to transition away from fossil fuels when they cannot control their own money supply and have a imperial behemoth breathing down their neck.  The chief barrier to the protection of a threatened biosphere is United States global hegemony.  Perhaps an internal war machine to the US’ borders will apply the necessary pressure to ease the transition, or perhaps it will come from without.  Then again, perhaps it will continue, but as far as I can tell, if the US prevails, you can kiss much of the life on this planet goodbye.

More on geopolitics from Michael Hudson:

Russia, China, and the Battle Against Dollar Hegemony

Geopolitics and Ecological Spirituality in Avatar: The Last Airbender

Avatar: The last Airbender gives us a stylistic and colorful look at a fictional world of warring nations together with a sharp focus on the planetary and even cosmic elements. The problems and conflicts of nations are interwoven with the quest of a group of teens or pre-teens as they try and right a world that is on the verge of total domination by one nation. These kids have no problem taking on a nation imposing its will on the rest of the planet, primarily using their powers to manipulate the elements but also teaming up with other nations to mass attacks and engage in war. This American cartoon with a decisively Asian stylistic influence, despite its heavy use of spiritual abstractions and flashy battle scenes, highlights some of the most important aspects of global geopolitics for us to learn today.

The imagined planet we begin on is one populated by four different peoples, each representing one element of nature as they were conceived in ancient times: water, earth, fire, and air. The first three nations are locked to a continent, with the air people being monkish nomads inhabiting mountain-top temples and the water nation having territory at both of the planet’s two poles. Keeping these nations each with their disproportionately weighted qualities from invading other territories and assuming power over them is the avatar, a Dali Lama like character that reincarnates upon death and wields enormous power. The avatar alone can learn the power to “bend” the element of each nation, while a select number of people can learn to bend the element from their own nation of origin. It’s an international system that weaves together martial-national ambition with individual spiritual enlightenment into an icon in such a way that nations can be nations, monks can be monks, merchants can be merchants, farmers can be farmers, etc., while a mechanism exists to keep empires from rising. The avatar is like Buddha and Sun-Zu mixed together, as if attaining enlightenment also granted this single great figure a god-like fighting power.

This scenario is an enchanting thought experiment and I’m tempted to ask: “who are the avatars today?” To quickly answer that question, no individual has that power nor should they. But rather than musing on the avatar as inhabiting a middle-place between this fictional world and the real, what I’d like to turn your attention to the way that international politics and forces of the earth work together in Avatar: The Last Airbender. The show is particularly effective in making the personal/emotional trials and tribulations that most everyone faces in their life blend together with the grand scale of nations and the problems afflicting each. The disruptions and excesses of individuals, villages, and nations, felt by each other when they come into conflict with friends, our travelers, and other nations are all indicated at the same level and with similar affects gone astray. The difficulties of keeping the crew together and on task, moving toward their goal and not at each other’s throats, etc. are reflected in the deficiencies of nations in maintaining an international balance of power. For instance, the leadership and resilience that water bender Katara learns in rallying the band is reflected in the qualities that the Water nation lacked in beating back the Fire Nation, but have had traditionally: resilience and adaptability.

Isaac Yuen has already pointed out many of these connections in his ekostory of the show, so I’ll just link you to his great piece here: []. And there’s two more pieces on Avatar lying that way.

Our heroes eventually pick a member of each elemental to form the final version of their team, but thanks to the main protagonist, the new Avatar Aang, and his giant flying bison (that’s right) Appa the group itself operates nomadically in their quest to “restore balance” between the nations and reestablish harmony. The absent peoples of the show is the air tribe – not only has the Fire Nation killed them all but Aang in an act of genocide but of the three seasons (Books) of the show the book of air is the only one missing. Seeing as the crew we follow on their adventure is always moving from place to place and they are led by the only airbender Aang, we can say that they represent the missing element themselves: the nomadic opposition to the ascendant empire.

The fire nation is in the midst of a conquest of the rest of the nations, having pacified the Water nation more slowly by capturing its water benders and is in the process of laying siege to the Earth Nation. In the finale to season 2, we are taken brilliantly through the stages of a coup in the vast capital of the Earth Nation, Ba Sing Se, with the rest of the war to be fought in clandestine fashion with sneak attacks by the cobbled together rebels met in past episodes. They will attempt an invasion of the Fire Nation and all those left willing and able to fight are accepted, regardless of nationality (or age), in this teenage (at best) militant resistance force.

It is the Avatar’s duty to maintain the balance of power between nations, and she/he is not restricted by the nation in which he/she was born. In season 3 we are told of a particularly significant recent Avatar who was born in the Fire Nation and grew up best friends with the Fire Lord (king), who also happened to have started the fire nation’s dream for expansion and conquest. He was born in the Fire nation and trained together with the soon to be Fire Lord in adolescence, remaining friends until a turn of events allowed the Fire Lord to cross him and begin his multi-generation plan to spread the Fire nation influence and control over the rest of the planet. This cultural superiority was justified by the time of unprecedented technologically-infused prosperity that had to be “shared”. No culture is judged here in its entirety. The ambition of a nation is to be expected; it was the avatar’s inability to foresee the danger of his expansionist fiend and his untimely death due to a natural disaster that disabled him from preventing it. Luck and lack of precaution by those with power seem to be the holders of blame for the war rather than the Fire Lord alone, should blame need be assigned.

The real strength of the show lies in its planetary perspective of warring nations and their continental territories. When the Fire Nation attacks, the Earth Nation loses the will to fight (falling to authoritarian propaganda, fear tactics, and class dissension), and the Water Nation gives way to eking out an existence as scattered and relatively disempowered tribes, the cause is attributed to a lack of harmony. The guarantor of harmony in the Avatar was simply absent, and, in his youthful anxiety in the face of his destined the role, he hid himself away in a kind of bad faith. A lopsided spike in the forces of the planet results from a similar imbalance in the psyche of the main character. It’s as if the show is saying that, in a world where the planet is fully charted out and populated with regional powers, the burden for the excesses of an erratic nation falls with personal make-up of certain well-placed individuals. While the idea of the Avatar is a product of fantasy, people with intentions toward global stability could be inspired to maintain a similar balance within themselves in their rise to a position of influence on the geopolitical stage.

As we look for answers to the question of how such historical atrocities were able to happen we are invariably led to the decisions of some politicians who either scheme on the behalf of others and interest groups or are motivated by their own ambitions toward power. Granted, some obvious imbalances of power can be identified as causing such horrifying effects, such as when technologies are developed and manipulated for war sooner than others (Europeans, the Fire Nation) or when a glut of natural resources are discovered in regions that damn them to strife or obedient subjugation (the Middle East), and not the aspirations of individuals. There are always forces beyond our control on one side and those that we can influence on the other. What Avatar is telling us is that for those decisions that we can make for situations within our ability to exert influence over, it would be better off for all those considered to make those decisions in a state where we are not ourselves under the grip of one passion at the expense of another.

It is much more difficult for someone to excuse something like the Fire Nation for an act of genocide against the people of the Air Tribe. This is the case of a planetary extinction decided by an individual (the Fire Lord) in order to eliminate the next Avatar and consolidate his power. The people of the Air Tribe did not have a standing military to withstand the threat of invasion on their temples. They led their lives as concerted monks living to pass on their wisdom detached from “worldly concerns”. This mode of living puts them at an obvious disadvantage as they lacked the affect of anger and a strategic instinct for survival, opting instead for the pursuit of knowledge and practices of self-mastery. This deficiency of the Air Tribe does not doom them but is symbolic of a ripped apart world where hyper-aggression has eradicated that which would be the very thing that would prevent domination and empire – understanding and composure.  The self-criticism that the Air Tribe has got in spades doesn’t stop them from being bulldozed by the Fire Nation, but the Fire people are capable of self-criticism too – it was a result of bad luck, a turn of the wind, that the Fire Lord was able to act in the absence of the Avatar.

When such an outside force is felt, one that seeks to destroy merely for the sake of power, expansion, and triumphal cultural superiority, the only way to defeat them is head on with an opposing force. The show understands this and our heroes and heroines use whatever is at their disposal to defeat the Fire Nation. Anger is often the best way to mobilize that force which would fight and topple a domineering force headed your way, but it also can quickly turn into that which it is fighting against, as that other force is using the same affect against you. The self-mastery of such a wide array of affects evidenced in the Avatar’s mastery of all four element bending, so that each one can be drawn on as the situation calls for it, can keep the body (as well as the planet and the nation) from being contaminated by a single force, dominating all of the rest. Although, we are admittedly still within the realm of power and forces with the word “mastery” as in self-mastery and not the tranquility of ascetic contemplation.

Nowhere is this struggle better displayed than in the character of Prince Zukko of the Fire Nation. He begins at the outset of the show with the single goal of finding and killing the avatar to restore his lost honor. His sole goal in life is winning back the favor of his father the Fire Lord. But with some good life coaching from his uncle Iroh (vs. his father) he comes to despise his father for the destruction and fear which he has wrought upon the people of the planet. Due to his transformation and his decision to join the avatar in his quest for peace and “harmony” in season 3, his uncle gives him one last piece of advice: he must disrupt the coronation of his sister Azula and assume the throne to better lead the Fire Nation. It is a change of rule at he highest possible level of political power, with a 180 degree change in policy that is required to seal the transformation and complete the revolution *within* the imperial Fire Nation. Princess Azula took his place as the enemy that the crew fights most often after season 1 and her ruling style is based on fear; she consequently alienated her own friends and servants leading up to her coronation, ending up alone and full of frustrated rage. The Fire Lord himself attempted a jump up from the throne of the Fire Nation to the throne of emperor of the world: the Phoenix King, with new totalitarian symbols and everything.

It is the transformation of Prince Zukko in the later part of the show that demonstrates best the personal/political trajectory of its message. The harmony sought between nations, those great powers set against each other in differing, competing interests is mirrored in the competing emotional drives of the individual and the band of traveling friends. Zukko has a tough time convincing the crew to accept him, being their former enemy number one, but once he does join he helps each of them confront their past demons and clear current barriers. [For the record, Toph didn’t need him. She’s as solid as a rock.]. He is ideally placed to reverse the disastrous policies of three generations of Fire Lords and his internal struggle between the imperial ambition of his father, motivated by aggression, and the advice of his uncle, no slouch in battle himself. Uncle Iroh was once a conquering Fire Nation general himself who turned another leaf after his own son died in battle. The shear force of anger represented by the Fire Nation is an undeniable fact of life; it can be a great ally when unleashed at the right time, but mustn’t be allowed to continue unchecked.

The question of holism in a world of nations fighting geopolitical battles with each other remains. The figurehead of the avatar with its ultimate power to control the elements of the planet/cosmos holds a super-national position with respect to everyone else, and the viewer is led to believe that the avatars are always balanced and harmonious themselves because of their training from the greatest masters of each respective nation. In a world where one elemental people is entirely eradicated, it is hard to see how a balanced avatar could ever arise. The avatar receives not just military training but spiritual training from gurus. They teach them to meditate, that “everything is connected”, and to let go of all worldly desires. After achieving a kind of enlightenment, avatars become “one with the cosmos” or whatever the religious equivalent be in a culture’s spiritual/metaphysical tradition. How could such concepts born of an ascetic eschewing of the material world *also* be the great liberators of military oppression having turned away from such existential commitments? This is not so much a problem within the logic of the show as one for the reality that we face.

The recent actions of Pope Francis could be mentioned when he derides nations and industries for imperiling the life-producing capacities of the planet with carbon emissions resulting in global warming. []

His position as spiritual leader of a large chunk of the believing people around the world puts him in the unique position of letting his voice on such crucial matters. Millennia of entrenched religious practices cultivated from the power of the pastorate have placed someone like this (and other similar religious leaders) in a privileged position to let these global matters be explored by their subjects. The scientific community as well, especially when there is as much consensus as is healthy for an organization of skeptics to have [], has an authoritative voice that is heard when looking for support for creating policy and action. The religious wisdom of the avatar could also be understood as the very forces of the biosphere itself as it responds to the threat of human activity by vanishing until, many thousands of years later, it is time for the life inducing complex ecosystems to emerge again. But let’s not get too confused.

The avatar is shown in various flashback scenes manipulating the very substance of the planet itself in a bid to alter the consequences of other human’s actions. An avatar uses her powers to create an island and isolate her people from a different conquering Lord generations earlier, killing him in the process, and another avatar limits the damage done to a village by a volcano by controlling the elements around it. These are actions performed *on* the earth by a privileged person in the context of human dramas. Such talk invokes geo-engineering – which may become necessary after, or during the time we pull together and put a *gigantic* dent in carbon emissions. But this must be in conjunction with a major effort to severely limit carbon emissions largely resulting from market actors and their allies in nations.

What Avatar: The Last Airbender can teach us is the importance of keeping oneself on an even keel affectively, with the sentiment it provides being extractable onto nations whose actions have a more direct effect on the planet. The cosmic-spiritual aspect of Avatar does a great deal of good in connecting itself to the planetary elements of earth, air, fire, and water – as dated as those natural elements are claiming the status of ’substances’.  This makes Avatar an excellent ecological fantasy – a rare blend of grounded spirituality *and* rough and ready international warfare.

As for the issue of idealistic holisms and realistic political forces, the wonder that springs from holistic contemplation should not be divorced from the planetary and human forces those ideas effect. Avatar does this extremely well. Even when extra-terrestrial phenomena like a solar eclipse and a comet come at key plot points in the narrative, they do so not as transcendent forces from another world but as immanent forces effecting the elemental powers of people on the planet. Planetary-natural and national-political forces intermingle in the narrative seamlessly, as displayed by the threat of Fire nation imperialism and its ecosystem destroying weapons factories. The closest we get to transcendent other-worldly phenomena is when the avatar meditates himself away into the “avatar realm” and there are other problems with having an avatar around. But the avatar is best thought of in relation to one’s own choices, even though a select few people have vastly more power over the masses. There’s no telling what a committed and balanced individual can do, however, especially when taught at an early age with good works of fantasy that they can change the face of the earth.

Dollar Hegemony and Super Imperialism: An Update from CounterPunch

Not only does the dollar enable the US empire, but also protecting the dollar’s status is a major reason for US imperial wars. American financial and military strength is based upon the fact that the dollar is the world’s reserve and international trade currency, creating a global demand for dollars which allows the US to print as many greenbacks as it likes. It then pumps them into the overbloated finance capital system and uses them to fund its criminal wars…

…Although it has so far been unsuccessful, the idea of rebalancing the world monetary system is extremely threatening to the US, and goes a long way toward explaining recent US wars and warmongering, which may otherwise seem irrational. The line of NATO bases in Eastern Europe and the coup d’etat in Ukraine are attempts to split Europe from Russia, trying to keep a subordinated Europe in the US sphere, prevent a single Eurasian economic area, and isolate and destabilize Russia. The Transatlantic Trade and Investment Partnership has the same goal. Weakening Russia and China (and the BRICS in general) on a military, economic and political level, with a regime change in mind, is a fundamental part of the US strategy for maintaining dollar hegemony. The US therefore has surrounded them with bases and continues to try to destabilize them. The US presence in the Middle East serves not primarily to gain access to its oil and gas (the US has its own, especially since the fracking boom) or even to control access to them (the Chinese are already there), but first and foremost to protect the petrodollar, to ensure that the global fossil fuel markets continue to be denominated in dollars. Iran has been talking about wanting to de-dollarize its oil and gas trade for years – thus, it and the Shia crescent are in the US line of fire…

…This is exactly in the interests of US financial imperialism: to economically undermine any rivals that question dollar hegemony. It is absolutely unacceptable that one country should arrogate to itself the right to set a wildly loose money policy for years and then tighten it at whim, giving the rest of the world a violent thrashing. It is unacceptable that any one country control the world’s reserve currency. As the above quote says, because of the circumstances created by QE and the zero interest rate policy, today if the US economy does well, the global South suffers. It’s a zero-sum equation. This is throwing burning obstacles in front of their process of de-dollarization, and making them suffer. On purpose? Again, it would be difficult to impute too much individual agency behind these effects, but they are predictable, necessary and not unprecedented consequences of the imperial monetary policy waged by the US for years. The question of agency in this case is moot: these policies serve the empire. They go along with and have similar effects to the more obvious forms of financial imperialism such as sanctions. The US should be held accountable for the disasters it sows, and the world should remove its imperial privileges, through the creation of a neutral world reserve currency.

What Is at Stake in the Ukraine: Global Financial Dominance

With the latest round of American and European news media outlets loudly announcing that President Obama is considering arming the neo-fascist Ukrainians to fight Eastern Ukrainian separatists, risking an escalating proxy war with Russia, it’s time we gained some broad perspective on this conflict.  Each side is pointing fingers at the other, with few facts being spoken that both sides can really agree on.  The US media-war-machine is vamping up the aggression of words as seen here: Fox[Obama Confirms Arming Ukraine on the Table if Diplomacy with Russia Fails ], USA Today[Obama Team Considers Arming Ukraine], NY Times[US Taking a Fresh Look at Arming Ukraine Forces] (no, going to all of those mainstream media websites was not a pleasant experience).
A tentative peace deal has been signed with leaders of Europe in attendance, with German Chancellor Angela Merkel leading the way in promoting a peaceful resolution to the conflict.  Whether this truce will hold is uncertain, but with major national interests at stake and their strategy plays already set in motion, we are entering a phase in which the drivers behind the conflict must be payed bare.  With all of this hate in the air, and pathetically little debate about the intricacies of the conflict, a number of questions need to be asked:
Why would the US risk setting off a proxy war with Russia and a potential nuke-firing, ’unthinkable’ World War III?  Where is the intense demonization of Putin in Washington and its long arm in the media coming from?  What is the US doing right on Russia’s doorstep using strong-arm tactics like sanctions and pursuing NATO expansion, including a new “rapid response force” [] ready to be deployed along the boarder of Russia at a moment’s notice?  We could flip the questions around for the sake of objectivity and ask: “why did Putin annex Crimea during the Maiden episode?” and also, “why would Putin arm and supply the East Ukrainians to fight the new Kiev government?”.   The two powers are squaring off alright, but if we turn off the highly charged rhetoric that is being flung around in the narrative and look at the situation in terms of geopolitical power and national interests, we find a set of dominant forces that span the globe are being challenged right now, ones that American global hegemony just might be willing to risk World War III to protect.
I will eventually offer some links and facts about the current crisis, but first the scope of this conflict needs to be elaborated.  Only then can we feel the weight of the conflict and answer those questions above.  So, why are these powers willing to risk so much?
When Putin and other Russian politicos speak about their motives and relay messages to their US and NATO counterparts, they have repeatedly been saying that they no longer accept the US dominated world order as it is.  [Putin Accuses United States of Damaging World Order].  They demand that the US stop interfering with affairs far away from their land and basically stop playing global policeman.  America has been the overwhelming superpower ever since WWII (despite the Cold War) but it was with debt, money, and currency manipulations that the US achieved a imperial superiority over the rest of the world unparalleled in history.  Few know how these mechanism work (and this was most likely intentionally obscured with the help of ideologically driven economist-speak), but it seems that Russia feels like it has regained enough of a footing in global politics to challenge US super-imperialism with its alliances and trade deals.  The US in turn ratchets up the pressure with a series of sanctions and foments unrest right on Russia’s doorstep.  If we take the longview on the Ukrainian conflict and tune-out the heated rhetoric we can see a major stand-off between the clear world hegemon desperately holding to its power and another large imperial nation who is refusing to bow down anymore.
This is what the Russians are talking about when they speak of the US-led world order whose rules they no longer want to play by:
America projects power thanks to its fortunately located continent away from other world powers in Europe and Asia (who have other competitive nations very close to them).  They have control over much of the Earth’s maritime shipping routes with strategically placed Naval bases and keep the close nations located in the Americas from retaining the wealth of their natural resources, thereby keeping them more impoverished and, consequently, weaker.  See this brief Caspian Report video on how the US geologically projects power:[Foundation of American Dominance].  While Cuba and Venezuela remain thorns in their side, much work is surely being done (as it has been accomplished already in its numerous interventions in its own backyard [7 Fascist Regimes Enthusiastically Supported by America]) to wrest away the profits of Venezuelan oil for American multi-nationals.  Venezuela’s ability to keep the wealth generated from its vast oil reserves within its own national government has made it a target for regime change. [Venezuela, Regime Change, and the Hidden Hands of US Capitalism].  The Venezuelan government headed by Maduro is now claiming to have foiled a coup attempt by military officials on the anniversary of the student protests [Opposition Leaders Issued a Statement to Signal the Launch of the Foiled Coup].
But the real crux of American global dominance is performed via money and debt.  In the system of global trade and finance, there is no standardized unit of account that levels-off the panoply of currencies engaging in importing and exporting with each other like the gold standard once did.  Nixon took the US off of the gold standard in 1971, when Vietnam War expenditures rose so high that its gold reserves were rapidly being depleted.  Currencies were left to float against each other or be pegged to one another, but US dollars were still needed by-and-large because America was by far the most productive economy and a trading partner to many nations.  The US dollar gained the status of ‘reserve currency‘.  Countries would still need dollars in reserve to buy oil and to cover losses from speculative raids, seeing as it is that the foreign exchange market (ForEx) allows currency holders to trade currencies at will and for speculative profit.  The phenomenon of ’short selling’ is a major weapon that speculators use to devalue an entire nations economies by conspiring to lower the value of its national currency.  Countries can peg their currency’s value to the dollar, but can still see capital flight and their doliar reserves depleted if they don’t set the peg exactly right.  Basically everybody needs dollars to buy oil (thanks to the US/Saudi “Petrodollar” deal: [Confessions of an Economic Hitman]) and make sure their foreign and economic policy won’t lead to those dollars fleeing their own central banks, which usually means they must export more to the US than they import.  The imperative for economies to “grow” by producing consumer goods and exporting them is largely an effect of debt payments they must meet and dollar reserves they must hold onto.  For a more detailed analysis, read Ellen Brown’s Web of Debt, chapter 21, ’Goodbye Yellow Brick Road: From Gold Reserves to Petrodollars’.  [Web of Debt]
The excess of imports into America means that US balance of payments is always negative, hence the US national debt perpetually rising at an astronomical rate.  But the large US national debt is not a hindrance;  since countries are required to hold dollars for oil purchases, other countries must export their goods to the US and usually import oil.  With all of these dollars in circulation, central banks end up buying US treasury bills to get a return on those dollar reserves.  This ensures that dollars are continually “recycled” back to America, with the US Treasury making its minimum debt payments on those bills and bonds as the total debt climbs ever higher.  Thanks to the Federal Reserve system, the US Treasury must borrow from this private central bank in order to print its own national money.  All of this ensures that demands of debt (as well as oil) are met at almost every step of the way: whether by countries who must accept onerous loans from the IMF to protect their own currency/dollar reserves to buy oil, or a US government that turns the global need for dollars into more debt of its own.  Though, all together, the system is drastically beneficial for the US (that is, until people realize that its debt will never be completely payed off): it gets excessive imports and situates itself as a middle-man (via the dollar) between nations and their energy needs.
This video from Storm Clouds Gathering explains the Petrodollar system well: [The Geopolitics of World War III]
Now, this nefarious system is not accepted happily by those who understand it and feel the pressure it exerts upon them.  The BRICS Bank enters as a challenger to Dollar Hegemony for its ability to offer development loans similar to the IMF but in currency besides the US dollar.  Here is a Cursory overview of the BRICS Development Bank: [BRICS Set Up Bank to Counter Western Hold on Global Finance], and an Al Jazeera segment about the goals and motives of the BRICS alliance[Empire: BRICS: The New World Order] .  With such a massive tool at their disposal, countries could break the need for dollars in purchasing oil, as Russia has tried to do with its currency swap deal with China: [Russia and China: The Dawning of a New Currency System].  Russia stopped trading their oil for dollars over a year ago and, if using dollars is absolutely necessary, they will immediately take those dollars and exchange them for gold – the value of gold being pushed down at a low price thanks to central bank policy.  A more detailed look at Putin’s scheme to get around the petrodollar, by using artificially devalued gold and rubles: [Grandmaster Putin’s Trap: Russia Is Selling Oil and Gas in Exchange for Physical Gold].
I also highly recommend watching this debate between Michael Hudson and Leo Panitch about the significance of the BRICS Bank, where geopolitical and international banking dynamics are contrasted with a downer, “you’re either a Capitalist or a Socialist economy”, analysis: [Is The New BRICS Bank a Challenge to US Global Financial Power] and here is my take on the debate: [The BRICS Bank and Dollar Hegemony: The Importance of Geopolitics].
“Neoliberalism is not simply an economic philosophy. It’s interwoven with American foreign policy.” -Hudson.
According to Ellen Brown, Russia and other BRICS countries have a greater diversity in banking methods that would put them fundamentally at odds with Western private banking elite.  She cites this article that glosses how the Russian banking system has changed its ways towards public financing following the 2008 financial crisis:[Financial Crisis Alters Russia Banks].  A vast network of smaller, state controlled banks offering low-interest rates puts Russia and the BRICS at odds with private banks of the west, who lend primarily for profit and operate at the behest of maximizing the returns to their shareholders.  According to Brown, the unsung hero of China’s rapid growth in industry is its banking system that operates as a public service rather than as a parasite.  The entire first section of her book, The Public Banking Solution is devoted to juxtaposing private and public banking models and how the BRICS nations exemplify the necessary measures that need to be taken to ward off the wealth siphoning machine of onerous debt and interest.
Speaking of financial tensions, there is also the lingering memory in Russia of the American intervention during the transition form communism to capitalism.  Aid, support, and advice were continually given to Yeltsin, who in turn attacked the Russian parliament building, rammed through neoliberal shock therapy, and made sure a potential democracy became an oligarchy instead.  I encourage everyone to read or reread Naomi Klein’s chapter 11 in The Shock Doctrine titled ’Bonfire of a Young Democracy: Russia Chooses the Pinochet Option’ in light of current events.  Just a few excerpts:
“To provide ideological backup for Yeltsin’s Chicago Boys, the U.S. Government funded its own transitions experts whose jobs ranged from writing privatization decrees, to launching a New York-style stock exchange, to designing a Russian mutual fund market.  In the fall of 1992, USAID awarded a $2.1 million contract to the Harvard Institute for International Development, which sent teams of young lawyers and economists to shadow the Gaidar [the head of Yeltsin’s economic reform team] team.  In May 1995, Harvard named [Jefferey] Sachs director of the Harvard Institute for International Development, which meant that he played two roles in Russia’s reform period: he began as a freelance adviser to Yelstin, then moved on to overseeing Harvard’s large Russia outpost, funded by the U.S, government.” (p.281)
“Despite the fact that Russia’s Constitutional Court once again ruled Yeltsin’s behavior unconstitutional, Clinton continued to back him, and Congress voted to give Yeltsin $2.5 billion in aid.  Emboldened, Yeltsin sent troops to surround the parliament and got the city to cut off power, heat and phone lines to the White House parliament building.” (p.294)
He would eventually order Russian troops to burn down the parliament building, their own White House.
“… several of Yeltsin’s ministers transferred large sums of public money, which should have gone into the national bank or treasury, into private banks that had been hastily incorporated by oligarchies.  The state then contracted with the same banks to run the privatization auctions for the oil fields and mines.  The banks ran the auctions, but they also bid on them – and sure enough, the oligarch-owned banks decided to make themselves the proud new owners of the previously public assets.  …the Russian people fronted the money for the looting of their own country.” (p.294)
“…he [Sachs] now sees that there was something else at work: many of Washington’s power brokers were still fighting the Cold War.  They saw Russia’s economic collapse as a *geopolitical victory*, the decisive one that ensured U.S. supremacy.” (p.315)
Putin has echoed this sentiment, proclaiming that the fall of the Soviet Union “was the greatest *geopolitical catastrophe* of the century.”.  Seen from this geopolitical perspective and not the ideological one in which it is usually viewed, one major national power was crippled with the help of another major national power through military force and disastrous economic reforms.  The oligarchy reigning in Russia (similar to the one reigning in America, as this scientific study found [US Is an Oligarchy not a Democracy, Says Scientific Study]) was fostered and supported by American neoliberals and is not simply the product of its own vague tendency for corruption.
Then there’s the New York Times running an article by Thomas Friedman openly questioning if the recent plummet of oil prices was not a ploy between US and Saudi Arabia to cripple Russia’s oil and gas economy [A Pump War?].  This would line up perfectly with the US tactic of weaponized financial mixed with control over oil markets.
During the Maidan protests as well, evidence has been accumulated that the US has been directly involved with putting known fascist party members into power.  This video from Storm Clouds Gathering goes into this in detail: [The Ukraine Crisis: What You’re Not Being Told].  The hard evidence of leaked phone calls between US assistant secretary of state Victoria Nuland laying out the exact people she wants to see in power for the new post-coup Ukrainian government is tough to deny.  The right sector leader in Kiev has been documented as rejecting the recently signed peace-deal: [Neo-Nazi Leader of the Right Sector Rejects Ukraine Peace Deal].  To top things off, fake pictures of Russian troops in Eastern Ukraine were brought before US congress as war propaganda last year by a US Senator: [US Senator Used Old Photos to Push Ukraine War Propaganda].  They have since been debunked.
On the financial hegemony side, we don’t have to go very far to see the negative effects of IMF’s monetary policy, it is apparent right there in the Ukraine.  To finance Ukraine’s war with the separatists, the IMF has granted it loans that demand it privatize public sector industries and undergo austerity, even though the IMF is not allowed to give loans to countries at war. Here is Michael Hudson talking about Ukraine’s coming financial crisis: [Has the IMF Annexed Ukraine?].  Now Joe Biden’s son has even been appointed to the board of a Ukrainian oil and gas company with tremendous power in Ukraine.  The $17 billion IMF loan to Ukraine is alleged by Hudson to be a New Cold War Loan meant to wrest away debt payments owed to Russia by Ukraine [Losing Credibility: The IMF’s New Cold War Loan to Ukraine].
So, facing all of this evidence that US power is in trouble and has been stirring up aggression right on Russia’s border, how can we go along with the narrative of Putin the aggressor, the demon?  Russia invaded the formerly Ukrainian territory of Crimea and annexed it, which has been denounced ad nauseum as an act of aggression.  Right after the event, a referendum was conducted in which the Crimeans voted overwhelmingly for annexation by Russia, with over 90% in favor.  Recently, another poll was held by the Ukrainians themselves in which this sentiment was upheld, with ~93% in favor of Russia [Annexation of Crimea to Russia. Opinion Poll].  But the inflammation of this great geopolitical chess game is the consequence of no mere diplomatic misunderstanding or idle hands in the military-industrial complex, Russia is the greatest threat to the interest of the US because it is leading the way in establishing an alternative to the debt-based monetary policies that cripple nations and bolster US power around the Earth.  An alliance of BRICS countries with a new development bank not under control of the IMF/World Bank/Bank of International Settlements is a threat to the hierarchy of order that has settled internationally, with the US on top.  But we not simply side with the BRICS be their cheerleaders, there is a public banking movement going on in the US which is spreading the model at home.
In America, public consent is required (for the most part) before war is waged and the battleground of public opinion is crucial in determining how the military decisions will be made by the president.  It is important that these fact of the US’s involvement in Eastern Europe be distributed and understood before we head into what would be a horrifying and devastating war to protect an order that already impoverishes so many people and nations as a whole.  The private banking cartel that rules Washington with its revolving door of financiers and politicians keeps the vast majority of people from wealth, while ensuring that a few (the 1%, if you will) continue to profit off of assets that are already held like stocks, shares, property, and large businesses.  Public banking models threaten the stability of the wealth generating machines that wealthy elites will fight tooth and nail to keep in motion, with the BRICS alliance raising the biggest alarm.  There is no guarantee that the BRICS Bank will operate on a more benign model than the IMF does now, but the history and composition of public banks in those countries suggests they would be far more likely to restructure and cancel debts, make cheaper loans, and not apply harsh conditionalities that lead to austerity policies and privatization.  Although, to be quite honest, we need a shake up of the dominant forces of the Earth in any case, and detaching the most important element from an economy (money: what we need to have and earn in order to survive more than any other thing in the present day) from oil (the thing most threatening to a flourishing planet when burned) would be a good start.  Simply put, without the Petrodollar system, there is a whole lot more that countries could do.
I highly recommend looking into the idea of public financing and dig into the way monetary policy shapes the international composition of forces.  Since you’ve made it this far, please check out all of the links I have provided in this essay to get the bigger picture.  With an informed public, war and ecological devastation can be prevented and our present situation need not continue indefinitely.  A new development bank headed by large capitalist nations isn’t exactly as glamorous as the notion of a global grassroots revolution, but these developments signify that the greatest powers at work on the surface of the Earth are facing an uncertain future.  Understanding how these forces are deployed, who benefits, and who loses will allow us to more effectively withstand the on-coming media shocks.

The BRICS Bank and Dollar Hegemony: the Importance of Geopolitics

Michael Hudson and Leo Panitch had a spirited debate at the Real News Network recently that brought to light two different views on the strategies for resisting Capitalism. Watch it hear and follow along with the transcript:

Is the BRICS Bank a Challenge to US Financial Power?

The BRICS Development Bank (Brazil, Russia, India, China and South America) was just announced and is an attempt to subvert America’s dollar hegemony or, what Hudson calls, Super Imperialism. They will make loans outside of the dollar system, which coerces/persuades countries that receive loans from the IMF to keep their currencies pegged to the dollar, and issue loans to countries in their own currencies. This, Hudson believes, will be a major geopolitical move by countries extremely frustrated by the Washington Consensus in America and will provide an alternative to the broken philosophy of neoliberalism and its Trojan Horse policy of forcing countries to accept austerity, privatization, and cheap asset sell-offs to private companies when sovereign countries cannot pay back their debts. Rather than write down debts that cannot be repaid, the IMF and World Bank (who accept and champion the dollar standard) demand “developing countries” who cannot keep up with entrenched global corporations on the world market sell away their natural resources, privatize public services and industry (including pensions and health benefits), and generally accept nation-wide austerity when the interest on the loan bloats the bill too high.

A recent case of this comes from Argentina. Argentina was going to write down its debts so that it could repay without crippling its economy until the “Vulture Firms” who bought up some of its debts at very low, distressed prices and demanded they be relayed in full. A New York judge decided that Argentina must make the Vulture Firms whole, with many big Wall Street Banks owning stakes in these vultures. Such is the logic of debt intoxicating countries under financial imperialism, demanding all debts be repaid. Whole peoples wealth and well-being can be sacrificed, but heaven forbid an investor should not get the full amount of capital returned on his investment!

Leo Panitch, however, believes that the significance of the BRICS Development Bank in combating US led neoliberalism is overblown. These five countries all themselves operate as Capitalist economies, forcing their population into low-waged labor and engaging in land purchases around the globe. Oligarchs dominate Russia, ghettos abound in Brazil, Indian farmers have been committing suicide by the thousands, and everyone must submit to the toil of the work day for their livelihood. These aren’t Socialist countries we’re talking about.

Why is the issuing of loans in the currency of a sovereign nation instead of dollars so important for opposing neoliberalism and, eventually, Capitalism itself?

It depends on how much you think American foreign policy and its war machine is bound up with the character and functioning of global economies – whether they could go Socialist or whether they would still choose by themselves to remain fully Capitalist. Does the “room for maneuver” that Panitch says the BRICS alliance is seeking create a whole new place where countries can more democratically reorganize or are they merely jockeying for more of the Capitalist pie?

Hudson emphasizes the Geopolitical where Panitch emphasizes the social forms; I would like to explain why geopolitics (the position of nations on the Earth, the resources they contain, their strategic location for war and trade routes, etc.) is crucial in determining the course of action that a country can take. Countries’ decisions on how their goods and services will be distributed are not merely internal decisions based on voting or their succumbing to the overarching logic of Capitalism. Monetary flows that are unleashed on markets and colonial histories play a major role in shaping the options a country has in taking on the social form it has at any given time. One might call them “external pressures”, but monetary flows and debt levels operate with fluidity and course through countries boundaries according to policies and decisions made at the IMF, World Bank, and Washington DC. If a new development bank would appear that would be more willing to cancel debts and make low interest rate loans, a fundamental shift could occur that would free up a countries’ ability to change its socials forms. The big question, yet to be answered, is whether the BRICS Development Bank will be willing to cancel/write down debt, i.e. whether the credit that is pumped into global markets will be for the purpose of productive works and projects that people need or for making a return at all any “external” cost. Will they be neoliberal financial parasites by another name?

The blight of austerity ravaging the world, of which there seems no end in sight, is largely driven by American Politics: which has been captured by the financial interests of Too-Big-To-Fail Banks and extractive parasites. Their main weapon is debt and interest. The dollar standard ensures that, internationally, sovereign nations must keep their currencies at a fixed rate to the dollar or else leave those currencies open to crippling currency raids and Short Sells. Here is Ellen Brown:

“[After the dollar was taken off of the gold standard] Currencies were now valued merely by their relative exchange rates in the “free” market. Foreign exchange markets became giant casinos, in which the investors were just betting on the relative positions of different currencies. Smaller countries were left at the mercy of the major players – whether other countries, multinational corporations or multinational banks – which could radically devalue national currencies just by selling them short on the international market in large quantities. These currency manipulations could be so devastating that they could be used to strong-arm concessions from target economies. (Web of Debt, p.207)”

Hudson in The Bubble and Beyond writes about the constraining system set up by the dollar standard:

“A double standard has been implicit in the world’s economic rules since the dollar was decoupled from gold in 1971, when the U.S. trade deficit of $10 billion was the equivalent of more than half the U.S. gold stock. But today there is no gold convertibility and hence no major constraint on U.S. spending abroad or at home. The United States has not subjected itself to any of the distressing fiscal conditions that all other countries feel obliged to follow. What makes this asymmetry so ironic is that it was made possible by what seemed to be a financial defeat for the United States. Once America stopped paying gold, there was not much that other central banks could ask for as they found themselves flooded with dollars obtained by private-sector exporters and asset sellers in excess of their need…

…Now that gold had been demonetized, all that foreign central banks can do with their excess dollars is to send them back to the U.S. Government by buying Treasury bonds. If they do not do this, their currencies will surge against the dollar, threatening to price their manufacturers and food exporters out of foreign markets.” (p.368)

The United States of America is an a unique, privileged position in the geopolitical dynamic of forces: it alone gets to run up its debt without limit and maintain a “balance-of-payment” deficit without ever having to pay its debt back. The interest that it must pay for the Treasury bonds it issues are simply added to the debt pile it already has built up. The U.S. Federal Reserve can keep printing dollars and issuing Treasury bonds to match them (the government must borrow in order to create new money), while other countries must use their dollars to buy more Treasury bonds. The Treasury bond nets its buyers money on interest, but that interest paid out by the U.S. comes from printing more money – issuing more T-Bonds.

This “recycling process” fuels U.S. National debt and at the same time ensures that other countries keep using dollars that they obtain from selling their exports to America, foreign company buy-outs, and IMF loans. In international finance, America has become a black hole of debt: other nations receive a glut of dollars must “send them back to the U.S. Government by buying Treasury bonds. If they do not do this, their currencies will surge against the dollar, threatening to price their manufacturers and food exporters out of foreign markets” (Hudson, TBaB p.368). These are currency wars performed almost entirely on computer screens and with the frightening threat of falling to the bottom of a hostile world market when your currency becomes over-valued (relative to the dollar and the value of goods). Suddenly all of the work your country has performed to create products and grow food will be un-tradable because it will cost to much for other countries to convert their own currency into yours for the exchange. This is constraining force burdening the “developing countries” (“developing” because they must export to “developed” countries or else face default or the impending hostile military takeover) to use dollars and continue to finance the U.S. and its war machine.

Michael Hudson is one of the few people to understand this mechanism and has been yelling about it since the early seventies. Few others understand it, but when you do, the importance of not using the dollar – freeing up the room to use one’s own currency for receiving loans and trade with other countries not denominated in dollars – becomes a huge move to open up possibilities for economic activity.

David Graeber writes about this mechanism at the end of his book Debt: The First 5,000 Years:

“Because of the United States trade deficits, huge numbers of dollars circulate outside the country; and one effect of Nixon’s floating of the dollar was that foreign central banks have little they can do with these dollars except use them to buy U.S. Treasury bonds. This is what is meant by the dollar becoming the world’s “reserve currency.”…

…The effect, though, is that American imperial power is based on a debt that will never – can never – be repaid…
…At the same time, U.S. policy was to insist that those countries relying on U.S. Treasury bonds as their reserve currency behave in exactly the opposite way as they did: observing tight money policies and scrupulously repaying their debts.” (p.366-7)

Both realize that this is a special position for the U.S. to be in and reinforces imperial authority in a very efficient, monetary way. Capitalism might have spread throughout the globe, with countries and their ruling classes forcing their people into a reserve of cheap labor and the strict adherence to property rights among other coercions, but the method used for getting new countries to accept this state of affairs is an age old tactic: interest and debt. More from Graeber:

“The new global currency is rooted in military power even more firmly than the old was. Debt peonage continues to be the main principle in of recruiting labor globally: either in the literal sense, in much of East Asia or Latin America, or in the subjective sense, whereby most of those working for wages or even salaries feel that they are doing so primarily to pay off interest-bearing loans.” (p.368)

Getting out of the Capitalist trap will involve financial maneuvering in the national-geopolitical landscape as much as labor struggles because the power of the logic of debt is so great, taking its most global and destructive manifestation to date with American Super Imperialism or Dollar Hegemony. The linking of the influence of debt and military might means that whenever a country attempts to get out of the debt/dollar system, the military steps in to enforce U.S. interests. Saddam Hussein’s Iraq stopped trading in dollars and went for euros in 2000 as well as Iran in 2001. As long as dollars are used in the deal America will win, but if anyone steps out of line and rejects the dollar the hammer comes down. This is why only a large block of high producing nations can legitimately challenge dollar hegemony, unless America’s corporate media is so thoroughly corrupt that it can convince its people a war on China, Russia, Brazil, South Africa and India. It is already demonizing Russia and China the best it can, the two largest players…

Both Hudson and Panitch are anti-Capitalist political-economic thinkers. They both wish to see a Socialist government that can restructure economies to stop apocalyptic climate change and promote prosperity absent the dominance of Capital. Hudson, though, is peering deeper into geopolitics and the forces moving and controlling nations to act in certain predictable ways to find a way out of Imperial U.S. led global Capitalism. A new development bank, though not as uplifting and energizing as a revolutionary uprising, is a glimmer of hope that will change the dominant forces operating all around the Earth if the BRICS countries do it right. All that is left is to see if the BRICS Development Bank will use money and credit solely as a means to serve their Capitalist classes vs the U.S.’s or whether the credit they lend will allow countries the means to invest in national infrastructure that will stop climate change and provide for the public health and food security.