Ukraine: Imperialism in Crisis

Since the Russian invasion of Ukraine in February 2022, MIM(Prisons) has not published any analysis of the war, nor have we participated in any organizing around the war. Our position is that our movement should be looking to counter and prevent Amerikan war-mongering against Russia, or any other country.

Unfortunately, most opposition to the Russian invasion in the United $tates is being led by the State Department and is fanning Amerikan support for war with Russia and promoting the overthrow of Russian President Vladimir Putin. As we go to press, things have continued to heat up and the threat of inter-imperialist war seems greater than it’s been in decades.

Imperialists are stealing from other imperialists. The U.$. Treasury Department has already seized $1 billion worth of boats and planes and hundreds of millions of dollars in bank accounts. The House of Representatives passed a bill to liquidate these assets and use them to rebuild Ukraine. In addition, the U.$. imperialist bloc has frozen $600 billion of Russia’s central bank foreign reserve fund, which they are also considering using to rebuild Ukraine.(1) They are taking the stolen wealth of other imperialists and using it to rebuild Ukraine to serve U.$. imperialism instead of Russia. This greatly adds to the original military threat Russia had felt from NATO encircling them, making the escalation to all-out inter-imperialist war more likely.

The U.$/IMF/World Bank will of course sink their teeth deeper into Ukraine through loans, which have already begun during the war period. As they do to oppressed nations around the world, these loans become means by which they control their policies and structure their economies as neo-colonies. Perhaps they will even use assets stolen from Russia to loan to Ukraine.

As this issue of Under Lock & Key reaches ours subscribers, we will be approaching the anniversary of the victory over Nazi Germany (May 8-9). In the Russian-allied Donetsk and Luhansk Peoples’ Republics they are restoring statues of V.I. Lenin and hanging red flags as they prepare to celebrate, while the Azov neo-Nazis threatened to attack victory parades.(2) The memories of World War II run deep. While there is no socialist camp engaged in the current war, we can see how the crisis is pushing people to look for answers. In addition to being morally abhorrent, the fascists cannot address the contradictions of capitalism that are playing out today. It is only a new economy that is driven by universal humyn need and not profit that can solve the problems of war, environmental destruction and economic booms and busts that capitalism brings.

What sort of sanctions is Russia under? What will the effect be?

Russia was banned from SWIFT, a component of the global payments processing system. Many other sanctions have been placed on the Russian economy, including obstacles to outside investment and bans on the sale of anything that could conceivably have a military use (which is a lot of stuff). Oil and gas, as of this writing, are still being bought from Russia by most European countries, but this might change soon even though Europe has no other reliable supply of natural gas to rely on currently. Germany, for example, ships weapons to Ukraine that are used against Russian troops and pays Russia for its natural gas at the same time.

The effects of the sanctions aren’t clear yet. If Russia loses access to the European market for its oil and gas its export earnings will collapse. China cannot replace the lost demand, and sanctions will play havoc on Russian industry’s supply chains.

What will the effects of the war be on the Ukrainian economy?

One of the major battles, around the town of Mariupol in the southeast, is unfolding in Azovstal, an enormous Soviet-era steel mill. The complex has mostly been destroyed. This serves as a symbol of what the rest of Ukraine will look like once all this is over. Following the war there are likely to be fewer and worse jobs, a large refugee population abroad, environmental devastation and a radical polarization of Ukrainian society. There is talk of forgiving some of Ukraine’s foreign debt, and maybe there will be aid for reconstruction, but the rest of the world’s charity is not likely to make up for what’s being lost now, and its also likely to come with strings attached.

Are there Nazis in Ukraine?

Yes. The Azov battalion, which is based in southeast Ukraine and has been fighting Russian separatists in the Donbass region since 2014, is a far-right military formation with white supremacist leadership and ideals. They’re responsible for numerous attacks on Roma encampments, LGBT people and leftists in Ukraine since their founding, as well as attacks on civilians and war crimes during the battles against separatists in the east. Many of their leaders, including founder Andriy Biletsky, used to openly promote race war against “untermenschen”[define?] and Jewish people, but have dialed back such talk in public in recent years.

Their logo features the Wolfsangel and the Sonnenrad, both indisputable Nazi SS symbols, and the constant appearance of these logos in sympathetic coverage of the Ukrainian military has been a PR headache for the government. The Azov battalion is just one part of a larger fascist Azov movement coming from the Western part of Ukraine. U.$. news media has helpfully downplayed the significance of an openly fascist, highly armed and well-organized formation at the heart of Ukrainian politics by claiming that the symbols and years of fascist rhetoric and actions either don’t mean anything or are in the organization’s past. The limited presence of explicit far-right figures in the Ukrainian parliament, the Verkhovna Rada, belies their ability to organize outside parliament and the impunity with which they do so.

The popularity of Stepan Bandera is another aspect of fascism in Ukraine. Bandera was the head of the Organization of Ukranian Nationalists, and worked with the Nazis during their occupation of Ukraine, including participating in the Holocaust and in ethnic cleansing in southeastern Poland. He is admired by the far right and those influenced by them, but not by the rest of the country – the Rada refused to award him the title of Hero of Ukraine when this was proposed in 2019. So it’s wrong to say that Ukraine is a Neo-Nazi dictatorship, just as it’s wrong to say that fascists have no influence and are not a serious issue in Ukranian society. Of course, Putin has his own fascists and couldn’t care less about Nazi rhetoric among his own forces, so he can’t use that as a pretext for an invasion.

Are war crimes being committed in Ukraine?

The biggest war crime is starting one, so Russia is undoubtedly guilty on that score. In addition, indiscriminate shelling of civilian areas in Ukraine by Russia has led to probably thousands of casualties so far, though confirmed counts are much lower. During early April, when Russian forces retreated from the area surrounding Kiev, Ukranian forces reoccupying the town of Bucha found hundreds of bodies of civilians on the streets. The brutality of the invading forces is clear.

The Ukranian side has also engaged in war crimes, like the kneecapping of prisoners of war. That happened on video, so who knows what’s going on when phones aren’t pulled out. War is hell.

Are there diplomatic efforts to stop the war underway?

Ukraine and Russia started talking almost immediately, and the demands have shifted with the battle. When it looked like Russia was about to capture Kiev immediately in the early days of the war, Russia’s demands were significant. But now that Russia has withdrawn from the area around Kiev and suffered significant casualties, things are different. The discoveries in Bucha as well as the radicalizing effect of war in general, might make negotiations break down completely in the future.

The key issues in the talks are Ukraine’s diplomatic relationship with the EU and NATO, and territory in Ukraine. Russia wants Ukraine to stay out of NATO, and wants its territorial acquisitions, including Donetsk and Luhansk in the east and the Crimean peninsula in the south, to be confirmed.

Does Putin support the Soviet Union and its recreation?

The Soviet Union was formed on a voluntary basis by independent nations. Most of those who joined the Soviet Union had been part of the Russian Empire in the past. As an imperialist, Putin may be aspiring to something closer to the Russian Empire. However, stated motivations for the invasion of Ukraine are immediate concerns about defending Russia from NATO.

In a recent speech Putin denounced Lenin and the Bolsheviks for the creation of Ukraine, because Lenin recognized the right of all nations to secede. In ULK 36 we wrote about the emblematic image of the toppling of the statue of Lenin in the Ukrainian capital of Kiev in 2013. This was done by supporters of the right-wing populist party of Svodoba.

Both sides of the current war in Ukraine are openly and virulently opposed to Bolshevism and the ideas of Lenin and Stalin.

Should we support sanctions as a way to peacefully pressure Russia to stop the war?

The sanctions being implemented by the U.$.-led imperialist bloc are not peaceful as they come along with large military support being sent into Ukraine to prolong the war and the fighting.

Sanctions are economic warfare. They can be a softer way to pressure other powers than military conflict, but given time they can also have more damaging effects.

In a few days the U.$. imperialists achieved more than the movement to boycott, sanction and divest from I$rael has achieved in years. The illegal occupation of Palestine and daily oppression of the Palestinian people does not get the support of many of the multinational corporations and organizations that jumped to ban Russia or pull their operations from Russia.

As the sanctioning of Russia happened more quickly and successfully, it is that much more dangerous. The increase in economic boundaries between imperialist camps marks the shift from a stage of relative peace between imperialist powers to one of more violent competition. Tariffs, sanctions, market control, dividing up of the world’s colonies, resources and markets, were what led up to the first and second inter-imperialist wars.

Supporting sanctions on Russia right now is further isolating an imperialist power and increasing the chances of military escalation between the imperialists, which increases the chance of nuclear war. None of this is in the interests of humynity as a whole.

Is siding with the Amerikans and against the Russians the profitable option for the capitalists?

For the last century the United $tates has led the most prosperous path for international finance capital. As a result many of the big names are loyal to the Amerikans. But there are also many exceptions, companies who are not volunteering to stop business in Russia. And others who are looking to capitalize on others leaving. One financial company made a bold statement saying that if they were to ban a country from their services for invading a sovereign people, they’d start with banning the Amerikans.(3)

Different capitalists are going to have different interests, and their interests are going to conflict with those of their competitors. While the big finance capitalists benefit from and support stability, other capitalist interests will fund and fuel escalating conflict between the imperialist camps. Meanwhile, weapons manufacturers always benefit from militarism and are very powerful and influential in imperialist circles of power. The mutual interests that created the military-industrial complex has posed a great threat to the world since WWII.

What is a multipolar world, and is it a good thing?

Since the collapse of the Soviet Union, the United $tates of Amerika has been the sole dominant superpower in the world. Before then, countries who opposed U.$. interests could find support from the other imperialist pole of the Soviet Union.

Since WWII, Europe has been subsumed by Amerikan imperialism. If you look at a map of those imposing sanctions on Russia today it is occupied Turtle Island (the United $tates and Klanada), Western Europe, Australia and Japan. This has been the alliance of imperialist powers that has dominated the world, operating under U.$. military and economic leadership, for 70 years.

China left the socialist path in 1976, and has continued to rise as an economic superpower since then. When the Soviet Union took the capitalist path it led to collapse 35 years later as the bourgeoisie was divided, carving out their own fiefdoms from which to extract wealth. China’s new bourgeoisie however has remained united in a plan to exploit its own proletariat, and is now seen as the biggest threat to U.$. dominance almost 50 years after taking the capitalist road. Of course, the people of China and the former Soviet Union were the losers in both cases.

China and Russia remain politically separate from the U.$.-dominated imperialist pole, despite China’s deep integration with the U.$. economy. Their socialist past is one reason for this separation. Together Russia and China control most of the Eurasian land mass, and as neighbors have shared interests in promoting trade in the region. The media has been buzzing about the new Russia/China pole as the geopolitics of the invasion of Ukraine play out. Some dissident media outlets cheer this prospect as a counterbalance to U.$./European imperialism, or what is often referred to as “Western” imperialism.

We look at the invasion of Ukraine with the outlook of “it’s terrible, but it’s fine.” An invasion by an imperialist country is always terrible, with Ukrainians and Russian soldiers dying and 100,000s of Ukrainians being displaced. Communists should never aid an imperialist invasion.

Ultimately, it is imperialist conflict that creates space for the proletariat to organize, and to play the imperialists against each other in order to win victories for the people. In that sense, the increase in disorder in the world “is fine.” It is the inevitable result of the contradictions within the capitalist system. These conflicts will come sooner or later, we cannot prevent them in the short term, but we can seize the opportunities they create to put an end to this system to prevent chaos in the long-term.

Prior to WWI, Britain was the leading imperialist power, and maintained its dominance in part by keeping continental Europe divided. Today the Amerikans play the leading role, but are working with the British to prevent closer relations between Germany and Russia. This has been their strategy since the 1930s when the imperialists feared Germany would join the socialist camp.

In recent years, the United $tates has been threatening sanctions to stop the Nord Stream 2 pipeline that would pipe natural gas directly from Russia to Germany through the Baltic Sea. Germany is already Russia’s biggest gas customer, and Nord Stream 2 would strengthen that relationship. The Amerikans oppose this as they see this tying German and Russian interests closer. In recent negotiations around sanctions against Russia, Germany proved reluctant but ultimately joined the NATO consensus to impose them. Germany even gave in on shipping arms to Ukraine after refusing at first.

Among the imperialists there are disagreements about this. Henry Kissinger famously opposed NATO inclusion of Ukraine, promoting a policy of integrating Russia into the U.$.-led sphere. Kissinger warned of the consequences of trying to break the back of Russia.

Nord Stream 2 provides an alternate route to transport gas to Germany than the other primary route through Ukraine.

Petro Dollars and Reserve Currencies

Following WWII, the U.$. was the least damaged imperialist power and was booming from the wartime economy. Profits were high, exploitation of the Third World was transferring wealth to the rising U.$. empire that financed the rebuilding of Europe. This allowed Europe to be built in the way the Amerikans saw fit. One thing this allowed for was they positioned the dollar to become the global reserve currency, or the currency that other countries held and conducted international trade in. Oil was set to trade exclusively in exchange for the “petro dollar.”

This arrangement has allowed the U.$. to have a growing trade deficit for decades without the value of their currency dropping. When Third World countries have trouble paying their debts, their currencies can become worthless overnight. A replacement of the U.$. dollar as the global reserve currency makes the United $tates more economically vulnerable.

“According to the IMF, the share of reserves held in U.S. dollars by central banks has dropped by 12 percentage points since the turn of the century, from 71 percent in 1999 to 59 percent in 2021. But this fall has been matched by a rise in the share of what the IMF calls ‘non-traditional reserve currencies’, defined as currencies other than the ‘big four’ of the US dollar, euro, Japanese yen and British pound sterling, namely such as the Australian dollar, Canadian dollar, Chinese renminbi, Korean won, Singapore dollar, and Swedish krona.”(4)

Currently Russia is saying ‘unfriendly countries’ must begin to pay them for gas in Russian rubles. Hungary, which is part of the European Union, but also friendly with Russia has already agreed to pay with rubles. But the European Union(E.U.) has said the deal was to pay in euros and dollars and they would not change. This is an effort by Russia to stabilize their currency using their vast gas trade with Europe to force others to buy rubles. While the value of the ruble initially dropped about 50% after invading Ukraine, it has since recovered close to pre-war levels.

Poland, Germany and Bulgaria have refused to pay Russia for natural gas in rubles instead of euros as they are demanding. On 27 April 2022, Russia halted natural gas flows to Poland and Bulgaria after their deadline for paying in rubles was not met. About 40% of Europe’s gas consumption is supplied by Russia. The region is talking about tightening up its consumption. While good for the planet, this will lead to a further constriction of the economy, applying more pressure to the imperialists who must always expand their markets to circulate more capital. However, it is reported that some undisclosed purchasers are going ahead and buying with rubles, despite it being a violation of EU sanctions.(5)

Would joining the European Union benefit Ukranians economically?

As we discussed in ULK 36, GDP in Ukraine after the dissolution of the Soviet Union was 1/3 what it was just before. Though the Soviet Union had already been operating a capitalist economy for 35 years at that time, the complete opening up of the region to the West, the complete Liberalization of policies, and the resultant chaos and uncertainty led to a precipitous drop in material wealth in the country.

Leading up to and following the 2014 coup in Ukraine, the GDP fell and had not recovered pre-coup highs before the current war.(6) The coup installed a U.$.-backed, EU/NATO friendly government that introduced International Monetary Fund (IMF) loans to the country, which are used around the world to extract wealth from the exploited countries to the finance capitalists. As we predicted in ULK 37 these IMF loans contributed to decreasing wealth in Ukraine.

Before 2014, the Russian-speaking areas of Ukraine in the East and South were much more productive and prosperous. People in those regions have lost significant income. Meanwhile, the rest of the country that was somewhat ignored by Russian imperialism, has not seen material improvements by cozying up to the West.(7)

To join the E.U. is a logical option for many in Ukraine who see the wealth in those countries and the incomes they can earn migrating to even the eastern E.U.. Yet the spoils of imperialism are limited, and experience in the last 8 years in Ukraine show the limitations of this option.

Ukraine and Russia remain largely proletarian countries, with material interests opposed to imperialism. While there does not appear to be a strong anti-imperialist current in Ukraine at this time, this can change quickly as this crisis has brought much disruption and displacement in the country.

<sup>Notes: 1. Fatima Hussein and Michael Balsamo, 29 April 2022, The US Wants to Sell Oligarchs’ Assets to Help Ukraine. It Just Needs This Law First, NBC4 New York.
2. Dmitryi Kovalevich, 27 April 2022, April update: Proxy war in Ukraine is for Western loans
3. “Kraken crypto CEO bashes US, won’t freeze Russian accounts,” NY Post, March 3rd 2022.
4.“The end of dollar dominance?”
5.Huileng Tan, 28 April 2022, The EU warns natural-gas companies not to pay Russia in rubles after the country cut supplies to Poland and Bulgaria, Business Insider.
6.https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=UA
7. “Class contradictions and the war in Ukraine”</sup>