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State Plan in the American Style

© Форпост Северо-Запад

The decision of the collective West (the EU, the G7 and Australia) to impose a price cap on Russian oil transported by sea as of December 5 caused extremely contradictory reactions in the Western countries themselves. The same former U.S. Treasury Secretary Steven Mnuchin described it as "ridiculous and unfeasible".

Market analysts started talking about an increase in oil prices to $120 a barrel because Moscow had declared in advance that it would stop supplying its oil under these conditions. That is, the supply will shrink, and Russia will win back everything at the expense of the inevitable rise in prices, just as it happened with gas. In addition, OPEC+ has previously confirmed its decision to reduce production levels this year and next year. Japan, which has experienced extra-economic coercion from the U.S., is worried about the future of the market economy in general.

Of course, it is the fate of the market as the main civilizational product of the West that comes to the front. The fact that it is not straightforward has been clear for a long time. Keynesianism had already helped to save Anglo-Saxon capitalism once before, during the Great Depression, when President F.D. Roosevelt proclaimed the famous New Deal. In his first inaugural address, he explicitly spoke of the importance of "government planning and control," if only for the "public services" sector to begin with. Banking regulation followed, which - in the form of the Glass-Steagall Act - was done away with by American elites by the year 2000. This "deregulation" laid the groundwork for the Global Financial Crisis of 2008, the aftermath of which has yet to be overcome. Then it was the mortgage mess of the financial sector with the quasi-governmental mortgage corporations of Fannie Mae and Freddie Mac.

Elements of socialism were also prominently present in U.S. agricultural policy, with good results. The Great Depression was the first time the phenomenon of convergence was announced. It also humbled America's ruling classes, who agreed to establish diplomatic relations with the USSR 16 years after the Russian Revolution. What is going on now, when it seems to be no time for convergence, moreover, in the conditions of an open economic war of the West against Russia?

The imperatives of "geo-economics", as the experience of sanctions pressure on Russia shows, are at odds with the requirements of the market. It is either one or the other, and, as Kipling said, "they will not come together!" The business community and the expert community understand this very well. The specter of the American Plan, and already for the whole world, is quite logical when there is no mirror of its Soviet original. And it speaks of something else entirely, namely the empire, whose interests are paramount to everything, including the principles of market economy. Then, too, the Inflation Reduction Act has nothing to do with protectionism, but only with the fight against climate change. In addition, there is also what economists call the innate tendency of business to extract rents, which on a global scale gives rise to the same empire.


Thus, the imperial nature of Western control over the global economy becomes apparent. Even if the measures taken within its framework are self-destructive in their consequences.

The possible geopolitical consequences of this "absurdity" are quite interesting. Firstly, when Russia in the form of a sanctions boomerang gets an ideal means of destroying not only the transatlantic bond, actually acting in tandem with the U.S. against Europe, but also Western society in general. Secondly, the course to contain China seems to have convinced Beijing that capitalism is not a serious and long-term thing and, no matter how hard it tries, to inherit the global empire of the West by natural order is ruled out. Other giants such as India and Brazil might come to similar conclusions, observing a demonstration of the ad hoc nature of market principles, from which no one is now immune to arbitrary abolition.

Third, and most importantly, at the heart of the empire is the imbalance between the cost of finished goods and raw materials in favor of the former. On the horizon is a kind of revolution in the global economy in favor of resource-producing countries, which otherwise, while maintaining their neocolonial dependence on former metropolises, will never solve the problems of their development. This "breath of freedom," it must be assumed, was in the crosshairs of the announced price ceiling: if other countries, primarily Beijing and New Delhi, accept it, they will find themselves in the Western system of coordinates and recognize the obligation of its "rules."

Rector of the Diplomatic Academy of the Ministry of Foreign Affairs of Russia,
Ambassador Extraordinary and Plenipotentiary of the Russian Federation to Great Britain (2011-2019)
Alexander Yakovenko