Nobody has any doubt that Russian capital will come out of the invasion of Ukraine with a heavy loss. However, it will not be the only loser, nor will its defeat be the one that will most strongly mark the course of imperialist conflicts in the coming years. Germany and China are proving to be more fragile than they already realized. And the US itself must openly accept that it can only maintain its hegemony by fragmenting the world market against all productive logic.
The German export model is unsustainable under the new imperialist map
Volkswagen factory in Wolfsburg (opposite the Ritz-Carlton). The factory employs 60,500 workers who produce more than 850,000 cars a year on an area of 6.5 million m2.
This week the fear of a bankruptcy of Gazprom's subsidiary in Germany - the banks did not want to operate with it in the framework of the sanctions - and the impact on the chemical industry of eventual gas cuts led the Berlin government to expropriate it. The move, which prompted an immediate threat of retaliation from the Kremlin, "illustrates the catastrophic adaptation of Europe's leading economy to the new world order," according to Le Monde.
It is no exaggeration. The rapid leap forward towards militarism of the German capital and state is far from acting as a soothing balm: the inflation of energy costs and the shortage of chips and elecrical wires are putting the German industrial machine literally at half throttle with forced reductions in working hours.
But the problem has much deeper roots. In the first place, it shows that the design of the Green Deal, tailor-made for Germany and based on an implicit alliance with Russia, has become a spectacular disaster due to a profound misunderstanding of imperialism, which, by the way, was already taking its toll (in gas) before the war.
There was a national policy consensus in which everyone participated: climate neutrality by 2045, phasing out nuclear power and coal; then only gas would remain, at least until renewables were available in sufficient quantity. We never imagined that Vladimir Putin would act against Russia's intrinsic interests.
Lars-Hendrik Röller, head of the Chancellor's department for economic and financial policy between 2011 and 2021 and former "Sherpa" of Angela Merkel in an interview in Handelsblatt
Breaking the cost structure of the Green Deal goes beyond the short-term.
Since the late 1990s, the winning formula of "made in Germany" has consisted of importing raw materials, energy and intermediate products at good prices, to build and assemble in Germany high value-added products, exported worldwide at a strong margin, particularly to China. No other country of this size has benefited so much from globalization.
The consequences of the acceleration of the developments driving a new international division of labor will therefore be doubly painful for German capital. While the German government's Council of Economic Experts, in its latest assessment of the economic impact of the war, was sounding the alarm bells, its leading economists were publishing opinion articles in the media and think tanks warning that the German competitiveness model will have to "reinvent itself" by eliminating gas and reducing its dependence on China.
How? Nobody is saying anything, but the path is predictable: create a tailor-made "little China" under the EU umbrella, reinforce the role of the euro as an income sucker for the Southern European countries and compensate for increases in supply costs by lowering the real wages of workers on German soil. In short: more imperialism and more exploitation to maintain costs and even more imperialism to seek alternative markets.
China won the trade war against the US, but finds itself unarmed for the economic war threatened by Biden
Biden and Xi
In a world with chronically insufficient markets to "realize" global production, the opportunities to reinvest profits are also insufficient to match the amount of accumulated capital. Hence the grotesque development of [fictitious capital](http://dictionary.marxismo.school/Fictitious capital/) and its cyclical forward flights through financialization.
The prodigious growth of Chinese capital since the 1990s thanks to its unprecedented access to world markets (what was called "globalization") did not escape this historical conditioning factor. Despite growing at rates which the developed world hasn't experienced for a very long time, China itself never generated sufficient investment opportunities for all the capital it accumulated. Hence, it took on a massive amount of U.S. debt. Last January, according to the Chinese foreign exchange regulator, the mass of Chinese reserves in US debt reached $3.22 trillion.
The problem: the US is so invested in the Ukrainian war and so openly afraid that China might cancel out its worst effects on Russian capital, that it is now threatening to freeze Chinese reserves on its own debt... even if doing this devalues it.
Evidently the Chinese Central Bank has long been aware of the danger. And since 2015 it has been substituting US debt for other currencies and assets. But it does not have many alternatives. Investing in debt of semi-colonial countries would be taking too high a risk. And turning to the euro would neither make them completely safe from the US nor improve relations with Europe. Ultimately, switching dollars to euros would raise the price of euros, further reducing the competitiveness of European industries abroad.
By implementing sanctions, Washington has demonstrated that control over the global payment system gives it an enormous amount of power. Countries like China, Iran, Russia and Venezuela, which are very concerned about the exercise of that power, now have a greater incentive to hold something other than the dollar. But they can't go much further than that..... what else could they buy?
Michael Pettis, professor of finance at Peking University, as reported by the South China Morning Post
In other words, China has gone from successfully confronting the trade war with the US to finding itself impotent as soon as an economic war is outlined. Faced with the challenge, it can only stomach it or seriously consider a direct war with the US. So the immediate consequence has been the appearance, for the first time in decades, of a clear fracture in the Chinese bureaucracy around its imperialist orientation... which has quickly moderated the official Chinese position.
USA: A Pyrrhic winner?
The US 6th Fleet plying the Mediterranean.
Russian, European and Chinese impotence in the face of the impetus of the US response to Russia would seem to restore the US role, at least for a time, as the world's hegemonic imperialist power. According to some readings -such as the one that can be intuited under the latest moves of Sánchez or Draghi- we would be returning to a "new nineties" and its "new world order".
Nothing could be further from the truth. In the 1990s, the US also promoted a new international division of labor. But it deepened and unified the capitalist world market, distributing the chains of production over the global board. The US felt capable of governing the system as a whole through multilateral institutions and automatic mechanisms, reserving sanctions and military actions for semi-colonial and peripheral countries like Iraq that could never become "global challengers" to its national capital.
Now, the US is once again conducting the world imperialist orchestra. But only to fracture the world market by breaking up gigantic economic units and concentrating production chains that had proven to be extremely cost efficient. That is to say, it does not ride and lead an increase of productive capacities, but the forces that concur to their destruction. And of course, the game of automatism, multilateral institutions and, eventually, sanctions, was left far behind, definitively overtaken by events. And now, as its open imperialist rival, it no longer has a semi-colonial country, but the second world power.
In short: Germany and China lose, but the US only manages to impose itself by placing its rivals before the precipice of an open economic war. Washington is far from "leading" by offering access to markets and profitable investments to the other competing capitals in exchange for synchronizing their game and accepting Washington's rules, as it did in the 1990s. What it is imposing in practice is a situation in which each national capital can only see losses ahead and, like Taiwan is doing right now, tries to minimize them by ceding its technological or commercial advantages to the Washington boss.
Such a situation will not generate a period of stability. Never was the "Pax Americana" further away. The war in Ukraine is only the prologue to larger imperialist conflicts.