Wars and economies...

The dismissal of Shoygu and the appointment of the economist Beluosov in Russia should be considered a significant development. This indicates Russia's belief that the Ukraine war will not end in the near future and will gradually escalate and expand. It suggests that Russia has decided to structurally transform its entire economy in preparation for a larger confrontation.

Throughout world history, partial and local wars have been fought based on capacities prepared for possible wars. Often, ceasefires, peace agreements, and normalization follow in succession. However, the transformation of economies due to wars is a very different situation. This indicates that wars will spread and not remain limited to a particular region.

The militarization of economies is not unique to Russia. SIPRI data shows that Europe and Asia are also undergoing a similar structural transformation. Can we expect a reversal from this dangerous trend? For instance, can we anticipate that the Russia-Ukraine war will conclude somehow, preventing a larger war through an agreement? If the structural transformation of economies had not occurred, perhaps we could have kept our hope for peace alive. But now, expecting that would be futile.

The root causes of war stem from the economy. We can say that there are various stages to this. War starts economically. It unfolds as currency and trade wars. Ultimately, it leads to the structural militarization of economies and the outbreak of wars.

At its core lies the loss of advantages by the US and Europe in competition with China. The expectations of Western capital in their investments in China were twofold. After World War II, the world was built on Western production monopolies. However, over time, rising taxes and wages in the West increased production costs. If cost increases had been accompanied by productivity increases, there would have been no problem. But that was not the case. Cost increases were followed by productivity losses. This was something that capitalist economic logic could not accept. The rapprochement between the US and China in the 1970s was actually to meet the centrifugal demand of capital. After World War II, the restructuring of Japan and Germany based on the expansion dynamics of capital was a good experience. Now it was envisaged that China would be integrated. China would not only be a vast production base where costs were reduced and productivity was restored, but it would also become a vast consumption base.

Things went as expected for a while. But over time, China transitioned from labor-intensive production to capital-intensive production. Eventually, it began to secure its monopolization through the know-how technology it first copied and then developed. At first, the West made China dependent on itself; however, over time, it became dependent on China itself. For example, after World War II, the largest volume of world trade was between the US and the EU. Over time, not only did China seize the US market, but it also pushed back the US in the European market. This is what started currency and trade wars. Trade wars prompted the US, the global economic champion, to take protectionist measures, which we can call neo-mercantilism. Various measures began to be taken to prevent Chinese goods from entering the US. The ban on Huawei, the TIC TOCK decision, heavy taxes on Chinese electric cars, and similar applications indicate how tough the trade war is. Last year, the US reversed China's decline by making its largest purchase from Mexico. The vilification of Russia and the instigation of the Russia-Ukraine war led to Europe's dependency on the US in terms of energy. This also crippled China's Northern trade route reaching Europe. The Middle zone is being made insecure with various instabilities and conflicts in the Black Sea and the Caucasus. Finally, the sea route is under threat due to wars in the Middle East. The closure of the Red Sea should be considered the clearest evidence of this. In short, China's transportation arteries and supply routes are being weakened. In fact, these practices indicate that there is no fundamental difference in the China issue between Biden and Trump.

China is under a double pressure. On the one hand, it deals with pressures from the US and its allies. It is preoccupied with overcoming the prohibitions imposed on it in various ways. On the other hand, the quality improvement it achieved in its production is increasing costs in China as well. Economic development in China, as seen in all industrialized societies, has led to an unsatisfied middle class focused on domestic consumption. The Chinese population is rapidly declining and aging. This increases costs and reduces efficiency. Recently, capital flight from China has begun. Chinese decision-makers are trying to manage this process, i.e., capital outflow, in line with their interests. Finally, amidst all these troubles, China is also preparing for a potential Pacific war to some extent and therefore has to militarize its economy to some extent.

To suppress the economy with political-legal decisions may be possible to a certain extent. China, which still holds economic superiority, will find a way out one way or another. It should not be difficult to predict that this will lead to further hardening of the US and EU positions, and their militaristic measures. Capital will not return to the US or more generally to the West. I predict that Africa will be the new continent where it will go, whether orchestrated by China or not. This also indicates that the conflict will move to the Black Continent.

In short, the situation is becoming increasingly ominous, with numerous signs emerging. As Hegel once said, "War disperses the storm clouds gathering over the world," illustrating the potential for conflict to disrupt the prevailing tensions.

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