Leo Panitch and Paul Jay discuss how Trump’s admiration for Putin’s authoritarianism and his close alliances with capitalist oligarchs leads away from neoliberal international rule-making and towards crude deal-making

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PAUL JAY: Welcome to The Real News Network. I’m Paul Jay. President Trump has appointed his Secretary of State, his National Security Advisor, and other people at the CIA, Pompeo. These people all have in common one thread — perhaps Tillerson might be somewhat the exception — which is they seem to have Iran in their crosshairs as their primary foreign policy objective.

But there’s another very important division happening, which is playing itself out over a fight over whether or not Russian interfered in the American elections by hacking into the DNC emails and John Podesta’s emails. It’s perhaps a fight over something real — or not, it’s hard to say at this point — but it’s certainly emblematic of a real fight, which is, Trump, in terms of both his rhetoric and his appointees, seems to have in mind a kind of an alliance with Russia and Putin — not just a rhetorical admiration society — and what does that mean when you have such aggressive language towards China? Trump calls the President of Taiwan, and he can’t be so out of it not to know what that would mean in terms of China and their view on their One China policy. So, aggressive rhetoric towards China, and a kind of almost realignment of US foreign policy into a form of alliance with Russia.

Now, these things aren’t just driven by personality — although it doesn’t mean it doesn’t play a role. Behind Trump is a whole group of capital and billionaires, and you have other pools and sections of circles of billionaires and Big Capital and deep economic interests. For example, people that John McCain and Lindsey Graham represent — and traditionally, they have been extremely hawkish on Russia, and continue to be — and even though their President is Republican, McCain and Graham seem to have no problem in publicly denouncing this, what they call, “cozying up to Putin”.

So what does all this mean in terms of how capitalism works, and how these economic interests work? How the economic integration and global capitalism works; at the same time there seems to be other forces in terms of the way geopolitical strategy works.

Now joining us to help grapple with all of this is Leo Panitch, who joins us from Toronto. Leo is a Professor Emeritus and Senior Scholar at York University. He’s the co-editor of the annual Socialist Register, 2016 volume, that focuses on the politics of the right. Leo is also co-author of the book The Making of Global Capitalism: The Political Economy of American Empire. Thanks for joining us, Leo.

LEO PANITCH: Hi, again, Paul.

PAUL JAY: So, what do you make of all this? This realignment with Russia is rather interesting, if not even surprising.

LEO PANITCH: Well, and at least that is predictable. Trump made it very clear his admiration for Putin, and that is of a piece with the New Right’s admiration for Putin everywhere. I think there’s an element of this that has to do with Putin’s very open homophobia, and I don’t think that should be left out in terms of its appeal to the cadre, the soldiers of the New Right — even beyond the alt-right, if you want to put it that way.

But I think it more has to do with the admiration for the type of authoritarian, no-nonsense politics that Putin has come to represent, and his close alliance with the capitalist oligarchs, and his willingness sometimes to put them down in an authoritarian way. But he’s the government of the new rich in Russia and he’s a deal-maker of the crudest kind. And I think that this new authoritarian right wants to get away with liberal democratic procedures. Wants to get away from the international codification of rules through which neo-liberal globalization has prospered. There is a move away from this liberal or neo-liberal international rule-making — which has been in place really since the end of the Second World War but especially since the ’80s — towards deal-making. And that’s what Trump represents and that’s what Tillerson represents at a higher level of capitalist global operations.

You know, Russia has never been a threat to the United States in the sense of trade deficits. That’s not America’s problem with Russia, as it ostensibly is with China in terms of job losses, trade deficits, trade imbalances, etcetera. And, you know, Trump is, in that sense, pragmatic and I’m sure Tillerson will be around the question of, well, really, does Estonia matter very much when it comes to exploiting the Siberian oil fields? Even does the Ukraine matter very much, when it does? Now there will be people, of course, whose entire orientation is what clinical scientists call geo-strategic and look at the world as a map of competing nation states, one trying to better each other in military intelligence strategic terms. And they’ll be present as voices, as well – you know, you get that much more out of Michael Flynn, the National Security Advisor, probably.

But I think, in terms of an economic orientation, this is what we’re seeing. I don’t know that the rhetoric against China yet needs to be taken that seriously because of the degree of integration of the Walmarts of this world, as well as the Apples of this world, with China — really, there’s one global factory that gives us jeans from China, that we buy at Walmart or the Apple cellphones that are produced in China.

PAUL JAY: Well, one of the Trump’s major campaign promises was to the military manufacturers of America, armaments manufacturers of America, and he said, “Don’t worry. Don’t worry. You’re gonna get lots of money. We’re gonna do lots for you.” Well, to do lots for you, you need a good enemy, and if he’s going to play nice with Russia and reduce the level of rhetoric and tensions with Russia, which I always thought, frankly, had a lot to do with giving the rationale for arms purchases — I’m not saying there wasn’t some real tension, but I often thought it was somewhat exaggerated — but still a good rhetorical war with China and lots of tension with China would help fuel that.

LEO PANITCH: Yes. I mean, that’s possible, and I don’t think that the build-up of military equipment and arms, which has its own dynamic, even though it’s justified rhetorically, is any sense going to stop because of this alignment with Russia. It’s not going to stop on Putin’s part, either. And I don’t think it needs to be justified by the threat of war between the United States and Russia. It really has its own self-generating dynamic in terms of the military-industrial complex now.

PAUL JAY: The connections with Putin are interesting. Michael Flynn, who you mentioned, last December was at the 10th anniversary of RT — Russia Today, the television network, that’s more or less financed by the Russian government — and is on in the United States, in Europe. In fact, they really have a global footprint now. Michael Flynn was at that dinner for the 10th anniversary of RT about apparently three, four seats away from Putin, who also attended the dinner.

This developing relationship with Putin and deal-making, it goes back some ways, and one can imagine a kind of geopolitical deal that involves some kind of resolution of Syria to very much in Russia’s favor. And, again, one could imagine, given the hawkish natures of all of the foreign policy appointments of Trump towards Iran, there’s perhaps some grand bargain being made here about what the United States might do towards Iran and Russia; in other words, maybe making some noise about it, but not doing anything serious to oppose it. Frankly, I don’t know how much they can do to oppose it, if the Americans are intent on it.

LEO PANITCH: Yeah. At this point, this is all speculation, except that this administration will leave the Russians playing the leading role in Syria, I think. And that’s important to Russia because Syria provides them with their only naval base in the Mediterranean that truly matters. And I don’t think they’re going to want to play a game about removing that. I think this’ll involve leaving Assad in place, frankly, I do think so. And because of that, in a sense, Iran wins, as well, because his religious group is aligned with Iranian Shia, and the Iranians have supported him strongly.

There are conflicting tendencies in this respect. We’ll have to see. I don’t imagine, in my own view — but I could be wrong — there’ll be noises about Iran, there’ll be noises about the deal Obama made. It was a means of discrediting Obama — and Clinton — as far as Trump was concerned, in an opportunistic way. I’m not so convinced that he is looking to pick a fight with Iran.

What I do fear is that if the economic strategy goes belly up, if there are confrontations in the streets between Black Lives Matter and Blue Lives Matter, if there is in that sense a lot of dissent in the United States that, yes, one could see the military rhetoric being unleashed and all kinds of unpredictable things happening. Partly in order to, as usual, in the cynical way that these types of politicians do, in order to try to create a national unity against those who, quite rightly, are raising more fundamental questions of inequality, etcetera.

PAUL JAY: I talked to Larry Wilkerson many times, and I talked to him about why he, after being in the Bush Administration, got so disillusioned, and his feelings about what was driving the Iraq war, and he said, more than once, “Don’t underestimate how banal the motivations were.”

LEO PANITCH: Yes.

PAUL JAY: You know, it was about getting a chunk of the oil — and you can hear Trump, he was so disappointed Americans didn’t grab the oil.

LEO PANITCH: I think he was even more — you’re right, Paul — but I think it was even more banal. I think it was driven by those people who had been young aides in the Nixon White House and found that the Presidency, the Executive, was heavily constrained after Nixon — by virtue of Vietnam, by virtue of Watergate, etcetera — and the Executive lost a lot of its autonomy, especially with regard to war-making powers. These guys were absolutely determined one way or another that they were going to break that. And they broke it. Now, it’s not to say that Cheney being related to Halliburton, as well, it wasn’t something that, you know, provided Halliburton with an accumulation opportunity that they couldn’t have imagined: setting up all of the construction camps all over Iraq through which the war was prosecuted, American soldiers were housed and new oil facilities were established.

But I think it was even more banal. I think it had to do with their experience of way back in the Nixon White House and their determination to turn that around. Talk about banality in terms of where it went.

PAUL JAY: Well, I think in these issues, it’s often all of the above. There are many reasons why these things happen. But the reason I raise this issue is that, if you listen to the words and rhetoric of all of the people around Trump, Iran is — even Giuliani and others – is the source of all-evil in this world, “Iran is the source of terrorism.” And I think it really comes from this issue, both in terms of the Saudi interest in diminishing the role of Iran, Israeli interest in diminishing Iran’s regional power — and if you want to go back kind of into the roots of this, too, simply not wanting to accept that you could have the overthrow, meaning the Shah, of such an important American ally, if you analyzed the way these people talk, it’s very much focused on that the next linchpin of American foreign policy needs to be the overthrow of Iran.

Now, I don’t think they’re going to do regime change, I don’t think they’re going to invade, but to bomb, especially to reintroduce full-scale economic sanctions, to disturb and just distract the Iranian economy and politics in order to weaken their role in the region, that seems to be their objective. They say it openly, and Flynn’s very much part of that.

LEO PANITCH: The more openly they say it, the more I doubt it. I much more think it’s likely that it’s something horrible like that is going to happen, that they’ll stumble into it. The more openly they say it, the more I think it’s symbolically important. But maybe not substantive. I think where you began is what’s important. What’s important in the short run is that we’re going to see an increase in oil prices. The Russians and Saudis have already made a deal to restrict oil output that’ll lead, of course, to that happening generalizing(?) through OPEC, that clearly is related to the kind of alliance between Trump and Putin you pointed to, which will now be reinforced, of course, with Tillerson from Exxon Mobil in the State Department.

The interesting question then is what will that do to inflation, especially at a time when interest rates are already going to slightly go up, and that’ll justify pushing them up even further. The implications of that, I think, need to be worked out because that’s what’s going to be immediately on the agenda.

PAUL JAY: Well, this is where I was heading, is that if you concoct some excuse about the Iranians violating the nuclear agreement, put full-scale sanctions back on, get Iranian oil off the table, either through sanctions or through bombing or through bombing and sanctions, nothing — that kind of tension — nothing creates higher oil prices faster and more dramatically than that.

LEO PANITCH: Yeah, it could be. The tensions in the Middle East have been — in recent years — have not reduced the high oil prices, but historically you’re certainly right. And, yeah, maybe there’s a logic to that. I really don’t know. I think, at this point, this is speculation.

What we can be sure is what we were talking about. That there’ll be a new deal-making kind of alliance with, you know, governments that represent regimes that are not interested very much in the rules. And we’ll see a break away from the attempt to establish more and more rules with which global capitalism should operate–

PAUL JAY: Sorry. Go ahead.

LEO PANITCH: Yeah, and instead their inclination, of the Trumps and the Putins of this world, will be to restrict that arena and leave more room for their arbitrary decisions and their arbitrary cooperation.

PAUL JAY: Well, this, to a large extent, goes back to this organization and document they created, the Project for New American Century, back in the late 1990s, and not only do they in that document, that Cheney, Wolfowitz, Rumsfeld, all these guys signed — and who I think Pence and Flynn and others are a continuum of — not only was regime change in Iraq, Syria and Iran the next objectives of US foreign policy, but the other major point of the document was that, more or less, the end of international law, that there’s no need for it anymore; in a single superpower world, you don’t need international law, which speaks to your point. There’s no longer a need for these kinds of rules. It’s now back kind of one gang with another making deals.

LEO PANITCH: Yeah, but they didn’t do that around economic rules. They continued the codification of legal frameworks for international contracts, protection of foreign capital, etcetera, etcetera. And you’re right, though, I mean, I think that that’s an interesting parallel, and now we’ve seen the other shoe drop.

What is remarkable is that even Bush and the people around him were people who came out of political families, of political history, etcetera. You know, at worst, the kind of person that Rick Perry now represents — although he really is just another cipher for the oil industry — and you now have three of them in senior positions in the Cabinet, including the guy from Oklahoma, as well as Exxon Mobil in the Secretary of State’s office.

But that was a more political administration. This is a more directly economic administration. One that has very little autonomy from the capitalists that it represents. You see that, of course, also with the Kochs and the Adelsons and so on. And I think that the security establishment that gave rise to the Bush-Cheney regime is not quite as important or central — so far — to this administration as is this set of capitalists who stretch from, you know, the kind of shady, even shysterist deal-markers that Trump are, to the brokers that Mnuchin represents out of Goldman Sachs, who are very different from the Rubins of Goldman Sachs, who are kind of the patricians, very much interested in the rule-making and liberal internationalism.

They seem to me to be more important. And now with Exxon Mobil coming in, indeed the oil companies being so centrally placed — not least by, my God, Perry being Energy Secretary — I feel we’re seeing the dominance of the economic logic here rather than so much the Pence-Cheney kind of logic. But we’ll need to see. There are representatives of those people certainly in very senior positions.

PAUL JAY: Yeah, I don’t think there’s any contradiction between those two groups that you’re talking about. Certainly, Cheney was a very good representative for the fossil fuel industry himself, and they seem to work together, these two groups, even if they have somewhat their own logic.

LEO PANITCH: I think his motivation, however, was more geo-strategic and more political in the narrow sense of the word, with more of the inside operator in Washington.

PAUL JAY: We’ll talk more about this, but this one point, I just want to add something, too. This more direct control of the politics and the state by the billionaires and by the direct representatives of the billionaires. Add to that Robert Mercer, who’s the guy from Renaissance Technology, one of the most — not one of — the most successful quantitative high-frequency trading hedge fund in the world, and one of the most parasitical sections of capital. Robert Mercer is directly the funder of the Trump candidacy. His daughter is on the transition team, and Kellyanne Conway and Bannon both work for Mercer, and that is the core of the Trump team, directed directly by one of these billionaires.

So, yeah, the sort of somewhat separation between the state, the politics and the billionaires has broken down in sort of an unprecedented way with this incoming President Trump.

LEO PANITCH: And we talked about this before, right? But I think the big question is that when you have such close ties with individual capitalists, especially of the kind of capitalists we’re talking about — I don’t mean that as Exxon Mobil where you have a massive multinational corporation, but the kinds of people you’re just speaking to — then it becomes more difficult for a state to act as the Executive Committee, as Marx once put it, of the whole bourgeoisie. It makes it more difficult for them to do a reading of what’s in the class interests of the bourgeoisie as a whole and, in that sense, what’s in the national interest of a capitalist United States, in a global capitalism. And this could lead — it could lead — to a lot of jerkiness and scandals and dysfunction in such an administration.

PAUL JAY: Yeah.

LEO PANITCH: We’ll have to see. But I think this is what we need to be looking out for. We need to be looking at the contradictions, I think. My greatest fear is still that in the face of those contradictions, the inclination of these people will be a closed political space. And you may be right — part of the justification for that closing of political space, they may then turn to will be military adventurism, “We need to unite against the enemy.”

But I think we need to look for those contradictions and then keep our antennae up for what they will do of a reactionary nature in the face of those contradictions.

PAUL JAY: All right. Thanks for joining us, Leo.

LEO PANITCH: Okay, Paul. Glad to talk.

PAUL JAY: Thank you for joining us on The Real News Network.

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