INVISIBLE GLOBAL REVOLUTION

At the time when the world searches feverishly for the means to cope with the economic and social havoc caused by the Covid-19 quarantine, potentially more important but barely noticed dynamic processes have been started around the globe. While the germs of these processes were seeded when the powers fought valiantly another manmade calamity – the Great Recession 2008, it took almost 12 years for the period of their germination to be completed.

In the retrospect, what happened in 2008 was an instinctive reaction of the global capitalist system to adapt to emerging economic realities that did not fit the political order of the day. But the ‘Old Guard’– fearful of potentially unfavorable to them repercussions provoked by the redistribution of wealth worldwide – stupefied the instinct by issuing unlimited amount of what still serve as the global reserve currencies, that is US dollars, Euros, Yens, etc. Unfortunately for the administrators of monetary drug, the magic wand of ‘monetary easing’ has a limited time span and when it fails – now or later – the last bastion of l'Ancien Régime will hang out the white flag and its remaining defenders will learn the meaning of Latin phrase Vae victis: woe to the vanquished.

The daily news provides ample evidence to that conclusion. For easy reference, let classify them in three groups: political, economic and social.

On the political front, the news leads to conclude that:

• The established international structures have malfunctioned because none of them – be it UN, G7, EU, OECD, etc. – managed to raise its status as a forum to tackle global issues, multilateral action for which is glaring. In fact, while private citizens embrace the reality of ‘social distancing’ and restrict their contacts within their surroundings, the national governments distance themselves as well and are less willing to put their fate in the wrong (global) hands.
• Western concept of solidarity has cracked further. In time when the access to relevant medical supplies became urgent, the countries with their surplus have pretended not to hear the distress calls from their less fortunate partners with Covid-19 issues. Figuratively speaking, such indifference may be interpreted as the signal used in the old French navy “sauve qui peut” (save yourself if you can) that was used to indicate that a ship cannot be saved through collective efforts and must be abandoned.
• Many national governmental bodies have shown their political impotence. Being left without the staff under the quarantine rules, they failed in the democratic countries to instill the sense of security raising doubts within the population in their ability to act. Observing on TV their leaders “working from home” or, worse, staying sick in bed – as, for example, Canada’s Justin Trudeau or UK’s Boris Johnson – makes the watchers question whether they can rely on such authority in the first place. Several episodes of medical and support staff walkout from nursing homes in Spain and Canada indicate that public faith in the integrity of social system approaches the point of no return.
• Traditional mass media lose their lead in forming the policy agendas. Increased social restrictions have interrupted the normal channels of transmitting information from closed sources to mass media. In the atmosphere of evaporating public trust in traditional sources of data and a greater importance of social media, single bloggers become as potent political agenda setters as professional journalists are.

From the economic point of view, it is hard to ignore the following points:

• Western governments disregard for budgetary discipline is again on the rise. Last year, the US government suspended the requirement to observe national debt ceiling for two more years. Last March the Canadian government failed to release its annual budget as it does annually and which also serves as a vote of confidence in the Parliament. For the time being the EU is still resisting calls to implement extraordinary borrowing measures that would cover the support programs of some ‘southern’ members of the EU – so-called ‘Coronabonds’ – but as the economic situation deteriorates because of nationwide lockouts, the sources of funding for the affected industries need to be found anyway.
• The central banks of developed countries have introduced significantly stronger financial measures than in 2008-9 to bring about the stability of existing economic system. Yet, this supposedly potent counterattack in the defense of ‘old order’ has a risk to become suicidal as it may prompt the collapse of social welfare systems of the participating countries.
• Recent jerky movements of stock indices, which go out of line with the macroeconomic developments potentially provoked by the interference of large institutional players – such as central banks or treasuries – that intervene to support national ‘economic flagships,’ reveal that the news of additional financial support do not convince other market players.
• The existing laissez faire trade system is under heavy strain that may tear it apart. A supposedly minor disagreement between Saudi Arabia and Russia on the crude oil quotas has rapidly degenerated into a major issue that hit hard the interests of main powers. The national governments of non-OPEC+ oil producers – notably, Mexico and Brazil – had to join unwillingly the discussions on supply cuts whereas other countries, such as USA and Canada, tacitly support what amounts to forming a new cartel agreement. The latter development contradicts their self-professed principles of free market exposing their moral corruption at least.
• Gold price is on the rise indicating another bout of public doubt in fiat currencies. What is worse, the stock of physical gold appears to be dwindling when such online retailers like Kitco claim to be “out of stock” or offering “very low quantity of product.”

Finally, the quarantine has further stressed the social fabric that has already been under strain for some time because:

• Lavish wage subsidy programs for displaced workers announced by governments undermine the importance of traditional trade unions, churches and other social formations as vehicles, using which professional organizations and communities formulate and advance their social agendas. Why do people need intermediaries if their needs are recognized directly by government?
• Strict quarantine rules give additional impetus to the breakdown of family ties that have been already weakened in the Western society. Now, teleconferencing is promoted as an alternative to family reunions, weddings, birthday parties and even funerals that may become entrenched as a new cultural habit.
• Increasing atomization of the society coincides with the opposite process of shrinking private space. It has become technically feasible to use personal communication devices to monitor the movements of their owners or to control their actions. Given that in some countries face recognition tools are already employed to detect transgressors of the quarantine rules, the users of these devices are at risk of being followed relentlessly in real time if such measures become legal under emergency laws.

Taken together these observations indicate that the role of government as a guarantor of social security is expected to grow in importance. What is more startling – at least, for the English-speaking countries – is the trend towards a new function of government as an economic planner. The first role seems to have been already accepted in the US – a stalwart supporter of personal liberty – due to the ongoing erosion of community bonds further accelerated by the current rules of ‘social distancing.’  The second trend is somewhat novel given the earlier reluctance of US authorities to interfere in supposedly private economic affairs. However, the vitality of private enterprises is contingent on predictable future earnings that become blurred without the price stability that, in its turn, can be achieved alongside with lax monetary policy only if adequate sinks are available to neutralize the impact of excessive money supply on prices.

At the moment such sinks are found in various national ‘wealth funds’ and private savings external to the western countries, but whether they have extra capacity to accommodate the next, even more generous, round of monetary easing is still unclear. Another channel of money neutralization can be found in the government speculative buying of the stock when it is cheap and selling dearly when the private investors stop panicking. Such so-called ‘reprivatization’ after the emergency measures are lifted – like it happened with the GM stock 10 years ago – is feasible, but if the investors sense the trick this time, they may not return to the market. A broader doubt is that if the US authorities failed to tackle the public finance issues before, finding the working remedy now presents an even more insurmountable task.

Other observations concerning specific developments expected in the near future are the following.

First, as the cost of maintaining horizontally structured organizations grows due to the logistics problems, such business practices as outsourcing will decline. On the contrary, the cost of maintaining vertically integrated holdings, especially if they are supported by the government, will become relatively smaller. In adverse environment a new normal for the organization is to be organized as a walled around medieval town rather than an open-space horizontal network.

Second, the stock of previously accumulated physical resources will be eventually depleted because of the current bout of financial generosity on the part of national governments. In the aftermath, those nations that assure the continuous inflow of essential products will gain in prominence at the expense of countries that previously specialized in trade of semi-finished goods. The same argument can be applied to domestic organizations whose absence from the market – due to the quarantine measures – will expose them to be irrelevant to the social welfare.

Third, the ensuing simplification of organizational structures makes economies less productive, at least in the short term until new trade patterns emerge. As resources become scarcer, social welfare expenses must be reduced resulting in a greater income inequality that will prompt societies to search for new forms of cooperative agreements.

Fourth, the private space will be further eroded. Asian-style societies with their loyalty and respect for hierarchy will find themselves more suitable for a new normal but modern libertarians will be devoid of means to continue practicing their beliefs. The living on personal savings will become unrealistic as the precarious state of existing monetary systems, built on fiat money, will reduce the importance of money as delayed consumption instruments. An option of immigrating to new lands, more favorable to libertarianism, is similarly unfeasible because the essentially completed globalization has left no refuge for escapists.

In short, the steady state of global economic system that persisted in 2009-2019 is perturbed one time more and significant changes are underway. They will benefit the countries and organizations that are more accustomed to paternalistic modes of governance, more self-sufficient in resources and less dependent on international exchange as well as where popular cultures are receptive to hierarchical structures and do not shy away from the public way of life.

What is next in the battle for Ukraine?

I have not updated this site since July for the following reason: the events developed as predicted making unnecessary a new post. Ukraine tried to crush the rebellious Donbass, but as soon as its army saw glimpses of victory, the third force appeared and preserved the status quo. Then, the Ukrainian power went broke and the Donbass units were, in their turn, on the verge of decimating their opponent's demoralized troops. Again, the third force intervened and denied the Donbass its victory.

This sequence of events was still supportive of my previous argument that Mr. Putin was ambivalent regarding what side in the conflict to take. On one hand, he could not ignore the anti-Russian rhetoric emanating from what was once a key bastion of Russian Empire (the east and south of Ukraine called, sometimes, Novorossia). As the president of Russia, Mr. Putin was obliged to show who calls the shots in the area. On the other hand, he is more comfortable cutting backroom deals with oligarchs - be they of Russian or Ukrainian vintage - or fighting for the "just" place in the Washington-led international pecking order rather than charging bravely against the "enemies of Mother Russia" on the fields of Donbass. As a result, Mr. Putin vacillated between supporting this or other side and his non-committal policy culminated in the Minsk accords that froze the Ukrainian divide along the line that did not satisfy either party (Ukraine and Donbass) of the conflict. It was expected that the truce did not last long and that Donbass was more likely to attack Ukraine to recapture the cities it lost during summer 2014.

The months of October and November have passed, but the envisioned attack has not materialized. The truce took an excessively long pause to stay a part of the previous plan that envisioned the gradual Kyiv's submission to the new reality. In fact, the Ukrainian president Mr. Poroshenko appeared to be drifting towards a backstage deal with Moscow, but such accord was not reached.

Since the previous analysis did not predict this failure, it needs to be updated using new information. It becomes valid again, if another conflict - between Russia and the USA - takes prevalence over the original conflict between Russia and EU over Ukraine. In that case, the battlefield expands. Ukrainian theater of operations becomes subsidiary and, possibly, a trap laid for America in the case that the USA supports militarily its weakened ally in Kyiv.

According to this logic, the main action from now on will take place at another theater. Possibly, it will be Europe. Ms. Merkel has become unusually politically pro-active (and anti-Russian) at the expense of German companies wanting to continue 'business as usual' with Russia. Her activism may be a sign that Germany has been granted the 'go ahead' permission to reassert its power in Europe and in Eastern Europe (including Ukraine), in particular. In that case, the ball is on the German side.

Does the US policy benefit the Ukrainian rebels?

It might sound provocative but the answer to this question is 'yes'. To see the logic of the argument one needs to know the superposition  principle from physics and the concept of non-linear war introduced by writer Nathan Dubovitsky, aka Vladislav Surkov who is the most intellectual adviser to Russian President Putin.

The first principle states that the end result of an applied force may be very different from its intended consequence because it is the combined effect of ALL forces that matters. The second idea claims that the modern war is so complicated that each participant is better off pursuing his or her objectives independently from anybody rather than adhering to a stable coalition of allies. In short, the non-linear war is Hobbesian at its finest where friends can betray and enemies can join forces in an instant. Let apply the two concepts to the Ukrainian case.

As I have mentioned earlier (see Who controls the eastern Ukrainian separatists?), the Kremlin is not in hurry to help the rebels because it does not exercise full control over them. For example, while the Ukrainian military repeats that their opponents are extremely well equipped; Igor Strelkov, the field commander in Donetsk, complains about being overwhelmingly outgunned by his enemies. The two statements seem to contradict one another but they both can be true.

The front line reports constantly mention the mysterious "third force" that helps selectively the separatists but only at the time and in the place that it considers to be appropriate. This force is commonly associated with Russian special units but the reality can be more complicated. The "third force" may in itself be a complex combination of several independent forces applied with different objectives - exactly in compliance with the concept of non-linear war. Soldiers on the ground from the Ukrainian side suspect their commanders to share information about their movements with the enemy. The rebels report that the Ukrainian National Guard units fight with the Ukrainian Army while their opponents notice clashes among the rebel formations. Who is then fighting whom, under what circumstances and for which objectives?

To answer this question, one needs to establish a frame of reference to separate the dimension of forces. In my opinion, the most distinct interests lie within a two-coordinate frame formed by the idea of socialism/nationalism on one axis versus the idea of hierarchy/globalism measured on the other axis. Along the first line the Russian nationalists fight their Ukrainian counterparts and the leftists advance their opposing visions of 'social justice'. Along the second line the Russian, EU and US elites define their rankings within the global hierarchy of power. Then, it becomes visible that the Washington's insistence on downgrading the ranking of Russian elite (for their "meddling in the Ukrainian affairs") along one axis works towards raising the Ukrainian rebels' chances to succeed along the other axis.

The problem is that up to now Mr. Putin has worked against the rebels due to his deep-seated their distrust. Being a functionary who has climbed the career ladder under the condition of unswayed loyalty, he is psychologically unprepared to ally with charismatic 'grassroots' politicians. For him the leaders of rebellion are pesky upstarts who need to be constantly reminded of who is their real boss. This personal trait explains why the trailblazers who risked the most in the beginning (Messrs. Pushilin, Khodakovsky, possibly Boroday) are gradually replaced with retired security personnel like Mr. Antyufeev and why such charismatic field commanders as Messrs. Strelkov and Mozgovoy are allowed to lose in Slavyansk and Severodonetsk.

If not for the US intervention, the Ukrainian drama would most likely result in modest reshuffling of relative weights of individual members of Russo-Ukrainian elite. Roughly speaking, certain assets in Ukraine would change the ownership to better reflect the new power disposition after February 2014 and, possibly, Russia and Ukraine would agree on the joint management of Crimea.

The recent events, such as the Malasyan plane accident and the ruling of Hague Court on the expropriation of Yukos, have put significant downward pressure on the Russian elite. Figuratively speaking, Mr. Putin and his friends have been given a 'death card' regarding their ranking in the global hierarchy of elites. Being virtual outcasts, they cannot anymore cut a deal with their Ukrainian opponents who - in their wildest dreams - have already imagined themselves being promoted at the expense of defeated Russians. But there is a glitch. Facing a powerful attack from the top of global wealth pyramid, Mr. Putin and his circle are obliged to seek help from the bottom that is to join forces with nationalistic (Mr. Strelkov) or socialistic (Mr. Mozgovoy) field commanders in eastern Ukraine.

Thus, the current US policy of punishing Mr. Putin and his inner circle objectively strengthens the position of Ukrainian rebels.

News from the oligarchic front in Ukraine

Analytically, there is insufficient information to conclude what the latest round of oligarchic squabbles in Ukraine leads to. Nevertheless, new facts, taken together, shed light on the emerging political disposition in this country. Potentially, the centrifugal force that initiated in Kiev last February has acquired sufficient strength to break the state forever. But let me mention the context before proceeding with the facts.

As I have mentioned before (see Creeping decentralization of Ukraine), Dnipropetrovsk governor Ihor Kolomoyskyi is a maverick oligarch who has broken the rules of the game played by the Ancien Régime in Kyiv. Apparently, his refusal to follow the rules - which can be a witty move as this chess game develops - has worried President Poroshenko (and supporting him oligarchs, most of all Dmitro Firtash and Rinat Akhmetov) so much that the latter may feel now that Mr. Kolomoyskyi is a greater threat to his group than the Donbass separatists. A few facts point in this direction.

July 8: the TV channel "Inter" broadcast a film that blamed Mr. Kolomoyskyi for, among his other sins, the creation of "private battalions." The channel belongs to Mr. Firtash who is currently on bail in Vienna waiting for his extradition, on the U.S. request, hearing to be completed. Other media attacks have been reported as well.

July 7: Mr. Kolomoyskyi proposed that the Ukrainian government "today is simply obliged to confiscate property ... of supporters of separatism (e.g.) ... UkrTeleCom ... (to form) a special company, in which shareholders are members of anti-terrorist operation, veterans, relatives of the victims. Why do some have to die for their country while the rich get richer?" UkrTeleCom is the owner of Ukrainian national telephone network and it belongs to Mr. Akhmetov.

July 6: Mr. Kolomoyskyi may visit Vienna (at least, some of his close affiliates were reported to be there), apparently, to meet Mr. Firtash. The reasons for such a meeting could be numerous: Mr. Kolomoyskyi purchased recently arrears from a bankrupt Ukrainian bank and came to discuss the terms of payment - in shares, if necessary - that Mr. Firtash owed. Apparently, with little success.

It should be added that the battalions funded by Mr. Kolomoyskyi were the prime force capturing Mariupol last month. This city is at the center of Mr. Akhmetov's business empire. The attack took place despite Mr. Akhmetov's plea to prevent military activity in the region.

Mr. Kolomoyskyi has pioneered the use of paramilitary formation to attain business means in Ukraine. Appealing to the confiscation of large property in favor of "veterans", he has made another step towards dismantling the "old" Ukraine.

P.S. July 11: The Ukrainian Ministry of Defense is reported to have rejected Mr. Kolomoisky's request to provide arms (e.g. automatic grenade launchers and machine guns) to his battalions. Minister Geletey recommends Mr. Kolomoisky to negotiate this issue personally with President Poroshenko (see Geletey refuses to transfer weapons to the volunteer battalions, in Russian)

P.S.S. July 11: A blogger reports that some Sergey Krasnovsky has come to the separatists. According to the report, he has claimed representing "a large businessman" who expects the political structure of Ukraine to be radically changed in 2-3 weeks. Mr. Krasnovsky has sought opinion on what structure the Donbass leaders would agree upon (see Benya prepares a coup d'état, in Russian)

The report refers, apparently, to Mr. Kolomoisky. Knowing that Mr. Kolomoisky is a seasoned corporate raider, I have mulled a wild idea that he might plan to split the region he controls (Dnipropetrovsk, Odessa, and Kharkiv) from the rest of Ukraine in the hope of signing a separate deal with Russian President Putin. The latest news is consistent with other information. First, rumors are that Mr. Kolomoisky's affiliates planned to meet with people linked to Mr. Putin in Kharkiv a few days ago but failed due to the change of leadership in Donetsk. Second, the interview given by Gennady Korban, the right-hand man of Mr. Kolomoisky, contains a paragraph of what the Kolomoisky's group considers to be the Putin's plan in Ukraine (see I do war and finance, in Russian.) Thus, the idea of Mr. Kolomoisky being a separatist may not be crazy after all.

Political activity and repression in Ukraine

Armed rebellion is a blunt instrument to resolve political differences within a nation but it becomes unavoidable when the opponents fail to resolve a conflict using non-violent methods of negotiation. Peaceful methods are preferable because they do not endanger the human life and do not destroy property and, hence, are less costly economically. Have they been fully employed to find a solution to the current problem with separatism in Ukraine?

To find answer to this question let consider the options. Negotiating through the elected representatives comes first to mind. The Verkhovna Rada (“Supreme Soviet” in Ukrainian) is the highest representative body in this country. It has seats for 450 deputies who were elected in 2012. Half of the deputies represent territories and the other half are appointed by the political parties that gain more than 5 percent of votes at the elections. Currently, 445 deputies have official mandates. Is their work sufficient to arrive at national consensus? The available evidence gives little hope for optimism.

Since February 2014 only about 300 deputies have registered for plenary sessions on average, which gives relatively low attendance rate of less than 70 percent. Participation is not uniformly distributed among delegates. The statistics reveals much higher abstention exactly for the representatives of eastern and southern regions such as Lugansk, Donetsk, Kharkiv, and Crimea: for example, the participation rate of Crimean delegates varies between 10 and 30 percent. The real participation rate may be even lower. The voting pattern for 10 deputies from Crimea that I have studied is odd, for example, the voting system may register a deputy being both “absent” and “present” within short periods of time and no obvious reason. A casual look on the topics to be voted does not show specific political preferences. Potentially, non-participating deputies are voted for by somebody else. Low participation rate implies that the regions at the center of conflict are not properly represented in Rada. As a result, the Rada discussions tend towards denying the problem of separatism.

An early parliamentary election could make debates less biased but the circumstances do not seem to be favorable. First, a significant part of deputies – mostly the high-ranking members of the Party of Regions – do not appear in Rada literally fearing for their lives. For example, maverick deputy Oleg Tsaryov had even to resettle his family to Donbass facing death threats. His home in Dnipropetrovsk region was burnt and his other property was seized by the structures affiliated with Dnipropetrovsk governor. How to assure the security of separatist delegates is a question for Kyiv that has no answer. Second, Kyiv does not control Crimea, Lugansk, and Donetsk and, hence, the local leaders should consent to participating in elections. They do not. Finally, rumors circulate that a coalition of opposition factions in Rada and the government have agreed a deal to avoid an early election. (They say that the opposition abstains from criticizing President Poroshenko as part of the deal.) Therefore, Rada is not a likely platform to search for reconciliation in Ukraine.

Participation in local politics such as demonstrations or can mitigate the excesses of armed conflicts. Unfortunately, this venue is shut on both sides. Two issues – nationalistic and pacifistic – are not publicly debatable anymore. After the events of May 2 in Odessa, pro-Russian activists find dangerous to organize public rallies on the territory controlled by Kyiv. Pro-Ukrainian protesters avoid appearing on the streets of rebellious cities. Pacifists end up increasingly in the same position. For example, the religious procession for peace that was planned in Kyiv on June 22 was cancelled as clashes with pro-Ukrainian nationalists became imminent. In general, public debates in Ukraine become dangerously polarized. Any topic becomes analyzed on the subject of who will benefit from its resolution – the proponents of united Ukraine or separatists.

The plurality of opinions appears to be still tolerated on economic topics. This tolerance allows the opponents in civil conflict to find the areas of agreement. For example, the proponents of united Ukraine and separatists are united in their hatred towards corrupt officials or wily oligarchs. But does such an agreement have a chance to succeed in the modern Ukraine? The ubiquity of bribing and the preponderance of back-room dealings within Ukrainian elite witness to the contrary.

The review of political options available to the residents of Ukraine shows that peaceful venues of conflict resolution are largely closed. The political discourse degenerates to the binary choice between “united Ukraine” and “secession”, to which other options are subordinated. Given that economic issues are still within the limits of public debate, there is weak chance that the Ukrainians can come to the agreement on how the country should be governed. Unfortunately, the official Kyiv does not recognize the problem within its ranks. In the absence of political change, the civil war in Ukraine remains the only effective method to win in the debate.

The Russian factor in Ukrainian affairs

Russian actors in Ukraine can be represented as a triad consisting of the government (the Kremlin), national elite, and active commoners. Their actions do not necessarily point in the same direction. Various political issues at home and actors’ competing interests abroad add to the confusion creating the impression that Russia does not really pursue a well-defined policy in Ukraine.

The position of rank-and-file activists is the most straightforward: it is nationalistic. They see the war across the border as a fight for the unity of their nation. The eastern Ukrainian rebels are viewed as “our guys” who fight against “them.” Who are “they” is unimportant but, curiously, common perceptions avoid ethnic connotation. Some think that “they” are “fascists” or direct descendants of the western Ukrainian division “Galichina” formed in 1943 to support the German army. Others believe that “they” are local “puppets” operating on behalf of their American masters. Very few are of opinion that their opponents are true Ukrainian patriots who work towards building a new nation-state: in general, non-rebelling residents of Ukraine are seen either as compromised by weird ethnic prejudices or as subordinate to foreign interests.

Short history of grassroots activism in Russia suggests that it is not be a serious factor in Ukraine. There are stories of volunteers and non-lethal aid that leaks in Ukraine but they make the impression of being only marginally important. Yet, the power of public opinion that is firmly in favor of supporting the pro-Russian rebels is not to be underestimated: it is the force that the Kremlin has to listen to.

The Kremlin is commonly considered to be the principal actor on this scene but its conduct is somewhat too contradictory to support the claim. Obviously, Putin has crossed his personal Rubicon when he sanctioned the annexation of Crimea in March 2014. Since then, he is obliged to stir troubles in Ukraine or to face retributions. However, the price of doing so is too high to believe in Putin’s enthusiasm. The Russian leader and his inner circle had comfortable living within the western-based financial system. If the collective West introduces sanctions what is perceived as Russia’s violation of established global conventions, that living would be imperiled. My interpretation of the time was that Putin had to annex the peninsula for the lack of better moves. After suppressing the pro-democratic movement of winter 2011-12, his power-base narrowed. Russian nationalists became the force to be reckoned with. Facing looming economic recession at home, Putin had to avoid the impression of losing in Ukraine for his political survival. Reestablishing formal control over a piece of “indigenous” Russian land, Putin hoped to please his key supporters. Besides, he faced another dilemma.

The Kremlin balancing between the nationalists who demanded the action and the West that insisted on preserving the post-war borders was further complicated with feeble but evident anti-oligarchic streak in the wave of protests in Kyiv. Annexing the Crimea, Russia effectively offered a lifeline to the Ukrainian oligarchy. Immediately, the Kyiv protesters switched attention from their campaign against corruption and nepotism – the two most detested features of Ukrainian oligarchic regime – to fighting the “enemy at the gate.” Thus, the Ukrainian oligarchs had the time to solidify their grip on power while the citizenry, under the banner of nationalism, rushed to form the territorial battalions of self-defense.

Across the border, the same deed spurred another wave of activism, this time from a nationalist part of the Russian elite. It should be noted that the so-called “green men” who supervised with arms the Crimean transition were volunteers sponsored by wealthy Russian businessmen like Konstantin Malofeev. After Crimea they moved to the eastern Ukraine (see From Crimea to Donbass) where local residents rose against the interim government in Kyiv seen in Donbass as nationalistic. While the resentment was local in nature, Russian volunteers with military background provided the very framework on the basis of which the local rebels have built their militia.

The flow of non-lethal supplies and funds from the same businessmen to purchase Ukrainian weaponry from the corrupt military followed but the numbers and effectiveness of weaponry that the rebel possess appear to exceed of what could be procured on the ground. Apparently, informal transfer of arms takes place on the Russian border. This cannot happen without the Kremlin’s approval but, again, I would not jump to conclusion that it puts its main stake on the rebellion.

It was obvious from the start that the uprising against the “Ukrainian values” together with the visible presence of Russian volunteers would inflame nationalistic passions in the rest of country. Predictably, Kyiv sent the army to restore control over the restive provinces. At first, Russia growled across the border with a military buildup. The military threat was driven by fear that Kyiv nipped the rebellion in the bud. In this case, the Kremlin would be exposed to the wrath of Russian nationalists for being “ineffective.” Closing eyes on the traffic of arms – and not necessarily of weaponry registered in Russia – the Kremlin minimized the fallout at home without inflaming too much the war in Ukraine.

The current situation in Kremlin is characterized with precarious balance between the need to keep the rebellion alive, the need to prevent apparently maverick groups of separatists to gain the upper hand, and the need to avoid western sanctions. The latter are particularly damaging to that part of Russian elite (e.g. investment bankers) that maintains close business relationships with the West.

Having described the key Russian forces that act in Ukraine, one can observe the direction in which they point in aggregate. First, the “hot” part of the conflict is not driven by Russia. It is directly proportional to the Ukrainian efforts to quell the rebellion. In this respect, the Russian objective is to match the strength of combatants. Second, the Kremlin plans to negotiate with the Ukrainian government using mostly economic levers such as requesting the advance payment for gas. Third, it tries to maneuver to avoid the western sanctions in order to satisfy the part of Russian elite most vulnerable to them but not at the expense of alienating Russian nationalists. The latter will continue to supply the rebels until they gain.

The Ukrainian strain of nationalism

It is often stated that the Ukrainians only react to the Russian interference in their east whereas the causes of conflict are two-directional. The east of the country is predominantly concerned with the Ukrainian nationalism. The residents in the east complain that they are required to recognize the dominant status of the Ukrainian language and to accept as theirs such western Ukrainian heroes as Stepan Bandera. This complaint has merit.

The Ukrainian type of nationalism is peculiar. It proves its value building on the perceived inferiority of its “Russian brethren.” The title of a major book written by the former president of Ukraine Leonid Kuchma – Why Ukraine is not Russia – introduces this argument in open. The main idea of the book is that the “Ukrainians” are more civilized than the “Russians” without defining the terms. Then, the author explains that as he compares different parts of Ukraine, he observes that the western Ukraine (Galicia) is, in his opinion, the most “European”, or developed, region. Its architecture is distinctly European that is similar to the architecture of adjacent Poland. Technologies are advanced. People are polite and support one another. On the other end of the geographic spectrum lies the eastern Ukraine (Donbass) that the author considers to be truly “Russian.” It has the same shoddy Soviet-type architecture like across the border. Its industries are dilapidated. People are rough and careless for one another. In short, Galicia represents for the author the most “European”, or civilized, part of the country when compared with Donbass, or the most “Asian”, backward, region.

The conclusion follows that to become truly “European”, the whole of Ukraine should become like Galicia. But what does it mean practically? The Ukrainian nationalism answers this question cunningly: ‘Become the Ukrainian. Speak Ukrainian like the residents of Galicia and behave as they do. Then, you will become as civilized as they are.’ The appeal of this simple answer is strong among the Ukrainian residents who already speak Ukrainian at home and, hence, do not face the cost of learning another language. But the urban dwellers and residents of predominantly Russian-speaking eastern provinces are more skeptical. They question what the benefit is changing their way of speaking and thinking. The Ukrainian nationalism replies: ‘Do not compare two worlds. The Russian culture might have its own attraction but do not forget that it was imposed upon you through the occupation. In reality, you are Ukrainians who have forgotten your culture under the influence of the Russian masters. Come back to become Europeans as we are. It might take time to learn the language but, in between, you can easily accept other Ukrainian values such as our national literary pieces, dress code, and our heroes.’ If the residents still hesitate rejecting the Russian culture, the Ukrainian nationalism condemns them either as unwelcome descendants of Russian colonists or as cultural “Asians” persisting in their incivility.

The argument of Ukrainian cultural superiority over the Russians forms the basis of political discourse in this country. It lies at the heart of Ukrainian desire to join every Western-led institution – be it WTO, EU, or NATO – at least ahead if not at exclusion of Russia even at the expense of its national interests. The problem with this argument is that it is flawed. Formally, it is based at two premises and a conclusion:

1)      Galicia speaks only Ukrainian and has specific values;

2)      Galicia is the most developed Ukrainian region;

3)      Therefore, other Ukrainian regions should speak only Ukrainian and to accept specifically Galician values to become developed.

The conclusion does not follow from the premises suggesting the non sequitur fallacy. Even accepting the fact that Galicia is the most developed Ukrainian region – other regions like Dnipropetrovsk or Odessa might be better candidates – the language and cultural values are unlikely causes of development as people in former European colonies (e.g. India or Algeria) who accepted the colonial language and the way of living can attest. A more plausible explanation is that Galicia was a part of the Austro-Hungarian Empire and, as such, it bears the signs of its colonial past that happened to be – in the eyes of Ukrainian nationalists – more glorious than in other Ukrainian regions.

In the time of peace, the Ukrainian strain of nationalism is not without certain charm in its promotion of “all-Ukrainian values.” Glorification of local songs or garments is an important and colorful part of local folklore. Its less benign features can be annoying but tolerable: being mocked as a ‘moskal’ is the worst treatment that the pro-Russian residents can expect for their allegiance to a different culture. However, in the time of war that has started after the Russia’s annexation of Crimea, such ridicule has quickly degenerated in something more menacing – the dehumanization by Ukrainian nationalists of their opponents.