Nov 7, 2021
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The name of the beast is neoliberals, inequality and a vengeful climate

Confusion, discontent and uncertainty reign in the heart of Europe. Britain, having broken away, has become a cut-off hunk. Germany is at a loss after the departure of “mutti”, Angela Merkel, who personified the inviolability of the chosen course. France is seething with demonstrations.

Against this background, the XIV Eurasian Economic Forum was held in Verona. It is the largest platform outside of Russia for the exchange of views between representatives of the business community in Eurasia. The pathos and the style of the speeches of the forum hosts and guests serve as a fairly accurate indicator of moods changing along with the assertion of a “new normality” (more precisely, a new abnormality).

Consolation is the more or less stable economic growth in the Old World. The forecast for the euro area is plus 5% to GDP by the end of the year. Italy, with an expected 6.3% GDP growth, looks like a favorite at all. However, as one Chrysostom put it, “there is a rise, but there is no happiness.”

Devaluation of traditional values

Several scenarios for the development of a crisis situation are being seen, said Professor Giovanni Bazzoli, Honorary President of Bank Intesa Sanpaolo. First, in the event of a further imbalance in the relationship between man and nature, we will face a catastrophe caused by climate change on the planet.

The second scenario, according to Professor Badzoli, boils down to “the loss of the universal values ​​on which the European (Western) civilization rests.” Both due to the shift of the center of power to Asia, and as a result of the erosion of the socio-demographic foundations of society. Europe will face waves of migrants, as in 20 years more than one billion people will live in Africa alone. “Social inequality is becoming unbearable.”

The devaluation of traditional values ​​and the rejection of “the heritage of Christianity on which Europe, including Russia, over the past two thousand years” was based, are alarming. As a consequence, Professor Badzoli postulates, there is a threat of “a return to the era of barbarism.”

After the collapse of the USSR, which represented an “alternative development model”, the illusion arose that the foundations and principles of Western democracy were of universal importance, and that the “free market” regulated by major powers would allow new sales markets to continue to grow.

After 1991, the adherents of capitalism in its neoliberal edition continued the “process of unrestrained financialization”, which is characterized by the subordination of the real sector of the economy (production of goods and services) to the financial one. An iconic detail: the condemnation of financialization came from the mouths of Giovanni Bazzoli, founder of the leading Italian bank (number one in the hierarchy) Intesa Sanpaolo, the third largest bank in terms of capitalization and the first most liquid bank in Europe.

In the pursuit of super profits, the banker recalled, the West did not notice how it “became a victim of a craving for excesses,” for which it paid with the mortgage and financial crisis of 2008. The washing out of the middle class, which has always served as a pillar of economic prosperity, has accelerated. It is worth adding to the words of Professor Badzoli that the middle class has always been the guarantor of social stability. Now the pauperization of the middle peasants increases the protest in the society.

It is necessary, says Badzoli, “To restore confidence in state institutions” and turn globalization into a process of exchange of “knowledge and people, into a process of rapprochement between peoples who are aware of their responsibility – and this is the guarantee of our survival”

Consumer Narcissism Is Furious

Almost in unison with Badzoli, the “alarm” speech of his colleague, the chairman of the board of directors of Banca Intesa, professor Antonio Falliko, sounded. The core of his speech was the thesis about “the need to subordinate economic growth to the needs of society, to achieve greater social equality and a model of development that puts people in the center of attention.” According to Professor Falliko, the founding father of the Association “Explore Eurasia”, “It is necessary to overcome the neoliberal economic model”… After all, for half a century, neoliberal doctrine has been shaping the economic and political agenda of the vast majority of countries in the world.

The regret of this circumstance, as I see it, is due to the fact that the ideology and practice of the neoliberal model of development presupposes the primacy of competition and rivalry by suppressing the natural desire for interaction and solidarity.

One of the manifestations of neoliberal dictatorship – with the exception of crises like the one that hit the world from the United States in 2008 – has been the restriction of the creative, regulatory role of the state and the collapse of the social support system, which undermines welfare in general and destroys the middle class in particular.

Meanwhile, social injustice is growing. Two billion people on the planet do not use electricity. One billion is unable to write and read their name. The richest 1% own 18% of all wealth, becoming slaves to “consumer narcissism,” as Antonio Fallico put it.

Jump on the train step

Major concern of Klaus Mangold, Chairman of the Supervisory Board Knorr brake (the concern, which is headquartered in Munich, occupies the first positions in the production of brake systems for rail transport and trucks in the world), comes down to the fact that Europe has become weak.

According to Herr Mangold, “The glue of economic success is integration.” This means that “it is necessary to bring Russia and China closer to Europe”, especially since Russia needs European advanced technologies, and Europe will not be able to ensure its energy security without Siberian hydrocarbons.

How realistic is it to resume meaningful interaction between Europe and Russia in the context of a hybrid Cold War? “There is a schizophrenic situation”, – says the chief executive officer Pirelli and CSpA, Co-chairman of the Italian side of the Russian-Italian Committee of Entrepreneurs Marco Tronchetti Provera. Europe, in his opinion, already “plays a secondary role” in the system of international coordinates, since it does not have independence. A full-fledged dialogue is required, including with Russia, but businessmen by themselves cannot be its driving force – this is the destiny of politicians.

In another session, this postulate was reinforced by Simone Krolla, Managing Director of the American Chamber of Commerce in Italy. He cited as an argument in favor of the beneficial influence of business on politics the fact that McDonald’s has invested $ 2.5 billion in Russia and, despite all the lockdowns, intends to open an additional 800 fast food restaurants. However, Mr. Krolla did not explain why the McDonalization of the catering sector did not in any way affect the state of bilateral relations, marked by the sanctions war, provocations on the diplomatic track, and spy mania.

Isn’t it too late for Europe to jump on the bandwagon of a Russian train leaving eastward? Previously, the volume of trade and economic interaction between Russia and Europe in comparison with the Asian direction was expressed by a ratio of 3: 1. Today it is almost 50-50.

Pay for the first or second!

If over the past 400 years Europe has been the dominant center of power in the world, today it is receding into the background, marginalized, turning from leading to being driven. These theses were developed in his speech at the Verona Forum by Sergey Karaganov, Dean of the Faculty of World Economy and World Politics at the Higher School of Economics.

In his report on the state of trade between Russia and the EAEU countries, the section “Import and export of mechanical equipment and electrical equipment” attracts attention. For these two categories of goods, the trade turnover between Russia and the European Union decreased from 51.1% to 39.2% and, accordingly, from 38.1% to 20%. At the same time, trade in these products with China grew from 22.6% to 32.9% and from 32.3% to 50.7%. It is no less significant that the share of energy exports to Europe showed a decrease from 53.6% to 45.6%, while oil and gas supplies to China increased from 6.5% to 20.8%. This is the statistics of the “pivot to the East”.

Beijing is rebuilding on a high-tech basis the Silk Road, an ancient bustling highway of trade and other links between East and West. And thus, Karaganov noted, China returns us to the era when the Celestial Empire was the largest center of power and influence in Eurasia. What will the irrepressible rise of China, which has already overtaken the United States in industrial production, turn out for the rest?

There are two scenarios, Karaganov predicts. In the first case, China will aggressively resurrect the Middle Empire, surrounded by vassal states. it “Will inevitably cause resistance from India, Iran, Turkey, and even Russia”who will be forced “balance”

The second scenario assumes that China will borrow the scheme of partnership with other states from the European Union, will build an alliance in the image and likeness of the EU. And then “The creation of” Greater Eurasia “will proceed at an accelerated pace”, noted Karaganov, adding that if half a century ago the USSR and the PRC had not quarreled, the idea of ​​Eurasian integration would have taken shape long ago.

In any case, we are in for a breakdown of the old model of the world order. Probably, no one will say whether this will happen after the battle of the contenders for world domination or on the basis of mutually acceptable agreements on the changing rules of the community.

Specialist. corr. FSK,
Verona – Moscow

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