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“The British may not like the Americans, but they have no choice but to stand behind them”

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On July 4, the United Kingdom will hold snap elections to elect a new parliament and a new government. Decades of economic stagnation in the United Kingdom have been accompanied by a political and social crisis exacerbated by the Brexit process and the rise of geopolitical tensions that began with its inclusion in the holy alliance against Russia.

On the other hand, there is something “unique” about British imperialism. London has long been the nerve center of global financial flows. In the aftermath of the 2008-9 financial crisis, the Gulf countries’ ties with British finance capital came to the fore, while in the 2010s a similar issue arose with China, with London becoming the most important focal point of the global renminbi trade in the West.

At the center of all these financial flows is the famous City of London, or simply The City, also known as the “Square Mile” in reference to its small size. The City, which has its own separate administrative and legal structure, is somehow involved in all the conspiracy theories about finance in the world, as it has always had a dark side.

Tony Norfield, author of The City: London and the Global Power of Finance (Verso, 2017), which focuses on the role of finance in the functioning of the City of London and British imperialism, strongly emphasizes that finance is an integral part of the capitalist world system and that it would be absurd to attempt to separate the two.

However, the City of London and finance also point to the specific nature of British imperialism, with the financial sector in particular playing a critical role in both British GDP and investment structure.

Norfield does not think it is possible for London to pursue a policy independent of Washington. In his view, even if the British wanted to do so, they are too weak to act separately from the US. The rise of China and the pivot of Asia and Latin America towards China, as well as Russia’s victory in Ukraine, are inevitable, Norfield believes, despite all British efforts to the contrary. Norfield writes about his thoughts on current affairs on his personal blog “Economics of Imperialism.”

Let me start with Britain’s role in global finance. The City of London is not well known in Turkey. But especially in the 2010s, City officials have developed deep ties with the AKP government. For example, Public-Private Partnership projects, which are often criticized in Turkey, were approved through Britain and the City of London in the same decade; even the legislation was taken from Britain. Can you tell us a little bit about what distinguishes the City of London from other financial centers and the importance of the City for British imperialism?

Yes, it’s a big topic, of course, but one thing you might remember is that in the middle of the financial crisis in 2008, there was a lot of discussion about interest rate swaps and the sheer volume of them. You know, if you look at how much they are technically involved in terms of hundreds or even thousands of billions of dollars worth of swaps.

What many people overlook is that the legal basis for these interest rate swaps is actually in English law. This may seem strange because not many swaps are done with people in Britain, but it reflects the fact that the British influence on finance is quite large. And this is really based on historical factors because the growth of the British empire, especially in the 19th century, even before that, meant that all kinds of commercial, maritime, transportation, insurance and trade relations, most of these were dominated by the British.

The British, for example, in an earlier period, were the biggest slave traders. So basically they played a very big role in international trade, partly because of their imperial ambitions. In the case of India, for example, they more or less closed down the Indian shipbuilding industry and the Indian shipping industry. Indians were able to build ships, sail ships and go from port to port. But what the British did was that they prevented ships from docking in colonial India unless it was a British port. So a large part of the shipping and shipbuilding industry in India closed down and was instead dominated by the British.

In insurance, marine insurance, Lloyd’s of London I think is the biggest marine insurance company in the world. And of course Lloyds is made up of wealthy individuals who are members. But it still reflects this historical factor, it’s a historical factor that continues today.

The multiple connections that the British have actually go back much further than the Americans. Even though the US is the largest economic power, obviously much larger than Britain, it is quite clear that the connections on which financial and business transactions can be built are very strong in the case of Britain and are actually more widespread than they are for the US.

So what happened? There are actually two phases. First, in the 19th century the City of London was a major financial center for the world economy, as I said, finance, shipping, insurance, insurance in general and trade, basically trade. One historian put it quite nicely and said that England was not the workshop of the world, it was the warehouse of the world. In other words, a lot of goods came in and were sent out again.

So Britain has a long history of being a kind of trading center and financial relationships were built on that basis. So, again, maritime insurance, trade, finance and things like that, and this was very important for the British.

So, even though the British economy in the 19th century had a deficit in commodities, the money that it made from insurance and the investment income from all its investments overseas meant that its current account was actually about 5% of GDP. So it had a huge deficit in trade but a huge surplus in investment income and various financial incomes, including insurance.

This was hit by the First World War of 1914-1918. As you know, this damaged world trade and meant that Britain was in a weaker economic position. In the inter-war period they tried to remedy this. Although they used the empire as a basis for doing that, it didn’t go very well.

Then, in the post-war period, the British were in a much weaker economic position, but they used their relationship with the US to continue to strengthen their financial dimension. So in the period immediately after the war, for example in the 1950s, you saw that trade financing was predominantly in British Pounds, not in US Dollars. Again, this seems a bit unusual because of the dominant economic position of the US, but that’s what happened. There was also, especially during the 1960s, the growth of the euro markets. The center of the euro markets was largely in London. The City of London was attracting foreign banks to come to London where they could do these transactions. This was because of the low regulations that existed in the City of London to circumvent local laws in the US that restricted the amount of interest that could be paid on a bank deposit.

European markets, for example, have very different regulations and the Bank of England and the City of London have much less regulation. So most of the big boom in international finance through the euro markets took place in London.

And despite the relative weakness of the UK economy, which was never in very good shape during this whole period, British finance used the US dollar, but it acted as a kind of financial trading instrument. So even today you see that the City of London, or the UK more generally, is not like that.

The City itself is a relatively small area. There’s also Canary Wharf and some other places within London. So geographically it’s not exactly a city, but the City of London, even after Brexit and despite the weakness of the British economy, is still the largest foreign exchange trading center in the world. It’s also one of the biggest financial derivatives trading venues between banks and their clients, like interest rate swaps and things like that.

The banks in the UK, not all of them are British banks of course, but the banks in the UK had the largest international links compared to other countries. And this again was creating stress. I emphasize how big the City is despite the relative weakness of the UK economy, certainly compared to the US, but also compared to a number of European countries.

And you know, they had a big role in setting regulations for the bank, for international agreements, for all sorts of things, because of this accumulation of expertise and because of this role that they played as an allied partner and accomplice with the US. That gave them a lot more freedom and influence than they would have had on their own as the British economy.

The City has a separate administrative structure alongside the British state apparatus. We hear some people in Turkey, some people close to the government, talk about London barons, London bankers trying to interfere in our domestic politics. Because the City of London is a kind of, you know, dark place, an ominous place for foreigners.

I think a lot of the discussion about this on the internet is completely wrong. The City of London has been given all sorts of privileges in terms of financial regulation, but it’s not as if it’s a separate power in its own right. This has been the policy of every government. It has been a deliberate policy of Conservative governments and Labour governments, particularly since the 1970s. To stimulate the financial sector, loosen regulations and allow the city to expand massively.

In 1979, exchange controls were relaxed. From 1986 or 87, I can’t remember, the so-called big boom happened. Then governments did not say, no, this is a bad idea, let’s change it. No, they continued it and they did more and more.

And under the Labor government in 1997, one of the biggest supporters of City was Gordon Brown, the Labour Chancellor of the Exchequer. He even ridiculously praised Lehman Brothers, as I mentioned in my book on the City. This was just a year or so before everything went to hell. This was a consistent British government policy.

So, okay, even though the Bank of England is a different institution, different governments, different policies, etc., it is completely wrong to portray the City as some kind of demon that sits indoors. This is a deliberate, precise and consistent part of British policy. And that’s because they make a lot of money out of it, or the British economy does.

And again, this was looking at the period when a former Labour government was in power. And they were actually praising all these jobs, big bonuses and a lot of tax revenues from tax revenues.

This is something that ironically the Brexit policy has messed up because it has been a factor in reducing the economic benefits for the City.

We’ll come to that. Okay, but I read an article in Politico yesterday and it said that the City has already won the elections because both Labour and the Conservatives have guaranteed how the City will function. But again, in your book you emphasize that all capitalist corporations carry out important financial operations. Where do you think the particular anger towards financial activities comes from? Could it be that the masses, especially the non-proletarian masses, are confronted with the capitalist structure, with the financial sector as one of its 1001 faces?

In general, there is a public opinion that looks at banks, the city, finance and things like that as a negative for the economy of the country. And this was a little bit less. During the boom years, so to speak, when everything looked ridiculously great, stock prices were soaring, all sorts of financial indicators looked good, there was a more popular view against the greed of bankers, that sort of thing. And of course, even young people earning millions of pounds, let alone big executives, were dealing with this sort of thing. It was an easy focus of resentment.

Then the financial crisis of 2008 and the bailout of the banks and things like that became a big thing and there was widespread dislike and hatred of bankers, that sort of thing. But what none of them could deny was that finance was an important factor for the British economy in terms of tax revenue, news and that sort of thing.

So there is a popular view against banking and finance, and it is very common among left radical people. But it’s a very simplistic view. Maybe I should not say that, but I think it’s a stupid view because it ignores the fact that the financial sector is a necessary element added to the functioning of capitalism.

As you mentioned, I talk about this in my book and I even give an example, let’s take Apple. Apple is a huge technical marvel of a company in the US. It also owns one of the biggest bond trading companies, right? It’s funny, I always thought Apple was all about consumer technology and stuff like that. No, they have a huge amount of financial derivatives deals.

It’s involved in a lot of bonds and it’s got a company called Braeburn. Right? Braeburn is a kind of Apple and it’s based in Nevada and a lot of people don’t know about it. They know about iPods and iPhones and Macs and things like that, but they do not really know about Braeburn.

Every big company, not just Apple, every big company has to have a finance arm in terms of dealing with currency risk, interest rate risk transactions and everything else. So you can not escape that. Every single company does it, technically an industrial company, a commercial company or whatever, has to do it. And this is a necessary, inevitable factor of capitalist markets.

So if you don’t like finance but you want capitalist markets, then there is a contradiction. In your view, these things inevitably arise from capitalist markets. So you can’t get around that. You have to do something about capitalist markets, if you don’t like capitalist finance. Otherwise you are on the losing side.

Yes, but related to the previous question, in the aftermath of the 2008 crisis and during the Brexit debate, attention was simultaneously drawn to the City of London’s evasion of EU regulations and to the hyperinflation of the financial sector in the UK and the relative decline in the competitiveness of the so-called productive sectors. Was this debate purely populist or was it an extension of real material class interests for Britain? I mean, there is some debate about industrial capital versus finance capital and so on.

I think this is again a misguided, ill-informed debate. Let me put it this way, there is no great distinction between an honest and wonderful industrial capitalist and an evil finance capitalist, because all these necessary links are there where you find, for example, an oil company like British Petroleum, BP, right? Yes, they do.

They will have a big treasury trading department because they deal with the ups and downs of oil prices, cash flows and all kinds of things. So every big industrial company necessarily has a financial aspect. True, technically they produce things or they are engaged in other things, but they have to do them.

But at the moment most of the world’s production takes place in a number of countries, particularly in Asia, where wages are relatively low and production costs are lower. And that means that the richer countries are focusing on having a monopoly position in the narrower industrial areas – specialized engineering and so on. Or they get involved in commercial power.

Let’s go back to Apple. They get everybody else to produce for them. And they rely on licensing and commercial monopolization to make their big profits. So they do not produce a lot. They outsource all the production elsewhere, but they still make a big profit because they can make big mark-ups.

So everybody else produces for them and they raise prices. It’s an extreme case, but it’s similar to what most of the rich capitalist countries do. So you see that in all these countries in general the share of manufacturing and industry is declining and instead the services sector is growing.

I mean, of course you need a service sector, don’t you? You cannot live in an economy with only manufacturing, mining or industry. But what happens is that the trading power of the rich countries is an important way for them to siphon value from the rest of the world. This is part of their parasitism on the world economy.

The financial dimension is also an important part of it. So this commercial parasitism and financial parasitism is an important part of the infrastructure of the rich powers that run the world economy. You know, they have a problem when the financial sector goes crazy and explodes, but when the post-crisis period comes and they want to do something else, they try to re-impose it in a different way.

Right now they are having even bigger problems with Russia, China and a number of countries trying to build something different. On top of all this, there is the parasitic system of domination over the world economy that the US, the British and other western powers have been in charge of for decades.

So you disagree with the claim that there is no capitalism anymore and that we are living in a new feudal world order?

No, that’s absurd. It is basically, if you want to call it that, imperialist capitalism, and in many ways a much more parasitic and corrupt capitalism.

You know, rather than having the good old 19th century concept of, you know, I’m a greedy capitalist, but at least I’m investing and producing and things like that. Right? No, what they are doing is they’re setting up a commercial monopolized system to control things and, you know, in the financial commercial sense, it means benefiting their producers as long as they still own them. But even if they don’t own the producers and they outsource the production to you, they want to make sure that the financial links and the commercial links are run by them and that all the big price increases happen for their benefit. That’s what happens, isn’t it?

Yes, I see. Now let’s talk a little bit about the Brexit discussions and this is also relevant. With Brexit, some of the Thatcherite Tory economists said that they wanted to make the UK a new Singapore, and you criticized that very harshly in one of your articles. But don’t you think that complaints about bureaucracy in the EU, Brussels’ attempts to regulate financial institutions, and Tory criticism of a move away from the free market, all of these things represent a bifurcation with capitalist institutions and ideas on the continent?

It’s always been a problem for the British because for a long time Europe seemed to be the main growth area of the world economy, not anymore but for a while it was. With the growth of the European economy and the growth of the EU, there was a big debate in Britain about whether to join the EU or not. Throughout the 1960s there was a lot of internal British debate: Should we join? Should we not join?

And they found that their previous imperial connections were not doing them much good economically. Most of Australia and New Zealand, for example, was one long railroad. The Canadian connections were not as strong. So basically it looked like Germany, France, Italy, Spain. These European countries were growing. Maybe we should have joined them.

The problem was, if the British did that, then would they still have a dominant position? That was always the problem and that was always the calculation they had to make.

In the early 1970s they finally decided: Yes, we have to do this. So they joined the European Economic Community. It made a lot of economic sense for them, but they were using their ties with other Europeans to put economic pressure on their own industries, which were in decline, and to have a competitive whip to improve them and put them in better shape, whereas before they had strong ties with the old empire, the Commonwealth, which gave them a privileged position, but it meant that they were no longer competitive in the rest of the world.

So the Conservative government in the early 1970s and the Labour governments afterwards tried to make the British economy more competitive so that it could compete a little bit more with the Europeans. But they had a big problem, even in the European context, of how to maintain your dominant position when you are no longer so dominant economically.

And they were very concerned about losing their political power. So that was why they didn’t want to join the European Union; or they joined the EU, but they didn’t want to join the new order of creating a single currency and having the euro, because that would be a step too far and it would mean that they would lose their influence. So they didn’t like to do that.

They were also afraid that it would weaken the City’s position and instead give more direct power to, for example, Germany, to the European Central Bank and things like that. So they didn’t like that and they wanted to step back from doing it.

There was always this tension, they wanted to have the connections. In fact, the City of London was doing most of the euro-related business in Europe, and the Europeans didn’t like that very much because the size of Frankfurt or Paris as an alternative financial center was relatively weak to do that compared to the size and power of the British financial system dealing with European finance.

You also mentioned in your Singapore article that during the Brexit debate some Londoners, particularly hedge funds and venture capital, were trying to separate the UK from the EU. But other institutions, some banks and pension funds, and asset managers were in favor of staying. How do you explain this phenomenon?

Brexit was a very stupid economic idea, completely stupid except in a few narrow dimensions. And that’s why you saw that the big companies didn’t make a big deal out of Brexit, because just over half of the population was in favor of Brexit. So they didn’t want to make a big deal out of it and piss off half of their customers. They didn’t want to talk too much about it.

But in the financial sector, for example, or in the business world, the people who were really in favor of Brexit were either hedge funds or venture capitalists, people like that who thought they could benefit from less regulation, lower wages and that sort of thing. So they had a more Brexit-oriented perspective. They also appealed to a more nationalist version which, frankly, most of the British working class supported. So it was British nationalism against a so-called European power that they didn’t like. We were going to be free, we were going to be able to do separate things and that sort of thing. It was a rather silly nationalist view and it actually undermined the social welfare aspects of the British working class. But the British working class generally supported this nationalist, anti-European view.

I’m not saying that Europeans are great progressives and that’s a negative thing from that perspective, but it was certainly a bit stupid from an economic point of view, and it opened the way for a more reactionary perspective that could be implemented by whatever government, in this case a Conservative government rather than a Labour government, because the trade unions, for example, were generally a bit more pro-European because they saw more positive social welfare events in Europe than were likely to happen outside Europe, outside the EU. So this was a reality.

And it was also an anti-immigration against EU migrants, undermining our living conditions and, you know, trying to get British welfare benefits and that kind of thing. That was the anti-immigration aspect of populism, it was anti-European stuff, which led to the British working class, not everybody but most of them, having an anti-EU view, which was the fuel for the Brexit view, which was linked to the anti-EU Nigel Farage type, UKIP type view.

But economically it’s a stupid thing, economically Brexit was a bad mistake. You know, you see the way the European Union is going, it’s not very progressive, it’s also dominated by the US and it’s doing stupid things.

So my position, to be honest, was to abstain. I thought that the European Union was bad and I thought that the great British alternative was bad. I mean, you know, I wouldn’t say that one was better than the other, but, you know, it was clearly absurd to have the view that there was a great British alternative.

Throughout 2010, the UK and the City of London became a hub for Chinese financial flows and in particular the renminbi. In turn, the UK joined the Belt and Road Initiative and the Asian Infrastructure Investment Bank, attracting Chinese investment to Britain despite the crisis. Did Brexit have anything to do with these developments, or was it just a coincidence? Does China still see Britain as a gateway to the western hemisphere?

The British expected more positive economic growth from Asia, whereas the European dimension of growth looked rather weak by comparison. But at the same time they were afraid of Asia’s growing economic power. So it was a bit of a mixed view. So, yes, for a while they wanted more Asian engagement in the economy, but at the same time they were afraid of a larger Chinese dimension and then they easily bought into the American paranoia about China. And that always undermined how much the British could embrace the Asian perspective. So, you know, they. Basically they wanted to be involved in Asia but as long as it could keep Western power in place, which they had a big role in. So that was the angle they were trying to push. And that led to this absurd “Singapore on the Thames” alternative, which went nowhere and looked silly.

But the British are in the middle of nowhere in this respect, frankly, they are not strong enough to implement some kind of independent view. As far as the Americans are concerned, they are number two or three on the list. The Europeans don’t like them very much, but they are stuck. They look a bit stupid, frankly.

But they will always, you know, try to strengthen their great international position. We are not Americans. We are not as aggressive and imperialistic as the Americans… But they are doing a lot of what the Americans are doing.

Today the European Union also announced new tariffs on Chinese electric vehicles. According to news reports, Germany, Sweden and Hungary opposed the new tariffs, while France and Spain in particular pushed for new tariffs. So how realistic do you think Europe’s decoupling from China, or “de-risking” as it is officially called, is?

First, it cannot be done. Secondly, whether from a British perspective or a European perspective, it is an attempt to prop up a very weak European economy.

But we can say that many German companies are completely against this idea of decoupling. And decoupling from China cannot be done. Basically, it cannot be done. And it’s stupid to try to do it.

And it’s not only China. They are worried about Korea, they are worried about India, they are worried about basically all kinds of things where they cannot compete with Asia. That’s the bottom line. You know, they cannot compete with the growing power of the Asian economy. So they want to do these kinds of things but basically they cannot compete. That’s the whole thing.

And they’re going to pick China in particular, because China is a big economy that continues to grow, a stronger, competitive economy. So they will claim that Huawei is doing all this bad spying, whereas the great Google, the great Amazon and all these kinds of things don’t spy as much as the Chinese do. It’s just ridiculous.

And they just want more western, American based power rather than Chinese risk, which they don’t like, which is not an independent power.

Lately we have been hearing a lot of talk in the western media about China’s overcapacity. Before it was about China dragging emerging economies into debt. Do you think there is any truth in all this? Does China’s great economic power aim to make countries, especially in Asia and Latin America, dependent? Or accusations of dumping from the EU?

This is absurd. You know, many African countries, for example, are choosing China as a more progressive alternative, a productive alternative to western domination. That’s it and it works for them, doesn’t it?

Who is going to build these things? I mean bridges, roads, railroads, power stations, etc. It’s not going to be the fucking Brits, Europeans and Americans. It’s going to be the Chinese. So it’s not a debt trap. And frankly this whole debt trap hoax is nonsense and has been proven not to be true. But basically they want to argue that.

Of course, I’m not claiming that every Chinese investment is great and every European investment is completely terrible, that’s not true. But to say that China is a debt trap and everything else is good is nonsense. There is all sorts of evidence that this is nonsense and that they cannot compete. But they don’t have as much control as they did when the Anglo-American view of the wonders of Western power was dominant. And that’s the point. And they are worried about losing that. That’s basically the issue.

You said this in one of your articles. In the past years, the BRICS countries have done some things outside the western financial system. It is also argued that the sanctions policy of western imperialism, led by the US, has failed and accelerated this process. But unlike Russia, China is still cautious about relations with the US, given the tensions between the other members of the bloc. What are the prospects for BRICS as an alternative?

Basically very good. And this is the way to go. It’s a good idea to build something more productive and different than the Western-US-Anglo type of domination that many Asian countries, Latin American countries and African countries have suffered and know they have suffered in previous decades.

There will be all kinds of conflicts and grievances and all the rest, but this is a more productive alternative than what was offered to them by the British, Americans and Europeans.

So this is the way to go and they are doing it in all kinds of ways. This will continue. The Americans will complain, the British will complain, the Europeans will complain, but it is a good thing that they are trying to build an alternative productive economy that is not dominated by parasitism, by the parasites of the western world. Basically, they are trying to get out of this trap and it is working. It’s better for them. And they see it every time. One of them now sees that there is an alternative to this nonsense and they don’t want it anymore, so they are trying to build an alternative. And that’s it.

There might be a mess here and there, whatever. It may not always work exactly. Yes, but to build an alternative to these things; that’s what they have to do and they are doing it.

Turkey, Asia and other countries should join in. Not the western nonsense that is trying to dominate them instead.

Finally, let’s talk about the ongoing occupation of Gaza, the war in Ukraine and Britain’s role in all this. Britain has been actively supporting Israel since October 7th. In addition, London has established a very close financial and political relationship with reactionary Arab regimes that have overt or covert relations with Israel. Given the financial infrastructure of British imperialism, what can you say about the role of the British government in the Middle East at the moment? As far as Ukraine is concerned, Britain seems to be pursuing a tougher anti-Russian policy than the US in Eastern Europe and the Black Sea region, as well as in the South Caucasus. It has established deep relations with Poland, the Baltic states, Turkey and Azerbaijan. Is Britain trying to create a cordon sanitaire against Russia?

The British, of course, are strong allies with the Americans and they see any real challenge to American power as a problem for them. It’s kind of like, you know, being the great helper who wants to be a great alternative or not an alternative but has their own thing. It doesn’t exactly suit them but they can’t do anything else. They want to be bullies but they are dependent on the Americans. That’s the real issue. They want to pretend that they have alternatives, but they don’t. They need to depend on the Americans to increase their power.

So they are more anti-Russian when it comes to Ukraine than the Americans are when it comes to Ukraine. They are more against what the Russians are doing than the Americans are. But this policy will lose because Russia will win.

But instead they want to strengthen something else because they are worried about losing their power, the power of the Americans and the West in general. And something else is being built that is not the power of the Americans and the West. That’s why they don’t like it.

That’s how all these things should be looked at. That is the key point. Anything that happens today is about whether there will be western power, mainly American power, and the British have their own point of view or European power or whatever, and instead there will be an alternative built by other countries.

The British don’t like it, the Americans don’t like it and they try to argue how terrible it is. But these other countries are obviously trying to build a better alternative. That’s what we are trying to build.

What about the Middle East connections and the Gaza war going on in the Middle East in Palestine?

Yes, the British have a reactionary role in this. They have a terrible role in this. But you know, there is no way they can be a progressive force in Palestine, in Gaza, in the Middle East, in West Asia. It will always play a reactionary role. They realize that now with their policy of supporting Israel in every way, it depends on supporting the Americans.

But it has to fail. I hope so, but it’s not something that they are really going to back down or try to do something different. All their policies are reactionary and stupid and they will fail.

So you still think that the UK will act as a kind of lapdog of American imperialism around the world?

Yes, because that’s basically their only option. They want to be independent, they want to be a great alternative. They don’t like the Yanks. They want to be something different but they can’t be because they are too weak. So they want  British stuff. But the British don’t do anything for anybody, they don’t build anything and they are not an alternative for any other country. So basically they support the reaction, not the alternative. That’s how it works.

So they have to support the reaction in the Middle East and in the rest of the world and that’s what they are doing.

I think the basic idea is that the Europeans are losing. They may not like the Americans very much and they want to be different from the Americans, but it turns out that they are not that different. The Americans, one of them, is trying to ruin you too. Okay, I’m British, but that’s basically what they’re doing. So if you want to build something different you have to look elsewhere.

Interview

“The AfD is an expression of internal contradictions within German big capital”

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Following the Alternative for Germany (AfD)’s major victory in the Saxony-Anhalt state elections, significant uncertainty regarding Germany’s future has emerged. Subsequently, in Berlin, Die Linke (The Left) pulled off a major surprise by becoming the leading party, after which a massive counter-campaign began in the mainstream media and the political establishment.

The future is uncertain, but certain signs are evident: the political center, represented by the CDU/CSU, SPD, and the Greens, has crumbled with a loud crack and is on the verge of collapse. We are moving toward a model in which the U.S. will scale back its role in the war in Ukraine, allowing Europe’s “Big Three” (Germany, Britain, and France) to take a more prominent role. While German capital, reliant on cheap Russian gas and despite alarm bells ringing in its industrial sector, is trying to strain relations with China, pessimism and war mongering are on the rise in Berlin.

We discussed all of this with journalist Arnold Schölzel at the Berlin office of Germany’s only left-wing daily newspaper, junge Welt. Schölzel’s biography is quite interesting and deserves a more detailed account; but for now, let’s just say this much: As a young man, he was among those who fled from West Germany to East Germany (the German Democratic Republic—GDR) in 1967. He made this decision because he could no longer tolerate the “old” Nazi influence while serving in the German Armed Forces (Bundeswehr). Schölzel says that throughout the entire history of the GDR, nearly one million people crossed from the West into the country. In a world where escapes from “behind the Wall” to the West are constantly recounted, this issue deserves closer scrutiny.

We spoke with Schölzel on a wide range of topics, from the rise of the AfD to the war in Ukraine, and from German mainstream politics to the “transatlantic right.” The journalist, who emphasizes the prevailing uncertainty, believes that within German big business, there is a segment more inclined toward cooperation with Russia alongside those who favor a more aggressive stance against it. Nevertheless, Schölzel believes that a significant segment of the German business and political class sincerely believes it can bring Russia to its knees and reduce the Russian Federation to a sort of colonial position. In his view, the AfD serves as a “reserve force” kept in reserve precisely for this climate of uncertainty, and it is possible for the party to radicalize even further to the right under different circumstances.

Let’s start with current German politics. What are your thoughts, in particular, on the Russia-Ukraine war and the U.S.’s recent “peace” initiative? Does the U.S. truly want peace, or is it trying to buy time and push its European allies forward?

This is definitely one of Trump’s goals—namely, getting Western Europeans to foot the bill for the war. I believe he reiterated this yesterday [October 18]; it has always been his goal. Western Europeans have also accepted this with great enthusiasm.

I, however, have serious concerns about this for two reasons. One is the long-standing geopolitical tradition of the U.S. and the United Kingdom opposing cooperation between Russia and Western Europe—particularly Germany—on the continent; this has been the case for 120 years. This is a very clear policy. The interests of the U.S. and the entire Anglo-Saxon world are clear. So this relates to the “Heartland” theory outlined by [Zbigniew] Brzezinski in his book The Grand Chessboard, doesn’t it? Whoever plays the Eurasia card poses a threat to U.S. global power. This is understandable.

Here’s what I think: If they aim to create discord between Russia and Western Europe—and especially Germany—they might miscalculate, just as I believe they did during the First and Second World Wars. I firmly believe this: I call it German imperialism; German imperialism still wants a place in the sun. Everything starts with that. In 1897, [Bernhard] von Bülow—then Foreign Minister and later Chancellor—made this declaration. It was a declaration that Germany was challenging Great Britain at the time—and, of course, the United States as well—and asserting its own claims to the status of a world power, a great power.

My counterparts in Russia do not believe me, but I suspect that there are still factions within German big business who hold this view: We must secure a position as a great power here on our own. As far as I know, the debate once again revolves around the following question: Will we achieve this through cooperation with Russia, or through an anti-Russian policy that will ultimately weaken Russia to the point of collapse?

In my view, this constellation stems from geography, economics, and—in my eyes—a denial of reality: namely, German foreign policy’s refusal to acknowledge the actual balance of power on the continent.

The prevailing belief in Germany—and I think this is the dominant policy right now—is that Russia can be brought to heel. We hear this over and over again. There are people like Kiesewetter, who are constantly featured on German public television; Roderich Kiesewetter, the foreign policy expert. Morning and night, it’s Kiesewetter, Ms. [Claudia] Major, and many others whose names I’ve forgotten.¹

So within the circle of German foreign policy and security experts, there is a group—behind which, I believe, lie rigid interests—and they believe that Germany, as the leading nation of the EU, is still so powerful that this leader can finally bring Russia to heel.

[German Foreign Minister Johann] Wadephul actually drew a comparison on faz to the collapse of the Soviet Union. This is actually a template: just as we diminished the Soviet Union, we will now diminish the Russian Federation. I see this as madness. I’ll say it again: my Russian counterparts—for example, Fyodor Lukyanov, whom I speak with from time to time—can’t believe that I think German politicians are this crazy, but to be honest, I’m afraid. I’m afraid they actually believe this. As I said, Wadephul repeated this in faz. And this is, of course, a very, very dangerous game—everyone knows that, right? Because this war between Ukraine and Russia could escalate into a larger war at any moment, and there are people who are clearly willing to take that risk.

The U.S., in its current form, seems to be standing somewhat on the sidelines, I suppose. Last week, Der Spiegel published an interview with NATO Supreme Commander General Alexus Grynkewich and the Inspector General of the German Armed Forces (Bundeswehr). You read different things there. There, contrary to the rhetoric of these war hawks in German foreign policy, it states that Russia is not planning a war. Russia is not planning a war. Grynkewich said that we are far superior militarily. That’s precisely why Russia shouldn’t be allowed to take the initiative. But what isn’t clear from this interview is that we want to corner and weaken Russia. You hear this from the Germans—and, of course, from the coalition of the willing that is effectively led by Germany now that Joe Biden is gone—don’t you?

We’ve heard many reports that the U.S. will withdraw from Europe and that the U.S. is trying to dismantle NATO. But at the same time, they’re somehow forcing Germany to take on NATO’s leadership; the Trump administration, it seems, is saying we want Germany to lead Europe. And this process of rearmament—and perhaps the militarization of German culture—is steadily increasing, because every time I come to Berlin, it feels like there’s more and more war mongering in the air—much more. But it’s hard to understand what German big capital, the big bourgeoisie, is trying to do in Ukraine. Of course, they have some major investments, particularly in the arms and defense industries. I suppose this also serves as a kind of laboratory for war efforts, digitalization, or things like that, but still, Germany—or at least some German bourgeois circles—is also facing some difficulties due to the war in Ukraine. How can we reconcile these conflicting interests of the German bourgeoisie and what they plan to do in Ukraine? Why are they doing this?

I truly believe the real target is Russia—the collapse of Russia, just as it was with the Soviet Union. Russia is made up of more than 80 different nations and ethnic groups. There are also many, many different nationalities within the Russian Federation itself. I think they tried this in the 1990s and 2000s in Chechnya, the Caucasus, and generally in places like Tatarstan by playing the “national card” against the Muslim population. This failed, just as efforts to play the “national card” and foment national division in China—through Tibet or Xinjiang, that is, the Uyghurs—have failed.

Now, the openly declared goal in Russia—which possesses immense natural resource wealth—is to weaken Russia politically to such an extent that it regresses to a semi-dependent or colonial status.

I always recall a pioneer of German foreign policy from the era of the German Empire. His name was Paul Rohrbach. In 1916, he uttered this memorable phrase: Whoever controls Kiev can bring Moscow to its knees. This actually comes from Brzezinski—and yes, from 70 to 80 years ago. I get the impression that a large portion of German capital has abandoned the idea that it could achieve its own goals through cooperation with Russia. I view even the fact that Siemens has almost completely withdrawn from Russia as a very, very serious warning sign. Siemens had been operating in Russia since around 1860. Lenin’s plan—communism, Soviet rule, plus electrification—was largely carried out by Siemens.

Therefore, abandoning this trade and withdrawing is, in my view, a very serious warning sign that German big business has other plans regarding cooperation with Russia. In addition, I believe Donald Trump—though this began under Biden—told the Western Europeans: “What you do with Russia is now your story; we have our own issues with China.” I believe this is the backdrop to what is happening right now.

So the question is: What will the future of U.S.-China relations look like? This situation, of course, is affecting these alignments in Europe. Frankly, I’m not sure about this issue. German big business is clearly split on the matter of China. On the one hand, they argue that if we don’t cooperate with China, we’ll fall behind technologically and economically. On the other hand, I think they’re trying by any means necessary to break away from this close bond with China, this economic integration, and—though I don’t yet have a clear idea of how it will play out—they’re trying to gain independence through a policy that forces China to make concessions that will weaken Russia.

This seems a bit contradictory, because, of course, the cooperation between China and Russia is on such a scale that there’s no sign China is abandoning Russia. I don’t believe that. But China will likely take its own position there as well. I don’t know which one, but this is very, very complex.

“The current interests of German capital coincide with the CDU-SPD coalition”

Where does the AfD fit into this picture, and what position does it hold? This party is polling at 30 percent—could you explain how the AfD positions itself regarding the war and in relation to German big business?

I think this is also an expression of the internal contradictions within German big business. They are not in agreement on policies regarding the war and relations with Russia, and fortunately, nothing has been decided yet. As I said, there is an aggressive faction; but alongside that, of course, there is also a sufficient number of companies and segments of capital that favor a reasonable policy toward Russia—one that seeks cooperation. There were many German companies at the recent International Economic Forum in St. Petersburg. Gerhard Schröder has now taken on this role at Globus. Other major German companies are also still operating in Russia. For example, Metro and the automakers haven’t shut all their doors. At least they haven’t completely abandoned their factories.

As for the AfD, in my view, it serves as a political reserve in the broader political landscape. In other words, I believe that in a situation where the economic crisis may be deepening and a political crisis is unfolding in the Federal Republic, the AfD acts as a “transatlantic right-wing” reserve—particularly, of course, to support the CDU.

Magdeburg [the capital of the state of Saxony-Anhalt] is perhaps a laboratory where such a scenario is being tested. There are also influential forces that have finally forced Friedrich Merz to tear down this so-called “firewall” (Brandmauer) against the AfD.

So far, it has been said that this is merely a rumor, but it is reported, for example, that Axel Springer CEO Mathias Döpfner has twice asked Merz to pursue a more cooperative policy toward the AfD. This is just a rumor, but it has never actually been denied either.

And Döpfner has very good relationships with Peter Thiel and Elon Musk.

He recently presented Peter Thiel with the Axel Springer Award and had a long conversation with him. And the truly interesting thing here—which reinforces the argument that Sevim Dağdelen and I have made regarding the AfD’s ties to the transatlantic right— —is Peter Thiel’s remarks, his lengthy conversation with Matthias Döpfner at the award ceremony, and now his connections with various figures from U.S. big business. For example, Jamie Dimon, CEO of JP Morgan Chase—the largest bank in the U.S.—says that what Trump is doing here is threatening our allies, presenting the withdrawal of NATO from Western Europe not as an actual policy but as a threat… Dimon said this is going in the wrong direction, that it’s the wrong policy, and that we need to “win back the old West.” This means reestablishing sensible cooperation not only with Western Europe but also with Japan, the Philippines, and South Korea—in other words, rebuilding the old West. He didn’t say what this means politically in terms of China policy, but I’m skeptical that it will be a good thing. Therefore, this will likely be more in line with the Democrats’ traditional policy: pursuing a more liberal stance domestically compared to Trump and the entire MAGA movement, but adopting a tougher stance abroad toward China and Russia.

And to me, it makes a lot of sense for them to ally with the AfD to reestablish the “old West.” For U.S. capital, this is probably more appealing than the U.S.’s confrontational policy toward Western Europe. But all of this is in such flux right now that it’s hard to say what kind of realistic policy will emerge from it. I have to admit that. In other words, things are at a stage where it’s difficult to say where they’re really headed. I’ll say it again: interests in Germany—within German big business—appear to be divided. There are at least two: an aggressive variant and a cooperative variant. The AfD likely serves both of them—it makes no difference to them. They are, as we might say, a “reserve force”—a recreational reserve for big politics. Whether this will actually materialize is another matter, depending on the CDU’s election results. There, Friedrich Merz is consistently dragging down the CDU’s vote share; so much so that the necessity of bringing the AfD on board is increasing rather than decreasing.

Of course, decisions are primarily made at the economic level, and these are later reflected in politics—including policy toward Russia and China. But as I said, it’s very hard to say which faction will prevail there.

Do you think the AfD will turn into a new CDU—or a “CDU 2.0”—once it grows large enough?

Absolutely. The AfD was a breakaway from the CDU. It was founded by CDU members. In East Germany—for example, in Saxony—its leadership consists primarily of former CDU members who came of age under Kurt Biedenkopf’s leadership in the 1990s. The AfD, which is particularly strong in Saxony, is, in my view, a product of the CDU.

Of course, it could always return. A shift toward radicalization could also occur; the AfD has brought together elements that were banned in the old CDU of the Federal Republic—namely, anti-Semites, racists, and supporters of the U.S. Open fascists are welcomed with open arms in the AfD. My view is this: The AfD is not a fascist party, but it is a party for fascists. Of course, radicalization could also occur in this context.

This also depends on developments within the EU. Take Italy, for example—things are going a bit differently there than expected; that is, there is no radicalization under Meloni. But if Marine Le Pen becomes president in France next year, we will likely have to reassess where things are headed here in Germany as well. Right now, so many things are up in the air.

Does the same apply to Die Linke (The Left)? Because I think I read an article in your newspaper, *Junge Welt*, suggesting that Die Linke is increasingly becoming the party of the urban, trendy crowd—in other words, sort of like a new SPD. Is that true?

Yes. Even though it won the election in Berlin, it’s constantly losing ground, especially in East Germany. Up until 10 years ago, its voter base across all of East Germany was around 20 percent; now it’s mostly below 10 percent, and here in Berlin there’s a notable exception where the vote largely comes from the immigrant population—or people of immigrant origin. Elif Eralp, the lead candidate, played a major role in this.

It’s also worth noting that there were 2.5 million eligible voters in Berlin, and because voting was permitted for the first time starting at age 16, there were a large number of young people. However, there was also a record number of people—1.4 million—who have lived in Berlin for years but lack the right to vote. These are, of course—I think nearly 1 million of them—people without German passports, which had never been seen before.

The Left’s entire platform, in my opinion, is indeed a social democratic one. I think it will be very difficult for the Left to repeat this election victory. They won’t be able to repeat this victory in future elections.

However, mainstream parties like the CDU, SPD, and the Greens seem to be trying to normalize the AfD by portraying Die Linke in Berlin as anti-Semitic or something similar. Because I’ve read some news articles or watched videos in publications like *Die Welt* where it’s claimed that the AfD is already more “normal” than Die Linke. Is it possible to use Die Linke to normalize the AfD?

Yes. When the AfD won the election in Saxony-Anhalt, [CSU leader and Bavarian State Premier] Markus Söder said this was democracy. But when the Left Party won in Berlin, he said, “We’ll cut off all the money we give them; we’ll do this, we’ll do that.” I can say that for the CSU and Markus Söder, the question is also about how to deal with the AfD, and I think they’ve already decided how to manage their policies regarding the AfD.

But there’s still a kind of division within the CDU regarding how to deal with the AfD. Because one part of the party wants to ban this party, while the other part says, “No, don’t do that.” Is it possible to ban this party?

The “C” in the names of the Union parties stands for “Christian.” There are major Christian churches—Catholics, Roman Catholics, and Lutherans—and they are very powerful within the CDU/CSU. And there are also Jews. Take Karin Prien, for example, the minister of youth and social affairs. Prien comes from a Jewish family, and I don’t think there would be any cooperation between her and the AfD, for instance. So you’re right, the CDU is also divided internally, and this will lead to major problems.

You mentioned China, but there have been many debates in Germany recently that are critical of China. I think for the past few years, both German government officials and major sectors like the automotive industry have been taking a cautious stance toward China. For example, they didn’t want any tariffs imposed on China. But recently, they’ve changed their stance and adopted a harsh rhetoric similar to that used against Russia.

No, the situation is more complex. Do you remember Annalena Baerbock, that famous foreign minister? She presented a China strategy, didn’t she? In that strategy, China was defined as a “partner, competitor, and systemic adversary.” The result was supposed to be “decoupling” [economic separation].

Looking at it today, I can say that this has failed. No one is talking about this China strategy anymore, and I think the strategy is only three years old. No one is talking about it anymore. Furthermore, “decoupling” later evolved into a cautious—very cautious—process of “risk reduction” [derisking]. These are the famous supply chain issues. In other words, you want to avoid putting all your eggs in one basket; you don’t want to remain dependent on shipments from China in the event of a crisis.

On the other hand, I visited China for the first time last year, and the Chinese press is writing things about German executives that are completely different from what you read here in the business section of the *Handelsblatt* or in the *Süddeutsche Zeitung*. German executives in China—especially in the automotive sector—are saying that we shouldn’t just manufacture here; we actually need to conduct research and development activities here as well.

BMW established its own research and development facility in China last year. The situation is the same for VW. The reasoning is this: They are, so to speak, at the forefront of the world—at the forefront of global technology—and if we aren’t part of that, we’ll miss out on opportunities in the global market.

For German companies, the issues at stake are now entirely different and strategic—not just in this sector, but in sectors like artificial intelligence as well. They’re stating this quite clearly: Germany has fallen so far behind in certain technical fields that it can only keep up by collaborating with China.

As for the tone in German politics… If I were in their shoes, I’d be cautious. Politicians have become more cautious in their stance, but the German media has not. Even in the business newspapers here, you don’t hear about what’s really happening technologically in China.

Of course, there are exceptions. Today’s economic section of *faz* reports that China has almost caught up with Nvidia in the software sector. Even just a short time ago, it was being said that China lagged months, even years, behind Nvidia and major U.S. tech companies in the field of AI software. Today’s *Faz* notes that the two are now very close and, above all, emphasizes that China’s strategy is to make everything open-source. This means it’s incredibly cheap and accessible to everyone. Consequently, *Faz* describes this, so to speak, as massive competition: The Germans will join this competition too; naturally, they’ll gravitate toward what’s cheaper, won’t they?

At the investment forum that began today (October 19) in Berlin, the Chancellor is expected to meet with Nvidia CEO Jensen Huang. In an interview he gave to the Bild newspaper in London just before heading to Berlin, he said it broke his heart to see how far behind Germany has fallen in the technology sector. According to him, Germany (after all, they’re always polite) has very talented people, but now they really need to get down to business.

To be honest, I was in China merely as a sort of political tourist, but when I read about what’s been happening in Germany, I learned this: an economic stagnation that’s been ongoing since 2019. We’ve been in a recession since 2019, and wages have been affected as well—which, of course, is a major source of discontent among the public. This is precisely the ground on which the AfD has actually grown.

The issue isn’t just peace with Russia; first and foremost, of course, it’s the loss of industry and blue-collar jobs. We’re talking about hundreds of thousands of jobs; in the automotive electronics sector alone, 10,000 jobs are being lost every month right now. The problem is that there has been a decline in investment. Foreign investment in Germany has not yet returned to 2019 levels.

That is precisely why we are organizing an investment summit like the one taking place here today. When I returned from China as a political tourist, I said, “One gets the impression—perhaps a bit exaggerated and not entirely accurate—that Germany resembles an industrial museum compared to China and what is on display there.”

This is a clear strategy, and the Federal Republic must confront it: I believe it is precisely this situation—this weakness and decline—that is the reason we are holding an investment conference here today. In other words, the aggressiveness in politics stems in part from this weakness. As we can see, we are losing ground, and that is a problem.

In France and other European countries, many groups—especially young people—are taking to the streets, but there’s no similar trend in Germany. For example, if we compare the number of participants at the peace rally we witnessed in Berlin three years ago with those at this year’s events, there’s a clear drop in attendance. What do you make of that?

That’s true. However, there has also been a “School Strike” ongoing in Germany for over a year now. In these protests, young people are mounting significant resistance against mandatory military service. Even though there isn’t the same level of street activism as in France, the School Strikes appear to be quite significant for a country like Germany.


¹ Roderich Kiesewetter: A CDU member of parliament and the party’s foreign policy spokesperson. He is known for his hardline stance toward Russia. Claudia Major: A German expert on security and defense policy born in East Berlin. While she argues that striking Russia’s interior regions is legitimate, her recent meeting with Chechen separatists also made headlines in Germany. (Editor’s note)

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Interview

Daniel Davis warns US strategy fails against Iranian defense grid

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Retired US Army Lieutenant Colonel and military analyst Daniel Davis discussed the US military operation against Iran, decision-making mechanisms in Washington, US-Israel relations, transformations in modern warfare doctrine, and the global balance of power in an interview with Harici Media.

Answering questions of Harici Editor-in-Chief Tunç Akkoç regarding the Iran war, retired Lieutenant Colonel Daniel Davis stated that the US administration lacks an achievable military strategy on the ground. Davis said: “I would say the US has a desire, not a strategy. It wants to subjugate the Iranian side, corner them, seize control of the Strait of Hormuz, prove they pose no threat to anyone in the region, and ensure they never possess nuclear weapons. That is our desire. But there is no strategy to achieve any of these goals.”

Drawing on his past military experience, Davis detailed the geographical and technical challenges on the ground: “As a soldier with direct combat experience, having gained combat experience in some of these mountains between Afghanistan and Pakistan, for example, I know that many of the mountains inside Iran belong to the same mountain category. I knew what a difficult military task it would be to conquer a country as large as most of Western Europe, where such mountain ranges cover the entire western front. Therefore, I knew you could do nothing on the ground. However, I also knew that you could not subjugate a country with this kind of defense capacity and of this nature through air power alone.”

Pointing out that Iran’s defense infrastructure spans many years, Davis continued: “You cannot do this, especially when they have anticipated this for twenty years and made all kinds of preparations by constructing underground caves, production facilities, and storage facilities, and developing production capabilities for their unmanned aerial vehicles and missiles. There is no way you can defeat them. Because such facilities were designed not only to withstand all our strike missiles, such as Tomahawk, Jasmine cruise missiles, PSM, or ATAC, but also to survive. Most are capable of surviving nuclear explosions as well. I have been inside some of these here in the US. I have been in some physically located beneath a mountain. I know they were specifically designed when constructed to withstand the largest nuclear weapons the Soviet Union might possess. The ones there are of the same kind. If you know before embarking on an act of starting a war that the enemy is this large, possesses these types of defenses, and everyone knows these are resistant to our non-nuclear conventional munitions, why would you start a war to force them into something you clearly cannot achieve?”

Addressing the assumptions behind the war decision, Davis said: “I think this is a fantasy stoked by Benjamin Netanyahu. It was said, ‘If we assassinate their leaders, the same thing will happen as happened to Maduro in Venezuela. You went there, captured him, and disabled him; when you did that, you took control of the entire government, they basically handed the country over to you, and the same will happen here.’ Anyone who thinks Venezuela is like Iran has paid attention to nothing. The culture, history, religion, experiences, and everything that has transpired over the last 47 years are radically different from those in Venezuela, and you do not have an insider to facilitate the process as we had in Venezuela. But President Trump appears to have thought this way.”

“When he started the war on February 28, he sealed our fate; we lost this war”

Pointing to inconsistencies in US President Donald Trump’s decisions and the trajectory of the operation, Davis stated: “This situation is proof that he is stuck. Because, in my view, when he started the war on February 28, he sealed our fate. We lost this war. Even if it is ongoing right now, there is no logical way for us to win it. Because we cannot eliminate the trump card held by the Iranian side.”

Stating that military pressure mechanisms are insufficient, Davis explained: “We still have our missiles, aircraft, aircraft carriers, and all such elements. That is why it appears feasible. It is thought, ‘Maybe if we make a good enough deal, or put enough pressure on them, or impose a blockade and leave the public in a dire enough position to change the government’s mind.’ This is a fantasy. This is the only thing President Trump has. Because if he were acting based solely on military reality, strategic reality, and cultural and religious reality, he would know this was an unwise move, but he does not know.”

Describing Trump’s negotiation approach and the breakdown of the reached agreement, Davis used the following expressions: “He is a transactional individual who wants relationships resolved overnight. For example, during the memorandum of understanding period, this duration was to be 60 days. After starting the war, no achievable military objectives remained. Whatever your desires were, you can no longer reach them because you have confronted reality. Now he is trying to find an exit route, but even within this understanding, he cannot arrive at a rational and consistent perspective. Any rational person would think that when the memorandum of understanding was signed on June 17, it provided him with an exit route. You implement the terms of this memorandum, the crisis is resolved, the dual blockade is lifted, and the Strait of Hormuz could reopen.”

Addressing the clauses of the agreement text and subsequent developments, Davis said: “The terms Trump signed stated that Iran had administrative control of the Strait of Hormuz but could not demand any transit fees for 60 days. Iran accepted this, but accepted only one condition: the ‘for 60 days only’ stipulation. Subsequently, they publicly announced that they would collect fees later, but not during these 60 days. The US was not mentioned in the text in any way. We had no say. The authority to decide how operations would run was left to Iran together with Oman. We gave them 30 of the 60 days to prepare their plan for this. But after four or five days passed, the US suddenly declared a new southern corridor together with Oman.”

Detailing the process of reversing the decision, Davis noted: “While a step to reopen the strait had been agreed upon, traffic had risen to approximately one-third of pre-war levels, and many shipments had passed directly on the first day, Trump personally turned back this development toward finding a reasonable exit route from the unfolding disaster. According to reports from some sources in Washington, he came under intense pressure from pro-war figures in his inner circle and those on the Israeli side. He backed down under this pressure and modified the terms by inserting himself into the fifth paragraph. He never made Israel implement the first paragraph, which covered Lebanon and envisioned a ceasefire on all fronts. We did not even give them 30 days; we intervened before five days had passed. Trump has a goal, fails to reach it, puts forward another condition, and then withdraws that as well. He is very easily manipulated; he reaches a decision, then someone speaks with him, and he changes his mind.”

Recalling that a similar situation occurred in relations with Saudi Arabia, Davis said: “He said he made a great deal with Saudi Arabia, and the next day he changed the condition by saying, ‘as long as they sign the Abraham Accords.’ Saudi Arabia, on the other hand, announced that this was not part of the agreement and had never been discussed. This situation shows that President Trump constantly makes concessions when pressured. On this basis, how can any agreement be reached with the US? This situation means that no military or diplomatic exit point remains because he does not permit it.”

“Control is no longer an economic matter; it is a national security imperative”

In response to a question about whether a mutual exit opportunity remains from the current impasse, Davis said: “We had the memorandum of understanding; we had secured this agreement. However, President Trump and his Secretary, Scott Bessent, said, ‘as long as it is a deal we like, we want a new deal.’ You already had a deal; what deal are you talking about now? Why would the Iranian side negotiate a new deal that differs from an agreement made two months ago? This is completely illogical. The Iranian side holds military superiority through its missile cities and half a dozen alternative methods to control the strait. As their official authorities stated on social media, control of the strait is no longer merely an economic matter; it is a national security imperative because it is the only tool with which they can balance their American adversary, who is far stronger militarily.”

Evaluating the impact of the oil crisis, Davis stated: “Strategic Petroleum Reserves are declining. This situation has prevented a crisis so far, but it cannot cover products like jet fuel, diesel, and fertilizer. If it continues this way and the problem is postponed, the reserves will be depleted one day, and economic activity cannot be sustained without oil. Pressure is on President Trump, and the Iranian side is aware of this. They know the blockade will harm them, but they have calculated that they can endure much longer and deeper pain than our side. This is an existential matter; they know that if they surrender their only trump card to an unpredictable president, they will be attacked again later.”

“Reflexive support for Israel in society has been broken”

Touching upon relations between the US and Israel, Davis said a clear divergence has begun in American society. Davis noted: “In the past, across all segments of society and all generations, it was reflexively said, ‘Of course we are pro-Israel, they are our democratic ally.’ This situation continued until the Gaza process following October 7. Israel was attacked on October 7, and no one found it strange that it responded. However, what happened afterward created problems. Israel used this opportunity to destroy the Gaza Strip, increase pressure in the West Bank, bring in new settlers, and discuss annexation.”

Describing the rift between political elites and the public, Davis explained: “There is a major divide in America. Elites are unaffected by genocide or the killing of women and children in the West Bank and Gaza; they close their eyes, arguing that Israel is an ally. However, the eyes of the American public are not closed. They see human suffering on social media and do not carry the memorized assumptions of the past. These elites are not merely bought with money; for decades, they genuinely believed that our interests and Israel’s interests were one and the same. In their minds, saying something negative about Israel is equivalent to saying something negative about the US. Younger generations in particular, and a growing portion of all generations, recognize that our interests are not the same.”

Drawing attention to the cost of the war to the US, Davis noted: “We elected President Trump to apply the America First principle, not Israel first, Britain first, or Germany first. There is anger against those who sacrificed America’s needs by entering the war. According to figures reflected in the public domain, at least 600 Americans were injured; according to what I have heard, this number is over a thousand. Money has been spent, our facilities have been damaged, and our aircraft destroyed; around 40 to 50 of our aircraft were damaged or destroyed. Our bases were ruined and will likely never be rebuilt. We have also lost our geopolitical influence in the region. I doubt that relations with Saudi Arabia, Qatar, the United Arab Emirates, and Kuwait can return to their former state. Because the foundational assumption of this entire structure was that we could protect them; we could not even protect ourselves.”

“We are still living as if it were 1992”

Evaluating the shift in military technology, Davis stated that the US has lost its traditional military superiority. Davis said: “A large number of people in America are still living as if it were 1992. The Soviet Union had just collapsed, China was a peasant army developing militarily and economically, and we held absolute dominance following Operation Desert Storm. We are no longer in 1992. The Russians corrected their mistakes after the initial phase of the Ukraine war in 2022; they became a much stronger land force, missile, and drone force. China, meanwhile, reached immense technological and industrial capacity.”

Explaining the current situation through the example of Iran, Davis said: “We thought we could crush Iran like a fly, but we could not do so due to their missile cities and technologies. If we cannot eliminate Iran, what can we do against China or Russia, which possess power far beyond that? We have fallen behind in categories such as hypersonic missiles and the new Oreshnik missile. When I saw the Bayraktar TB2 vehicles used by the Turks in the 2020 Armenia-Azerbaijan war, as someone with an armored unit background, I understood that the nature of war had changed. The US, meanwhile, talks about producing 300,000 drones by 2030. In an environment where tactics change every six weeks on the Ukrainian and Russian battlefield, our systems remain extremely slow. Ukrainian soldiers mocked the tank platoon manual published last year, saying that with these methods, one could not survive on the battlefield for even ten minutes.”

“The idea of containing China is a fantasy”

Criticizing the US military approach toward China, Davis evaluated: “There is talk of a strategy to militarily contain China. Will you prevent their activities within their own borders, their technological developments, or the expansion of their military? You cannot stop a country with a strong economy and a massive population. We can achieve no result other than entering a war with China in the Asia-Pacific region and losing it. China’s shipbuilding capacity is approximately 200 times ours; they are vastly superior to us in artillery ammunition, aircraft, and missile production. Our methods left over from the Cold War no longer work. What we need to do is keep our own defense strong and ensure deterrence, not spend billions of dollars in the region to establish forward bases that will be hit.”

Touching upon the potential for diplomatic relations between the two countries, Davis said: “I think President Trump personally knows that going to war with China is unwise. However, the Pentagon and the military-industrial complex view China as a constant enemy, demanding more budget, more bases, and more missiles every year. No one considers diplomacy. Yet we can develop peaceful, stable relations with China based on mutual benefit, even if not friendly. Regarding Taiwan as well, I think leaders realize after seeing what occurred in the Middle East and Ukraine that help will not come, and they will adopt a more cooperative stance by withdrawing independence rhetoric. China does not want to start a war; it desires a model similar to Hong Kong. Even if a conflict breaks out in the worst-case scenario, it is between China and Taiwan; the US should not choose to join the war and lose.”

Emphasizing that the arms lobby inside the US maintains its power, Davis stated: “The military-industrial complex remains extremely powerful and holds all levers of power. They maintain control through members of Congress, the media, and public relations networks; I see no sign that this structure is weakening.”

“They did not want someone who would tell the truth about Israel”

Providing information about the process surrounding the cancellation of his appointment within the Office of the Director of National Intelligence, Davis recounted the issue in these words: “When Tulsi Gabbard came to me and asked me to become the number three executive in the Office of the Director of National Intelligence, I said I would be honored to serve my country. However, I stated that I had openly opposed the policies pursued by Israel since October 7 and the war in Gaza and Lebanon, and that these views might not be welcomed within the administration. She thought my accurate past analyses would compensate for this situation. One of my duties was to present the daily intelligence briefing to the president.”

Describing the stage at which his candidacy was withdrawn, Davis said: “Articles against me appeared in the Israeli press and American media. I never hid my views; I said Benjamin Netanyahu’s policies were harming Israel and dragging us down as well. I advocate the ‘America First’ principle, but there are many people within the administration who say ‘Israel First’ and have zero tolerance for any criticism directed at Netanyahu. They did not want someone who would tell the truth regarding Israel. The process expanded following posts by figures like Laura Loomer. On the day I passed the CIA polygraph test and was set to begin duty, Susie Wiles was informed that I had put the president in a difficult position regarding the Russia-Ukraine war. While Trump was saying there would be a ceasefire, I stated on my program that Vladimir Putin would not agree to a ceasefire given his current advantage. Although I stated that I supported a ceasefire, this was made a pretext, and my appointment offer was withdrawn,” completing the interview.

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Interview

Quincy Institute expert says the United States had no plan B

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In an interview with Harici Media, Trita Parsi, Executive Vice President of the Quincy Institute for Responsible Statecraft, stated that global unipolarity is coming to an end, transitioning into an increasingly multipolar order.

Parsi addressed shifting global power dynamics, US foreign policy toward China, structural domestic pressures in Washington, and the strategic miscalculations surrounding the ongoing US conflict with Iran.

Parsi noted that while many analysts declare the arrival of a post-American world, the transition will not be an abrupt moment. Instead, he described a phased emergence where it becomes clear that no single superpower possesses deterministic influence over global affairs.

Parsi observed that many governments have been slow to internalize this reality or adjust their policies accordingly, creating the superficial illusion that a unipolar system remains intact. “Whether it’s fully multipolar or other configurations, we can be debated. What I think is clear is that the unipolarity is coming to an end,” Parsi said.

“Unipolarity is an aberration, an abnormality”

Regarding Washington’s readiness for a multipolar world, Parsi asserted that the US political establishment remains unprepared and has historically denied the shift. He recalled that during the first two years of the Biden administration, describing the world as multipolar was dismissed as a Russian propaganda narrative.

However, Parsi highlighted a shift under US Secretary of State Marco Rubio, who stated in a February 2025 interview that unipolarity was an anomaly. Parsi explained, “He actually went further. He said that unipolarity is an aberration, an abnormality, a historical accident. If you believe that it’s a historical accident, if you believe that it’s an abnormality, then I think it comes from that, that any effort to try to restore unipolarity should be rejected.”

Addressing US policy toward China, Parsi noted that despite the summit between US President Donald Trump and Chinese President Xi Jinping in Beijing, there is no structural indication that Washington views Beijing as a potential partner rather than a rival.

He contrasted the Biden administration’s aggressive posture—which assumed an existential struggle for dominance—with the Trump administration’s softer but poorly planned approach.

Parsi argued that neither power can decisively defeat the other, making mutual coexistence and co-governance essential to avoid a catastrophic zero-sum confrontation.

“An effort to indefinitely contain China is a recipe for disaster”

Parsi rejected the feasibility of military containment against Beijing, warning of severe consequences. “I think an effort to indefinitely contain China is a recipe that will bring about great power competition and a confrontation between the US and China that is going to be completely disastrous,” Parsi stated.

He observed that despite significant US strategic errors, such as the conflict with Iran, China has exercised restraint rather than exploiting American vulnerabilities. Parsi argued that if Beijing were dead-set on aggressive power competition, it would have acted differently.

Economically, Parsi argued that containing China through tariffs or Soviet-era containment models is a losing proposition.

Unlike the Soviet Union, which maintained an isolated economic model, China is deeply integrated into global trade and serves as the primary trading partner for most nations, including those in Latin America such as Brazil. Parsi emphasized that economic containment is unviable against a state with such vast global integration.

“This confrontation will be the deadliest conflict in human history”

Evaluating the risk of the “Thucydides Trap,” Parsi criticized the Washington foreign policy establishment for its structural inability to envision peaceful coexistence.

He noted that the political culture in Washington is built around zero-sum competition and conflict rather than diplomatic management.

Parsi emphasized that while historical precedents exist, humanity is not bound to repeat them, particularly when the stakes involve existential risks. Parsi warned that an unmanaged confrontation between the US and China “would be the deadliest conflict in human history if it is allowed to happen,” threatening human survival itself.

Parsi attributed this narrow strategic focus to structural domestic forces, particularly the US military-industrial complex and influential lobbying groups. Working alongside the grand strategy of liberal hegemony, these forces require US military dominance worldwide, especially in Asia.

Parsi explained that institutional inertia makes it extraordinarily difficult for Washington to alter its strategic trajectory.

“The US had an unrealistic plan A and no plan B”

Turning to the conflict with Iran, Parsi asserted that Washington lacks a coherent strategy, having relied on an unrealistic plan that failed within the first three days.

He stated that the US expected a swift regime collapse or surrender within four days, but faced horizontal escalation from Iran, including threats to the Strait of Hormuz and regional strikes.

“The United States had a very unrealistic plan A and no plan B, and it’s been stuck in that situation ever since,” Parsi said, adding that Washington has been improvising and executing tactical operations without strategic success.

Parsi attributed President Trump’s shifting decisions on Iran to this absence of strategy and his personal demand for immediate results. When military action failed to yield swift progress, Trump turned to diplomacy, only to lose patience within three weeks and resume military strikes. Parsi questioned whether the global community could afford a superpower acting in such an erratic manner.

“Without Israel’s push, there would not have been a war with Iran”

Addressing Israel’s role, Parsi stated that Israeli pressure was a decisive factor in driving US policy toward confrontation with Iran.

“Without Israel’s push, there would not have been a war with Iran. Without Trump agreeing to the Israelis, there would not have been a war with Iran. Both of them were needed,” Parsi remarked, noting that Israeli efforts since 1995 elevated Iran into a primary US national security concern disproportionate to actual US interests in the region.

Parsi identified a growing divergence between US and Israeli interests in the Middle East. While the US benefits from reducing its regional military footprint of 50,000 troops, Israel requires continuous US military presence and intervention to maintain a favorable regional balance of power.

Parsi noted that this divergence has created a visible rift between Washington and Tel Aviv following the poor execution of the war and subsequent diplomatic maneuvers.

“Israel’s standing amongst the American public has plummeted”

Parsi highlighted a major shift in American public opinion regarding Israel, noting that sympathy for Palestinians has surpassed sympathy for Israel across almost every demographic category, except Republicans over the age of 65.

He attributed this decline directly to Israel’s military actions in Gaza and its perceived role in drawing the US into a disastrous war with Iran, which mirrored earlier public grievances over the Iraq War.

Regarding a resolution to the conflict, Parsi stated that a dignified exit for both the US and Iran remains possible, though the window is narrowing due to personal hostility and political miscalculations.

Finally, addressing Trump’s political image, Parsi clarified that Trump was never strictly anti-war, but rather anti-risk.

He explained that Trump entered the conflict because Israeli officials convinced him that war with Iran posed little risk and would be concluded within 100 hours. Parsi concluded that had Trump not been misled into believing the operation would be a swift success, he would not have initiated it.

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