A short editorial comment by Christian Takushi on 5 Sep 2017
The West may end up harvesting what it has sown.
Many fingers are being pointed to China to blame her for the status quo. Yes, China feeds and uses North Korea, but the West resorted for over two decades to extreme appeasement in self interest. Sadly, even this self-interest did not serve national interest, they rather served mainly the interests of Western corporations in China. Western appeasement did not serve the strategic or geopolitical interests of the USA, EU, Japan nor South Korea.
After weakening their middle classes, polarised Western democracies are becoming increasingly unable to deal with tough issues. They simply postpone them as no elected leader wants to be unpopular or a crisis with a high human toll on his watch. Although they know, the problem will only get bigger.
When it comes down to North Korea it is a collective failure of the West as well as South Korea and Japan. Just a few weeks ago Seoul forbid the USA to deploy THAAD missile-shield batteries in order to appease China and North Korea. Tokyo only woke up to the cruel reality last week when sirens alerted the shocked population. Just like Hitler used the economic interests and Pacifist nature of Western leaders to his own advantage, the North Korean leadership has played out South Korea, Japan and the West – knowing well that no Western leader would dare to confront China. Why shouldn’t China and Russia also advance their legitimate national interests with the means at their disposal?
The weakness of a foe is something a smart contender will use to advance his own agenda. The West sacrificed its middle class and geopolitical vantage position just to boost the profits margins of big firms. Profits they barely reinvested or fed into their economies. Big firms have actually failed to share their profits with their governments (tax avoidance), workers (stagnant salaries) and clients (pricing). Advanced Western economies have accelerated their own geopolitical decline and gotten little back instead. But let’s make no mistake, the moral decline of the West preceded its geopolitical and economic decline.
China is not the only winner – Russia is benefitting too
Given China the closes ally of N Korea, Russia is smartly and effectively mediating between N Korea and the West. Despite their different roles, both China and Russia benefit from a growing N Korean threat to the West. And it is clear that anything that buys time for N Korea and allows the regime to continue expanding its nuclear arsenal, boosts the geopolitical influence of Russia and China into the world.
From the standpoint of China and Russia it pays off to demand renewed diplomatic talks, because this buya the North Korean regime time and allows it to further the develop its weapons program (ballistic capabilities, nuclear & hydrogen payloads, EMP capabilities etc). This is the effective cycle North Korea has played with the West for some 24 years:
- threatening to kill millions of South Koreans, Japanese and Americans
- construction of weapons of mass destruction
- offensive action against South Korea, Japan and the USA while threatening them with war
- accepting of diplomatic talks to avert a military confrontation
- using the stalemate or peace to again advance its arsenal weapons of mass destruction
Every single time this cycle repeats itself, the West is ever more dependant on China and Russia, albeit in different ways. Every time, the West is weaker and the options fewer and more severe.
The EU is next and it is the most vulnerable Western power
The weakness of the West is laid bare for all the world to see. We shall see this soon play out in the Middle East – with even more dire risks for Europe. Iran and Turkey know the West’s weakness and that Europe has dismantled her military. The EU can neither protect herself nor can it defend the USA. NATO is actually a one-sided alliance, since only the USA can defend herself and effectively protect the EU. Additionally, Britain’s exit of the EU makes the EU a geopolitical dwarf. Britain may have limited military assets, but it has a feared nuclear deterrence and the most impressive network of strategic military bases around the world. As a whole, Europe is a continent in denial: Europe’s divisions exist only on paper, their ready units are only brigade-size and their desire to rebuild their militaries (Germany, France etc) has come too late. It takes 7 to 20 years to build a credible military that can project power & deterrence.
Looking ahead, the path is set
The departure of the West from its values & roots to further a globalist agenda, accelerated its moral decline and degraded its social cohesion. The resulting political polarisation was only exacerbated by the attrition of the middle class. The subsequent economic and geopolitical decline will be exposed by the multiple crises and challenges that are converging over mankind.
In a time when media, universities and think tanks are perceived as highly politicised, it is an advantage to be able to analyse global geopolitical trends without an ideological political mindset – we use an economic mindset that takes into account Western & Oriental ways of thinking and other factors that drive decision making (i.e. geography, history, religious & demographic trends etc.). Economists know well that every nation advances its interests with the means at her disposal. China’s means, Russia’s and America’s are all different. The fact that China uses N Korea doesn’t make it evil, the West has allowed herself to be “tricked” again and again. China is just being smart and consequential. In the same way, Russia uses energy and nuclear deterrence as primary geopolitical assets in areas where historical tensions have only been patched over. This is their macroeconomic-geopolitical endowment (they don’t have the world currency nor the world’s no1 or no 2 consumer market). But not less effective indeed.
Sadly and once again, the Pacifist predictability of Western leaders over the past two decades has been taken advantage of. This has set our world on course for large scale war and confrontation. Although times and places are difficult to forecast, they are unavoidable.
China is being simply smart and consequential. The decline of democracy, freedom of speech and market economy throughout the West is making it only easier for China, Russia, North Korea, Turkey, Iran etc. to rise further.
The West’s sacrificing of their political stability, fiscal health and middle classes to advance the interest of (ever bigger) oligopolies has not paid off.
With political leaders in denial, most Western firms are not prepared for the sweeping changes ahead.
Christian Takushi MA UZH, Macro Economist & Strategist, Switzerland – 5 Sep 2017