The narrative usually begins with the end of World War II when the World Bank (otherwise known as the Marshall Plan) was set up to help in the reconstruction of Europe, something whose success is usually praised by the experts. The main genial idea was that of giving rather than lending money to the tune of 13 billion dollars, in order to restore the economy of 17 EU countries (in today’s currency value it would be the equivalent of 120 billion dollars) as long as those countries agreed to use the money to buy goods from the US.
Then the narrative seems to jump some 40 years or so to the dissolution of the Soviet Union and the setting up of the Western economically prosperous camp under NATO’s and the EU’s influence, and the Eastern camp under the influence of Russia. So, having eliminated ideological beliefs and strife (i.e., Communism vs. Capitalism) the split is now a mere spheres of influence opposition. This, so the argument goes, could have been easily eliminated if Russia had been economically been integrated into the G7 and brought up to speed, but alas it did not happen and that explains the present geo-political turmoil; in other words if another Marshall Plan had been devised benefitting the whole Eastern region.
At first blush it seems to make sense, but it’s a bit too facile and naïve. There are truths here, but there are also half-truths and false assumptions. It assumes that indeed ideology and political principles have simply disappeared in the world; that a sort of “end of history” has occurred. The fact is that they have not, and that is discernible not by what there is but what is missing, namely Democracy, what was also missing during the Soviet era. Let’s dig a bit deeper into this analysis.
Indeed it is true that the Marshall Plan, within the World Bank, was set up specifically to help a devastated Western Europe and foment its economic development. In effect the Marshall Plan replaced the World Bank. It was decided that the reconstruction of Europe would be more efficient and cost-effective than mere loans. But the ultimate goal of this economic program was to buttress the capitalistic Western democratic block against the undemocratic Easter bloc sponsored by the USSR. This has to be kept firmly in mind when suggesting that a second Marshall plan should have been created after the fall of the Berlin wall or one risks comparing orange and apples.
It needs to be mentioned also that the US government has learned from the mistakes made in the 1920s and 1930s. At the end of the first World War, the Treaty of Versailles, imposed on Germany the payment of huge compensations for war debt and reparation. Germany soon found it difficult to pay and this led to social discontent. The Wall Street crash that occurred in 1929 brought on a global economic crisis. The US drastically reduced capital outflow. Germany stopped paying its debt to France, Belgium and Britain, and these countries in turn stopped paying their debts to the United States. The more industrialized world sank into recession and massive unemployment, and international trade plummeted. To prepare for a different outcome after WWII, Washington decided on policies that would be completely different from those implemented after WWI and until the early 1930s. It set up the Bretton Woods institutions and the United Nations. This was the international institutions approach.
The US government’s major concern at the end of the Second World War was to maintain the full employment that it had achieved thanks to the tremendous war effort. It also wanted to guarantee that there would be a trade surplus in relations between the US and the rest of the world. |2| But the major industrialized countries that could import US commodities were literally penniless. For European countries to be able to buy US goods they had to be provided with lots of dollars. But how? Through grants or through loans? To put it simply, the US reasoned as follows: if we lend to our European allies the money they need to rebuild their economy, how are they going to pay us back? They will no longer have the dollars we lent them since they used them to buy from us. In all, there were three possibilities: first possibility, Europe pays back in kind. If this happens European goods will compete with ours on our home market, full employment will be jeopardized and profits will fall. This is not a good solution.
Second possibility, Europe pays back with dollars. They cannot use the dollars they received on loan to pay us back since they have used them to buy our goods. Consequently, if they are to pay us back, we have to lend them the same amount again, plus interest . The risk of being caught in an infernal cycle of indebtedness (which puts a stop to or slows down the smooth running of business) is added to the risk attached to the first possibility. To reduce their debts towards us the Europeans they will try to sell their goods on our home market. They will thus get some of the dollars they need to pay us back, but this will not be enough to rid them of their debts and it will endanger employment in the US.
We are left with the third possibility: we give Europe the money with which to recover. Rather than lend to Europeans (through the World Bank or otherwise) it seems appropriate to give them the dollars they need to build up their economy within a fairly short time. Europeans will use these dollars to buy goods and services from the US. This will guarantee an outlet for US exports which will help to maintain full employment. Once economic reconstruction is achieved Europeans will not be riddled with debts and will be able to pay for what they buy from the US. The US authorities thus concluded that it would be better to proceed by grants, and therefore launched the Marshall Plan.
To those grants in the framework of the Marshall Plan we must add the partial cancellation of France’s debt to the US in 1946 (2 bn USD were written off). Similarly Belgium benefited from a reduction of its debt to the US as compensation for the uranium provided to make the first two atomic bombs which were dropped on the Japanese cities of Hiroshima and Nagasaki causing the first nuclear holocaust. The uranium had been extracted from the mine of Shinkolobwé (near Likasi, then Jadotville) located in the province of Katanga in the Belgian Congo. In the first instance: Belgium was granted debt cancellation thanks to the natural resources from its colony, which it lavishly exploited. Then: some fifteen years later, Belgium transferred, to the newly independent Congo, the debts it had incurred in order to exploit those natural resources as well as its population.
From the end of the second World War until today major powers have refused to implement a Marshall plan for developing countries (with two exceptions, South Korea and Taiwan). Loans with interest have been the main instrument used to allegedly finance the Third World’s development. Such refusal shows that creditors do not really want these countries to develop and be rid of their debts. Creditors consider that it is in their better interest to maintain developing countries in a permanent state of indebtedness so as to draw maximum revenues in the form of debt reimbursement, but also to enforce policies that serve their interests and to make sure that they remain loyal partners within the international institutions.
What the United States had done through the Marshall Plan for industrialized countries that had been ravaged by war they exceptionally repeated towards South Korea and Taiwan, two allied developing countries at strategic locations on the outskirts of the Soviet Union and China. As from the 1950s these two countries received significant aid, that largely contributed to their economic success.
Economists and geo-political area experts are now asking the crucial question: why was not a new Marshall Plan devised for the impoverished Eastern countries (former satellites of the Soviet Empire) after the fall of the Berlin Wall? It would have indeed made eminent sense if we stay with economic considerations. But there is another important consideration and it is the consideration of Democracy and a new ideology called Eurasianism to which we turn next.
What is Eurasianism? It is a kind of prophetic vision envisioning Russia’s destiny as that of leading all Slavic and Turkic people in a grand empire to resist corrupt Western values. Its main proponent is Alexander Dugin. His philosophy glorifies the Russian Empire—while on the Western side of the equation Bannon and the conservative website that he founded, Breitbart News, has revived the slogan of “America first.”
What Bannon and Dugin have in common is the idea that global elites have conspired against ordinary people—and the old order must be overthrown. In the West this is called populism. As Dugin declared to Newsweek: “We have arrived at a moment where the world is discovering a new model of ideologies. The election of Trump shows that clearly.”
Eurasianism seems like a mutual admiration society: Bannon admires Dugin for placing traditional values at the heart of the nationalistic revival and he has said as much at a Vatican Conference he attended in 2014. Dugin admires Bannon for rejecting Western liberalism.
One may ask: which are their common enemies? They are secularism, multiculturalism, egalitarianism and what both Dugin and Bannon dub the “globalized and internationalist capitalist liberal elite.” Which is to say the global ideological struggles will be reduced to an ultimate struggle between culturally homogenous—mostly white-homogenous groups founded on Judeo-Christian values and practicing a humane sort of capitalism, and the international crony-capitalist network of bankers and businessmen.
Both Bannon and Dugin wish to revive the nation-state. Hence their support for anti-European Union candidates from England and France to Hungary and Greece. They both are firmly against pan-European Union. In the US they have invented the Deep State or what they see an over-centralized government but paradoxically they’d rather have a strong state with an authoritarian personality on top, one that in effect ignores the freedoms as set-up by the founding fathers to be controlled at the local level.
In order to appear democratic and not ethnic chauvinists both Dugin and Bannon have declared that they believe in multi-civilizations which have their own identity and destiny and follow their own course. They have both described themselves as revolutionaries; Bannon has described himself as a Leninist who wants to destroy the State (i.e., the Deep State), while Dugin is the founder of the National Bolshevik Party which has been fomenting armed uprising among Russian minorities in former Soviet Republics. In any case, those states are always white, non Asian which of course is redolent of the theory of the “super-race” of Hitler and Mussolini.
So it comes as no great surprise that Trump’s election was greeted with enthusiasm in Russia. Trump would give Russia the respect it has so far been denied. St. Petersburg Cossacks have given Trump the honorary title of “captain” in case he decides with Bannon, to “make Russia great again.”
But this love-fest has been rather short-lived. Bannon has not advised to lift sanctions on Russia (imposed after Crimea’s annexation in 2014), nor to lift a travel ban on Dugin (imposed when he acclaimed Putin for taking over Crimea and invading the Ukraine) as he had previously hinted at. After all there are allegations making the round of contacts between Trump advisers in the White House and Russian spies. Suddenly Trump has became “tough on Russia” as I have endeavored to explain in my daily column “The Caligula Presidency.” At this point the appearance of collusion needs to be avoided at any cost, not to encourage the FBI to dig deeper.
Lastly let’s see what the reaction to these economic explanation has been among the nations of the EU. What is missing in those expert analysis: the very concept of Democracy. Let’s begin with England that has already divorced the EU. Theresa May is treating Britain to a surprise election in June. Even politicians have been blind-sided.
Were one to ask “what do so many disparate nations of the EU have in common?” one could find plenty of cultural common strains, but in purely political terms, perhaps the most apt answer may be “democracy.” That is the concept that seems obvious but one hardly ever hears in the debates and discussions about the possible dissolution of the EU, even when referenda and elections are taking place.
There is much bickering over fish, farms, cheese, sausages, pork pies, but little is mentioned on what unites and what divides so 27 disparate countries that consider themselves a super-nation. One hears about differences over currency, the return of sovereign rights control of one’s borders.
But one hears little about Free Speech or the ability to argue every detail of an issue without fear of arrest or worse. Democracy in fact remains the only indispensable pre-requisite needed to join the EU but nobody seems to notice it.
What one hears is advocacy for exit from the EU. One such example is already in place. The election of April 23 may determine if France and others will follow. Authoritarianism is on the rise and the putrid smell of dictatorship is in the air, Recep Tayyip Erdogan took control of his country out of the hands of the people, in effect turning his back on the model of democracy enjoyed in Europe, meanwhile he continues arguing for access to the EU and its single market. That’s now unlikely to happen.
What’s happening in the Ukraine is just as bad. There Russian President Vladimir Putin takes Ukraine’s desire to tip toward democracy as an insult. He is quite good in his rhetoric describing an overreaching NATO encroaching on regions of historic Russian interest, but what the experts out to defend him forget is that the vast majority of Ukrainians despise his manipulations of the media and the economy.
Meanwhile at the EU’s borders the anti-democratic forces are converging. They smell blood in the water. Erdogan for one, not unlike Donald Trump, treats every EU negotiation as business deal of sorts. Take the refugee deal: it started off as 3 billion euros in aid which quickly became 6 billion euros.
Then there is Putin whose strategy seems to be divide and conquer: not so much by brute military or economic force where he knows he will be beaten, but by breaking up the EU’s unity and resolve to punish his land grabs and flagrant violations of international law. Neither men give a damn fro North Atlantic values, never mind that of democracy itself. Their appetite for power creates a powerful contrast with what the EU has in common: Democracy and the democratic process which allows the likes of Theresa May to hold snap elections and be assured that the outcome will be free and fair. The same cannot be said for Russia or Turkey.
On Sunday the 23rd nobody will be voting to end democracy, which in fact is not on the ballot, but that may not be sufficient to stop democracy from being placed on the backburner while good old xenophobic nationalism gets moved to the front. That, I dare say, is the challenge that the Russia experts have to deal with yet.