Tag: Russia

Speech on “Ukraine: Tactical Nuclear Weapons”

~ Robert Skidelsky

My Lords, I am grateful, as we all are, to the noble and right reverend Lord, Lord Harries, for initiating this debate and for drawing attention to the real danger of nuclear escalation.

I am in profound disagreement with the Government’s policy on Ukraine—I have said it before in this House and I shall say it again. This disagreement can be stated in one sentence: the Government’s policy is a war policy; I support a peace policy. I shall try to justify that.

The then Foreign Secretary, Liz Truss, stated on 27 April:

“We will keep going further and faster to push Russia out of the whole of Ukraine.”

This policy has been repeatedly restated by government spokesmen. It is supported by the Opposition and echoed by the media.

In calling for peace, I may be an isolated voice in Britain, but not in the world. Everyone outside the NATO world is calling for negotiations and some within it—I draw attention to President Macron in particular. Let me try to be logical. The Government’s policy makes sense on one assumption: that Ukraine, with NATO military support and economic sanctions on Russia, will soon complete the reconquest of Ukraine, including Crimea. In this case, there will be nothing to negotiate; the deed will have been done—it will have been accomplished.

I am not privy to secret military intelligence, but such evidence as I have, plus a dose of common sense, suggests that neither Russia nor Ukraine can achieve their war aims at the present level of hostilities, so the pursuit of victory is bound to bring escalation on both sides. Russia will intensify its air war, and NATO will provide Ukraine with more weapons to shoot down Russian aircraft. At what point such escalation leads to the accidental or deliberate deployment of tactical nuclear weapons is anyone’s guess, but the danger must be there, as the noble and right reverend Lord, Lord Harries, pointed out. That is why the war should be ended as soon as possible, and that can be done only by negotiations based on a ceasefire.

I utterly reject the premise underlying the Government’s policy that it is up to Ukraine to decide if and when it wants to end the war. President Zelensky’s policy is to get his “land back entirely”. Of course, it is up to Ukraine to decide what to do, but we cannot give Ukraine carte blanche to determine its war policy when we are in fact providing it with the weaponry to continue the war at considerable sacrifice to our own people. The decisions for peace and war, and on what terms to end the war, must be taken by Ukraine and NATO jointly.

I have reached one conclusion which is more compatible with government thinking: that no meaningful negotiations are possible as long as President Putin remains in office and, more importantly, in power. It is not only that his personal prestige is too heavily implicated in an impossible object but that his attempt to achieve it is leading his country to disaster. His invasion of Ukraine has galvanised Ukrainian nationalism, expanded NATO, shifted the balance of power in Europe to its most anti-Russian eastern states, exposed hitherto hidden Russian military and technical weaknesses, subjected Russia to the most sweeping economic sanctions ever imposed, and provoked the emigration of many of the most talented Russian scientists, technicians, thinkers and artists. In sum, he has erected a new monument to imperfect and incompetent statesmanship.

Any settlement of the war which can inspire confidence in the future will require Mr Putin’s departure from the scene. I do not know how this is to come about; it is beyond our control. However, we can offer an incentive: our Government can say that they would be willing to join our partners in serious negotiations to end the war with a new Russian Government. This negotiation would include the future status of Crimea and the dropping of sanctions. It would encourage forces within the Russian state to implement a change of government. This is a tough but constructive policy that I would understand and support; I do not understand the present policy in intellectual terms. It might not succeed, but it is infinitely better than the dangerous bellicosity we seem to be trapped in.

Too Poor for War

~ Robert Skidelsky

Nov 8, 2022 ROBERT SKIDELSKY and PHILIP PILKINGTON

Decades of deindustrialization have hollowed out the UK economy and made it woefully ill-prepared for wartime disruptions. As the financial speculators who funded its current-account deficits turn against the pound, policymakers should consider Keynesian taxes and increasing public investment.

LONDON – A wartime economy is inherently a shortage economy: because the government needs to direct resources toward manufacturing guns, less butter is produced. Because butter must be rationed to make more guns, a war economy may lead to an inflationary surge that requires policymakers to cut civilian consumption to reduce excess demand.

In his 1940 pamphlet “How to Pay for the War,” John Maynard Keynes famously called for fiscal rebalancing, rather than budgetary expansion, to accommodate the growing needs of the United Kingdom’s World War II mobilization effort. To reduce consumption without driving up inflation, Keynes contended, the government had to raise taxes on incomes, profits, and wages. “The importance of a war budget is social,” he asserted. Its purpose is not only to “prevent the social evils of inflation,” but to do so “in a way which satisfies the popular sense of social justice whilst maintaining adequate incentives to work and economy.”

Joseph E. Stiglitz recently applied this approach to the Ukraine crisis. To ensure the fair distribution of sacrifice, he argues, governments must impose a windfall-profit tax on domestic energy suppliers (“war profiteers”). Stiglitz proposes a “non-linear” energy-pricing system whereby households and companies could buy 90% of the previous year’s supply at last year’s price. In addition, he advocates import-substituting policies such as increasing domestic food production and greater use of renewables.

Stiglitz’s proposals may work for the United States, which is far less vulnerable to external disruption than European countries. With a quarter of the global GDP, 14% of world trade, and 60% of the world’s currency reserves, the US can afford belligerence. But the European Union cannot, and the UK even less so.

While the UK has been almost as aggressive as the US in its response to Russia’s actions, Britain is far less prepared to manage a war economy than it was in 1940: it makes fewer things, grows less food, and is more dependent on imports. The UK is more vulnerable to external shocks than any major Western power, owing to decades of deindustrialization that have shrunk its manufacturing sector from 23% of gross value added in 1980 to roughly 10% today. While the UK produced 78% of the food it consumed in 1984, this figure had fallen to 64% by 2019. The British economy’s growing reliance on imported energy has made it even less self-sufficient.

For decades, the financial sector propped up the UK’s hollowed-out economy. Financial flows into the City of London allowed the country to neglect trade and artificially maintain higher living standards than its export capacity warranted. Britain’s current-account deficit is now 7% of GDP, compared to a current-account surplus of 1.3% of GDP in 1980. Until recently, the British formula had been to finance its external deficit by attracting speculative capital into London via the financial industry, which had been deregulated by the “big bang” of 1986.

This was brilliant but unstable financial engineering: foreigners sent the UK goods that it otherwise could not afford, Britain sent them sterling in return, and foreigners used the pound to buy British-domiciled assets. But this was a short-term fix for the long-term decline of manufacturing, enabling the UK to live beyond its means without improving its productivity.

In his 1930 Treatise on Money, Keynes distinguishes between “financial circulation” and “industrial circulation.” The former is mainly speculative in purpose. But an economy that depends on speculative inflows experiences financial booms and busts without any improvement to its underlying growth potential. The UK’s strategy echoed this observation: it did little to develop exportable goods that could improve the current-account balance, and its success depended on foreigners not dumping the pound.

But the speculator’s logic, as George Soros explains, is to make a quick buck and get out before the crash. Relying on speculators is like a narcotics addiction: a temporary high becomes a necessary crutch. The energy crisis brought on by the Russia-Ukraine war was the equivalent of cold-turkey withdrawal, blowing an even larger hole in the UK’s trade balance. The current-account deficit is expected to increase to 10% of GDP by the end of 2023, providing short-term investors with a strong incentive to sell their sterling-denominated bonds.

The pound’s ongoing decline will make UK imports more expensive. And since import prices will likely rise faster than export values, the decline in the sterling’s exchange rate will probably widen the current-account deficit, not least because the country’s diminished manufacturing sector depends heavily on imported inputs. As the pound depreciates, the price of these imports will increase, resulting in even greater erosion of living standards.

This leaves policymakers with few good options. The Bank of England has already raised interest rates to maintain inflows of foreign capital, but high interest rates will likely crash housing and other asset markets that have become addicted to rock-bottom rates over the past 15 years. Taking steps to balance the budget may temporarily calm markets, but such measures would not address the British economy’s underlying weakness. Moreover, there is no evidence that fiscal consolidation leads to economic growth.

One possible remedy would be to revive government investment. UK public investment fell from an average of 47.3% of total investments between 1948 and 1976 to 18.4% between 1977 and 2007, leaving overall investment dependent on volatile short-term expectations.

The only way the UK could “pay for the war” is to implement an industrial strategy that aims to increase self-sufficiency in energy, raw materials, and food production. But such a policy will take years to bear fruit.

All European countries, not just Britain, face an energy crisis as a result of the disruption of oil and gas supplies from Russia, and policymakers are eager to increase energy inflows. But any deal with Russia as it wages its war on Ukraine with apparent disregard for human life would carry enormous moral and political costs.

One possible way forward may be to reach an agreement to ease economic sanctions in exchange for a resumption of gas flows. Given its special economic vulnerability, and following Brexit, Britain is well placed to explore this idea on behalf of – but independently from – the EU.

A limited agreement could ease Europe’s energy crisis while allowing continued military support for Ukraine. But it should be conditional on Russia reducing the intensity of its horrific “special military operation.” Negotiation of a limited energy-sanctions deal could, perhaps, open the door to a wider negotiation aimed at ending the war before it engulfs Europe.

As for the UK, in the short term it will remain dependent on City-generated financial inflows to prevent a catastrophic near-term collapse of the pound, forcing the new British Chancellor, Jeremy Hunt, to scramble to “restore confidence” in the British economy. In lieu of Keynesian taxes or public investment, that will most likely mean drinking more of the austerity poison that caused Britain’s current malady.

Gorbachev’s Tragic Legacy

~ Robert Skidelsky

Oct 19, 2022ROBERT SKIDELSKY

Admired in the West but loathed by his countrymen as a harbinger of Russia’s post-Cold War misfortune, Mikhail Gorbachev fully grasped the immense challenges of reforming the ailing Soviet Union. Today’s Russia largely reflects the anti-Western grievances stemming from his failure.

LONDON – Mikhail Gorbachev, the Soviet Union’s last leader, was buried last month at the Novodevichy Cemetery in Moscow next to his wife Raisa and near fellow Soviet leader Nikita Khrushchev. To no one’s surprise, Russian President Vladimir Putin did not attend the funeral. Novodevichy, after all, is where “unsuccessful” Soviet leaders had been consigned to their final rest.

Putin’s snub reminded me of a conversation I had two decades ago during a midnight stroll through Red Square. On impulse, I asked the army officer stationed in front of Lenin’s Tomb who was buried in the Soviet Necropolis behind it, and he offered to show me. There, I saw a succession of graves and plinths for Soviet leaders: from Stalin to Leonid Brezhnev, Alexei Kosygin, and Yuri Andropov. The last plinth was unoccupied. “For Gorbachev, I suppose?” I asked. “No, his place is in Washington,” the officer replied. 

Ironically, Gorbachev has been lionized in the West for accomplishing something he never set out to do: bringing about the end of the Soviet Union. He was awarded the Nobel Peace Prize in 1990, yet Russians widely regarded him as a traitor. In his ill-fated attempt at a political comeback in the 1996 Russian presidential election, he received just 0.5% of the popular vote. 

Gorbachev remains a reviled figure in Russia. A 2012 survey by the state-owned pollster VTsIOM found that Gorbachev was the most unpopular of all Russian leaders. According to a 2021 poll, more than 70% of Russians believe their country had moved in the wrong direction under his rule. Hardliners hate him for dismantling Soviet power, and liberals despise him for clinging to the impossible ideal of reforming the communist regime.

I became acquainted with Gorbachev in the early 2000s when I attended meetings of the World Political Forum, the think tank he founded in Turin. The organization was purportedly established to promote democracy and human rights. But in practice, its events were nostalgic reminiscences where Gorbachev held forth on “what might have been.” He was usually flanked by other has-beens of his era, including former Polish leaders Wojciech Jaruzelski and Lech Wałęsa, former Hungarian Prime Minister Gyula Horn, Russian diplomat Alexander Bessmertnykh, and a sprinkling of left-leaning academics. 

Gorbachev’s idea of a “Third Way” between socialism and capitalism was briefly fashionable in the West but was soon swamped by neoliberal triumphalism. Nonetheless, I liked and respected this strangely visionary leader of the dying USSR, who refused to use force to resist change.

Today, most Russians cast Gorbachev and Boris Yeltsin as harbingers of Russia’s misfortune. Putin, on the other hand, is widely hailed as a paragon of order and prosperity who has reclaimed Russia’s leading role on the world stage. In September, 60% of Russians said they believe that their country is heading in the right direction, though this no doubt partly reflects the tight control Putin exercises over television news (the main source of information for most citizens). 

In the eyes of most Russians, Gorbachev’s legacy is one of naivete and incompetence, if not outright betrayal. According to the prevailing narrative, Gorbachev allowed NATO to expand into East Germany in 1990 on the basis of a verbal commitment by then-US Secretary of State James Baker that the alliance would expand “not one inch eastwards.” Gorbachev, in this telling, relinquished Soviet control over Central and Eastern Europe without demanding a written assurance. 

In reality, however, Baker was in no position to make such a promise in writing, and Gorbachev knew it. Moreover, Gorbachev repeatedly confirmed over many years that a serious promise not to expand NATO eastward was never made. 

In any case, the truth is that the Soviet Union’s control over its European satellites had become untenable after it signed the 1975 Helsinki Final Act. The accord, signed by the United States, Canada, and most of Europe, included commitments to respect human rights, including freedom of information and movement. Communist governments’ ability to control their population gradually eroded, culminating in the chain of mostly peaceful uprisings that ultimately led to the Soviet Union’s dissolution. 

Yet there is a grain of truth to the myth of Gorbachev’s capitulation. After all, the USSR had not been defeated in battle, as Germany and Japan were in 1945, and the formidable Soviet military machine remained intact in 1990. In theory, Gorbachev could have used tanks to deal with the popular uprisings in Eastern Europe, as his predecessors did in East Germany in 1953, Hungary in 1956, and Czechoslovakia in 1968. 

Gorbachev’s refusal to resort to violence to preserve the Soviet empire resulted in a bloodless defeat and a feeling of humiliation among Russians. This sense of grievance has fueled widespread distrust of NATO, which Putin used years later to mobilize popular support for his invasion of Ukraine. 

Another common misconception is that Gorbachev dismantled a functioning economic system. In fact, far from fulfilling Khrushchev’s promise to “bury” the West economically, the Soviet economy had been declining for decades. 

Gorbachev understood that the Soviet Union could not keep up with the US militarily while satisfying civilian demands for higher living standards. But while he rejectedthe Brezhnev era’s stagnation-inducing policies, he had nothing coherent to put in their place. Instead of facilitating a functioning market economy, his rushed abandonment of the central-planning system enriched the corrupt managerial class in the Soviet republics and led to a resurgence of ethnic nationalism. 

To my mind, Gorbachev is a tragic figure. While he fully grasped the immense challenges facing Soviet communism, he had no control over the forces he helped unleash. Russia in the 1980s simply lacked the intellectual, spiritual, and political resources to overcome its underlying problems. But while the Soviet empire has been extinct for 30 years, many of the dysfunctions that contributed to its demise now threaten to engulf the entire world.

Russia’s Path to Premodernity

~ Robert Skidelsky

Jun 14, 2022 ROBERT SKIDELSKY

The Stalinist retreat from science and logic persisted following the Soviet Union’s collapse and is now the main tendency of Russian President Vladimir Putin’s rule. With his faith-based mythology, warping of history, and denial of facts, Putin’s withdrawal from contemporary Europe could not be starker.

LONDON – The Russian writer Pyotr Chaadayev said of his country that “we have never advanced along with other people; we are not related to any of the great human families; we belong neither to the West nor to the East, and we possess the traditions of neither. Placed, as it were, outside of the times,” he wrote, “we have not been affected by the universal education of mankind.”

That was in 1829. The “riddle, wrapped in a mystery, inside an enigma,” as Winston Churchill described Russia more than a century later, is no closer to being solved today. The philosopher John Gray recently wrote that Russian President Vladimir Putin “is the face of a world the contemporary Western mind does not comprehend. In this world, war remains a permanent part of human experience; lethal struggles over territory and resources can erupt at any time; human beings kill and die for the sake of mystical visions.” That is why Western commentators and liberal Russians are baffled by Putin’s so-called “special military operation” in Ukraine.

Personality-based explanations for Putin’s actions are the easiest to advance – and the most facile. Putin is neither acting like an expert chess player, calculating every move, nor like a ruler unhinged by power or steroids.

Rather, Putin has a distorted, or at least one-sided, view of Russian history, and of what constitutes Russia’s special virtue. But this does not explain the widespread popular and intellectual support in Russia for his justificatory narrative regarding Ukraine. We are all to some extent captives of our national myths. It is just that Russian mythology is out of step with “the universal education of mankind.”

We expect Russia to behave more or less like a modern, or even postmodern, European nation-state, but forget that it missed out on three crucial ingredients of European modernization. First, as Yuri Senokosov has written, Russia never went through the Reformation or had its age of Enlightenment. This, Senokosov argues, is because “serfdom was abolished only in 1861 and the system of Russian autocracy collapsed only in 1917 […] It was then swiftly restored.” As a result, Russia never experienced the period of bourgeois civilization which, in Europe, established the outlines of the constitutional state.

Second, Russia was always an empire, never a nation-state. Autocracy is its natural form of rule. To its current czar, the disintegration of the Soviet Union in 1991 was a violation of Russian history.

The third missing ingredient, related to the absence of the first two, was liberal capitalism, of which Russia had only brief and limited experience. Marx insisted that the capitalist phase of economic development had to precede socialism, because any attempt to build an industrial economy on the archaic soil of peasant primitivism was bound to lead to despotism.

Yet, this is exactly what Lenin’s revolutionary formula of “Soviet power plus the electrification of the whole country” amounted to. Lenin, a brilliant opportunist, was following in the tradition of the great reforming czars who tried to westernize Russian society from the top. Peter the Great demanded that Russian men shave their beards and instructed his boyars: “Don’t gorge like a pig; don’t clean your teeth with a knife; don’t hold bread to your chest while cutting it.”

In the nineteenth century, Russia’s relationship with Europe took on a new dimension with the idea of the New Man – a Western type inextricably linked to Enlightenment philosophy and enthusiastic about science, positivism, and rationality. He appears as Stoltz in Ivan Goncharov’s 1859 novel Oblomov. In Ivan Turgenev’s Fathers and Sons (1862), he is the nihilist “son” Bazarov, who champions science and rails against his family’s irrational traditions. Nikolai Chernyshevsky’s novel What Is to Be Done? (1863), which strongly influenced Lenin, imagines a society of glass and steel built on scientific reason.

Because of their shallow roots in Russian culture, these futuristic projections incited a literary peasants’ revolt. Fyodor Dostoevsky’s Notes from the Underground, published in 1864, not only became one of the canonical texts of Christian Slavophilia, but also raised profound questions about modernity itself.

The Bolsheviks made the greatest collective attempt to bring the New Man out of literature and into the world. They, like Peter the Great, understood that transforming a society required transforming the people in it. They launched a concerted effort, with the participation of the foremost avant-garde artists of the time, to modernize people’s mindsets and nurture their revolutionary consciousness. Russians would become the scientifically and collectively minded New Men who would help build the Communist Utopia.

This was perhaps the biggest failure of all. With Stalin deeming socialism achieved in 1936, and state-mandated socialist realist literature and art exalting mysticism over science, Soviet dreams of a New Man remained just that. The retreat from science and logic survived the Soviet Union’s collapse and now is the animating tendency of Putin’s rule. His own faith-based mythology, unusual symbiotic relationship with the Orthodox Patriarch Kirill of Moscow, warping of history, and denial of facts, underscore the extent of Russia’s withdrawal from contemporary Europe.

In his 2003 book The Breaking of Nations, the former European Union diplomat Robert Cooper thought Russia’s future was still open. The signing of the Conventional Armed Forces in Europe Treaty and later Russian moves to join NATO indicated that “postmodern elements” were “trying to get out.” Whether the rapprochement was foiled by Western arrogance or Russian incompatibility will long be debated. By 2004, Putin had shed most of his liberalizing tendencies and began embracing traditionalism. In Cooper’s classification, Russia is a modern pre-modern state.

Following the Soviet Union’s 1968 invasion of Czechoslovakia, the Czech writer Milan Kundera refused to adapt Dostoevsky’s The Idiot for the stage. “Dostoevsky’s universe of overblown gestures, murky depths, and aggressive sentimentality repelled me,” Kundera said. It is in these murky depths, behind the rational façade, that we can glimpse Putin’s war.