'While the Ukrainians are paying for their democracy with their blood and their lives, our financial system should not allow powerful elites to profit endlessly as working people pay the price.'
Russia’s catastrophic attempt to gain re-entry into the league of great powers, after its re-entry into capitalism reduced the country to a raw materials supplier to stronger economies, calls to mind Kalecki’s remark about the fascist promise to humiliated nations after the First World War, that ‘roads to glory lead to war.’ In the violence into which this latest ‘road to glory’ has descended, it is sometimes forgotten that Russia may possess the largest army in Europe .
However, much of these restrictions on foreign exchange transactions are journalistic hyperbole: The demand for payment in roubles is actually a requirement to deposit dollars in Sberbank or Gazprombank to buy the roubles required to pay for oil.
But globalization is more than this, and less. It is more than just ‘global supply chains’ assuring cheap raw materials and components to assembly plants on the fringes of industrial centers. Behind this is a system of worldwide payments, necessary for settling trade and debt obligations in different countries. The Society for Worldwide Interbank Financial Telecommunications, or SWIFT, is a network of 11,000 banks around the world through which most cross-border payments are routed.
This system of regional trade and payments areas was already fragmenting before the War in Ukraine. The most spectacular case has been the departure of Great Britain from the European Union, ‘going global’ to set up barriers to international trade and payments. But perhaps the biggest push towards that fragmentation has been the use of economic sanctions by the United States as an alternative to military persuasion, which is perhaps Donald Trump’s most significant innovation in statecraft.
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