Co-written by *Michael Hudson
An article by Robert Berke in oilprice.com, which describes itself as "The No. 1 Source for Oil & Energy News," illustrates how interest groups control outcomes by how they shape policy choices.
Berke's article reveals how the US intends to maintain and extend its hegemony by breaking up the alliance between Russia, Iran, and China, and by oil privatizations that result in countries losing control over their sovereignty to private oil companies that work closely with the US government. As Trump has neutered his presidency by gratuitously accepting Gen. Flynn's resignation as National Security Adviser, this scheme is likely to be Trump's approach to "better relations" with Russia.
Berke reports that Henry Kissinger has sold President Trump on a scheme to use the removal of Russian sanctions to pry President Putin away from the Russian alliance with Iran and China. Should Putin fall for such a scheme, it would be a fatal strategic blunder from which Russia could not recover. Yet, Putin will be pressured to make this blunder.
One pressure on Putin comes from the Atlanticist Integrationists who have a material stake in their connections to the West and who want Russia to be integrated into the Western world. Another pressure comes from the affront that sanctions represent to Russians. Removing this insult has become important to Russians even though the sanctions do Russia no material harm.
We agree with President Putin that the sanctions are in fact a benefit to Russia as they have moved Russia in self-sufficient directions and toward developing relationships with China and Asia. Moreover, the West with its hegemonic impulses, uses economic relationships for control purposes. Trade with China and Asia does not pose the same threat to Russian independence.
Berke says that part of the deal being offered to Putin is "increased access to the huge European energy market, restored western financial credit, access to Western technology, and a seat at the global decision-making table, all of which Russia badly needs and wants." Sweetening the honey trap is official recognition of "Crimea as part of Russia."
Russia might want all of this, but it is nonsense that Russia needs any of it.
Crimea is part of Russia, as it has been for 300 years, and no one can do anything about it. What would it mean if Mexico did not recognize that Texas and California were part of the US? Nothing.
Europe has scant alternatives to Russian energy.
Russia does not need Western technology. Indeed, its military technology is superior to that in the West.
And Russia most certainly does not need Western loans. Indeed, it would be an act of insanity to accept them.
It is a self-serving Western myth that Russia needs foreign loans. This myth is enshrined in neoliberal economics, which is a device for Western exploitation and control of other countries. Russia's most dangerous threat is the country's neoliberal economists.
The Russian central bank has convinced the Russian government that it would be inflationary to finance Russian development projects with the issuance of central bank credit. Foreign loans are essential, claims the central bank.