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How America’s Economic War on Russia - Richard Wolff

Richard Wolff explains why Western sanctions against Russia failed, how they strengthened the China-Russia alliance, and why Europe now faces economic decline.

By PUN-Global

06 February 2026, 11:02 am

By PUN-Global

06 February 2026, 11:02 am

The Insider’s Verdict: Biography and the Inconvenient Truth

Economist. Marxist system analyst. One of the most prominent critics of capitalism in the United States.

Professor Richard D. Wolff, born in 1942 in Youngstown, Ohio, is an American economist and Marxist theorist. He studied economics at Harvard University, Stanford University, and Yale University, and spent several decades as Professor of Economics at the University of Massachusetts Amherst.

Wolff approaches economic crises not as policy failures or political mismanagement, but as structural outcomes of the capitalist system itself. He gained international prominence after the 2008 financial crisis, through media appearances, lectures, and publications linking deindustrialization, debt expansion, social inequality, and militarization into a single systemic diagnosis.

He is the founder of Democracy at Work, an organization dedicated to alternative economic models, including worker cooperatives and democratic control of enterprises.

💬 “Capitalism does not fail by accident — it produces its crises systematically.”

Professor Richard Wolff, the American economist and host of Economic Update, was unsparing in his assessment. “How on earth do you go to your people with something like that and expect to win an election?” he asked during a recent wide-ranging conversation with Norwegian-Russian relations scholar Glenn Diesen. The question hangs over every European capital. And the honest answer, increasingly, is: you don’t. What follows is an attempt to map the full dimensions of what both analysts describe — without apparent hyperbole — as Europe’s economic suicide. It is a story that begins not with Trump, not with Ukraine, and not even with the post-Cold War settlement, but with a structural transformation of global power that Western elites managed, for decades, to simply refuse to see.

The Economic Dimension: Smashing and Colonizing Russia

The idea was to divide Russia into various geographic regions and colonize the sub-territories officially or unofficially — it is an old idea in Europe, but it was very much alive.

Glenn Diesen opens with the fundamental question: why was it so important to draw Ukraine into the Western sphere of influence from 2008 onward — even though many knew this would likely trigger a war? Angela Merkel, various ambassadors, CIA Director William Burns — they had all predicted the consequences. Was there an economic rationale, or was it purely political? Richard Wolff’s answer is characteristically direct: as usual, he says, it is a mixture — political, economic, ideological, military. But the economic dimension has been systematically underdiscussed, and it is the one that Wolff believes explains the otherwise puzzling intensity of Western commitment to a project whose risks were openly acknowledged.

The economic situation of Europe was already precarious before the war began. A successful weakening of Russia as an economic power would have been enormously tempting. There was hope of destabilizing Russia — but then came something beyond mere hope. The notion that the right moment had arrived: Russia was seen as very weak, had never truly recovered from the Soviet collapse, and appeared vulnerable to the kind of pressure that might cause it to fragment. Russia is a vast country, and the underlying logic — rarely stated in polite company but occasionally surfacing in think-tank papers and policy memos — was that a Russia broken into manageable geographic regions could be effectively colonized by Western European capital for the rest of the twenty-first century.

Europe’s old vulnerabilities revealed themselves on several dimensions:

Europe was caught between the Soviet Union and the United States, forced to constantly balance
Directly behind Russia stood China — economically far more significant than Russia itself
In high technology, the Chinese could already imitate or surpass the United States
Europe was not strong enough to contend with either of the two new poles of the world order

The fantasy was coherent, in its way. A successfully partitioned Russia would offer Western European nations access to vast natural resources — energy, rare earths, agricultural land — on terms set by the colonizers rather than the colonized. It would remove the one large power capable of organizing Eurasian resistance to Western dominance. And it would deliver this prize at a moment when the United States appeared too distracted by China to notice or object. The problem was that none of the premises held. Russia did not fragment. It fought back. And the attempt to break it accelerated precisely the China-Russia convergence that Western strategists had feared most.

Trump, in Wolff’s reading, came to power partly because he was willing to say what the foreign policy establishment refused to acknowledge — that the Ukraine project had failed, that the costs were falling on ordinary Americans and Europeans rather than on elites, and that the whole enterprise deserved skeptical scrutiny. He spoke the unspeakable. That he then did nothing fundamental to change it is a separate story, but the fact that such skepticism found a mass political constituency reveals something important: the gap between official narrative and economic reality had become wide enough for a demagogue to drive a freight train through it.

Managing Russia’s Decline - the Fundamental Error

The entire idea of creating a Europe without Russia was based on the assumption that Russia would remain weak and ideally follow the same path as the Soviet Union — that assumption was fundamentally wrong.

Diesen identifies the core strategic miscalculation with precision. The Western relationship with Russia was never designed as a genuine partnership. It was designed to manage a decline — to administer the slow fading of a great power that had already lost its empire and was expected, in due course, to lose its coherence. This condescension shaped every major Western decision from the 1990s onward: the refusal to offer Russia meaningful inclusion in European security structures, the steady eastward expansion of NATO, the treatment of Russian concerns as the complaints of a defeated party rather than the legitimate interests of a major state. European politicians still speak openly about how desirable it would be if Russia fragmented into many smaller nations — calling it a “prison of peoples” that could theoretically be divided into two hundred independent states.

Richard Wolff observes all of this from New York City — from inside what he describes as “a massive case of denial.” From the president downward, Americans expect their politicians to speak as though the United States still occupies the position it held in the 1960s. Wolff recalls his years as a PhD student when Russian economists visited American universities: they came from a country that felt genuinely underdeveloped, genuinely behind. That sense of American superiority was once grounded in reality. It is no longer. But neither American nor European political culture has developed the institutional vocabulary to acknowledge the change.

The new reality presents Europe with insoluble problems:

Russia is the fourth-largest economy in the world by purchasing power parity
How can the largest European state be permanently excluded from European decision-making?
The entire Western framework is undermined by Russia’s continued economic and military viability
Europe has no coherent policy for dealing with a Russia that refuses to collapse on schedule

The most revealing symptom of this confusion is Europe’s inability to formulate any Russia policy beyond containment, punishment, and wishful thinking about internal collapse. There is no European plan for what to do if Russia simply continues to exist as a major power — which is, of course, exactly what it is doing. Russia’s economy has adapted to sanctions faster than Western analysts predicted, its military has absorbed enormous losses while maintaining strategic coherence, and its political leadership shows no signs of the internal fractures that Western governments have been hoping for since 2022. The policy has failed on its own terms, and the European political class lacks the intellectual resources to acknowledge this.

Wolff is frank about what this represents at the level of economics. “All of that is over,” he says of the era when Russia seemed genuinely behind. “But you don’t get that news in the United States, and you don’t get it in Europe either.” The denial is not random or accidental. It serves specific interests — the defense industry, the political figures who built their careers on the Atlanticist consensus, the media ecosystem that has invested heavily in a particular narrative. But denial has costs. And those costs are now being paid by European workers, European pensioners, and European small businesses facing energy prices that their competitors in Asia do not face.

The Sanctions Catastrophe - Failed Twenty Times, the Twenty-First Will Surely Work

This sanctions program will go down in history as one of the most catastrophic miscalculations of a belligerent party — twenty versions have already failed, but Europe is hoping for package number twenty-one.

Wolff is a professor of economics, and on the empirical question of whether economic sanctions work, his discipline has reached something close to a settled position. “I believe number 19 or 20 is the latest version of the sanctions package,” he observes with visible incredulity. “There are twenty because all the previous ones failed.” The fundamental question — how many times must you try something before you question the underlying logic — has apparently not been asked in any European foreign ministry. Each new package is announced with fresh confidence, accompanied by predictions that this time the pressure will be sufficient to compel behavioral change in Moscow. Each time, those predictions are falsified.

The economic literature on sanctions is, as Wolff notes, unambiguous. Targeted financial measures against specific individuals can be effective in narrow circumstances. But comprehensive trade sanctions against large, resource-rich economies with alternative partners available have an extremely poor track record. The United States has imposed comprehensive sanctions on Cuba for seventy years. The Castro government came to power in 1959 and its political successors govern Havana today. The goal of regime change has not been achieved. Iran has been under various sanctions regimes since 1979. North Korea has been sanctioned for decades. In not one of these cases did sanctions produce the intended political outcome.

The economic literature on sanctions is unequivocal:

On tariffs it is ambiguous — they can work under specific conditions
But on comprehensive sanctions the lesson is clear: they do not achieve their stated goals
The United States leads the world in sanctions usage — the Cuba case stands for seventy years
In every case, the stated goal was behavioral or political change — and it has not been achieved

There is a second mechanism by which sanctions tend to backfire that Wolff identifies as particularly relevant to the Russia case. Extreme sanctions cause the sanctioned country to develop the domestic capacities and alternative partnerships it previously lacked. Russia was, before 2022, significantly dependent on Western imports for certain categories of industrial goods and technology. The sanctions forced a crash program of import substitution and alternative sourcing — painful in the short term, but ultimately building industrial capacities that Russia now possesses and would not have developed under normal conditions. The sanctions, in other words, partially solved Russia’s economic vulnerability rather than exploiting it.

Diesen sharpens the point with characteristic directness: “The first twenty didn’t work, but they’re hoping for a twenty-first. You honestly cannot make this up.” The Europeans have simultaneously cut themselves off from cheap Russian energy — dramatically increasing the cost base of their entire industrial sector — and failed to achieve any of the political objectives that supposedly justified that sacrifice. They are paying the costs without receiving the benefits. And the response to this failure is not a reconsideration of the strategy but an escalation of it: more packages, more restrictions, more expenditure, more dependence on American energy at prices several times higher than what they previously paid.

Lenin’s Prophecy - Decades Go By, Then Decades Happen in Weeks

Ukraine is those few weeks — and suddenly what was already underway is accelerated and made visible to everyone.

Diesen poses the diagnostic question: how does one explain Europe’s decline? The failure to digitalize industry, the absence of technological sovereignty, the shortage of skilled labor, the hollowing out of the manufacturing base — these are structural problems that predate the Ukraine war by many years. But the war has acted as an enormous accelerant, compressing into months a deterioration that might otherwise have unfolded across decades. The decoupling from Russian energy, the threats to confiscate Russian sovereign assets (a signal that reverberated through every non-Western sovereign wealth fund), the subordination of European economic policy to American strategic priorities — each of these has imposed real costs that compound one another.

Wolff reaches for Vladimir Lenin’s famous observation — not as ideological endorsement but as a description of historical mechanics: “Decades go by and nothing happens, and then in a few weeks decades happen.” The Ukraine war is precisely such a moment. It did not create the structural problems that are now consuming Europe. The deindustrialization was already underway. The political fragmentation was already advancing. The demographic pressures were already building. The loss of technological leadership was already visible to anyone paying attention. What the war did was make all of these simultaneous, mutually reinforcing, and — crucially — undeniable. The fog of managed narrative can no longer obscure what the electricity bills and the unemployment statistics are saying.

The Ukraine war as historical accelerant:

Ukraine represents Lenin’s few weeks — the moment in which decades of change become visible
What was already underway is suddenly compressed, accelerated, and impossible to deny
The acceleration feeds into broader political and economic conversations across the continent
The war did not cause Europe’s structural decline — but it has dramatically speeded the reckoning

Europe was, for centuries, the center of the world — the civilization that organized, named, colonized, and ultimately defined modernity in its own image. Wolff does not believe that Europe has yet genuinely understood that it has lost that position. The center of gravity has shifted — first to America after the Second World War, then to Asia as China’s growth compounded year after year. But the political class operates from a mental map drawn in 1960. They speak in the idiom of a power that is still shaping events, still setting terms, still in a position to offer or withhold recognition. The map no longer matches the territory.

This mismatch between self-image and reality has specific political consequences. Leaders who cannot acknowledge decline cannot develop credible strategies for managing it. They retreat instead into escalating rhetorical commitments — more weapons, more sanctions, more solidarity, more resolve — that substitute emotional intensity for strategic coherence. The populations of Europe, meanwhile, can read their energy bills. They know something has gone badly wrong. The resulting gap between what governments say and what citizens experience is the engine driving the political fragmentation that now threatens every major European democracy.

China’s Success Story - Despite and Because of Western Exclusion

The greatest success story of the postwar era is the People’s Republic of China, which was excluded from what the academic discipline studied — and they did it best precisely when they did it themselves.

Wolff turns to his own discipline with a question that has, in his view, never received an honest answer in mainstream Western economics. Since the end of the Second World War, economic development became a central field of inquiry: how do poor countries become wealthy countries? What are the conditions for sustained growth? The question consumed generations of economists, produced enormous quantities of research, and informed decades of development policy. And then something extraordinary happened: the country that answered the question most successfully — that moved the largest population from poverty to prosperity in the shortest time in recorded history — was the one whose methods the Western economic profession systematically refused to study.

“The greatest success story is the People’s Republic of China, which was excluded from what the academic profession examined,” Wolff says. “They did it best when they did it themselves.” He describes bringing this observation to a Columbia University seminar. There is a pause. Everyone in the room knows it is true. That is precisely what makes it uncomfortable. The correct answer to the central question of development economics is politically inconvenient, so the profession finds ways not to ask the question in that form. China’s growth has been two to three times faster than that of the United States for twenty-five consecutive years. Every year that ratio persists, the power gap narrows further.

Wolff’s experience at Columbia University illustrates the depth of the embarrassment:

He raises the China success story as the central case study in a seminar on development
There is a pause while everyone in the room processes what has been said
They know it is true — which is precisely what makes it so professionally uncomfortable
The response in European policy circles is identical: the question is simply not examined

What China actually did is not ideologically satisfying to either market fundamentalists or central planners, which is perhaps why it resists incorporation into the existing paradigm wars. China built a hybrid economy — roughly fifty percent state-owned and fifty percent private — that was not dogmatic about which sector should handle which activity. It asked practical questions: what do we need to control to preserve Chinese ownership of the development process? What can foreign capital do for us, and on what terms? How do we ensure that technology transfer accompanies foreign investment rather than merely extracting cheap labor while leaving the intellectual property base in foreign hands? These questions were answered pragmatically, case by case, over decades.

The deal China struck with Western corporations — including, most visibly, Walmart — was essentially this: you want access to the world’s largest and fastest-growing consumer market, and you want the benefit of Chinese industrial labor costs. We will give you both. In exchange, you will share your technology, your distribution systems, and your market access. You will build joint ventures on terms that ensure Chinese firms develop their own capabilities rather than remaining permanently dependent on foreign partners. Walmart, the richest corporation and largest private employer in the United States, became absolutely dependent on Chinese production. China used that dependence strategically. “If Walmart could do it,” Wolff asks, “why can’t we all do this?”

Not Just Trump - the Structural Shift in American Politics

What Trump does is shift the discourse — he speaks the unspeakable, but even if there is a political backlash, Europe makes a fundamental error if it simply waits for him to leave.

Wolff is careful to place Trump in his proper structural context. “This is not limited to Trump,” he insists. “He is not a polished politician. He speaks too fast. He has the same limited understanding of typical businessmen: taxes are bad because money goes out the door. The notion that taxes hold society together — that information they don’t want.” Trump speaks it openly. He mocks the conventional politician. He has shifted the boundaries of allowable discourse. But the underlying shift in American strategic priorities — away from expensive European entanglements and toward a transactional, extractive relationship with allies — reflects a genuine change in American political economy that preceded Trump and will survive him.

The American working class that forms Trump’s political base has watched for thirty years as manufacturing jobs migrated to Asia, wages stagnated, communities hollowed out, and the military adventures that were supposed to demonstrate American power ended instead in embarrassing retreats from Kabul and Baghdad. These voters did not benefit from the liberal international order that European elites celebrate. They experienced it as deindustrialization, opioid epidemics, and the replacement of stable employment with gig-economy precarity. When Trump tells them that Europe has been freeloading on American protection while stealing American jobs, he is not offering economic analysis. He is offering a story that connects with lived experience. That story will not disappear when Trump does.

The fundamental question for European strategists: what exactly are they waiting for?

For the United States to become great again, as promised? That trajectory has reversed over thirty years
Vietnam, Afghanistan, Iraq, Ukraine — a pattern of military defeats against far weaker adversaries
Meanwhile Russia and China have become enormously richer and more capable in relative terms
The degree of institutional blindness required to ignore this record is becoming untenable even in Washington

Wolff summarizes the American military record with deliberate bluntness: “Losing, losing, losing. And you were the richest country, with a greater margin over the enemy than today. Wars against the poorest countries on earth — and still couldn’t win. Meanwhile Russia and China have grown enormously richer, economically and militarily more developed.” What this record demonstrates is not merely the failure of specific military campaigns but the exhaustion of a model of power that was already showing its limits in Vietnam and has now comprehensively failed across four major conflicts. The empire is not declining because of bad decisions. The bad decisions are symptoms of the decline.

Europe’s bet that the next American president will restore the old order is therefore not a strategic calculation but a wish. The structural forces driving the United States toward a more transactional, extractive relationship with its European allies — fiscal constraints, domestic inequality, the China competition, the lessons of military failure — are not going to be reversed by an election. A more conventionally Atlanticist Democrat in the White House might soften the rhetoric and restore some of the procedural niceties. The underlying dynamic would continue. Europe has, at most, a four-year reprieve in which to build something different. There is no evidence it intends to use it.

The Revolution and the Parents’ Disappointment

The child’s rebellion is the product of the parent — the ability to see a better path is itself enabled by the parent, whether voluntarily or not. That is simply how history works.

A Chinese economist colleague of Wolff’s puts the dialectic in terms that cut through ideological categories. The revolution — meaning China’s economic and geopolitical assertion of independence — is a great disappointment to those who are displaced by it. They say: look at what we did for you. And it is true. The Western-led international order did a great deal for China’s development. The access to Western markets, the technology transfer that accompanied foreign investment, the institutional frameworks that disciplined Chinese policymaking in ways that ultimately served Chinese interests — all of this was real. The complaint of the parent is not without foundation. But the rebellion of the child is itself a product of what the parent provided. The capacity to imagine a better arrangement was developed within the existing one.

Wolff finds the metaphor illuminating beyond its immediate application. “It is the lament of the parent over the rebellious child,” he says. “The child’s rebellion is the product of the parent. The ability to see a better way is enabled by the parents. That is part of life. One must adapt.” Europe’s situation requires a similar analytical framework. The skills, the wealth, the institutional capacities, the educated populations that Europe now possesses — all of these were developed within and partly because of the American-led postwar order. The resources needed to transcend that order were built up within it. The question is whether Europe will use them.

The central lesson about the costs of clinging to a passing system:

When you hold on to the old while the old is passing, it no longer fulfills the same function
You receive the costs of the old relationship but no longer the benefits
You must navigate the contradiction with clear eyes — not pretend it does not exist
Underestimating the costs of the old system means losing the advantages of the new

The trap that Europe finds itself in is precisely this one. The Atlanticist framework once provided genuine benefits: security, market access, technology, the political stability of clear alliance membership. Those benefits have not entirely disappeared, but they are declining. The costs — inflated energy prices, mandatory investment flows to the United States, weapons purchases, the subordination of European economic policy to American strategic preferences — are increasing. Europe is, in Wolff’s formulation, receiving more costs than benefits from a system it refuses to acknowledge as outdated.

The path out of this trap is not mysterious, even if it is difficult. Europe must build the alternative arrangements that would reduce its dependence on American favor: genuine energy diversity, sovereign technology investment, meaningful partnerships with the emerging economies of Asia and the Global South, and above all a negotiated end to the Ukraine conflict that restores something like normal economic relations with Russia. None of this is impossible. All of it requires a political class willing to tell voters the truth about the situation — and then willing to act on that truth. That political class does not currently exist in most European capitals.

The Economic Collapse - Deindustrialization Without an Exit

Europe is deindustrializing, the economies are heading downward, and every economic plan for reconstruction appears structurally incapable of succeeding under current conditions.

The scale of the problem is visible in the data that European governments and media prefer not to discuss directly. Germany — for decades the manufacturing engine of the continent, the country whose export-led growth model underpinned European prosperity — has entered what increasing numbers of economists are calling structural deindustrialization. The business model that made Germany the world’s leading exporter in many categories rested on two foundations: cheap Russian natural gas and open access to Chinese markets. Both have been deliberately dismantled, by German and European policy choices, without any serious plan for what would replace them. The energy cost differential between German and American or Chinese manufacturers is now large enough to make entire categories of production uneconomic in Germany.

The cascade from that initial damage spreads through the European economy in multiple directions. Higher energy costs raise the cost of every manufactured good. Higher manufacturing costs reduce exports. Reduced exports weaken the current account. A weakened current account reduces the investment available for the green-energy transition and the technological upgrading that might eventually restore competitiveness. Simultaneously, the fiscal commitments made to sustain the Ukraine war, rearm European militaries, and now subsidize American energy and investment through the von der Leyen deal reduce the public investment available for exactly those transformative projects. The fiscal and structural traps reinforce each other. There is no obvious exit.

The triple fiscal trap from which there is currently no exit:

Remaining fiscal space must be spent on inflated American energy prices — far above pre-2022 Russian rates
What is left must be directed into American markets as investment — the von der Leyen commitment
Defense spending must increase dramatically — with weapons procured largely from American defense contractors
There is no remaining fiscal pathway to rebuild industrial capacity or fund the green transition

Wolff had framed the historical context precisely: the Europeans made a deal to live under the American military and technological umbrella. That deal precluded the development of European strategic autonomy. Now the deal is being unilaterally cancelled, and Europe is being asked simultaneously to rearm — at enormous cost — and to maintain the social welfare systems that are the political foundation of European democratic stability. The arithmetic does not work. You cannot do both. And you certainly cannot do both while also transferring $1.5 trillion to the United States.

The social consequences are becoming increasingly visible. Welfare programs that European governments cannot afford to cut — for the electoral reason that cutting them produces political earthquakes — are quietly deteriorating through underfunding, delayed investment, and the creeping privatization of functions that were once public. The health systems, the pension systems, the educational systems that made postwar Europe the most equitable region in the world are being hollowed out from within, not through explicit policy choice but through the relentless arithmetic of budgets that do not balance. The populations experiencing this deterioration are not wrong to be angry. They are responding rationally to a real decline in the quality and security of their lives.

The Desperate Hope - Waiting Out Trump, Hoping for the Next Ideologue

They want to maintain Trump’s interest in Europe, wait him out, and hope that the next president will be an ideologue who ties America’s future more closely to Europe’s destiny.

Diesen reconstructs the operative European strategy with the precision of someone who has spent years studying it from the outside. Everything, he argues, rests on a single bet: that the Americans can be kept engaged in European security long enough for something to change. The United States, in a genuinely multipolar world, has other strategic priorities and will eventually reduce its European footprint. European governments know this at some level. Their response is to offer whatever is required to delay that reduction — massive economic concessions, political subordination, rhetorical solidarity — while hoping that the next electoral cycle produces an American president more committed to the transatlantic relationship. It is a strategy of deferral dressed up as diplomacy.

The theory of the case, as Diesen reconstructs it, has a certain internal logic. Trump is idiosyncratic. His personal engagement with European leaders, his golf-course meetings, his susceptibility to flattery and transactional arrangements — these create opportunities for European governments to maintain American attention and interest even as the structural logic of American strategy points toward withdrawal. By demonstrating maximum loyalty and willingness to pay, European leaders hope to keep Trump personally invested in European security to a degree that pure strategic calculation would not support. And then, when the next election comes, they hope for an ideologue — a Democrat or a traditional Republican internationalist — who will restore the old framework on principled rather than purely transactional grounds.

The logical conclusion that European governments refuse to draw:

The obvious strategic implication of the dependence analysis is: end this war now
As long as the conflict continues, the security dependence gives the United States enormous leverage
That leverage is being converted, systematically, into economic and political tribute
Every month of war continuation deepens the dependency and makes eventual autonomy harder to achieve

The problem with this strategy — beyond its dependence on American electoral outcomes that Europeans cannot control — is that it requires continuing the Ukraine war indefinitely as the mechanism of American engagement. As long as there is a war, European governments can justify their extraordinary economic concessions on security grounds. As long as there is a war, the American military presence in Europe has a rationale. As long as there is a war, the logic of alliance solidarity prevents any serious reconsideration of the underlying economic relationship. The war is, paradoxically, both the cause of Europe’s economic distress and the political justification for all the policies that perpetuate it.

Ending the war would require European governments to acknowledge that the initial strategy — using Ukraine to permanently weaken Russia — has failed. It would require negotiating with Russia from a position of strategic weakness, accepting outcomes that fall far short of the maximalist war aims that European leaders have publicly committed to. It would require explaining to populations that have been told the war is about democracy and European values that it is now time for a compromise that leaves Russia in possession of significant Ukrainian territory. That is a difficult political message. But it is less difficult, Diesen argues, than the alternative: continuing a war that is destroying the European economy while the United States extracts tribute from the ruins.

Eighty Years in Uncle Sam’s Basement - the Chains Become Comfortable

It is eighty years in Uncle Sam’s basement — the chains become comfortable over time, and after centuries as the subject of world history, the realization of having become its object is genuinely disorienting.

There is a psychological dimension to Europe’s paralysis that goes beyond strategic miscalculation or institutional inertia. For several centuries, Europe was not merely a participant in world history. It was the subject of world history — the civilization that organized, mapped, colonized, and ultimately defined the modern world in its own image. The great powers that sat at the Congress of Vienna in 1815, the empires that carved up Africa at Berlin in 1884, the statesmen who redrew the world map at Versailles in 1919 — all of them were European. The shift from that position to one of increasing marginalization is not a mere geopolitical adjustment. It is a transformation in identity, in self-understanding, in the most basic sense of who and what Europe is.

“After centuries, Europe sat at the table and moved the pieces,” Diesen observes. “They were the subject of world history, not its object. The realization that they now belong among the pieces being moved — that is humiliating. And there is a certain panic, without solutions.” This is not mere metaphor. The political symptoms of this panic are visible across the continent. The nostalgia politics that celebrates a national greatness that no longer exists. The scapegoating of immigrants, minorities, and external enemies for decline that is structural and self-inflicted. The oscillation between grandiose claims about European values and civilizational leadership and the paralyzed inability to act on those claims. All of these are responses to a disorientation that European politics has not yet found the language to address directly.

The transformation from historical subject to historical object:

For centuries, European powers sat at the table and determined the agenda for the rest of the world
They were the active agents of history — colonizers, empire-builders, architects of world order
The current realization is that they are now the objects being managed, extracted from, and repositioned
This is experienced as deeply humiliating — and has produced a political panic without constructive outlet

Wolff identifies the same dynamic within the United States, where it takes a different form. American political culture cannot accommodate the straightforward acknowledgment of decline because that acknowledgment would require dismantling the mythology of manifest destiny that is foundational to American national identity. The result is a political system that oscillates between denial — the insistence that America is still the indispensable nation, still the unipolar power, still winning — and the desperate theater of a Trump, who acknowledges the failure loudly while proposing responses that are psychologically satisfying but strategically incoherent. Neither pole of this oscillation produces a coherent strategy for managing a transition to a multipolar world.

Europe’s version of the same dysfunction is less theatrical but equally dysfunctional. The institutions that collectively constitute the European foreign and security policy establishment — the think tanks, the foreign ministries, the NATO bureaucracies, the Brussels apparatus — are so thoroughly organized around Atlanticist assumptions that the cognitive infrastructure for a genuinely alternative strategy barely exists. It would need to be built from scratch. Building it would require acknowledging that the previous framework was not merely challenged by external events but was, at a fundamental level, inadequate from the beginning. That is an institutional demand that most institutions are incapable of meeting while continuing to operate normally.

The Final Reckoning - Economic Suicide as Political Virtue

Europe stands before a choice: navigate the contradiction and begin building something new — or continue drowning in the costs of a past system that no longer offers any of its former benefits.

The Ukraine project was, at its deepest level, economically motivated: a fantasy of a smashed and colonized Russia that would supply raw materials and market access to a Western-managed empire for the rest of the twenty-first century. That fantasy was old — rooted in European imperial traditions that never entirely disappeared — but it was very much alive in the think tanks and foreign ministries of the 2010s. It has now failed with a comprehensiveness that is difficult to overstate. Twenty sanctions packages, all of them failed. A military conflict that has killed hundreds of thousands and displaced millions while failing to achieve its stated strategic objectives. A European economy that is weaker, more dependent, and more politically fragile than at any point since the 1970s.

Wolff frames the core analytical lesson with the precision that his years as an economist have given him. Systems that once served a function do not simply expire — they linger. And when they linger past their moment of utility, they stop delivering benefits and start delivering only costs. The Atlanticist order gave European nations security, prosperity, and a sense of civilizational purpose for decades. It is now demanding, as the price of continued membership, the surrender of energy independence, the redirection of investment capital to American markets, the subordination of European economic policy to American strategic preferences, and the indefinite continuation of a war whose principal beneficiaries appear to be the American defense industry and American geopolitical positioning — not European security.

Europe’s fundamental errors, laid out in sequence:

Europe never understood that it had lost its position as the center of the world — the adjustment was never made
Instead of developing strategic technology, it lived entirely under the American umbrella
The Marshall Plan in reverse: $1.5 trillion extracted and flowing into the United States
The crisis of political legitimacy — the people have stopped trusting governments that have no answers

The Chinese, Russians, and Vietnamese — the adversaries who were excluded from the Western-led order and forced to develop their own capacities — have navigated the transition to multipolarity with greater agility than the Europeans who were, until recently, the order’s most comfortable beneficiaries. They navigated the contradiction between old dependencies and new possibilities because they had no choice. They could not afford the luxury of denial. Europe has had that luxury for eighty years, and it has used it to avoid the reckoning that is now arriving with compound interest.

The final choice stands before European governments:

What are you waiting for? For the United States to become great again — not happened in thirty years
Navigate the contradiction: break from the deepening dependence and begin building strategic autonomy
End the war — or continue going down with a ship whose captain has already decided to abandon it
The chains may have become comfortable after eighty years — but they have always been chains

Europe’s economic suicide is not inevitable. The continent retains significant assets: a large wealthy population, strong universities, residual industrial capacity, and a geographic position that makes it a natural bridge between the Atlantic and Eurasian economic spaces. What it currently lacks is the political imagination to deploy those assets in European rather than American interests. That imagination could, in principle, be summoned. The question is whether the political crisis that is already underway will produce, through the democratic process, leaders capable of the necessary reckoning — or whether it will produce instead a further descent into nationalist scapegoating and authoritarian shortcuts that would make the reckoning even harder.

As Wolff observes: Russia and China are watching. They are talking to each other, most likely every night, in something like disbelief at the spectacle of Western self-destruction. They do not need to intervene. The West is doing the work for them. The only remaining question is whether Europe will grasp its situation clearly enough, and in time, to choose a different path. The answer to that question will determine whether European decline is a controlled transition to a more modest but still dignified place in a multipolar world — or a free fall whose bottom has not yet been reached.

Thank You, Richard Wolff.