Syria, Iraq, Iran, Kurdistan, Libya The world held prisoner by permanent imperialist war

English translation from A Free Retriever’s Digest

“Capitalism is the legitimate racket organized by the ruling class.”

The definition is not from Karl Marx, as you might think, but from one who knew racket: Al Capone. (1) And imperialism – we add – is its most accomplished expression. The most evident proof that this is actually the case is given by war raging now in every corner of the planet, all the more so, if it is rich in some raw material or because it is situated in a position of geo-strategic importance, as is the case in the Middle East.

The Middle East has the misfortune to be a middle ground between East and West and to contain large oil deposits under its soil. These two conditions should ensure a high degree of socio-economic well-being for the people living there as few others have in the world; instead, a boundless barbarism reigns there. With the exception of the narrow sections of the local bourgeoisie and their lackeys, only a few leftovers of hope of being able to watch the sun rise and set the next day gives meaning to the life of the majority of its inhabitants. Or [the perspective of] fleeing elsewhere, wherever it may be, as long as it is far away from that everyday life in which hunger, the most cynical and ferocious violence, and death always lurking around every corner, are the absolute masters.

For oil is not only an energy source of primary importance, but also an effective instrument of parasitic appropriation of surplus-value. (2)

In fact, since oil is quoted in dollars, each change in the value of the dollar and its exchange rates with all other currencies also corresponds to a change in its value. Therefore, the price of oil changes, and consequently a more or less large share of the surplus value extracted from the proletariat on a world scale. [Oil] moves without hindrance from one part of the planet to another, for or against this or that faction of the international bourgeoisie, even of the same nationality, depending on the source from which their profits derive (industry, finance, trade, etc.). For the Federal Reserve – who prints and sells dollars, that is in-convertible pieces of paper, as if they were real goods produced in the USA – there is always a prevailing interest in a normally higher oil price than that resulting from the supply/demand ratio alone, in order to obtain a higher dollar’s worth than its actual value. It thereby realizes an income of enormous dimensions, [which is] indispensable to sustain the gigantic public debt and military spending in the USA. The control of the sources and the trade routes of the black gold is therefore a fundamental pillar on which the American imperialist primacy rests. In fact, it is a veritable extortion tax imposed on all international transactions that are regulated in dollars, of which oil transactions account for the bulk. It follows, however, that if the extortion tax is less than the increase in the oil price, there is full convergence between the interests of the exporting countries and those of the Federal Reserve to have a higher price, but if the extortion tax is higher than the price increase, the interests diverge. And it is precisely the widening of this divergence that, over time, has led many importing and exporting countries to use less expensive means of payment than the dollar for all their commercial transactions. As the context and/or monetary policy of the Federal Reserve changed, yesterday’s friends met the day after, armed against each other, as [former] enemies became close allies.

The euro, so [hated by] Trump, was born with the intent at least to limit the extent of this extortion. (3)

For the same reason, the regime of Saddam Hussein was eliminated first and then that of Qaddafi. The former wanted to quote Iraqi oil in euros and the latter even wanted to use Libyan gold reserves to create a pan-African currency with which to replace, at least in African intercontinental trade, both the dollar and the franc of the French community of Africa (CFA). (4)

The decline of the dollar

Over time, and with the deepening crisis, the international payment system centered on the dominance of the dollar has become increasingly unsustainable, first of all for the countries of the European Union, for some producers, and finally for China, which has meanwhile become the factory of the world and the largest subscriber to US public debt securities. (5) and for some time now China, strengthened by the extraordinary power of its production apparatus, has already entered into agreements with various trading partners to regulate its exchange no longer through the us dollar but: either with Special Drawing Rights currencies (India and Japan) or with the euro (EU) or with roubles and/or renminbi (Russia). The consequence has been a sharp reduction in purchases of dollars and securities expressed in dollars, mainly those of US public debt. From February 2018 to February 2019, China alone reduced its purchases of US Treasury bonds by around 46 billion dollars, and from 2015 onward all the major central banks have done the same, subscribing on average 19 percent less for each auction, causing a significant reduction in the cash flow of the Federal Reserve and the US government. All this while, due to the increase in military spending and the reduction of taxes in favor of the richest envisaged by Trump, the ratio of Government Debt to GDP has reached the record figure of 4.5% (6) and the National debt has exceeded 23 trillion dollars, “the most gigantic figure ever recorded in the history of humanity”. (7)

The primacy of energy

To deal with this, unable to bomb Beijing, Moscow, Tokyo or Brussels, the Trump administration first tore up the anti-nuclear agreement with Iran and further tightened the sanctions against it to strengthen the blockade of its oil exports. It did the same thing with Venezuela and Cuba as its protector. At the same time it eliminated all environmental constraints by giving the green light to the so-called shale revolution to produce oil and gas using the fracking technique to the point where it could export them and thus impose American supremacy not only in the monetary field but also in the field of energy. The main recipient of the gas had to be – as it happens – the Eurozone. Officially, not out of petty interests, but to liberate it from Russian energy domination, not as it was 75 years ago by Nazism: “with young soldiers” but “with freedom gas”. (8) In the event, however, that the new liberation was not welcome – Trump had specified a year earlier to the then President of the European Commission Jean-Claude Junker and Brussels: “Failure to comply with his demands would result in a storm of trouble: taxes on EU cars, particularly German ones, and targeted sanctions on Gazprom’s partner companies in the North Stream 2 consortium.” In the meantime, the European Commission should have made “(available) at least 11 receiving terminals in the areas of interest indicated by him for exports of liquefied natural gas (LNG) produced in the USA.” (9)

Shale: a mindless marketplace

But, as the old adage goes: “between saying and doing there is half the sea”, in this case there were the main characteristics of shale gas. The U.S.A., in fact, has already reached the much-desired energy independence last September and could export in 2019 about 89 thousand barrels per day of oil, but not a single cubic meter of gas has crossed the ocean. Not only because, of the 11 stations requested by Trump, not even one has been set up, but above all because, as BP CEO Bob Duddley commented lapidarily: “Shale is a market without brain”. (10) And even more so is the shale gas market. Since it is, in fact, a waste from the shale oil refining process, it is still produced, even if it does not have a sufficient market outlet, for the simple reason that to be marketed it must be properly purified and the current network of American refineries – almost all owned by Big Oil – is not equipped to refine or store it. So it is either destroyed, with serious environmental damage, or sold at prices close to zero, dragging the price of natural gas down from 4.40 dollars per BTU (British Thermal Units) (11) in December 2018 to 2.24 dollars per BTU last December: “At present… most of the small and medium drillers are on the brink of bankruptcy, or are already bankrupt, for the resistance of investors to finance them without profits.” (12) In short, like some kind of Nemesis, what was supposed to be the gas of freedom of Europe has turned into a boomerang that twisted against the liberators.

In the meantime, the occupier, Russia, has not been waiting and has completed the construction of the Turkish Stream, the gas pipeline that, bypassing Ukraine, brings Russian gas directly to Turkey and soon also to Bulgaria, which “(…) will begin to use the Turkish Stream from the Stradnza-2 compression station… obtaining 2.9 billion cubic meters of gas every year. Thanks to the fact that the gas will enter the country from Turkey, Sofia will be able to reduce transit costs by 5%.” After Bulgaria, it will be the turn of Macedonia and Serbia and “Turkish Stream Europe could become interesting also for Hungary and Italy.” (13) Moreover, by spring 2021 – as Putin and Chancellor Merkel confirmed last January 12 during a joint press conference – the Russian-German North-Stream 2 gas pipeline will be completed, despite the sanctions launched last December by the Trump administration against European companies working on its construction. The Chancellor was sibylline in her comment on this issue: “We are not dependent on Russia for gas supplies. Let Trump think about it again.” (14)

On the other hand, why pay much more for something you can buy for much less and, moreover, of better quality?

It would have made sense if the danger posed by the Soviet Bear had still been looming – if ever it was – but certainly not after its demise. Today, Russia needs to sell its gas more than the European Union needs to buy it. There would be an abundance of gas if the wars in the Middle East were to cease and the sanctions against Iran and Venezuela, which prevent the exploitation of so many deposits, were lifted. Nevertheless, in order to limit the downward trend in gas and oil prices, not least because of the increasing competitiveness of energy produced from renewable sources, the OPEC countries and Russia have recently agreed to limit [their] production.

In short, the gas battle unleashed by Trump to impose energy domination by ‘Stars and Stripes’ is almost lost. And so: “From the fable of freedom gas, the Trump administration has moved on to punishments to be inflicted on bad actors. […] this time they are European… [and] the great bad actor” (OPEC and Russia, I.O.D.’s note). (15) As mentioned above, European companies involved in the construction of the North-Stream 2 have been punished with very harsh sanctions; while against the agreement between OPEC and Russia an old antitrust law has been dusted off and should be approved by the House of Representatives already in the next few days. In the case of approval: Saudi Arabia and many OPEC countries have made it known that a policy will be adopted to push oil prices below $30 per barrel “to destroy the shale industry of the United States.” (16)

The control of every gas field or oil well has therefore taken on such a significance that it cannot be delegated even to the most faithful allies.

The Turkish invasion of Rojava

So it was enough that with the defeat of ISIS, the Autonomous Administration of North-East Syria (Rojava) could agree with Assad some form of peaceful coexistence – in exchange for a large autonomy of the region – for the White House to give Turkey the green light to invade the territory and place the wells of North-East Syria under the direct control of the marines. And this while the YPG, the armed branch of the Kurdish autonomous administration, were still fighting against Daesh, substantially in place of the marines.

Iran or China

Whereas for Henry IV of Bourbon, “Paris is well worth a Mass”, likewise for Trump’s America the black gold is well worth not only the Rojava but also the risk (or the hope?) of an open clash with Iran, to the point of assassinating, in perfect racket style, the powerful Iranian general Soleimani. Obviously, not for having distinguished himself for the ferocious repression of every protest movement in both Iran and Iraq, but, officially, because he was about to order and direct attacks against military bases and US embassies in the Middle East. In reality, the real objective was to strike Iran’s closest economic and commercial partner, China:

“Iran has a role of primary importance in the New Silk Road launched by Beijing in 2013, which is at an advanced stage of implementation: it consists of a road and rail network between China and Europe through Central Asia, the Middle East and Russia, combined with a sea route through the Indian Ocean, the Red Sea and the Mediterranean. Road, rail and port infrastructure in more than 60 countries is planned to be invested to the tune of over a trillion dollars. In this context, China is investing around 400 billion dollars: 280 billion dollars in the oil, gas and petrochemical industry; 120 billion dollars in infrastructure, including oil and gas pipelines. It is expected that these investments, made over a five-year period, will subsequently be renewed. In the energy sector, China National Petroleum, a state-owned company, has received a contract from the Iranian government to develop the South Pars offshore field in the Persian Gulf, the largest natural gas reserve in the world.” (17) (M. Dinucci in Il Manifesto of January 9)

Preventing all this from happening is, therefore, really a matter of vital importance because it would not only be the final defeat of the gas war alone, but also the loss of control of one of the most important routes of world trade that would be diverted from the current sea routes, now almost all under the protection of the US Navy, to land.

A truly global confrontation is underway. It’s a monetary, economic, geopolitical and military clash. No one can lose it but paradoxically, ‘rebus sic stantibus’ (18), neither can win it without risking, in turn, a collapse that would almost be as severe as a defeat.

The War of Tariffs

In this regard, it says a lot about the substantial failure of the tariff policy promoted by the Trump administration towards China and Europe. They were meant to favor the repatriation of the productive activities that the large American transnational companies, attracted by the very low cost of labor, have relocated in the course of time to various parts of the world and especially to China, Mexico and South-East Asia. In addition to the creation of several millions of new jobs, their return should also see the US-American trade balance return to positive figures from an eternity in chronic debt, and the U.S.A. would again become the first exporter in the world, as in the first decades after the Second World War, like in the electoral slogan of Trump: “Make America great again!” After three years, none of this has come true and the trade deficit, instead of decreasing, has passed “from 735 billion dollars in 2016 to 874 billion in 2018. And by September 2019 it had already reached the same volume as three years earlier.” (19)

It is of little importance whether it was ignored, or pretended to be ignored, in good faith or for mere electoral reasons, that the relocation of companies was necessary to rebuild the profit margins that had been severely eroded by the eruption of the crisis of the average profit rate, starting with the USA in the early 1970s. In fact, thanks to the introduction of microelectronics and information technology in the production processes, it was possible to fragment every single phase of the production cycle and locate it in places even very distant from each other, but where more favorable market conditions existed, especially on the labor market.

Of ‘Apple’ mobile phones, for example, not a single component is produced in the United States: they are produced in about a hundred different countries, from Latin America to Eastern Europe, Japan, Vietnam, and so on, and then assembled by the infamous Chinese Foxxcon. (20) The result is that of the overall surplus value extorted from the proletarians in the various production phases, 50% ends up with ‘Apple’, which owns the patent and the trademark, because all transactions are settled in dollars. Only about 2% remains in China.

Now, any possible import tariff on mobile phones would inevitably also lead to a reduction in their demand, because it can only be passed on to the sales price, damaging ‘Apple’ in the first place, that benefits most from the relocation of production. It is therefore in the common interest of all parties involved that the tariffs should not exceed the threshold above which the damage suffered by the exporter does also affect the importer. At the same time, however, as the capital to be remunerated increases and the world crisis continues, each of them has an unavoidable need to increase their own share of surplus value. And it does so not only by increasing the exploitation of the workforce, but also by trying to exercise greater control over the different segments of the supply chain and new outlet markets for its goods and capital (see the New Silk Road) and/or by using a less disadvantageous means of payment than the dollar. Therefore, both the common interests of the various actors and the conflicting ones remain. And so it is also for the war, which is nothing than the prolongation of the economic conflict on military terrain.

One cannot not fight it and one cannot lose it, without going to total ruin. But given the ties between the contenders, paradoxically the war cannot be won without leading even the winner to ruin. The possibility cannot be ruled out that this may come about, even with a kind of hetero-genesis of goals. (21) What is certain, however, is that war, with its macabre procession of barbarism, is destined to be more and more normal itself and that it can only be brought to an end by eradicating the capitalist mode of production from which it originates. It is therefore very important to note that there are still many people who, even though they pretend referring to Marxism and revolutionary internationalism, are incapable of grasping its purely imperialistic character, and are therefore easily deceived by the ideological envelope by which it is disguised from time to time (of “national liberation”, ethnic and tribal religion, etc.). They compete with those who take sides in favor of one camp of the international bourgeoisie from the start, as if one could be less exploitative and disgusting than the other. Never before has the alternative: communist revolution or barbarism been so clear-cut.

Giorgio Paolucci, January 28, 2020

Translation: H.C., February 17, 2020. Proofreading: F.C., February 20, 2020.

Last edited: February 23, 2020.

Notes

(The referenced sources are in Italian language, unless indicated otherwise)

1 Le Capitalisme, No 65/2005 – p. 5. Quote from Hervé Kempf in: To save the planet we must end capitalism – Ed. Garzanti – 2010 (Italian).

2 On the manner in which such appropriation takes place see: G. Paolucci, 2011, 2016: about the subprime crisis following Marx. (English)

3 See G. Paolucci, 2012, 2016: The Euro of discord – L’Euro della discordia.

4 It is the currency imposed by France on 14 of its former colonies, whose convertibility into euros is guaranteed by the French Central Bank at a fixed exchange rate but subject to a number of conditions including the obligation for the central banks of these countries to set aside 50% of their reserves with the French central bank and the right of the Treasury of Paris to participate in the definition of their monetary policies.

5 Treasury bonds (translator’s note)

6 Source: A. Plateroti – War of Tariffs, Xi’s weapon is the flight from American bonds – Il sole 24 ore of 12.05.2019. [See also: https://www.ceicdata.com/en/indicator/united-states/government-debt–of-nominal-gdp (English), translator’s note]

7 Dario Fabbri – America between empire and free will – Limes no. 2/2019. [Corresponding figures: https://en.wikipedia.org/wiki/National_debt_of_the_United_States (English), translator’s note]

8 This is what the U.S. Secretary of Energy Rick Perry said on May 2 in Brussels – Margherita Paolini – The U.S. energy primacy has feet of clay – Limes no. 2/2019 – p. 101.

9 Ibidem. p. 101.

10 Ibidem. p. 108.

11 The traditional, non-SI unit of measurement of heat (energy) in use in the Anglo-Saxon world and the energy sector. 1 BTU is about 1,055 Joules in SI-units (translator’s note).

12 Ibidem. p. 107.

13 Yurii Colombo – Turkish Stream is starting. Putin meets Erdogan – Il Manifesto of January 9, 2020.

14 Quote from: Yurii Colombo – Zelensky at gunpoint, the ayatollahs’ excuses are not enough – Il Manifesto of January 12, 2020.

15 Art cit. Limes no.2/2019 – page 110.

16 Ibidem.

17 M. Dinucci, China not only the Ayatollahs, under U.S. fire in the Middle East – Il Manifesto of January 9, 2020.

18 “as things stand”. Alludes to a doctrine in international law that serves as an escape clause to the general principle “pacta sunt servanda” – agreements must be fulfilled (translator’s note).

19 Diego Fabbri – America between empire and free will – Limes cit.

20 See: Xu Lizhi – Food for the machines, Ed. Istituto O. Damen, 2015, 2016: Mangime per le macchine.

21 Diversity of origins. Alludes to creationist conceptions of “spontaneous generation” in biological evolutionary theory (translator’s note).