Clausewitz, Xi, Putin And The New World Order

Economic policy is the continuation of war with other means. In the last great confrontation between the world’s dictatorships and democracies, economic circumstances favored the democracies. Japan and Germany possessed neither the resources nor the manpower to power them to victory: they were forced to spend blood and treasure to conquer nations and populations to fuel their war machines.

The allies, most specially America, had all the economic advantages: a 25 per cent unemployment rate to provide a pool available for military service or to work in defence factories; a female population ready, willing and eager to escape the kitchen in favour of the factory; an ample supply of natural resources, and the ability to step up production of war materiel at an astounding pace.

This Ain’t Your Grandfathers’ War

That was then, this is now. The boot is on the other foot. Many of the materials of war are minerals that China has in ample supply and we do not. The communist regime accounts for 63 per cent of the world’s rare earths and 85 per cent of the capacity to process them. Our adversaries in the New World Order do not need conquests to obtain oil, as did Germany and Japan: Russia and its OPEC partners have an oversupply. Both China and Russia have ample manpower to meet any needs, including convicts for cannon fodder and Uyghur slave labor. And with the Chinese navy now larger than America’s, they have the sea power capable of long-run engagement, an advantage Japan possessed only initially. That’s something their predecessor dictatorships lacked.

Meanwhile, despite some efforts to curtail China’s access to American technology, the administration response remains inadequate. An historically low unemployment rate of 3.5 per cent, the withering of patriotism, and a shrinking eligibility pool have prevented the military from attracting the recruits it needs. Because of obesity, drugs and criminal records only 23 per cent of Americans ages 17-24 are eligible to serve without a waiver, and only 9 per cent of that shrunken pool have any inclination to do so. We do not know whether a major increase in rewards for military service might make it more attractive since budgets for the Defense Department are constrained by the demands of entitlement spending.

Perhaps even worse, President Biden is limiting development of domestic oil resources, and last week increased our dependence on Russia by fencing off from development America’s only competitive source of high-grade uranium ore. The President tells us and Ukraine we are running out of ammo, but America’s defence industry remains starved for funds as domestic entitlements take priority over military spending while we run deficits that produce a downrating of American debt.

The commerce department has added 140 staff to process the 460 statements of intent by companies seeking a slice of the $53 billion to be appropriated over five years to subsidize the construction of fabs, jargon for factories making computer chips. The review process will extend well into next year. The commerce secretary will then deploy a skill new to a federal bureaucrat, and pick winners. Construction of a fab requires some 6,000 construction workers, many skilled and all in such short supply that one company is flying workers in from Taiwan. It will be between three and five years before a completed fab can turn out chips.

America’s Economy Rolls On, China’s Struggles

America does have one major advantage over China: a robust as opposed to a faltering economy. In July, China’s exports fell 14.5 per cent compared with last year, youth unemployment is 20 per cent, the nation’s brilliant entrepreneurial class is sidelined by fear that success will bring retaliation by a government that fears its emergence as a political competitor, and the key real estate industry is over-burdened with debt. A deflationary spiral threatens as  factory-gate prices plunge from year-earlier levels for ten straight months.

Xi and Putin Take The Cold War To The Arctic

Nevertheless, China has financed a world-largest navy, found America’s business elite willing to support the Chinese regime with new investments and access to technology for the pilfering, and the US government a supplicant, pleading for a renewal of relationships. Between them, the new Axis of Russia and China possesses a ring of bases from sea to shining sea, extending from 55 miles off the Pacific coast of icy Alaska to 90 miles off the Atlantic coast of sunny Florida.

While America is devoting resources to turn its military from khaki to green, and forcing its defense contractors to provide costly social amenities, China and Russia concentrate on expanding their control of today’s  equivalent of what in an earlier day were called the sinews of war. Arctic international waters overlay 22 per cent of the world’s undiscovered oil and gas, some 412 billion barrels; some geographers put that figure at 30 per cent. They also hold large quantities of minerals (rare earths, phosphates, bauxite, nickel).

Russia is building military bases, airfields and deep- water ports in its arctic region. Along with China, it recently made a show of force near Alaska’s Aleutian Islands with joint military exercises involving a large flotilla of war ships and helicopters.

NATO secretary general Jens Stoltenberg notes that Russia has a new Arctic Command, has opened hundreds of new and Soviet-era Arctic military sites, including deep-water ports and airfields, and developed a fleet of nuclear-powered icebreakers. China regards the Nordic countries as the western end of its “Polar Silk Road” has anointed itself a “near-Arctic State”, prepared to participate in Arctic affairs, and is projecting the capabilities of the People’s Liberation Army to the Arctic region.

Putin Suffers Seller’s Remorse

April marked the 150th anniversary of senate approval of America’s purchase of Alaska, for a paltry $7.2 million, or about $150 million in today’s money. Alaska is 55 miles from Russia, separated by the Bering Strait. It was purchased from Russia by America in 1867 for a paltry $7.2 million. Russian military magazines still refer to “The Alaska We’ve Lost,” and only half-dozen years ago Sergey Aksyonv, the prime minister of Crimea, by then in Russia’s possession, told a television audience “If Russia was in possession of Alaska today, the geopolitical situation in the world would have been different.” Vladimir Putin has characterized the US development of a security system in Alaska as one of Russia’s “most pressing security issues.” Right up there with Ukraine