So this peace deal, and no one knows what's going to happen yet, but clearly is a form of what Marx and economists would call primitive accumulation. It's part of making the land accessible even further to foreign power and speculation and in doing so pretending that there is some form of objective economic advancements in which all interests are united. What do you think about that? I mean, you can go there and there clearly is just a land grab going on at some level and certainly the settler interest in Israel is principally interested in that.
I mean, in my diagnosis, I think there's three levels. There's a settler interest, very powerful, also in the West Bank, a big part of the Israeli real estate boom. Israel is a classic neoliberal real estate driven boom society and believe it or not building large apartment complexes in the West Bank is part of that. You know, you can get mortgages on this thing. It's part of it. I think from the point of view of the most powerful centers of capital in Israel, which are really tech centered, they would rather we weren't doing this. If you're actually talking about the most powerful elements of Israeli tech, they were doing just fine before all the genociding started and they were living very happily within a kind of apartheid type regime of labor that worked for them. It was uncomfortable at some social level. The FT used to write little pieces about how this was quite difficult for people to deal with but you carried on as in so many other racially segregated labor markets. You live in Singapore for any time you see exactly the same, not the same thing, but you see structures of inequality of a type which are very very radical, anywhere in sub-Saharan Africa all the time, right?
And then there's a third element which is the really grand strategic level and the grand strategic level is this reconfiguring the space, bolting Israel between India and the Gulf, and there I think Gaza is really a road bump, you just need to clear it out of the way and put a good container port there and for heaven's sake can we please stop talking about this? And that's the violence. The violence is the erasure of the entire question of Palestine, less than the kind of Nakba level, we take your land and put a kibbutz there. There are certainly some people in Israel still involved in that project and deeply committed to it. And in politics for Netanyahu's coalition, they're vital, but we need to think of this as a complex assemblage of different elements. And the settler one is one element. The tech capital that would operate within a racially segregated kind of Middle Eastern economy. You know, if you're in the Gulf, it's the same thing. As a white person, you suddenly discover you're in the kind of mercenary professional class, the real owners are the Arab elite and then there's the South Asian helot class below you. They could operate in a space like that. And then Netanyahu and the leadership, this geopolitical leadership, are playing this other game and for different positions in that power complex, Gaza plays a different role, I think. So I want to differentiate like that. I don't deny the land grab, I just don't know whether it's the principal vector here and whether Israel is rich because of primitive accumulation. Israel exists because of primitive accumulation, but then its economy spirals off from the 90s certainly into a very very different zone.
This is really important. How about the fact that the erasure of Gaza being led by technocrats? And I think this is where it gets interesting because it's about really hiding the economic and political violence behind some form of objective science, which is something that we see over and over in the history of our economic system. And we saw also very explicitly in Ukraine with the report that you talk about in one of your chartbooks from the Center for Economic Policy Research published in September 2022, in which in fact you call it Keynesianism without the state, war Keynesianism without the state. But apart from getting into Keynesianism, which I hope will be the topic of another conversation, you show how the crisis is, and of course this is also a big theme in the famous book of Naomi Klein, right, The Shock Doctrine, the crisis brings about opportunities to deregulate and impose hard dosages of austerity. Once you have a budgetary problem and you have an inflationary spiral, this is the best opening up moment to impose the usual recipe of huge labor market deregulation and sacrifice of workers, which is actually something that you say even Zelensky was able to pass in Ukraine, having had opposition prior to the war to his plan of creating spaces to fire workers at will and get rid of the national legislation to protect labor that exists in Ukraine, together with of course the dismantlement of social services.
Yeah. I mean, I think the general point here is that political economy and class struggle does not stop in a war and it doesn't stop in a war which many people in the Ukrainian case think of as a good war, right? A struggle of Ukraine against the extraordinary breach of international law by Putin and the aggression of Russia. And Ukraine was a divided political economy from independence in the early 1990s. It was hugely unstable. By any macroeconomic measure, all of the macroeconomic indicators suggested it was a very unsuccessful transition. It was hugely unequal with a very powerful oligarch class and it was vastly fragile in terms of its dependence on external funding. And of course, all of that just gets massively worse in the event of a war, notably the external dependence. And so what one has seen on and off in Ukraine, and it's an ongoing thing, and I intend to write about Ukraine, if I can find the space in the next month or so, because the tension is mounting very dramatically. We spend a lot of time talking about cruise missiles and all of this kind of military hardware, but behind the scenes, the Ukrainian war economy is entering a really difficult phase. But we've been living through a kind of lull. Early on in the war, there was a real risk of Ukraine accelerating towards not hyperinflation exactly but very very dramatic rates of inflation and a quite serious struggle went on over Ukraine's political economy. And this is a struggle also in Israel, on the Israeli side, if people can be bothered to spend any time on the soul searching that goes on within Israel, because there is soul searching going on about how they fight wars. And there was this argument that Ukraine has survived because it has overcome Soviet legacy, it is stripped down, it's entrepreneurial, they're super good at military tech, they innovate all the time, the private sector is highly dynamic. And the answer of a certain contingent of ex-western advisers was that Ukraine could only prevail and go on in this war if they did even more of this, like a kind of narco-libertarian dismantling of the Ukrainian wartime state as they were fighting the Russians, on the kind of idea that this is ultimately the special source that has enabled the Ukrainians to put up this incredible resistance to the force of the Russian invasion.
And this just struck me as, and I know there's a Ukrainian left which is much better informed about this than I'll ever be, and you should talk to some of those people, but my point was simply, you know, wake up, smell coffee here. This is exactly, as you say, the prosecution of a neoliberal restructuring experiment under the cover of a war and a war emergency. And this is very unlike the situation of say a war economy where you have full sovereignty, where you maybe have a balance of class power, like say in Britain during World War II or to a degree even in the New Deal in the US, though there as well. Any history of the wartime economy in the US will tell you that the balance shifted towards business massively in the 1940s, not the same in Britain. So we need to get our model right and Ukraine is and remains massively dependent on external capital, draws in support in part through promises of future development to come when western capital be welcomed to take advantage of the very considerable raw material resources. This is where a primitive accumulation story I think is more relevant, because Ukraine, not Gaza. And that politics is playing out in the middle of this life and death struggle which is claiming the lives of thousands of people a month, tens of thousands of people a month if we believe the casualty figures. It's absolutely appalling.
And it's striking to me in reading this report the way in which this cruelty emerges. The fact that you say that to argue for the fact that Ukraine should outsource its basic social function, they cite the fact that children, given that many children and young adults have left the country, the number of locations and budgets of schools and universities can be recalibrated, freeing up resources for other uses. So the other use of course is the military, because the military expenditures are going up historically everywhere as we know also in Europe today. The money for the military expenditure is never useless or absent. It actually has to, the money elsewhere has to be shifted in that direction constantly.
Such scorn for the Ukrainian public authorities. They literally argue the entire welfare state ought to be taken over by volunteerist western NGOs. It's like in the middle of a war which is the closest thing to total war that we've seen on this scale since World War II in the West. I mean, the Yugoslav wars were massive in intensity, but these are bigger protagonists than in Yugoslavia. The Ukrainians, we think, are spending 30% of GDP on the war effort. This isn't quite World War II total war, but it's a huge, huge mobilization. And they say, oh well, yeah, really, we should just hand this over to the international NGO community. I mean, it's staggering. I don't think that particular report didn't go very far, but I think the conceptual point here is important, right? And that's presumably why we're talking about this, is that the point to make is that political economy doesn't sleep. It continues to grind forward and it grinds forward under even the most extreme circumstances. And you know, it's maybe not always going to be the way ultimately to explain what's going on. I don't think the war in Gaza is being waged to realize property development projects. I think there's deeper motives for it. But nevertheless, once you've got a war going, there are going to be property development projects and it's going to be impossible to wage a modern war without the mobilization of huge amounts of economic and technological resource. And so this is a way in and it's a way in to understand all of the different conflicts which are sucked into the cauldron of a war and the way in which wars can dynamize, inflect, change the path of those other struggles.
