An Analysis of the International Stage
For Hans Morgenthau, the evaluation of factors of power in present and in future is, always, an ideal task that, when performed successfully, constitutes “the supreme intellectual achievement”, of the analyst of international policy. On another point, as Mao Tse Tung states, in strategic diagnostics, it is essential to “discover the direction of affairs”.
It happens to be evident that for the analyst of international policy to perform a strategic diagnostic of the international stage, tending to discover major trends, he or she cannot wait for 30 or 40 years for the archives of the great powers to be opened up. Thus it turns out to be undeniable that the first step in comprehending the international stage and discovering the direction of affairs consists of the observation of reality itself. Nowadays, as in the times of the Roman Empire, the apothegm of the great Greek historian Polybius of Megalopolis is still valid, who, through his effort to create a useful conceptual system in order to understand certain aspects of the political reality, was one of the first to clarify that: “…any disquisition or theoretical elaboration must be made from an attentive observation of reality, an in the end it will be this that gives it the category of being assumes or rejected.”
On the other hand, it is important to specify that the analyst of international reality, in order to perform the strategic diagnostic of the international stage, can in no way at all, -without falling into the most absolute gullibility- use the speeches of the leaders of the great world powers, the official declarations of their respective Ministries of Foreign Relations, nor the official doctrine created by them.
In international policy, the speeches of the great leaders and diplomatic declarations are almost always pretexts and excuses in order to cover up the true cause that has motived political action. It so happens therefore that, only reading over the political actions carried out by the world powers, it is possible to begin to put the puzzle of the world situation together. It is precisely in the analysis of the actions carried out by States, as Polybius would teach, that it is always necessary to distinguish between pretexts and excuses, and true, immediate causes. The former are easily perceptible, and are those normally brandished in political and diplomatic debate; the latter are only understood through rigorous, logical and methodical research. Thus, “…the study of causes is erected within a crucial topic of Pobylian methodology. These are never abstract, but rather deductible from the facts themselves, to the point that the causes and facts are the two sides of the same coin: historic facts.”
Moreover, we believe that a correct diagnostic of international reality must be based primarily on the analysis of the actions carried out by the main characters of the system and not on the analysis of the international system in and of itself, because it is necessary to have in mind that, despite the growing process of interdependency “The main players never possess the feeling of being submitted to the system in the way that a medium sized business is subjected to the laws of the market. The structure of the international systems is always oligopolistic. In every age, the main players define the system more than how much they are defined by it”.
It is in this sense that it is so important to correctly diagnose the current situation of the relationship of powers in the international system as well as to discover the great trends that will shape the future international stage medium- and long-term, in order to later reach the most correct proposal of action.
To discover the direction of affairs is the main objective of this task.
1. The three possible dimensions of the strategic diagnostic
In a general sense, the study of international relations consists of the study of international reality within the three main dimensions that make up international life: culture, economy, in the scope of the international market, and military policy, in the scope of the relationship between States. These three dimensions are closely interrelated, influencing each other mutually one to another, though it is important to point out that each one is defined, in a predominant way, by its own dynamics. In each one of these dimensions a historical process is developed, with the cultural process tending to usually be slower than the other two. In this way, while the economic dimension frequently crosses paths with the political dimension on the medium- and long-term, the cultural dimension crisscrosses with the economic and political dimensions only on the long-term. Nevertheless, it is necessary to keep in mind that it is in the cultural dimension that the mega-categories are generated, the great categories of meta-political analysis that coincide with concrete actions as much of the so called national policy as well as of the international policy.
These categories make up a categorical world – egalitarianism, identity, homogenization, uniformity, multi-culturalism, memory, progress, consensus, human rights, original people groups, pluralism, relativism, unique world- that, though they are not perceived in an immediate fashion but rather only by their effects, they provoke a mega conditioning of the political and economic life as much on state as well as on international levels.
2. The Analysis of the Cultural Dimension
The problem of the cultural crisis of the West shapes the central field of our analysis because this crisis is of such amplitude and depth that it forces us to describe it by its main features, given that any analysis of a long period of time that tries to discover the direction of affairs on the international stage on a long-term scale must necessarily take the cultural dimension as an inescapable reference. The other great indispensable phenomenon of analyzing to discover the direction of affairs on the long-term is the reaffirmation of the cultural identity that is taking place in the Islamic cultural population.
2.1. The Crisis of our age
The cultural crisis of the West sinks its roots all the way down to the Renaissance and the Enlightenment. Society and the western man face off today with the deepest crisis of values that its evolution has as of yet recorded. A crisis which goes back to the origins of the modern age and that is sharpened –as Heidegger cannily perceived- with the contemporary technological revolution. Nevertheless, at the same time that the crisis of values of Western culture is taking place, paradoxically, the universalization of that culture is taking place, despite its axiological crisis. As Erich Fromm would discover in the opulent West, “having” replaces “being”, but anguish and depression become endemic ailments. As Helio Jaguaribe points out, the rich West reaches the XXI century without “valid options capable of restoring the meaning of life…Consumerism –Jaguaribe highlights- is now discredited as a purpose of life, for those who can enjoy it, by the demonstration of its intrinsic emptiness and, for others, by the proving of the impossibility of generalization for the whole world of the riches of the privileged minorities of the central countries.”Nevertheless, as we have already highlighted, despite its axiological perplexities, the absolute universalization of Western Culture is taking place. “Confronted by the Western ratio and its capacity of effective application in scientific-technical manipulation of nature and in the engineering of human things, non-Western societies find themselves obliged, in order to survive, to adapt to that ratio. This is how Japan proceeded with its Meiji Restoration and, more recently, with its Neo-Westernization, after the Second World War. This is how China proceeded with the Mao Revolution and its followers, after the frustrated attempts of Sun Yat-sen.
2.2. The Cultural Crisis and the Phenomenon of Mass Immigration
The mass exodus of immigrants towards the richer countries of the European Union, primarily to Germany and the Scandinavian countries undoubtedly has multiple causes that should be found as much in the present as in the past.
“Centuries of trafficking human beings submitted to slavery and the exploitation of natural resources: colonialist territorial occupancy imposing made-up borders on top of the historical forms of culture and existing societies; a post-colonialism that supported and continues protecting local corrupt and dictatorial regimes at the service of the Western world, comprise a historical frame impossible to obviate. More recently, the intervention in countries like Iraq, its occupancy and the destruction of its social and political organizations with the false excuses of the possession of weapons of mass destruction. The bombings of the French aviation, which the United Kingdom, Spain and Denmark joined in on in the “Threat Odyssey”, that established the fall of Kadafi and the beginning of chaos in Libya.
Without a doubt the sad exodus of that giant human mass, that day by day tries to reach Europe, is due to the more important immediate cause of the destruction of Iraq, Libya and Syria. That overwhelming human mass flees from violence, hunger and death. Nevertheless, it is necessary to clarify that the wave of immigration also has as another remote cause: the cultural crisis that Europe is traversing and the consequent loss of the idea of transcendence. The study of the different cultures that have developed throughout history allows us to observe that when a substantial majority of the population loses the sense of transcendence, they reach the conclusion that if there is no transcendence, the most rational aptitude and action that a human being can adopt consist of living the present to maximize immediate pleasure and enjoyment. From there to the exacerbation of individualism and consumerism. Given that to a greater number of children there corresponds a diminishing in the capacity to maximize individual pleasure and immediate enjoyment, it seems logical that the generalized tendency to have just one or no children would appear. From this point it can be affirmed that the loss of a sense of transcendence leads, as a logical consequence, to a disinterest in procreation. There therefore appears the image of a funeral-like population pyramid. A population that tends to age rapidly. Since in the long-term this imbalances the economic system and puts the reached material well-being of said society at risk, there then appears, as a logical consequence, the structural need to incorporate a young population. Immigrants become the main resource to solve the ensuing problems of the aging of the population. Thus, the inexorable march of the “foreign proletariat” is produced towards the opulent aged society that has lost its sense of transcendence. The arrival of the foreign proletariat does not produce any immediate instability –though the host society circumstantially finds itself in a period of economic recession- because the foreign proletariat performs the most physically heavy, dangerous or least paid labor that the host population does not want to perform, which is the reason why unemployment does not increase and neither struggles for employment nor general decrease in salaries are produced. Nevertheless, it goes to point out that when the foreign proletariat becomes an internal or local proletariat –if in the transition from one state to the other- it has not lost its sense of transcendence, it tends to have a greater birth rate than the host society, which in the long-term causes the descendants of the foreign proletariat to become more numerous than the descendants of the original population, that is, that of the host society. However, if the foreign proletariat has a sense of existence and a vision of how to organize society and state antagonistic to the one reigning in the host society, and if their descendants maintain that same sense and same vision, its comes as a logical consequence that when the descendants of the foreign proletariat make up the majority of the population, they naturally tend to want to modify, peacefully or violently, the political and social organization in which they find themselves, since it goes against the idea that they have of how society and state should be organized. Therefore a cycle of tensions and imbalances is generated in those societies.
The reports made by the European Commission point to Germany, the economic motor of Europe, as being the country with the largest middle-aged population on the planet after overcoming Japan and that the European Union will need to add some 50 million more workers over the next three decades in order to maintain its social systems, all due to an aging European population. The conclusion of the reports of the European Commission is that without immigration, the European Union has no formula at all to solve the problems caused by its aging population.
2.3. The international policy in the post-modern world
The cultural crisis has caused modernity to take a step towards post-modernity with which the “dawn of duty”, “the empire of the short-lived” and the kingdom of consumption finished forcing themselves onto Western society. Therefore, the relationship of man / thing was imposed before man / man, taking possession of the signs of everyday life. The whims of the present, the temple of self, of the body and of the community became the New Jerusalem of the already post-modern man.
Thus the “light man” mas created, which slowly tends to conform to the majority of the population, a hedonistic and materialistic being whose only goal in life consists of reaching success, a being that is only interested in money, consuming and the sensuality of power. This change had profound consequences in the order of politics, as since the “post-modern man” began to venture into politics, he did so for his exclusive personal profit. The search for common good is not found within his mental categories. Politics is not, for him, a vocation of service or a revolutionary action. He is a “professional in politics”. He does not live for politics but rather he “makes a living” from politics. That is exactly the reason that explains the absence of great Statesmen like Roosevelt or De Gaulle on the international stage.
The cultural process slowly begot a new type of man, the post-modern man, and he, set at doing politics, modified the relationships of strength in the international system, placing the state at the service of international speculative capital.
In this way, for example, when the 2008 crisis was produced, the main heads of state that make up the so called West made use of international speculative capital and decided to save the banks by transferring the cost of the crisis to their respective states through public indebtedness and the application of a policy of an adjustment whose main cost was paid for by public sectors.
The post-modern man – essentially hedonistic and materialistic that is only interested in success, money, consumption and power by power itself –soaring to the highest posts in government – put the state at the exclusive service of the international financial elite. This situation decisively contributed, and will continue to in the mid-term, towards further weakening the role of “State” as the main actor on the international stage and to strengthening the role of financial and speculative entities as central actors of international relations.
This situation – that the men that make up the political elite of the principal world powers are, in their majority, at the service of international speculative financial capital – was acknowledged and explained, colloquially, by the representatives of ultra-liberal thought themselves, such as the essayist Alvaro Vargas Llosa who, in his column in the “El Mundo” newspaper, reached the point of acknowledging that everyone has a sensation that state only exists to serve the international financial elite.
It is important to highlight that this subordination of the state to international financial capital and its ideology, neo-liberalism, is what has provoked, for example, that in the European Union, the gap between rich and poor be the worst now than it has been in the last 30 years. It is such that the income of the richest 10% is almost nine times greater more than those of the poorest 10%.
According to reports made by the Organization of Cooperation and Development (OCDE), even in the countries of egalitarian tradition like Denmark, Sweden and Germany, the income of the richest 10%, that was five times great than the poorest 10% in the 80’s, today is 6 times greater. The OCDE confirmed a general increment of the inequalities between those that achieve more annual income and those that obtain less in all of the members of the European Union. In the case of Italy and the United Kingdom of Great Britain, this difference is 10 to 1. Inequality has certainly increased in all the countries that are members of the OCDE. In the United States for example, the difference is 14 to 1. “Studies have been made - states Angel Gurria, General Secretary of the OCDE – that throw out the hypothesis that the benefits of economic growth automatically have repercussions for the more unfortunate. Without an integral strategy for growth, inequality will continue to increase”.
2.4. International Policy in the Post-Modern World
AS Gilles Kepel well points out in his work “La Reenche de Dieu. Chretiens, juifs et musulmans a la reconquete du monde”, from the mid 70’s on, Christian, Jewish and Muslim movements performed a spectacular penetration in social and political realms. These movements benefited as much from the disenchantment, from the discouragement towards secularized ideology and utopias as from the reigning sense of general rootlessness. All of those movements had projects to rebuild the world and society. These projects found in sacred texts the rules to build the society of tomorrow and a new world order. The militants of these movements were in their majority well-educated young people with superior university studies – many times attained from Harvard, Oxford or Sorbonne – adopted comparable tactics, be it from up high, trying to seize power from the state, or down low, incessantly trying the undertaking of building networks of solidarity through work and social help for the less fortunate. They all violently combatted against the spirits of Enlightenment and secularism. Nevertheless, only in the Muslim countries was it that these movements became popular and hegemonic. While the Western Culture, submerged in its axiological crisis, strayed away from its religious foundation, from the foundations of its faith: the Koran and the life of its prophet Mohammad that, unlike the other religious initializers, was simultaneously the founder of a faith and the organizer of a State. His actions were, in both realms, according to the most accepted Islam theology, “worthy of study and emulation”, because these, “from the Revelation on, were conserved by God from all mistake”.
Thus, in Islamic countries, great masses look for a new fundamentalism, the replica of Western Culture and the recuperation of the ancient values of their own tradition. Islamic fundamentalism is, at the same time, the defensive reaction of a cultural scope that feels assaulted and the offensive reaction of a cultural scope that takes up once again from its original sources its purest tradition of belligerent proselytism. This is the reason why Turkey, Saudi Arabia and Arab Emirates logistically and financially supported – Qatar alone, in the course of the year 2014, “contributed 3 billion dollars” - the fundamentalist insurgents that struggle to end the secular government of Bashar al Assad and to instate an Islamic fundamentalist regime. It is important to point out that the so called Islamic State is only the most virulent product of that defensive and offensive reaction that embodies Islamic fundamentalism. The destiny of it hangs in the balance between its transformation into a state of full rights or that which seems more probable, its dissolution when the ceasing of foreign financing that supports it is carried out. The first possibility would mean the consolidation of an aggressive state that could attempt to export armed struggles to impose Islam in Central Asia, the Balkans, or Northern Caucasus.
The second possibility could lead to the apparition of a large number of “unoccupied combatants” – a situation similar to the one that occurred in the decade of the 90’s after the end of the war in Afghanistan – that would return to Northern Africa, to the European Union and to Russia. Thus impoverished suburbs of the large cities of Western Europe, like Paris, Madrid and Rome, could be destabilized by the outbreak of virulent outbursts of violence. Only by way of example do we point out that the Russian Federation estimates that there are between 1000 and 3000 Russian-speaking combatants enrolled in the Islamic State.
3. Analysis of the Economic Dimension
It is important to state that the economic dimension of the international reality is characterized mainly by the preeminence of speculative financial capital over productive capital. Beginning with the economic crisis that broke out in 1973 caused by the abrupt increment in the prices of petroleum, international speculative financial capital began to displace productive capital, from the leadership of the hegemonic structure of world power.From the decade of the 70’s on, international speculative financial capital began to take on more and more importance and strength that nowadays allows it to try and put at its service, no longer the peripheral states as in times of old, but rather the very same central states that used to make up the nucleus of the global hegemonic structure.
It therefore so happens that the direction of affairs – and thus is the interrelationship between the economic dimension and the political one produces –is determined by the decision of the international speculative financial capital to discipline the governments in the peripheral system that had carried out distributive policies and to end scraps of the state of wellbeing that had been created in the central states after the Second World War.
It is important to point out that international financial capital had to face, from 1917 on – with the Bolchevique Revolution – a phase of dispute with the socialistic model but, from 1930 on, the most important challenge it had to face was, not coming precisely from the socialistic field, the Keynesian alternative model of organization of society and State. Keynesianism, creating that which commonly is known as the State of Wellbeing, essentially modified the economic order of states, substantially limiting the freedom of action of large financial entities. From then on, the fundamental strategic objective of international speculative financial capital was to destroy the work done by the great leaders such as Roosevelt, Konrad Adenauer, De Gaulle, Vargas or Peron, each in his respective countries and, with its own peculiarities, to destroy the state of wellbeing.
And what does international financial power propose today? “Nothing more than its own amplified reproduction, meaning, the amplified reproduction of capital, without meaning or external finality of any kind, putting aside any other consideration. Without meaning or finality: the power of capital is of nihilistic nature, it is pure negatively maximized repetition of a sign that in its growing emptiness dispatches the totality of the signs solely to exponentially expropriate its meaning, causing it to circulate in this way in an undefined and ever more vertiginous fluidity and in this way do away with them, subjecting them to itself. Modernity has ended up being a monstrous operation of planetary expropriation of work, expropriation of speech, where its insatiable power, the power of fetterless negativity, whose other name is capital, obstinately repeats its voracious and unsatisfied empty self-reference. The sphere of politics pales before it, being reduced to a mere administration at the service of the alliance of economics and media".
4. Analysis of the Political Dimension
Therefore, we affirm in our work that if the direction of affairs on the international stage, in the cultural dimension, is determined by the axiological crisis of Western culture and by cultural identity reaffirmation that is performed in the interior of the Islamic world, in the political dimension it is determined by two decisions made but the royal power that govern the United States:
1) The strategic decision to rebuild the national power of the United States through a new energy revolution.
2) The tactical decision to neutralize the new poles of emerging power through the indirect manipulation of the petroleum market.
It is precisely these two decisions that allow us to correctly read into the international reality, comprehend the profound significance of the actions that we are living on the international stage – from the civil war in Syria to the economic crunch applied by the government of Temer in Brazil – as much as to discover the direction that affairs could take in the mid-term. It is important to specify that while the first decision was being conceived in the decade of the 80’s, the second came about in the first few years of the new century and that the latter puts the former in danger but affects it circumstantially because the manipulation on the fall of prices is only a tactical maneuver of mid-term and not of long-term.
Logically, before analyzing these two strategic decisions of the United States, it is necessary to explain the origin of the structural crisis that pierced North American power – whose peak point was the crisis of 2008 – after almost three decades given that the first of these two decisions was made, precisely, to reverse said crisis.
4.1. The Origin of the Structural Crisis of North American Power
In the decade of the 70’s North American military power is convinced that the power of states would be given, in the immediate future, by the possession of cutting edge technology and that the United States could, in consequence, rid itself of its classic industrial apparatus without its national power having to suffer any consequences at all. Paradoxically then the North American political and military elite, fundamentally influenced by the strategic thinking of Alvin Toffler, promoted and supported the high North American bourgeoisie when it, in search of capital appreciation, began to outsource industrial production from the United States to Asian countries. The substantial idea of Toffler’s strategic mindset – accepted largely by the North American military and political elite – was based on the idea power, now, was a matter of cutting edge technology.
This idea that at first is true possesses, nevertheless, a flaw. From the point of view of the construction of national power, the constitution of a complex technological apparatus should not be performed to the detriment of the industrial apparatus. To adopt one should not meaning throwing out the other. Nevertheless, seeing as how power exclusively consisted of the possession of cutting edge technology, the United States began to specialize itself through through a great State Impulse – coming from the military-space complex -, in itself exclusively, casting off its application to basic common industry thus progressively losing industrial leadership.
It is helpful to remember by the way that the North American State decided on that technological development given the fact that private companies would not have been able to do it, ever, by themselves (computers and the Internet, just to mention a few examples, started out as developments performed for the North American aerospace-military complex). It had to do with a “covert” subsidy that, through the military-space system, private North American technological companies received.
Though it is correct that power runs through the domination of high technology, what was not contemplated in that analysis, performed by American intelligence, is that it was turning the United States into a society exclusively dedicated to providing naturally volatile services - oversized banking services and other highly dispensable services, such as those meant for leisure – displacing the more stable industrial production, which in turn is the primary source of permanent employment and is much larger as far as its capacity to absorb personnel of the most ample range of expertise. Hence, as the United States transferred its industrialization process to Asia, it deindustrialized itself and lost one of the footholds of its national power. From that moment on, and as of the supremacy of its currency, they began to “live on borrowings” and to “backslide”.
Since the arrival of Ronald Reagan, with an ever unfavorable commercial balance, the economy of the United States began to live off of incessant monetary issuing, with which the United States imports all the products it consumes. Dollars end up boosting the economies of rival powers, while in the meantime in the United States more and more workers lose their jobs. Unemployment does not take on dramatic proportions as of yet because a percentage of the industrial unemployed are absorbed by the service sector. Nevertheless, the jobs created by the services are much more fragile than those of industry when faced with crisis and they happen to be easy to abandon, as much by he who offers them as by those that consume them – when they do not possess a limited duration, as in the case of construction -. The truly essential services are few and far between and because of that, before the apparition of any difficulty, services are the first to be abandoned by consumers and the jobs they generate also begin to disappear, thus subtracting even more consumers from the economies.
That was the profound origin of the crisis that North American power underwent during three decades and that came into bloom in 2008. The financial problems that were manifest at that moment were such, a consequence and not the cause. The true structural origin of the crisis was in the transfer of the industrial production of the United States to Asia, because the capital gain obtained by the trans-national global elite was enormous compared to that which it could have obtained in the United States.
4.2. The Lessons learned from the crisis by the North American Leading Elite
It was certainly a long time before the outbreak of the grave crisis of 2008 that the Pentagon reached the conclusion that it had made a strategic axial mistake, given the fact that the deindustrialization hade brought on a deep social fracture in the United States that considerably weakened its national power. What’s more, the industrialization of Asia had not only provoked the birth of a pole of power eventually proving to be antagonistic to North American power but also, upon raising the prices of oil in the international market, it had allowed Russia to begin a process of reconstruction of its national power.
As of the described situation, the best of North American intelligence asks itself how to reindustrialize the United States. In return to this question, North American intelligence answers that by once again having the cheapest energy in the world on North American’s very own soil. Thus scientific and technological research and numerous federal subsidies are directed at achieving that objective.As a result, the United States today is the protagonist of a new energy revolution, the revolution of shale gas, thanks to which the cost of energy for North American industry will in the long-term be – after the manipulation of the decrease in the price of petroleum has run its course – substantially lower than the cost that industries installed in Asia or Europe will have to pay.
4.3. The Energy Revolution brought on by Shale Gas
The production of shale gas or natural shale gas in the United States surprised the world by its rapid development and repercussion in the diminishing of the price of fuel and the increase in hydrocarbon reserves. This development grew together with the supply of petroleum and condensed natural gas. The reports done by CEPAL estimate that “that the United States will be self-sufficient in petroleum and have a surplus of natural gas in less than 30 years.” On the other hand, CEPAL’s reports affirm that “the renewed drive of non-conventional hydrocarbons begins to be seen as an energy revolution that will give thrust to the economy of the United States”. The North American manufacturing industry is the “direct benefactor of the fall in the price of gas (-39% in 2011), whose primary consequence is a lower cost of electrical energy, which becomes lower than that of Asia”.
It is important to highlight that until now the United States is the main protagonist in the new energy revolution. Diverse factors have contributed to this privilege, its geological base, the high volume of exploitable reserves, decades of development and competition in the gas and oil industries, the existence of numerous companies that are suppliers of goods and services for shale exploration and exploitation, laws favorable for exploitation, an important infrastructure in material transportation of gas and the existence of an enormous domestic market.
4.4. The Energy Revolution as a Key Factor in the Reindustrialization of the United States
In the strategic plan made in the decade of the 80’s by the political elite of the Pentagon, the North American energy revolution, through shale gas and petroleum, had to be made up of the determining factor to reach the fundamental strategic objective of the reconstruction of North American power through reindustrialization. The reasoning, made by Washington, was based on the following premises: A much lower energy price than China, Europe or Japan – combined with a possible hike in salaries in China – and, an increase in productivity of North American factories, would create the necessary conditions for the significant American companies to make the decision to go back to producing in the United States. In the estimates made by Washington, it would establish the condition to be able to create a million new jobs by 2025 in the manufacturing industry alone. But it was not until the year 2012 that the facts started to show Washington was right. Thus, between 2010 and the end of March of 2013, chemical companies – according the Chemical Counsel of the United States – put 100 industrial projects in motion valued at 7.2 billion dollars. At the same time significant North American companies like Chemical, General Electric, Ford, BASF and Caterpillar, began to invest considerable sums in the construction of new plants and the reopening of many that had closed down. Specifically Apple opened a new plant in Arizona after a decade of having closed their last plant on North American soil. On the other hand, in Washington’s estimates the United States should reach, by 2016, an advantage in exportation costs of between 5% and 25% over Germany, Italy, France, the United Kingdom and Japan in a range of industries, including plastic and rubber, machinery, computers and electronics. These are significant data with respects to the oil company Royal Dutch Shell beginning the construction of a chemical plant in the gas-rich zone of the Appalachians, that the French industrial group Vallourec would invest 1 billion dollars in the construction of a new plant in Ohio and that Voestalpine, the Austrian steel company would invest 750 million dollars in their new factory in Texas.
AS a result of this new revolutionary way of extraction of petroleum and gas, the petroleum supply rose 50% from 2008 to 2014 and, in 2012 American production of crude reached 800,000 barrels per day. This constitutes the greatest growth in a single year in the history of the United States since, in 1854, their products were registered as far as hydrocarbon material production is concerned. It is important to point out that more than four fifths of this exceptional rise is the work of shale gas, above all that which comes from the Bakkkon (North Dakota) and Eagle Ford (Texas) deposits. Thanks to the new energy revolution, for 2013, the costs of production of North American industrial manufacturing (fundamentally in the steel and petro-chemical industries) are already 30% less than their German, Chinese and South Korean competitors. “The new industrial revolution, and its source of energy – the explosion of shale gas –make up a structural core of a gigantic was of innovation that will unfold with ever increasing intensity over the next 20 years.”
It is important to point out that the energy revolution, by lowering energy costs and therefore production costs, has begun to provoke the reindustrialization of the United States and is bringing a steady increase in industrial exports, a diminishing of the importation of manufactured goods, and an increase in the employment rate. Thus, each increase in the industrial employment of the United States provokes an increase in the unemployment rate in China and the European Union. In 2013 the North American economy is already 20% more productive than it was in 2007; and the spear head of that spectacular phenomenon is the manufacturing industry, that increases its productivity by 34% within that time frame. Finally, towards the end of 2014, the North American economy is reborn, thus profoundly renewed and more competitive than the previous one of 2007 and the United States is able to end, fundamentally, the national power crisis initiated in the 70’s, the same one that had manifest itself so brutally in September of 2008.
There will therefore begin a new cycle of interest rate increases and, given that markets “discount” (or is at least anticipated), a re-direction of global finances is produced, a revaluation of the North American currency – despite the brutal emissionthat was used to overcome the banking crisisof 2008 – that is already seen in a huge swing of capital from the emerging world to the United States – with the ensuing fall in the stock market in the rest of the world – and a proportional increase in the earnings of the Treasury bonds, and together with this, the fall in price of raw materials that saw its prices hit rock bottom once again in history.
On the other hand, part of the process of reindustrialization of the United States driven by the shale gas energy revolution has begun to already provoke the deceleration of the Chinese economy that will cause a more modern growth in China that would favor the United States in the long-term in several ways. In first place, we would need to consider that the slowing down of the Chinese economy would keep inflation in check provided that the weakening of Chinese demand logically deflates the price in raw materials. In second place, we would need to reasonably expect the falling cost of energy in the United State and the slowing down of the Chinese economy would increase the attractiveness of investing in the United States according to the profitability of investments decreasing in China and increasing in the United States. On the other hand it is important to point out that the expansion of the Chinese economy is of fundamental importance to African and Latin American countries, exporters of raw materials to the Chinese market, countries that maintain a close connection with China. But said connection does not exist between the American economy and the Chinese economy because North American exports to China represent around 1% of the GDP of the United States. As Paul Ashworth states, if China were to disappear off the map, American growth would be reduced by around one whole percentage. On the other hand, the deceleration of the Chinese economy would allow the United States to strengthen pressure on China to dismantle the majority of the state control on its financial system. It is evident that one of the strategic objectives of the United States is to achieve that China undergo a liberal reformation of its financial system. Liberalization that would in turn create an enormous opportunity for the big banks, insurance companies and health firms, Internet and American training for expanding their business into China.
The fundamental element in the reconstruction of American national power is the extraordinary change brought on by the energy equation by the exploitation of shale gas, that drives and sustains the new industrial revolutionbut it is convenient to not forget that at the origin of that fundamental change can be found the decision of the Pentagon to reconstruct the national power of the United States, or rather, the decision of state impulse.
4.5. From the Energy Revolution to the Geo-Political Revolution
Shale means for the United States an energy revolution that will allow it to not only reach self-sustenance but also to become a great world exporter of gas. The International Energy Agency (IEA) and the oil giant BP thus estimated and believe that the USA will reach energy independence by 2035.
Accordingly thus, the transformation of the United States into importer and exporter will not only have Deep repercussions in international energy balances but also profound geo-political consequences.
The fundamental point of American shale gas is that it qualitatively reduces the geo-political importance of oil producing companies of the Gulf, Russia and Venezuela, and in that way changes the strategic global equation over the next 50 years. The USA virtually eliminates the need to import liquid gas (LNG) in the next two decades and begins to export it. The price of North American gas is at its lowest in this last decade. The participation of Russia in the European gas market also falls from 27% in 2009 to 13% in 2040, the equivalent of its disappearance as an instrument of political pressure. Venezuela is discarded as the primary LNG exporter to the USA and the geopolitical relevance it has had since the 70’s is reduced. Finally, the geo-political significance of the Middle East is transformed, which is no longer – for the United States – the most strategic region of the 21st century. Once the United States is independent of the petroleum and gas produced by the Arab countries, China and Europe will be dependent on the supply of North Africa and the Near East.
4.6. The neutralization of the new poles of power
At the beginning of the year 2000 the price of oil was for the first time more, since 1986, than the 30 dollar per barrel mark. The increments in the price of crude have been due to the apparition of a new and strong demand brought on by the emergence of China and India as large consumers, plus production problems (a strike on bosses in Venezuela and the invasion of Iraq in March 2003), that brought on new hikes in prices. Crude reached practically 80 dollars per barrel in the summer-winter of 2006. By mid-July of 2007 the price was around 72 dollars per barrel. The International Energy Agency (AIE) calculates that the mid-price per barrel of petroleum will be over 100 dollars per barrel in the next six years and that from 2030 on it will be over 200 dollars per barrel, according to its perspective report. The AIE considers that “the years of cheap oil have long gone”. In July of 2008, the price of oil reached 148 dollars per barrel.
Nevertheless, against the predictions of the AIE, from mid-2014 on the price of crude dropped to almost 50% in the last six months of the year. It was the longest lasting slide in 20 years. On July 7th 2015 oil dropped to 49.92 dollars per barrel.
Among the most visible causes of the price drop are:
1) The increase in supply provoked by the producers of shale oil in the United States that flooded the market with a production close to four million barrels per day.
2) The increase in supply provoked by the resumption of Libyan exports.
3) The reduction of the demand for oil by China and the European Union that had begun to be affected by the reindustrialization of the United States.
The conditions were thus given or the Organization of Petroleum Exporting Countries (OPEP) to intervene by reducing the production to boost prices. Nevertheless, OPEP headed by Saudi Arabia – despite a furious opposition by Venezuela, Iran and Algeria – made the historic decision that it would not intervene in reducing its production of 30 million barrels per day but rather declared that it had no intentions of doing so even if the price fell to $20 US dollars per barrel. Without the uncomfortable presence, as in other times, of Hussein and Gadafi, the Saudi royal family – aware of the suggestions of Washington – were not only able to paralyze OPEP, hindering the reduction in production, but also left clear that fact that they were willing to also increase the supply of petroleum in the world market with the goal of accompanying the decision of the United States to neutralize the new poles of emerging power through the manipulation of the oil market. From that point on Saudi Arabia proceeds to flood the market with cheap oil.
The main countries affected by the drop in the price of petroleum are the Russian Federation, Iran and Venezuela. In Brazil, the expectations created by Presal were made evident. As collateral damage of the very same North American companies dedicated to the extraction of Shale Oil, they suffer a hard economic blow and as a consequence the North American economy itself as well due to the shale oil and gas industry had contributed in a very significant way to reducing unemployment and increasing growth. It is the economic cost that the United States is willing to pay to achieve the strategic objective of neutralizing Russia and provoking a change in the political direction of the Russian Federation. Having achieved this objective Saudi Arabia will once again restrict the production of petroleum and will once again raise the price per barrel – probably to 145 dollars as in July of 2008 – and the main political competitor affected by this will then be the People’s Republic of China.
The Most Probable Trends in the Direction of Affairs
We are at the beginning of a large migratory cycle whose main current goes from Asia and Africa to the European Peninsula given that the societies that have lost their sense of transcendence, without immigration have no formula to solve the problems caused by the aging of their population. It just so happens therefore that it is the older opulent society – due to the loss of their sense of transcendence –that originates the primary cause that makes the foreign proletariat begin to march on it. On the other hand, two reasons lead us to affirm that the migratory wave that we have attended, up until now, is only the tip of the iceberg. The first of those reasons is that Islamic fundamentalism having not been a circumstantial phenomenon but rather a profound structural phenomenon – product at the same time of the defensive identity reaction of a cultural realm that feels attacked and the offensive identity reaction of a cultural realm that takes, from its original sources, its purest tradition of belligerent proselytism – the conflicts of the Middle East could easily last decades and extend to the Caucasia, to the Balkans and to North Africa, in particular to Algeria whose regime is at the point of an outbreak.
The second reason is the climate change that is already turning the Sahel into a desertand will cause thousands of men and women to be expulsed fromSub-Saharan Africa – gigantic human masses that, to save themselves from hunger and death, will try to reach the coasts of North Africa to be able to penetrate into Europe. The European Union will swing between opening up the borders –t o solve the problem of their aging population and the inevitable collapse of the economic system that this implies in the long-term – and the intent of closing them up in order to avoid the dismemberment – before a migratory wave of such magnitude – of their own cultural identity.
It turns out therefor that the analysis of the interrelationship between the cultural crisis that is traversing Europe, the phenomenon of the mass of immigration towards the old continent, and thus being able to affirm with a high degree of probability:
- That the European Union will tend to, in the mid-term, solve the problem of their aging population through immigration and, will therefore achieve, in this sense, the strengthening of their economy.
- That the state members of the European Union will suffer, in the long-term, a process of dissolution of their respective original national identities.
- That the process of mass immigration will give way, in the long-term, to a change, pacific or violent, of the way society and state are organized.
On the other hand, the interrelationship between the cultural process and the political process will cause the political elite in their majority of the so called Western countries to be in their majority made up of by what we have come to denominate the “post-modern man” – an essentially hedonistic and materialistic human subject that only sees success, money, consumption and power for the sake of power itself – to go deeper into the process by which the different national states have been put at the exclusive service of the international financial elite. This situation will contribute, in the mid-term, to weaken even more the role of the “state” as the main actor on the international stage and to strengthen the role of financial and speculator entities as central actors of international relations. This fact will in the mi-term widen, in said states, even more the gap between rich and poor.
From the analysis of economic and political consequences of the future energy Independence of the United States – produced by the shale gas revolution –it can be affirmed with a high degree of probability that:
- The much lower price of energy in the United States tan in China, Europe and Japan – combined with the increase in the productivity in North American factories – will create the necessary conditions for a significant number of American companies to make the decision to produce once again in the United States. Said phenomenon is already taking place.
- That the energy revolution, by lowering the costs of energy and therefore the costs of production, will cause a profound reindustrialization of the United States and this will in turn bring a steady increase in industrial exports, the decrease of imports of manufactured goods and the increase in the employment rate.
- That each increase in the employment rate of the United States will definitely provoke an increase in the unemployment rate in China and the European Union. This phenomenon is already taking place.
- That – as a result of the beginning of a cycle of elevation of the interest rates in the United States – a re-direction of global finances will be produced that wil be shown in a brutal swing of capital from the emerging world towards the United States.
- That decrease in cost of energy in the United States will slowly increase the attractiveness investing in the United States according to the diminishing profitability of investment in China and for these to grow in the United States.
- That the incipient reindustrialization of the United States has given way to a long cycle of modern growth of the People’s Republic of China that will cause its neutralization as a pole of alternative power on the international stage.
- That the cycle of modern growth of the Chinese economy has given way to a cycle of decreases in price of raw materials that will be a more and more devastating blow to the countries of South America – for having their, including Brazil, exports consisting of more than 60% by raw materials and for having the People’s Republic of China as their main partner – taking them into a new period of economic crisis and stagnation that will once again deepen social inequalities.
- That the United States will proceed to gradually withdraw from the Middle East, maintaining only the two pivot regions: Israel and Saudi Arabia.
- That that retreat presupposes the application first to itself of the “theory of organized chaos”. Iraq and Libya are in that sense two witnesses.
- That the European Union will be the most damaged region by the application of the theory of organized chaos.
In concluding we affirm therefore that we are witnessing the beginning of ten long cycles:
- A migratory cycle whose main current goes from Asia and Africa towards the developed West.
- A cycle of reaffirmation of identity in the Islamic cultural world.
- A cycle of deconstruction and dissolution of European power.
- A cycle of preeminence of speculative financial capital within the hegemonic structure of world power.
- A cycle of increase in social inequalities in developed countries.
- A cycle of reconstruction and strengthening of North American national power.
- A cycle of diminishing of the strategic importance of the Middle East.
- A cycle of deceleration (and possible paralysis) of the construction of Chinese national power.
- A cycle of economic stagnation and increase in social inequalities in South America.
- A cycle of diminution of the margin of autonomy of all the countries that make up South America.
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