Oil price collapse – The end of the petrodollar – end of US dominance… War?

The petrodollar has provided the US with unlimited fiscal power for decades. Now that the oil price has crashed, Russia has its own reserves, China has immense power and Iran is the sleeping giant being poked, it’s only a matter of time before war begins.

Main article link: https://www.middleeastmonitor.com/202…

Definition link: https://www.thebalance.com/what-is-a-…

 

Straw admits oil is key priority (in Iraq War)

The foreign secretary, Jack Straw, yesterday pinpointed for the first time security of energy sources as a key priority of British foreign policy.

Mr Straw listed energy as one of seven foreign policy priorities when he addressed a meeting of 150 British ambassadors in London.

The US and British governments officially deny that oil is a factor in the looming war with Iraq, but some ministers and officials in Whitehall say privately that oil is more important in the calculation than weapons of mass destruction.

These ministers and officials have pointed to the instability of current oil sources – the Middle East, Caspian region and Algeria – and the need for secure alternatives. Iraq has the second biggest known oil reserves in the world.

Mr Straw told ambassadors that, following a review he ordered last year, the Foreign Office drew up a list of seven medium to long-term strategic priorities, including “to bolster the security of British and global energy supplies“.

A Foreign Office source said: “I can’t say that energy is irrelevant (to the Iraq conflict) but the issue is one we would have to deal with even if Saddam was a cuddly individual.”

The Foreign Office insists that the main motivation in the confrontation is fear that Iraq has, or intends to develop, biological, chemical and nuclear weapons. Mr Straw put the proliferation of weapons of mass destruction and terrorism at the top of his list of priorities. The others are:

· To minimise threats to the UK such as uncontrolled migration, transnational crime and Islamic extremism;

· To maintain a stable international system based on the UN, the rule of law and multilateral cooperation;

· To promote UK economic interests in an open and expanding global economy;

· To promote democracy, good governance and development, citing as an example involvement of the G7 developed countries in helping Africa;

· To build a strong EU in a secure neighbourhood.

Follow the Money: Preparing for the Collapse of the Petrodollar System

In the final days of World War II, 44 leaders from all of the Allied nations met in Bretton Woods, New Hampshire in an effort to create a new global economic order. With much of the global economy decimated by the war, the United States emerged as the world’s new economic leader. The relatively young and economically nimble U.S. served as a refreshing replacement to the globe’s former hegemon: a debt-ridden and war-torn Great Britain.

In addition to introducing a number of global financial agencies, the historic meeting also created an international gold-backed monetary standard which relied heavily upon the U.S. Dollar.

Initially, this dollar system worked well. However, by the 1960’s, the weight of the system upon the United States became unbearable. On August 15, 1971President Richard M. Nixon shocked the global economy when he officially ended the international convertibility from U.S. dollars into gold, thereby bringing an official end to the Bretton Woods arrangement.

Two years later, in an effort to maintain global demand for U.S. dollars, another system was created called the petrodollar system. In 1973, a deal was struck between Saudi Arabia and the United States in which every barrel of oil purchased from the Saudis would be denominated in U.S. dollars. Under this new arrangement, any country that sought to purchase oil from Saudi Arabia would be required to first exchange their own national currency for U.S. dollars. In exchange for Saudi Arabia’s willingness to denominate their oil sales exclusively in U.S. dollars, the United States offered weapons and protection of their oil fields from neighboring nations, including Israel.

By 1975, all of the OPEC nations had agreed to price their own oil supplies exclusively in U.S. dollars in exchange for weapons and military protection.

This petrodollar system, or more simply known as an “oil for dollars” system, created an immediate artificial demand for U.S. dollars around the globe. And of course, as global oil demand increased, so did the demand for U.S. dollars.

As the U.S. dollar continued to lose purchasing power, several oil-producing countries began to question the wisdom of accepting increasingly worthless paper currency for their oil supplies. Today, several countries have attempted to move away, or already have moved away, from the petrodollar system. Examples include IranSyriaVenezuela, and North Korea… or the “axis of evil,” if you prefer. (What is happening in our world today makes a whole lot of sense if you simply read between the lines and ignore the “official” reasons that are given in the mainstream media.) Additionally, other nations are choosing to use their own currencies for oil like China, Russia, and India, among others.

As more countries continue to move away from the petrodollar system which uses the U.S. dollar as payment for oil, we expect massive inflationary pressures to strike the U.S. economy. In this article, we will explain how this could be possible.

Alan Greenspan Talks About the Petrodollar System
PETRODOLLAR DEFINITION | The money that oil exporting nations receive from selling their oil which is then deposited into Western banks.

The Coming Collapse of the Petrodollar System

When historians write about the year 1944, it is often dominated with references to the tragedies and triumphs of World War II. And while 1944 was truly a pivotal year in one of history’s most devastating conflicts of all time, it was also a significant year for the international economic system. In July of that same year, the United Nations Monetary and Financial Conference (more commonly known as the Bretton Woods conference) was held in the Mount Washington hotel in Bretton Woods, New Hampshire. The historic gathering included 730 delegates from 44 Allied nations. The aim of the meeting was to regulate the war-torn international economic system.

During the three-week conference, two new international bodies were established.

These included:

In addition, the delegates introduced the General Agreement on Tariffs and Trade (GATT, later known as the World Trade Organization, or WTO.)

More importantly, for our purposes here, another development that emerged from the conference was a new fixed exchange rate regime with the U.S. Dollar playing a central role. In essence, all global currencies were pegged to the U.S. Dollar.

At this point, an appropriate question to be asking yourself is: ”Why would all of the nations be willing to allow the value of their currencies to be dependent upon the U.S. Dollar?

The answer is quite simple.

From Bretton Woods to the Petrodollar System

The U.S. Dollar would be pegged at a fixed rate to gold. This made the U.S. dollar completely convertible into gold at a fixed rate of $35 per ounce within the global economic community. This international convertibility into gold allayed concerns about the fixed rate regime and created a sense of financial security among nations in pegging their currency’s value to the dollar. After all, the Bretton Woods arrangement provided an escape hatch: if a particular nation no longer felt comfortable with the dollar, they could easily convert their dollars holdings into gold. This arrangement helped restore a much-needed stability in the financial system. But it also accomplished one other very important thing. The Bretton Woods agreement instantly created a strong global demand for U.S. dollars as the preferred medium of exchange.

And along with this growing demand for U.S. Dollars came the need for… a larger supply of dollars.

Now, before we continue this discussion, stop for a moment and ask yourself this question: Are there any obvious benefits from creating more dollars? And if so, who benefits?

First, the creation of more dollars allows for the inflation of asset prices. In other words, more dollars in existence allows for a rise in overall prices.

For example, imagine for a moment if the U.S. economy had a total money supply of only $1 million dollars. What if, in this imaginary economy, I attempted to sell you my home for $2 million dollars? While you may like my home, and may even want to buy it, it would be physically impossible for you to do so. And it would be completely absurd for me to ask for $2 million because, in our imaginary economy, there is only $1 million in existence.

So an increase in the overall money supply allows asset prices to rise.

But that’s not all.

The Petrodollar System creates an artificial demand for U.S. Dollars which allows asset prices to rise

The United States government benefits from a global demand for U.S. dollars. How? It’s because a global demand for dollars gives the Federal government a “permission slip” to print more. After all, we can’t let our global friends down, can we? If they “need” dollars, then let’s print some more dollars for them.

Is it a coincidence that printing dollars is the U.S. government’s preferred method of dealing with our nation’s economic problems?

Remember, Washington only has four basic ways to solve its economic problems:

1. Increase income by raising taxes on the citizens

2. Cut spending by reducing benefits

3. Borrow money through the issuance of government bonds

4. Print money

Raising taxes and making meaningful spending cuts can be political suicide. Borrowing money is a politically convenient option, but you can only borrow so much. That leaves the final option of printing money. Printing money requires no immediate sacrifice and no spending cuts. It’s a perfect solution for a growing country that wants to avoid making any sacrifices. However, printing more money than is needed can lead to inflation. Therefore, if a country can somehow generate a global demand for its currency, it has a “permission slip” to print more money. Understanding this “permission slip” concept will be important as we continue.

Finally, the primary beneficiary of an increased global demand for the U.S. Dollar is America’s central bank, the Federal Reserve. If this does not make immediate sense, then pull out a dollar bill from your wallet or purse and notice whose name is plastered right on the top of it.

Have you ever asked yourself why the U.S. Dollar is called a Federal Reserve Note?

Once again, the answer is simple.

The U.S. Dollar is issued and loaned to the United States government by the Federal Reserve.

Because our dollars are loaned to our government by the Federal Reserve, which is a private central banking cartel, the dollars must be paid back. And not only must the dollars be paid back to the Federal Reserve. They must be paid back with interest!

And who sets the interest rate targets on the loaned dollars? It’s the Federal Reserve, of course.

Federal Reserve Note - Money is Debt and Debt is Money

To put it simply, the Federal Reserve has a clear vested interest in maintaining a stable and growing global demand for U.S. Dollars because they create them and then earn profit from them with interest rates which they set themselves. What a great system the Federal Reserve has for itself. No wonder it hates oversight and intervention. No wonder the private banking cartel that runs the Federal Reserve despises all attempts to actually audit its books.

In summary, the American consumer, the Federal government, and Federal Reserve all benefit to varying degrees from a global demand for U.S. Dollars.

The Bretton Woods Breakdown: Vietnam, The Great Society, and Deficit Spending

There is an old saying that goes, “He who holds the gold makes the rules.” This statement has never been truer than in the case of America in the post-World War II era. By the end of the war, nearly 80 percent of the world’s gold was sitting in U.S. vaults, and the U.S. Dollar had officially become the world’s undisputed reserve currency.

As a result of the Bretton Woods arrangement, the dollar was considered to be “as safe as gold.”

A study of the United States economy in the post-World War II era demonstrates that this was a time of dramatic economic growth and expansion. This era gave rise to the baby boomer generation. By the late 1960’s, however, the American economy was under major pressure. Deficit spending in Washington was uncontrollable as President Lyndon B. Johnson began to realize his dream of a “Great Society.”With the creation of Medicare and Medicaid, American citizens could now, for the first time, earn a living from their government.

The Breakdown of the Bretton Woods Arrangement - Lyndon B. Johnson - Vietnam, The Great Society, and Massive Deficit Spending

Meanwhile, an expensive and unpopular war in Vietnam funded by record deficit spending led some nations to question the economic underpinnings of America.

After all, the entire global economic order had become dependent upon a sound U.S. economy. Countries like Japan, Germany, and France, while fully on the mend from the devastation of World War II, were still largely dependent upon a financially stable American economy to maintain their economic growth.

By 1971, as America’s trade deficits increased and its domestic spending soared, the perceived economic stability of Washington was being publicly challenged by many nations around the globe. Foreign nations could sense the severe economic difficulties mounting in Washington as the United States was under financial pressure at home and abroad. According to most estimates, the Vietnam War had a price tag in excess of $200 billion. This mounting debt, plus other debts incurred through a series of poor fiscal and monetary policies, was highly problematic given America’s global monetary role.

But it was not America’s financial issues that most concerned the international economic community. Instead, it was the growing imbalance of U.S. gold reserves to debt levels that was most alarming.

The United States had accumulated large amounts of new debt but did not have the money to pay for them. Making matters worse, U.S. gold reserves were at all-time lows as nation after nation began requesting gold in exchange for their dollar holdings. It was almost as if foreign nations could see the writing on the wall for the end of the Bretton Woods arrangement.

As 1971 progressed, so did foreign demand for U.S. gold. Foreign central banks began cashing in their excess dollars in exchange for the safety of gold. As nations lined up to exchange their dollar holdings for Washington’s gold, the United States realized that the game was over. Clearly, America had never intended to be the globe’s gold warehouse. Instead, the convertibility of the dollar into gold was meant to generate a global trust in U.S. paper money. Simply knowing that the U.S. dollar could be converted into gold if necessary was good enough for some — but not for everyone. The nations which began to doubt America’s ability to manage their own finances decided to opt for the recognized safety of gold. (Historically, gold has been, and will likely remain, the beneficiary of poor fiscal and monetary policies, and 1971 was no different.)

One would have expected that the large and growing demand by foreign nations for gold instead of dollars would have been a strong indicator to the United States to get its fiscal house in order. Instead, America did exactly the opposite. As Washington continued racking up enormous debts to fund its imperial pursuits and its over-consumption, foreign nations sped up their demand for more U.S. gold and fewer U.S. dollars. Washington was caught in its own trap and was required to supply real money (gold) in return for the inflows of their fake paper money (U.S. dollars).

They had been hamstrung by their own imperialistic policies.

Soon the United States was bleeding gold. Washington knew that the system was no longer viable, and certainly not sustainable. But what could they do to stem the crisis? There were only two options.

The first option would require that Washington immediately reduce its massive spending and dramatically reduce its existing debts. This option could possibly restore confidence in the long-term viability of the U.S. economy. The second option would be to increase the dollar price of gold to accurately reflect the new economic realities. There was an inherent flaw in both of these options that made them unacceptable to the United States at the time… they both required fiscal restraint and economic responsibility. Then, as now, there was very little appetite for reducing consumption in the beleaguered name of “sacrifice” or “responsibility.”

Goodbye, Yellow Brick Road

The Bretton Woods system created an international gold standard with the U.S. dollar as the ultimate beneficiary. But in an ironic twist of fate, the system that was designed to bring stability to a war-torn global economy was threatening to plunge the world back into financial chaos. The gold standard created by Bretton Woods simply could not bear the financial excesses, coupled with the imperialistic pursuits, of the American economic empire.

On August 15, 1971, under the leadership of President Richard M. Nixon, Washington chose to maintain its reckless consumption and debt patterns by detaching the U.S. Dollar from its convertibility into gold. By “closing the gold window,” Nixon destroyed the final vestiges of the international gold standard. Nixon’s decision effectively ended the practice of exchanging dollars for gold, as directed under the Bretton Woods agreement. It was in this year, 1971, that the U.S. dollar officially abandoned the gold standard and was declared a purely “fiat” currency. (A “fiat” currency is one that derives it value from its sponsoring government. It is a currency issued and accepted by decree.)

Here’s a brief 2-minute excerpt of the actual televised speech delivered by President Nixon on August 15, 1971 in which he ended the U.S. Dollar’s convertibility into gold.

As all other fiat empires before it, Washington had come to view gold as a constraint to their colossal spending urges. A gold standard, as provided by the Bretton Woods system, meant that America had to attempt to publicly demonstrate fiscal restraint by maintaining holistic economic balance.

By “closing the gold window,” Washington had affected not only American economic policy — it also affected global economic policy. Under the international gold standard of Bretton Woods, all currencies derived their value from the value of the dollarAnd the dollar derived its value from the fixed price of its gold reserves. But when the dollar’s value was detached from gold, it became what economists call a “floating” currency. (By “floating,” it is meant that the currency is not attached, nor does it derive its value, from anything externally.) Put simply, a “floating” currency is a currency that is not fixed in value.

Like any commodity, the dollar could be affected by the market forces of supply and demand. When the dollar became a “floating” currency, the rest of the world’s currencies, which had been previously fixed to the dollar, suddenly became “floating” currencies as well. (Note: It did not take long for this new system of floating currencies with floating exchange rates to attract manipulation by speculators and hedge funds. Currency speculation is, and remains, a threat to floating currencies. Proponents of a single global currency use the current manipulation of currency speculators to promote their agenda.)

Petrodollar System

In this new era of floating currencies, the U.S. Federal Reserve, America’s central bank, had finally freed itself from the constraint of a gold standard. Now, the U.S. dollar could be printed at will — without the fear of not having enough gold reserves to back up new currency production. And while this new-found monetary freedom would alleviate pressure on America’s gold reserves, there were other concerns.

One major concern that Washington had was regarding the potential shift in global demand for the U.S. dollarWith the dollar no longer convertible into gold, would demand for the dollar by foreign nations remain the same, or would it fall?

The second concern had to do with America’s extravagant spending habits. Under the international gold standard of Bretton Woods, foreign nations gladly held U.S. debt securities, as they were denominated in gold-backed U.S. dollars. Would foreign nations still be eager to hold America’s debts despite the fact that these debts were denominated in a fiat debt-based currency that was backed by nothing?

 

The Iraq and Afghanistan wars were both “resource wars” sold to the American public under false pretenses. America’s empire of 700+ military bases in 130+ nations serves as a global oil protection service, not a national military seeking to protect American citizens. Instead of protecting our nation’s borders, the U.S. military is used by the Washington elites to protect the petrodollar system. The foundations of the American empire are now crumbling as emerging nations are no longer willing to spend their lives and their new found wealth propping up the U.S. consumer. Nor do they have any desire to tolerate the belligerence of the U.S. war machine.

Like all failing empires, America will fall under its own weight as more nimble economies arise in its wake. America’s attempts at regional dominance of Central Asia will lead to further friction with Russia and/or China. This friction will provide the spark for yet another war

Jimmy Dore – Corporate Democrats, The Iraq War, Military Industrial Complex

Joe Rogan and Jimmy Dore talk about Barack Obama, Hillary Clinton, and Donald Trump.

Kamala Harris: the US fought wars over Oil

OAKLAND (CBS SF) — For the first time since her election, Vice President Kamala Harris was in her hometown of Oakland Monday, returning to the Bay Area to promote the Biden administration’s American Jobs Plan and the need to rebuild the country’s water delivery infrastructure.

Air Force Two arrived at Oakland International Airport from Los Angeles just before 10 a.m. She was greeted at the airport by Lt. Governor Eleni Kounalakis, Senator Alex Padilla — who filled the Senate seat Harris vacated with her election — and Congresswoman Barbara Lee.

The Great Delusion: Liberal Dreams and International Realities | SOAS University of London

The Great Delusion: Liberal Dreams and International Realities was a talk given by Professor John J Mearsheimer at the Centre for International Studies and Diplomacy, SOAS University of London on 21 January 2019.  Find out more at http://bit.ly/2Dv5nlZ

It is widely believed in the West that the United States should spread liberal democracy across the world, foster an open international economy, and build institutions. This policy of remaking the world in America’s image is supposed to protect human rights, promote peace, and make the world safe for democracy. But this is not what has happened. Instead, the United States has ended up as a highly militarized state fighting wars that undermine peace, harm human rights, and threaten liberal values at home. Mearsheimer tells us why this has happened.

Speaker
John J. Mearsheimer is the R. Wendell Harrison Distinguished Service Professor of Political Science at the University of Chicago, where he has taught since 1982. He graduated from West Point in 1970 and then served five years as an officer in the U.S. Air Force. He then started graduate school in political science at Cornell University in 1975. He received his Ph.D. in 1980. He spent the 1979-1980 academic year as a research fellow at the Brookings Institution, and was a post-doctoral fellow at Harvard University’s Center for International Affairs from 1980 to 1982. During the 1998-1999 academic year, he was the Whitney H. Shepardson Fellow at the Council on Foreign Relations in New York.

Professor Mearsheimer has written extensively about security issues and international politics more generally. He has published six books: Conventional Deterrence (1983), which won the Edgar S. Furniss, Jr., Book Award; Liddell Hart and the Weight of History (1988); The Tragedy of Great Power Politics (2001, 2014), which won the Joseph Lepgold Book Prize and has been translated into eight different languages; The Israel Lobby and U.S. Foreign Policy (with Stephen M. Walt, 2007), which made the New York Times best seller list and has been translated into twenty-two different languages; Why Leaders Lie: The Truth about Lying in International Politics (2011), which has been translated into ten different languages; and The Great Delusion: Liberal Dreams and International Realities (2018).

He has also written many articles that have appeared in academic journals like International Security, and popular magazines like Foreign Affairs and the London Review of Books. Furthermore, he has written a number of op-ed pieces for the New York Times and the Los Angeles Times dealing with topics like Bosnia, nuclear proliferation, American policy towards India, the failure of Arab-Israeli peace efforts, the folly of invading Iraq, and the causes of the Ukrainian crisis.

Finally, Professor Mearsheimer has won a number of teaching awards. He received the Clark Award for Distinguished Teaching when he was a graduate student at Cornell in 1977, and he won the Quantrell Award for Distinguished Teaching at the University of Chicago in 1985. In addition, he was selected as a Phi Beta Kappa Visiting Scholar for the 1993-1994 academic year. In that capacity, he gave a series of talks at eight colleges and universities. In 2003, he was elected to the American Academy of Arts and Sciences.

Chair
This event will be chaired by Professor Arshin Adib-Moghaddam. Arshin Adib-Moghaddam is Professor in Global Thought and Comparative Philosophies at SOAS University of London and Fellow of Hughes Hall, University of Cambridge.

33:50
Madeleine Albright’s comments we are the
indispensable nation we have a right we
have the responsibility and now we have
the military power since we’re Godzilla
to turn the world into a different place
to remake it in America’s image think
about the concept of American
exceptionalism no American politician
can you know move one micrometer away
from American exceptionalism right you
know that Barack Obama who got
criticized on this issue was forced to
say that America is the indispensable
nation he used those words
it’s American exceptionalism we’re
different we’re better but that
nationalism juiced the liberalism the
nationalism coupled with the liberalism
coupled with the fact that we were so
powerful coupled with the fact that we
had this template in their head about
how we were going to make the world a
much better place
and we were off to the
races what’s the track record let’s talk
about the Bush Doctrine and the greater
Middle East the Ukraine crisis and
us-russia relations I’ve talked a bit
about that and then the failure of
engagement with China these are the
three most glaring examples of failure
the bush doctor the Bush Doctrine was
designed to turn the Middle East into a
sea of democracies in keeping with
liberal hegemony it’s very important to
understand that the war in Iraq 2003 was
not going to be in the minds of the
liberal hegemonist the last war in the
Middle East it was the first stop on the
train line
the second stop on the train line if you
want to include Afghanistan
we didn’t go
much further in terms of invading other
countries because Iraq turned into a
fiasco but the idea was that we could
use military force or the threat of
military force the threat of military
force to overthrow governments in the
region and install liberal democracies
in their place and therefore produce
peace in the Middle East that solved the
proliferation and terrorism problems I
know this sounds crazy now but this is
the way we were thinking you remember
Afghanistan is finally under American
control by December 2001 and then in
early 2002 the Americans are talking
about maybe invading Iraq the Israelis
catch wind of the fact that we’re going
to do Iraq and the Israelis send a
high-level delegation to Washington to
say why are you doing Iraq you should be
doing Iran
it’s the greater threat the
Americans say don’t worry Iraq is the
low-hanging fruit we’re gonna go in and
do a rack and then when we’re done with
Iraq will either do Syria or Iran next

but we won’t have to do one or two more
of these military invasions before
everybody in the region understands how
powerful we are and throws up their hand
and jumps on the american bandwagon
the
israelis foolishly believe the americans
thinking that we have found the magic
formula for winning wars and they then
begin to champion an invasion of iraq
right what’s the result total disaster
it’s truly amazing the amount of murder
and mayhem that the united states is
responsible for in the Middle East truly
amazing
virtually no successes and nothing but
failures and failures were huge numbers
of people died countries are physically
wrecked
Afghanistan now the longest war in
American history I know not a single
37:47
national security analyst who thinks
37:49
there’s any possibility we can win that
37:51
war and all we’re doing is checking
37:52
can down the road now so that Obama
37:55
doesn’t get blamed for losing
37:58
Afghanistan and now Trump doesn’t get
38:00
blamed for losing Afghanistan to Iraq we
38:03
wrecked that country Syria where the
38:06
United States displayed of a very
38:08
important role in trying to topple Assad
38:11
that’s hardly ever repeat reported in
38:14
the media that’s a total disaster the
38:17
amount of murder and mayhem we’ve
38:19
created in Syria no Libya we did a great
38:21
job there right with the help of the
38:23
Europeans my god right the Bush Doctrine
38:27
in the greater Middle East an abject
38:29
failure then there’s the Ukraine crisis
38:31
and us-russia relations I’ve talked a
38:34
little bit about this you know in the
38:35
West here in Europe and certainly in the
38:38
United States we blame the Russians for
38:40
the crisis well I don’t buy this
38:44
argument for one second from the time we
38:47
started talking about NATO expansion the
38:50
Russians made it very clear that it was
38:52
unacceptable to them they were too weak
38:55
to stop it in 1999 that’s when the first
38:58
tranche took place they were to stop too
39:01
weak to stop in 2004 which is when the
39:04
second tranche of expansion took place
39:06
but after 2008 when we were talking
39:09
about doing Georgia and talking about
39:11
doing Ukraine they said this is not
39:14
gonna happen
39:15
it was April 2008 at the bucura summit
39:19
the bucura Sneyd au summit April 2008
39:21
where when the meeting was over with the
39:24
declaration was issued by NATO that said
39:27
Georgia and Ukraine would become part of
39:30
NATO the Russians went ballistic it’s no
39:33
accident ladies and gentlemen that a
39:35
couple of months later in August 2008
39:38
you had a war over Georgia Georgia
39:40
Russia war August 2008 Bucharest summit
39:42
April 2008 and then on February 22nd
39:46
2014 you had a major crisis break out
39:49
over Ukraine the Russians had no
39:54
intention of letting either Georgia or
39:57
Ukraine become a Western bulwark on
40:00
their doorstep and the end result is
40:04
that neither one of those countries has
40:06
come Western bulwark and the Russians
40:09
are going to great lengths to wreck
40:10
those countries and the Russians are now
40:13
going to great lengths to split NATO
40:15
apart and split the EU apart so that
40:17
they can expand further eastward and
40:20
further where we have terrible relations
40:24

analysis was based on the idea that
57:28
there is a genuine effort in u.s.
57:31
foreign policy to export democracy and
57:36
some would say that you know this was
57:39
more like a Trojan horse to expand US
57:42
dominance or hegemony or however you
57:44
want to call it and that example such as
57:47
Pinochet in Latin
57:48
America or the Shah in Iran or or you
57:51
know us alliances with with autocracies
57:53
all over the world do not really
57:56
unprovided of evidence for a real
57:59
genuine effort to spread democracy in
58:02
the way it was done in in Europe with a
58:04
Marshall Plan that was really a genuine
58:06
effort to democratize absolutely agree

with you the European continent but with
the Iraq invasion in particular there
was no Marshall Plan there was no really
systemic structure competent effort to
create a democracy the only
administrator that was guarded after the
invasion was the oil ministry
and none
of the others so this is just a point
for my for my own understanding about
the trajectory of of you know what
happened to to the liberal United States
and we used to no good
these are two great issues and let me do
my best to answer them I take them in
reverse order first of all with regard
to what happened with the Shah would
happen with Pinochet Guatemala in 1954
and your comments on the Marshall Plan
remember my argument is that liberal
agenda only takes effect with the end of
the Cold War really about 1990
so I
would argue that the this is just
dovetails with what you said the United
States has a rich history of
overthrowing democratically elected
leaders right and furthermore preventing
the emergence of Democrats in other
cases and furthermore aligning itself
with murderous thugs and dictators
and
my argument would be then in a world of
realpolitik where security competition
is it play you’re going to see a lot of
that kind of behavior so I’m not
challenging that part of the story in
any way what I’m saying is that after
59:58
1990 Oh
but so recently up until Trump the
United States I believe was genuinely
committed to spreading democracy around
the world now a number of people
including some of my really good friends
make the argument that you make which is
dead even after 1990 this is a Trojan
horse their argument is John this is you
know the atavistic realist United States
taking advantage of the unipolar moment
to dominate the globe and then
disguising its aggressive behavior with
liberal rhetoric okay now uh I think
that’s wrong okay and I think whether
you’re you and my friends are right or
I’m right is largely an empirical
question it may be the case in thirty
years when they open the public records
there is an abundance of evidence that
supports your perspective which is that
we behaved in a very realist
we tried to become a global hegemon and
we successfully covered it up and we
bamboozled people like John okay that
that may happen I cannot deny that okay
but my argument to you and to my friends

is that I believe that’s wrong and I
61:23
believe that the people who are who have
61:29
been conducting American foreign policy
61:30
are not that clever they’re fools
61:32
they’re fools and they are remarkably
61:36
idealistic and I think there is an
61:39
abundance of evidence to support my
61:41
position right I can’t adduce it all
61:44
here or we can’t have a big debate about
61:45
it but I do think that’s true and the
61:48
reason I go to the case of NATO and I
61:50
say that NATO was not about containment
61:53
cuz I’m anticipating your question
61:56
necessarily from you maybe from somebody
61:59
in the audience
61:59
right and I’m trying to show you that
62:01
NATO expansion was not realpolitik at
62:04
work
62:05
it was liberal hegemony but again I
62:09
think I’m right in the terms of the
62:11
story that I’m telling you
62:12
but again this is an empirical question
62:14
and as you well know we want to be
62:16
humble in this business because we’re
62:18
sometimes proved wrong your question
62:21
about nationalism and liberalism I’m
62:23
gonna make two responses to that first
62:26
of all I do think one can make an
62:28
argument that liberal democracy is in
62:31
trouble in the United States with Donald
62:34
Trump as the president I think most
62:37
people believe that there is some chance
62:40
some reasonable chance he will get
62:42
reelected I think eight years with him
62:45
could do a great deal of damage to
62:47
liberal democracy but I would take it a
62:52
step further and say that Trump is a
62:54
manifestation of you know underlying
62:58
forces that are at play here that don’t
63:03
bode well for liberal democracy so I’m
63:05
not at all making light of what a
63:09
dangerous situation were in and of
63:11
course not only applies to the United
63:14
States as I told you folks in my talk if
63:17
you go look at Freedom House’s data
63:19
since 2006 the number of liberal
63:22
democracies in the world has been going
63:24
down now another fascinating issue you
63:28
raise is the whole question of the sort
63:36
of omnipresent state in the United
63:39
States right that doesn’t look like a
63:42
liberal state it looks like it’s
63:44
interfering in the management of almost
63:48
everyone’s daily life I don’t want to go
63:53
into this in any great detail but
63:54
basically when I talked about rights I
63:59
was talking about negative rights I was
64:02
talking about freedoms and the problem
64:05
is that in the modern world this is all
64:07
to be a good thing we’re not just
64:09
interested in negative rights were
64:10
interested in positive rights and the
64:14
best example of that is just think about
64:16
this the right to an equal opportunity
64:20
it’s not just the right to life liberty
64:22
and the pursuit of happiness we you’re
64:24
talking about freedoms those were
64:26
we’re talking about rights like the
64:28
right to health care the right to equal
64:33
opportunity those are called positive
64:35
rights and they’re very important in
64:38
every society today including the United
64:41
States and the point is once you start
64:44
talking about positive rights as well as
64:47
negative rights the state begins to get
64:50
involved in a really serious way and you
64:53
remember folks when I told you about the
64:55
three solutions that liberals have to
64:59
dealing with potential for violence
65:01
I said inalienable rights tolerance and
65:04
the state and remember that I said that
65:07
it’s very important to have a limited
65:09
state and the point that you’re making
65:11
is that we’re moving away from that
65:13
limited state and I think in modern
65:17
societies it’s very hard not to do that
65:22
I’m agreeing with you because of the end
65:24
is because of the emphasis on positive
65:26
rights and then when you start thinking
65:30
about things like artificial
65:31
intelligence the national security state
65:34
the ability of the state to intervene in
65:36
our daily lives you see that liberal
65:39
democracy is a fragile device that
65:44
really has to be protected so I’m
65:47
agreeing with you in very important ways
65:50
in terms of ever saying that was
65:53
essentially the point that we are all in
65:56
the same boat in many ways trying to
65:58
struggle to keep the rights alive when
66:00
trying to struggle to keep a democracy
66:03
alive here but questions from from the
66:07
audience and if I may I take two at a
66:10
time John is that okay it’s perfectly
66:12
fine I should have said at the beginning
66:13
by the way switch off your mobile phones
66:15
I mean Jeff reminded myself with a so –
66:19
two questions the lady with the colored
66:23
jumper yes I forgot to bring over a big
66:31
piece of paper
66:33
hello thank you very much for your talk
66:35
in your talk you mentioned international
66:37
institutions particularly the WTO and
66:40
the IMF as kind of instruments of
66:43
liberal hegemony I’m wondering what do
66:45
you see the future of those
66:47
international institutions now that
66:49
there’s a failure of in of liberal
66:52
hegemony thank you okay one more
66:54
question the gentleman in the back just
66:57
right at the back yes with the highest
66:59
hand ah yes that’s what the blue blue
67:01
sweatshirt hi thanks you said that
67:08
obviously liberal Germany is faltering
67:12
is it any more or less faltering than
67:17
autocracies such as China Russia Thank
67:21
You Jon first question had to do with
67:32
the future of international institutions
67:34
I believe that in a highly
67:40
interdependent world and we live in a
67:43
highly interdependent world a globalized
67:46
world a hyper globalized world cult
67:49
whatever you want international
67:52
institutions are absolutely essential
67:55
and that doesn’t mean that certain
67:59
international institutions won’t die but
68:02
if they do they’ll be replaced by new
68:04
international institutions there’s just
68:07
no way you can do business without
68:11
international institutions international
68:13
institutions is I learned a long time
68:15
ago when I wrote an article on this
68:17
subject are basically rules and you need
68:20
rules for all sorts of reasons when
68:23
you’re doing business and that business
68:25
can be economic it can be military I
68:28
mean if you have military alliance NATO
68:31
as an institution the Warsaw Pact as an
68:33
institution if you’re gonna fight the
68:35
Cold War all over again you’re going to
68:36
do it with a mill
68:37
Alliance which is an institution you
68:39
need the WTO although I think you need a
68:42
different variant of it you need the IMF
68:45
the World Bank the Chinese have created
68:48
the aii big institutions are here to
68:50
stay
68:51
Donald Trump can get rid of NAFTA but he
68:54
in effect just produced another
68:56
institution that looks like NAFTA so
68:59
institutions aren’t going away no
69:01
question in my mind on that the
69:05
gentleman up here asked me about whether
69:07
you know the Chinese political system
69:10
and the Russian political system were
69:12
also failing and maybe failing more so
69:15
than liberal democracy I don’t know what
69:19
the answer is to that at this point in
69:21
time I think that both the Chinese and
69:26
the Russians are doing reasonably well
69:28
at this point in time what the long-term
69:31
future of those political systems is
69:35
it’s hard to say so I’m just not too
69:41
sure I think in in both the Chinese in
69:45
the Russian case a lot depends on the
69:47
economy and I think a lot depends on how
69:53
much progress they make on the economic
69:57
front over the future but I think at
70:00
this point in time to some extent
70:02
everybody’s in trouble okay two more
70:05
questions
70:06
the lady in the back all the way
70:16
my question is about based on the
70:20
relationship between China and United
70:22
States do you think we are entering oh
70:26
we are already living you know in new
70:29
Cold War era and secondly do you think
70:34
that sports country US and China will
70:37
end up in Susa dated Trump’s will end up
70:41
way so City Detra okay second question
70:52
yes the gentleman right here would you
70:57
wait for the microphone it’s right that
71:02
it’s in the front yeah thank you
71:04
it’s okay sorry to make you run hi John
71:09
thank you for your talk much of the US
71:12
political discourse lately around Trump
71:15
seems to be focused apart from the
71:17
collusion with Russia seems to be on the
71:20
lack of coherence of foreign policy and
71:23
I think looking at some of trumps
71:26
rhetoric in recent years it seems to
71:29
align a lot with the core tenets of your
71:31
book tragedy of great power politics and
71:33
in particular we see Trump adopting an
71:35
offensive realist position towards China
71:37
we see him somewhat buck-passing Syria
71:40
to Russia and we see a kind of offshore
71:42
balancing with regards to NATO in Europe
71:45
so my question is to what extent do you
71:48
think that Trump is a meerschaum
71:50
heurists
71:50
so to speak truth
71:51
[Music]
71:54
okay John okay I’ll take the first
72:01
question on China and the United States
72:04
and the young woman in the back asked me
72:07
if I thought there was a new Cold War in
72:10
store between those two countries I
72:13
think the answer is yes my basic view of
72:18
international politics is that the great
72:20
powers in an ideal world want to
72:23
dominate their region of the world and
72:26
they want to do like the United States
72:29
did in the Western Hemisphere they want
72:30
to be the only great power and they
72:34
don’t want any other distant great
72:36
powers coming into their backyard and if
72:40
you look at China today China’s growing
72:44
economically and militarily and I think
72:49
that the Chinese are very interested as
72:51
they should be in dominating Asia and
72:55
that means not only being the most
72:58
powerful country in the region but also
73:01
making sure the Americans are pushed out
73:04
the Americans well the Chinese talk
73:11
constantly these days about the century
73:14
of national humiliation which ran from
73:17
the late 1840s until the late 1940s the
73:21
Chinese were weak over that hundred year
73:24
period and they were exploited by the
73:28
Japanese the Americans and the European
73:30
great powers they have never forgotten
73:32
that
73:32
and their goal is to make sure they are
73:35
really powerful in the future if you
73:38
were to go up to a Jap to a Chinese
73:40
policymaker or remember the Chinese
73:43
foreign policy League and say to that
73:45
person you have two choices you can be
73:48
twenty times more powerful than Japan or
73:51
Japan can be 20 more times powerful than
73:54
you do you think it makes any difference
73:56
they would laugh in your face they would
73:59
tell you we know what happened the last
74:00
time Japan was 20
74:02
more times powerful than us we intend to
74:04
be 20 times more powerful than Japan in
74:07
the future and then when you ask the
74:09
Chinese behind closed doors what they
74:11
think about the Americans running ships
74:13
and aircraft up their coast and having
74:16
ground forces off their coasts and
74:18
places like Korea and Japan they will
74:21
tell you in no uncertain terms if they
74:24
get powerful enough they will try to
74:25
push us out beyond us meaning the
74:27
Americans beyond the first island chain
74:29
and then beyond the second island chain
74:32
and if you look at how they think about
74:33
the waters around them they’ve made it
74:35
very clear that they think the South
74:37
China Sea belongs to them and we’ve made
74:40
it clear to them we don’t agree with
74:42
that they’ve made it clear they think
74:44
the East China Sea belongs to them and
74:47
there’s a real possibility they’ll get
74:49
into a fight with the Japanese over
74:51
those small islands in the East China
74:53
Sea
74:53
then there’s Taiwan which is a potential
74:56
flashpoint of great significance China
74:59
is not a status quo power so the Chinese
75:03
as they get more and more powerful are
75:06
going to try and become more and more
75:09
influential in East Asia and they’re
75:12
going to try and push the Americans out
75:13
and you know what the Americans are
75:15
going to do the Americans are going to
75:16
pivot to Asia and they’re going to try
75:18
and contain the Chinese and they’re
75:20
going to push back so I would argue that
75:24
there is likely to be trouble ahead and
75:29
put it in your terms you are likely to
75:31
get a new Cold War in Asia second
75:38
question had to do with Trump and he
75:43
accused me of being in bed with Donald
75:46
Trump intellectually this is a
75:49
frightening thought
75:54
yes right that’s right then we know
75:58
there is no connection look to be
76:03
serious I think that I think that Donald
76:06
Trump has no coherent foreign policy I
76:10
think he flies by the seat of his pants
76:12
and he has certain intuitions and I do
76:18
think apropos your question that some of
76:21
those intuitions are consistent with a
76:23
realist perspective in other words when
76:26
Trump says that he is not interested in
76:30
using military force to spread democracy
76:33
around the planet that’s an argument
76:35
that resonates with realists there’s
76:38
just no question about it now another
76:41
example that you used was containment of
76:44
China right that of course resonates
76:47
with realist logic but also you want to
76:50
remember that the person who articulated
76:52
the pivot to Asia was Hillary Clinton
76:54
and the Obama administration the Clinton
76:56
administration was also interested in
76:58
the pivot to Asia so this is not
77:00
something new to trump but it gets
77:03
consistent both with the Democrats and
77:05
with Trump with basic realist logic my
77:08
problem with Trump is that he’s done a
77:10
half-baked job of pivoting and dealing
77:14
with our Asian allies Trump’s big
77:16
problem and this is where you know he
77:18
parts for realism his realist believed
77:21
that alliances matter allies matter and
77:24
if you’re gonna deal with an adversary
77:28
like China right you need help from
77:31
countries in East Asia and you don’t
77:34
want to be slapping him around which is
77:36
what he does I also think the TPP the
77:39
trans-pacific partnership which was an
77:41
economic institution that was designed
77:44
to contain China right it was designed
77:48
for economic purposes but also for
77:49
security purposes he vetoed that or he
77:53
killed that when he came
77:54
to office that was a big mistake so I
77:58
think a lot of what he has done is
78:00
inconsistent with a realist approach but
78:03
there is no question that he does have
78:04
realist tendencies although again it’s
78:07
not part of any sort of grand theory of
78:11
how the world works okay last round of
78:14
questions
78:16
the gentleman white sweatshirt thank you
78:24
so much for your talk it’s very
78:26
enlightening I just have a question with
78:30
regards to the Iraq invasion
78:33
so you said and I quote there are
78:36
virtually no successes in Iraq and I
78:39
personally think that there were some
78:40
successes for the United States let’s
78:44
put aside all of the inexplicable damage
78:46
that has been wrought on to the Iraqi
78:49
population I think that there were
78:53
benefits for it for its economic
78:56
interests in the long term we can see
78:59
today that although what was done in
79:01
Iraq was a failure in many ways many oil
79:05
contracts if not all were given to
79:08
American country companies like
79:10
ExxonMobil war was created which
79:14
increases the demand for for weapons
79:17
which in turn can increase manufacturing
79:20
and selling of weapons by American
79:23
companies although all these contributes
79:27
to the economic superiority of the
79:29
United States and its prominent
79:31
companies so we need a question I will
79:34
come to the question because we’re
79:35
running out of time all right I
79:37
apologize for that so we can’t imagine
79:40
the United States today without its
79:42
superior economy right so I ask can the
79:49
Iraqi invasion be seen as a commercial
79:51
success for the United States
79:53
thank you very much the second question
80:05
hi thank you very much for your talk
80:08
my question is regarding the European
80:10
Union as America focuses on itself more
80:13
and liberalism takes a backseat do you
80:16
think there is a future for the European
80:18
Union and what do you think the future
80:19
holds for Western Europe thank you I
80:29
should go okay thank you
80:31
with regard to your question about Iraq
80:33
I thought you were gonna argue that it
80:36
had some benefits for Iraq but obviously
80:39
you’re arguing that it had benefits to
80:41
the United States economic benefits for
80:43
the United States I don’t believe that
80:46
I think it’s estimated that the two wars
80:53
won in Afghanistan and two in Iraq and
80:56
the Iraqi war is the more expensive the
80:58
two of the two is gonna cost us
81:00
somewhere between four to six trillion
81:03
dollars over time again when you think
81:08
of all that money and and and and the
81:11
consequences for the Iraqi people it’s
81:14
just stunning right but for the six
81:16
trillion dollars I don’t think the oil
81:19
companies ended up making much of profit
81:24
as a result of the invasion and I think
81:28
in terms of arms sales yes we sold some
81:31
more arms but not enough to really
81:34
matter not enough to really affect the
81:36
economy so I don’t think I don’t think
81:42
that you’re right that the the United
81:44
States benefited economically from this
81:47
war but again even if it did it wouldn’t
81:49
justify you know what happened in Iraq
81:53
and by the way remember that one of the
81:55
principal consequences of the invasion
81:58
of Iraq was the creation of Isis just
82:01
don’t want to lose sight of that
82:04
second question a very interesting
82:06
question on the EU and the future of the
82:08
European Union and you prefaced it by
82:11
saying America’s losing interest in
82:15
Europe to some extent and as American
82:18
interest in Europe wanes what does that
82:21
mean for the EU I make two points first
82:26
of all I believe that one of the reasons
82:29
probably the main reason that European
82:32
integration has been so successful and
82:35
there has been peace in Europe is
82:37
because of the presence of the American
82:40
military in Europe its NATO it’s the
82:45
American pacifier as I often say to
82:48
audiences you know I’ve spent a lot of
82:50
time going around Europe since 1990 when
82:52
the Cold War ended I have never met a
82:56
single policymaker a single pundit a
82:59
single academic a single representative
83:03
of the foreign policy establishment in
83:05
any country in Europe who wants to see
83:07
the Americans leave Europe this is quite
83:09
remarkable and now I was recently
83:12
Romania as recently in Denmark the
83:15
Romanians and the den Danes do not want
83:18
us to leave Europe and it’s because they
83:20
understand that this I’m throw but the
83:23
American military presence that NATO
83:25
underpins the EU and peace and security
83:29
in Europe okay that’s my view so in
83:33
terms of the future of the EU what
83:37
really matters in terms of the United
83:39
States is that we stay in NATO keep NATO
83:43
intact and keep American forces here the
83:47
second point I would make to you the
83:49
problems in the EU today despite all
83:52
Donald Trump’s rhetoric have nothing to
83:55
do with the United States they’re mainly
83:59
Eurocentric problems problems associated
84:02
with the euro problems associated with
84:05
brexit if you look at what’s going on in
84:07
Italy and a lot of these problems by the
84:10
way have to do
84:10
with nationalism right I’m not going to
84:12
get into that in any detail here but
84:14
there are real problems in the EU today
84:17
but those problems are not the result of
84:21
the United States right so the Europeans
84:24
have to figure out how to fix those
84:25
problems but more importantly for the
84:28
Europeans they got to keep the Americans
84:30
here in my opinion I think the America
84:33
the European elites understand correctly
84:35
that an American military presence is a
84:38
pacifying factor here in Europe the main
84:43
pacifying factor thank you very much
84:46
John unfortunately we have to leave it
84:48
at that there will be a drinks reception
84:51
outside in the foyer but join me once
84:54
again to in thanking professor much I’m
84:58
afraid
84:58
excellent
85:00
[Applause]
85:05
you
85:06
[Applause]