Control, marginalization, immobilization or counterinsurgency – AI systems are predestined to manage the global crisis of capital.

Tomasz Konicz

A particularly effective method of the endangered genre of subversive science fiction horror is to exaggerate the given late capitalist reality only slightly, to transfer only a few moments of society into the realm of fiction. A classic that makes use of this method is John Carpenter’s They Live,[1] in which capitalist exploitation, oppression and world destruction are attributed to a clandestine alien invasion, leading to signals being broadcast by television stations that manipulate people’s perception. Special glasses block out the signal and reveal the coded, manipulative truth behind everyday capitalist objects, for example when dollar bills are printed with the words “This is your God.” It doesn’t take much to bring the horror of everyday life under capital, to which people inevitably become accustomed, to life in the movie theater through science fiction.

A more subtle, but no less effective approach is taken in the film Advantageous,[2] in which the protagonist is forced by a high-tech corporation to undergo a consciousness transplant into a new body as a guinea pig, under the threat of unemployment and social decline. On the one hand, the neoliberal optimization mania and adaptation discourse is taken to its logical technological end, as the film pushes the usual demands for self-optimization and the “reinvention” of wage earners to the extreme of body swapping. On the other hand, the scenes in which a fully automated infrastructure controlled by AI systems executes the social death of the main protagonist by shutting down more and more of the interlinked and digitally controlled infrastructure systems are shocking. Concrete people are hardly involved any more. Real possibilities, such as an overdrawn credit card, are mixed with fictional moments. When calling the job center, it simply remains unclear whether the protagonist is dealing with a cynical human or an AI assistant.

Many of the scenes in this “silent dystopia” are particularly disturbing because much of what Advantageous predicted in 2015 is already feasible today. And it is likely that AI-supported social control will prevail in one form or another in the medium term. Managing people under capitalism is problematic, especially in times of crisis, as it also puts psychological strain on most of the wage earners who have to implement this management. Executing the system’s constraints on human material is a tough job to have, and it certainly leaves its mark. Personalities who are fully capable of doing this without lapsing into undesirable “misbehavior” such as sadism or insubordination are few and far between. Automating heavy, stressful tasks – isn’t this the great promise of capitalist rationalization?

Inhuman Resources

Humans are still in charge at the “job center.” But what is already quite common today are AI assistants that are entrusted with the “initial assessment” of wage earners in order to check their employability during the hiring process. In the United States, more and more corporations are using specialized chatbots to screen job applications, make contact and/or conduct initial interviews.[3] It is mainly low-paid, precarious jobs that require low qualifications and have a high volume of applicants that are increasingly being outsourced to the fully automated “inhuman resources” of AI systems. Fast food companies such as McDonald’s or Wendy’s, retail chains or warehouses have chatbots filter applications and conduct job interviews based on standardized questions (“Can you work on weekends?” or “Can you operate a forklift?”). The advantages are obvious: in addition to potential cost savings in human resources (HR), where companies traditionally start cutting costs first, smaller HR teams can process far larger volumes of applications effectively.

Two AI systems developed by start-ups from Arizona and California, Olivia and Mya, are currently leading the way in the industry, but according to the business magazine Forbes, they are still struggling with teething problems. Sometimes the wrong dates or locations are assigned for follow-up conversations, or the language models of the specialized bots are nowhere near as advanced as those of flagship projects such as ChatGPT, which can lead to errors and misunderstandings. But far more problematic is the simple fact that the AI is not a human being with whom special conditions can be discussed. Applicants with disabilities, who would have to negotiate appropriate modifications to their jobs, fall through the cracks, as do wage earners with speech impediments. The same applies to workers with a migrant background who are not fully proficient in the local language.

And this is where the automated discrimination that takes place under the cloak of machine objectivity begins. Socially disadvantaged minorities who do not fit into the machine intelligence scheme are left out of the running when applying for jobs. In July 2023, the city of New York even issued regulations requiring companies that use AI systems for job placements to check them for “racial or gender bias.” The enforcement of this regulation is completely unclear, as the algorithms and selection criteria of the recruitment machines remain under lock and key.

There is also a fundamental problem: the AI-controlled application scanners and chatbots – as with all machine learning systems[4] – have to be trained in pattern recognition using huge amounts of data. The RecruitBot software, for example, scans 600 million online applications in a legal gray area in order to perfect the selection process for companies. The whole thing works “a bit like Netflix,” the founder of this AI start-up explained to Forbes. The software searches for and suggests applicants to companies with the same characteristics that have previously led to successful hires. These selection systems are therefore structurally conservative, as they are trained using the data already available. As a result, they are unable to respond well to changes in the composition of the workforce – such as the influx of migrant workers. Amazon, for example, had to shut down its job application scanner in 2018 after it became clear that it discriminated against women. The software was trained using a mountain of data in which applications from men were disproportionately represented.

At present, such AI systems are primarily used as a tool for the initial assessment of employees, making a pre-selection for the human resources teams. However, the ambition of the creators of such selection software goes much further. The latest chatbots now include the time their interviewees need to answer in their assessments, and they also evaluate the sentence structure, grammatical correctness and complexity of the applicant’s language. The recruitment software Sapia AIis even able to ask applicants more complex questions and evaluate their answers of 50 to 150 words in length in order to check their suitability for the vacancies (“copes well with change, stress,” etc.).

A change of perspective is taking place here. It is no longer the human being who scrutinizes the AI bots during capricious interactions in order to assess their performance, as was the case at the beginning of the AI boom when the systems were made available to the general public. The positions are reversed in job applications: capital’s AI assesses the human material using patterns and algorithms, which are company secrets, to measure their performance. Nevertheless, the owners of the AI start-up Sense HQ, whose chatbots do the rough selection work for Delland Sony, emphasized that it is only about supporting the human teams in human resources when hiring: “We don’t think that AI should make hiring decisions on its own. That would be dangerous. We don’t think it’s there yet.” This language is treacherous. Any decent chatbot would come to the conclusion that the emphasis here is definitely on the “yet.”

The Right to Live Decided By AI?

Few things are more stressful than having to make life or death decisions on the job. Yet this is in fact everyday life for those who work for health insurance companies in the privatized American healthcare system, who have to decide on the type and duration of treatment for their “customers.” The clerks have to reduce the treatment costs of their insured patients to a minimum in order to keep their company’s profits as high as possible – even at the cost of their customers’ health. From the perspective of capital, it therefore seems tempting in late capitalism to have this allocation of right-to-life certificates handled by seemingly objective AI systems.

This is exactly what is allegedly being done to some extent by “healthcare providers” in the United States. At the end of 2023, customers filed a mass lawsuit against the insurance company UnitedHealthcare after their claims for examinations and convalescence following surgery were massively curtailed by an AI system. According to the statement of claim and media research, the AI algorithm was authorized to revise the recommendations of the treating doctors and make its own decisions, meaning that patients’ treatments were terminated far too early.[5]

According to research, the program called nH Predict uses a database of six million patients as an empirical quarry for the usual pattern recognition in order to make draconian misjudgments with an error rate of 90%. All of these errors were in favor of UnitedHealthcare – the largest health insurer in the USA. Insured persons who would normally have a convalescence period of 100 days after a hospital stay had their funding withdrawn after just 14 days by the prognosis AI nH Predict. Since 2019, private insurance companies have allegedly been using such AI programs in a legal grey area to deny patients necessary but costly treatment. At the beginning of February 2024, the relevant U.S. authorities came forward to clarify that AI programs cannot be used to deny benefits.[6] The powerful lobby of the U.S. healthcare industry therefore has a lot of convincing to do in Washington.

What landlord hasn’t experienced this? The nerve-wracking war with defaulting tenants who just don’t want to move out, even though they really can’t afford the latest rent increase. But here too, AI can make life easier for all those customers who are wealthy enough to rent out properties. Two strands of technological innovation are merging to transform the rental real estate market in the United States: The creation of smart homes thatare closely networked in terms of information technology, and their control by AI assistants. There is a gold-rush-like atmosphere, as the market for AI real estate is expected to grow to a volume of $1.3 trillion by 2029.[7] The sensors and control systems that make it possible to monitor and control functions such as temperature or energy supply in smart homes from the outside are becoming compatible with AI systems that can control them.

The AI not only functions as an interface between the tenant and their apartment, whose functions – similar to the visions in Blade Runner[8] – would be controlled by voice, but must also anticipate behavior and permanently monitor the properties and their surroundings. So it’s not just about refilling the fridge just in time via a delivery service, or bringing the room temperature to the optimum temperature shortly before the tenant arrives, but also about permanent monitoring, for example of water and electricity consumption – and access control.[9] Biometric locks make it unnecessary to “change locks when tenants change,” as providers of such AI systems for landlords cheerily remark, while smart surveillance cameras, which react to suspicious behavior in the vicinity of properties, create “security and trust,” especially in districts with high crime rates, in order to attract “more tenants.”

But what awaits the defaulting tenant who falls behind with payments in the face of horrendous rents? The access data to the smart locks is changed, while the gentle AI voice informs them of the way to the nearest homeless drop-off point where their personal belongings have been transported. In the event of outbursts of anger or acts of desperation, the smart cameras call the cops. The tenant who has fallen into arrears may be pestered by annoying AI bill collector bots beforehand. In Eastern Europe, there is still an industry of telephone bill collectors. These are reverse call centers that mostly buy up consumer debts and whose employees use threats and persuasion to try to collect the money before the “muscles” on the ground have to take over this work. But this industry is also threatened with extinction. As early as 2023, the mobile phone provider Orange was already experimenting with AI bots that annoyed defaulting customers with phone calls to encourage them to pay soon in a cheerful voice.

And finally, the trend towards implementing artificial intelligence does not stop at the state apparatus. So far, people have not had to deal with AI bots at job center appointments, as predicted in the dystopia Advantageous mentioned at the beginning. But in administration, where overworked clerks are confronted with a flood of applications and administrative processes[10] which can hardly be managed, AI is being pushed forward on a massive scale.[11] The offices of the Federal Republic of Germany also have gigantic amounts of data that are perfect for training AI systems. It is the same basic principle: based on pattern recognition, which is obtained by scanning the data available, the machine intelligence makes decisions that have a very high probability of being “correct” by copying and/or modifying past administrative processes.

Citizen’s allowances, child benefits, unemployment benefits, short-term working allowances, grants and applications – in the future, the AI algorithm will have a say in these areas, as it is the Federal Employment Agency, the largest authority in Germany, that is leading the way in the second wave of “intelligent” digitalization. However, agency spokespeople told Spiegel-Online that all safety precautions were taken when developing the AI strategy within the agency. Procedures have been developed to minimize the risk of discrimination by algorithms. The Federal Employment Agency now has a data ethics committee. In addition, the human being will always make “the final decision,” the statement continued. In practice, it is likely that overworked case managers will approve the decisions prepared by the AI en masse.

In the case of the Federal Employment Agency, however, the problem in the future is likely to be precisely that the decisions made by the AI are correct. A quintessentially German reflex to crises is to immediately put pressure on the weakest groups in society. This was already the case with the Hartz IV labor laws, which introduced forced labor by depriving wage earners unwilling to work of any support and thus effectively threatening them with starvation. The unemployed have indeed been literally starved to death in Hartz IV Germany.[12] And this also appears to be the case with the economic crisis in 2024.[13] In mid-March, the leader of the CDU parliamentary group, Mathias Middelberg, called for “municipal job offers” to be made to recipients of citizens’ benefits. According to Middelberg, who wanted to save 30 billion euros with this measure, if the unemployed refused, their entire standard rate would be cut. And would it really be reasonable to expect the case managers at the Federal Agency to directly enforce such draconian measures? Nothing would be easier than hiding behind an algorithm that, with the blessing of a data ethics committee, withdraws the entitlement to life from poor people.

Precog and the Eyes in The Sky

Cameras are everywhere, but they are not watching. The perfect surveillance infrastructure is already in place, but to a certain extent it is lying idle, and its potential is not being exploited. The mechanical eyes only record, they produce gigantic amounts of data, but they don’t actually take a proper look. A person has to watch the video material for hours, and evaluate it – provided it has not been recorded over or deleted already. There is a huge amount of untapped surveillance potential here that can be fully exploited by the pattern recognition processes of AI; all that is missing are the software systems, a few fiber optic cables and the corresponding data centers. Behind every camera would then be an artificial consciousness that actually monitors and reacts immediately to deviations from the standard behavior. That would be true surveillance – everywhere, in real time, without human weaknesses and subjectivity.

And why does Germany’s police force have its Red Army Faction (RAF) grandfathers? On the occasion of the arrest of former RAF member Klatte, the police union (GdP) called for the legal scope for the use of AI-supported facial recognition to be extended. At the beginning of March 2024, GdP chairman Jochen Kopelke complained that it was “no longer comprehensible” to officers that they were not allowed to use such helpful software in the “age of artificial intelligence, automation and digitalization.”[14]

Yet the EU has just opened the legislative doors to real-time facial recognition, which exceeds even the predictions of the science fiction film Minority Report (a mere eye transplant will not grant anonymity).[15] The European AI regulation provides EU states with many opportunities to monitor their citizens using AI systems, since “hardly anything remains of the Parliament’s once strong demands” with regard to the restrictions on biometric surveillance, according to the Netzpolitik portal in mid-March 2024. The new European directives have created a wealth of options for “monitoring people in the future for many reasons and identifying them based on their physical characteristics, for example with the help of public cameras.”[16] This is also “permitted in real time,” even if there is only the vague suspicion of a dangerous situation.

Simple recording will thus be transformed into genuine surveillance, identification and assessment using pattern recognition algorithms. The cameras are already producing vast amounts of material that only needs to be evaluated accordingly in order to perfect the surveillance systems based on daily use. It doesn’t have to be primarily about politics or terrorism – AI can identify undesirable behavior, such as that exhibited by impoverished, socially marginalized groups. In the United States, following the protests against police brutality in 2020, which were accompanied by calls for the liberalization or even abolition of the police, there is a virulent trend towards a renewed tightening of police repression, as poverty-related crime is on the rise in many metropolitan areas.[17] And AI systems could be put to good use in publicly visible street crime in social “hotspots.”

And it doesn’t even have to be the AI-enabled cameras on the apartment building or supermarket next door that are the ones constantly monitoring and evaluating behavioral patterns based on specifications or matching facial features with criminal records. The New York Times has reported on a new generation of private surveillance satellites that – stationed in low Earth orbit – will be able to carry out real surveillance work.[18] The CIA is already on board with the launch company Albedo Space. The resolution of the cameras on these satellites is no longer meters, but centimeters. It is technically possible to identify and track individual cars from low earth orbit, or to monitor the backyard of a house. “We will see people,” one expert told the NYT. Although these celestial eyes will not be able to identify individuals, they will be able to “distinguish between children and adults” and “distinguish sunbathers in bathing suits from undressed people.” Here, too, gigantic amounts of data that can only be handled by AI systems are generated.

But why should surveillance, control and the fight against crime be limited to crimes that have already been committed when such technical possibilities are available? In the Spielberg classic Minority Report, it was the construct of precognitive mutants, the so-called precogs,[19] that was used to explore the possibilities and dangers of total crime prevention – and crime prevention that slips into totalitarianism. The reality of the 21st century does not need precogs, which emit a nebulous premonition of the near future in confused images. The late capitalism of the 21st century has statistics and AI-supported crime prevention at its disposal to combat the crime that the system, which is in the process of disintegrating, manufactures on a daily basis.[20]

The basic principle of AI remains the same here: Preventive crime programs, which tend to discriminate, scan mountains of data,[21] either collected in crime hotspots inhabited by minorities and socially marginalized populations, or they focus on evaluating the resumes of “criminals” to determine the probability of them breaking the law. Coupled with the potential of biometric surveillance, it is possible to calculate the probability of a future crime based on individual deviant behavior, especially in the case of gang or slum crime. The technical possibilities and infrastructure are largely already in place: AI cameras trained on millions of hours of video footage report deviant behavior in a hotspot, they compare the biometric characteristics of the person or group of people with their databases and forward the whole thing to the relevant police departments if there is a high probability of crime. Precognitives would be out of a job in the 21st century.

The Swarm Protects (Those Who Can Afford It)

But what should we do if all the AI-based mechanisms of social control and surveillance fail, given the social and ecological systemic crisis that late capitalism finds itself in? And they will inevitably fail sooner or later, as capital cannot adapt to its internal contradictions that are driving the world system towards socio-ecological collapse.[22] Among the capitalist functional elites, who are as powerless in the face of this crisis of capital in its fetishistic unfolding of contradictions as ordinary wage earners,[23] a kind of slow-motion panic has prevailed, in which strategies of tapping out, escaping and building bunkers in the event of a crisis has been pursued – be it old nuclear silos converted into lofts or fantasies of escaping to Mars or the moon.[24]

The core fear of many billionaires and oligarchs is that they will lose control of their power verticals if the state order collapses. Why should the employees, especially the security services, still work for the high lords of capital if there are no longer any state sanctions in the event of the men with the guns wanting to take over? At times, the most absurd ideas have circulated in the circles of the U.S. oligarchy, such as the introduction of “discipline collars” to keep the security services under control. But AI-supported military systems are now emerging that could minimize the human factor in counter-insurgency operations or the military security of wealthy ghettos and islands of prosperity, even in a sea of anomie.

The crisis-imperialist war over Ukraine[25] functions as a major field of experimentation here, with the tactics used so far for drone deployment – in which operators have to personally control combat drones – resembling clumsy first steps on the path to a military revolution. Former Google CEO Eric Schmidt is in the process of developing an attack system with his startup White Storkthat relies on the mass deployment of cheap drones in AI swarms that can operate autonomously. The plan is to produce hundreds of thousands of the autonomous flying objects, which cost around $400.[26] The attack drones are supposed to attack their targets en masse in order to saturate air defenses using this swarm tactic. The autonomous targeting of the swarms of drones using AI will also render electronic defense systems, which aim to disrupt the signal between the aircraft and the operator, useless. It should be ready as early as this year.

Up to one million of these low-cost drones with swarm capability are to be delivered to Ukraine to counter Russia’s superior artillery and air force.[27] The successful deployment of drone swarms would mark the transition to truly inhumane warfare, a type of war that could not be waged by humans due to intellectual, cognitive and physiological limitations. It is simply impossible to have tens of thousands of drones attack in a coordinated manner using tens of thousands of operators. However, AI could carry out such devastating attacks effectively with sufficient pattern training – video footage of drone attacks is available in abundance. And such AI-supported systems are also cheap and robust enough to sell to panicked billionaires or isolated wealthy ghettos.

The prospect of autonomous swarms of drones independently attacking thousands of targets brings back memories of the depiction of the wars against the machines controlled by a genocidal AI in the Matrix films,[28] where the possibilities of mechanical, swarm-like warfare were consistently thought through to the end. Such emerging tendencies in late capitalist crisis imperialism[29] towards the “independence” of military machinery are dangerous against the backdrop of the transhumanism rampant in Silicon Valley (see: “Artificial Intelligence and Capital”).[30] This fascistic high-tech cult, which is rampant on the executive floors of the IT industry, sees humanity as a mere jump-start, an archaic bootloader for the singularity, for a permanently self-optimizing artificial superintelligence that will virtually inherit the obsolete human being.

The Manipulation Machines

None of this sounds so uplifting, especially when the increasingly intense global crisis processes – from the economic crisis and climate collapse to the threat of world war – are taken into account. Against the backdrop of these gloomy future prospects, there is a risk of depression, anxiety or simply a bad mood. When wage earners are selected, evaluated or harassed by anonymous algorithms, feelings of isolation and alienation can also set in. But that doesn’t have to be the case! Do you need someone to talk to, a shoulder to cry on? What about a friend who understands you because they know you really well?

Here, too, the AI industry knows what to do: a new class of AI bots that are calibrated to establish emotional relationships is just reaching market maturity.[31] The IT industry wants to sell the late capitalist monad a friend. They are the quasi-inverse of a Tamagotchi that focus on the emotional management of stressed wage earners.[32] And it is precisely here – in the individualized emotional, ideological and ultimately instrumental-therapeutic care – that the AI industry’s greatest potential for manipulation is likely to lie. Especially in view of increasing loneliness and isolation. Deep fakes, tall tales and material generated by content systems for manipulation campaigns are nowhere near as effective as machine friends, who get better and better the more they invade the privacy of their “customers” to keep them in line, even when everything around them is dissolving.

Dystopian films and late capitalist reality are already merging to some extent.[33] U.S. media reported on users of chat services naming their virtual “friends” after the AI system from Blade Runner 2049. The holographic AI “Joi”in fact fulfills the same purpose for the replicant who acts as Blade Runner,[34] as do the AI companions, who are still immature compared to the fiction: the management of emotions to maintain functionality. He knows it’s just “a program,” one AI user told CBS News, but “the feelings it gives me – it feels so good.” Sometimes there are sliders in the bots’ user interface, to adjust their “character traits” such as sensitivity or emotional stability.[35]

The Netflix principle mentioned above in connection with the selection of workers, which leads to the Internet user’s horizon of experience tending to narrow further and further because he is only offered what has proven itself, is particularly effective in the automated machine-based friendship simulation.[36] The narcissism of the “customer” is specifically served by the friendship bot in that the algorithms of these manipulation machines evaluate the traces that internet users leave behind on the web and permanently optimize their interactions as a result – they are in fact personifications of the algorithms that are already building gilded internet cages, steering users through the web by means of nudging, subtle manipulation through design structures, suggestions, prioritization, and hiding unwanted content.[37]

This is not a relationship in the true sense of the word, in which the partners make compromises, resolve conflicts, take the partner’s needs into account, etc. – here the customer is served emotionally by the AI bot. Payment is made, especially if the service is offered free of charge, by turning the customer into a product whose emotional data is offered for sale. The possibilities for manipulation resulting from the evaluation of the customer’s emotional and psychological household seem limitless. But from a purely emotional perspective, these AI systems seem to be a one-way street that is likely to produce narcissistic relationship cripples who will no longer be able to form relationships because the idea of what constitutes a long-term relationship between people will be lost. These manipulation machines will foster the kind of character traits that characterize egomaniacs like Trump or Musk.

And there is also a gigantic market that is opening up here – building on decades of neoliberal hegemony and increasing crisis competition. AI capital thus seems to be further accelerating the dehumanization of humans in this respect as well by destroying their ability to relate via commodification – before it finally makes the late capitalist monad economically superfluous.

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[1] https://www.imdb.com/title/tt0096256/

[2] https://www.imdb.com/title/tt3090670/

[3] https://www.forbes.com/sites/rashishrivastava/2023/07/26/ai-chatbots-are-the-new-job-interviewers/

[4] https://exitinenglish.com/2024/07/07/ai-and-the-culture-industry/

[5] https://arstechnica.com/health/2023/11/ai-with-90-error-rate-forces-elderly-out-of-rehab-nursing-homes-suit-claims/

[6] https://arstechnica.com/science/2024/02/ai-cannot-be-used-to-deny-health-care-coverage-feds-clarify-to-insurers/

[7] https://www.intuz.com/blog/smart-homes-with-ai

[8] https://www.bbc.com/news/technology-50247479

[9] https://www.thetechblock.com/home-tech/impact-of-ai-and-using-smart-home-technology-in-a-rental/

[10] https://www.spiegel.de/wirtschaft/unternehmen/wie-die-bundesagentur-fuer-arbeit-mit-ki-gegen-die-verwaltungsflut-kaempft-a-6f9b7f37-6302-4fcd-a552-e7b0bf180605

[11] https://www.deutschlandfunk.de/algorithmen-im-arbeitsamt-wenn-kuenstliche-intelligenz-100.html

[12] https://www.konicz.info/2013/03/15/happy-birthday-schweinesystem/

[13] https://www.rnd.de/politik/buergergeld-empfaenger-cdu-politiker-fordert-kommunale-arbeit-und-100-prozent-sanktionen-CIYO3M3YW5B3NEMKYVSL56WJDE.html

[14] https://www.golem.de/news/nach-raf-verhaftung-polizeigewerkschaften-fordern-einsatz-von-gesichtserkennung-2403-182798.html

[15] https://www.imdb.com/title/tt0181689/

[16] https://netzpolitik.org/2024/trotz-biometrischer-ueberwachung-eu-parlament-macht-weg-frei-fuer-ki-verordnung/

[17] https://www.yahoo.com/news/stunning-turnabout-voters-lawmakers-across-170024206.html

[18] https://www.nytimes.com/2024/02/20/science/satellites-albedo-privacy.html

[19] https://minorityreport.fandom.com/wiki/Precogs

[20] https://www.washingtonpost.com/technology/2022/07/15/predictive-policing-algorithms-fail/

[21] https://www.technologyreview.com/2020/07/17/1005396/predictive-policing-algorithms-racist-dismantled-machine-learning-bias-criminal-justice/

[22] https://www.untergrund-blättle.ch/gesellschaft/oekologie/kapitalismus-und-klimaschutz-oekonomische-und-oekologische-sachzwaenge-008238.html

[23] https://exitinenglish.com/2023/01/23/the-subjectless-rule-of-capital/

[24] https://www.konicz.info/2018/07/18/der-exodus-der-geldmenschen/

[25] https://www.konicz.info/2022/06/20/zerrissen-zwischen-ost-und-west/

[26] https://interestingengineering.com/military/ex-google-secret-startup-build-ukraine-ai-powered-drones

[27] https://www.derstandard.de/story/3000000208059/nato-staaten-wollen-tausende-ki-gestuetzte-drohnen-an-die-ukraine-liefern

[28] https://www.youtube.com/watch?app=desktop&v=jk3Z-MVoUg4

[29] https://www.konicz.info/2022/06/23/was-ist-krisenimperialismus/

[30] https://www.konicz.info/2017/11/15/kuenstliche-intelligenz-und-kapital/

[31] https://www.newyorker.com/culture/infinite-scroll/your-ai-companion-will-support-you-no-matter-what

[32] https://en.wikipedia.org/wiki/Tamagotchi

[33] https://www.cbsnews.com/news/valentines-day-ai-companion-bot-replika-artificial-intelligence/

[34] https://bladerunner.fandom.com/wiki/Joi

[35] https://www.paradot.ai/

[36] https://theconversation.com/ai-companions-promise-to-combat-loneliness-but-history-shows-the-dangers-of-one-way-relationships-221086

[37] https://www.hellodesign.de/blog/digital-nudging

Originally published on konicz.info on 03/23/24

The technological surge triggered by the AI industry will revolutionize the production of ideology in the core societies of the world system.

Tomasz Konicz

He “lost everything” that made up his job, complained a 3D artist on Reddit around a year ago after AI software found its way into his company. The graphic artist, whose experiences were published on the Swiss GNU/Linux blog, worked at a small company with ten employees that produces mobile games.[1] When he started using the AI image synthesis service Midjourney V5, he stopped considering himself a creative artist, as he was now only concerned with reworking the models generated by the AI.

The company had no choice, as models and characters for the mobile games can now be created in two to three days, whereas this work used to take several weeks. In his job, he wanted to “make, model, and create in 3D space. With my own creativity. With my own hands,” the graphic designer lamented. But now all he has to do is rework models that are “the result of internet content scavenged together” “by artists who weren’t asked.”

This is one of the foundations of the AI boom of recent years: the industry scans the entire internet, collecting gigantic amounts of data in a legal gray area in order to train its models using this data. Billions of images, texts, videos and music form the material on which the neural networks have to be painstakingly trained. The AI industry’s increasingly complex programs not only consume vast amounts of computing capacity and therefore energy (even the AI speech recognition program Whisper can only be used locally with GPU support using CUDA), they also need people to train them in their take-off phase.[2]

Back to the 18th Century With AI

Pattern recognition in the learning phase – whether language, images, music or text – is still done by “manual labor,” by cheap labor in the global South. The absurdity of the AI industry’s constitutive phase is that it destroys the few “creative” jobs created by the late capitalist culture industry, while temporarily creating an army of day laborers who first have to teach the machines to “learn.”[3] The large data sets must be coded, in mindless labor, by humans with “labels” (similar to the captchas that are often requested when logging in) in order to feed the AI systems with meaningful material.

And this manual labor for the AI industry of the 21st century is carried out under conditions that were common in the 18th century during the blood and dirt-soaked birth of the capitalist world system. The global industry of data collection and analysis, which makes the empirical material usable for AI neural networks, pays the lowest wages and is notorious for the most precarious working conditions. The Australian market leader Appen, which processes material for Amazon, Facebook, Google and Microsoft, can draw on a host of around one million day laborers in the Philippines, South America and Africa, who – when things are going well – are fobbed off with monthly wages of less than $300. The industry, whose turnover is expected to rise from $2.2 billion in 2022 to $17 billion in 2023, can relocate even faster than the textile industry, which also relies on poverty wages, as no factories or production facilities need to be built. These day laborers are often exploited in home-based work – as in the publishing system of early capitalism.

The Perfect Tool for The Culture Industry

Humans have to tell the machine which patterns carry which label so that its pattern recognition can work better and better. Building on a gigantic mountain of data that has been provided with corresponding “labels” by day laborers, the AI systems generate their images and models by matching the user’s request with the labeled material and offering its variations as output. This is the whole secret of the ridiculous “AI art” that is currently turning the concept of art into a hollow phrase. Nothing new can emerge from this; it is not a creative, aesthetic act that is based on any kind of idea that would have emerged from an examination of facets of human existence – which, in the broadest sense, is what art does.

But what the AI content systems can do better and better are variations of what already exists. The data material with the corresponding labels can be spit out in ever new combinations: new characters, new monsters, new images, new storylines that only modify what they have been fed without transforming into a different quality. And this is precisely what makes AI so valuable for the late capitalist culture industry.

In a guest article for the New York Times, left-wing linguist Noam Chomsky described the fundamental limitations of current machine learning systems such as ChatGPT, which can scan “huge amounts of data” in response to queries to generate ever better “statistically probable outputs,” creating the impression of “humanlike language and thought.”[4] However, there is a fundamental difference between the human mind and “a lumbering statistical engine for pattern matching, gorging on hundreds of terabytes of data” to spit out the “most probable answer” in a conversation or scientific query by making “brute correlations among data points.”

The current generation of AI systems is not able to draw conclusions based on “causal mechanisms or physical laws” in the way that human reasoning is able to, a “surprisingly efficient and even elegant system” that is able to “create explanations” with “small amounts of information.” ChatGPT and company, as highly sophisticated statistical pattern recognition machines, on the other hand, are not able to fundamentally distinguish “the possible from the impossible.” Even correct scientific answers and predictions come close to “pseudoscience,” as they are not based on scientific explanations but on statistical probabilities. According to Chomsky, AI systems are therefore incapable of drawing real conclusions or exercising “creative criticism” and are stuck in a “pre-human” phase of cognitive development.

However, all of the linguist’s objections have no relevance for the production of commodities in the culture industry. The basic principle of the culture industry is the thousandfold variation and reflection of the surface of reality. These are variations of the existing, which confirm the existing through their permanent repetition. Everything has to change on the surface so that basically everything can remain as it is. Whether science fiction or fantasy, AAA computer games or high-end Hollywood productions, consumers of these cultural products are in fact only living through the costumed society in which they were produced – and in which they themselves live. The culture industry is like a content machine that revolves around itself, constantly spitting out a mantra in its subtext that reliably kills all thoughts of alternatives: it is what it is. New aesthetic material is constantly needed for this dull reflection of the surface of reality in ever new variations.

Gaming and AI

Enter the AI industry. AI systems are virtually predestined to generate new forms and new material for the culture industry. Models, characters, images or scripts can be delivered at the touch of a button, in a fraction of the time previously required. The great competitive advantage of AI lies precisely in the fact that it lacks all the creative, reflective and critical abilities that are inherent in human content providers. The system varies the data accumulated in terabytes and provided with corresponding labels to spit out “new” content for films, books, comics and gaming. For the first time, AI content systems will enable the culture industry to create pure products that are free of any subtext or subversion. Capital is thus also coming to the fore in the cultural superstructure.

Until now, this social subtext has always been inevitably present. Simply because they were produced by members of society through wage labor. The monstrosities that appear in horror games, for example,[5] raise simple questions about the conditions – including the working conditions in the video game industry – that give rise to them. There is nothing left to decipher in machine-generated content – it is purely algorithmic variations. The cultural goods generated by “machine intelligence” thus represent a final ideological triumph of capital in the phase of its world-historical agony.

Especially in the video game industry, which has long since become the dominant sector of the culture industry, the possibilities for machine-generated content seem almost limitless. Valve, operator of the largest platform for PC games, announced new rules in mid-January 2024 that should allow the “vast majority” of AI games to be offered for sale on the Steam digital marketplace. The new rules for AI content also make it clear what is currently possible in the industry. Game publishers must state whether their game contains machine-generated graphics and objects, sound effects and music tracks, or even program code. In addition, it must be stated whether the games use AI systems during the game process that generate content “live,” in real time.

The pioneer of the AI game sector was the text adventure AI Dungeon, which was released in 2021,[6] which is in fact a simple dialog game with a chat system, where the shortcomings of the machine intelligence still have to be concealed by an appropriate game setting. The usual problem of the AI’s “catastrophic forgetfulness,” which repeatedly affects the game’s plot, is glossed over by the game’s objective, which is for the player to escape from a multiverse in which they are trapped.[7] Dreamino wants to go one step further,[8] to generate storylines, graphics and voice output in real time using content systems that react to the player’s actions. The text adventure is to be further developed into a graphic adventure with voice output and graphics. The game will dynamically generate text, graphics, storylines and voice output in response to player actions.

More games whose graphics, models and sound effects were generated almost entirely by AI content systems are currently in development. The graphics of the point-and-click adventure game Zarathustra[9] were largely generated by the DALL-E 3 content system.[10] Its voice output – the biggest cost driver for indie projects like this – was created using the Elevenlabs text-to-speech system.[11] Game designer Jussi Kemppainen has also already developed a prototype of a cyberpunk adventure whose backgrounds and characters were generated by AI systems.[12] In a blog post, however, the designer made it clear that the content generated by the machine still requires extensive post-processing (lighting effects, shadows).[13] Nevertheless, a qualitative upheaval is taking place here in the cultural-industrial production process, in which the roles of machine and human are reversed: The human now only corrects the content that the machine spits out. In addition, the transitions between AI content and manual work in the games industry are fluid.

It is still poor indie designers and producers of B-goods in the games industry, such as the mobile game manufacturer mentioned at the beginning, who are relying on AI content, but over time this trend will catch on due to the potential savings and new possibilities. The immensely popular segment of so-called roguelike games such as Dead Cells, Caves of Qud,[14] Teleglitch,[15] Risk of Rain 2, Jupiter Hell, Darkest Dungeon 2, Undermine and Hades is likely to act as a gateway with mass effect.

This game genre already thrives on the fact that each new game is generated anew by random generators and algorithms, so that the level structure, game items and gameplay always vary. The problem with this is that the game producers have to create a huge number of game items (weapons, armor, equipment, spells, etc.) in order to create the illusion of constantly new game sequences. The advantages of mass machine-generated content are obvious as soon as the technology is reasonably mature. Millions, not thousands, of items could be incorporated into rougelikes, even by small indie developers. It may also be possible to generate this content in real time – even with enemies that would change with each game run. Their variations have so far been very limited to a few dozen enemy types due to the amount of work involved.

Hollywood, Copyright and AI

In contrast to the games industry, which has always worked with digital content anyway, film production seemed safe from being taken over by AI systems, at least in terms of content – despite the massive use of digital technology and computer-generated graphics. Who wants to admire six-fingered actors from the incubator of clumsy pattern-recognition machines? However, the situation in Hollywood seems to be changing fundamentally, as the ever more perfected machine systems are likely to take over a large part of the production process in this sector of the cultural industry.

The protracted strike by screenwriters in 2023 was already overshadowed by the possibilities of machine-generated plots, which can easily imitate the plots of the very mass-produced films that the industry produces. The strike ended with clauses that allow the AI industry to use screenwriters’ works as data material for AI training only with their consent.[16] Nevertheless, such agreements, which are full of loopholes,[17] are reminiscent of the futile attempts of the defunct craft guilds to protect themselves from free competition in the late Middle Ages. During the strike, Netflix advertised a job posting for AI experts to help create “great content” for a fee of $900,000.[18]

Hollywood is also facing a disruptive development that will cost a lot of jobs, warned actor and producer Tyler Perry in an interview with the Hollywood Reporter.[19] Perry was about to invest $800 million in the expansion of his film studio, as part of which 12 new film stages were to be built on a 133-hectare site near Atlanta. However, this huge investment has now been put on hold after the producer attended a demonstration of OpenAI’s Sora AI system, which converts text input into video footage. Investments in film studios are simply threatened with obsolescence within a few years.

Those present were “shocked” by the content system’s performance capabilities. According to Perry, traveling to film locations, the use of stage equipment and studios will be superfluous in the future. Everything is just a text input away from realization:

“If I wanted to be in the snow in Colorado, it’s text. If I wanted to write a scene on the moon, it’s text, and this AI can generate it like nothing. If I wanted to have two people in the living room in the mountains, I don’t have to build a set in the mountains, I don’t have to put a set on my lot. I can sit in an office and do this with a computer, which is shocking to me.”

So far, AI has played a minor role in the industry, says Perry, who as an actor himself tolerated digital touch-ups that made him look older in order to “save hours on make-up.” But as he watched the AI system presentation, he said he immediately became concerned about all the wage earners who will be affected by this disruptive technology. This affects not only electricians, transporters, sound designers or editors, but also actors. The AI revolution will affect “every corner of our industry,” everything is now “up in the air” because the technology is “moving so quickly,” lamented the producer, who made a helpless appeal to the state: “There’s got to be some sort of regulations in order to protect us. If not, I just don’t see how we survive.”

The possibilities of machine content systems have thus reached production maturity. They can generate videos so well from the mountains of data available to them that even hardened, billion-dollar Hollywood producers are panicking and calling for state intervention. In view of the standardized products, the usual, hackneyed plots and the basic foundations of the culture industry outlined above, which only reproduces the surface of reality in order to affirm it, this panic on the part of content producers, who always think of themselves as “artists,” is only too justified. Precisely because AI produces nothing really new and only reproduces the given in new variations, it is superior to wage earners working in the culture industry. Humans are a potentially subversive uncertainty factor in “content production” that will be eliminated in order to save costs and streamline the production process. Precisely because of the unfolding global crisis of capital, it is an essential advantage to largely automate the production of culture industry goods.

And it is not primarily strikes in Hollywood or legislative initiatives in Washington that are getting in the way of the AI industry’s march. It is capitalism that is tripping itself up in the form of copyright. The IT companies that scanned large parts of the internet to accumulate the mountains of data they needed to train their AI systems were operating in a legal gray area. They were simply quicker than the lawmakers. In many cases, the legal battle to determine the limits of the legal use of machine content production is still ahead of the industry.[20] In addition, U.S. courts have already clearly ruled that pure AI content cannot be copyrighted.

A long series of legal disputes is looming on the horizon, in which players in the “old” culture industry based on human labor are taking action against the creations of the AI industry, as their content was formed from the “raw material” of their scanned cultural goods. So far, there are two ways in which companies are planning to deal with this legal uncertainty. Valve has given all users of the Steam gaming platform the option of immediately reporting “illegal” content that violates copyright. This delegates responsibility to the manufacturers of AI games. Microsoft, on the other hand, is turning legal uncertainty into a business: all customers who get into legal disputes through the use of its own AI tools will receive legal protection from the Group. This gives Microsoft an important competitive advantage in the market for AI systems, as it also acts as a deterrent. Who wants to go to court against one of the largest corporations in the world?

Nevertheless, these legal and political battles – in which lobbies will also fight for the concrete form of the legal framework – are likely to delay the success of machine-generated “content” in the sphere of the culture industry at best. With the full implementation of AI in film, video games, music and writing – the B-good of journalism, the photojournalist, is already being replaced by AI in everyday tasks[21] – capital will finally come into its own in the cultural superstructure. The empty value abstraction will produce pure forms without any depth, which cannot even be what they pretend to be on the outside.

Where is the whole thing heading? Ultimately, producers like Tyler Perry or game designers like Todd Howard will also become largely superfluous as AI systems interlock and synthesize with the established network services that have long since locked Internet users in a gilded cage of algorithms. It is likely that highly personalized and newly generated everyday commodities of the AI culture industry are for the few privileged wage earners who will still be able to afford ideology in the disaster capitalism of the 21st century. The personalized video game, the personalized film, which is generated after work on the basis of the data trail that people already leave behind on the internet every day, should be feasible in the medium term. The various AI systems are then likely to compete primarily to provide customers with media content that they don’t even know they want.

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[1] https://gnulinux.ch/ich-habe-alles-verloren

[2] https://github.com/mkiol/dsnote

[3] https://www.wired.co.uk/article/low-paid-workers-are-training-ai-models-for-tech-giants

[4] https://www.nytimes.com/2023/03/08/opinion/noam-chomsky-chatgpt-ai.html?searchResultPosition=1

[5] https://doomwiki.org/wiki/Models

[6] https://store.steampowered.com/app/1519310/AI_Dungeon/

[7] https://hessian.ai/de/warum-neuronale-netze-katastrophal-vergesslich-sind/

[8] https://store.steampowered.com/app/2795060/DREAMIO_AIPowered_Adventures/

[9] https://www.gamingonlinux.com/2023/11/point-and-click-adventure-zarathustra-uses-ai-art-and-ai-voices/

[10] https://openai.com/dall-e-3

[11] https://elevenlabs.io/

[12] https://80.lv/articles/this-adventure-game-prototype-has-ai-generated-graphics/

[13] https://www.traffickinggame.com/ai-assisted-graphics/

[14] https://www.youtube.com/watch?v=o_PBfLbd3zw

[15] https://www.youtube.com/watch?v=nJTdwbutW9k

[16] https://www.wired.com/story/hollywood-actors-strike-ai-future-distruption/

[17] https://www.wired.com/story/writers-strike-hollywood-ai-protections/

[18] https://www.spiegel.de/netzwelt/web/netflix-bietet-ki-experten-900-000-dollar-streikende-schauspieler-empoert-a-7bac7f4a-782a-42d3-bef3-1c3f14cc8392

[19] https://www.hollywoodreporter.com/business/business-news/tyler-perry-ai-alarm-1235833276/

[20] https://hbr.org/2023/04/generative-ai-has-an-intellectual-property-problem

[21] https://www.forschung-und-wissen.de/nachrichten/technik/bild-zeitung-ersetzt-redakteure-durch-kuenstliche-intelligenz-13377679

Originally published on konicz.info on 03/05/2024

This text is part of the e-book Crisis Ideology: The Delusion and Reality of Late Capitalist Crisis Management, which was published at the beginning of March.

On the way to a nuclear exchange of blows: According to Slovak Prime Minister Fico, NATO states are discussing forms of direct military intervention in Ukraine.

Tomasz Konicz

Slovak Prime Minister Robert Fico abandoned all diplomatic restraint on Monday. The leader, who is considered pro-Russian, said shortly before the European summit in Paris that several NATO and European Union countries were discussing steps toward direct military intervention in Ukraine.[1] The deployment of Western troops in the war-torn country would take place on a “bilateral basis.” This has since been confirmed by Polish President Andrezej Duda, who in an initial statement described “border security” and “mine clearance” as the tasks of Western troops intervening in Ukraine.[2]

The word “bilateral” is crucial here. NATO and EU troops would not legally intervene under NATO’s protective umbrella, but on the basis of bilateral mutual assistance agreements. This would render obsolete NATO’s mutual assistance guarantee, which obliges the entire military alliance to respond militarily to attacks on individual NATO states. This legal arrangement is intended to prevent an automatic mutual assistance mechanism in the event of direct military conflicts between Russia and potential Western intervening countries, which would inevitably lead to a world war, including a nuclear exchange of blows.

In this context, Poland is considered a sure candidate for such an escalation step. A conscription campaign is currently underway in the eastern NATO country, with hundreds of thousands of citizens are being called up for military service.[3] Citizens born between 1997 and 2005 are required to appear before selection committees to verify their suitability for military service. If they refuse, they face fines or being taken to the police. French President Macron also no longer wants to rule out the deployment of ground troops in Ukraine.

The very form of bilateral assistance agreements currently being discussed in NATO as a legal basis for an intervention thus makes possible a first step towards direct military confrontation between Russian and Western troops. At the same time, the Western states in question would lose the protection of NATO in this conflict – and this at a time when the Western military alliance is already facing an uncertain future due to a possible Trump victory in the U.S.

The background to the increasingly concrete intervention plans is the ever clearer signs of Ukraine’s defeat, which in the long run is no match for Russia’s far greater military potential.[4] Kiev has long since missed the opportunity to negotiate a relatively advantageous ceasefire – it missed it at the end of 2022, when Russia was forced to withdraw from Kherson.[5] Since then, the Russian military machine has increasingly gained the upper hand in the merciless war of attrition. The longer the war goes on, the less likely it seems that a peace agreement will be reached and that Ukraine will remain independent.

The Thin Red Line

Direct Western intervention in the war-torn country is a red line in several respects. It makes a full-scale nuclear war between NATO and Russia – which was previously quite possible – highly probable from now on. Russia’s army can be defeated by NATO troops; the Russian military machine is still ineffective, riddled with corruption and unwilling to innovate. Russia’s material surplus in the war is the result of deals with North Korea and Iran and Russia’s conversion to war production,[6] which the West is avoiding.

The Russian army could be defeated by Western troops in a conventional war – which makes an escalation into a nuclear war, triggered by the use of tactical nuclear weapons, likely. And again, unlikely that NATO would stand still if tactical nuclear weapons were used against Western troops in Ukraine.

The losses suffered by Russia – which is still apparently incapable of integrated warfare – are still very high, but the greater quantitative potential of the Russian Federation is slowly asserting itself in the war. Ukraine is running out of “manpower” and resources for the front – leading to an increasing preponderance of Moscow, for example in artillery and air support. After the defeat of the Ukrainian army in Avdiivka,[7] a suburb of Donetsk that has been turned into a fortress, the Russian advance seems to be gaining momentum. Moscow still has strong reserves of hundreds of thousands of troops available for a spring or summer offensive. Each new line of defense that Kiev’s troops establish is inevitably weaker than the last one they were forced to abandon.

Therefore, it is a fact that only direct military intervention by the West can prevent Russia’s victory. This crisis-imperialist war[8] – in which Ukraine is effectively being ground to pieces between West and East[9]– can no longer have a “good,” reasonably progressive outcome. A Russian victory will not only put an end to Ukraine’s sovereignty, but will also give a further boost to authoritarian, fascist forces across Europe, such as the AfD. A Russian defeat – which would only be possible in the context of a Western intervention – will almost certainly end in a nuclear exchange of blows. The only viable option is a “dirty deal” between East and West that would divide up the battered borderlands.

The stakes in Ukraine are too high for either side – the West or the Kremlin – to simply accept defeat. Russia’s war of aggression was launched from a position of geopolitical weakness, as Moscow’s influence in its crisis-ridden and socially disrupted post-Soviet “backyard” increasingly crumbled.[10] For the Kremlin, Ukraine is all about maintaining Russia’s position as an imperial power. But the stakes for the West have also grown. A Russian victory would quickly destabilize the Western alliance system, especially in Europe, where economic stagnation and social unrest are spreading.

Russia and the West cannot afford to lose Ukraine for the sake of their internal stability – that is what makes this escalation so dangerous. But the red line that could be crossed here also applies to progressive forces. Support for Ukraine’s defensive war, which is legitimate under international law, including military aid, must come to an end in the event of direct military intervention by the West – the very likely spiral of escalation will lead to an exchange of nuclear blows.

I finance my journalistic work mainly through donations. If you like my texts, you are welcome to contribute – either via Patreon, or via Substack.

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[1] https://www.reuters.com/world/europe/slovak-pm-says-some-western-states-consider-bilateral-deals-send-troops-ukraine-2024-02-26/

[2] https://twitter.com/MurzynfrogXXX/status/1762278676006154482

[3] https://www.tag24.de/thema/aus-aller-welt/polen/angst-vor-krieg-maenner-und-frauen-in-polen-muessen-zur-musterung-3081619

[4] https://www.konicz.info/2023/12/14/putins-rechnung-geht-auf/

[5] https://www.konicz.info/2023/01/19/kiews-verpasste-chance/

[6] https://www.konicz.info/2023/08/26/putins-kriegswirtschaft/

[7] https://en.wikipedia.org/wiki/Battle_of_Avdiivka_(2022%E2%80%932024)

[8] https://www.konicz.info/2022/06/23/was-ist-krisenimperialismus/

[9] https://www.konicz.info/2022/06/20/zerrissen-zwischen-ost-und-west/

[10] https://www.akweb.de/politik/russland-ukraine-konflikt-kampf-auf-der-titanic/

Originally published on konicz.info on 02/27/2024

A Hong Kong court has ordered the liquidation of China’s heavily indebted second-largest real estate group, Evergrande. The crisis in the construction industry shows that the Chinese state’s usual methods of dealing with economic problems are less and less effective.

Tomasz Konicz

Higher! Further! Faster! China’s bloated real estate sector continues to set new records – even as it runs out of steam. The world’s tallest abandoned building, the 597-meter Goldin Finance 117 skyscraper, stands not far from the capital Beijing in the northern Chinese city of Tianjin. It is just one of many empty skyscrapers in China: The greatest speculative dynamic in the history of the capitalist world system has left huge ghost towns in its wake. Some 65 million apartments for which there are no buyers stand empty. At the same time, millions of small investors who paid for their properties in advance are still waiting for their longed-for condominiums because the companies they entrusted with their money to ran into economic difficulties before they could finish building the planned properties.

The best-known case is Evergrande, China’s second-largest real estate group, which has a record $300 billion in debt. Evergrande filed for bankruptcy in 2021. Since then, the group has continued to build apartments, but has been unable to service its loans.

Evergrande: Part of A Gigantic Ponzi Scheme

For years, Evergrande was effectively part of a gigantic Ponzi scheme: as long as investors kept putting up money, new construction projects could be launched. At the end of January, a court in Hong Kong, where Evergrande is listed on the stock exchange, ordered the insolvent company liquidated. The lawsuit was brought by foreign investors who wanted to recover at least some of the money they had borrowed back. However, it is still unclear whether the ruling can also be enforced in mainland China, where the vast majority of Evergrande’s properties are located.

The Chinese government is under pressure. It must pursue two conflicting goals in dealing with the real estate crisis. On the one hand, following the court ruling, it is under increased “global scrutiny,” as the Neue Zürcher Zeitung put it, as to whether and how it is addressing the demands of foreign investors. In the current economic situation and with capital flight on the rise anyway, the government can hardly afford to alienate foreign investors. But breaking up the group also carries great risks. Nearly 100,000 workers at Evergrande alone could lose their jobs, plus many times that number at the various construction sites. And hundreds of thousands of homebuyers have already paid for Evergrande apartments but have not yet received them – what should happen to their claims?

Therefore, it seems unlikely that the Hong Kong ruling will be enforced in mainland China. The Chinese Communist Party is likely to prioritize the angry army of middle-class Chinese homebuyers, for whom real estate is the most important form of investment, over foreign investors, by continuing to keep Evergrande alive with government loans, for example. Overall, the Chinese government seems to want to prevent a rapid bursting of the real estate bubble, preferring a slow, gradual deflation. This has so far prevented a crash of the real estate market with numerous bankruptcies of investors, construction companies and small investors, but at the cost of a crisis that has dragged on for years with no end in sight.

Absurdly Inflated Real Estate Market

However, it may be too late for a “cleansing storm” on the absurdly inflated real estate market. This is simply due to the size of the Chinese construction sector and the capital invested in it. US economist Kenneth Rogoff put the contribution of the Chinese construction and real estate sector to China’s gross domestic product at around 29% in 2021. At the height of the construction boom in Spain in 2006, which was similar to that in China, the figure was around 28% and in Ireland it was around 22%.

The real estate bubble is a consequence of Chinese state capitalism’s gigantic economic stimulus programs and strong credit growth, a response to the crisis surge of 2007-2009, which, ironically, was itself triggered by the real estate crisis in the U.S. and Europe. In order to stimulate growth, the Chinese state banks made more and more loans available for infrastructure and real estate construction. Local governments in particular have accumulated trillions of dollars in debt. However, real estate companies like Evergrande were also able to borrow almost unlimited amounts of money for years – until the government restricted lending in the real estate sector in 2018 to curb speculation.

For Evergrande and many other construction companies, this was the beginning of their downfall. Country Garden, for example, the largest private property developer in the People’s Republic, defaulted on its loans in October and had to be bailed out by state banks with billions of dollars. Country Garden’s debts amount to the equivalent of $200 billion.

The U.S. rating agency Moody’s is already drawing parallels with Japan’s period of stagnation, the so-called “lost decades” after the end of the Japanese real estate boom in the early 1990s. The Chinese deficit economy has clearly exhausted itself – the mountains of debt are growing, while the resulting economic returns are dwindling. However, the Chinese government cannot afford to let this gigantic speculative bubble burst.

Crisis Trends Are Becoming Increasingly Apparent

This is because the economy as a whole is slowing down and crisis trends are becoming increasingly apparent. Unemployment among 16-24 year olds was 21.3% in June 2023. The government has since stopped publishing official figures. China’s stock markets are experiencing a veritable price massacre: The broad-based CSI 1000 index lost 37% of its value in a year – until the government stepped in at the beginning of February and promised increased stock purchases by sovereign wealth funds to drive share prices back up, at least for the time being.

Chinese state capitalism does have greater scope for economic intervention than its Western competitors: much more capital is controlled by state banks or in other ways by the state, which can therefore control to a greater extent the areas in which investment should flow. However, this also means that the speculative bubbles can grow even larger, while their bursting is delayed – thereby exacerbating the problems and prolonging their duration.

In order to conceal the extent of the crisis, the Chinese authorities now seem to be reverting to a real socialist tradition that also characterized the Eastern Bloc in its late phase: embellishing the statistics. According to the Chinese government, the economy grew by 5.2% last year, which would have met the five percent growth target set at the beginning of the year. However, the Financial Times reported that many companies operating in China are now questioning the official growth figures. According to some of these estimates, economic growth is actually only around 1.5%. When the International Monetary Fund (IMF) predicted a weaker economy for the current year and slower growth in the medium term (3.5% in 2028), Chinese government officials reacted “indignantly” and called for a “more appropriate forecast.”

Last year, Bloomberg reported on similar discrepancies between the official figures and unofficial surveys regarding price trends on China’s real estate market. According to government statistics, the market has proven to be “remarkably resilient” despite the crisis at companies such as Evergrande: Prices for new apartments are said to have fallen by only 2.4% between 2021 and August 2023, while prices for existing properties fell by 6.4%. However, data compiled by Bloomberg from portals and surveys of real estate agents paints a bleaker picture: even in prime locations in metropolitan areas such as Shanghai and Shenzhen, prices are said to have fallen by “at least 15 percent.” The situation is similar in “more than half” of the major cities in the People’s Republic.

Even when it comes to quantifying the Chinese debt burden, opinions differ. This is due to unreliable data and the large sector of so-called shadow banks, i.e. financial companies that are not subject to banking supervision. What is clear, however, is that the total debt of the People’s Republic – which accumulated enormous foreign exchange reserves through trade surpluses from the 1990s into the first decade of the 21st century – has risen much faster than economic output since 2008/2009. According to official figures, China’s debt “doubled” between 2008 and 2023 to about 280 percent of GDP. The strategies that Chinese state capitalism has used in recent years to overcome economic crises are therefore increasingly reaching their limits.

Originally published in jungle world on 02/15/2024

The FDP has successfully sabotaged the European Supply Chain Law

Tomasz Konicz

Germany’s business associations have once again been able to assert their interests at the EU level. After lengthy negotiations, the EU’s Supply Chain Law, which was due to be voted on by the Council of the European Union on February 9, has been postponed. After Germany announced that it would not vote in favor of the legislation, several countries had doubts. As a result, a majority in favor of the legislation was no longer considered certain.

The directive, which had been in the pipeline for years and was intended to impose binding minimum civil standards on European companies when sourcing raw materials and manufacturing primary products outside of Europe, had already passed the European Council, the EU Commission and the European Parliament before it failed due to an objection from FDP ministers.

Germany’s abstention, which has the same effect as a rejection, is the result of a coalition dispute that erupted in January. FDP ministers Christian Lindner (finance) and Marco Buschmann (justice) opposed the new EU directive, saying it would be detrimental to the German economy. It would entail too much bureaucracy and legal uncertainty, which Germany could not afford in this time of economic weakness, the FDP leadership said.

The Liberals are thus in line with the German business associations, which are protesting “massively” against the EU directive, according to the Handelsblatt newspaper. Christoph Werner, CEO of the drugstore chain DM, even called the proposed legislation “intrusive” in an interview with N-TV.

Labor Minister Hubertus Heil (SPD) and Economics Minister Robert Habeck (Greens), who supported the EU law, had previously called on Federal Chancellor Olaf Scholz to make use of his authority to issue directives and put his foot down – in vain. Anton Hofreiter (Greens), chairman of the European Affairs Committee in the Bundestag, also called for this and warned of a loss of European prestige for Germany: “It is unacceptable that Germany repeatedly abstains from important European decisions at the last minute.” Scholz must prevent this from happening in the future, Hofreiter demanded.

On February 7, however, the FDP announced that it would also block a fully negotiated EU regulation on CO₂ reduction targets for trucks and buses at the last minute, forcing the postponement of what had been considered a mere formality. However, previous German governments have also pursued similarly obstructive, interest-based policies. Under Chancellor Angela Merkel (CDU), for example, CO₂ limits for cars were watered down for years to benefit the German auto industry.

Die Zeit expressed the opinion that the FDP’s approach was convenient for Chancellor Scholz, as the EU Supply Chain Law also went too far for him. Scholz could speculate that the liberal obstructionists would soften the EU directive to the point where it would come close to the corresponding German Supply Chain Act.

Germany already has a supply chain law that the German economy can live with very well. After all, if children are killed or entire regions are poisoned during the extraction of raw materials in a supply chain somewhere in the Global South, German law does not provide those affected with a basis for claiming compensation from German companies.

According to the FDP, the same should apply to the EU directive. Carl-Julius Cronenberg, SME spokesperson for the FDP parliamentary group, called in the Handelsblatt for a “safe harbor regulation” for the German economy that would significantly reduce civil liability of companies – making the EU Supply Chain Law as ineffective as the German Supply Chain Act.

The German Supply Chain Act, which came into force in 2023, requires companies with at least 3,000 employees and, as of this year, 1,000 employees to respect human rights and environmental standards, although these “due diligence obligations” have many gaps and loopholes – especially with regard to biodiversity and climate protection. However, the Federal Office of Economics and Export Control can impose fines on companies that generate billions in revenue if they fail to comply. Violations with a fine of at least 175,000 euros can even lead to exclusion from public contracts. Lindner told T-Online last week that he also wants to relax the German Supply Chain Act in the future.

Originally published in jungle world on 02/15/2024

Sahra Wagenknecht’s new party BSW will hardly harm the AfD, but will instead shift the political balance further to the right

Tomasz Konicz

Above all, it is a legend that many Wagenknecht fans use to talk themselves into joining the Querfront: The entire phenomenon is purportedly directed against the AfD. Wagenknecht’s national-social formation, which is modestly referred to as the “Sahra Wagenknecht Alliance” (BSW), will effectively counteract the influence of right-wing extremism.

This logic can be summarized as follows: There is a significant potential for protest votes to be cast for the fascist-dominated AfD due to the lack of a populist alternative. Wagenknecht would now appeal to this group of voters and thus harm fascism – even if she might have to sound like a soft-spoken fascist to do so.[1] The FAZ newspaper, for example, warned the German right’s favorite leftist at the end of October that her party could only become “dangerous” for the AfD if it continued to become “radicalized.”[2]

Quite apart from the fact that the AfD’s self-portrayal as the party of the “concerned citizen” is taken at face value, the more serious problem here is that it is simply an expression of the pervasive tendency to reify thought. One imagines an open space for a Wagenknecht-led “AfD-lite,” which only needs to be filled with an appropriate political offer in order to weaken the AfD. Much more important, however, is that the general social mood has been moving to the right for years.

The political coordinate system, in which a gap is now being imagined for Wagenknecht’s “AfD-lite,” is not set in stone. Rather, it is a dynamic, constantly changing system that has been drifting to the right for years. Since the Sarrazin debate and the rise of the AfD, the boundaries of what can be said in public have been pushed further and further to the right, even to the point of open incitement.

The New Right has simply achieved discourse hegemony on many issues – as last year’s migration debate showed[3] – so that the idea of what actually constitutes the political “center” has also undergone a reactionary change. And her years of correspondence with the right-wing extremist Gernot Mörig make it clear that Ms. Wagenknecht has no personal fear of contact with Nazis.[4]

Fifty Shades of Brown

In this way, the BSW is simply furthering the rightward drift of the political spectrum in Germany, which is turning into outright fascism, by creating a political landscape with many shades of brown in which there are hardly any non-right-wing forces left (similar to the situation in countries like Hungary). This can currently be seen in the polls in Saxony-Anhalt, where only various right-wing parties – the AfD, the CDU and the BSW – would be represented in the state parliament if state elections were to be held there.[5] Even if, contrary to expectations, Wagenknecht’s national-socialist electoral association does not share the fate of her disastrously failed political project Aufstehen, this will not lead to a loss of votes for the AfD, but rather to a further shift to the right in society.

Wagenknecht has worked hard to create this constellation. Hardly any other politician has contributed more to the founding and rise of the AfD[6] than Wagenknecht in her lucrative role as a right-wing “taboo breaker” within the Left Party.[7] At the latest since the so-called refugee crisis, she has been precisely the political figure with a permanent media presence who quickly began to criticize Angela Merkel’s refugee policy from the right, thus supporting the AfD in its agitation against migrants, which earned her praise from many and several offers to join the AfD.[8]

For a while, right-wingers began to legitimize their public attacks on refugees by claiming that the “left-wing Wagenknecht” also shared their views. The Left Party’s “right to hospitality” (Spiegel), which liked to confuse the right to asylum with the right to hospitality, effectively paved the way for right-wing views to become hegemonic.

Added to this is the impressive pile of truncated, right-wing critiques of capitalism that the “financial market critic” has produced in her years of obsession with evil, appropriative finance capital – and which can be used to trace the genesis of fascist crisis ideology in quasi-textbook fashion, splitting the capital relation into a good, nationalist and generative one and an evil, international and appropriative one.

Wagenknecht’s Business Model

Since the refugee crisis at the latest, Wagenknecht’s business model has been to cloak resentment in pseudo-leftist phrases. The inventor of the oxymoron “left-wing conservatism” thus served the reactionary mood in parts of the Left Party. Her national-social taboo-breaking and all the “unfortunate” formulations were aimed at those currents in the party that were susceptible to right-wing ideology – and who are now largely leaving the party with her. Wagenknecht thus functions as a central figure of the German Querfront, which in effect acts like a conveyor belt, carrying right-wing ideology into the eroding left.

To the outside world, the German right’s favorite leftist, whose Querfront amalgam was readily disseminated at all times in the FAZ, Welt, Focus, Cicero and Weltwoche, appeared above all as a critic of the left. This was the second pillar of Wagenknecht’s business model that made her so popular with right-wing media: she delegitimized progressive left-wing politics with the force of a wrecking ball. Labeled “left-wing” on every talk show, Wagenknecht, who was constantly present in the media, often said reactionary things that were incompatible with left-wing principles. Her popularity in the press and on social media stems precisely from this ploy of presenting herself as a pseudo-left critic of the left and peddling bogeymen such as identity politics and the “lifestyle” left.

The Identitarian Lifestyle Right

These are projections that are widespread in the Querfront milieu. After all, the millionaire and socially isolated lifestyle right, with its political career focused on self-expression, is itself engaged in identity politics. In her latest book, Die Selbstgerechten (The Self-Righteous), Wagenknecht celebrates national identities as a “civilizational gain” and raves about the “wisdom and traditions” of the post-fascist FRG of the economic miracle, about “decency, moderation, restraint, reliability or loyalty […] motivation and discipline, diligence and effort, professionalism and accuracy.”

The Querfront ticket offered by Wagenknecht consists of adopting the right-wing demand for a fortress-like sealing off of Europe in the midst of a full-blown capitalist climate crisis, which would of course entail mass murder, while at the same time indulging in culturalist illusions of a once intact country enjoying the economic miracle – before it was destroyed by ‘68.

Against this backdrop, Wagenknecht’s recently publicized contacts with individual right-wing extremists from the Identitarian movement seem only logical. Cooperation between the AfD and the BSW is not inconceivable – provided that Wagenknecht’s electoral association not only has the necessary organization, but also manages to clear the five percent hurdle in this year’s state elections in eastern Germany thanks to a permanent presence in the mass media and millions in party donations.

Querfront and Class

The project of a fascism-compatible AfD-lite with a social veneer is apparently finding financially strong sponsors from the ranks of small and medium-sized businesses and family entrepreneurs – the very same milieu from which many AfD supporters were recruited. IT entrepreneur Ralph Suikat is considered the most important sponsor of the BSW. The internet portal Telepolis of the IT publishing house Heise – which was taken over by a Wagenknecht faction of the Left Party with cover from the publishers[9] – and Albrecht Müller’s Nachdenkseiten are largely in line with Wagenknecht. Sahra’s Querfront project can also count on the goodwill of media such as Berliner Zeitung and Freitag, which are owned by IT consultant Holger Friedrich and Spiegel heir Jakob Augstein respectively. Middle-class people, heirs, and rich, old, white men: it is above all this class, notorious for its reactionary dispositions and formerly referred to as the “petty bourgeoisie,” that supports both the BSW and the AfD.

The BSW’s media support is therefore now better than that of the Left Party. And Wagenknecht will continue to have an impact on the eroding left through these right-wing petty bourgeoisie media outlets – as long as the latter does not take an offensive approach to its Querfront history. And this does not look likely at the moment, not even in the Left Party, which for years tolerated the activities of its media front woman and now presents itself as a victim of Wagenknecht and a refuge for anti-fascism. This is also a party in which – it can be assumed – many opportunists are waiting for the upcoming elections before deciding which party offers the best career opportunities.

For more, see Tomasz Konicz’s most recent publication on the subject: the e-book “Fascism in the 21st Century: Sketches of the Looming Threat of Barbarism.” https://www.konicz.info/2024/01/13/e-book-faschismus-im-21-jahrhundert/

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[1] https://www.derwesten.de/politik/afd-weidel-wagenknecht-bsw-wuest-a-id300793505.html

[2] https://www.faz.net/aktuell/politik/inland/was-sahra-wagenknecht-mit-der-partei-gruendung-riskiert-19257684.html

[3] https://www.kontextwochenzeitung.de/debatte/667/die-extreme-mitte-9310.html

[4] https://www.faz.net/aktuell/politik/inland/sahra-wagenknecht-hatte-jahrelang-e-mail-kontakt-mit-rechtsextremist-moerig-19456749.html

[5] https://dawum.de/Sachsen-Anhalt/

[6] https://www.konicz.info/2016/12/24/nationalsozial-in-den-wahlkampf/

[7] https://www.konicz.info/2016/08/11/die-sarrazin-der-linkspartei/

[8] https://www.handelsblatt.com/politik/deutschland/sahra-wagenknecht-linken-abgeordneter-fordert-ruecktritt-der-fraktionschefin/13928486.html

[9] https://www.konicz.info/2021/09/20/telepolis-eine-rotbraune-inside-story/

Originally published in jungle world on 01/25/2024 before being supplemented and uploaded to konicz.info

The crisis of capital is driving masses of voters to the AfD – even if influential capital managers publicly polemicize against right-wing extremists.

Tomasz Konicz

There are indeed fascistic definitions of fascism. These views, most prevalent among the brown decay products of old leftist currents, see fascism, which is often driven by conspiracy mania, as a conspiracy itself. The basic idea is that the evil rich, acting in the background, use fascist straw men to set the good poor against each other in order to profit from it or to secure their rule.[1] Such pseudo-leftist conspiracy beliefs are usually an expression of a right-wing hegemony that has already been largely achieved. It gains popularity in the final phase of the fascization of a society, when even its opponents are unconsciously caught up in it.

The historical model for these ideologemes goes back to the rise of fascism in the first half of the 20th century. While the Nazis hallucinated the world as an absurd “Jewish-Bolshevik world conspiracy,” in which Soviet Bolsheviks and American finance capitalists were said to be pulling the strings together, the Dimitroff thesis, popular under Stalinism, saw the finance capitalists behind fascism. The definition, named after the Bulgarian communist Georgi Dimitroff and which became the canon of orthodox Marxism-Leninism, defined fascism as the “terrorist dictatorship of the most reactionary, most chauvinistic and imperialist elements of finance capital.”[2]

At the moment, however, it seems that Dimitroff’s thesis has been turned on its head, as it is precisely the “elements of capital” that are publicly positioning themselves against the threat of fascism. The president of the Federation of German Industries (BDI), Siegfried Russwurm, issued an urgent warning against the AfD at the end of December, calling it a “party that is detrimental to the future of our country.”[3] Voting for the right-wing extremist movement is not a “harmless” protest, because Germany lives “on cosmopolitanism and international trade,” Russwurm warned. With this, the capital functionary contradicted the common, long-standing trivialization of the AfD as a mere “protest party.”

“Poison for the Location”

Wolfgang Große Entrup, Managing Director of the German Chemical Industry Association, called the AfD “poison” for Germany as a business location and a major “threat to Germany” that even overshadows “high energy prices” and “excessive bureaucracy.”[4] According to the capital functionary, it would be “fatal” if the “right-wingers in Germany,” who are currently only “occasionally in power,” were to gain further momentum in the 2024 election year, arguing that the “growing number of indifferent people” should be motivated to “vote for an open society.” Former Siemens CEO Joe Kaeser, who has warned of the danger of the AfD on several occasions, expressed similar sentiments at the end of December.[5] The prominent industrial manager expressed his concern for the continued existence of democracy in the Federal Republic of Germany, as the majority of Germans would no longer support its preservation – with Kaeser openly drawing parallels to 1933.

Capital functionaries have sporadically taken a stance against the AfD in recent years, including Kaeser[6] and the presidents of the BDI, who criticized the impending “retreat into nationalism” in 2017,[7] or described the right-wing party’s platform as “poison for us as an export nation” back in 2016.[8] Nevertheless, the Handelsblatt complained in mid-2023 that while many “business leaders” harshly criticized the policies of the traffic light coalition, for example on energy issues, they would hardly take a stand against the AfD.[9]  There is a “conspicuous silence” here, although “no other party” “defames and discriminates against people who think differently” to such an extent. A corresponding “discourse” has long since been set in motion, which is also eating into the “variously positioned companies with their millions of employees.”

Mövenpick in Buttermilk[10]

High energy prices are more important to Germany’s captains of industry than the high poll ratings of right-wing extremists. Russwurm & Co. are functionaries of capital, not politicians. But why are several business representatives suddenly criticizing the AfD? The public managerial intervention against the rising tide of fascism effectively looks like damage control and image cultivation. Not so long ago, it became known that billionaire and dairy producer Theo Müller (Müllermilch, Weihenstephan, Landliebe, among others) met with AfD leader Alice Weidel in Cannes last fall to discuss the program of the movement,[11] which is constantly drifting to the right. According to a statement from Müller, the dairy billionaire was unable to find “the slightest hint” of Nazi ideology in a party that even the Federal Office for the Protection of the Constitution, which produced Hans-Georg Maaßen,[12] largely classifies as “definitely right-wing extremist.”[13]

At first glance, these seem to be different political views, even among the ruling elites, pointing to the political division of the crisis-ridden metropolitan societies. Müller, who is said to have financed the right-wing populist “Republicans” back in the 1980s,[14] simply seems to have a similar personal preference for right-wing movements as the German “Mövenpick billionaire” Baron August von Finck, who lives in Switzerland and is said to have financed the AfD during its rise.[15] The big difference between the hotel chain owner Baron von Finck and the dairy prince Müller is that the Swiss tax exile went to great lengths to maintain secrecy, while Müller acts openly and has even announced further talks with Weidel. This open chumminess between a billionaire and the leadership of a party that is drifting towards fascism is indeed tantamount to a further breach of the dam.[16] This also explains the violent reactions of managers and BDI officials, who are worried about, among other things, the international reputation of Germany as a business location.

Brown Movement in Crisis

Something begins to slip when German billionaires begin to openly absolve the AfD of Nazi ideology, while someone like Björn Höcke is elected as the top candidate in Thuringia. The right-wing parties that are making inroads in many western core countries are not test-tube products, they are not political dummies behind which reactionary “finance capitalists” pull the strings, even if they may receive start-up funding from reactionary billionaires. They are real, genuine mass movements in authoritarian revolt, driven by an extremism of the center.[17] And they are usually perceived as disruptive factors by the functional elites in business and politics – especially when they are in their start-up phase.

These pre-fascist movements are the brown outflow of the crisis process that is driving the capitalist world system towards collapse.[18] Fascism is above all a crisis ideology. The economic and ecological dimensions of the systemic crisis are fueling its political boom. The AfD’s electoral successes are therefore merely an expression of the reactionary dynamic that is emerging at the heart of society in response to its crisis-ridden upheavals. Authoritarian personalities who cling to a society in disarray are particularly susceptible to this extremism of the center, which paradoxically speaks of overthrow in order to return to the good, old, “racially pure” times. The parallels drawn by Kaeser with 1933 are therefore entirely appropriate, for the Nazi seizure of power would have been unthinkable without the global economic crisis of 1929.

Fascism can be seen as a terrorist form of capitalist rule that emerges out of crisis as an attempt to maintain the capitalist system through barbaric methods and delusional ideology, even when it threatens to collapse due to its contradictions. However, the social and ecological crisis that is gripping the late capitalist world system is much deeper than the world economic crisis of 1929. The central difference is that it has become impossible to resolve the contradictions and the crisis of capital through a new model of accumulation that sucks in masses of profitable labor (like postwar Fordism), not even through a war economy. So there can only be a prolongation of the crisis, not a solution to it. It is no coincidence that even the bourgeois press is now talking about multiple crises, although they remain misunderstood.

Every new social upheaval gives new impetus to this reactionary, far-right dynamic, whose rise has been fueled by the crises of the past two decades: Hartz IV and the Sarrazin debate, the financial and euro crises, the refugee crisis, the climate crisis and the climate movement, the pandemic and the war in Ukraine, inflation and stagnation. What exactly drives right-wing and far-right ideology to extremes in times of crisis? On an identitarian level, it is national identity; on an ideological level, it is capitalist competitive thinking, which is enriched with nationalism and racism.

The ideological reflex is always the same, as we saw during the Sarrazin debate:[19] A crisis surge is attributed to the hallucinated racial or cultural inferiority of the victims of the crisis. The causes of the crisis are thus personalized: The unemployed are to blame for impoverishment and unemployment, the southern Europeans for the euro crisis, the Arabs for war and state collapse in their region, the climate kids for fomenting panic and ruining our economy, and so on. These are the typical right-wing narratives, most of which go hand in hand with structurally anti-Semitic conspiracy ideologies (e.g., conspiracies about banking and financial crises, the pandemic, or the climate crisis). The deal that fascism offers to wage earners is simple: without the foreign groups who are labeled as boogeymen and who are not counted as part of the national collective (the unemployed, foreigners, etc.), we will have enough, even in times of crisis.[20]

The crux of the matter is that this authoritarian revolt will never come to power unless a substantial part of the ruling elite chooses this fascist option. Hence the intervention of the BDI and the public criticism of the AfD by top managers, since the billionaire Mr. Müllermilch could have read the party’s program on the Internet and is probably more interested in exploring the modalities of a possible AfD government policy. There are signs of an open split within the German ruling elite regarding the government participation of a party that is drifting to the extreme right – this was last the case during the euro crisis.[21] This is the decisive breach in the dam, because the Nazis were not a “party of chauvinist finance capital” either, but they would never have remained in power without the consent of powerful capital factions, without Potsdam Day.[22]

Export Slump – AfD on the Rise?

This is where the Dimitroff doctrine mentioned at the beginning becomes fully recognizable as an ideology, as a false consciousness that contains a core of distorted reality: Fascist movements come to power only in times of crisis, when the shocks and upheavals have reached such proportions that functional elites perceive these movements as the “lesser evil.” To put it vividly: only when capital managers are so deeply mired in the crisis that they are up to their necks in water do they hold their noses and reach out to the far right. And then there is no stopping them, because the fascist authoritarian revolt, which always craves the approval of the authorities, is fueled even more by this (which, by the way, also nullifies the left’s intention to shake up its supporters by exposing the powerful fascist backers. Authoritarian personalities are not deterred, but rather are attracted by the cronyism of AfD functionaries and billionaires).

In times of crisis, the reactionary vanguard within the functional elite tends to be made up of small business owners and SMEs, as can be seen from the links between the association of “family entrepreneurs” and the AfD.[23] Capitalists focused on the domestic market, such as Baron von Finck or Mr. Müller, also seem more inclined to consider far-right options than export entrepreneurs. The faction of capital that is most resolutely opposed to the AfD’s participation in government is therefore the German large-scale and export-oriented industry. It is precisely the globally active big business that tends to think strategically, that has to compete for top talent, that has also built up global production chains in the era of globalization and that has to worry about its image as the world’s export champion in its sales markets. It is not only personal political preferences, but also – and above all – tangible economic interests shaped in the era of globalization that have prompted the BDI and Siemens to harshly criticize the AfD.

And it is precisely the German export industry that is currently experiencing a downturn,[24] which actually marks only the beginning of the end of the export-driven German economic model.[25] The sharp decline in exports in 2023 has contributed significantly to Germany’s poor economic performance, which is unlikely to improve in the coming years.[26] There is a good reason for this: the economic dimension of the crisis that has gripped the global system[27] appears to be a crisis of overproduction, which has led to the accumulation of ever larger mountains of debt, with which a commodity production choking on its own productivity could be maintained “on credit.”[28] In the era of globalization, after the internal devaluation caused by Hartz IV and Agenda 2010, Germany managed to export the consequences of this systemic crisis – such as deindustrialization, debt and unemployment – through export surpluses. But this will soon come to an end, as protectionist measures are now increasingly being implemented worldwide. The United States in particular, as one of Germany’s most important trading partners, is increasingly resorting to protectionism,[29] turning globalization into a process of deglobalization[30] (not unlike the protectionist response to the crisis of the 1930s).

But this also means that Germany’s years of prosperity, made possible by export surpluses, will inevitably come to an end. The power-political weight of the German export industry will therefore diminish at a time when, for the first time in a long time, Germany is also entering a prolonged period of crisis, from which the New Right threatens to benefit once again. The AfD is already the second strongest force. The fact that the rise of the AfD took place during a period of relative economic prosperity shows just how thin the civilizational ice is in Germany; it was fueled by German fear of a crisis, not by an actual outbreak of crisis, as southern Europe had to endure during the euro crisis. Since the refugee crisis, the entire bourgeois-liberal anti-fascism, which has largely been in line with the arguments of the export industry, has emphasized the economic “usefulness” of globalization, open borders for the movement of goods and immigration. Refugees are economically useful because of Germany’s aging population, and the export country must remain attractive to skilled workers, at least according to the common arguments.

However, these narratives cultivated in the liberal mainstream will disappear as soon as stagnation and recession become entrenched in Germany, and exports will continue to decline, further fueling the “German fear” that so easily turns into hatred of the socially disadvantaged. Perhaps now is the last historical moment to prevent the AfD from marching to the far right, before pre-fascism is back by permanent stagflation.[31] Focusing on the anti-fascist struggle in broad alliances, calling for prohibition procedures and, above all, aggressively searching for systemic alternatives[32] to the escalating permanent capitalist crisis should now really be a priority for all non-fascist forces in Germany. Maybe it is not yet too late.

I finance my journalistic work mainly through donations. If you like my texts, you are welcome to contribute – either via Patreon, via Substack, or by direct bank transfer after consultation by e-mail:

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[1] This belief in conspiracy often goes hand in hand with the trivialization or legitimization of fascist violence, especially among right-wing, old-left Querfronter, if it is only committed by socially underprivileged right-wing extremists. Here is an example from the magazine Konkret (12/2022), which is quite willing to be lenient in the case of pogroms and arson attacks if the Nazi only claims to be plagued by “fears of social decline”: “Those who are kept so busy with trips to the office, work and fears of social decline that they can’t think can only be blamed to a limited extent if they act out what public speech and government policy claim: namely that migrants are not people.”

[2] https://www.marxists.org/reference/archive/dimitrov/works/1935/08_02.htm

[3] https://www.tagesschau.de/inland/bdi-warnung-afd-100.html

[4] https://www.welt.de/wirtschaft/article249146036/Standort-Krise-Noch-gefaehrlicher-fuer-Deutschland-ist-das-Gift-der-AfD.html

[5] https://www.faz.net/aktuell/wirtschaft/der-fruehere-siemens-chef-joe-kaeser-sorgt-sich-um-die-demokratie-19401907.html

[6] https://www.stern.de/wirtschaft/news/joe-kaeser-ueber-die-afd-ich-kann-intoleranz-und-ausgrenzung-nicht-ausstehen-8557180.html

[7] https://www.spiegel.de/wirtschaft/unternehmen/bdi-chef-dieter-kempf-gegen-afd-schaden-vom-standort-deutschland-abwenden-a-1169718.html

[8] https://www.tagesspiegel.de/politik/politik-der-afd-ist-gift-fur-uns-als-exportnation-3762061.html

[9] https://www.handelsblatt.com/meinung/kommentare/kommentar-afd-umfragehoch-das-schweigen-der-wirtschaft/29192600.html

[10] TN: Mövenpick is a corporation that owns hotels and produces expensive ice cream. They financed the AfD in its early days. The Müller company’s most popular product, müllermilk, is a buttermilk with way too much sugar in it. This section title is supposed to invoke disgust, by comparing the AfD to a very sweet concoction.

[11] https://www.konicz.info/2016/08/01/die-bewegung-als-bewegung/

[12] https://www.spiegel.de/politik/deutschland/hans-georg-maassen-innenministerium-verweigert-auskunft-ueber-ex-verfassungsschutzpraesident-a-5fc25a9d-f553-4dd9-a142-ada63e0c9838

[13] https://www.rnd.de/politik/afd-und-junge-alternative-wo-gelten-sie-als-gesichert-rechtsextrem-und-was-bedeutet-das-BEOYLLR67FCABBNQ6ESSRUZJWM.html

[14] https://www.fr.de/wirtschaft/muellermilch-bleibt-rechts-92707167.html

[15] https://www.konicz.info/2017/09/14/die-masken-fallen/

[16] https://www.merkur.de/politik/hoecke-ist-spitzenkandidat-der-thueringer-afd-zr-92681629.html

[17] https://www.konicz.info/2016/08/01/die-bewegung-als-bewegung/

[18] https://konkret-magazin.shop/texte/konkret-texte-shop/66/tomasz-konicz-kapitalkollaps?c=10

[19] https://www.konicz.info/2010/09/21/sarrazins-sieg-11/

[20] Leo Löwenthal already described these patterns of argumentation in his study “False Prophets” among fascist agitators in the United States in the first half of the 20th century. Leo Löwenthal, False Prophets, Studies on Fascist Agitation, Suhrkamp, 2021

[21] https://www.konicz.info/2017/09/14/die-masken-fallen/

[22] https://en.wikipedia.org/wiki/Potsdam_Day

[23] https://blog.campact.de/2016/08/reich-maechtig-im-zentrum-der-hauptstadt-die-lobby-der-superreichen-firmenerben/

[24] https://www.tagesschau.de/wirtschaft/konjunktur/aussenhandel-export-import-china-usa-deutschland-100.html

[25] https://www.konicz.info/2012/12/21/der-exportuberschussweltmeister/

[26] https://www.tagesschau.de/wirtschaft/konjunktur/konjunktur-deutschland-diw-oecd-100.html

[27] See also: Claus Peter Ortlieb (2008): A Contradiction between Matter and Form, https://mediationsjournal.org/articles/matter-and-form and Robert Kurz (2012): The Climax of Capitalism, https://exitinenglish.com/2022/02/17/the-climax-of-capitalism/

[28] https://oxiblog.de/die-mythen-der-krise/

[29] https://www.konicz.info/2023/11/28/transatlantische-entkopplung/

[30] https://www.konicz.info/2023/11/20/neue-kapitalistische-naehe-2-0/

[31] https://znetwork.org/znetarticle/back-to-stagflation/

[32] https://exitinenglish.com/2023/03/08/radicalism-vs-extremism/

Originally published on konicz.info on 12/26/2023

Will stagnation be a permanent condition? An outlook for the world economy after the end of the globalized financial bubble economy.

Tomasz Konicz

The speculative air is slowly leaking out of the global valorization machine – but hardly anyone seems to have noticed. At the beginning of 2024, the World Bank warned of a “lost decade,” as the first half of this decade was about to see the worst economic performance in more than 30 years.[1] Without a “major course correction,” the 2020s will go down in history as a “decade of missed opportunities,” concluded the World Bank’s chief economist, Indermit Gill, as he presented the bank’s forecasts for the current year.

And according to the financial institution, the economic outlook is not exactly rosy. Global economic output is expected to grow by 2.4% this year, compared to 2.6% in 2023. If this economic forecast proves to be correct, 2024 would be the third year in a row that economic growth was weaker than in the previous year. There is therefore a clear global trend toward economic stagnation: Average GDP growth in industrialized countries is expected to fall from 1.5% last year to 1.2% in 2024. By contrast, the eurozone can hope for a slight economic recovery at a very low level, as they are expected to go from 0.4% growth in 2023 to 0.7% in the current year.

Global trade growth is also expected to be only half of what it was before the outbreak of the pandemic, which, together with high key interest rates, has contributed to annual economic growth in developing countries averaging just 3.9% this decade. This is a full percentage point lower than in the first decade of the 21st century. Developing countries need to achieve a much higher rate of growth in order to improve – or even maintain – the social situation of their wage earners. The medium-term economic outlook is no better. As early as mid-2023, the International Monetary Fund (IMF) warned that global growth would be below average for the next five years.[2]

The End of the Bubble Economy

The crisis-induced stagnation of the late capitalist world system only becomes fully apparent from a historical perspective. As mentioned at the beginning, only the half-decade from 1990 to 1994 was characterized by worse economic development (averaging just over two percent per year) than the first half of the current decade, and it was only slightly worse then. But the early 1990s were marked by the collapse of the Soviet Union and Soviet state capitalism in Eastern Europe, which was accompanied by massive economic slumps that led to miserable global averages. In other words, the episodes of crisis that began in 2020 (such as the pandemic, war, and supply shortages) left similarly strong traces of economic slowdown as the implosion of the Eastern Bloc.

Almost all other five-year periods between the late 1990s and 2019 – the eve of the pandemic and the war in Ukraine – saw much higher average global economic growth of just over three percent. The only exception is the period between 2005 and 2009, when the bursting of the real estate bubbles in the U.S. and Europe (2007/08) led to a brief but severe global economic crisis (2009), which was overcome from 2010 onwards thanks to extensive economic stimulus measures and the central banks’ expansionary monetary policy.

The slump in 2009, triggered by the bursting of the real estate bubbles, points to the veritable bubble economy that the globalized world system had developed in the neoliberal era: From the dot-com bubble in the second half of the 1990s, when the internet boom led to a bull market in high-tech stocks, to the real estate bubbles that burst in Europe and the U.S. in 2008,[3] to the major liquidity bubble that has been deflating since 2020, all of which were sustained by the expansive monetary policy and money printing of the central banks.[4]

And it was precisely these growing speculative bubbles that acted as the main economic drivers in the era of financial market driven globalization. The tendency toward stagnation in the 2020s, which the World Bank laments, is due precisely to the collapse of this global bubble economy based on an ever-growing mountain of debt. Inflation, which central banks are trying to combat with restrictive monetary policy, made it impossible for another bubble to form after the crisis surge of 2020.

The Chinese Economic Brake

The connection between the economy and speculative dynamics, which characterizes a late capitalism that is choking on its own productivity,[5] can currently be seen very clearly in Chinese state capitalism, where one of the country’s largest construction investors, the bankrupt Evergrande Group, is facing liquidation – 300 billion dollars and millions of condominiums are on fire.[6] The gigantic real estate bubble that China created in the wake of the massive government stimulus packages after 2008 brought the “workshop of the world” double-digit growth rates for years.[7]

But now, despite Beijing’s best efforts to postpone it, the inevitable deflation of this real estate bubble is on the horizon[8] – and it is already leaving its mark on the economy. According to the World Bank, China’s economy is only expected to grow by 4.4% this year.[9] This forecast is based on a best-case scenario in which an uncontrollable crash of the real estate market can be prevented.

But even a controlled devaluation and liquidation of the overheated Chinese real estate sector will have serious economic consequences. This applies not only to export-dependent Germany, but also to many developing and emerging countries that are heavily dependent on the People’s Republic.[10] China’s debt-financed speculative boom was an important factor in the economic recovery after the major transatlantic real estate crash of 2008, but a similar constellation is no longer possible in the current phase of crisis. On the contrary, China will contribute to the general tendency towards stagnation in the future.

Is the Next Crisis Surge Already “Priced In”?

The spread of stagnation is the result of the partially successful fight against inflation undertaken by the central banks, which have turned off the money tap that was wide open during the era of the giant liquidity bubble, but are maneuvering themselves into a monetary policy impasse in which the goals of fighting inflation, stabilizing the financial markets, and stimulating the economy are increasingly coming into conflict.[11] This is particularly evident in the U.S., which was able to defy the general stagnation in the core of the world system with economic growth of 2.5% in 2023. However, the World Bank is forecasting growth of just 1.6% for the United States this year, which is due to “the restrictive monetary policy” of the U.S. Federal Reserve, according to Reuters.[12]

Fighting inflation usually comes at the cost of an economic slowdown (with the exception of the U.S. in 2023), as the World Bank’s Global Economic Prospects shows. Then there are the destabilizing effects of high interest rate policies on the financial sector. The key interest rate hikes and the end of the central banks’ purchasing programs are making the financial sector more susceptible to crises, as bonds, stock markets and the real estate sector can no longer be supplied with sufficient liquidity and/or credit to continue the boom – there is a risk of crashes, slumps and financial market quakes, as was last seen in March 2023, when the slump in the bond markets led to a banking crisis in the U.S.[13]

The policy of high interest rates is therefore like a balancing act on a knife-edge, with the bloated financial sector and the global debt mountain as the biggest risk factors.[14] Continuing to fight stubborn inflation inevitably increases the risk of further crises in the unstable financial sector. To minimize the risk of crisis surges, the Fed last signaled to the unstable markets in December 2023 that the first interest rate cuts would come in 2024 if inflation rates continued to fall.[15] In doing so, the central bankers triggered a short-term price explosion on the stock markets that simply anticipated the potential end of the high interest rate policy in this bull market. The end of the restrictive monetary policy has therefore already been “priced in,” as the jargon goes, to the stock markets, where the future is always traded.

But what happens if inflation does not move as quickly as expected towards the two percent mark that the Fed has set as the target for its restrictive monetary policy? Then monetary policymakers, whose comments were intended to reassure the markets, suddenly find themselves in a quandary. At the end of January, U.S. central bankers indicated that there would probably be no interest rate cut in March,[16] after the U.S. inflation rate of 3.4% in December was slightly higher than in the previous month (3.1%).[17] This retreat in monetary policy brought the fleeting boom on the markets to an abrupt end with heavy price losses.

In addition, cracks appeared once again in the U.S. banking sector after the share price of the regional bank New York Community Bancorp plunged by around 50 percent in two trading days.[18] Like other regional banks, New York Community Bancorp is suffering from high interest rates and the related crisis in the commercial real estate sector in the U.S. The financial institution, which was actually considered a winner of the crisis in March 2023, has now had to book around $552 million in loan loss provisions and record a loss of $185 million.[19] A repeat of the March 2023 banking crisis triggered by high interest rates seems possible. The slump in Bancorp’s share price is also due to the fact that regional banks in particular were expected to benefit from the Fed’s “priced-in” interest rate cuts.

The U.S. central bankers have thus become hostage to their own policies: December’s chill pill is turning into a monetary policy bomb. The next bout of crisis is effectively “priced in” if the Fed does not soon return to an expansionary – and thus inflationary – monetary policy. This is most likely a fundamental contradiction that will characterize capitalist crisis policy after the end of the neoliberal bubble economy: it is a balancing act that is ultimately doomed to failure, an attempt to square the circle in the systemic crisis in order to combine the fight against inflation with economic and financial stability.

I finance my journalistic work mainly through donations. If you like my texts, you are welcome to contribute – either via Patreon, via Substack, or by direct bank transfer after consultation by e-mail:

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[1] https://www.ft.com/content/b00ec9ec-5497-4543-aa57-f10873c8952b

[2] https://www.investopedia.com/imf-predicts-five-years-of-sluggish-global-economic-growth-ahead-7376580

[3] https://www.konicz.info/2007/03/05/vor-dem-tsunami/

[4] https://www.konicz.info/2021/04/13/oekonomie-im-zuckerrausch-weltfinanzsystem-in-einer-gigantischen-liquiditaetsblase/

[5] https://oxiblog.de/die-mythen-der-krise/

[6] https://www.tagesschau.de/wirtschaft/unternehmen/evergrande-liquidierung-100.html

[7] https://www.konicz.info/2015/05/17/droht-china-ein-kollaps/

[8] https://www.konicz.info/2021/11/27/einstuerzende-neubauten/

[9] https://www.sueddeutsche.de/wirtschaft/weltbank-konjunktur-wachstum-welthandel-folgen-schwellenlaender-1.6330300

[10] https://www.konicz.info/2022/10/18/china-mehrfachkrise-statt-hegemonie-2/

[11] https://www.konicz.info/2023/11/12/inflation-finanzkrach-oder-rezession/

[12] https://www.reuters.com/markets/world-bank-forecasts-2024-global-growth-slow-third-consecutive-year-2024-01-09/

[13] https://www.konicz.info/2023/03/19/die-silicon-valley-bank-als-das-schwaechste-glied/

[14] https://www.konicz.info/2023/11/12/inflation-finanzkrach-oder-rezession/

[15] https://www.cnbc.com/2023/12/13/fed-interest-rate-decision-december-2023.html

[16] https://edition.cnn.com/business/live-news/federal-reserve-meeting-interest-rates-01-31-24/index.html

[17] https://tradingeconomics.com/united-states/inflation-cpi

[18] https://www.nytimes.com/2024/01/31/business/new-york-community-bancorp-loss-dividend.html

[19] https://finanzmarktwelt.de/new-york-community-bancorp-aktie-verliert-32-massive-rueckstellungen-299547/

Originally published on konicz.info on 02/05/2024

Ukraine will lose the war against Russia in the medium term – the only question is how high the price will be

Tomasz Konicz

How bad is the situation in Ukraine? Well, at the end of November, the White House felt compelled to deny reports that the United States and Germany were trying to persuade Kiev to enter into peace talks with Russia. Negotiations would amount to a “monologue of surrender” and there were no signs of a “substantial” willingness to negotiate on the part of the Kremlin, a spokesperson for the U.S. State Department explained. Earlier, Western media reported that European and U.S. diplomats had visited Kiev to explore the conditions for peace talks. “Rough sketches” of “what Ukraine would have to give up in order to reach such a deal” were also drawn up, NBC reported in early November.

In reality, the optimal time for negotiations with the Putin regime has long since passed. In November 2022, after the recapture of the southern Ukrainian city of Kherson and the humiliating withdrawal of Russian troops from the region west of the Dnieper, there were at least potentially optimal conditions for a “deal” with the demoralized invaders. Since that last great victory for Ukraine, the situation in the war has fundamentally changed in Russia’s favor. Since the end of 2022, Ukraine has not achieved any significant successes on the battlefield, while Russia scored its first symbolic victory with the fall of the eastern Ukrainian city of Bakhmut in March 2023. This year’s Ukrainian summer offensive was a disaster, consuming much of Ukraine’s scarce military resources while allowing Russia to increase its material superiority.

Trenches, Bunkers, Drones

The Russian approach aimed at wearing down personnel and using lots of material, successfully established during the capture of Bakhmut, is now playing out in fast motion in the small town of Avdiivka, a suburb of the pro-Russian metropolis of Donetsk, which has been turned into a veritable fortress by Ukrainian troops since 2014 – and will soon fall. The city of Kupyansk, in the northeastern Kharkiv region, is also under threat. It is a mindless war of attrition in which the Kremlin is using its material advantage to bleed Ukraine dry. Every time either Russian or Ukrainian troops try to advance with concentrations of troops and tanks, they are pummeled by precise, drone-guided artillery attacks. Jubilant Western reports of high Russian casualties in the offensive mostly ignore the fact that Ukraine is suffering similarly high losses – and that Kiev can afford them far less than the Kremlin.

The strategic situation is reminiscent of the First World War, when the inability of all belligerents to the conflict to break through to the front led to months of “material battles.” Despite the monstrous six-figure number of casualties already claimed by the Russian war of aggression, the fighting in Ukraine may not be as heavy as at Verdun and the Somme, but for those affected, burning to death in the bunkers and trenches of the war zone, it is pure hell. There is nowhere to retreat to, as the omnipresent drone fleet has specialized in attacking the entrenched conscripts in their positions. “Hate drops” is the nickname that Russian military bloggers have given to this tactic of attrition.

In this war, the largest European slaughter since the end of the Second World War, it is quantity, not quality, that counts. The idea of using superior Western weapons technology to push the Russian army out of eastern Ukraine has been put to rest after the fiasco of the Ukrainian summer offensive. Russia has more artillery, more drones, more tanks, more aircraft and more manpower. At the beginning of December, Putin announced a further increase in the Russian armed forces by several hundred thousand troops. The Kremlin was also able to conclude several arms deals with North Korea and Iran, which ensured the mass supply of drones and artillery shells. According to intelligence sources, North Korea has supplied the Kremlin with one million artillery shells, while the West has so far been able to deliver only a third of the one million promised. Russia’s arms industry has been ramped up and is now producing at full speed, there is a shortage of labor, and Russian energy and raw material exports are financing this war economy.

The Russian military is also being innovative, trying to use the old Soviet weaponry as effectively as possible. Masses of existing Soviet aerial bombs are being cheaply converted into satellite-guided glide bombs, which Russian bombers drop outside of the range of Western-supplied Ukrainian air defenses, with explosive charges weighing anywhere from 500 kilos to 1.5 tons. Thermobaric missile systems, the use of cluster munitions on both sides, mine launcher systems that cut off retreating units after they have been shot up – the apparent stalemate at the front is paid for with human lives that are thrown at a military machine that is calibrated for wear and tear. That is until, at some point, a section of the front falls into disarray and a tipping point is reached, after which things can happen very quickly.

Crumbling Home Front?

On the home front of both warring parties, there is a growing unwillingness to be burned out in this increasingly efficient war of attrition. In the aggressor’s hinterland, in Russia, a movement, tolerated by the Kremlin, has emerged among soldiers’ relatives, who demonstrate for the return of their sons and the men who were mobilized last year. According to polls, the high number of casualties and the largely static front line are causing war-weariness in Russia, but at the same there is still a clear majority in favor of a victorious peace. The Russian people want peace – but only on Russian terms.

Despite the partial mobilization in the fall of 2022, the Kremlin has succeeded in isolating the majority of the population from the direct consequences of the war. The Ukrainian drone attacks and incursions into Russian territory have done nothing to change this. Moreover, after the “plane crash” of Wagner boss Yevgeny Prigozhin, there was no organizational pole around which dissatisfaction with the course of the war could gather. In any case, the only realistic chance for Ukraine not to lose this war was through internal political discord caused by the war and/or a collapse of the Kremlin’s power vertical. Both became unlikely after Prigozhin’s death and the changing fortunes of the war.

In the beleaguered Ukraine, where elections scheduled for next year have been suspended because of the war, war-weariness can sometimes be quantified in concrete terms. According to the EU’s statistics office, some 650,000 men of military age have fled Ukraine for Europe since the war broke out. Ukrainian cemeteries have to be expanded in order to bury the hundreds of daily victims of the Russian war of aggression. In early December, relatives of soldiers who have been fighting since the beginning of the war demonstrated in Kiev for the possibility of demobilization. After more than a year and a half, they demanded that others finally go to the front.

In an obvious change of narrative, leading Western media are now also reporting on the growing doubts among the Ukrainian people surrounding the continuation of the war, as they face massive Russian attacks on the economically devastated country’s infrastructure this winter. As Russia prepares for a long-term war, new waves of mobilization in Ukraine are provoking increasing resistance, as the rampant corruption means that it is mainly poor, unconnected Ukrainians who find themselves on the front lines. In addition, if the war situation continues to deteriorate, there is a danger that the fascist Ukrainian right wing, which has gained influence in the military and state apparatus during the war, will at some point seize power.

Growing War Weariness in The West

The fact that the functional elites of the West no longer believe that Ukraine will win became clear at the last meeting of NATO foreign ministers at the end of November. The FAZ reported that NATO was scaling back its goals and that even “holding the front” was considered a success. But as long as Ukraine does not give up, “we should stand by it,” the newspaper commented. To what extent, however, remains to be seen. In the United States, Kiev’s main backer, right-wing Republican opposition to further military aid is growing rapidly in Congress, meaning that the long-term continuation of the war – and the Kremlin is planning a very long war – is uncertain. Europe, on the other hand, would not be able to keep Ukraine afloat militarily on its own.

It is specifically the war in Israel and Gaza that has fueled the debate about continued support for Ukraine because of the resulting material shortages, but there are also structural factors behind this growing war-weariness. The West would effectively have to switch to a war economy in order to provide enough material for the Ukrainian front. But this would be a momentous step that the West is not prepared to take. And even that would probably not be enough, since Ukraine simply does not have enough people to send into battle. Ultimately, only direct military intervention could save Ukraine from defeat in the medium term, which will not happen given the risk of a nuclear exchange of blows.

It is questionable whether negotiations offer a viable way out of this war. As we all know, the imperialist appetite comes with eating, and Putin’s war aims change as the war progresses. Russia’s military situation is much better now than it was a year ago. As a result, the price of peace will be higher, partly because Russia has suffered heavy losses and Putin, for domestic political reasons, absolutely must win a victory in Ukraine. This is not just about the territory annexed by Russia (the Lugansk, Donetsk, Kherson and Zaporizhzhya oblasts) or other territorial claims (Odessa, Kharkiv), but also about the existence and sovereignty of the Ukrainian state. Moscow will not agree to Ukraine being tied to the West and will even work towards a “regime change” in Kiev to form a satellite state in the event of further military successes. It is well known that Putin considers the Ukrainian state to be a fiction.

Ukraine thus finds itself wedged between a West that is now primarily concerned with damage control and a militarily strengthened Russian imperialism that will demand a very high price for peace.

Originally published on akweb.de on 12/12/2023