I am linking two pieces from Asia Times, one by M K Bhadrakumar, and one by Gabriel Kolko. Kolko’s is second, and zooms back from Bhadrakumar’s relative microanalysis of realignments in the Middle East.

M K Bhadrakumar served as a career diplomat in the Indian Foreign Service for more than 29 years, with postings including ambassador to Uzbekistan (1995-98) and to Turkey (1998-2001). Mr. Bhadrakumar writes frequently for Asia Times Online, and I have found myself consistently impressed by the former Ambassador’s grasp of the realpolitik of South and Southwest Asia.

The linked piece frm the most recent ATO is interesting because — as Bhadrakjumar always does — he has by-passed the conventional discourse, with all its propagandized catchphrases and premises, and given us a peek into the mindsets of the various foreign services. As someone who had two opportunities to work directly out of Embassies, and to observe the peculiar world of “diplomacy,” I find his very frank and nuanced accounts quite valuable.

The cynicism of realpolitik is offputting to many people, which is why consumers prefer news with a nice moral narrative of good and evil. But the world-system we live in remains — for the time being — one of strife and maneuver; and these maneuvers have real consequences. Understanding this background is the only way we can make sense of the policy initiatives of our own so-called leaders, and the only way we can deconstruct the stories they feed us to gain our acquiescence.

The ascendancy — at least for the time — of Ahmadenijad, Nassrallah, and Sadr is said to represent the rise of a Shia bloc, with Iran at its helm. While there may be an element of truth in that, it is like describing the paint on a house. There is a lot more about the house that we need to know — the materials with which it is constructed, the floor plan, the foundation, the drainage of the land under it, how the roof holds up in stormy weather, etc etc etc.

The demonization of these three leaders is an active campaign, which is one reason we have to take many reports of their activities with several grains of salt. And while the details of the actual actvities of any one of them may or may not seem unsavory, that is not the issue that preoccupies US leadership, or the leadership of the US aircraft carrier, Israel. The issue that concerns US leadership is that these three have chosen a political course, with political Islam as their popular reply to the depradations of neoliberalism, that is explicitly anti-American. This makes them, for better or worse, objectively anti-imperialist. While many of us might prefer that the opposition to imperialism come in a more familiar and acceptable form, the realworld is more complex than that by orders of magnitude.

Let me reiterate, the reason for US establishment opposition to these leaders has nothing at all to do with, for example, how they are perceived to treat women. The US used this as an excuse to attack Afghanistan, and the position of women post-invasion, outside of a tiney enclave in Kabul, has degenerated for women to one worse than it was under the Taliban… and that is a feat. The mobilization of sentiment in the West against political Islam is manipulative, and in no way represents the true motives of those who generate it. The reason for US opposition to Ahmadenijad, Nassrallah, and Sadr is their declared intent to move the region toward independence from US control.

With that preface, here is Mr. Bhadrakumar’s analysis:

The Saudis strike back at Iran
By M K Bhadrakumar

If ever the need arose to differentiate between brothers and friends, that was last week when Saudi King Abdullah bin-Abd al-Aziz al-Saud spoke of Iran as a “friend” of the Saudi state.

The king said this while receiving Iranian Ambassador Hossein Sadeqi during the latter’s farewell call on the conclusion of an eventful two-year tour, which witnessed, arguably, a steady rise in

the warmth and coziness of Saudi-Iranian relations.

The king praised the trend in the relations between the two countries in recent years, and stressed the importance of bolstering Saudi-Iranian relations “in all fields”, adding that Saudi Arabia had “confidence” in Iran. But what stood out was Saudi Arabia’s characterization of ties between the two most important countries of the Muslim world as being between “friends”.

Nevertheless, Iran’s sense of unease about the shadows falling on Saudi-Iranian ties and the potentially deleterious trust deficit developing between them over issues of regional stability and peace was apparent in its decision last week to keep out Saudi Arabia from the trilateral summit that Tehran proposed, involving the heads of states of Syria and Iraq. What has led to a chill in Saudi-Iranian relations is the eruption of vicious sectarian strife in Iraq, apart from the crisis unfolding in Lebanon.

Saudi Arabia has viewed with disquiet the rapid ascendancy of Iranian influence in Iraq since the US invasion. The reasons are several, but primarily the Shi’ite claim of political empowerment in the region haunts Riyadh, coupled with the prospect of Iran’s seemingly unstoppable march as the premier regional power in the Persian Gulf region and the Middle East. The disquiet has turned into dismay as the incipient murmurs of a likely shift in the United States’ strategy in Iraq have lately become audible, and given the likelihood of the shift involving a constructive engagement of the regimes in Tehran and Damascus by Washington.

Despite sustained Saudi (and Egyptian) efforts to carve out a niche of influence in the fragmented Iraqi political landscape, the desired results haven’t been forthcoming. The latest Saudi attempt was the Mecca Document of October 20, endorsed by 29 Iraqi Sunni and Shi’ite senior clerics who assembled in the Muslim holy city of Mecca. They vowed to God in front of the blessed Kaaba “not to violate the sanctity of Muslim blood and to incriminate those who shed [it]”.

But not only has the Mecca Document not arrested Shi’ite-Sunni hostilities within Iraq, the sectarian divide has since dramatically widened. Iran alleges that conspiracies pitting the Sunnis against Shi’ites are afoot. The powerful Speaker of the Iranian majlis (parliament), Gholam-Ali Haddad-Adel, while visiting the eastern province of Sistan-Balochistan (bordering Pakistan’s restive Balochistan province), said on Saturday, “Today the enemies wish to sow the seed of discord among Shi’ites and Sunnis and make them insult each other … The enemies of Islam are attempting to disrupt Muslim vigilance, lay their hand on the wealth of Muslim lands and plunder their oil reserves. To achieve this goal, they are attempting to sow the seed of discord among Muslims.”

Indeed, Western media have also reported that in recent months US and Israeli intelligence have been working together in equipping and training Kurdish, Azeri and Baloch tribesmen to undertake covert operations in Iran’s northern and southeastern provinces. Tehran already visualizes that in Lebanon, too, in the latest confrontation, the battle lines will fast assume a Sunni-Shi’ite dimension.

The latent Saudi-Iranian rivalry is likely to play out in Lebanon. Unlike with the Iraq problem, there is a convergence of Saudi and US interests over Lebanon. Saudi commentators have been counseling Washington not to compartmentalize Iraq and Lebanon as separate issues.

From the Saudi perspective, any US-Iranian engagement in the region should not be limited to a US “exit strategy” in Iraq. The fear of a resurgent Iran is palpable. The London-based Al-Hayat newspaper recently compared Iranian President Mahmud Ahmadinejad to Osama bin Laden as two renegades equally bent on destabilizing the region.

That is why Saudi diplomacy worked in tandem with the US to get a “global consensus” over the setting up of an international tribunal to look into the murder of former Lebanese premier Rafik Hariri. Saudi commentators heaved a sigh of relief when Moscow decided to delink from Syria’s (and Iran’s) dogged opposition to the tribunal. But what was extraordinary was that the Saudis publicly commended the “significant and remarkable cooperation” from China in making it clear to the Russians that China was “on the side of the US, France and Britain” in the United Nations Security Council negotiations over the decision to set up the tribunal.

A Saudi commentator boasted, “By doing so, China left Russia with the sole option of cooperating and not obstructing.” Indeed, the People’s Daily recently took note of Washington’s realization of the need of a “new direction” in its Middle East policy - “a new FULL

FROM Kolko:

The failure of socialist theory is much more than matched by the failure of capitalism because the latter has the entire responsibility for keeping the status quo functioning, and it has no intellectual basis for doing so. The crisis that exists is that capitalism has reached a status of most destructiveness, and no opposition to it exists.

This malaise involves foreign affairs and domestic affairs - vast greed at home and adventure overseas. If the foreign-policy aspects are largely American in origin, the rest of the world tolerates or sometimes collaborates with it. Its downfall is inevitable, perhaps imminent. The chaos that exists, much less comes, will exist in a void. No powerful force exists to challenge it, much less replace it, and therefore it will continue to exist but at immense and growing human cost. Visions to create alternatives are, for the moment at least, mostly cranky.

Ingenious and precarious schemes in the world economy today have great legitimacy, and they profit in the sense that classical economics is fast becoming irrelevant. It is the era of the fast talker and buccaneer-snake-oil salesmen in suits. Nothing old-fashioned has credibility. Joseph Schumpeter and other economists worried about pirates, but they are more important today than ever before, including than during the late 19th century when they were immortalized in Charles Francis Adams Jr’s Chapters of Erie.

The leitmotif is “innovation”, and many respectables are extremely worried. I argued in Counterpunch earlier (June 15 and July 26) that gloom prevailed among experts responsible for overseeing national and global financial affairs, especially the Bank for International Settlements, but I grossly underestimated the extent of anxieties among those who know the most about these matters.

More important, over the past months officials at much higher levels have also become much more articulate and concerned about the dominant trends in global finance and the fact that risks are quickly growing and are now enormous. Generally, people who think of themselves as leftists know precious little of those questions, questions that are vital to the very health of the status quo. But those most au courant with global financial trends have been sounding the alarm louder and louder.

The problem is that capitalism has become more aberrant, improvised, and self-destructive than ever. It is the age of the predator and gamblers, people who want to get very rich very quickly and are wholly oblivious to the larger consequences. Power exists but the theory to describe the economy that was inherited from the 19th century bears no relationship whatsoever to the way it operates in practice, a fact more and more recognized by those who favor a system of privilege and inequality.

Even some senior officials at the International Monetary Fund (IMF) now acknowledge that the theory that powerful organizations cherish is based on outmoded 19th-century illusions. “Reconstructing economic theory virtually from scratch” and purging economics of “neoclassical idiocies”, or that its “demonstrably false conceptual core is sustained by inertia alone”, is now the subject of very acute articles in none other than the Financial Times, the most influential and widely read daily in the capitalist world.

Capitalism as an economic system is going crazy. In late November there were a record US$75 billion in global mergers and acquisitions in a 24-hour period. Global capitalism is awash with liquidity - virtually free money - and anyone who borrows can become very rich, assuming he or she wins. The beauty of the hedge fund is that individual risks become far smaller and one can join with others to wager big and much more precariously.

So spectacular chances are now being taken: on the value of the US dollar, the price of oil, real estate and countless others gambles. Amaranth Advisors lost about $6.5 billion at the end of September on an erroneous weather prediction and went under. At least 2,600 hedge funds were founded from the beginning of 2005 to October 2006, but 1,100 went out of business. The new financial instruments - derivatives, hedge funds, incomprehensible financial inventions of every sort - are growing at a phenomenal rate, but their common characteristic, as one Financial Times writer summed it up, is that “everyone [has] become less risk-averse”.

Therein lies the danger.

Hedge funds will bet on anything, pension-fund members FULL