Posts Tagged ‘Germany’

A weary time

December 4, 2014

Two hundred years ago last month, Hegel wrote contemptuously to a friend about the patriotic vaunting of national identity (Deutschdumm, or ‘Germandumb’) that was sure to follow the Congress of Vienna:

[According] to a few rumours, the era after the Congress of Vienna is — apart from the political aspect, which does not concern us — to be assured by an interesting literary-artistic idea: the erection of the great memorial column dedicated to the Nation along with a comprehensive national archive for the conservation of Old German monuments and patriotic relics of all sorts, including the song of the Nibelungen, Imperial treasures, King Roger’s shoes, electoral capitulations, free constitutional charters, Albrecht Dürer’s woodcuts, Norica, and so on.

It will be built on a quiet spot, so that its enjoyment will be more secure from the noise of the rest of reality…

The entire Congress, however, is to be concluded with a great ceremony, a torchlight procession with the ringing of bells and roaring of cannons to the ultimate rule of reason in which the German people [Pippel] will be trampled in the dirt.

Behind Pippel there follow, as valets and attendants, a few tame house cats, such as the Inquisition, the Jesuit Order, and then all the armies with their sundry commissioned, princely, and titled marshals and generals.

Romantic nationalism, tricked out with philosophical respectability by Fichte and Schlegel, was one cause for sarcasm.

Another was the conclave itself, where autocrats plotting Europe’s post-Napoleonic order had decorated their arcana imperii with liberal banners:

It is a new, unforgettable experience for the peoples to see what their Princes are capable of when they convene to devote themselves in mind and heart to discussion of the welfare of both their own peoples and the world  all, to be sure, according to the most noble declared principle of universal justice and the welfare of all.

For centuries we have only seen action taken by cabinets or individual men for themselves against others. The present phenomenon, however, is unique and calls for a brilliant result.

Kissinger Metternich

Of the War of Liberation that had expelled the French, Hegel commented scornfully: ‘if by chance I see any liberated individuals I myself will rise to my feet.’

There were ‘still many things to be asked about this Liberation of ours which is said to have taken place’:

I have already noticed that the public hopes that Imperial freedoms will be won back again, and the rabble is convinced. They hope to have back the good old days.

It will then once more be permitted, as one man puts it, to give a box on the ear for sixteen pennies — for that is what it cost under the Old Regime — while a second man thinks he will be free again to have his ears boxed.

[…]

Great events have transpired about us. It is a frightful spectacle to see a great genius destroy himself. There is nothing more tragic. The entire mass of mediocrity, with its irresistible leaden weight of gravity, presses on like lead, without rest or reconciliation, until it has succeeded in bringing down what is high to the same level as itself or even below.

Six years earlier, in October 1808, Hegel had appealed in gossipy tones to the poet Karl Ludwig von Knegel, demanding to learn ‘for my personal edification’ about Napoleon’s audience with Goethe at Erfurt:

What did Napoleon talk about at the ball with Wieland and Goethe?…

Tell me about it when you feel inclined. And tell me whether there was any delight in it for you, and whether even some honour slipped in along with it  I do not want to say for the Germans, but rather for those individuals of such great merit.

Goethe and Napoleon at Erfurt

In October 1806 Hegel had famously observed the Weltgeist trotting through Jena on horseback:

I saw the Emperor  this world-soul  riding out of the city on reconnaissance. It is indeed a wonderful sensation to see such an individual, who, concentrated here at a single point, astride a horse, reaches out over the world and masters it.

Hegel’s enthusiastic evocation of the conquering hero is one of the more familiar, quotable, exoteric passages in an otherwise forbidding and obscure output.

So let’s renew our interest by reminding ourselves that, for him, Napoleon’s arrival heralded the onset of military occupation, with all its predictable depredations and rapine.

The latter began just before winter set in, and the philosopher soon complained to friends of French ‘plunder’ of food and timber for fires, along with ‘the inevitable inflation, thievery… Nobody has imagined war such as we have seen it!’

Moreover, the Grande Armée‘s advance had made Hegel’s own financial circumstances suddenly precarious.

In late September 1806 his publisher had imposed a final deadline for delivery of the remaining sections of his Phenomenology of Spirit, which hitherto had allowed Hegel a steady cash flow of 21 florins per page.

Accordingly, two days before the Battle of Jena-Auerstädt began, Hegel had entrusted the manuscript to a mounted courier, instructing him to pass south through French lines to Bamberg.

Hegel-and-Napoleon-in-Jena-1806

For the most part, Hegel did not exhibit a giddy Schwärmerei for the person of Napeleon, the military genius.

He warned a student against ‘marvelling speechless at events like brutes  or, with a greater show of cleverness, from attributing them to the accidents of the moment or talents of an individual, thus making the fate of empires depend on the occupation or non-occupation of a hill.’

Rather, Hegel welcomed Napoleon as the ’emanation’, the ‘outward diffusion’ of the French Revolution to the rest of Europe:

Thanks to the bath of her Revolution, the French nation has freed herself of many institutions which the human spirit had outgrown like the shoes of a child. These institutions accordingly once oppressed her, and they now continue to oppress other nations as so many fetters devoid of spirit…

This is what gives this Nation the great power she displays against others. She weighs down upon the impassiveness and dullness of these other nations, which, finally forced to give up their indolence in order to step out into actuality, will perhaps  seeing that inwardness preserves itself in externality — surpass their teachers.

Years later, in his Philosophy of History, Hegel would include Napoleon alongside Caesar and Alexander the Great as ‘World-Historical persons, whose vocation it was to be the agents of the World-Spirit’:

[Thinking] men, who had an insight into the requirements of the time  what was ripe for development.

This was the very Truth for their age, for their world; the species next in order, so to speak, and which was already formed in the womb of time. It was theirs to know this nascent principle; the necessary, directly sequent step in progress, which their world was to take; to make this their aim, and to expend their energy in promoting it.

World-historical men  the Heroes of an epoch  must, therefore, be recognized as its clear-sighted ones; their deeds, their words are the best of that time.

What was Napoleon’s world-historical mission, according to Hegel?

It was to act as a pawn or tool of Reason, spreading abroad by military conquest the achievements of France’s bourgeois revolution.

After its defeat at Jena, the agrarian mainstays of Prussian absolutism had been reinvigorated, rather than overturned, by Stein and Hardenberg’s reforms.

The Bauernlegen (Enclosure movement) seized yet larger manorial estates for the wealthiest members of the Junker class. Consolidation via land sales was especially pronounced east of the Elbe.

Nonetheless, in Vienna Metternich could sniff that the Prussians were ‘German Jacobins’, their military ranks infested with a ‘Jacobin spirit.’

Commons and Smallholder losses under land reforms

Prussian farm structure

Even decades later, writing in the dark European night of the Holy Alliance, having renounced his youthful opinions and reached a philosophical accommodation with the Prussian state, Hegel would recall the great French Revolution as a ‘glorious mental dawn’:

All thinking beings shared in the jubilation of this epoch. Emotions of a lofty character stirred men’s minds at that time; a spiritual enthusiasm thrilled through the world, as if the reconciliation between the Divine and the Secular was now first accomplished.

[…]

Objective or Real Freedom: to this category belong Freedom of Property and Freedom of Person. Those relics of that condition of servitude which the feudal relation had introduced are hereby swept away, and all those fiscal ordinances which were the bequest of the feudal law  its tithes and dues, are abrogated.

Real [practical] Liberty requires moreover freedom in regard to trades and professions  the permission to every one to use his abilities without restriction  and the free admission to all offices of State…

Germany was traversed by the victorious French hosts, but German nationality delivered it from this yoke. One of the leading features in the political condition of Germany is that code of Rights which was certainly occasioned by French oppression, since this was the especial means of bringing to light the deficiencies of the old system. The fiction of an Empire has utterly vanished. It is broken up into sovereign states. Feudal obligations are abolished, for freedom of property and of person have been recognized as fundamental principles. Offices of State are open to every citizen, talent and adaptation being of course the necessary conditions.

In 1807, Hegel had written in tremulous anticipation about the Confederation of the Rhine and introduction of the Code Napoléon:

Everyone here awaits the great reorganization soon to break in upon us. I have reported in my newspaper that the land is to be divided into prefectures. There is, moreover, talk of a great assembly of princes and magistrates of the Empire. The crucial decision will surely come from Paris.

Already the crowd of little princes who have remained in northern Germany makes a stronger tie necessary. The German professors of constitutional law have not stopped spewing forth masses of writing on the concept of sovereignty and the meaning of the Acts of Confederation.

The great professor of constitutional law sits in Paris…

Napoleon will have to organize all this.

Thus Hegel’s effusions did occasionally lapse into a certain awestruck fascination with Napoleon.

Tilsit treaties

Later he counselled tranquility in the face of the Restoration, judging its reversals to be transient and minor, with the Prussian reforms largely intact:

I adhere to the view that the world spirit has given the age marching orders. These orders are being obeyed.

The world spirit, this essential [power], proceeds irresistibly like a closely drawn armoured phalanx advancing with imperceptible movement, much as the sun through thick and thin. Innumerable light troops flank it on all sides, throwing themselves into the balance for or against its progress, though most of them are entirely ignorant of what is at stake and merely take head blows as from an invisible hand.

Yet no lingering lies or make-believe strokes in the air can achieve anything against it. They can perhaps reach the shoelaces of this colossus, and smear on a bit of boot wax or mud, but they cannot untie the laces. Much less can they remove these shoes of gods… once the colossus pulls them on.

Surely the safest thing to do both externally and internally is to keep one’s gaze fixed on the advancing giant. To edify the entire bustling zealous assemblage, one can even stand there and help daub on the cobbler’s wax that is supposed to bring the giant to a standstill. For one’s own amusement, one can even lend a hand to the enterprise that is being taken so seriously.

I have anticipated the Reaction of which we presently hear so much…

The Reaction is still far removed from genuine resistance, for it already stands entirely within the sphere over against which resistance stands as something external. Even if it intends to do the opposite, the will of the Reaction is chiefly restricted to matters of vanity. It wishes to place its own stamp on the events it thinks it most vehemently hates, so as to read upon them: “This have we done!”

The essential content remains unaltered. The addition or subtraction of a few small ribbons or garlands changes matters as little as actual injury that is no sooner suffered than healed. For when such injury pretends to a more significant relation to the whole substance than it is capable of having, it proves ephemeral.

Thus  if we largely ignore all the fuss and paltry paper successes of human ants, fleas, and bugs — has this most fearsome Reaction against Bonaparte in essence changed so much, whether for good or evil?

We shall allow these ant, flea, and bug personalities to appear to us just as the good Creator has destined: that is, chiefly as a subject for jokes, sarcasm, and malicious pleasure. If need be, what we can do, in light of this provident design, is to help these poor vermin along to their destiny.

What then happened, amid the conservative post-Napoleonic scene, to this confident vision of the ‘world-historical individual,’ after the established order of dynastic regimes had been reinstated at Vienna and the ageing Hegel was succeeded by his many squabbling legatees?

The philosopher himself was haunted by ‘confused fantasies’ that his work was ‘mere irrelevancies, mere packaging.’ Upon waking from such torrid dreams, ‘it seemed difficult to me to have to go to class and lecture on law.’

Meanwhile nineteenth-century European capitalism, safe beneath the clerical shield of the Holy Alliance, devoted itself to the tame, tawdry, internally pacific business of enrichissez-vous.

Nobody mistook Gladstone, Guizot or Cavour for the World-Soul.

Europe 1815

There matters stood until the mid-twentieth century.

Then, in 1930s Paris, Alexander Kojève appealed to Hegel’s scriptural authority to anoint Stalin, in place of Robespierre-Napoleon, as leader of a ‘universal and homogeneous state’ (enthusiasm he later transferred to the European Economic Community).

Hegel’s sequence of social forms had culminated in Kremlin tyranny, beyond which, for Kojève, no systemic progress was possible: ‘the vanguard of humanity virtually attained the limit and the aim, that is, the end, of Man’s historical evolution.’

In the person of Stalin, once again ‘politics is a tributary of philosophy’, the Georgian seminarian having learnt at the feet of Marx, himself an inheritor of Hegel:

[The] statesman who actualized the first effective step had been educated by a disciple at the second remove from the theoretical initiator… The tyrant who here inaugurated the real political movement consciously followed the instruction of the intellectual who deliberately transformed the idea of the philosopher so that it might cease to be a “utopian” ideal… and become instead a political theory on the basis of which one could give concrete advice to tyrants, advice which they could follow.

Thus, while recognizing that the tyrant has “falsified” the philosophical idea, we know that he has done so only in order to “transpose it from the realm of abstraction into that of reality.”

In 1989, in turn, Francis Fukuyama announced the ‘End of History’, with liberal capitalism now the ne plus ultra of political-economic arrangements. Following the collapse of European Stalinism, all ‘viable systematic alternatives’ to the status quo were henceforth eliminated from the scene.

Benjamin’s ‘storm blowing from Paradise’ turned out to have been but a passing squall. The Angel of History now idled limply in the doldrums, its job complete.

Fukuyama’s conjecture attracted little open assent, smacking too brassily of State Department hubris, if not misguided complacency.

Yet, whether embraced or not, Fukuyama’s dismissal of alternative futures today haunts our Restoration epoch, its tacit assumption so universal that it needn’t be spoken aloud. All the wisdom of the age shares a resigned certainty that socialism was tried once and failed prohibitively, leaving its chastened, disabused epigones with no possibility of progress beyond our existing world of private ownership and paid employment.

In 1977, as French intellectuals underwent full-blown de-Marxification, Jean-François Lyotard had famously announced the death of ‘le grand récit marxiste. From Hegel’s Phenomenology to Solzhenitsyn’s Gulag there ran a clear path.

By 1990, tucked in Fukuyama’s slipstream, Lyotard was registering his own reactions to the Persian Gulf crisis and collapse of European Stalinism:

The fall of the [Berlin] wall… provides evidence that the more open the system, the more efficient it is; while on the other hand it shows that closed and isolated systems are doomed to disappear, either by competition or merely by entropy (Brezhnev should have studied thermodynamics a bit).

‘When the Berlin Wall fell,’ it became clear that all competitors to liberal capitalism had ‘failed definitively’:

The bourgeois discourse of emancipation and the communal organization connected with it, that is, liberal “late” capitalism, now look like the only survivors and winners after two centuries of struggle that sought to impose another way of reading and leading human history. This system has good reasons to claim to be the true supporter of human rights and freedom.

In this ‘present historical situation,’ Lyotard felt entitled to indulge in an imaginative exercise, ‘a postmodern fable… the unavowed dream that the postmodern world dreams about itself:’

[It] happened that systems called liberal democracies came to be recognized as the most appropriate for the task of controlling events in whatever field they might occur. By leaving the programs of control open to debate and by providing free access to the decision-making roles, they maximized the amount of human energy available to the system.

The effectiveness of this realistic flexibility has shown itself to be superior to the exclusively ideological (linguistic) mobilization of forces that rigidly regulated the closed totalitarian systems.

In liberal democratic systems, everybody could believe what they liked, that is, could organize language according to whatever system they liked, provided that they contributed to the system as energetically as they could.

Given the increased self-control of the open system, it was likely that it would be the winner in the competition among the systems all over Earth.

Nothing seemed able to stop the development of this system except the Sun and the unavoidable collapse of the whole star system. In order to meet this predictable challenge, the system was already in the process of developing the prosthesis that would enable it to survive after the solar sources of energy, which had contributed to the genesis and maintenance of the living systems, were wiped out…

The natural sciences were ‘thus preparing for the first exodus of the negentropic system far from Earth with no return.’

Why was this demented cosmic fantasy not a grand narrative, and therefore, on Lyotard’s own terms, suspect?

Because, he explained, it did not describe a ‘promised emancipation.’ It was not a ‘narrative of a promise to be kept… an emergence from an initially alienated condition toward the horizon of the enjoyment of selfhood or freedom.’

Rather, in it ‘the contemporary world’ had been liberated from the ‘horizon of history or historicity in which emancipation was a promise.’

Here, in Lyotard’s ad hoc refinement to his theory, arrived a new intellectual prohibition. Hope for an improved world or better society was now the unacceptable element in any philosophy of history.

Henceforth all that remained was the ‘tangible emancipation’ provided for by capitalism itself: ‘programs that improve what already exists are inscribed in its very mode of functioning.’

Emancipation lay not in an alternative social order, but was ‘an ideal that the system itself endeavors to actualize in most of the areas it covers, such as work, taxes, marketplace, family, sex, race, school, culture, communication.’

Time September 1977 - Nouveaux Philosophes

Thus for contemporary opinion, academic and journalistic, the idea of history as a unique linear ordering has fallen out of favour, convicted of assorted lapses and defects.

The four-stage theory, which grew out of the Scottish Enlightenment, held that:

There are four distinct states which mankind pass thro:—1st, the Age of Hunters; 2dly, the Age of Shepherds; 3dly, the Age of Agriculture; and 4thly, the Age of Commerce.

This schema was carried over wholesale by a certain kind of Marxism (though the latter’s view of history was, for the most part, traduced by Cold War enemies like Popper).

Popper, for his part, promoted the explanatory power of unintended consequences and spontaneous order over what he mistakenly saw as Marxism’s belief in ‘inexorable laws of social development’.

This preference for fortuitous cosmos over purposive taxis upheld, thought Popper, his favoured political programme of ‘piecemeal’ tinkering and meliorist reform. It gainsaid, on the other hand, any Promethean, ‘totalitarian’ ambitions to social planning, which relied on accurate prophecy of the future.

Yet  however apt these strictures against historicism and the latter’s presumptuous claims to forecast the future from past evidence  Popper’s arraignment misfired wildly, letting its intended target off the hook. The ‘fundamental idea that it should be possible to predict revolutions just as it is possible to predict solar eclipses’ was no maxim of Marxism, but largely a figment of the Viennese philosopher.

And, as is well known, Hegel’s ‘ruse of Reason’ was itself drawn from the unintended outcome or ‘invisible hand’ of Adam Smith and the Scots.

To be sure, Hegel’s pre-scientific world of German idealism is separated from our own by a Big Ditch of cognitive style. If ‘every philosophical baby that is born alive is either a little positivist or a little Hegelian’, then sex ratios are increasingly skewed. Hegel’s account of Spirit evolving through successive transitions in the ‘ethical life of a nation’ was indeed, as Popper declared, ‘sheer historicist superstition.’

Yet its commonsense rejection today is, whatever the theoretical rights and wrongs, a symptom of blocked historical imagination, of lowered horizons and world-weary renunciation, an inability to imagine a society fundamentally different from our own perpetual present.

Does such despondency rest  as today is claimed from Paris-Nanterre and the LSE to the US State Department  on a more realistic, hard-headed appraisal of historical possibilities?

Historical reversals are plainly possible: restorations have followed regicide, and chastened ‘post-capitalist’ societies have trudged back to capitalism. Thus disproved is any view of history as a consecutive, strictly ascending sequence, ‘from rudeness to civilization.’ Societies need not progress from the Age of Hunting to the Age of Commerce.

That’s not to say, however, that there isn’t secular evolution, or a preferential path of development, which imparts a bias to history, appearing retrospectively as ‘progress’.

For there to be a secular evolution of modes of production such that mode of production B tends to supersede A (say B = capitalism and A = feudalism), it must merely be the case that the transition probability Pr (A → B) exceeds the reverse transition probability Pr (B → A), and that the latter tends to falls over time.

In the table below, the rows and columns measure the probability per unit of time of a transition from each initial state to each end state. Each state is accessible from any other, but the transition probabilities are asymmetric (i.e. reversions from capitalism to feudalism are unlikely) and non-constant over time, as a system consolidates or undermines itself (e.g. by moulding technology, political or juridical arrangements to fit its purposes).

Transition matrix - modes of production

An eerie stability (juste équilibre européen) prevailed throughout Hegel’s Concert of Powers during the age of Metternich, Talleyrand and Castlereagh, granted ‘perfect security against the revolutionary embers more or less existing in every State of Europe.’ The stultifying continental peace was broken only by the independence of Greece and Belgium, and later the stillborn revolutions of 1848. Outside Europe, imperial bellicosity proceeded unchecked.

Today, following Gorbachev’s Mediterranean conversion to ‘democratic values’, we are similarly stuck without apparent breath or motion on a flat sea, stupefied as capital blares, noisily and garishly, its hour of triumph. A bellum Americanum contra omnes rampages unchallenged. Respectable opinion agrees that development of social institutions and mutations in property rights is forever over.

Political events and social skirmishes would continue to occur, said Fukuyama. But in the advanced capitalist countries there would be no more structural ruptures or capsizals of the sort that transformed society’s basic institutions.

Such illusions in the status quo’s stability are certain to be punctured.

When the July Revolution broke out one year before his death from cholera, Hegel met it as ‘a crisis in which everything that was formerly valid appears to be made problematic… [These are] anxious times in which everything that previously was taken to be solid and secure appears to totter.’

At the victory banquet

November 9, 2014

George Steiner in 1959 on the bureaucratic degeneration of language in Adenauer’s Federal Republic, breeding ‘a profound deadness of spirit, such an inescapable sense of triviality and dissimulation’:

The thing that has gone dead is the German language. Open the daily papers, the magazines, the flood of popular and learned books pouring off the new printing presses; go to hear a new German play; listen to the language as it is spoken over the radio or in the Bundestag.

It is no longer the language of Goethe, Heine and Nietzsche. It is not even that of Thomas Mann.

Something immensely destructive has happened to it. It makes noise. It even communicates, but it creates no sense of communion…

[Languages] can decay and they can die…

Actions of the mind that were once spontaneous become mechanical; frozen habits (dead metaphors, stock similes, slogans). Words grow longer and more ambiguous. Instead of style, there is rhetoric. Instead of precise common usage, there is jargon…

All these technical failures accumulate to the essential failure: the language no longer sharpens thought but blurs it.

[…]

Languages have great reserves of life. They can absorb masses of hysteria, illiteracy, and cheapness (George Orwell showed how English is doing so today).

But there comes a breaking point. Use a language to conceive, organize, and justify Belsen; use it to make out specifications for gas ovens; use it to dehumanize man during twelve years of calculated bestiality. Something will happen to it.

Make of words what Hitler and Goebbels and the hundred thousand Untersturmführer made: conveyors of terror and falsehood. Something will happen to the words. Something of the lies and sadism will settle in the marrow of the language.

The Axel Springer tabloid, though newly sober in tone and respectful of NATO and Tel Aviv, was no less ‘ossified with cliché, unexamined definitions, and leftover words.’

Bild inaugural

Indeed the mannered, inhibited civility of postwar German politics, its well-stocked armoury of polite euphemisms and vacuous consensus — a bland unanimity given philosophical respectability by Jürgen Habermas — was unmatched.

Conventional opinion, official as well as media and scholarly, had acquired a chronic slackness, a ceremonious refusal of straightforwardness, which couldn’t easily be shaken off.

Thus the term used by contemporary German newspapers to describe privatization of state assets (a common story since 1990) is abwickeln (‘wind up’ or ‘settle’), a task accomplished after reunification by the Treuhand (‘trust’).

Political speech, ‘like that used to sell a new detergent, was intended neither to communicate the critical truths of national life nor to quicken the mind of the hearer. It was designed to evade or gloss over the demands of meaning.’

Meanwhile the ‘arrogant obscurities of German philosophic speech’ (a reference to Heidegger) damaged the mind, impairing ‘its ability to think or speak clearly.’

The linguistic rot began, said Steiner, when Bismark’s new state usurped the German language from Goethe, Schiller, Heine and Kleist: ‘citizens of Europe’ who had been alien to the narrow ’emotions of nationalism.’

Henceforth the property of provincial Junkers and Wilhelmine functionaries, the German tongue spoken by ‘university, officialdom, army and court’ after 1871 would become a byword for ponderous and evasive.

After collapse of the Hohenzollern Empire there intervened ‘a brilliant, mutinous period’:

Brecht gave back to German prose its Lutheran simplicity and Thomas Mann brought into his style the supple, luminous elegance of the classical and Mediterranean traditions. These years, 1920-30, were the anni mirabiles of the modern German spirit.

This was followed by the long fascist era, its depredations and barbarisms recorded by Victor Klemperer, in which German became ‘half nebulous jargon, half obscenity.’

Their language threatened by Hitler’s mix of atavism and bureaucratic leadenness, its literary custodians preserved the contents of the German cultural ark by fleeing into exile.

The most capable of them, far from being deracinated, were artistically renewed. Thomas Mann was ‘a citizen of the world, receptive to the genius of other languages and cultures.’ Brecht, ‘being a Marxist, felt himself a citizen of a community larger than Germany and a participant in the forward march of history.’

In the postwar Bundesrepublik, however, no anti-fascist lustration occurred:

On the court benches sit some of the judges who meted out Hitler’s blood laws. On many professorial chairs sit scholars who were first promoted when their Jewish or Socialist teachers had been done to death. In a number of German and Austrian universities, the bullies swagger again with their caps, ribbons, duelling scars, and “pure Germanic” ideals.

The consequences for language, said Steiner, were dire:

[The] major part of what is published as serious literature is flat and shoddy. It has in it no flame of life. Compare the best of current journalism with an average number of the Frankfurter Zeitung of pre-Hitler days; it is at times difficult to believe that both are written in German…

And so far, in history, it is language that has been the vessel of human grace and the prime carrier of civilization.

Until 1989 the preeminent West German writers evaded this narrow philistinism and provincial mediocrity of the Bonn republic by living in West Berlin or, like Peter Weiss, remained abroad.

After the DDR’s collapse and annexation, Günter Grass would compare the unification of 1990 to that of 1871. The contemporary Anschluss, he said, promised little more than the first for German cultural heritage.

As the Ode to Joy played, this scandalous attempt to discredit the festivities prompted a literary critic to tear up Grass’s novel on TV:

Apparently I had disturbed the victors at their victory banquet. According to the official reports then flickering throughout the land, German unification had been a rousing success, one for the history books (despite minor flaws)…

Where is the bright side in all this? Indeed, where? Should I count off the billions that have flowed from West to East and, on balance, trickled back to the West with interest?… Were you expecting an encomium on Dresden’s brilliantly restored Baroque façades?…

The disaster of German unification has been accepted without dissent, however blatantly social injustice divides this country again…

Telegenic twaddle has won the day.

reich-ranicki

In 1997, with Kohl’s decrepit corruption yet to give way to the vigorous SPD-Greens government of Schröder, the federal capital still unmoved from Bonn, Grass could detect diffidence and hesitation in the German ruling elite:

[These] victors of history have no idea what to do with their putative victory. They’re already a little embarrassed about holding it up like a trophy while the cameras are rolling. They’ve been left sitting on their victory as though it were a slow-selling product — a “white elephant,” as the expression has it…

If you hold your hand up to your ear, you can hear the triumphant ideologies of capitalism rasping their demands into a vacuum, wagering now on globalization. They crave an echo…

I picture the victorious capitalist of just yesterday — in most un-Marxist fashion — as a person abandoned by fate, an individual: a middle-aged gentleman, properly attired, except that he just can’t seem to get his tie straight. So there he stands — no, he’s stuck to a stool — the lonely, lonesome capitalist.

He is still feared, it’s true, and probably hated as well, yet no one ever talks back to him.

Whatever comes out of his mouth is considered sacrosanct — be it the most fatuous nonsense, such as that mantra of his: “the market takes care of everything.” He has acquired, in spite of himself, an odour of infallibility, like the Pope.

Poor guy, I say to myself, without pity, and begin to make literary capital out of him.

Few writers besides Grass have since bothered to make much of the old DDR’s destruction, though Uwe Tellkamp’s The Tower has just been published in English.

It is striking that the dissolution of European Stalinism, so often compared heroically to the revolutions of 1848, was for German literature a comparative dead letter. Whereas the original featured Heine, Manzoni, Petöfi and Mickiewicz in starring roles, its pastiche summoned only the Scorpions, David Hasselhoff and David Bowie. Rudolf Bahro had contributed the opus of the DDR dissidents in the late 1970s, before retreating into mysticism by the early 1980s.

Contemplating all this, and yesterday’s tawdry revelries at the Brandenburg Gate, brings to mind Fredric Jameson’s remarks on the historical novels of Peter Weiss:

Such a confrontation with the past must also necessarily include the resistance to it and disgust with which West German readers today greet the older political literature of the West German Gruppe 47 writers, as well as that which postmodern readers in general bring to the now dead past of the interwar years and of World War II — a boredom sometimes mingled with curious stabs of nostalgia, and strengthened by consumerist habits for which the outmoded and old-fashioned are somehow more intolerable than the palpable shoddiness of much of what is truly contemporary.

In today’s Restoration Germany, the population flow has reversed direction: carpetbaggers, tourists and real-estate developers flood into unified Berlin.

The local propertied classes, too, have recovered their composure and sense of mission. At officially consecrated ceremonies of Vergangenheitsbewältigung, state officials are no longer so gun-shy as in days past.

Yesterday Angela Merkel, herself an ornament to the Stalinist bureaucracy’s deft assimilation to the capitalist West, delivered a solemn, canting speech in Berlin.

Collapse of the DDR, in which the Chancellor began her political rise, was saluted as evidence that ‘dreams can come true’:

Nothing has to stay the way it is, however big the hurdles are. We can change things for the better.

This is the message… especially for the people in Ukraine, Syria, Iraq and in many, many other regions of the world where liberty and human rights are threatened or being trampled.

It is a message of confidence in our ability to tear down walls today and in future, walls of dictatorship, violence, ideology and hostility…

We have the power to create, we can turn things to the good: That is the message of the fall of the wall.

German public language is now approaching the semantic nullity of its US counterpart. It is as portentous as it is substantively empty. Like ‘change we can believe in,’ its sleekness is born of the abstract rule of capital: profit and private property unencumbered by cultural tradition or institutional barrier, heedless of logic or meaning.

Such language, rudimentary and therefore infinitely capacious, is perfectly suited to statecraft by a newly ambitious and forthright imperial power. It may be directed at once towards two audiences, listeners at home and abroad, articulating domestic concerns in their own idiom, while being palatable to international audiences, catering to the needs of international diplomacy and power-projection.

Delivered with the appropriate sombreness at one of the country’s many architectural Denkmäler, memorial sites and museums, the televisual effect is striking.

Note that foregrounding 1989 in such a fashion allows Germans to celebrate themselves as historical authors of their own liberal redemption, wresting some of that honour from the United States and other Western Allies (the role of the Red Army in creating conditions for the postwar Rechtsstaat is naturally best ignored). Washington’s ownership since 1945 of the symbol ‘Bringer of salvation from Hitler’ has been a useful useful ideological tool of US hegemony.

The chance to present a similarly feelgood popular symbol of Berlin’s own — German good triumphing over Russified evil, bleached of any political content — is most welcome in the Foreign Office.

Its price — a further debauching of German language, public discourse and historical knowledge — is, for those tendering the currency, well worth it.

Hasbara through the ages

August 5, 2014

Chancellor Bethmann Hollweg, in a July 1914 telegram to the Reich’s ambassador in Vienna, counsels tact in the practice of Weltpolitik.

Trumping up a plausible pretext for war requires both finesse and patience; at the last moment, a headlong rush may be thwarted:

As we have already rejected one British proposal for a conference, it is not possible for us to refuse this suggestion also a limine.

If we rejected every attempt at mediation the whole world would hold us responsible for the conflagration and represent us as the real warmongers. That would also make our position impossible here in Germany, where we have got to appear as though the war had been forced on us.

Our position is the more difficult because Serbia seems to have given way very extensively. We cannot therefore reject the role of mediator; we have to pass on the British proposal to Vienna for consideration, especially since London and Paris are continuously using their influence on Petersburg.

[…]

The Imperial government is thus put into the extraordinarily difficult position of being exposed during the intervening period to the other Powers’ proposals for mediation and conferences, and if it continues to maintain its previous reserve towards such proposals, the odium of having provoked a world war will in the end recoil on it, even in the eyes of the German people.

But a successful war on three fronts (viz., in Serbia, Russia and France) cannot be initiated and carried on on such a basis.

It is imperative that the responsibility for any extension of the conflict to Powers not directly concerned should under all circumstances fall on Russia alone.

Twenty-five years later, Hitler fears similar delays and obstructions:

All these fortunate circumstances will no longer prevail in two to three years. No one knows how long I shall live. Therefore conflict better now…

I am only afraid that at the last minute some Schweinehund will make a proposal for mediation.

Income distribution, technical change and foreign policy in Germany since reunification

September 26, 2013

The less than innocuous totems of the Kohl-Schröder-Merkel years Luftwaffe flying combat missions over the Balkans for the first time since 1945, Joschka Fischer’s theatrical turn at the UN, monetary rules devised in Frankfurt acquiring continental sway, Bundeswehr preserving NATO’s client state in Afghanistan, Lisbon Treaty signed under German presidency of the EU  — require some explanation deeper than that offered, typically, by polite journalism.

What, besides momentary calculation of interest and symbolic expediency, has driven the Aussenamt since its return to Berlin?

How, in particular, do the internal features of German society — broadly, the manner in which economic output is generated and the pattern of its distribution between classes  affect Berlin’s external stance?

Influence running in the opposite direction — from world conditions to domestic performance and growth trajectory — is plain enough to see, and widely acknowledged.

With exports making up around 50% of German GDP, the chronic global macroeconomic imbalances of the last 45 years have governed the recent evolution of the German economy more than most.

This post is a quick guide to how and why some of Germany’s key economic variables have changed since 1990.

What, finally, does their trajectory imply for Berlin’s future role in world affairs? Above all, how resilient is German Atlanticism, the keystone in the arch of the postwar Federal Republic, likely to prove?

As Angela Merkel embraces photo opportunities in Afghanistan, and deploys new expeditionary forces to Central and West Africa, are Strobe Talbott and his juniors at the Brookings Institution correct to fret about a fraying of Berlin’s commitment to NATO?

In the 1970s, following the Nixon Shock, West German firms and their Japanese counterparts famously maintained export competitiveness, despite sharp currency appreciation, by switching rapidly to new capital-intensive techniques (those using more capital goods per worker).

Mechanization, for a time, reaped higher levels of labour productivity (output per worker).

To be sure, technical progress during the 1970s and 1980s would be slower than it had been in the previous ‘miraculous’ two decades.

But, under the SPD administrations of Brandt and Schmidt, followed by Kohl’s long reign, the Bonn republic’s annual growth rates (labour productivity at 2.7%; capital intensity at 3.4%) still outpaced those of other advanced economies besides Japan.

Since labour productivity grew faster than real wages, the wage share in West German national income fell steadily from 1974 onwards.

Wage share GDP - West Germany

Yet this capital-deepening approach was no longer feasible by the time of later currency shocks: the 1985 Plaza Accord, the Exchange Rate Mechanism and the 1999 advent of European monetary union.

In the decade following the collapse and annexation of the Stalinist DDR, unfavourable technical conditions prevailed in the Bundesrepublik. The much-decried fiscal burdens of reunification, mesmerizing popular media if not policy elite during Kohl’s prolonged dotage, distracted from this deeper malaise.

By the early 1990s, further accumulation of fixed capital (by German firms switching to more capital intensive techniques) no longer yielded a proportionate rise in labour productivity.

In other words, adding more capital goods per worker did not sufficiently increase output per worker.

It also reduced ‘capital productivity’ (the output-capital ratio, or value-added per D-Mark of capital used).

Labour productivity - Germany

Output-capital ratio - Germany

Labour productivity and capital productivity - Germany

Constrained by declining profitability, fixed investment slowed down.

Capital-labour ratio Germany

How then were German firms, unable to resort to currency devaluation, to retain their export markets against competitors?

Unit labour costs needed to be held downwards, as before. But since labour-saving technical change was exhausted, real wages would tend to rise faster than labour productivity.

A deflationary solution was soon provided.

Following the opening of vast labour reserves in eastern Europe, came the ascent to power of the SPD-Greens coalition in 1998.

In 2002, amid much excitement in the press at delivery of cures long prescribed, Gerhard Schröder unveiled his Hartz/Agenda 2010 ‘reforms’ to the labour market.

To the applause of the Economist and the OECD, German real wages entered a decade of prolonged stagnation and decline, amid the growth of sporadic or intermittent employment (so-called ‘mini-jobs’).

Real wage - Germany

Since labour productivity, though still sluggish, now rose faster than real wages, the share of value-added won by employees fell.

Wage share GDP - Germany

The declining wage share counteracted the fall in the output-capital ratio, allowing profitability to rise.

Profit rate - Germany

In 2005 at the World Economic Forum in Davos, Schröder boasted that his government had ‘built up one the best low-wage sectors in Europe.’

The combination of slowing accumulation of fixed capital with greater income inequality (the ratio of non-wage income to wages) has indeed restored the profitability of German firms.

Nonetheless, as the country’s enormous trade surpluses since 2002 show, this has entailed a shortage of domestic spending.

The sum of workers’ consumption, capitalist consumption and private investment, plus government spending is insufficient to absorb Germany’s surplus product domestically.

Instead, locally-owned firms depend for their demand on global liquidity from deficit countries in southern Europe, the United States and Britain (whose propertied classes thereby appropriate a share of the surplus produced by German workers).

Meanwhile Germany’s persistent trade surpluses allow its firms, like those in China and Japan, the opportunity to acquire claims over capital assets in these net debtor countries and elsewhere.

Particularly in the satellite economies of Mitteleuropa  the Czech Republic, Poland, Hungary, Slovakia, Slovenia, Romania, Bulgaria, Austria, Belgium, the Netherlands, Sweden, Finland, northern Italy, etc.  German firms have acquired title to growing numbers of capital assets: shipping out machinery, factory equipment and outsourced or offshored operations.

Germany’s increasing stock of capital holdings abroad, plus its dependence on export markets sustained by US spending, helps explain Berlin’s strategic posture since 1990.

This may be seen in the remarks of German president Horst Köhler, a former president of the IMF, who in 2010 explained the Bundeswehr’s mission in Afghanistan:

A country of our size, with its focus on exports and thus reliance on foreign trade, must be aware that… military deployments are necessary in an emergency to protect our interests  for example when it comes to trade routes, for example when it comes to preventing regional instabilities that could negatively influence our trade, jobs and incomes.

For the moment, German property-owners and the German state rely, for a stable internal social order and the fulfilment of external aspirations, upon the successful functioning and continued growth of a world economy that operates under US leadership.

While an integrated world market is intact and international financial architecture continue to function under US protection, the German ruling elite benefits from access to markets and resources, maintained asset values, custodial military support and access to advanced technology, inward investment and protection of external property holdings.

Berlin, to be sure, has real interests and strategic goals which strongly contradict those of Washington.

Nonetheless it is committed, for the moment, to aiding, sponsoring and materially supporting US hegemony. This subordination is embodied in the post-1945 alliance structure of NATO unified command.

Hence Berlin’s support for (if not always fulsome participation in) successive US military expeditions since the 1990s.

Yet, as the case of Willy Brandt (if not Joschka Fischer) makes clear, the lofty sentiments of German Atlanticism rest on a merely temporary alignment of interests.

The convergence between Berlin and Washington will not survive a systemic breakdown and crisis of international markets and finance capital that stifles international trade and investment flows.

Latent competitive ambitions can be perceived without much effort. Concealed beneath the overtly sterile phrases of contemporary state officials are the same fixations that preoccupied German imperialism in the 1930s.

Recent years saw the formation by BASF, Bayer, ThyssenKrupp, Daimler and other German firms of a Resource Alliance. This lobby aims to ‘secure key raw materials in the face of mounting competition from emerging economies.’

Its website explains that ‘international markets can no longer guarantee the availability of relevant raw materials in the required quantities. Thus, German industry therefore again needs direct access to raw materials through involvement in commodity projects in foreign countries.’

Handelsblatt February 2013

In July this year the Frankfurter Allgemeine Zeitung hosted an Energy Security conference which brought together ‘high-level policy makers, representatives from the energy industry and energy experts from non-governmental organisations.’

Speakers included Deutsche Bank executives and the German environment minister, as well as officials from the oil ministries of Iran, Turkey and Iraqi Kurdistan.

They were to ‘focus on political developments in producing countries, particularly the security and geostrategic implications of changing global energy supply routes’:

In the face of growing dependency on oil and gas imports, safeguarding the reliable supply of energy lies at the heart of national and international policy agendas.

The German foreign ministry, its troops placed astride the Oxus river since 2001, touts Central Asia for its ‘as yet untapped gas and crude oil reserves which could be a factor in diversifying Europe’s energy supplies.’

The Central Asian Water Initiative, by which Berlin directs and oversees ‘regional agreement and cooperation on vital resources’, seeks to use the ‘green economy’ to expand its diplomatic influence, while favouring German construction, energy, agriculture and transport firms in the Central Asian marches of the former Soviet Union.

Since 2002, the Termez airbase in Uzbekistan has provided logistical support and a regional footprint.

termez

Finally, one may heed the words of Angela Merkel’s parliamentary spokesman for foreign affairs:

As an open economy closely integrated into the world market, Germany owes much of its prosperity to the stability of the international financial system and open world markets, as the current global economic and financial crisis has so starkly demonstrated…

In addition to this, as a heavily export-oriented economy, we have a great interest in securing maritime trading routes. This is why it is right for the German Navy to be involved in fighting piracy at the Horn of Africa.

Germany’s security depends not least on the most unrestricted possible access to the markets for energy and other raw materials. The German Federal Chancellor has made energy and raw material security an important theme of her chancellorship. The risks that are associated with our heavy dependence on energy supplies from abroad were made abundantly clear by the Russian-Ukrainian gas conflict at the beginning of the year.

Climate protection is closely connected with questions of energy security….

Recently the Handelsblatt was unable to resist characterizing the Desertec project, a North African venture of Deutsche Bank, E.ON and RWE, as a search for Germany’s ‘place in the sun’.

Invoking a ‘hunger for energy’, the business newspaper explicitly recalled the ‘historical precedent’ of the Berlin-Baghdad railway line.

Since the 1960s, and especially since the late 1980s, German and French policymakers have tried with meek persistence to build up an autonomous European military instrument. This would have the capacity to act independently of Washington, projecting power outside Europe in pursuit of their own distinct strategic goals.

The collapse of Stalinist rule in Moscow and Berlin stirred pious hopes that the US-led Cold War security apparatus might also be dissolved.

Instead, European ambitions have again been subordinated to Washington, as NATO has found a new line of business in ‘humanitarian interventions’, peacekeeping operations and the Global War on Terror. Creation of a new supranational political entity, the EU, has not changed matters.

Berlin thus remains reliant, for now, on US cruise missiles and logistics capacity for any expeditionary operations. It cannot openly defy Washington, cut its own deal with energy suppliers, etc.

Yet a prolonged downturn in growth trends, or some other rupture in the capitalist world-system  final annulment or momentary suspension of the postwar practice of interstate benefaction and mutual conviviality of trade — may soon force German rulers to seek a specifically German solution to their problems.

Swimming in it

September 18, 2013

From Part Six of Paul Carell’s Hitler Moves East, 1941-1943:

In the economic field Hitler’s obsession was oil. Oil to him was the element of progress, the driving force of the machine age.

He had read everything that had ever been written about oil. He was acquainted with the history of the Arabian and American oilfields, and knew about oil extraction and refining.

Anyone turning the conversation to oil could be sure of Hitler’s attention. Goering was put in charge of the economic four-year plan because he was playing Hitler’s favourite card: oil.

Typical of Hitler’s attitude is an attested remark he made about an efficient civil servant in the Trade Policy Department of the German Foreign Office: “I can’t bear the man — but he does understand about oil.”

Hitler’s Balkan policy was based entirely on Rumania’s oil. He had built into the Barbarossa directive a special campaign against the Crimea, merely because he was worried about the Rumanian oilfields, which he believed could be threatened by the Soviet Air Force from the Crimea.

[…]

Every one of Hitler’s idées fixes played its fatal part in the war against Russia — but most decisive of all was his obsession with oil.

 

From a lengthy secret report produced in 1946 by the British Defence Ministry, titled ‘Oil as a Factor in the German War Effort, 1933-1945’:

Bent upon the total mobilisation of all domestic resources, the National Socialists, from the moment of their seizure of power, did everything possible to expand crude oil production.

The Mining Laws were immediately altered to permit large-scale exploration and a comprehensive geophysical survey was set on foot. A large programme was worked out for increased drilling and exploration with public funds and, in addition, industry was compelled to spend large sums of its own for the same purpose.

As a result of these measures total drilling increased from 62,000 metres in 1932 to 220,000 metres in 1938, the exploration drilling in virgin areas increasing from 13,000 to 100,000 metres. The effect was a 150 per cent, growth in crude oil output.

Addendum to Hitler’s Directive No. 34, addressed to the Army’s High Command (OKH) on 15 August 1941:

The most important missions before the onset of winter are to seize the Crimea and the industrial and coal regions of the Don, deprive the Russians of the opportunity to obtain oil from the Caucasus… rather than capture Moscow.

Case Blue

Hitler to Friedrich Paulus and other members of the OKH, 1 June 1942, at the Ukrainian headquarters of Army Group South: ‘If I do not get the the oil of Maykop and Grozny, then I must end this war.’

Hitler’s table talk from August 1942, speaking from his new HQ Werwolf:

We must at all costs advance into the plains of Mesopotamia and take the Mosul oil-fields from the British. If we succeed here, the whole war will come to an end, for the British have now only Haifa as their sole loading port for oil.

As regards oil, statistics show that the Russians until quite recently obtained 92 per cent of their oil from the Caucasus.

Carell on Operation Blue (see Hitler’s directives number 41 and 45), June 1942:

[Hitler] had decided to try something entirely new after the unfortunate experiences on the Central Front in the previous year, and to seek the decision in the south by depriving Stalin of his Caucasian oil and by thrusting into Persia. Rommel’s Africa Army played a part in this plan.

The “desert fox,” who was just then preparing his offensive from Cyrenaica against the British positions at Gazala and against Tobruk, the heart of the British defence of North Africa, was to advance right across Egypt and the Arabian Desert to the Persian Gulf.

In this way Persia, the only point of contact between Britain and Russia, and after Murmansk the greatest supply base of US help for Russia, would be eliminated. Moreover, in addition to the Russian oilfields the very much richer Arabian oilfields would fall into German hands.

German military intervention in Iraq had commenced the previous year, threatening what Time magazine called ‘the carotid artery of the British Empire, the Mosul-Haifa oil pipeline.’

Hitler’s Directive No, 30 announced support for ‘forces hostile to England in the Middle East’, while Rommel undertook ‘an offensive against the Suez Canal, finally to break the British position between the Mediterranean and the Persian Gulf.’

Directive No. 32 then envisaged the ‘despatch of a motorized expeditionary force from Transcaucasia against Iraq’.

Meanwhile British and Soviet forces had occupied Iran to secure oil wells, refineries and export terminals in Khuzestan, and preserve their supply lines through Central Asia.

Iraq petroleum company pipeline

Persian Corridor

Hitler in August 1942, after Maykop was taken: ‘In the East it will be all over once we have cut their communications to the south and to Murmansk. Without oil they are finished!’

The opportunities for plunder offered by the Ukraine and Caspian oil excited particular giddiness and dreams of autarky:

There are here a million tons of wheat in reserve from last year’s harvest. Just think what it will be like when we get things properly organised, and the oil-wells are in our possession! …

When the war ends, the German people need not bother its head about what it is going to do during the next fifty years!

We shall become the most self-supporting State, in every respect, including cotton, in the world. The only thing we shall not have will be a coffee plantation — but we’ll find a coffee-growing colony somewhere or other! Timber we shall have in abundance, iron in limitless quantity, the greatest manganese-ore mines in the world, oil — we shall swim in it!

And to handle it all, the whole strength of the entire German man-power!

NY Times Maykop 1942

The German chancellor, dazzled by cornucopian visions, anticipated the realization of Generalplan Ost, the most ruthless of 1930s imperial projects, which had succeeded the earlier visions of the Pan-German League and the September Program.

The fertile and mineral-rich East would supply German enterprises with raw materials, and German farmers would populate a soon-to-be denuded steppe:

The river of the future is the Danube. We’ll connect it to the Dnieper and the Don by the Black Sea. The petroleum and grain will come flowing towards us.

The canal from the Danube to the Main can never be built too big.

Add to this the canal from the Danube to the Oder, and we’ll have an economic circuit of unheard-of dimensions.

Europe will gain in importance, of herself. Europe, and no longer America, will be the country of boundless possibilities. If the Americans are intelligent, they’ll realise how much it will be to their interest to take part in this work.

There is no country that can be to a larger extent autarkic than Europe will be. Where is there a region capable of supplying iron of the quality of Ukrainian iron? Where can one find more nickel, more coal, more manganese, more molybdenum? The Ukraine is the source of manganese to which even America goes for its supplies.

And, on top of that, so many other possibilities! The vegetable oils, the hevea plantations to be organised. With 100,000 acres devoted to the growing of rubber, our needs are covered.

[…]

Through the Black Sea and up the Danube will come iron, manganese ore, coal, oil, wheat — all in an unending stream.

In 26 July 1942 one could find Hitler daydreaming over lunch about the discovery of vast new oil deposits:

The presence of oil in the Caucasus, in the vicinity of Vienna and in the Harz leads one to suspect the existence of an oilfield of whose magnitude and importance one had not the least idea. This is not in the least surprising. As in the case of mineral wealth, the trusts would immediately buy up any newly discovered oil-bearing territories, with the intention of restricting their development to a degree compatible  with their other interests; in this, their primary object would be to prevent exploitation by others.

One must give the Russians their due and admit that, in this respect, they have succeeded in limiting the power of monopolies and eliminating private interests. As a result, they are now in a position to prospect throughout their territory for oil, whose position and probable extension are studied by experts with the assistance of very large-scale maps. In this way, they have not only been able to trace the course of the oil-veins, but have also verified their  facts and extended their knowledge by test borings carried out at the expense of the State. There is a lot we can learn from them.

There is no limit to what we could have extracted from the sources in the vicinity of Vienna, if the State had undertaken the necessary exploitation in time. This, added to the oil-wells of the Caucasus and Rumania, would have saved us from all anxiety for the future. One must not, however, forget that oil-wells are not inexhaustible; and that is why I am still in favour of gas-driven public vehicles, and particularly of gas-driven vehicles for the Party.

Yet these lofty goals were prompted not by grandiose delusion but by simple exigency.

Hitler’s private fixation on oil wasn’t simply a matter of his personal idiosyncracies or predilections. It met the most remorseless, pressing imperative facing the German elite: to secure oil for the Wehrmacht and deny it to the Red Army and British Empire.

Oil lay at the root of Hitler’s notorious difficulties with the Army’s High Command (OKH), whom he said ‘know nothing about the economic aspects of war.’

Germany had abundant supplies of coal in the Ruhr and Silesia, but other strategic materials were less plentiful. For their ongoing supply to be assured against interruption or blockade, it was vital to assert military control over these sources and transport routes, both maritime and overland.

Thus Berlin’s attempt to annex the iron ore of France’s Lorraine basin during the First World War, and the last-ditch lunge for Caspian oil by General Ludendorff in 1918.

In November 1918, the British war cabinet could boast it had ‘floated to victory on a wave of oil’. Later, when describing the actions of Hitler’s government from 1933, the British Defence Ministry would recall this remark of Curzon’s, and the lessons it had imparted to Berlin.

In 1938 Göring’s Reich Office for Economic Development, chaired by the IG Farben’s Carl Krauch, had conducted technical studies into the volumes of raw materials and inputs — oil, rubber, chemicals, tungsten, copper and nickel — that Germany would need for sustained military mobilization.

It estimated that the armed forces would need 485 000 tons of oil products per month, and the entire war and armaments machine would consume almost 700 000 tons.

Estimates of German oil consumptionYet Germany had limited domestic production and refining capacity (200 000 tons per month) and deficient stocks of strategic reserves: only 2.1 million tons, barely enough to cover a few months of civilian commercial activity.

By contrast, Britain had 6.7 million tons of oil in storage at the outbreak of war. The United States, meanwhile, produced 164 million tons of crude oil in 1938, and the Soviet Union 32 million tons.

For aerial warfare, which consumed vast quantities of fuel, Berlin was dependent on unconventional, high-cost sources of energy. The Luftwaffe depended for its aviation fuel on synthetic oil produced from coal via the Bergius hydrogenation process (an alternative to the Fischer-Tropsch process).

In addition, the diesel-powered and fuel oil-driven ships and submarines of the Kriegsmarine would also need ready supplies of crude oil. So would the petrol-fuelled trucks, tanks and motorized artillery of the army divisions.

The territorial boundaries of the German state did not contain the wells and refineries sufficient to meet these needs. In 1939 Germany’s net imports reached 5.2 million tons.

Moreover, Germany’s weak balance of payments position on the current account, and the legacy of Versailles, meant that it had acquired few net assets abroad during the 1920s.

German energy firms therefore lacked the stock of external oil investments held by their continental rivals in France, Belgium and the Netherlands.

German oil production 1944

Given this deficit between its domestic oil production and consumption, and the predictable wartime imposition of naval blockades, interdictions and disruption to overland supply routes (imposed by the British and French from September 1939), German oil stocks would be rapidly depleted.

This meant that the German government’s fuel would have to come from abroad, and would need to be seized.

The Wehrmacht would capture its own oil supplies and deny them to the Red Army and British Empire:

Four days after the [June 1940] signing of the Franco-German Armistice the Office of the Four-Year Plan produced a “Petroleum Plan for Europe.” This plan foresaw a Continental oil deficit, exclusive of the requirements of Great Britain and Russia, of 18 500 000 tons a year. This deficit was to be met by 18 200 000 tons of oil from the Middle East. It is interesting that this plan made no allowance… for any consumption by Great Britain which was presumably envisaged as either standing in unconquerable isolation or as a vassal State no longer worthy of the benefits of oil.

This 1940 plan, drafted by Alfred Bentz, Göring’s plenipotentiary for petroleum, concluded: ‘To keep Europe supplied it is essential to secure the petroleum of the Middle East.’

German oil consumption

As it turned out, in 1941 the Luftwaffe consumed about 100 000 tons of oil per month, the Kriegsmarine about 100 000, and the army 200 000, for annual oil consumption of 4.8 million tons.

To meet these needs, in 1940 the Romanian oil interests of recently conquered French, Dutch and Belgian firms were acquired by German firms like Deutsche Bank, and Romanian exports were redirected to supply German industrial needs.

German shareholders had owned 0.2 percent of Romanian oil assets in 1939; by 1941 this figure reached 48 percent. One million tons of Romanian oil went to Germany in 1940 and 2 million in 1941 — by then, being distributed directly to the Wehrmacht on the eastern front.

Meanwhile ‘the effect of the German occupation,’ wrote Adam Tooze in his Wages of Destruction, ‘was to throw France back into an era before motorization. From the summer of 1940 France was reduced to a mere eight per cent of its pre-war supply of petrol.’

But this wasn’t nearly enough.

In October 1940 the Wehrmacht’s military-economic office reflected on its economic platform after the fall of Paris:

Current favourable raw-material situation (improved by stocks captured in enemy territory) will, in case of prolonged war and after consumption of existing stocks, re-emerge as bottleneck. From summer 1941 this is to be expected in case of fuel oil as well as industrial fats and oils.

Early in 1941, before the attack on the Soviet Union, the Wehrmacht’s chief of war economy Georg Thomas warned Göring that the German armed forces only had enough fuel for a few more months of operations:

It is crucial to seize quickly and exploit the Caucasus oilfields, at least the areas around Maykop and Grozny… If this is not successful, we must expect the most serious repercussions, with unpredictable consequences for military operations after 1 August and for the survival of the economy.

Göring replied that the oil resouces of Baku would soon be seized ‘at all costs.’ His notorious Green Folder, a June 1941 OKW directive setting out priorities for the Soviet operation, read:

To obtain the greatest possible quantity of food and crude oil for Germany – that is the main economic purpose of the campaign.

The same month, Thomas drafted a memo for Göring’s Economic Organization East:

The military leadership has again and again to be reminded that a campaign against Russia has largely economic motives and that in this campaign the demands of the economy must be taken into account more than is usually the case.

When winter fell early, Hitler instructed his armies to secure a position on the lower Don and Donets, and prepare for a spring offensive against the Caucasian oilfields.

Soviet Marshal Timoshenko, charged with protecting the latter, observed in late 1941: ‘The only thing that matters is oil… [We] have to do all we can (a) to make Germany increase her oil consumption and (b) to keep German armies out of the Caucasus.’

Meanwhile the Wehrmacht was attempting to seize the shipment ports and airfields of the Black Sea, to protect the Romanian oilfields on its western shore.

In Tehran in 1943, in one of his pithy wartime toasts, Stalin acknowledged that Moscow and its US and British allies were engaged in ‘a war of engines and octanes’.

In the preparation and conduct of this conflict, the supposedly private fixations of the German leadership – Hitler’s obsession with oil, which he shared with Churchill, Roosevelt and Stalin – was most propitious for German imperialism.

The interwar years had brought fragmentation of the capitalist world economy. The benevolent, positive-sum game of the Pax Britannica and the Gold Standard had broken apart into rivalrous autarkic blocs, each armed to the teeth and engaged in zero-sum competition for resources, colonial possessions and markets.

Then, as now, in any conflict between territorial states the winner would be the party that could mobilize the greatest volume of economic resources to squander on war: that could tax, requisition, procure, conscript or plunder the largest surplus from its domestic economy or external sources.

Raymond Goldsmith - WW2 munitions production

Mark Harrison - Military spending as proportion of national income

In this contest to expand war production, certain commodities, in particular oil, presented a strategic bottleneck for each contending power.

Petrol, lubricants and other oil products and distillates (POL) limited a state’s productive (and military) capacity since they were a necessary input for armament production, chemicals, transport and logistics, and military operations themselves.

A state that would advance its interests through extra-territorial aggression was therefore condemned to stalk the earth with heaving breast and slavering mouth, thirsty for oil, sequestering oil reserves from its rivals, and asserting control over supply routes.

That is why US president Roosevelt, in his April 1939 telegram to Hitler, had asked the German chancellor to ‘give assurance that your armed forces will not attack or invade the territory or possessions’ of several European states as well as ‘Turkey, Iraq, the Arabias, Syria, Palestine, Egypt and Iran.’

If Berlin would publicly commit to a ‘a minimum period of assured non-aggression – ten years at the least – a quarter of a century, if we dare look that far ahead’, then:

The Government of the United States would be prepared to take part in discussions looking towards the most practical manner of opening up avenues of international trade to the end that every nation of the earth may be enabled to buy and sell on equal terms in the world market as well as to possess assurance of obtaining the materials and products of peaceful economic life.

After 1945, Washington itself would successfully prise open the European colonial empires and, through the Atlantic Charter and Bretton Woods institutions, secure ‘equal access’ to raw materials.

In the past, once or twice I’ve mentioned Nazi Germany’s preoccupation with oil, and its central place in Hitler’s grand strategy and war aims.

But I suspect these little asides and brief allusions haven’t been very useful, since the topic is now familiar to few people.

Back in 1973, Martin Van Creveld could write that it was ‘fashionable’ to see oil as the chief motivation behind Germany’s Balkan campaign, as well as in North Africa and the Soviet East.

Who today retains this impression?

General historiography remains more fascinated than ever by the Innenpolitik of Nazi racial doctrine, the microhistory of ‘everyday life’ under Hitler, and, in the (mostly Anglophone) scholarly backwaters, the psychology of political leaders.

For Hans Mommsen, ‘the regime’s foreign policy ambitions were many and varied, without any clear aims’: merely the haphazard outcome of domestic contingencies.

Thus, for the most part, the striving for oil in Hitler’s Drang nach Osten is judiciously left to the narrow and specialized attention of military historians. The recognized scholarly monuments afford oil a passing mention, at most.

‘Left-wing’ histories, like Ernest Mandel’s The Meaning of the Second World War or Clement Leibovitz’s In Our Time: The Chamberlain-Hitler Deal, do little better.

Meanwhile, military historians writing for a popular audience (Antony Beevor’s Stalingrad or William Craig’s Enemy at the Gates) deliberately divorce their precise ‘soldier’s-eye view’ descriptions of famous battlefield ‘showdowns’ from any broader historical context, strategy, antecedents or consequences.

Thus the thirst for oil is absent from today’s conventional view of Hitler’s wars of aggression. Such an obvious elision of historical fact was not necessary until recently.

Robert L Baker 1942

Today, however, Washington is itself engaged in a full-scale drive to secure military control over the world’s energy installations, transport networks and sea lines of communication.

Once again, a desperate and predatory imperial power is trying to sweep through Iraq, Iran, the Caucasus, Central Asia and North Africa.

As this project has proceeded, it has been necessary to obliterate a prior stock of nationalist myths, wartime slogans, popular knowledge and historical interpretations, in order to sustain ‘the Allied victory over Nazi tyranny’ as an enduring ideological symbol supporting the institutions of US hegemony.

Even respectable, mainstream British historians of Nazi Germany have noted this deliberate cleansing of the historical record.

Thus Richard Overy observed, with reference to the US-led invasion of Iraq, how ‘popular ignorance about the nature of oil politics’ had been encouraged via the ‘view that oil is some kind of Marxist red herring’.

Yet, deplorably, such political confusion and historical ignorance has been spread with the help of several self-described Marxists, including the historian Robert Brenner and his epigones like Vivek Chibber.

These academics, linked to the group Solidarity, have derided as un-Marxist the idea that the 2003 invasion of Iraq was a ‘war for oil’:

With respect to neo-liberalization, the Bush offensive was, at best, beside the point, an unnecessary distraction. At worst, it could conceivably endanger the globalization project…

Because the Gore administration would have sought both to sustain the post-Cold War status quo and to further the neo-liberal offensive, it would almost certainly have confined itself to attacking Afghanistan, most likely via NATO, but eschewed a military campaign in Iraq. Against this background, the shift in US policy represented by the attack on Iraq was not even conceivable apart from 9/11…

Given the already achieved level of US geo-political hegemony — in the sense of legitimized dominance — there was so little to be gained in terms of standard US geopolitical and pro-capitalist goals, that the risk-adjusted cost — especially taking into account the multiple ways in which things could go disastrously wrong — ruled out any campaign to significantly revise the world political order.

[…]

Because the goals of the Bush administration are, in effect, so sweeping, they are not remotely capable of being put into practice. Because, in so far as they are practicable, they speak to such narrow interests, they are not easy to sell to the US elite as a whole (although it must be admitted that they command major support within the Republican Party, precisely because those interests are disproportionately represented there). In the end, in view of its meager foreign policy payoffs, how the program of these adventurers could achieve such a powerful grip upon the US state constitutes a real conundrum, from the standpoint of both theory and history.

[…]

The paradoxical conclusion of the foregoing analysis is that very broad sections of US capital support, or at least acquiesce in, a new, and breathtakingly ambitious, imperialist project that, in itself, speaks in no obvious way to their interests.

[…]

In terms of the premises that had underpinned US postwar foreign policy, there seemed little requirement, or motivation, for the sort of global campaign that the Bush administration has now unleashed.

Brenner again:

Is it really conceivable that world oil, today capitalism’s most globalized and profitable industry, would be subjected — in its production, pricing, distribution, and so forth — to government regulation by the most free-market, oil industry-dominated régime in American history? …

On the other hand, any attempt by the US to use control over the oil spigot as a geopolitical weapon, by withholding oil from an opponent to extract concessions, would be considered tantamount to war — as in World War II, when the US sought to close off the supply of oil to Japan. But if the US were willing essentially to declare war by preventing another nation from accessing Middle-East oil, there would be no need to invade the Middle East in order to do so. It could merely use its control of the air and the sea to interdict the flow from that region.

And, repeatedly, from the economist Cyrus Bina:

[Why] do people find it necessary to appeal to anachronistic and misleading phrases, such as “No Blood for Oil”? Would it not be better for the Left, and for the global peace-movement in general, to re-examine the meaning of their actions and slogans? Isn’t it worthwhile for the Left to study the stigma of commodity fetishism behind this phrase?

Such remarks bespeak a view in which imperialist war constitutes an unnecessary, regrettable and messy diversion from the ordinary, clean, peaceful business of capitalism.

Today such a view is even less sustainable than it was in 1938.

Maintaining leadership

May 30, 2011

The US Secretary of State’s budget-request speech before the Senate Foreign Relations Committee in March was, as might have been expected, tedious and slow going.

Her remarks on funding for climate-change programmes, therefore, were calculated (42 minutes in) to straighten her audience’s back and command its attention:

We have a lot of support in the Pacific Ocean region. A lot of those small countries have voted with us in the United Nations.

They are stalwart American allies. They embrace our values… [and] we are in a competition for influence with China.

I’ll just be  let’s put aside the moral, humanitarian, do-good side of what we believe in, and let’s just talk, you know, straight Realpolitik.

We are in a competition with China.

Take Papua New Guinea, huge energy find, to go to one of Senator Lugar’s very strong points. ExxonMobil is producing it [LNG]. China is in there every day in every way trying to figure out how it’s going to come in behind us, come in under us.

They’re supporting the dictatorial regime that unfortunately is now in charge of Fiji.

They have brought all of the leaders of these small Pacific nations to Beijing, wined them and dined them.

I mean, if anybody thinks that our retreating on these issues is somehow going to be irrelevant to the maintenance of our leadership in a world where we are competing with China that is a mistaken notion.

With the obvious proviso that no public pronouncement, whatever the official’s apparent candour, can be taken as a straightforward expression of private opinions and strategic priorities  as though arcana imperii were artlessly disclosed without heed to audience or consequences here some conclusions may safely be drawn.

Washington is indeed disturbed by Beijing’s ability to exert political influence, and meet other objectives, through the offer of credit and provision of funds to states in the southwest Pacific and elsewhere.

Take the US diplomatic cable dated 19 June 2009, sent out of Beijing, and titled ‘PRC/SOUTH PACIFIC: INTERNATIONAL ISOLATION OF REGIME IN FIJI AN OPPORTUNITY FOR CHINA’.

A Fijian embassy official in Beijing, the State Department contact Filipe Alifereti, confided that Chinese economic and development assistance (both ‘project assistance’ and cash grants, including one of 10 million RMB) had won it a degree of influence among the Fijian elite.

Beijing, he claimed, ‘valued Fiji as a useful transit point and for its proximity to important shipping lanes’:

Beijing was privately candid about linking development assistance and economic engagement with “guaranteed” political support on issues of interest to China…

Alifereti asserted that there was little need for the Chinese to push directly for political support from Fiji on issues of Chinese interest, because such support was “guaranteed” and China’s interests were well-understood by Suva.  He indicated that such political support was a simple consequence of the enormous economic influence China had on the island.

In addition to assistance, trade and investment ties, the Chinese government was providing Fijian government officials with training on a range of skills in China, Alifereti reported. This included training military officials, a practice that began after the 2006 coup, he added.

The influence in regional capitals of China’s foreign ministry and Navy  and investment abroad by its companies acquiring productive assets in strategic industries  has grown sharply in recent years.

This blog has shown previously the disquiet this has prompted in the chancelleries of Washington, Canberra and elsewhere, provoking figures charged with strategic policymaking, and alarming media commentators and academic theorists.

While vexation is commonly voiced, a quick glance at a map does not show obvious reason for their unease. The US Navy retains unchallenged dominance of regional sealanes, its Pacific fleet graciously accommodated in ports from Okinawa to New Zealand. The US Treasury and State Department’s influence over local authorities is, likewise, seemingly boundless.

Yet recent regime change in Timor-Leste, military intervention in the Solomon Islands and attempted isolation of the Fijian leadership has not succeeded in maintaining the existing power balance in the southwest Pacific, responsibility for which had been delegated by Washington to the Australian deputy sheriff.

Thus, newspapers have reported that the Dili government’s dispute with Australian firm Woodside Petroleum over the Sunrise natural-gas processing plant could see the international treaty governing development of the offshore field overturned before development ever begins.

At the July 2009 ASEAN summit, one month after the above diplomatic cable was sent to Washington, Canberra and Wellington, Secretary Clinton declared that ‘the United States is back’ in the East Asia-Pacific region.

This return has been accompanied by a characteristic mode of public-diplomatic presentation, repeated faithfully in the newspapers.

As Clinton’s Senate testimony makes clear, officials denounce what they see (or affect to see) as the Beijing elite’s search for a Platz an der Sonne (often described in these very words), including naval expansion and quest for secure energy supplies.

This, the US and their allies tremble, will inevitably lead the Chinese leadership to naked aggression, just as it did for Wilhelmine Germany at the dawn of the twentieth century.

The historical comparison is regularly made.

“The Next Empire”, a 2010 article in The Atlantic, described Chinese outward investment in copper mines and railways in Zambia, the Democratic Republic of Congo and other parts of southern Africa:

The truest intellectual forerunner of China’s strategy seems to be a plan once pursued by Germany. Before its defeat in World War I, Germany’s leaders had dreamed of a continental empire, a Mittelafrika stitched together by railways stretching from Dar es Salaam to the Atlantic Ocean…

Germany’s railway schemes were driven by intense competition with Britain. Although China may claim to be a new kind of power, its plans, too, have always had a strategic component, including rivalry with the West, and lately a desire to circumvent the regional economic powerhouse, South Africa, and ultimately control the markets for key African minerals.

But the comparison is not apt.

What is described both by Clinton, in her Senate testimony, in The Atlantic article, and in a April 2011 report by the Lowy Institute on loans to Pacific countries, is Chinese export of funds and the acquisition of stocks of foreign productive assets, which then allows Beijing to exert political influence and meet strategic objectives.

This practice of net capital export is only open to countries, such as China and Germany, that persistently export more commodities than they import and run a surplus on the current account.

But this prerequisite was not met by the Kaiser’s Germany, which had balance of payments difficulties. It was because the gaining of influence through capital export was closed as a policy option that genteel figures like Bethmann Hollweg resorted to aggression and the seizure of territory.

In the decades before the First World War, Imperial Germany sought to add Angola and Mozambique to its existing territorial holdings in Rwanda, Burundi, Tanzania, Namibia, Kamerun and Togoland.

At the time Angola and Mozambique were Portuguese possessions. But the Portuguese government was massively in debt. In order to secure loans from foreign creditors, it was willing to put up its African colonies as security.

The deepest capital markets in those days were in London and Paris. In 1898 and again after 1911, Whitehall and the Wilhelmstrasse secretly negotiated to partition Portugal’s African possessions between themselves in the event of a default. (More recently the crippled Portuguese state has been bailed out in return for agreeing to privatize state assets.)

But in the first event Lisbon’s finances recovered, and in the second case agreement could not be reached.

Germany was left empty-handed, powerless to act alone (the British Foreign Office had understandably been less eager to conclude a deal).

To the east, as well, stakes in the Ottoman Public Debt were mostly held by French and British creditors, granting the Quai d’Orsay and Whitehall strategic influence.

Thus the Ottoman Finance Minister reported to the German Ambassador that ‘Germany could not expect to be treated the same as France. The latter had, through the granting of the loan, saved Turkey from a desperate situation while Germany, the power on which Turkey had placed all her hopes, had failed her completely, not only financially but also politically.’

Ultimately, access to Persian, Mesopotamian and Caucasian oil rested on this.

Before the Great War broke out, Deutsche Bank and the construction firm Philipp Holzmann AG had reported an ‘unavoidable breakdown of negotiations’ in extending the existing Berlin-Constantinople railway to Baghdad.

The outline concession for the project had been granted in 1899, and in 1903 a supplementary agreement allowed construction to extend to Basra, with the German firms granted authority to make exploratory bores for oil, and given options on confirmed discoveries around Mosul. The line was to be built in separate 200 kilometre sections.

But by 1913 Germany’s financial resources were such that it could not support completion of this project while also pursuing Ottoman-Balkan deals to supply arms, develop civilian and military port facilities, etc. The steel and armaments firm Krupp could not raise a loan for a planned Ottoman-Bulgarian arms deal on the Berlin market while Deutsche Bank refinanced its work on the Mesopotamian railway.

Britain and France, with their more liquid money markets, were able to produce funds for loans, German influence thereby losing out irretrievably.

Thus, in the years before war broke out, Turkish battleships were built in British shipyards by firms such as Vickers (two super-dreadnoughts, due for delivery in August 1914, were famously confiscated by the First Lord of the Admiralty). Meanwhile British leverage over the Porte’s public finances assisted the rise of the Anglo-Persian Oil Company, which together with part-British firm Royal Dutch/Shell secured control over Persian and Mesopotamian oil.

The same was true for achieving Rathenau’s strategic goal of a Mitteleuropa, set out as war aims in the September programme: Belgium ceding to Germany a coastal strip on the North Sea, the Netherlands annexed, France subordinated (with the Longwy-Briey iron-ore basin seized) and Russia’s European territory turned over.

This subordination of the European economy to German strategic imperatives (which has since been achieved peacefully) could not, at the time, be accomplished except by force.

So in general there seems to be an inverse relation between capital export and naked aggression. The latter is the policy resorted to when economic influence wanes or is no longer sufficient to keep out competitors.

Today, as Clinton’s opening remark makes clear, this describes the condition of the United States, which has become a net borrower, unable to pay for its imports with matching exports. Its political leadership, and the propertied classes that control it, must therefore rely on coercive means to preserve their international position relative to rival firms and territorial states.

The latter, on the other hand, can go on achieving export surpluses, with a corresponding buildup of overseas assets and supplicant borrowers, granting them ‘guaranteed political support on issues of interest.’

This does take a peculiar form.

Since many US and European manufacturers have shifted production to low-wage China, and the material form taken by the Chinese export surplus is primarily consumer goods, Chinese capital cannot be exported to the US or Europe productively, i.e. as intermediate or capital goods.

And US firms (e.g. Walmart) and their subsidiaries do own foreign assets in China. They may own plant outright, or hold controlling shares in plant, employ workers in Chinese factories, hire equipment, etc. But the stock of buildings and machinery for these factories hasn’t been manufactured in the US then shipped over. It has, by and large, been produced in China, as have the consumer goods that make up the real wage of the workers employed in these factories.

And, because the US runs a net trade deficit, the local currency necessary to purchase these assets is not obtained from the Yuan receipts of US firms exporting to China. Instead it is converted from dollars which are taken on as IOUs by the Chinese central bank, with these holdings then converted into US government assets, financing the arms expenditure of the Pentagon.

Chinese capital export to the US and Europe thus takes the unproductive form of credit, financing public spending and funding household loans to allow purchases of Chinese consumer-good exports. (Due to this, and to the advent of funded pension schemes, US financial markets remain by far the world’s largest and most liquid).

But there is export of productive capital assets, too. Aside from high-profile cases like Lenovo’s takeover of IBM’s PC division, this has been concentrated in strategic raw materials, and thus towards acquisition of assets in countries like Kazakhstan, Iran, Sudan, Zambia, Australia, Indonesia, Venezuela and (following Sinopec’s purchase of Addax Petroleum) Nigeria.

In short, Chinese firms can finance their railways and mines in southern Africa, and Beijing can afford infrastructure projects in Timor-Leste and the ‘wining and dining’ of people like Frank Bainimarama, in ways that the German Empire could not.

Washington, on the other hand  to ‘maintain its leadership’ and prevent its rivals ‘coming in behind and under’ it  must rely on force.

In the First World War, as now, the grand strategic prizes did not lay in the deserts of the Kalahari, the swamplands of the Caprivi, or even the more mineral-rich territory of southern Africa.

They dwelt in Persian Khuzestan (where in recent years the Chinese National Petroleum Company and Sinopec have negotiated production licences with the Tehran government), the oilfields around Basra (where the largest fields are allocated to ExxonMobil, BP, Shell and CNPC, remaining stakes are divided between mostly British, Dutch and US firms, but where more importantly the US has 50 000 troops, in addition to its various garrisons dotted around the Arabian peninsula), and the Caucasus and Caspian Basin (where the discovery of Tenghiz and Kashagan has raised the stakes, where NATO has recently intruded, which region is subject more generally to Russian-US strategic manoeuvring, e.g. in Georgia and Chechnya, and where, finally, the Shanghai Cooperation Organisation is something to watch).

It is in these territories that the State Department and the Pentagon have been most eager to plant occupation forces, establish large bases and overthrow governments.

Before this brazen and lawless Drang nach Osten, Beijing’s reliance on dollar diplomacy and penetration through loans and capital export can seem strategically unshrewd and hopelessly effete, much as the British and French political class and military High Commands once appeared mysteriously deferential and transfixed, during the first half of the twentieth century, by the expansionism, spiked helmets, and Nietzschean grandeur of their counterparts in the German Reich.

By extending hundreds of billions of dollars in credit, while the Pentagon undertakes its wars and ‘limited kinetic actions’ throughout the geostrategic Heartland of the World-Island, aren’t the Bank of China, the Chinese state and the Chinese capitalist class merely funding their own strategic encirclement?

Yes, but the overriding aim for the moment seems to be obtaining technical know-how through compulsory technology transfer.

The key concern here, it seems, is in developing a domestic industrial base to allow production of Beijing’s own aircraft carriers (the nearly-complete Shi Lang is a refitted Russian purchase), carrier-based fighter aircraft (the new J-15), and ballistic-missile submarines (of which the PLAN still has limited numbers). Today this level of naval development (i.e. being able domestically to build fleets of capital ships from which expeditionary air power can be projected) is a necessary attribute of a first-rate imperial power.

Only once this capacity is achieved, presumably, will the strategic middlegame be over, a prospect, properly considered, which ought to inspire dread.