Poles Formation and Disappearance Patterns in the Global Economy *

 


  Sergey Glazyev (Russia) – speech at the Global Conference on Multipolarity


Sergey Glazyev (Russia) – current member of the board for integration
and macroeconomics of the Eurasian Economic Commission. Adviser to the
President of the Russian Federation.

*Poles Formation and Disappearance Patterns in the Global Economy *

According to the dictionary of foreign words in the Russian language,
the term "pole" originates from the Greek word "polos," meaning the
extremity of an imaginary axis around which a wheel rotate [1].
Geometrically, there can only be two poles, as reflected in geography:
the North and South poles. However, this does not apply to contemporary
geopolitics, where the concept of a multipolar world is gaining
popularity. With this terminological clarification, we will cautiously
employ the notion of a multipolar world, considering its diverse
interpretations by various thinkers.

 

/*1. Change of Global Economic Poles during the Transition of World
Economic Systems. */

In the context of the author's theory on long cycles of global social
and economic development [2], a pole can be understood as a country
whose ruling elite exerts decisive influence over the development of the
global economy. Viewing this process as a shift of world economic
systems (WES), it is possible to establish the periodicity of change of
the global economic poles. During the transition period between WESs,
there cannot be fewer than two poles (the old and new WESs). Upon
completion of this transitional period global dominance shifts to the
country that forms the core of the new WES.

This is precisely how Giovanni Arrighi [3] conceptualized the
development of the global capitalist economy, dividing it into five
systemic, centurial cycles of capital accumulation: the Spanish-Genoese,
Dutch, English, American, and presently transitioning to the Asian
cycle. Throughout the five-century era of capitalism, the ruling elites
of the Spanish-Genoese, Dutch, English, and American powers successively
replaced each other as the decisive driving force in the development of
the global economy. Apart from the first cycle, in which Genoese capital
provided the financial foundation for the rapid expansion of the Spanish
Empire, each subsequent cycle was characterized by the dominance of a
single country whose production relations and institutions served as an
example for others. Over time, the effectiveness of these dominant
powers' production relations and institutions diminished, while a new
leader emerged on the periphery with qualitatively more efficient
production relations and institutions. Global dominance shifted to this
new leader as a result of a world war, which the declining power
initiated against its main competitors in order to maintain global
hegemony, oblivious to the emergence of a new social and economic
paradigm with its own geoeconomic pole.

The systemic centurial cycles of capital accumulation, as revealed by
Arrighi, represent corresponding epochs in the evolution of the global
capitalist system. These epochs differed not only in the leading
countries but also in the systems for managing the reproduction and
development of the economy. To study these cycles, the author introduced
the concept of a World Economy Systems (WES), which is defined as a
system of interconnected international and national institutions that
facilitate expanded economic reproduction and determine the mechanism of
global economic relations [4]. The institutions of the leading country
play a crucial role, exerting dominant influence over international
institutions regulating the world market, international trade, and
economic and financial relations. They also serve as a model for
peripheral countries that aspire to catch up with the leader by
importing the institutions imposed by it. Therefore, the institutional
framework of the social and economic paradigm permeates the reproduction
of the entire global economy, encompassing its national, regional, and
international components.

The systemic cycle of capital accumulation is a form of the life cycle
of the WES. The Spanish-Genoese, Dutch, English, American, and the
currently replacing Asian centurial cycles of capital accumulation
described by Arrighi are manifestations of the life cycles of the
corresponding trade, trade-manufacturing, colonial, imperial, and
integral WES, respectively. They differ so significantly in their
systems for managing reproduction and economic development that the
transition from one to another has historically occurred through world
wars and social revolutions. During these tumultuous events, the
outdated management system was crushed, and the victorious country
formed a new one.

World economic structures differ not only in the type of international
trade organization but also in the system of production relations and
institutions that allow leading countries to achieve global superiority
and shape the regime of international trade-economic relations. The
classification of world economic structures is determined by the
institutional systems of advanced countries that dominate international
economic relations and form the core of the global economic system. At
the same time, other, less efficient and even archaic institutional
systems of organizing national and regional economies can be reproduced
on its periphery. Relations between the core and periphery of the global
economic system are characterized by non-equivalent foreign economic
exchange favoring the core. The countries of the core extract a surplus
profit due to technological, economic, and organizational superiority in
the form of intellectual and monopoly rents, entrepreneurial and
emission incomes. Therefore, the core countries constitute the center of
the global economy, dominating in international economic relations and
determining global social and economic development.

The logic of geopolitical competition in the capitalist world-system
necessitated the dominance of one country within the life cycle of any
given world economic system. This is linked to the role of national
legislation and sovereignty in ensuring the expanded reproduction of
capital. National sovereignty provides the ruling elite with
opportunities for unlimited capital accumulation by relying on the
national credit and banking system, the issuance of national currency,
various tools to protect the domestic market, and judicial protection of
property rights. Although international treaties may provide norms for
the protection of property rights and foreign investors, in practice,
the guarantees of their compliance heavily depend on the balance of
geopolitical influence between countries. National armed forces often
became the decisive argument in resolving geopolitical contradictions.

From the Westphalian system, which paved the way for states to acquire
national sovereignty, to the present time no supranational or interstate
structures have been created at the international level that are close
in their effectiveness to the national systems of economic reproduction
and capital accumulation of the most powerful countries. Even if the
countries are civilizationally close, the various coalitions and
alliances between them are incomparably less strong than the
institutions that bind together the economic relations of economic
entities within sovereign states. The stronger they are, the more
opportunities the respective national elite have to realize their
interests in international relations, including enrichment through
non-equivalent foreign economic exchange, exploitation of natural
resources, and human capital of relatively weak states, the elites of
which are unable to ensure national sovereignty.

The direct dependency between the power of national states and the
opportunities for capital accumulation through non-equivalent foreign
economic exchange generates an upward wave of strengthening the power of
a country leading in the formation of a new WES. Its ruling elite
consistently increases its capabilities, using the superiority of its
state to maximize profits in international economic relations. This is
how the capitalist world-system evolves, with its center sequentially
moving from Northern Italy to Spain, the Netherlands, Great Britain, and
the USA. Meanwhile, the states that lost their leadership were relegated
to the periphery and vice versa, new leaders rose from it.

The life cycle of a world economic system (WES) consists of phases of
material and financial expansion. In the first phase, due to the
super-efficient management system, the country, forming the core of the
new WES, makes a breakthrough on a long wave of growth of the new
technological mode, modernizing the economy on its basis At this time
the countries of the core of the old WES are plunged into a structural
crisis and depression, caused by super-concentration of capital in
outdated productions of the previous technological mode. They are trying
to maintain hegemony by any means, including inciting a world war
between competitors. heir mutual weakening creates additional
opportunities for the economic breakthrough of the country, forming the
core of the new WES. As a result, it seizes global leadership, which it
consistently builds up to a dominant position. Therefore, Holland gained
global dominance after the Spanish-British War, Great Britain - after
the Napoleonic Wars, the United States - after World Wars I and II. At
present, the global hybrid war unleashed by the U.S. objectively
contributes to the economic breakthrough of China, which forms the core
of the new WES.

Having seized global dominance, in the second phase of the WES life
cycle, the country of its core gets an opportunity to impose its
conditions of international financial and economic exchange, up to the
use of its currency, financial institutions, foreign trade and transport
infrastructure on others. In this phase of financial expansion, the
dominance of the country's core of the already mature WES turns into
global hegemony, which is maintained by super-profits from the
exploitation of peripheral resources through non-equivalent trade
exchange, manipulation of world prices, capital squeezing and brain
drain. The flip side of this hegemony is a growing national debt and a
shrinking productivity of an economy in which financial speculation
becomes preferable to productive investment. WES is entering the final
phase of its life cycle, which coincides with the phase of birth of a
new WES on the periphery of the world-system with a more efficient
system of reproduction and economic development management.

It follows from this analysis that the capitalist world-system is
unipolar in the period of maturity of WES and multipolar in the period
of change of WES. During the formation of a new WES, one or more of its
core countries emerges, competing both with the outgoing hegemonic
country and with each other. As a result of this competition a global
leader emerges, consistently increasing its dominance. Apart from them,
there is also Russia, which preserves its global influence in various
political forms throughout the whole period under consideration, the
historical role of which Arrighi completely ignored.

 

/*2. Russia as an independent pole of world influence. */

Throughout the entire era of capitalism, starting with the
Genoese-Spanish systemic century cycle of capital accumulation according
to Arrighi, Russia has acted as an independent pole of global influence.
The outgoing imperial WES was bipolar, with the USA and the USSR
controlling a third of the world economy each, with the remaining third
being a field of their rivalry. In the preceding colonial WES, the
Russian Empire successfully opposed the British Empire, controlling a
large part of Eurasia, Alaska, and the northern part of the Pacific
Ocean. In the trade-manufacturing WES, Russia underwent the
modernization of Peter the Great, effectively catching up with the then
world leader - the Netherlands - in terms of technological development
and surpassing it in terms of production scales. The Moscow Empire of
Ivan the Terrible, which had inherited the traditions of the Byzantine
Empire and part of the territory of the Horde Empire, was hardly
inferior in its power to the Spanish Empire, with which it had no
contradictions.

Therefore, since at least the 17th century Russia constituted an
independent pole of world influence that existed in parallel with the
competing and successive countries of the WES core in the West. Here we
do not consider the previous period, covered by the gloom of historical
falsifications that obscure the world influence of Russia (Rus') in the
Horde and Byzantine periods. Our analysis concerns only the
well-documented period from the seventeenth century to the present, in
which the rhythm of the change of world economic and technological ways
can be traced. The regularities revealed on the basis of this analysis
allow us to make a reliable forecast of the change of global economic
development poles until the end of this century. The role of Russia
remains uncertain, which has remained an independent pole of global
development all this time parallel to the shifting poles of the Western
world-system with the change of WES.

After the Great Troubles and the accession of the Romanovs Russia was
drawn into a complex and contradictory relations with European states,
which at different times are at times allies and adversaries. Russia
they regarded as a reactionary force that hinders the processes of
liberalization of social and productive relations and democratization of
state and political systems. Russia is seen by them as a reactionary
force obstructing the processes of liberalization of social and economic
relations and democratization of state-political systems. The ruling
elites of European countries fear Russia and periodically unite against
it, striving to crush and dismember it. Starting with the establishment
of the colonial WES and British global hegemony, Russia is invariably
seen as a pole of global influence opposing the West.

For their part, the leaders of the Russian state treated the shifting
poles of the Western world-system as an ally and partner, an adversary
and enemy, a teacher and a learner. Centuries of systemic cycles of
capital accumulation affected Russia as the periphery rather than the
center, until the USSR stopped participating in this process altogether.
And now the West is trying to take everything it has accumulated from
Russia. It has to be said that the Russian ruling elite has not
developed any definite attitude toward the West. The discussion between
Westerners and Slavophiles continues to this day. The former link
Russia's special position to its backwardness and advocate its
overcoming through integration with the West, while the latter see
Russia's special mission in saving humanity from the threats posed by
liberalism, capitalism and post-humanism rooted in the West. This
argument has lost its relevance today due to the anti-Russian aggression
of the collective West, which, in fact, ends the half-century era of its
global dominance and, with it, the capitalist era. The center of the
world economy is shifting to Southeast Asia, where the poles of global
influence are emerging.

 

/*3. Poles of a new world economic order.*/

The ongoing change of the WES takes place in full accordance with the
previously identified patterns of this process [5]. It began with the
collapse of the USSR, and today it ends with the collapse of Pax
Americana. In full accordance with the theory to maintain its global
hegemony, the ruling elite of the U.S. unleashed a world war, seeking to
crush or chaotize the countries that have become beyond its control:
China, Russia, Iran. However, it will not be able to win it due to the
qualitatively higher efficiency of the management system created in
China. he U.S. has already lost a trade and economic war to China, by
the end of the current five-year plan China will achieve technological
sovereignty and become the first in the world in terms of scientific and
technological potential. By seizing Russia's foreign exchange reserves,
Washington has undermined confidence in the dollar and is rapidly losing
its hegemony in the monetary sphere. At the same time, China is becoming
the world's largest investor. China's investment in the One Belt, One
Road (OBOR) countries exceeds by an order of magnitude the financing of
the much-publicized "American Indo-Pacific Future Image" initiative. The
scale of this project pales in comparison to the OBOR, which plans to
spend, according to various estimates, from $4 trillion to $8 trillion.
The OBOR investment portfolio also dwarfs the Marshall Plan to finance
the post-war reconstruction of Western Europe, which, at today's dollar
value, could be valued at $180 billion. ($12 billion 70 years ago) [6].

After the collapse of the USSR, the American ruling elite rushed to
declare its final victory and "the end of history”[7] However, this
euphoria ended with the global financial crisis of 2008, which marked
the limits of the American century cycle of capital accumulation. The
era of U.S. global dominance lasted a little longer than Great Britain's
after the end of World War I, which ended with the financial crisis of
1929. The Great Depression and World War II that followed buried the
British Empire, which could not compete with the more efficient systems
of government in the USSR and the United States, forming the two poles
of imperial WES, which had replaced the colonial one.

In all macroeconomic indicators, China has already surpassed the United
States. Almost unaffected by the global recession of the last decade,
China supplanted Japan as the world's second-largest economy in August
2010. In 2012, with imports and exports of $3.87 trillion, China
surpassed the United States. The PRC overtook the U.S. with a total
foreign trade turnover of $3.82 trillion, displacing it from the
position it had held for 60 years as the global leader in cross-border
trade. By the end of 2014, China's gross domestic product, measured at
purchasing power parity, was $17.6 trillion, surpassing that of the
United States ($17.4 trillion), the world's largest economy since 1872 -
the largest economy in the world since 1872. [8]

China is becoming the world's engineering and technology center. The
share of Chinese engineers and scientists in the global workforce
reached 20% in 2007. The proportion of Chinese engineers and scientists
in the world reached 20% in 2007, and doubled since 2000 (1,420,000 and
690,000 respectively). Significantly, many of them have returned to the
PRC from American Silicon Valley, playing a major role in the rise of
innovative entrepreneurship in China. By 2030 China will be in first
place in the world in terms of expenditure on scientific and
technological development, and its share in the world expenditure will
be 25%. (30%) will be scientists, engineers and technicians from China
[9]. By 2030, China will take the first place in the world in terms of
spending on scientific and technical development, and its share in the
volume of global spending will be 25% [10].

Between 2000 and 2016, China's share of global publications in the
physical sciences, engineering, and mathematics quadrupled, surpassing
that of the United States. In 2019, the PRC surpassed the U.S. in patent
activity (58,990 vs. 57,840). Not only on the macro level, but also on
the micro level, Chinese companies are outperforming U.S. leaders in
innovation activity. For example, for the third year in a row, China's
Huawei Technologies Company, with 4,144 patents, is significantly ahead
of Qualcomm (2,127 patents).

China is the world leader in mobile payments, with the U.S. in sixth
place. In 2019, the volume of such transactions in China was $80.5
trillion. The projected total volume of mobile payments in the PRC is
$111 trillion, while in the U.S. it is $130 billion. This seems to
indicate that the bulk of U.S. money issuance is tied up in financial
market speculative circuits, not reaching end consumers.

The share of the dollar in international settlements is rapidly falling,
while the share of the yuan is steadily growing. At the same time the
continued growth of the U.S. sovereign debt pyramid and financial
bubbles of trillions of derivatives (doubled since the financial crisis
of 2008 and leaves no doubt about the impending collapse of the U.S.
financial system on a shrinking income basis.

Figure 2. he largest (TOP-5 and TOP-25) U.S. financial holdings -
holders of derivatives: volume of derivatives, assets (trillion dollars)
and their ratio (times)

Source: M. Ershov according to the Office of the Comptroller of the
Currency.

 

Figure 3. Dynamics of U.S. national debt over the past 230 years, in %
of GDP


        Source: BofA Global Investment Strategy.

 

Figure 4: Federal Reserve Balance Sheet since 1914


        Source: BofA Global Investment Strategy, Haver, Federal Reserve
        Board.

 

The more than fourfold growth in the monetary base after 2008 did not
translate into an upturn in the U.S. economy, as most of the money
supply went into blowing financial bubbles. China, on the other hand,
has achieved a much greater monetization of the economy while increasing
investment in the development of its real sector, creating a much more
efficient reproductive circuit of capital accumulation.

The reasons for China's advanced development lie in the institutional
structure of the new WES, which ensures a qualitatively more effective
management of economic development. By combining the institutions of
centralized planning and market competition, the new world economic
order demonstrates a qualitative leap in the efficiency of management of
social and economic development compared to its predecessor systems of
the world order: the Soviet one with directive planning and total
statehood; and the American one dominated by the financial oligarchy and
transnational corporations. This is evidenced not only by the record
growth rate of the Chinese economy over the past three decades but also
by China's rise to the forefront of scientific and technological
progress. And also the breakthroughs in the development of other
countries that use the institutions of an integrated world order: Japan
before the artificial suspension of its rise by the Americans by sharply
revaluing the yen; South Korea before the American financial oligarchy
provoked the Asian economic crisis in 1998, modern Vietnam, which in
many ways adopts China's experience; India, implementing a democratic
model of the new world order; Ethiopia, showing a record growth rate
with the active participation of Chinese investors.

Regardless of the dominant form of ownership - state, as in China or
Vietnam, or private, as in Japan or Korea - the integrated world
economic order is characterized by a combination of institutions of
state planning and market self-organization, state control over the main
parameters of economic reproduction and free enterprise, the ideology of
the common good and private initiative. At the same time, the forms of
political structure may differ fundamentally - from the world's largest
Indian democracy to the world's largest communist party in China. What
remains constant is the priority of national interests over private
ones, expressed in strict mechanisms of personal responsibility for
conscientious behavior, clear performance of one's duties, compliance
with laws, service to national goals. he social and economic development
management system is built on the mechanisms of personal responsibility
for improving the well-being of society.

Therefore, assuming the most likely outcome of the global hybrid war
unleashed by the US ruling elite not in its favor, the new world
economic order will be formed in competition between communist and
democratic varieties, the results of which will be determined by their
comparative effectiveness in exploiting the opportunities and
neutralizing the threats of the new technological order. It is likely
that the main competition between the communist and democratic varieties
of the new world economic system will unfold between China and India,
which are leading today in terms of economic development rates and are
claiming, together with their satellites, a good half of the world
economy. This competition will be peaceful in nature and regulated by
the norms of international law. All aspects of this regulation, starting
from control over global security and ending with the issuance of world
currencies, will be based on international treaties. Countries refusing
to accept obligations and international control over their observance
will be isolated in the corresponding areas of international
cooperation. The world economy will become more complex, the restoration
of the importance of national sovereignty and the diversity of national
economic regulation systems will be combined with the fundamental
importance of international organizations with supranational powers.

The competition between communist and democratic varieties of an
integrated world economy will not be antagonistic. For example, the
Chinese initiative "One Belt, One Road" with the ideology of "one
destiny of mankind" involves many countries with different political
systems. Democratic EU countries are creating free trade zones with
communist Vietnam. The competitive landscape will be determined by the
comparative effectiveness of national governance systems.

The further unfolding of the global financial crisis will objectively be
accompanied by the strengthening of China and weakening of the United
States. As Dr. Wang Wen rightly points out, "the global community sees
China growing and the U.S. shrinking on the parameters of international
investment, mergers and acquisitions, logistics and currency.
Globalization is becoming less Americanized and more Chineseized [11]".

In the course of this transformation, countries on the periphery of the
U.S.-centric financial system, including the EU and Russia, will be
significantly affected. The only question is the scale of these changes.
Under favorable circumstances the Great stagnation of the Western
economies, which has been going on for more than a decade, will last for
several more years until the remaining capital after the collapse of the
financial bubbles will be invested in new technological mode of
production, and they will be able to "ride" the new long wave of
Kondratiev. In an unfavorable course of events, the monetary pumping of
the financial system will lead to galloping inflation, which will entail
disorganization of economic reproduction, falling living standards and
political crisis. The US ruling elite will be left with two options. The
first is to accept the loss of global dominance and instead of forming a
world government, as in the century before last, to negotiate with
nation-states on the conditions of investment. This will give it the
opportunity to participate in the formation of a new world economy as a
leading player. And the second - to escalate the global hybrid war,
which they are already waging. And, although objectively they can not
win this war, the damage to humanity can be catastrophic, up to fatal.

The processes of destroying the reproduction system of the American
capital accumulation cycle will accelerate as the countries exploited by
the US ruling elite come out from under their control.

If we resort again to historical analogies of the previous period of
changing world economic systems, its final phase (analogue - World War
II) can take up to seven years. So far, these analogies are surprisingly
confirmed. The first phase of the transition period, which coincides
with the last phase of the life cycle of the current world economy,
begins with Perestroika in the USSR in 1985 and ends with its collapse
in 1991. In the previous cycle, it began with the First World War in
1914 and ended in 1918 with the collapse of four European monarchies
that hindered the global expansion of English capital.

The second phase of the transition period follows, during which the
world-dominating country reaches the peak of its power. After the end of
World War I, British hegemony was established for two decades, lasting
until the Munich Agreement, which marked the beginning of World War II.
In this phase of the transition period, the outgoing world economic
system reaches the limits of its evolution, while on its periphery the
core of the formation of a new world economic system arises. In the
antecedent cycle, this nucleus was manifested in three distinct
political paradigms: socialism as seen in the USSR, capitalism embodied
by the US, and a national-corporate model in Japan, Italy, and Germany.
Presently, it is similarly manifested in three unique political
frameworks: socialism with Chinese idiosyncrasies; Indian democratic
nationalism, and the transnational dictatorship of globalists, who are
seen to have instigated the escalation of the global hybrid war with the
introduction of the coronavirus. As with the previous instance, this
phase spans two decades, commencing with the disintegration of the USSR
and the provisional establishment of Pax Americana in 1991.

Lastly, the third and terminal phase of the transition period is
characterized by the disintegration of the core of the erstwhile
dominant global economic structure and the consequent emergence of a new
order, with its nucleus shaping the novel epicenter of global economic
development. Lastly, the third and terminal phase of the transition
period is characterized by the disintegration of the core of the
erstwhile dominant WES and the consequent emergence of a new order, with
its nucleus shaping the novel epicenter of WES. In the previous cycle,
this phase began with the Munich Agreement in 1938 and concluded with
the disintegration of the British Empire in 1948. Assuming the inception
of the global hybrid war instigated by the US to be the Nazi coup in
Kiev, their subsequent occupation of Ukraine, and the implementation of
financial sanctions against Russia, the concluding phase of the current
transition period commences in 2014, with its culmination projected for
2024. As prognosticated by Pantin, who accurately foretold the global
financial crisis of 2008, the apex of American aggression against Russia
is anticipated in 2024. It is noteworthy that this year also coincides
with a shift in the Russian political cycle in alignment with the
presidential elections.

Let us delve deeper into the historical analogy of the previous change
in global economic orders, which commenced with the engagement of
leading nations in World War I. Post the socialist revolution in Russia,
a prototype of a new global economic order was established,
characterized by communist ideology and comprehensive state planning.
Approximately a decade and a half later, in an effort to surmount the
Great Depression, the United States implemented the New Deal, which
forged another variant of the new global economic order, marked by the
ideology of a universal welfare state and state-monopolistic regulation
of the economy. Simultaneously, in Japan, Italy, and subsequently in
Germany, a third variant was being molded - characterized by Nazi
ideology and a public-private corporate economy.

All these transitions occurred during the concluding period of the
British capital accumulation cycle and the underlying colonial global
economic order. As the fulcrum of the world economic system, the ruling
elite of Britain endeavored to resist changes that threatened its global
dominion. Economic blockades were imposed on the USSR, and imports were
limited to grain only, with the intention of inciting mass famine. Trade
embargoes were enforced against the United States. In Germany, the
anti-communist Nazi coup was encouraged, and in an attempt to counter
the influence of the USSR, British intelligence agencies safeguarded and
propelled Hitler to power. With similar intentions and in anticipation
of substantial dividends, American corporations invested heavily in the
modernization of German industry [12].

The British adhered to their traditional geopolitics of "divide and
rule", provoking a war between Germany and the USSR. They hoped to
replicate their success in instigating World War I, which was
precipitated by the London-provoked Japanese attack on Russia. As a
result of World War I, all of Britain's major Eurasian competitors
self-destructed: the Russian, German, Austro-Hungarian, Ottoman, and
finally, the Chinese Empires. However, immediately after the onset of
World War II, the Third Reich's qualitative superiority over all
European nations, including Britain, in terms of economic management
efficiency and the mobilization of all available resources for war
purposes became evident. The British troops suffered humiliating defeats
not only from Germany but also, in conjunction with the Americans, from
Japan, which demonstrably surpassed the Anglo-American alliance in terms
of organizational and technological capabilities for conducting
large-scale military operations in the vast territory of Southeast Asia.
Although Britain, owing to its allied relationship with the US and USSR,
emerged as one of the victors, post World War II, it lost its entire
colonial empire - over 90% of its territory and population.

The Soviet system of managing the national economy proved to be the most
effective at the time, accomplishing three economic miracles: the
evacuation of industrial enterprises from the European part to the Ural
and Siberia, rebuilding new industrial areas within half a year;
achieving work productivity and capital return rates in wartime that
surpassed those of Fascist-allied Europe by an order of magnitude; and
the rapid restoration of cities and production capacities completely
destroyed by the occupiers after the war.

Roosevelt's New Deal significantly boosted the mobilization capabilities
of the American economy, which allowed the US to defeat Japan in the
Pacific Basin. In post-war Western Europe, the US had no competitors:
having insulated itself from the USSR with the NATO block, the American
ruling elite effectively privatized Western European countries,
including the remnants of their gold reserves. In Third World countries,
the former colonies of European states became a zone of rivalry between
American corporations and Soviet ministries. The further global
development took place in the format of a cold war between two world
empires - Soviet and American - each possessing similar technocratic and
diametrically opposite political models for managing social and economic
development. Each had its advantages and disadvantages, but both
significantly outperformed the colonial system of family capitalism with
its ruthless exploitation of wage workers and slaves in terms of the
efficiency of mass production organization and resource mobilization
capabilities.

A similar picture is currently emerging. The forming new global economic
order also has three possible variations. The first has already formed
in China under the leadership of the Communist Party of China. It is
characterized by a combination of state planning institutions and market
self-organization, state control over the main parameters of economic
reproduction and free entrepreneurship, the ideology of common good and
private initiative, and demonstrates astounding efficiency in managing
economic development, far exceeding the American system. This has been
vividly demonstrated by the much higher growth rates of advanced
industrial sectors over the past three decades and was again confirmed
by the performance indicators in the fight against the pandemic.

The second variant of the integral world economic order is forming in
India, the largest real functioning democracy in the world. The
foundations of the Indian version of the integral structure were laid by
Mahatma Gandhi and Jawaharlal Nehru on the foundation of Indian culture.
The Constitution of India, adopted after independence, defines its
economy as socialist. This norm is practically realized in the system of
strategic planning, norms of social policy, financial regulation. The
benchmarks for monetary emission are set by a special commission, which,
based on the planned priorities of social and economic policy,
determines the parameters of refinancing development institutions and
banks in the directions of lending to small businesses, agriculture,
industry, etc.

The nationalization of the banking system, carried out by Indira
Gandhi's government, allowed the management of financial flows to be
brought in line with indicative plans for economic development.
Correctly chosen priorities gave impetus to the development of key areas
of forming a new technological order, and shortly before the coronavirus
pandemic, India came first in the world in terms of economic growth
rates. As in China, the state in India regulates market processes to
increase public welfare, stimulating investment in production
development and the adoption of new technologies. At the same time,
currency and financial restrictions keep capital within the country, and
state planning directs entrepreneurial activity to the production of
material goods.

The third variant of the new world economic order exists so far as an
image of the future in the eyes of the Americentric financial oligarchy,
striving for world domination. The US deep state is initiating calls for
a new world order. On the wave of an artificially organized pandemic,
attempts were made to create institutions claiming to manage humanity.
The Bill Gates Foundation establishes control over the activities of the
WHO in terms of population vaccination. At the same time, vaccination is
used to promote a long-developed technology of biological programming to
reduce fertility and total control over the behavior of vaccinated
people. This technology combines the achievements of bioengineering and
computer science: vaccination is accompanied by chipping, allowing any
restrictions on human activities [13].

In other words, the third variant of the new world economic order
essentially envisages the formation of a world government under the
leadership of the American ruling elite in the interests of the
financial oligarchy, controlling the emission of world currency,
transnational banks and corporations, and the global financial market.
This is a continuation of the trend of liberal globalization,
supplemented by authoritarian technologies of population control in
countries deprived of national sovereignty. It is described in many
dystopias, starting with the famous "1984" by Orwell and ending with
modern religious images of the coming of the Antichrist - an "electronic
concentration camp", heralding the end of the world. This scenario of
world capital domination was presented in the first chapter of this
monograph.

Each of the variants of the new world economic order characterized above
implies the use of advanced information technologies, which are the key
factor of the new technological order. All of them rely on big data
processing methods and artificial intelligence systems necessary for
managing not only unmanned production processes, but also people in
systems of economic regulation and social behavior. The goals of this
regulation are set by the ruling elite, the way of forming which
predetermines the essential characteristics of each of the
above-mentioned variants of the new world economic order.

In China, power belongs to the leadership of the Communist Party, which
organizes economic regulation to increase public welfare and directs
social behavior towards achieving political goals of building socialism
with Chinese specificity. Market mechanisms are regulated in such a way
that the most efficient production-technological structures win in
competition, and the profit is proportional to their contribution to the
growth of public welfare. In medium and large corporations, including
non-state ones, party organizations operate, controlling the compliance
of the behavior of the management with the moral values of communist
ideology. The system encourages increased labor productivity and
production efficiency, modesty and productivity of managers and owners
on the one hand, and punishes market dominance abuses and speculative
market manipulation, wastefulness and parasitic consumption, on the
other hand. A social credit system is being developed to regulate the
social behavior of individuals. According to its design, the social
opportunities of each citizen will depend on their rating, which is
constantly adjusted based on the balance of good and bad deeds. The
higher the rating, the more trust in the person when getting a job,
promotion, obtaining credit, delegating authority. This unique
modernization of the personal file system familiar to Soviet people,
which accompanied a person throughout their working life, has its
positive and negative sides, the assessment of which is beyond the scope
of this article. Its main problem area is the dependence of the
mechanism for forming a productive elite of society on artificial
intelligence that manages the social credit system.

The second type of the new world economic order is determined by the
democratic political system, which can significantly differ in different
countries. The pinnacle of this type can be observed in Switzerland,
where pivotal political verdicts are primarily determined via public
referendums. The most consequential embodiment of this approach, from a
global economic standpoint, is India, alongside the traditional
countries of European social democracy. However, in numerous nations,
this democratic framework is severely compromised by corruption and is
susceptible to manipulation from large-scale businesses, which can
either harbor patriotic or comprador tendencies. The incorporation of
the widely recognized distributed ledger technology (blockchain) into
electoral systems can potentially enhance the efficacy of this
democratic model by eradicating vote-rigging and ensuring equitable
media access for all candidates. The burgeoning popularity of
independent media outlets in the blogosphere has engendered a
competitive environment for information sources, thereby facilitating
candidate access to potential voters. Assuming appropriate legal
provisions are established for the application of modern information
technology within the electoral process, an automatic mechanism for
holding government bodies accountable for the societal consequences of
their actions can be developed. The efficacy of this democratic paradigm
is directly proportional to the level of education and civic engagement
of the populace. The main challenge facing this paradigm is the
dependency of the ruling elite's formation on clan-corporate structures,
which are generally disinterested in promoting transparency and
electoral integrity.

Finally, the third type of the proposed global economic structure is
contingent on the aspirations of the financial oligarchy, aiming for
global hegemony. This is accomplished via liberal globalization, which
entails the erosion of national economic regulatory institutions and the
subordination of economic reproduction to the prerogatives of
international capital. Dominance within this structure is held by a few
dozen intertwined American-European familial clans who control major
financial conglomerates, law enforcement agencies, intelligence
services, mass media, political parties, and the executive branch [14].
This core of the U.S. ruling elite engages in hybrid warfare against any
nation beyond its sphere of control, employing a wide array of
financial, informational, cognitive, and increasingly, biological
technologies to destabilize and engender chaos. The ultimate objective
of this warfare is the creation of a global institutional system under
its jurisdiction, which regulates not only the global economy, but the
entirety of humanity via contemporary informational, financial, and
bioengineering technologies. he primary issue with such a political
system is its absolute lack of accountability and ethical principles,
with its hereditary ruling elite adhering to Malthusian, racist, and to
some extent, misanthropic ideologies.

The formation of a new world order will transpire in competition among
these three variants of the novel global economic arrangement. Notably,
the latter variant excludes the first two, although the initial two can
coexist peacefully. This scenario parallels the hypothetical outcome if
Fascist Germany and Japan had prevailed in their war against the USSR
and the USA, which would have negated both the Soviet and American
models of the novel global economic structure of that era. This scenario
parallels the hypothetical outcome if Fascist Germany and Japan had
prevailed in their war against the USSR and the USA, which would have
negated both the Soviet and American models of the novel global economic
structure of that era.

Hence, three prospective scenarios are proposed for the formation of the
new world economic structure. They all share a common material basis in
the form of a novel technological structure, the core of which comprises
an amalgamation of digital, informational, bioengineering, cognitive,
additive, and nanotechnologies. Leveraging these technologies, fully
automated unmanned productions are currently being developed, alongside
artificial intelligence systems managing infinite databases, transgenic
microorganisms, plants, and animals, as well as the cloning of living
creatures and regeneration of human tissues. Upon this technological
foundation, the institutions of an integrated global economic structure
are being built to consciously regulate social and economic development
of sovereign states and potentially humanity as a whole. This is
achieved through a combination of state strategic planning and market
competition based on public-private partnerships. Depending on the
interests that regulate the activities of autonomous economic entities,
one of the aforementioned variants of the new global economic structure
is formed. The first two – the communist and democratic variants – can
coexist peacefully, competing and collaborating based on international
law norms. The third – the oligarchic variant – is antagonistic towards
the first two as it assumes the establishment of hereditary global
dominance by a few dozen American-European familial clans, incompatible
with either democratic or communist values.

The trajectory of humanity's evolution, according to one of the three
forecasted scenarios, hinges on the outcome of the hybrid warfare
initiated by the American ruling elite against sovereign states.

Among the three scenarios previously characterized for the formation of
the new global economic order, the domination of the global capitalist
oligarchy appears least probable. Albeit this is the current direction
of the unfolding global hybrid warfare, the ruling elite of the USA is
destined to fail due to the qualitatively superior mobilization
capabilities of the People's Republic of China and the global
disinterest in this war.

Regardless of the scenario for the further unfolding of the global
economic crisis, the mechanisms for the reproduction of the American
capital accumulation cycle are eroding, leading to the weakening of the
USA's economic power. There is no doubt that the American ruling elite
will utilize any means to maintain their global dominance. They will
aspire to steer events towards the formation of a global government, as
recently suggested by the former Prime Minister of the United Kingdom,
Gordon Brown [15]. The pandemic of fear over the coronavirus, global
warming, and environmental catastrophe, inflamed by the media under
their control, is preparing public opinion for this scenario. However,
the financial interest of the US financial oligarchy to consolidate
their hegemony in the global financial system, and to maintain it, thus
precluding the independent development of other countries, is hidden
beneath this narrative. To maintain these countries in a dependent
position, the Anglo-Saxon geopolitical tradition employs tools such as
pitting competitor countries against each other, provoking social and
political conflicts, orchestrating coups, and encouraging separatists to
instigate chaos in non-compliant countries and regions. To minimize the
ensuing risks for Russia, the Eurasian Economic Union, Eurasia, and
humanity as a whole, the immediate formation of an anti-war coalition
capable of inflicting unacceptable damage on the aggressor is imperative.

Potential participants in the anti-war coalition could include all
countries not interested in a new global war and the overwhelming
majority of the population residing within them. Foremost, these include
countries against which the brunt of American blow is directed - Russia
and China. These are the countries of the new global economic system,
growing successfully on the wave of the new technological order: China,
India, and the countries of Indochina, constituting a new center of
global economic development. Others include Japan, Korea, and all
post-Soviet states that have maintained their sovereignty, the
precursors in forming its constituent institutions. And, of course, the
beneficiary countries cooperating with the Asian center of economic
development, receiving positive impulses from its growth through
participation in the One Belt, One Road initiative, and other processes
of Eurasian integration.

Contrary to the countries of the "core" of the existing global economic
order, which have imposed a universal financial-economic relationship
system as the basis of liberal globalization, the forming "core" of the
new global economic system is characterized by greater diversity. This
peculiarity is reflected in the principles of international relations
shared by the countries that constitute it: freedom of development path
choice, denial of hegemonism, and sovereignty of historical and cultural
traditions. The formation of a new global economic order is undertaken
on an equal, mutually beneficial, and consensus-based foundation. These
principles form the basis for new regional economic associations - SCO,
EAEU, MERCOSUR, ASEAN-China - and international financial institutions:
(the BRICS Development Bank and currency reserve pool, the Asian
Infrastructure Investment Bank, and the Eurasian Development Bank.

The unification of countries into such large international organizations
as the SCO and BRICS represents a qualitatively new model of
cooperation, paying tribute to diversity in contrast to the universal
forms of liberal globalization. The unification of countries into such
large international organizations as the SCO and BRICS represents a
qualitatively new model of cooperation, paying tribute to diversity in
contrast to the universal forms of liberal globalization. The principles
of international structure shared by the countries of the forming "core"
of the new global economic order differ significantly from those typical
of previous global economic systems, which, according to S. Huntington,
were formed by Western civilization "not due to the superiority of its
ideas, moral values, or religion (to which only the population of a few
other civilizations were converted) but rather as a result of
superiority in the use of organized violence" [16].

The restructuring of the global monetary and financial system is of key
significance for the transition to a new world economic order. The new
architecture of international monetary and financial relations should be
formed on a treaty-legal basis. Countries issuing global reserve
currencies will have to guarantee their stability by adhering to certain
constraints on the size of public debt and deficits of payment and trade
balances. In addition, they will have to comply with the requirements
set on the basis of international law for transparency of the mechanisms
they use to secure the issuance of their currencies, providing
unhindered exchange possibilities for all tradable assets on their
territory.

 

/*4. The configuration of poles in the new world economic order*/

 

Based on the above, the configuration of multipolarity of the world
economy by the end of the current century is likely to appear as follows.

 1.

    A bipolar core of the new (integral) WES with communist (China) and
    democratic (India) poles, between whose competition half of the GDP
    growth will be produced.

 2.

    Its near periphery (ASEAN, Pakistan, Iran).

 3.

    The significantly influential core of the capitalist part of the
    crumbling old (imperial) world economic system (USA and Britain)
    with their satellites.

 4.

    Entities wavering between the cores of the old and new world
    economic systems, such as the European Union, Turkey, and the Arab
    world, whose global influence opportunities will depend on their
    ability to break free from the dictates of the USA.

 5.

    Fragments of the old world economic system aligning with the core of
    the integral system, likely to integrate into it once they free
    themselves from dependency on Washington (Japan, South Korea, Taiwan).

 6.

    The raw material periphery of the integral world economic system
    (Africa, Central Asia, Latin America).

 7.

    Russia and the EAEU, which, depending on the economic policies
    currently being pursued, may either enter the core of the new
    (integral) world economic system or remain on its raw material
    periphery, where they are currently situated in effect.

 8.

    International organizations facilitating the consolidation of the
    new (integral) world economic system (BRICS, SCO, EAEU, ASEAN), the
    influence of which will be growing.

 9.

    International organizations used by the USA to maintain their
    hegemony (NATO and others), the influence of which will be rapidly
    diminishing with the end of the global hybrid war.

The integral world economic system differs from the imperial one by
restoring the significance of national sovereignty and international law
based on it. This presupposes a much greater diversity of the
geopolitical landscape, on which national states and their integration
associations can create various configurations of international
relations, striving to occupy the most advantageous niches in global
economic connections. In this context, the importance of non-economic
factors of integration, such as spiritual culture, civilizational
proximity, spiritual values, and common historical destiny,
significantly increases. Consequently, the influence of
spiritual-historical poles of influence will intensify, integrating into
the configuration of the integral world economic system. Its
multipolarity will have a civilizational connotation, affirming the
concept of a multipolar world of civilizations [17].

Russia's position in the multipolar world forming as a result of the
change in the world economic system remains uncertain. A radical change
in economic policy is necessary to escape the current peripheral
position between the cores of the old and new world economic systems.
This involves implementing a strategy of advanced development based on a
new technological order, relying on the institutions and management
methods of the integral world economic system [18].

 

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httpKATEHON
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16.  Huntington S. The Clash of Civilizations and the Remaking of World
Order (1996) is one of the most popular geopolitical works of the 1990s.
Originating from an article in the journal Foreign Affairs, it describes
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the famous article by F. Fukuyama's The End of History.

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Em
KATEHON
https://katehon.com/en/video/sergey-glazyev-russia-speech-global-conference-multipolarity
2/5/2023