The West’s crucial strategic failures
The West’s crucial strategic failures
Les MacDonald

The West’s crucial strategic failures

“The Earth is littered with the ruins of empires that once believed they were eternal.” Camille Paglia.

The West is becoming increasingly panicked about whether it can sustain its continued hegemony. That hegemony has been based on its technological superiority. That superiority was in a number of technologies the bulk of which arose directly or indirectly out of the vast expenditures by the US on its military-related research at universities and research institutes around the US. These expenditures were designed by the US elites to undertake the long-lived development efforts that the private sector would not fund as they could not produce quick profits. Computers, smartphones, solar-voltaics, wind turbines, space travel, advanced communications, electric vehicles, nuclear technology, artificial intelligence, semi-conductors, gene technology and pharmaceutical advances based on that technology, are the principal areas in which this leadership existed in the US until the beginning of this century.

We have in the last 40 years adopted a neoliberal economic ideology that focused on the assumed advantages of the private sector and the alleged inability of the public sector to match its entrepreneurial and efficiency advantages. That ideology has deliberately ignored the role of the public sector in undertaking these vastly expensive and long-lived research and development expenditures that are the basis of US success in these fields.

The overwhelming proportion of those technologies was developed in publicly funded universities and research bodies around the Western world. Once developed, those technologies were essentially handed over free or at risibly low cost to the private sector to profit from. The reigning ideology simply ignored that reality and focused on the private sector’s exploitation of that science in making a considerable range of consumer products from that publicly funded scientific research.

The private sector in the West, driven as it is by the ideology of profit maximisation, decided that it could make and sell those consumer products at a lower cost and hence much larger profit, by offshoring their actual manufacture to countries with much lower labour costs. China saw the opportunities in this short-term profit-driven thinking and took on the vast bulk of that manufacturing employment and, in the process, absorbed and improved upon the intellectual property inherent in those products and services.

The propensity of the Chinese to think long-term arose out of 4000 years of organised Chinese civilisation. They looked into the future and put in place long-term strategies to consolidate the growth of living standards that has arisen from this manufacturing expertise. There are many examples of this long-term planning but the key one in terms of geopolitics is their recognition that a vast array of these scientific breakthroughs requires a guaranteed and growing supply of rare earth elements for their implementation in finished goods and services.

Communications, space exploration, satellites, rocketry and other military applications, computers, electric vehicles, solar voltaics, wind turbines, quantum computers, AI and a host of other technologies are crucially dependent upon rare earth elements, and in considerable volumes. In the late 1970s and early 1980s, China recognised rare earths as a strategic asset and began to increase both its mining and refining of these metals. This was well before any Western country even began to think about projecting then current trends in the use of these minerals.

That has led to China now having 85% to 90% of the world’s rare-earth refining capacity. This is an expensive and complicated manufacturing process which uses processes and machinery that takes many years to develop and build. It also has 34% of the globally known mineable reserves of these minerals. As China is also a founding member of the BRICS alliance, it is joined in that alliance with other countries who together control 70% to 80% of known global reserves of these metals. In terms of actual current mining production, China does 70% of the world total. It is even more dominant in heavy rare earth refining where it controls 99.9% of refining of these crucial metals. A good example is Niobium, which is essential for production of high-strength steel, semiconductors, lithium-ion batteries and hypersonic weapons.

Control of this rare earths industry, both in mining and processing, gives any country that exercises that control, an astonishing control over new generation technologies and who gets access to these for their own advanced industries. China has, until the implementation by the orange Donald of his unhinged tariff war policies, been willing to supply refined products to any country wishing to access these supplies. That willingness has fallen victim to the geopolitical realities imposed by those tariff policies designed as we are told to “make America great again”.

China has placed restrictions on the supply of these elements to the US where the US uses them for armaments and other military hardware, but continues to supply them where they are used for civilian purposes. Should the US continue to expand this trade, and possible military action against China, the supply of those minerals would potentially be totally cut off. That would be catastrophic for US industry but even more importantly for the US military. Nuclear-powered ships, including submarines and ballistic and other missiles, require large amounts of these rare earths to function effectively, as do a vast range of other US military hardware like tanks, self-propelled artillery, drones and other UAVs. The geostrategic significance of this control is that it is creating a profound shift in the ability of nations like the US and UK to wage the dozens of aggressive wars against other countries, that have been the crucial means of the West continuing to maintain control of the rest of humanity. Those wars are increasingly crucially dependent upon access to large quantities of these rare earths for modern high-tech battlefield weaponry.

That means that for at least the next five to ten years China has the capacity to cripple or drastically reduce the war fighting capabilities of the West simply by withholding supplies of these metals. The US has generally used invasions and war fighting (as demonstrated by Trump’s re-naming of the Defence Department as the Department of War) as one of their primary tools of international control. The Chinese control of rare earths has largely stymied that as an effective strategy for any drawn-out conflict. Indian Prime Minister Narendra Modi has also put forward a proposal for a BRICS-wide critical minerals alliance to strengthen further their dominance of rare earth mining and refining. This constitutes a total strategic failure by the West brought about by their commitment to neoliberal economics that gives economic priority to the short-term profit-driven private sector over the more strategic and longer-term focused public sector.

This ideological propensity has also been responsible for Europe and the US using the private sector to manufacture the weapons they supply to Ukraine. The costs of those weapons and the short-term profit-driven approach to their manufacture has been utterly unable to match the Russian state-controlled armouries in supplying the weapons necessary for their armies.

The second area of strategic failure of the US has been their infantile belief that their previous control of the international currency and trade systems could be used as a weapon over an extended period to control those countries with which the US was at war in one form or another. BRICS+ and the rest of the Global South are now moving decisively to remove that monopoly control of international exchange by the dollar. Its proportion of international reserves and its use in settling international trade obligations has entered a period of steep decline.

BRICS is setting up a Precious Metals Exchange which will be entirely separate from and independent of Western-controlled exchanges and will trade in gold, platinum and diamonds. They hold 22% of the world central banks’ holdings of gold and that proportion is continually increasing as the basis for trading increasingly in their own local currencies and avoiding the US dollar. This direction is driven by the propensity of the US and Europe, through their current control of international central banking, to seize and, in some instances, steal the gold and currency holdings of other countries as a means of regime change.

Sixty-eight percent of inter-BRICS trade is already taking place outside the dollar system. That is rapidly enabling countries to escape the illegal imposition on them of financial sanctions by the US and the West. These developments represent a fundamental redistribution of power in geopolitics and critical strategic failures by the US. and the beginning of the end of the West’s domination of the other 88% of the world’s people.

 

The views expressed in this article may or may not reflect those of Pearls and Irritations.

Les MacDonald