Chapter 18
A Great Tragedy Since World War II

II. The Russia-Ukraine War is also a continuation of “Yalta”

The consequences of Roosevelt’s pro-Soviet stance not only caused the dangerous situation of the Cold War but also directly relate to today’s world situation.

The British Broadcasting Corporation (BBC) analysis on March 26, 2022, pointed out: Russia’s invasion of Ukraine is very similar to the outbreak of World War II.

The destruction and cruelty of Russia’s invasion of Ukraine, as well as the humanitarian devastation, shocked the world. The West imposed sanctions on Russia and continuously increased the intensity. The Russian central bank was also targeted, severely damaging Russia’s economy and the livelihoods of its people. Millions of Ukrainians have been displaced and have become war refugees.

The scale of this war seems incomparable to World War II, but many post-war commentaries have pointed out echoes of history, resonances across time and space, and various similarities between “past and present,” ranging from street fighting styles, weapons to historical evolution and the background of the era.

One similarity, however, is rarely mentioned — in the eyes of economists, the similarity between the current Ukraine war and World War II lies not on the surface, but at a deeper level.

Ronen Palan, Professor of International Politics at City, University of London, wrote that the root cause of both wars is a “conflict of ideologies,” which manifests in the real world as destructive shockwaves spreading global financial crises; there is roughly a ten-year gap between crises and wars, as in 1929 and 2008. Palan wrote: “Major financial crises and wars are signs of deeper structural social problems — the underlying structural movements cause these surface cracks.”

BBC senior reporter Allan Little commented that the Russia-Ukraine war is actually a conflict between “Yalta” and “Helsinki,” or between democratic and authoritarian regimes.

Palan said: “World War II can be said to be a massive battle among four industrial models, each of which provides its own solution to the problem.”

Britain — attempted to rebuild the pre-World War I empire-centered economy with Britain at its core, with Ukraine and Russia responsible for providing grain;

Soviet Union — Stalin rejected Britain’s efforts to pull the USSR into the international trade system and implemented a planned economy with the state organizing industrial production;

Germany — National Socialist decision-makers designed and implemented a mixed model: a semi-planned economy, with key industries and unions nationalized, but the basic system remained capitalist;

United States — Roosevelt’s “New Deal” combined state-owned utilities, defense, education, and pension systems with large corporate groups controlling a “planned corporate economy” based on private property rights and democratic political system.

These four solutions were implemented and juggled for ten years, ultimately meeting on the battlefield in 1939, with world upheaval and the defeat of Germany and its allies in 1945, resulting in the victory of the American model.

In the following decades, a new world order gradually formed and stabilized, with globalization trends growing stronger, but the increasing globalization and its resulting winners and losers and various contradictions caused it to be questioned, becoming what Palan calls ‘the core of today’s ideological conflict.”

Like World War II, Palan believes that the root of the current war traces back to the 2008 financial crisis, which damaged the post-war market capitalist economic model led by Europe and America.

The post-war new liberal economic system promoted by Europe and America dominated the world for decades. The free market economy and democratic political system were marketed as two sides of the same coin to voters and the world, combining inviolable private property rights and consumer freedom of choice. Multinational corporations dominate the “free market,” and judging from business, taxation, and debt aspects, these multinationals are the main beneficiaries of globalization, Palan points out.

By the late 20th century, “orthodox” capitalism began to show “variants”:

Russian model — state-led capitalism: after the Soviet Union’s collapse and economy being devastated by ‘shock therapy’, this solution became the basis for Putin’s prestige and consolidation of power. This form of capitalism shares some theoretical foundations with the new liberal economy.

Chinese model — Communist Party-controlled market economy: a market economy with market elements, coexistence of state-owned and private sectors, with the regime above capital.

Gulf model — authoritarian capitalism: opening the country to private enterprises and investment funds, but economic control always remains in the hands of a few sheikhs and ruling families.

These power blocs were all arranged by the “Yalta” framework, so it can be said that the “Russia-Ukraine war is also a continuation of ‘Yalta’.”