Monday, June 20, 2022

Non WEF Alliances

Subjects of Empire,

  Pepe Escobar, who has attended the St. Petersburg International Economic Forum, has an essay summarizing it. 
You have seen analysis of President Putin's keynote address, upon which he does not further expand. 
The main focus here is that economic corridors in the world, analogous to sea-routes or the old silk road, are a new battlefield for control and rent-collection of international trade. 
Pipelines are the purest example, but he looks at the Russia, Iran, India corridor in detail here. Donetsk will be shipping steel to Iran along this corridor soon.    
St. Petersburg sets the stage for the War of Economic Corridors
In St. Petersburg, the world’s new powers gather to upend the US-concocted “rules-based order” and reconnect the globe their way

Michael Hudson's recent interview is largely on the history of western economics as a study, updated to current trends.
Economic Rent and Exploitation:
..Patten cited public roads and canals to lower the cost of doing business. He also noted that every time you build a road or railroad, you’re going to raise the land value along these routes – and lower land prices for areas replaced by the now-more-accessible producers. You can simply self-finance the cost of these by taxing the rent.
  You also need public education, and that should be free so that you don’t have like today, to earn enough money to pay an enormous student debt – and receive a high salary to afford to pay that...

..So the movement towards public infrastructure towards government spending was led by the industrialists. It was they themselves who wanted strong government. The common denominator of politics from Adam Smith through all of the 19th century was to free economies from the unnecessary economic rent, to free them from unearned income, from the free lunch. To do that, you have to have a government strong enough to take on the vested interests – first the landlord class in the House of Lords, and then the financial class behind it...

..Government infrastructure is a fourth means of production. But what makes it different from profits and wages is that if you’re a wage earner, you want to make as high a wage as possible. If you’re a capitalist, you want to make as high a profit as possible. But the job of public investment is not to make an income, not to do what was done under Thatcher and Tony Blair, not to treat public utilities, education and health as profit making opportunities. Instead, Patten said, you should measure their productivity by how much they lower the cost of doing business and the cost of living for the economy at large...

..Protectionists in America said the way to minimise costs – and it may seem an oxymoron to you – the way you minimise costs is to have high-wage labour. You raise the wages of labour, or more specifically, you want to raise the living standards, because highly paid labour, highly educated labour, well fed labour, well rested labour is more productive than pauper labour. So they said explicitly, America’s going to be a high wage economy. We’re not like Europe. Our higher wages are going to provide high enough living standards to provide high labour productivity. And our higher labour productivity, shorter working day, better working conditions, healthy working conditions, public health, well educated labor will undersell that of countries that don’t have an active public sector...

..Needless to say, the fight for the kind of democracy that will free economies from economic rent was not easy. By the late 1880s, and especially the 1890s, you had the rentiers fighting back. In America the fight was led by John Bates Clark. There was a movement, which today is called neoliberalism, to deny the entire thrust of classical economics. Clarke said that there is no such thing is unearned income. That meant that economic rent does not exist. Whatever a businessman makes, he is said to earn. Whatever a landlord makes, he earns – so there was no unearned income...

On difficulties with big government and small government:  
..In the 19th century, in order to tax the land rent, you had to take on the most powerful vested interests of all: the real estate interests and the financial interests. But Henry George was a libertarian. He was for small government. He broke with the socialists, because he warned that socialism had a potential for authoritarianism. Well, we know that he was right in that warning, because we saw what happened in Stalinist Russia. But obviously, what you want is a government that is strong and democratic, and with enough authority to tax and regulate the vested interests. (That term is Veblen’s, by the way.) That was the ideal in America, but it needed a strong enough government so that Teddy Roosevelt could come in and be able to bust the trusts.​..​

​..​The government was strong enough in 1913-14 to impose an American income tax that fell just on 1% of the population, almost entirely on economic rent, on land rent, mineral rent on monopoly rent of the big corporations. If you’re a libertarian, your government is too small to take on these vested interests. And you’ll never win...

..I find little interest in today’s socialist movement or the socialist movement 50 years ago about land rent. They are more concerned about international issues, about war, about almost everything except land rent. And today I find the greatest interest in rent theory as a guide to a tax system in the context of an overall economic system to be in China. So that’s really where the debate over how to keep the price of housing down by keeping the financial sector from trying to capitalise the land rent into a bank loan...

..Russia could have been a low-cost economy. It could have kept the oil and gas, Yukos, GazProm, nickel and platinum resources all in the public domain to finance investment in re-industrialization, to become independent of the West. But as we all know, Ted and the people that Fred Harrison bought were completely overwhelmed by the billions of dollars that U.S. diplomats spent on promoting kleptocracy and shock therapy in Russia. Its officials andinsiders worked for themselves, not Russia...

..The National Income and Product Accounts treat rent as a product, not a subtrahend
A byproduct of this value-free doctrine is how countries calculate their national income and product accounts. And if you look at the GDP accounts for the United States (and I’ve published a number of articles on my website and in major economic journals), rent is counted as part of GDP.​..
..A classical economic accounting format would show how much of the prices for what our society produces is actually necessary, and how much is a subtrahend. Classical economists treat the land rent that you pay, interest charges and monopoly prices as a rake-off. So not all of your income is income equals “product,” because only a portion of that income represents a real product.
​  ​In America, the head of Goldman Sachs a few years ago said Goldman Sachs partners – a financial management firm – make more money than almost anyone else in America, because they’re the most productive. If you make a lot of money, by definition, you make it by being productive. That’s the false identity

..A precondition for what you call an economist, especially a Nobel Prize winning economist, is not to understand how the economy works. Because if you understand that, you’re going to threaten the vested interests that are getting the free lunch. You have to say there’s no such thing as a free lunch, everybody earns whatever they can get. Robbers and criminals like that idea. “Yeah, we stole it fair and square!”..

...So the way that the economy works today is no longer industrial capitalism; it is finance capitalism. Instead of Industrial Engineering, making society produce more with all of the environmental protection cost included, you have financial engineering, making wealth by increasing stock-market prices. Wealth is not achieved by earning it. You don’t save up your earnings and get wealthy. I think half of Americans are unable to raise $400 In an emergency. They have no savings at all..

.​..​Under Reagan’s 1981 tax “reform” you could pretend that if you buy a big commercial building, you can write off 1/7 of the entire costs every single year as tax deductible income. At the end of seven years, you change your ownership from one name to another name, and you start all over again. The same building can be re depreciated again and again and again... But nowhere in the national income statistics is a report of how much income real estate owners actually claim as depreciation. They haven’t done that because if they showed this, people would think, ‘Wait a minute, this is a giveaway. This is utterly unrealistic.”​...​

..The purpose of industrial capitalism was to free economies from the legacy of feudalism. And the legacy of feudalism was the landlord-warrior class collecting hereditary rent and the predatory banks that were not making loans for industry. None of the industrialists got their money to invest from banks. The inventors of the steam engine couldn’t get loans except by mortgaging their houses. Banks don’t lend money to create capital, only for the right to foreclose on it...

..Until 1971, countries running a balance of payments deficit would have to settle it either in gold or by selling off their industry to investors in the payments-surplus countries. Well, beginning with the war in Korea in 1950-1951, the U.S. balance of payments moved into deficit. The entire U.S. balance of payments deficit from the Korean War to the 1970s was a result of its foreign military spending.

​  By ​the time the Vietnam war was ending, the Americans had to sell its gold every month. Vietnam had been a French colony, so the banks there were French. As America spent more dollars in Southeast Asia, these dollars were sent from local French bank branches to their head offices in Paris. The Paris bank would turn over these dollars to the central bank for francs, and the central bank, under General de Gaulle, would cash in these dollars for gold.
​  ​Germany was doing the same thing, using its export proceeds that were paid in dollars to buy gold...

..My job at Chase was to analyse basically the balance of payments of Third World countries and then of the oil industry. I had to develop an accounting format to find how much does the oil industry actually makes in the rest of the world. I had to calculate natural-resource rent, and how large it was. I did that from 1964 till October 1967. Then I had to quit to finish my dissertation to get the PhD. And then I developed the system of balance-of-payments analysis that actually was the way it had been calculated before GDP analysis.
​ I went to work for Arthur Andersen and spent a year calculating the whole U.S. balance of payments. That’s where I found that it was all military in character, and I began to write in popular magazines like Ramparts, warning that America’s foreign wars were forcing it to run out of gold. That was the price that America was paying for its military spending abroad.
​  I realised as soon as it went off gold in 1971 that America now had a cost-free means of military spending. Suppose you were to go to the grocery store and just pay in IOUs. You could just keep spending If you could convince the owner, the grocer to use the IOU to pay the farmers and the dairy people for their products. What if everybody else used these IOUs as money? You would continue to get your groceries for free.
​  ​That’s how the United States economy works under the dollar standard, at least until the present...

..Just about everybody thought that it would take many years for China, Russia, Iran, India, Indonesia and other countries to get their act together and create an alternative. But this year the Biden administration itself destroyed America’s free ride for the dollar. First the United States grabbed Venezuela’s foreign exchange, then Biden grabbed all of the foreign exchange of Afghanistan, just confiscated it. And then a month ago he confiscated $300 billion of Russia’s foreign exchange reserves. He said, in effect, that we are the leading democracy in the world, and global democracy means that America’s military gets to appoint foreign presidents...

..Europe has committed economic suicide, United States offered its leaders a lot of money in their offshore accounts, and made sure that their kids got free education in the United States. But in return, they would have to represent the United States, not Germany, France or other countries. The Americans have been meddling in European politics for years. European politicians do not represent their own countries. They represent the American State Department and American diplomacy. And they were told to lock their countries into the U.S. economy...
..America said that you Europeans are bothering them by trying to stop global warming. That’s a direct attack on a major arm of U.S. diplomacy, the oil industry. American companies control almost all the world’s oil trade. It’s the highest rent-yielding sector in the world. And it’s income-tax free. It’s politically powerful, and as long as America can control the oil trade, it can talk to Latin American countries or African countries and say if they elect a leader that U.S. officials don’t like, it can impose sanctions and stop exporting oil to them to freeze them out. They won’t get fertilizer, so the U.S. can starve you out. It can put a sanction on their food trade.

Agriculture is Americans biggest trade surplus...

Regarding the developing alternate world trade block:  

They’re going to hold each other’s currencies. Especially now that Russia is denominating its exports, in roubles instead of dollars. The American banks have lost the trade financing of the world oil trade, certainly Russian oil and agricultural trade. Instead of holding dollars, countries will hold rouble reserves to stabilise their currencies via the rouble, China is holding rouble reserves, and Russia is holding Chinese yuan reserves.
  The balance will be held more in gold and some kind of assets without a liability attached to them. I think the logical direction in which this is moving is that the non-dollar countries will create their own version of the International Monetary Fund, their own World Bank, their own trade organization...

..If American Europe is left with its current foreign policy, biowarfare and atomic bombs, NATO will be shunned by the civilised world. As Rosa Luxemburg said a century ago, the choice is between socialism or barbarism. NATO, Europe and America represent the new barbarism. The alternative is socialism. That is how the world seemed to be developing in Europe and America until World War I untracked everything. The rest of the world now has a chance to get back on track. I don’t know what’s going to happen in the West.

  Russian warships have destroyed a Ukrainian command center with Kalibr cruise missiles, killing dozens officers, Moscow's Defense Ministry reported on Sunday.   “More than 50 generals and officers of the Ukrainian Armed Forces were killed,” the statement outline. The strike took place near the village of Shirokaya Dacha in Dnepropetrovsk Region. It hit a compound where commanders of several Ukrainian units had gathered for a meeting, according to Moscow.  The ministry added that Kalibr missiles were also used to destroy 10 M777 howitzers and up to 20 armored vehicles that were recently delivered from the West, and had been stored inside a factory building in the southern city of Nikolayev.

  The 3M14T has a range of 1500-2500 kilometers. The missile’s guidance system is built around an INS [inertial navigation system] and GLONASS satellite guidance systems. The cruise missile, which has a top speed of Mach 2.9, can fly as low as 20 meters above water and 50 meters above ground with a help of a TERCOM [terrain contour matching] system. It is armed with a 450 kg HE-FRAG [high explosive fragmentation] or bunker buster warhead.  The Russian military stepped up its missiles strikes on Ukraine in the last few days. As a result, Kiev forces sustained heavy losses in personnel and equipment.  Russia has been using precision-guided, long-range missiles like the Kalibr against high-value targets of Kiev forces since the beginning of its special military operation in Ukraine. These missiles have proven to be highly-effective and almost impossible to intercept.

Lithuania Bans Transit Of Sanctioned Russian Goods To Kaliningrad   (Poking the bear again. Russia does not want to "attack" 2 NATO members.)
​  ​The EU sanctions list includes coal, metals, construction materials, and advanced technology.
​  ​Anton Alikhanov, the governor of the Russian oblast, said the ban would cover around 50 percent of the items that Kaliningrad imports.
Alikhanov said the region, which has an ice-free port on the Baltic Sea, will call on Russian federal authorities to take tit-for-tat measures against the EU country for imposing the ban. He said he would also seek to have more goods sent by ship to the oblast...
..The commission stated that sanctioned goods and cargo should still be prohibited even if they travel from one part of Russia to another but through EU territory.
​  ​Russia's Baltic Sea exclave of Kaliningrad, sandwiched between Lithuania and Poland, became part of the Soviet Union after World War II. It has a population of about 430,000 people and hosts the headquarters of Russia's Baltic sea fleet.

​(Gonzalo Lira has a video out, projecting that the US will use Kaliningrad as a provocation for direct NATO war with Russia, and that he expects it to go nuclear.)​
​  ​In Moscow's eyes, this is tantamount to laying economic siege to part of Russia's sovereign territory and one million of its citizens. When the EU first proposed the blockage of goods as part of the last major sanctions package in early April, Kremlin officials warned of war given Moscow would have to "break the blockade" for the sake of its citizens...
"If they want to go to the length of making us break this blockade to save the lives of our people, who live there, we can do this," Dzhabarov said in a video interview at the press center of Parlamentskaya Gazeta (Parliamentary Newspaper).
He expressed hope, however, that the West "will have enough brains to opt against this".​..
..Additionally he ( Alikhanov) cited a key condition that was part of Lithuania’s 2004 accession to the EU. He quoted the prior agreement saying that the Baltic state "will apply in practice the principle of freedom of transit of goods, including energy, between the Kaliningrad Region and the rest of Russian territory."
​  "In particular, we confirm that there shall be freedom of such transit, and that the goods in such transit shall not be subject to unnecessary delays or restrictions and shall be exempt from customs duties and transit duties or other charges related to transit," Alikhanov quoted the Joint Statement further as saying.

Moscow will throw its full support toward helping the Donetsk and Lugansk People’s Republics revive their war-torn economies, Russia’s trade and industry minister, Denis Manturov, told RT on Friday.
“We have met with the heads of both republics for detailed talks over plans for economic reconstruction,” ...
 ​The Construction Ministry said it would also help rebuild and manage critical infrastructure and prepare for the winter
Schools, hospitals and daycare centers, as well as housing, will be the priorities.
​  ​The Donbass republics have already signed cooperation agreements with several Russian regions. Moscow Mayor Sergey Sobyanin has recently announced that 300 specialists from the city are already working to restore the water supply in Donetsk.
​  ​Meanwhile, DPR leader Denis Pushilin said on Friday that a deal had been signed to buy food and building materials from Iran. He added that Donetsk plans to sell metal, cast iron, mining equipment, fertilizer, and other goods to the Islamic Republic.

​  Kurdish, pro-government and Iranian-backed formations had established a joint operations room called the “North Thunderbolt” in Syria’s Aleppo to coordinate against Turkey, the Al-Monitor reported on June 19.
​  ​The operatio​​ns room, which was established on May 25, is headquartered at a Russian base in the village of Hardatnin in the northern countryside of Aleppo.​..
..Two Russian officers, three officers from Iran’s Islamic Revolutionary Guard Corps, three Kurdistan Workers Party (PKK) leaders and two leaders from the pro-government forces are reportedly present at the operations room, which commands some 600 fighters.

​  Medical Vitamin-D expert, David Grimes MD has been sorting through Canadian government health statistics, which are cumulative. 
He substacted the totals from the week of 4/10/22 from the week of 4/17/22 and found this information about COVID deaths for that week.​
​  ​Covid-19 deaths among the unvaccinated increased from 9511 to 9512, an increase during the week of just one. 
Only 1 of the 227 Covid-19 deaths was a person who had not been vaccinated. Let this true but unpublicised fact sink in.

​Somewhat Less Threatened
​(pictured with heterogeneous Mexican avocado seedling cold-survival research subjects)

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