The economic consequences of the war

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Listening to political speakers over the last day or so, from Starmer to Biden and beyond, it is apparent that they share a common view. It would seem that their political approach to the Middle East is fuelled by a lust to support Israel's desire for a war that I find profoundly worrying.

It is unambiguously the case that Israel has a right to exist. It is equally true that it has a right to self-defence. Neither of these opinions are, I think, open to question. I will not tolerate the posting of alternative views here.

That said, it is vital to differentiate the right of the state of Israel to exist and to defend itself from the actions of the current Israeli government, which is fairly unstable and could not guarantee electoral support for its actions if there were to be an election in that country at this moment.

Netanyahu may rule in the name of Israel at present, but the state of Israel is not identified by his actions, and anyone assuming that he has the right to claim that or that he and his government can determine what is antisemitic is wrong; there are other opinions available and they are at least as valid as that of a man desperate to cling to office to avoid the criminal charges that might well be laid against him if and when he ceases to be Israeli prime minister.

In my opinion, the conflict in the Middle East can, in any event, be discussed without ever having to consider the fact that Israel is a predominantly Jewish state. We are, in fact required to ignore that fact if we are to act appropriately and not discriminate on that basis, and so that is what I will do.

Instead, let's look at the regional tensions in the Middle East and see them for what they are. Israel stands as a proxy for supposed Western democracy and the values supposedly associated with it. Doing so, it opposes a range of Islamic states of widely varying opinions, all of whom are considered to be enemies by Israel even if it is not in conflict with them all at present.

Add into this mix the fact that there are tensions in this area over oil, gas and mineral rights, and the issues arising come down to a conflict between the traditions of the West, which always assumes it knows best as to what is required in the world whilst demanding the supply of resources in exchange for the supposed wisdom and claimed security that it supposedly supplies, and a number of states that have a distinct political and cultural philosophy of their own that rejects centuries of imperial oppression by those Western states that imposed considerable cost on them.

Viewed in this way, Israel is simply the outpost of Western imperialism in the Middle East, and it is behaving exactly as the Western powers of old did. It is unsurprising that in an era of proxy wars we fund Israel to do now what we once did, claiming the right to territory at will, and the right to subjugate people who might dissent from its right to make that claim without any consideration of their human rights.

So, the US, UK and some in the EU supply the weaponry and finance that Israel needs to pursue its aggression for reasons that have nothing to do with it being a Jewish state: it is instead seen as a vital partner of, and part of, the Western alliance, and as such its wars, however repugnant they might be - and that they certainly are, get the support Israel demands.

In that sense, this is a cultural war, but the culture is of the Judaeo-Christian tradition (although I suspect many of theological leaning would dispute that in these cases, not least because that tradition is not neoliberal despite the claims of those who say it is) opposed to Islam. The Abrahamic traditions are still in conflict with each other, in other words.

There are, in that case, three questions to ask. The first is, does Israel have the right to act outside its territorial boundaries when no one seriously thinks that any of its neighbouring states pose a threat to it if only it attempted to accommodate their own reasonable and legitimate claims? The answer is clearly no; it has not.

The second is whether, in that case, the West has the right to support Israel's aggression under international law, and I struggle with the claim that they have. What is more, if such a case could be made, then I think it would make a mockery of that law and require its revision. The slaughter of tens of thousands of civilians by Israel in territory beyond its borders is impossible to justify on the grounds of self-defence. Its attempt to deny the right of Gaza to exist, which claim looks like it will now be extended to Lebanon, is an act of illegal warfare, in my opinion.

Third, what are the consequences of this?

In terms of the war, I have no idea. My only comfort is that I think no one else has either. All we can reasonably say is that there are no good outcomes from this situation, and most that are likely to arise are horrendous or worse.

Politically, this action will continue to alienate the already fading Western states and their philosophies that are objectively based on greed and exploitation from the rest of the world. The common ground will be eroded. That, too, is dangerous, most especially given the other challenges that we face.

Third, there are the economic consequences to consider. The most likely of these is that, in the first instance, renewed and wholly unnecessary oil price speculation will push the price of that commodity upwards for no good reason.

The second will be consequent spillover effects of that price increase in other markets for raw materials, including food stuffs. In other words, all the scenarios of March 2022 might be recreated - and we all know that since then prices have returned to normal because there never was any reason for the speculative increases at that time, but we all paid the price for them happening. The possibility that this will recur is high, and if so, inflation will follow, although the gain will go entirely to the profiteers.

Then, there is a risk of supply chain disruption through the Suez Canal. It is claimed this will also cause inflation, although utterly needlessly.

Taken together, these factors will give Andrew Bailey and the Bank of England all the reason that they need to keep interest rates high or even increase them. Nothing could please them more. I can see it happening.

As a result, there will be a recession.

And Rachel Reeves will then deliver massive austerity to the UK, claiming that war conditions require it.

All that will be to support the supposed democratic right of Israel to invade its neighbours and impose genocide on them, which many in that country are themselves opposed to doing.

Such is the madness of the hegemony of thinking that grips the leaders of Western states now. The post-colonial, but still imperial, worldview of neoliberalism that demands the right to control the resource supply required for supposed ever-increasing consumption will not embrace the reality that there are, firstly, other world views and, secondly, other people with rights on this planet. It would seem that this has not occurred to those leaders.

That Palestinians might cry for their children, or that people in Lebanon might have hopes for their future, or that the people of Iran and Syria do not, on the whole, share a desire for our way of living is apparently beyond Western leaders' comprehension, as Starmer evidenced this week.

The trouble with neoliberal thinking is that it is hegemonic and no deviation from the model is allowed. Israel is within the hegemony, so it is good. The states around it are not within the hegemony, so they are bad in our leaders' opinions. It really is as simplistic as that. And we are going to pay an almighty price for that stupidity.


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