Russia-Ukraine conflict shows money isn’t the root of all war

By Edward Hadas
September 3, 2014

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Many people think politics is really a branch of economics. When the United States invaded Iraq in 1991, the common cry was that it was all about oil. On the same thinking, rich countries were indifferent to the brutal civil war in the Democratic Republic of the Congo – which has cost 5.4 million lives, according to the International Rescue Committee – because the economic stakes were too low to matter. This economic reductionism goes on in developed countries too. Pundits and pollsters argue that elections are won and lost above all else on the economy.

Such ideas can be traced back to the philosopher Karl Marx. He believed that material considerations motivated everything people do, including how they are governed. In modern surveys, people routinely say that the desire for better jobs or higher incomes is not what drives their voting behaviour. On Marx’s view, these respondents are either lying, or in denial. They may not realise that economic discontents and aspirations drive their action – and all of history.

Followers of this dialectic should be disconcerted by current events. Only a die-hard Trotskyite could see economic issues behind the conflicts in Ukraine and Iraq.

Economic explanations are inapplicable to the strategy of Vladimir Putin, even if the president of Russia is trying to reconstruct the glory of the supposedly Marxist Soviet Union. Putin treats narrow economic motivations with disdain. His creeping invasions are not cheap, the occupied areas are mostly in dire economic straits, and retaliatory sanctions will create economic hardship for all of Russia.

For Putin, power is clearly more important than prosperity. His propaganda machine is trying to persuade the Russian people to think the same way. That creates a good test for the neo-Marxist reading of history. Russia is sufficiently rich and large to tough out widespread foreign hostility, especially with some help from China and other sympathetic governments. However, tight sanctions will make the Russian people poorer. Will they put up with the required economic sacrifices, or will they eventually prefer greater prosperity to national pride?

The Western governments which are relying on sanctions hope that economic logic will prevail, that struggling Russians will eventually force Putin to change his ways or leave his office. These politicians are thinking in domestic terms. They see their own voters as hugely sensitive to even relatively small economic setbacks and assume Russians will also put pocketbooks before principles, especially Putin’s principles.

The situation in Iraq also defies economic determinism. It may be possible to find economic explanations. But Islamic State, the ultra-radical group which now controls large portions of the country and neighbouring Syria, puts its fanatic ideology before the mundane issue of helping residents live a comfortable life. The group’s many regional opponents also treat the promotion of the economy as a secondary goal, far behind religious beliefs, the protection or acquisition of political power and the glory of some people or nation.

Economic issues undoubtedly matter more in developed world politics. These countries would not be so rich without a great deal of attention to increasing production and developing technology. There is much worry about economic status – how do my wealth and income compare with my neighbour’s, how can my children retain or better my position?

Still, European and American politicians pay too much attention to economic issues, and often focus on the wrong ones. Basically, they are almost always too gloomy. In every rich country, the standard of living, even of poor people, is amazingly high by any historic standard, but that is not what the political rhetoric suggests. The economy is commonly seen as failing badly just because GDP, a deeply unreliable indicator, is not rising smartly. The exaggerated talk of immense inequality and of rapacious or cruelly austere governments practically encourages voters to feel hard done-by economically.

The almost frantic desire to provide economic goodies encourages governments to try too hard. The biggest problem is their determination to offer a welfare state that costs more than voters are willing to pay. Politicians should agree to offer only the benefits that the tax system can fund. People would be just as wealthy, but fiscal policies would be sounder and politicians would seem less dishonest.

Similarly, if the leaders were not always so desperate to get GDP up before the next election, they would invest more in infrastructure and research, which bear abundant fruit, but slowly. And if everyone calmed down about GDP growth, they could pay more attention to the labour side of the economy, where there are significant problems. Jobs are needed, but most governments are too economically exhausted by their welfare states to find the resources needed to create them.

In other words, economics is a branch of politics, not the other way round. Leaders would do well to recognise its place.

PHOTO: A Ukrainian self-propelled artillery gun is seen near Slaviansk September 3, 2014. REUTERS/Gleb Garanich 

21 comments

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The “leaders” in all lands are unfortunately individuals with self promotion in mind. They neither work for the country r believe their own rhetoric. Problems are needed to make them important and the people in Russian and the US are too stupid to see this contrivance of situations that only the politicians can provide.

Posted by brotherkenny4 | Report as abusive

I think the author needs to re-read Ayn Rand’s classic work, “The Fountainhead”. The accumulation of money and power are simply another facet of man’s ego, well described in her tome….

Posted by Subwavelength | Report as abusive

I think the author needs to re-read Ayn Rand’s classic work, “The Fountainhead”. The accumulation of money and power are simply another facet of man’s ego, well described in her tome….

Posted by Subwavelength | Report as abusive

I think the author needs to re-read Ayn Rand’s classic work, “The Fountainhead”. The accumulation of money and power are simply another facet of man’s ego, well described in her tome….

Posted by Subwavelength | Report as abusive

I think the author needs to re-read Ayn Rand’s classic work, “The Fountainhead”. The accumulation of money and power are simply another facet of man’s ego, well described in her tome….

Posted by Subwavelength | Report as abusive

It is true.Money is secondary to EGO of the nation and their leader for supremacy and want to show might.

Posted by gentalman | Report as abusive

You’ve got to be kidding. The conflict in Ukraine is all about money and economics and you don’t, as the author suggests have to be a communist to see that.

Posted by Brantley | Report as abusive

Dude, seriously? This isn’t motivated by economics? What planet are you living on?
This land grab is ONLY about money.
Putin is securing trillions of dollars of oil resources by invading Crimea. He now needs a land bridge in order to prevent the people on Crimea from falling into dire poverty and revolting against him.
This is all very simple economics of blood for oil.
Read the following:
http://www.nytimes.com/2014/05/18/world/ europe/in-taking-crimea-putin-gains-a-se a-of-fuel-reserves.html?_r=0

Posted by BentleyK | Report as abusive

Oh really? Its not about Money? How come then the World Bank/IMF Loans also come with a Monsanto connection?

Its ALWAYS about money.

Posted by Omasta81 | Report as abusive

Russia’s thinly veiled attempt to control South Eastern Ukraine certainly does have significant economic underpinnings. The Donbas Region has historically produced a great deal of military machinery and armament for Russia. Coal is its major natural resource, contributing greatly to Ukraine’s industrial capability and energy independence. All of this is integral to Ukraine’s prospects for sustained economic viability. Russia wants to divide and conquer by undermining Ukraine’s ability to produce and become economically competitive, thereby destabilizing its political independence.

Posted by baxter0113 | Report as abusive

“For Putin, power is clearly more important than prosperity.” – is correct if you are talking about prosperity of an average Russian citizen. For Putin himself and his cronies, power is money and money is power.

Posted by UauS | Report as abusive

Mony has rarely been an issue in imperial Russia foreign policy – political considerations always prevailed.
Even now in Russia an overwhelming majority of Russian voters strongly support President Putin move to reunite with Crimea despite the already staggering official price tag.
And now I have so far heard not a single question from a fellow Russian citizen with regard to the price of hosting about 800,000 refugees from Ukraine south-east – Russians just treat them all as members of one large Russian family (even if some of them may be actually ethnic Ukrainians who are treated just as some very close cousins).

Posted by snkuz1955 | Report as abusive

Author obviously confuses money with capital.
What creates the money? Capital does!
E.g. control over natural resources, military power that can be enforced onto people and loyal judicial system that secures ruling regime is the capital that enables regime to enforce the monetary and taxation (business and entrepreneurship is just the subject of that) systems on their subjects. Control over Ukraine is the capital with a lot of interests!

Posted by rologan | Report as abusive

Dude, this is all about money. Putin and his KGB mafia cronies have stolen trillions of dollars worth of gas from the Ukrainian people. Read this:

http://www.nytimes.com/2014/05/18/world/ europe/in-taking-crimea-putin-gains-a-se a-of-fuel-reserves.html?_r=1

Perhaps not all wars are about money. But Putin’s theft of Ukrainian land is ALL about money.

Posted by BentleyK | Report as abusive

I would postulate that economics and politics are completely separate entities in a healthy country – once one starts to dominate the other (USA ecomomics>polictics) (Russia – politics over economics) then undesired results occur.

Posted by BidnisMan | Report as abusive

Russia is in a defense position. It’s not the Ukraine-Russia war but interests of the U.S. military complex and energy industry versus russian interests. The war in the Ukraine is the worst example for wars without big money involved.
If you accept overhelming wealth as your religion and the Forbes list as your gods, who obviously have to be toppled by more greed, envy and miserliness, then you’ve arrived in the new developed world where security is a tool to control the mass, democracy a not even popular tv show and freedom a tradable good. This misery makes the russian oligarchy of course not better. Nonetheless I don’t see much difference.

Posted by seafloor | Report as abusive

This is Psychology 101, a purely personal ego trip of a diminutive self-possessed macho egomaniac. Even the Chinese communist party newspaper “Global Times” had the headline: “Putin’s Way is not China’s Way.”

Posted by pbgd | Report as abusive

Why don’t you write about:

– how the US provoked regime change in Ukraine (V. Nuland’s “Yats is our guy” tirade), or

– why the Ukrainian govt has yet to release the seized air traffic tapes from flight MH-17, or

– the stunning lack of proof that Russia shot down MH-17, or

– how the rush to blame Russia feels awfully similar to the mythical WMDs supposedly held by S. Hussein?

Posted by guttball | Report as abusive

“In modern surveys, people routinely say that the desire for better jobs or higher incomes is not what drives their voting behavior.”
Excuse me?! This sounds like the purest hypocrisy. Yet the author states in the following sentence that anyone who disagree is either lying or in denial. The true is that anyone who doesn’t lose interest in further reading is either naive or very patient.

Posted by lub | Report as abusive

First the US superpower with its NATO/EU coalition have failed in two wars that have been going on for longer than a decade. Iraq and Afghanistan. The cost of these two forays have cost the United States. 4,487 American lives, 32,223 wounded for Iraqi Operation Freedom, Operation New Dawn another 66 deaths, and 301 wounded. 2343 deaths in Afghanistan, and wounded 17,674. The financial cost is at about $5 Trillion, plus interest borrowed on the War debt is still to be calculated, and Afghanistan isn’t over in lives and cost. With a debt in the US approaching $18 Trillion. Also the United States has $118 Trilliion in unfunded liabilities. I think you people better learn to deal peacefully with your neighbors, don’t be conned by the EU. Using the US as its muscle.
The United States currently provides about 25 percent of these common-funded budgets, and will continue to do so after the addition of the new members. source NATO
So as countries join and costs increase, the US still pays 25%. So this will cost more $$$.
So how much longer can a bankrupt nation, that cannot secure its own border let the moochers of Europe drain our resources? Both with NATO and the UN. The rest of the free lunch free loaders of NATO bleed the US. You Europeans are the real welfare rats of the US. I don’t believe my countrymen should bleed for your living well at the expense of my nation.

Posted by americangrizzly | Report as abusive

On other fronts, alliance leaders pressed NATO countries to follow through on commitments to spend 2 percent of their nations’ gross domestic product on defense. Only four NATO nations meet that threshold: the U.S., Britain, Greece and Estonia.
Komorowski said that Poland would raise its defense budget to 2 percent of GDP in 2016 and would encourage other members to increase defense spending as well.
So the other 24 Nations fail in this. Including 10 of the founding members.
Belgium, Canada, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal,Turkey (1952), Germany (1955), Spain (1982), the Czech Republic, Hungary and Poland (1999), Bulgaria, Latvia, Lithuania, Romania, Slovakia, Slovenia (2004), and Albania and Croatia (2009).
Deadbeats living off the fat of 4 nations.

Posted by americangrizzly | Report as abusive