Ukraine: What Will Be Done and What Should Be Done?

Reprinted with permission from Economics for Democratic and Open Societies.

The inevitable has happened. Russia has invaded Ukraine. It was inevitable because the US and its NATO partners had backed Russia into a corner from which it could only escape by military means.

In effect, Russia confronted a future in which the US would increasingly tighten the noose around its neck by further eastward expansion of NATO, combined with military upgrading by the US of its Eastern European NATO proxies.

Accompanying that militarization was the prospect of a ramped-up propaganda war in which western media fanned the flames of public animus against Russia. Side-by-side, US government financed entities (such as the National Endowment for Democracy and the German Marshall Fund) would seek to influence European and Russian politics with the goal of regime change.

At this stage, there are two questions. What will be done? And what should be done?

What will be done?

The answer to the first question is clear. We now confront another era of cold war, which could easily turn hot and even nuclear. Moreover, the situation is far more dangerous than the first cold war as the US is much more powerful than Russia, relative to its standing vis-à-vis the Soviet Union. Consequently, the balance is precarious, which is why it could easily trip into something terrible.

The Neocon tendency holds that the US should be globally hegemonic and militarily unchallengeable, and it has triumphed definitively in US politics. That triumph is reflected in the Democratic Party which represents the “liberal” wing of US national politics.  It is also reflected in the opinions of elite liberal media.

The winners are the Washington DC status quo. The biggest winner is the liberal wing of the Neocon establishment which now has a clear runway to push US global hegemony under the false flag of democracy promotion. Even more importantly, the Neocons have ensnared European political leaders, cleaving the possibility of a peaceful productive rapprochement that might have joined Russia with the European economy and European family. The second obvious winner is the military-industrial complex which can look forward to continuing massive profits and larded budgets.

Unlike the first cold war, there will be no payoff for working families. That is because Russia has no global political economic agenda equivalent to socialism, the threat of which forced the ruling elite to make concessions to workers. Indeed, working families stand to lose as the military budget will become even larger. More importantly, the revival of jingoism and militarism stand to play their historic role as a wedge issue that divides working families, thereby enhancing the ability of business and liberal elites to shaft any agenda for progressive economic change.

But by far the biggest loser is Europe which has been shamefully sold out by its pusillanimous political class. First, Europe has foregone the economic opportunity of peaceful partnership with Russia. Instead, it will lose important markets and it will pay a lot more for energy. It will also make itself even more economically vulnerable and susceptible to US punishment, as already happened with the multi-billion dollar fines the US imposed on European banks.

Second, once again, Europe will suffer the backwash of the US push for hegemony. That is what happened with Iraq, Libya, Syria, and Afghanistan. The backwash has already fertilized a European right-wing extremist renaissance, which now promises to worsen. Meanwhile, the US is protected from most of that backwash by the Atlantic and Pacific Oceans.

What should be done?

Answering the question of what should be done is also easy but getting there is beginning to look impossible. What should be done is a profound recalibration that diminishes the influence of the US in Europe, strengthens the European Union, and aims for inclusion of Russia in the European family as envisaged by President Gorbachev in 1990.

The starting point is recognizing that there is no going back in time. New facts have been created. They were created by NATO’s eastward expansion, by the 2014 US sponsored coup in Ukraine, by Russia’s reoccupation of Crimea, and now by Russia’s invasion of Ukraine.

Next, there is need for a fundamental change of mind set that requires acknowledging Russia is not the Soviet Union. It is a weak economy with a declining population, and it has neither the capacity nor the desire to rule former Warsaw pact countries.

With those two building blocks in place, the way forward can be mapped out. Ukraine must agree to permanently being a neutral state, as were Finland and Austria in the Cold War. The US must stop arming Poland which is an intolerant nationalist polity that is likely to be a future source of major trouble. And the US must stop upgrading the military capabilities of the Baltic states which is an aggressive provocation.  

The European Union must build trade and commerce with Russia. That is an economic marriage made in heaven. Russia has resources and needs technology and capital goods. Europe has technology and capital goods and needs resources.

Even better, by diminishing the threat against President Putin, such partnership will promote internal political improvement in Russia. Authoritarian regimes clamp down when threatened. They are more tolerant when unthreatened.

Now for the difficult part. The Ukraine should be reconstituted as a federal state, and it may even need to be partitioned given the new facts that have been created. With US encouragement, Ukraine played with fire and it has gotten burned.

Lastly, there is need to build a Western European defense force and to diminish US military presence and influence in Western Europe. The US military was an essential presence in the Cold War when Western Europe lacked the capacity to deter the combined power of the Warsaw Pact. Those conditions are long gone. The Warsaw Pact no longer exists, and Russia is a shadow of the Soviet Union. Western Europe now dwarfs Russia in both economic and demographic terms, and it can (and should) look after itself.

The US Neocon menace

Tragically, none of this is likely to happen because it is profoundly at odds with the US Neocon goal of global hegemony, and Western European politicians have disgraced themselves as US flunkies.

A strong, prosperous, and liberalizing Russia would be an enormous threat to the US Neocon agenda. That is why the US has demanded Russian political liberalization now, knowing full well it will only cause weakness and disintegration at this moment in history.

A strong, united, and prosperous Western Europe would compound the threat to the Neocon agenda. And a Western Europe that helped Russia along the path to prosperity would doubly compound the threat.

History and George Orwell’s memory hole

The Western media is now focusing attention on Russia’s invasion. Built into that focus is a tacit remaking of history.

US Neocons want history to begin with the invasion. All else that went before is to be swept into Orwell’s “memory hole”.

That means forgetting the injuries and threats the US has heaped on Russia for thirty years; forgetting how the US helped loot Russia after the fall of the Berlin Wall, forgetting the promise made not to expand NATO eastward, forgetting the threat posed by putting missile defense and launch capabilities close to Russia’s borders, and forgetting the fateful 2014 US sponsored coup in Ukraine.

Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University. He currently runs Economics for Democratic & Open Societies. He has previously served as Senior Economic Adviser to the AFL-CIO and Chief Economist with the US – China Economic and Security Review Commission.