Russia’s present war on Ukraine is a most evil attempt of a world superpower to use military force to displace a properly elected democratic government of a foreign country but it is by no means the first such attempt. The U.S.A. started using military force to replace democratically elected governments with dictatorships in Latin America in the 1930s and continued to do so for 50 years. For example, with the active support of the government of the U.S.A., a military uprising in Argentina in 1976 overthrew its President and established an authoritarian state led by several successive dictators which implemented extensive human rights violations. Similar interventions to establish and support repressive military dictatorships were undertaken by the U.S.A. in Brazil, Bolivia, Paraguay, Peru and Chile. These dictatorships survived and flourished tolerated by European countries, the Soviet Union and the Catholic Church until the Falklands War in the 1980s.
Milton Friedman and Arnold Harberger in Chicago taught numerous economists –many of them Chileans who became known as ‘the Chicago boys’– about the absurd monetarist economic theories they developed after 1946. These absurd theories were designed to replace sensible Keynesian policies with idiotic monetary policies designed to control inflation. The Chicago boys rose to prominent positions as economists within the Governments of several Latin American states. Their policies tormented the poor populations of those countries and many others, and created harmful structural adjustment programmes adopted by the World Bank, the International Monetary Fund and the U.S. Treasury Department. These extremely harmful structural adjustment policies enhanced the welfare of the rich at the expense of the poor. They were adopted subsequently worldwide, including in the U.S.A , where they enriched billionaires, in the UK led by Margaret Thatcher and in Russia where they helped to create very rich oligarchs.
Milton Friedman was awarded a Nobel Prize in recognition of his services to economics. Some may think that prosecution for initiating crimes against humanity would have been a more appropriate form of recognition.
Nevertheless, in the period 1989 to 1991 –from the demolition of the Berlin Wall to the collapse of the Soviet Union – it may have beem reasonable to contemplate the possibility of a world largely controlled by a relatively benevolent form of capitalism as it had developed in West Germany. After the fall of the Berlin Wall in 1989, reunification with East Germany was mad possible by the former Federal Republic of (West) Germany’s confidence that acute short-term problems- huge financial deficits, higher taxes and substantial social problems would be amply compensated by long term benefits. This long-term vision was founded on the priority assigned to the common good over individual interests. And other countries –in particular Japan and South Korea also achieved economic success using broadly similar long term economic policies.
Unfortunately, however, Germany’s progress after reunification was not reflected in similar progress in the rest of Europe – neither in Russia, nor in Poland Hungary and Czechoslovakia (later split into the Czech and Slovak Republics). The European Union (EU) to which these countries except Russia now belong is only a free trade zone and by no means a political federation. Unlike East Germany these countries were unable to benefit from generous financial assistance -such as that granted by West to East Germany. And the UK economy has certainly been further weakened by its subsequent departure from the European Union.
During the early 1980s, the USA had seemed to be in retreat in every continent, powerless to stop Soviet expansionism. In the presidential election of November 1980, however, the far right Republican candidate Ronald Reagan triumphed over the Democratic President Jimmy Carter winning 45 States against Carter’s 5. In the next presidential election in 1984, President Reagan won again, this time winning 49 states. President Reagan ‘possessed an intuitive genius for capturing and shaping the economic trends of the 1980s’. European social democracy was evaporating, Adam Smith’s capitalism was ready to return, and President Reagan’s awareness of these trends and how to take advantage of them achieved great influence worldwide. Europe was his first major success, followed soon afterwards by developing countries in which a dramatic shift toward market forces, open competition and private enterprise was secured by the combined efforts of the World Bank and the International Monetary Fund(IMF), themselves inspired by Milton Friedman and his fellow neoliberal economists. Europe and the South were soon privatising extensively. Monetary policy was adopted generally in attempts to control inflation that was depressing property values and earnings and worsening inequality. Margaret Thatcher, who became the Prime Minister of the UK in 1979, held views similar to those of Ronald Reagan She envisaged a Europe of thrusting business and trade at the expense of Jacques Delors’ vision, shared by the European Parliament, of a political and social community. The European Single Market was and remains fragile.
The slide towards the American model of capitalism accelerated as the zones of decay and deprivation already on the periphery of cities continue to swell. This form of aggressive capitalism which favours rich people at the expense of the poor has been promoted brilliantly but inefficient and irresponsible. Nevertheless it has continued – and worsened in Europe especially in the UK now separated from the European Single Market. One feature is the disgusting state of so much of the rented housing which so many poorer people have to inhabit in the UK.
Russia’s enormously wealthy oligarchy was created by the western-inspired reforms of liberalisation and privatisation that followed the collapse of the Soviet Union. From August 1990, Russia was subjected to economic shock therapy which saw the wealth created by millions and owned by the Russian state frittered away or captured by a small group of individuals. That created the yawning gap of inequality which divides Russia today. About 500 very rich Russians now own an enormous proportion of Russia’s total wealth.
Britain’s political and business elite have done very well from the wealth owned by Russian oligarchs and ex-KGB evil bureaucrats. The Conservative party has been given loads of money by them , many of whom own fancy multi million pound mansions in London and elsewhere in the UK. They love London so much that they nicknamed it Londongrad. They can rely on an army of lawyers, accountants and public relations consultants there to protect their riches.
The USA and Europe are now confronted by Russia and China – both of which have developed into authoritarian states which are far less democratic than the plutocratic capitalist states of Western Europe and the U.S.A. This relentless confrontation represents a formidable barrier to the international cooperation essential for the survival of humankind on our small planet threatened by global warming