I’m incredibly surprised at the inability of humans to learn from their past mistakes, or to put it more literally, to learn from history.
We have been in a very similar situation to what we are in today in terms of global economic headwinds, yet it seems that many Western leaders have learned nothing and want to remain ignorant.
First, the obvious material mistake that Western leaders are doing in terms of fighting inflation is that they are waging a war against gas and oil prices, buts are not doing enough on the supply side of the equation.
We were in a similar situation in the 1970s. The 1970s was a decade of double-digit inflation in various Western European countries, and although Germany had it better with an inflation rate that peaked in 1973 at 7%, its industries still sought cheaper places where they could set up shop such as Mediterranean countries.
The sudden rise in the price of oil was due to the Arab oil embargo (done through OAPEC) on the US for supporting Israel in the Yom Kippur War. The rise in oil prices started a global secular inflationary process which had accelerated the bust of the economic boom which started at the end of the War.
Surprisingly, since then, the topic of energy security was never addressed in a serious manner. As soon as the oil embargo ended, the US went on to keep buying oil from Saudi Arabia and even increased its purchases as time went by.
The United States has plenty of economic power and natural resources to be able to wane itself off from the energy dependence of other countries. Trump, was right about this in principle although his methods can be debated. It was under Donald Trump that for the first time in many years, the US became a net export of oil rather than a net importer.
European leaders of today, especially the European Commission, France and Germany which are run by the socialists, are doing the same mistake the US did back in the 1970s: refusing to accept the reality that energy is a security issue which should be dealt with accordingly and not something which should be outsourced especially if it’s outsourced to a point where you can get critically compromised.
There is another major mistake that the French and German socialists are doing and this may be even more serious, and partly the cause of the former. Yesterday, German Chancellor Olaf Scholz announced that he spoke with President Putin for 90 minutes. On the same day, we also got to know that Sholz is blocking a deal by a private German company and the Ukrainian government to deliver a number of tanks. Scholz didn’t disclose what was said in this unusually, long conversation with Putin and remains unclear what the Chancellor’s intentions are for blocking the transfer of tanks from a German private company to the Ukrainian government.
So, now, Ukraine is also being victimised and treated as a country which can’t make its own independent security arrangements. As soon as the balance of war shifted in favour of Ukraine, Sholz rushes to legitimise Putin, once again.
Meanwhile, the US is back to square one begging Saudi Arabia to increase production so as to lower the price of oil. How did we get to this point, I would say, ironically?! Macron and Scholz are sleepwalking Europe into a disastrous endgame where our dependency on autocratic states like China will only keep increasing, putting us at further at future risk of serious global crises. This reckless behaviour comes from gross ignorance of history, but probably, also from short-sighted economic gains, corrupt interests and rent-seeking. China likes French handbags and Russia likes high-tech German parts. At what point do we prioritise long-term security and stability for short-sighted gains in free trade with autocratic states?
Surely, some things we have already learned. Germany, which is constantly compromising European security has lost its legitimacy to act as Europe’s leading nation. The accession of Ukraine into EU, will help balance the power away from Germany, but first Ukraine needs to win the war, and to do so, it needs heavy weaponry which Germany does not want Ukraine to have.
More focus needs to be made on the upcoming European Commission. The current commission under Ursula Von Der Leyen has been an absolute disaster. The Commission has wide executive and legislative powers, yet it made very little to counteract Russia’s energy war against Europe. The European Commission has also done practically nothing in the sphere of European security and this is when Russia is conducting psychological warfare against Europe on a mass scale through propaganda and political interference.
Then there is also another political reckoning that we need to contend with. European socialism has failed us miserably in these times of crisis and fascism is rearing its ugly head with Meloni soon to be the Italian head of government. Time for a pan-European-patriotic neoliberal turn? I think it is.
As for Putin, this should be his only endgame along with Bashar Al-Assad and their friends.