Note the following from An Economic Model for Securing Hormuz, 30 April 2026 for Project Syndicate, by three British-based emeritus professors of economics. Or see The Strait of Hormuz, Towards a Long-Lasting Solution 18 April 2026, CESifo Working Papers.

The authors say: “The need for solutions that rely less on coercion and more on aligning economic incentives with America and Iran’s shared interest in keeping the Strait open. That may mean institutionalizing today’s emerging arrangement, by which Iran, in coordination with the Gulf states, guarantees safe transit for a fee. Such a system would resemble the agreement under the Montreux Convention that governs passage through the Turkish-controlled Bosphorus and Dardanelles Straits. An Iranian toll based on Turkey’s current transit fee of $5.83 per net ton would be about $0.58 per oil barrel—small enough, relative to the value of the goods, that shipping firms would not balk at the expense or seek alternative routes. … such a toll would generate $4.3 billion annually, an amount large enough to create significant incentives for Iran to facilitate and ensure safe passage.”

Such an arrangement is described as a “service-based toll system”, and is arguably more efficient and stable than any alternative arrangements.

Clearly such ‘service-based’ systems are used in the Panama and Suez Canals. The service component of canal maintenance is obvious, and of course in the Panama case there is a substantial resource cost in terms of water required to run the locks. Yet in both cases the fees charged include substantial ‘rent’ or ‘royalty’ components. And for the Strait of Hormuz – along with the other examples – a significant service would be that of ‘protection’ or ‘security’.

Such a protection-fee may have the look of ‘extortion’ about it; but it also has the look of a regular ‘property right’; noting that property rights – and fees arising – form the centrepiece of liberal economics. Indeed, as it was, the world economy – and ecology – has been blighted by ‘cheap oil’. Every little bit to raise the price of oil – and oil-based products – towards their long-run opportunity costs can only be a good thing.

Under such a commercial regime, we could call the Iranians and Omanis (and whoever else becomes part of the service-consortium) Strait Lords or straitlords (like landlords). Indeed Egypt and Panama are – among other things – Canal Lords.

What would happen if the Strait of Hormuz was blocked by a giant earthquake? Then a pipe, tunnel, road or canal would have to be built. There would be no argument then about a portage fee being charged.

Indeed, there are many landlocked countries in the world. They expect to have to pay something to foreign authorities to access the international marketplace for goods. Ethiopia, with well over 100 million people, depends substantially on the port of Djibouti. Kazakhstan depends on China and Russia. Paraguay depends on access to the Paraná River. Switzerland depends on the Rhine and Rhone. Austria depends on the Danube. These passages all have associated commercial costs.

War and Sport

In the event of wars, Straits are typically the first passages to be blocked. Just think of the Strait of Dover, which connects the English Channel to the North Sea, in World War One and World War Two. The British used mines and submarine nets and guns to keep unauthorised traffic out. The best solution to wartime privations is to not start wars in the first place; and – if they happen anyway – to quickly find a pragmatic economic solution to end the war without creating ‘losers’; to end the war through negotiations rather than belligerent ‘demands’.

There is only one unreasonably belligerent nation-state in Southwest Asia, and it doesn’t have a coastline on the Persian Gulf. The rest of the states in a region – or in the world, especially when a Strait or a Gulf has global significance – can corral such a rogue state, if they choose to do so.

It is to the dismay of the vast majority of the world’s population that the rogue state of Israel has been allowed to operate uncorralled, and for so long; Israel with the thoughtless support – the uncritical loyalty – of its distant champion, its Goliath. Principles-based economic pragmatism can rule when rogues are constrained or reformed.

Iran is a proud nation that will play a fair game; it will, if allowed to, play fair and play hard. That’s the sporting mantra which reflects, for example, the New Zealand All Blacks.

Conclusion

The emeritus economists conclude: “The Strait of Hormuz is a cornerstone of the global energy system. For many years, the United States effectively managed its security; but this arrangement has become economically inefficient and politically asymmetrical in terms of responsibilities and burden-sharing. A cooperative regional security regime funded by transit charges [my emphasis] offers a promising alternative that would benefit oil exporters, shippers, and consumers.”

Yes, such a regime could contain a royalty component as well as a service component; ‘clipping the ticket’. Capitalism runs best with rents, but not excess rents, not Goliath rents.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

7 May 2026 – In Aotearoa New Zealand, citizenship functions as an exit permit. An adult New Zealand citizen is free to choose to become a foreign denizen.

A denizen (of New Zealand) is a person living and working in New Zealand, but who doesn’t qualify for a New Zealand passport. New Zealand has three tiers of denizenship, although the first tier are actually citizens who are perceived as immigrants. Too many New Zealanders – probably increasing numbers of New Zealanders – tend to regard all New Zealand residents who don’t look or sound Pakeha, Māori, Pasifika, white South African, or Australian as non-citizens; as not real New Zealanders.

New Zealand is increasingly becoming a country with a high denizen-to-citizen ratio. New rules intended to make it more difficult for New Zealand permanent residents to become citizens of Aotearoa New Zealand can be expected to keep more immigrants here. That may be the intention.

Probably the countries with the world’s highest denizen to citizen ratios are the United Arab Emirates and Qatar.

First-tier denizens don’t count as denizens, because they are actually citizens; they are just casually perceived by many to be denizens. Citizens of Indian or Chinese heritage whose presence in New Zealand dates back to the nineteenth century may be perceived as denizens now, whereas they were once perceived as citizens.

Second-tier denizens are those people living in New Zealand with ‘permanent residence’ status. Except that we would regard New Zealand resident Australians as citizens, even if most of them are not, technically.

Third-tier denizens are any ‘visa-holders’ living in New Zealand with some ‘right to paid work’ provision in their permits. This does include many international backpackers and many international students.

The denizen to citizen ratio is the number of resident adult second- and third-tier denizens divided by the number of resident adult citizens. I don’t know what it is, but am guessing that it is about one-to-three, and growing. (In the United Arab Emirates the denizen to citizen ratio is about nine-to-one.)

Is the new policy essentially an immigrant-retention scheme? We need our immigrants to stay, so in that sense it may be good policy. And, as the financial literati keep telling us, we are going to need many workers in the 2030s and 2040s to sell or otherwise provide services to our seniors. It’s just a shame that New Zealand has so many jobless young people, including many NEETs – over 20% of women aged 20 to 24 counted as NEETs in early 2026 – who have finished their tertiary education yet are not able to secure employment.

Young and Old

Just a note, if a decision is ever made to income-test New Zealand Superannuation, then many New Zealanders aged over 65 will choose retirement over employment, aggravating the pensioner to worker ratio. New Zealand has one of the world’s highest pensioner employment rates, thanks to its universal system of retirement income which enables people to delay retirement. Statistics New Zealand should keep more granular data about the employment attributes of people aged over 65.

And they should keep statistics of the numbers of qualifying people aged over 65 who choose to not opt-in to New Zealand Superannuation. The fiscal cost of qualifying older cash millionaires signing up for a superannuation income which they don’t need – all citizens and denizens with permanent residence – may be smaller than is widely presumed. We should find out.

The cost of income-testing seniors may be less than the actual savings. Further, given that the universal model works best for seniors, it most likely works best for juniors, too. Too many NEETs are trapped into the targeted benefit system. New Zealand is too poor to sideline its young citizens; too many respond by using their citizenship as an exit certificate; exit from Aotearoa New Zealand.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

6 May 2026 – While I have been aware for some time about Sweden’s difficulty in adjusting to its large inflow of refugees in the 2010s – especially African and Muslim refugees – I was nevertheless shocked by what I saw in the 2025 alternative travel documentary series Scandinavia with Simon Reeve, broadcast in New Zealand by SkyGo. The particular episode which compares and contrasts refugee ‘integration’ in Sweden and Denmark is here on DailyMotion, with a full transcript.

Before mentioning crime, cocaine and apartheid, we should note that Sweden is a large-scale military systems exporter. For Sweden, the ‘big gun’ industry is equivalent to the dairy industry in New Zealand as a source of foreign exchange revenue. Reeve notes: “There is really no other country of comparable size, of comparable population that can produce its own fighter jets and submarines. … The Swedes make some of the most advanced weapon systems in the world.”

In still-mainly-white and privileged central Stockholm, a quasi-progressive economist who appears to have a Jesus-complex notes among other things that Sweden’s much vaunted (though targeted) tax-subsidy system is “ensuring that women not just continue to provide economically for the family, but also for the state as well.” He notes “they contribute so much to our economy and welfare”. Sweden is the archetypal liberal mercantilist state that insists on running huge current account surpluses, and interprets national success as making vast amounts of money; it’s a corporate society which engineers people into making choices which reflect the ‘rainy day’ values of its state system.

In six out of seven years, Sweden ran current account surpluses in excess of five percent of GDP. Sweden has always run such surpluses for more than thirty years; as a country, it keeps putting ‘money in the bank’ and not spending it. It could be said that its foreign ‘investments’ support New Zealand’s inflated standard of living. New Zealand hasn’t had a current account surplus since 1973, and typically has a current account balance of minus five percent of GDP; mirror image of Sweden.

Despite (or because of) its liberal and mercantilist credentials, Sweden is a failing state. Reeve visits the police bomb squad. We learn that: “Deadly shootings among drug gangs, largely run by people from immigrant backgrounds, have more than tripled. The gun murder rate in Stockholm is now roughly 30 times that of London. Sweden has the highest gun crime death rate in Europe, after Montenegro and Albania. And it’s not just guns. … Somewhere around 2018, [Sweden] experienced rapidly increasing numbers of homemade bombs, hand grenades and so on. … Most of the hand grenades being thrown are being thrown by very young boys and girls. … Bomb units can get four callouts a day.”

He goes on to note: “Gang warfare has exploded here, fuelled by the rise in cocaine use in Sweden and across Europe. Gangs have taken advantage of liberal policies that children shouldn’t be arrested and actively recruited them. … Most of the perpetrators, as well as the victims, come from immigrant communities. … In recent decades, Swedes welcomed refugees from world conflicts, more than 100,000 from the wars in the Balkans, and hundreds of thousands from Syria, Iraq, Afghanistan. … Housing’s been provided, but often far from city centres, in estates where up to 90% of residents are now from immigrant backgrounds. … Two areas of suburban Stockholm … estates are cut off, hemmed in by motorways.”

The main problem growing up in those estates, mentioned by a Swedish-born woman of Somali descent, is “poverty”. “When I was 15 years old, I lost my best friend at this gang war that has been happening for 10 years, for decades. … The first thing is they need to see us as humans.” Yes, in Sweden, with its much-vaunted welfare state. (The Somali refugees came in the early 1990s, as a result of one of the United States’s failed foreign adventures.)

Reeve concludes: “We can debate whether there’s been a failure to integrate, but there has definitely been a failure of integration. The consequences are now being felt.”

The present government – in office since 2022 – is, more than most governments in Sweden’s history, heavily into New Zealand’s Luxon/Willis style of fiscal consolidation. Albeit with higher taxes and targeted subsidies.

We may note the following recent stories hosted by Al Jazeera: ‘Ready to murder?’ How criminal networks in Sweden are recruiting children to kill (15 Dec 2025), and Gangland wars killing dozens of bystanders, report Swedish police (4 May 2026). The former states that “What began as a utopian welfare project [of public housing in the 1960s and 1970s] gradually evolved into the physical framework of today’s segregated suburbs.” (Is this a portent of the fate which will befall the Unitec housing project, Te Kukūnga Waka, still very much in its early days? See my Carrington Precinct, Aka Unitec, 5 February 2026, Scoop) The latter story notes that “the minority right-wing government, propped up by the far-right Sweden Democrats, has been pushing through proposals to crack down on crime and immigration ahead of a general election on September 13.”

Sweden, reflecting its exceptionalist image as a warmly welcoming country, rejected any attempts to ‘assimilate’ its refugee immigrants; supposedly leaving them to retain their cultures of origin while being supported in deep poverty traps, in a suffocating welfare state of targeted housing and tightly means-tested hand-outs.

Denmark

Denmark, in recent years has gone the other way, heavily restricting refugee immigration and forcibly removing people from their immigrant silos into ‘mixed communities’. They have done much as what ACT in New Zealand wants to do here; mix them up, and sign them up to traditional national values.

Simon Reeve notes: “It would be wrong to think there are no problems in Denmark. All this social cohesion means outsiders can sometimes feel unwelcome. If you don’t conform here, it can feel uncomfortable.”

“The government even introduced what was called a ghetto law, aimed at preventing neighbourhoods being dominated by so-called non-Western immigrants. … One designated ghetto was the multicultural neighbourhood Mjolnaparkin. … Some families were actually forced to relocate. … It’s been described as the social experiment of the century. It’s also being described as social policy with a bulldozer. … Non-western parents in ghetto areas are now required to send their one-year-olds to preschools to ensure they learn Danish and traditions and values, or they lose government welfare benefits. Ghettos have since been renamed parallel societies …  an attempt to enforce and impose fundamental Danish values.”

Current policies; and multiculturalism in Aotearoa New Zealand

“Sweden’s reduced overall net immigration to zero. Denmark has the same target … they’ll offer up to £26,000 for immigrants to return home.” And “even in liberal Sweden, I met indigenous people who feel forgotten and excluded.” Shame, shame, shame. Sweden functions now too much like an apartheid state. And Denmark too, in its own less violent and less overt way.

In my view, genuine multiculturalism – cultural fusion – works best. In Aotearoa New Zealand that’s an absolute requirement, given the extent of demographic turnover, losing so many New Zealand citizens as well as welcoming immigrants. New Zealand will progress best without particular immigrant cultures becoming too dominant in any suburbs.

The word I like is ‘fusion’. Certainly not ‘assimilation’! Think of it like a ‘fusion restaurant’. We like immigrants to become fully integrated New Zealanders. But, in that process, New Zealand and ‘New Zealand values’ change; they adapt in a progressive way. In New Zealand we are doing this so much better than in Scandinavia. Especially in my own community of West Auckland which is financially poor but culturally rich, and has no ethnic or cultural silos or ghettos.

New Zealand of course could do much better. But it’s so important that neither overt nor covert racism creep further into the mainstream political discourse here. In New Zealand, relatively recent immigrants and their descendants supply so many of the goods and services which sustain us. Thankyou.

About the writer:

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Not me personally; and, of course, all ethnicities are equal. A week or so ago, as I was casually doing something else, I saw being interviewed a gentleman who I understand was a Gazan intellectual.

When asked about antisemitism, on the presumption that many Gazan people are somehow ‘antisemitic’ (and that somehow that alleged attitude is how so many people of Gaza got to be slaughtered with minimal western sympathy), the gentleman paused (in a kind of déjà vu frustration at the question), and then said “I am a Semite”.

Our use of the word ‘Semite’ (and its derivative words) is reminiscent of the widespread usage – between around 1875 to 1945 – of the word ‘Aryan’. Both words have been used as racial tropes. The correct word to describe people who are ‘anti-Jew’ is Judeophobia.

In my estimation, people who favour the term ‘antisemitism’ over ‘Judeophobia’ are too lazy to resist time-worn tropes. Through that laziness they become perpetrators of casual racism. Language matters.

Something else. I have only just come to hear about Israel’s Dahiya doctrine, of terrorising populations through the practice of domicide. James Bayes on Inside Story (Al Jazeera, 1 May 2026) quoted Daniel Reisner, lawyer for the IDF in 2009, saying: “If you do something for long enough the world will accept it, international law progresses through violations.” Such pursuits of domicide are the same dehousing and famine doctrines as those prompted by Churchill’s bestie Friedrich Lindemann during World War Two. Repetitive justification of collective terror does not make wrong behaviour right. Cases of domicide are motivated by racism and supremacism.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Analysis by Keith Rankin, 1 May 2026.

New Zealand is almost completely dependent on four things for its survival in the contemporary world. Imported wheat, rice, and refined fuel. And ships.

Wheat

New Zealand grows wheat in the South Island, most of which becomes animal feed. Reliance on New Zealand grown wheat is forestalled by a lack of milling capacity, and a lack of inter-island shipping. Eighty percent of New Zealand residents live in the North Island.

In the last week I have seen stories of South and West Australian wheatfields being plagued by mice. It’s a recurring story in Australia. I have also seen a story about a coming ‘super El Niño’ weather event. Such an event would hit the Australian wheatfields hard; drought and fires in South Australia, and too much rain in Queensland’s Darling Downs. Further, coming constraints on fertiliser supply can be expected to hit Australia hard,

In most years, 100% of New Zealand’s imported wheat – on which the North Island is totally reliant – comes from Australia. Much of that comes in processed form, given the constraints on flour milling in northern New Zealand.

What if Australia get better offers for its possibly compromised wheat crop? New Zealand may find itself in a diminished bargaining position for its usual slice of the Australian wheat pie.

New Zealand could transition to an economy based on balanced farming, with crop-farming and horticulture taking an essential and strategic place. But that would take time. It could only happen in the medium or long term.

Rice

Rice is a second staple food in New Zealand; a grain food which is entirely imported. Reliable supplies may become hard to secure in the future; though New Zealand’s traditional reliance on Australian rice means that there may still be a degree of rice-supply security.

We note however that rice is a staple of Asia, and that East and South Asian countries are likely to be among the most adversely affected by the imminent blockade-induced global economic crisis. Rice is a Giffen good, meaning that, as its price increases, Asian consumers eat more rice, not less. (Such Asian consumers can be expected to respond to a severe economic crisis by cutting back on the kinds of foods New Zealand exports, and to eat more rice instead; this is because rice will remain cheaper in Asia than long-haul imported foods, even when the rice price increases markedly.)

New Zealand should, from next week if not last week, establish a store of rice to ensure food security during a coming crisis; a crisis which seems increasingly likely. Rice, available now, may not always be available. Rice, once cooked, can be eaten directly; it does not require milling.

Ancient Romans, at times, depended on a universal bread allowance (as well as on circuses!). A society under deep strain depends on food benefits. For New Zealand in a future crisis, rice could be the best option as a dominant emergency food staple.

Fuel and Ships

While a producer of crude oil, New Zealand imports practically all the oil-based refined fuel that it consumes. 43% of New Zealand’s diminishing oil exports went to Australia for refining in 2025, down from 99% of a much larger amount of oil in 2011. Most of the rest is now refined in South Korea and Singapore.

For fuel, New Zealand is almost completely dependent on long-haul imports on fuel-consuming ships. At least this is a two-way trade with Korea and Singapore, though imports far exceed exports. So oil tankers taking New Zealand’s oil can at least be guaranteed to return with oil. But there is no guarantee that the rest of New Zealand’s scheduled oil imports will not be redirected, in response to better offers.

On the matter of fuel, it’s very distressing to see Ukraine – now a NATO proxy – doing its best to exacerbate the global fuel crisis by destroying the oil-export capacity of Russia, the one country best placed to relieve the present global crisis. When shortages of Ukrainian wheat threatened Africa’s food supply in 2022, arrangements were made between the combatants to free-up wheat exports. I see no sign of Ukraine or NATO taking the responsible option re the global fuel supply. (Even worse, King Charles – in the King’s speech – tried to incite the United States’ president to escalate the Ukraine-Russia war; a war that can never be resolved by escalation, but which can be resolved by a neutrality deal which would ensure that German troops would never again occupy places like Kharkiv.)

Finally, there’s the issue of ships. What is happening in the world’s shipbuilding industries at present? Are aging and eroding oil tankers and container ships being replaced as they normally would be in peace times? Will there be too few ships next decade to sustain re-established global supply chains; chains which, if similar to those of recent years, almost disregarded shipping as a cost?

Conclusion

For its most basic living commodities, New Zealand is almost completely dependent on long-haul shipping; or, in the case of wheat and rice from Australia, medium-haul shipping. By sea, Adelaide is a long way from Auckland. And New Zealand has minimum short-haul (ie coastal) shipping, which could serve – in a crisis – as an efficient domestic distribution mechanism.

To avoid a food security catastrophe, New Zealand needs to store more food. Food stores facilitate any transition in land use. A substitution to the production of food staples which will feed New Zealanders will take many years.

Rice is the best staple food to store, as well as being a staple much more widely consumed in the existing new New Zealand than in the previous century.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

There is a narrative going around that the war in the Persian Gulf and Gulf of Oman – Israel/USA versus Iran – is a training exercise for the big one, a war between the United States and China centred on the Taiwan Strait.

In Hormuz Today, Taiwan Tomorrow (Project Syndicate, 20 April 2026), Todd G Buchholz argues “By closing the Strait of Hormuz, Iran has handed the Trump administration a practice test. To pass – and preserve deterrence against a Chinese invasion or blockade of Taiwan – the United States must reopen the Strait decisively and visibly with escorts, minesweepers, and strikes on launch sites.”

Also, from Project Syndicate (27 April 2026), we have The Hidden Chokepoints Threatening the Global Economy, by Diane Coyle. She says: “Most notably, Taiwan dominates advanced semiconductor production through TSMC, which accounts for more than 90% of the global supply.” Should military means be used to protect the Taiwanese monopoly of a strategic commodity? That’s not how capitalism is supposed to work.

What would be a geopolitical solution to the presumed – albeit poorly researched – allegation that China plans to exploit the Taiwan Strait chokepoint to bring down The West?

The Asian political territory called China – a mix of continent and islands – is claimed by two rival regimes; one in Beijing, one in Taipei. There is an obvious solution; that the territory presently controlled by Beijing becomes the Sovereign State of China and the territory presently controlled by Taipei becomes the Sovereign State of Taiwan.

Obvious to most people, because most people believe that the boundary between the two territories is the Taiwan Strait. A big miscomprehension, which the geopolitical agitators seem very keen to never discuss; because those agitators – for their own reasons – want to present the Taiwan Strait as the world’s most consequential and unresolved geopolitical boundary.

The principal boundary between the two territories is Xiamen Harbour. There is a second boundary off the coast of Fuzhou. Xiamen is a Chinese city of just over five million people, the population of New Zealand. Fuzhou is a Chinese city of over eight million people, the population of London. Both cities are in the Chinese province of Fujian. The Taiwanese counties of Kinmen and Lienchiang sit on the western (Chinese) side of the Taiwan Strait. Taiwan proper sits on the eastern side of the Taiwan Strait.

Solution

Taiwan could cede the two counties of Kinmen and Lienchiang to China; not necessarily as counties of China’s Fujian province, but as economic zones comparable to Macau and Hong Kong.

In return, China could drop its claim to Taiwan proper. China would drop its claim to the vast majority of Taiwan, which is on the eastern side of the Taiwan Strait.

The result would be two clearly distinct countries – China and Taiwan – internationally recognisable as such, separated by the wide-enough Taiwan Strait; much wider than the Strait of Hormuz.

Yes, both China and Taiwan would be making concessions. But each would be making gains in excess of those concessions; a win-win solution based on reciprocity. China already has substantial pragmatic trade relations with Taiwan; there need be no barriers to the continuance of those relations. Indeed, Taiwan’s relations with all nations could improve, with international recognition of Taiwan as a sovereign nation state.

The world could then heave a sigh of relief; the normalisation of a piece of geography deeply politicised by three small but powerful groups of people – cliques in Washington DC, Beijing, Taipei – cliques with narrow and potentially destructive nationalist and mercantilist agendas.

The people – and other species – of this world should never be held hostage to egos; to bigheads, some of whose natural inclinations are to resort to massive externalised violence if they cannot prevail upon their rivals by ‘peaceful’ means.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Inflation is a topic which has, for a long time now, been at the forefront of normative economics. Normative economics is the economics of mainstream ideology, not the economics informed by concept or science.

The latest New Zealand CPI-inflation data – released this week – have been called the ‘calm before the storm’. We know that the CPI is going to rise markedly in the June quarter. But will that be due to inflation? Or will it be due to the real costs of war; and in the context that the present war has all the elements of global cost, not just local or regional cost. If the latter, then the present ‘war of choice’ – a euphemism for a war of aggression waged by traditional allies – also becomes a ‘cost-of living crisis’ of choice.

Can we characterise other cost-of-living crises likewise, as crises of choice which have downside foreseeable consequences (though, like all crises, may have a mix of upside and downside unintended and unforeseeableconsequences)? Such choice-making would be clear instances of ‘functional stupidity’, as outlined in the 2016 book The Stupidity Paradox: the Power and Pitfalls of Functional Stupidity at Work (by Mats Alvesson and André Spicer). We may note that the stupidity paradox applies to academic workplaces as well as to corporate workplaces.

With regards to ‘unforeseeable consequences’, there is also a category of ‘underforseeable consequences’, meaning plausible consequences only imaginable by people capable of genuine critical reflection. Such people appear in all walks of life; certainly not only in academia. It was Cassandra, in Troy, who foresaw downside consequences which others could not.

Inflation as a Concept: Inflation versus CPI-Inflation

Inflation, as a concept, is defined as a depreciation of the purchasing power of money. (It means that a dollar will buy less in the present than in the past.) Deflation, thereby, is defined as an appreciation of the purchasing power of money. Thus, a symptom of inflation is rising prices. This does not mean, however, that all cases of rising prices can be categorised as inflation.

(There may be cases of inflation where prices are not rising; where falling costs – that is, rising productivity – are offset by monetary depreciation. Indeed, a comparison of the twentieth century with the nineteenth century suggests that inflation may have been more ubiquitous in the twentieth century than is commonly realised. And that much of the hidden inflation of the twentieth century, rather than being a problem, was actually an unrecognised solution to the very real nineteenth century problem of CPI-deflation.)

A depreciation of money – inflation – may be a problem, may be a solution to a problem, or it may be neutral. For inflation to be a significant problem, economists normally understand it to be an ongoing process – like an out-of-control train – rather than a one-off or two-off event.

CPI-inflation has a separate definition. It is defined as an increase in the general – that is, average – level of consumer prices. Consumer prices are prices incurred by households of people within a defined territory; typically, we think of a territorial nation-state, though we could be interested in a province, or we could be interested in a geopolitical region, or the world as a whole.

There are essentially four quite separate versions of CPI-inflation. Only three of these meet the definition of inflation as monetary depreciation. The other version is increases in the cost-of-living, and has been a substantial problem in the world this decade; this version is about real supply, not about money supply. Further, this can become a process of ongoing real-supply cost-of-living increases, not just getting through a limited cost event such as a pandemic or short war; such a process is a significant problem, but it is not inflation. An appropriate policy response is to address the real supply costs, and to stop pretending that it’s a depreciation-of-money problem.

A cost-of-living crisis of choice is a politically imposed real-supply crisis. Conceptually, such crises may be the result of ‘evil’, but more likely they are the result of ‘stupidity’ (refer Bonhoeffer, Cipolla, and Alvesson/Spicer). ‘Stupidity’ can be a technical word; indeed, even words like ‘evil’ can be given a technical meaning, just as the word ‘genocide’ has both technical and popular meanings.

Understanding these conceptual differences is very important, because different kinds of CPI-inflation problems require different kinds of policy remediation. Sometimes the best policy is a political or administrative choice to do nothing; to watch and wait. And certainly a very important part of the policy response to processes of CPI-inflation is to work out which kind – or which kinds – of CPI-inflation are taking place. Getting this analysis wrong can mean the implementation of a policy which is worse – possibly much worse – than doing nothing.

The four kinds of CPI-inflation are these:

·         increases in the aggregate demand for commodities and services; this is primary inflation

·         increases in the supply costs of commodities and/or services; this, in itself, is not inflation

·         a corrective process facilitated, by increases in the supply of or the circulation velocity of money, and that may under certain circumstances go awry; this process is known as secondary inflation

·         a process arising from the presence of different denominations of money – for example, American dollars and New Zealand dollars – and changes in the exchange prices (ie exchange rates) of one such money vis-à-vis others such monies; a process of localised inflation

One: Primary Inflation; exceptional increases in aggregate demand

This is the demand-pull inflation which dominates Economics 101 textbooks. It is commonly understood as ‘too much money chasing too few goods’; though that pithy maxim needs some unpacking.

The best way to understand demand-inflation is through the concept of a demand shock (an acute event) or a demand-stress (a chronic event). An example of a demand-shock is an unfunded increase in the demand, say, for medical services. By ‘unfunded’ we mean that it’s not offset by a decrease in demand for other goods or services. (Though there is an adjustment issue that arises from demand ‘switches’.) Demand ‘events’ or ‘boosts’ can be characterised as shocks, stresses, or switches.

An unfunded increase in spending means, essentially, a withdrawal of money from bank accounts; such withdrawals increase the circulation velocity of money. More generally, a reduction in savings is a sell-off of financial assets, noting that a bank deposit is a financial asset. Alternatively, an unfunded increase in spending means an increase in borrowing – especially borrowing from banks – that is not offset by someone else’s increase in saving; this is new money. This can be called an increase in credit. A demand shock can also arise externally, by money being sent to or brought into a country.

Demand shocks can, potentially, bid up the prices of goods and services. ‘Potentially’, because if there have been ongoing productivity increases, then more spending should be accompanied by more output, and not by higher prices. (If productivity is increasing and there are insufficient demand-boost events, then prices should be falling; that would result in CPI-deflation. Such deflation indeed was the norm in the capitalist world in the nineteenth century; including New Zealand.)

Going back to my example of increased spending on medical services, a demand shock is strictly an increase in demand because people have increased wants; that is, more purchases of ‘nice-to-have’ items. Or it could mean more people moving into older age groups, spending their savings. Or it could arise from more babies being born; as in the New Zealand ‘baby blip’ at the end of the 1980s. It does not mean more purchases of medical services arising from a general deterioration of the health of the population; this example is an increase in real costs, and comes under the label of ‘supply stress’, not ‘demand shock’.

Primary inflation is not a problem in itself. Rather, it’s a feature of the market economy working as it should do; in particular it’s a source of information that production systems are tight, and that new investment would be helpful to deal with the ‘too few goods’ part of the demand-inflation experience. In this last circumstance, higher interest rates are appropriate; they result from increased market demand for production capacity, not from policymakers raising interest rates to discourage the very productive investment that’s required.

There is a special case of demand-inflation, whereby the government sector outcompetes the private sector for new credit. This may or may not be capricious – ‘evil’ as Peter Thiel might say – on the part of government; more often it’s the government borrowing for more essential purposes than the purposes of private borrowers. The capricious case is called ‘crowding out’. In this special case, there is a role for interest rate increases; essentially to ration credit.

It is to the capricious version of this special case that monetary policy as we have come to know it may apply. But this policy – an engineered recession – arguably harms the private sector most. To achieve more private spending and less government spending, it is fiscal austerity rather than monetary austerity which is most pertinent. But even that budgetary policy of ‘fiscal consolidation’ tends to backfire, because so much private income arises from businesses supplying goods and services to government sector organisations; much private investment arises to satisfy governmental demands. Indeed, Air New Zealand always did well supplying air travel to government-connected personnel.

Primary inflation is a mix of rationing and incentive. The more rationing that is required when the economy is responding to increased demands, the more primary inflation there will be. Rising wages, at least in some production sectors, is a part of the resource reallocation process; and is also appropriate to an economy which is experiencing rising productivity.

An important coming example of primary inflation will be the increased spending of accumulated retirement savings; ie from KiwiSaver and other managed funds. Those spending from the biggest funds will be queue-jumpers at a time of inflation-facilitated rationing.

Demand-pull inflation is rationing goods and services by market price, rather than rationing by need or by equity. Most economists will say that ‘rationing by price’ is the most efficient method of rationing. So, the inflation is not really the problem; rather the problem is the unresponsiveness (strictly the ‘under-responsiveness’) of the economy that creates the requirement for rationing. The biggest potential problem is that of inequitable rationing.

Of course, unanticable demand-shocks and demand-stresses are a problem. But they are rare; most demand-events that are heading our way are fully visible, so long as we choose to look. Failure to anticipate the future market demands arising from an aging population (eg healthcare expenditures) and from maturing retirement-savings funds represents a primary-inflation crisis of choice.

Second Case: ‘Cost-plus’ CPI-inflation which is not actually inflation

It costs more to pick, from a tree, high-hanging fruit compared to low-hanging fruit. The process of moving from the easy-to-pick fruit to the hard-to-pick fruit is not a process of inflation. It is a ‘cost event’, however.

The most problematic form of CPI-inflation is the one known in the textbooks as ‘cost-plus inflation’. The only thing is that primary ‘cost-plus’ inflation is not inflation at all. Although cost-plus inflation can under certain circumstances facilitate a process of secondary inflation; secondary inflation definitely is inflation, and may or may not be an important economic threat.

Supply-cost price increases most certainly are a threat; they are a cost-of-living threat, but not an inflation threat. They relate to supply shocks (acute) and supply stresses (chronic). Supply switches may also occur; for example, as certain resources run out or become too scarce.

Examples of supply shocks are disruptions to supply chains arising from a pandemic. Such disruptions may arise from the disease process itself, or from measures taken to address the disease process; or from a mix of the disease and the prescribed cure.

Supply shocks are especially relevant today, because our globalised supply chains are technically efficient – at least in the short- and medium-term – yet vulnerable. They mean that a country like New Zealand can suffer severely if the boats stop coming; if those supply-ships are reprioritised. This century, New Zealand has become dependent on imported food.

Another form of supply shock is war. War can also be a supply stress; for example, some forever wars. The Ukraine-Russia forever war has proved so far to have been a supply-shock. Workarounds came into effect after a few months. The Israel-Iran War – which threatens to be another forever war – may prove to be more of a global supply stress. The stalemate over the Strait of Hormuz chokepoint may never return to its prewar state.

Climate change is another supply stress; as are many other environmental costs. The real costs arising from climate change keep outpacing the workarounds; and some of the workarounds – for example, air conditioning – aggravate the root causes of these costs.

Another possible supply stress is rising labour costs. Labour costs are ambiguous. Higher wages granted to keep up with supply-cost price increases are a feature that sustains secondary inflation. But higher wages arising from shortages of skilled labour – from structural labour supply issues, including demographics and impediments to migration – are supply shocks if easily remediated, or supply stresses if largely irremediable.

Supply stresses set off a process of ongoing CPI-increases; for example, as pickable or minable low-hanging-fruitgive way to ‘higher-hanging fruit’.

A fourth important supply cost – again a shock if acute, and a stress if chronic – is the use of interest rate intervention to raise capital costs; to raise the cost of borrowing and therefore of economic investment, and also to squeeze existing debtors.

Raised interest rates, as a policy measure, may generate primary deflation; the problem of falling aggregate demand. Policymakers may juxtapose a non-inflation cost-of-living crisis with a primary deflation; making it look (superficially) as if neither problem is taking place when in reality there are two separate and serious problems being brushed under the carpet.

With one ‘policy lever’, we both create a cost-of-living mess and sweep away the more obvious evidence. Hidden ooze is even more problematic than its visible form.

A fifth important supply stress is the use of restrictive fiscal policy to delay or forever postpone vital works of public infrastructure. Inadequate civilian infrastructure – and this includes education as well as engineering projects – represents one of the most potent chokepoints in the supply chain; indeed, that’s why such infrastructure is so often targeted in a war of aggression.

Restrictive fiscal policies – ironically often implemented in the name of intergenerational equity, not saddling younger generations with public debt – are a clear example of a cost-of-living crisis of choice, with the crisis being most imposed upon the very population generation for whom that public-austerity policy was claimed to benefit. The classic case here remains Ruthanasia. New Zealand’s current water-supply woes are a direct result of 1990s’ fiscal austerity. (See The $49 billion cost of fixing water infrastructure woes laid bare, RNZ, 23 April 2026.)

(A topical example – see Australian company plans $3b lignite-to-fertiliser plant in Southland, RNZ 22 April 2026 – is that if there had been public support [adequate funding, not just talk] for investment in urea-fertiliser production in Southland ten years ago, when New Zealand had been moving further in the direction of complete dependence on Persian Gulf supplies, then New Zealand’s present accelerating cost-of-living crisis might have been preempted. Investing is borrowing and spending money, not hoarding it in Sovereign Wealth Funds which play the global markets and facilitate the very wars which are a large part of the cost-of-living problem.)

Third CPI-Inflation Case: Secondary Inflation

This is the adjustment case; the situation where inflation is a natural and probably necessary part of any post-shock economic correction. (That is not to say that all secondary inflations are OK.)

This is the one that the theory of anti-inflation monetary policy focuses on; fixing a problem which is often (but not always) a part of the most efficient (and market-led) corrective solution.

Secondary inflation is one of two options for a restoration of normality once a demand-shock or a supply-shock event is over. The most obvious – though least likely – option is a simple restoration of the pre-shock status quo. Thus, in the case of a primary event connected to rising petrol prices, in this option petrol and other prices would return to what they were before the shock. A primary CPI-inflation would be followed by an equal-and-opposite primary CPI-deflation.

An in-between case would be that the higher shock-related price increases are not reversed but the CPI-inflation rate quickly returns to something like normal. (Noting that normal inflation of two percent per year is generally regarded by policymakers as better, as more efficient, than zero inflation. Normal inflation is forever providing a bit of readjustment and a bit of demand stimulus.)

Another case would be that general prices rise further, beyond the shock phase of inflation, as relative prices re-adjust, meaning that the adjustment process itself has an inflationary component; albeit a decelerating inflation as the new-normal arises. This is a process of market-led disinflation. It is not at all clear that this market solution could be regarded in any way as a problem.

The fourth variant of the post-shock economy is the extreme case. In this case, there is a surge in ‘inflation expectations’, and secondary inflation accelerates, taking on a ‘mind of its own’, supposedly leading, if unchecked by authoritarian power, to a state of hyperinflation. This is the hypothesis of accelerating secondary inflation, and real-world examples are extremely scarce. (There have been historical examples of hyperinflation in particular countries in particular circumstances; these generally come into the localised inflation case; see below.) I know of no examples of either global hyperinflation or of hyperinflation in an economically unweakened country.

Nevertheless, the Great Inflation of the 1970s has often been presented as such an example. A careful unpacking of the inflations of that era tell a different story; a story of multiple shocks of different types. The evidence is that, globally, those events represented overlapping cases of primary inflation, supply-cost CPI-inflation, and slowly decelerating secondary inflation; despite instances of many countries implementing policies that amounted to ‘cost-of-living crises of choice’. The slow pace of the decelerations were most probably due to ‘anti-inflation’ monetary policies which raised interest rates to cause stagflation. Stagflation is most-commonly a contrived mix of high-interest-rate cost-of-living crises and suppressed secondary inflation. Suppressed secondary inflation eventually leads to a primary deflation; the result is apparent CPI stabilisation, but in reality two serious problems with opposing consumer-price symptoms that cancel each other out.

As well as ‘cost-of-living crises of choice’, the adjustment process of secondary inflation is extended by misinterpretations between inflationary and non-inflationary price increases. An important example is wage-setting, whereby trade unions seek to negotiate inflation adjustments to hourly wage rates based on overall CPI-inflation and not just on the monetary depreciation. This process is called price-indexing; it is partly necessary and partly misguided, depending on the actual diagnosis of the cost-of-living event.

For countries mired in private debt denominated in local currency, the only way out, really, is secondary inflation – initially, double-digit inflation. (For small countries with a weak presence in the financial world, government debt looks to international creditors very much the same as private debt.) Mass bankruptcies (on generous terms) are another form of reset. Other options which help with private debt are expansionary fiscal policy (as in Japan in the 1990s), universal incomes, charity, and forgiveness. Fiscal accommodation (opposite of ‘fiscal consolidation’) and inflation are generally the most efficient market – or marketish – mechanisms for accomplishing a restorative reset.

For countries mired in foreign-denominated debt, then international inflation is required. (Or default and forgiveness.) Under these conditions, global interest rates should be generally lower than inflation rates. Interest rates can be negative; indeed should be, if money generally is being transmitted from many ‘have-nots’ to relatively few ‘haves’. From 2014 until the early 2020s, Denmark, Sweden, Switzerland and Japan all had negative wholesale interest rates; and it worked, low inflation and fewer other problems.

Türkiye in the 2010s has been an example of a country with high inflation and high but often lower interest rates. Türkiye is a significant global economic player; arguably unweakened, maybe even strengthened, by its inflation experience and its refusal to yield to the ‘slam-on-the-brakes’ narrative which constitutes western monetary-policy orthodoxy. Türkiye’s average annual economic growth in the last two decades has been five percent.

When necessary inflation is suppressed, capitalist economies just grind to a halt, which is a form of collapse. New warlords – eg druglord types – fill the vacuum. Capitalism as we know it cannot continue if the indebted many have to keep paying more and more interest to the privileged few.

Fourth Case: localised Exchange-Rate driven inflation

The previous three cases of CPI-inflation apply to the world as a whole, as well as to individual countries. In today’s world, each nation-state has a currency which is ‘legal tender’; for most countries it is their own national currency.

When one national currency depreciates against a ‘basket’ of other currencies, that cheaper money can be expected to buy less; hence inflation has occurred, money has depreciated. Likewise, many of the other currencies in the basket will have appreciated, on average, so they will experience monetary deflation.

Such inflation or deflation may or may not show up in CPI statistics; it all depends on what other CPI-inflationary events or processes are taking place at the same time.

Very high national rates of inflation – indeed most hyperinflations are of this type – driven by devaluations or depreciations of countries’ domestic currencies. They represent fundamental weaknesses of such countries’ economies; although such countries’ weaknesses may well be hidden from global market scrutiny for a long time (eg for several decades).

This kind of inflation is often presented as a kind of bogeyman; presented to naïve politicians as a possible consequence of not following ‘orthodox’ monetary policy. So, such politicians find themselves facing a binary choice: to have a cost-of-living crisis of choice (but to pretend its something else), or to risk an exchange-rate collapse leading to the kind of hyperinflation which Zimbabwe experienced in the 2000s. So the politicians devolve the policy to unelected central bankers; they can blame someone else while suggesting that the ‘fix-up’ will be next year, always next year.

War Inflation

Finally, a note on war inflation. Inflation has always been associated with war. War circumstances require fiscal and monetary policies that redirect resources from ‘guns’ to ‘butter’, as the postWW2 economics’ textbooks used to say. Inflation gets forever worse during a war, though the measurable symptoms of wartime inflation are typically suppressed through other forms of rationing and the deprioritisation of data collection. So, it’s commonly immediately after wars that countries’ inflation rates explode, though often that inflation subsides as debts are reset.

The USA can be different, because it alone has the privilege of printing money without consequence; generally, the rest of the world responds to an American demand-shock by producing more and exporting those surpluses to the United States. In most of our lifetimes, capitalist economies have been responsive to demand shocks and stresses. Wars, though, create supply shocks and stresses. Generally, though, it has been surprising to what extent countries at war have been able to overcome those deprivations.

War experiences show that the inflation bogey has been generally overstated; with the few cases of genuine postwar hyperinflation – like Hungary in 1946 – proving to be the exception rather than the rule.

Conclusion

Inflation is much less of a problem than it is commonly presented as. As often as it’s a problem, it’s a solution.

The biggest problem of inflation is the contrived fear of inflation. Fear of inflation – combined with popular ignorance about it – becomes an important reason why we have cost-of-living crises of choice.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Are we witnessing, for the first time, a British King appeasing a foreign emperor? And on the quarter-millennial anniversary of Britain’s greatest ever geopolitical humiliation. Could King Charles be enacting one of the final straws in the deathknell of the Monarchy?

To Mr Starmer, Prime Minister of the United Kingdom: Man-up. Grow a spine. Otherwise, you too may fall. Call an election if you must to re-establish your mandate, and the mandate of the King.

According to the ABC’s Brad Ryan: “The king was clearly keen to communicate that not only was the UK a friend to the US, it was also actively supporting the Trump administration in its efforts to project military might around the world.” (Takeaways from King Charles’ speech to the US Congress, on RNZ News, 29 April 2026.) Not even a capital ‘k’ for King.

In the light of Trump says his mother had a crush on young Prince Charles (The Independent on YouTube, 28 April 2026), I can envisage the expiration of the Monarchy being marked by a tabloid broadcast of an AI fake mashup of the late Mary Anne MacLeod Trump singing Charlie is my Darling. It would be an ignominious end to a line of English Kings and Queens dating back to 1066.

My reading of British politics at the moment is that there are many angry men (and women) in the United Kingdom (and elsewhere); The Educated Miserables, as Victor Hugo might have called them. The ruling classes on both sides of the Atlantic Ocean are just so out-of-touch with the demos; the people who work, live and die under their semi-democratic jurisdictions. (Refer UK healthy life expectancy falls by two years in past decade, BBC 27 April 2026.)

The election of the barely mentioned never debunked President of Iran in 2024 today looks much more like a transparent exercise in people power than the elections that same year in the United Kingdom, the United States, and France. To eyes foreign to the above-mentioned countries, Iran may not be the only nation for which regime change is being sought. To the western Emperors, Presidents, Kings, Prime Ministers and counsels: “first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye” (Gospel of Matthew).

In the meantime – beams and motes notwithstanding – just stop holding the world to ransom. And resign, if you cannot at least try to act in the interest of the world.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

It’s commonplace, especially in The West, to think of wars in binary terms. In those terms, wars are either won or lost, like a sports match. And the symbol of victory is a trophy. In a match-up, the symbol of defeat is the loss of a trophy.

In the days of the Roman Empire, the trophy might be a ‘barbarian’ leader being paraded in chains; or maybe his head in a box. ‘Decapitation’ is a crude trophy word, still very much in vogue.

In the present Iran War, the trophy of victory might have been the ‘head’ of the 86-year-old ‘Supreme Leader’; Iran’s former equivalent of the United Kingdom’s late Queen Elizabeth II. But in reality, the Iranians were waiting for Ali Khamenei to die; and all the signs were, so long as Iran was left in relative peace, that a liberalisation process was already in place.

Further the assassination of Khamanei could never have been an adequate trophy for the United States. Because it was actually done by Israel, another country, another nuclear power, indeed a highly secretive nuclear power, a genocidal power which terrorises its part of the world. And we note that it has always been in Israel’s interest to keep Iran on a war-footing; to keep it from being anything other than an enemy. A progressive Iran would have very much stymied the Greater Israel project. Hence the need to assassinate Khamanei before he died of natural causes.

For the United States, another trophy had to be found. Having co-started the present war, the United States needs to end it, and with a victory trophy.

It would seem that the trophy being demanded is Iran’s enriched uranium. Apparently, the United States wants to be allowed to go into Iran, excavate the enriched uranium, and then to truck it and ship it to some undisclosed destination. To facilitate this, the United States is trying to make its victory arrangements with ‘negotiations’ brokered by an actual pro-China nuclear power in Southwest Asia; namely Pakistan, a country over which the United States has intruded upon its political sovereignty on a number of occasions, a country with no popular love for the United States and its proxies.

We need to note that, for Iran to allow the United States to acquire its trophy would represent a military defeat; a capitulation in the eyes of the world in general, the Iranian population (both those in favour of the present Pezeshkian regime, and those opposed to it) in particular, and to the global community of Shia Muslims. (The total Shia population is estimated to be 350 million, 250 million of whom are faithful, and 90 million of whom are resident in Iran.)

Japan

On the matter of understanding the shortcomings of binary victory and binary defeat, we may turn to the matter of Japan in 1945. The trophy at stake was Emperor Hirihito. And, on the basis of this binary, it was Japan, not the United States, which was victorious. Japan retained its trophy.

On 9 March 1945, the United States embarked on its campaign for unconditional victory; meaning that Japan had to unconditionally surrender, which in turn would mean that Hirohito would be Japan’s last emperor, and that his reign would end in 1945.

For starters, the United States slaughtered 100,000 residents of Tokyo in four hours of one night; the wee hours of 10 March. Total Japanese deaths from that spring and summer bombing campaign – including the nuclear deaths – was between 500,000 and one million people.

None of these bombings came close to resulting in Japan conceding its Emperor. The United States was preparing to drop three more atomic bombs on Japan that year – production criteria meant that these bombs were scheduled for November and December 1945. If Japan still refused to give up its trophy, the city of Kyoto was scheduled for removal from the United States’s non-hit list. Also, to note, the United States kept up its non-nuclear aerial assault on Japan until the day before the deal was signed.

In August 1945, communications were not good in Japan. The leadership in Tokyo had heard that there was an unusually large explosion at Hiroshima, and then another in Nagasaki, but they didn’t really have time to process their limited information. They had already been hit by plenty of other big bombs. Meanwhile, the people on the ground in Hiroshima were able to restore electrical power within three days of that explosion; locals did what locals do everywhere, pick themselves up if they can, and try to keep living.

What happened to finish the war was the threat from the Soviet Union. After the end of the war in Europe, the Soviet Union returned its attention to the East. There had been longstanding territorial disputes – and cold dispute still continues in the Kuril Islands – between Japan and Russia. Russia, having been embarrassed in the 1904/05 Russia-Japan War, potentially had a score to settle; Manchuria, for much of the first half of the twentieth century, had been territory contested between Russia, China and Japan.

But it was the United States which most feared the Soviet Union’s advance into Northeast Asia. In Europe, the United States was pushing the narrative that the Soviet Union, which had ‘liberated’ Eastern Europe from the German Nazi regime, was intent on pushing Communism onto Western Europe, and would use military means to do that. The hoary trope in Paris and London, that the Russians would soon be at their front-doors if they could not be held behind an iron curtain within Germany, was a narrative very much adhered to by the Americans with regard to the Far East as well as to the Far West. Indeed, by the time of the end of hostilities in August 1945, Soviet Russia had already ‘liberated’ half of the Korean Peninsula; Korea was a mirror image of the emergent East-West faultline within Europe.

So, the Americans caved in. They agreed that Japan could keep its Emperor. Japan saved face. Hostilities in the Pacific War ended the next day.

Iran again

2026 hostilities could end as soon as the United States removes its demand for a trophy which the Americans know the Iranians cannot accept. The barrier to ending the war is that the American regime would lose face without a compelling victory trophy. In the earlier Japan situation, by contrast, the American occupation after August 1945 meant that the United States could easily obscure the fact that it had had to make a major concession to secure the end of that war.

Enemies of Convenience: On the matter of Non-Binary War

At one level there is the matter of stated and unstated goals, criteria for ‘success’ (which is not necessarily ‘winning’), and knowing how and when to ‘vacate the arena’. Re the Hiroshima and Nagasaki atomic bombs, they contributed very little to ending World War Two, but were successful examples of ‘live testing’, and had the huge impact on the new Cold War arena in Europe as ‘demonstration devices”. With the Cold War setting in, Japan proved to be a World War Two enemy of convenience.

Of particular interest is Is war more profitable than peace? David Keen explains, Talk to Al Jazeera, 5 April 2026 (and on YouTube).

Introduction: “What if ‘who is winning’ is the wrong question? Because in many modern conflicts victory is not the only or even the main objective. … It opens streams of profit, and, for many, it creates a constant state of threat that justifies its own continuation. … Wars evolve, adapt, and sometimes sustain the very actors fighting them. … To understand why some wars don’t end, we turn to a leading voice in the political economy of conflict, Professor of Conflict Studies at the London School of Economics, David Keen.”

Keen suggests that some of the benefits of war include “making money”, “suppressing dissent under the cover of war”, “divide and rule”, “painting dissent as disloyalty”, “turning your enemy into the image that you’ve put about in your propaganda”, … “taking actions that are predictably counterproductive”. For certain aims “the enemy can be surprisingly useful”.

David Keen (unassuming, quiet, thoughtful): “This division of people into ‘good guys’ and ‘bad guys’ is incredibly simplistic, and goes back as far as the Vietnam War.” (And further, of course!)

The Soviet Union had proved so useful to the West, that from 1991, after the Cold War, a new bogeyman – convenient enemy – had to be invented. (Note Samuel Huntingdon’s influential 1992 thesis, The Clash of Civilizations, which facilitated the multi-decade employment of many people in high-paid jobs in Washington DC, and no doubt other federal capital cities with otherwise underemployed think tanks.) Iran had already become the enemy-in-waiting in the 1980s, albeit with a degree of secrecy, when a proxy leader for American interests (called Saddam Hussein) was called upon to deal to Iran. Saddam obliged; indeed, he over-obliged, taking his cut in the form of Kuwait.

In the midst of that Iraq-Iran War, in 1987, there was the Irangate scandal.

‘”Soon after taking office in 1981, the Reagan Administration secretly and abruptly changed United States policy.” Secret Israeli arms sales and shipments to Iran began in that year, even as, in public, the Reagan administration presented a different face, and “aggressively promoted a public campaign […] to stop worldwide transfers of military goods to Iran”. … After a leak by Mehdi Hashemi, a senior official in the Islamic Revolutionary Guard Corps, the Lebanese magazine Ash-Shiraa exposed the arrangement on 3 November 1986″.’ From Wikipedia.

Revolutionary Iran (the new Islamic Republic of Iran, under Ayatollah Khomeini) was becoming an enemy of convenience. It was, in the 1980s, being armed by Israel and the United States. Some of those arms will have gone to Hezbollah, established as a Shia resistance movement in 1982, in response to an Israel-led genocide in Lebanon. We note that, today, Hezbollah is a critical and convenient element justifying Israel’s grand expansionist venture.

Today, Russia and Iran – even China – are enemies of convenience to a few; and of great inconvenience to the many. Indeed, re Russia and China, there is talk of the New Cold War. See, for example, The New Cold War: A Wolf in Sheep’s Clothing, Fred Saberi, The Times of Israel, 19 April 2026.

Re Russia, the Cold War of the twentyfirst century represents the Third Cold War. In The First Cold War, historian Barbara Emerson discusses the ‘war’ against Russia that led to New Zealand’s fortifications on North Head and other places in 1885. (I also draw attention to this 2016 extended critique of President Obama’s ‘weakness’: War by Other Means: Geoeconomics and Statecraft, by Robert Blackwill and Jennifer Harris, and its unsavoury ‘adversaries of convenience’ premise.)

Modern history (which includes 1885) matters very much; Biblical history (or even the slightly more recent Koranic history) matters less. But ancient history can still matter; it tells us some pithy stories about war trophies.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

My first paragraphs here feature Steve Keen, Australian economist, who was a panellist on Al Jazeera’s Inside Story 12 April 2026 (Could the Iran war pose lasting risks to global food security?, or here on YouTube):

Interviewer: “You’ve warned that the world could face famine within months … an extraordinarily stark prediction.”

Keen: “Thirty percent of the world’s fertiliser passes through the Strait, which has now been disrupted for over a month. There’s no sign of this war stopping any time. … There’s not going to be enough fertiliser available. Without fertiliser the carrying capacity of the world is about two billion people. Six billion of us are alive because fertiliser flows freely. … This could have catastrophic effects in all sorts of countries which could not ever imagine that they might face a famine. … That could apply to places like England. … The usual bias we have is that it’s always going to be a problem for brown people; let’s be frank, we’ve got masses of racism in the way we think about the world, and the West doesn’t worry when brown people die; well, what will happen when white people start dying; people might pay more attention.”

While Keen overstates the case, given that seventy percent of the world’s fertiliser flows through other pathways or is used near to where it is produced (though high transport costs, more generally, impede fertiliser flows; not just the blockade of the Hormuz Strait). Thirty percent of six billion is potentially 1,800,000,000 people at risk. And of course there is much food wastage at present. And many people, indeed most people in ‘England’, could survive eating less than half of what they do eat; they may even be less malnourished, by eating better food. Keen later acknowledged the issue of first world food wastage.

Nevertheless, when there are food shortages, ‘rational’ market behaviour – as understood by ‘game theory’ – means that much food would be bought up by speculators and hoarded; profiteering, in other words, a not uncommon feature of famines. (This is similar to the issue of ‘ticket scalping’.) Keen is correct to point out the problem of Euro-supremacism. One feature of the new world food order, noted by the Indian panellist on the program – Avinash Kishore – will be export bans. India, for example, is an important exporter of wheat and rice.

Keen: “Because it has such a market-oriented non-government approach to virtually everything, the United Kingdom has insufficient stocks of fertiliser, diesel fuel, and it imports about forty percent or more of its food. It’s very vulnerable to being told ‘we cannot supply you’. And it doesn’t really have any bargaining ploy in the opposite direction [unlike Australia].”

People assume that, whatever happens, Aotearoa could always feed itself; after all it’s a ‘specialist’ food producer, isn’t it? I’ll come back to that. But we note that the United Kingdom could survive foodwise with a reduction of 40% of its food supply, given that its domestic food production is in better domestic-international balance than is New Zealand’s. The fertiliser question becomes the bigger issue for the United Kingdom, and I’m guessing that it has nearly enough fertiliser stocks for 2026 spring planting, and could redirect some food exports to the domestic market. 2027 though? Incidentally, in the later 1980s, under pressure from Rogernomics, New Zealand got by for a few years with substantially reduced fertiliser usage.

Interviewer: “Just how vulnerable are modern food systems to international shocks like this?’

Keen: “The Trump administration [ie regime] had no idea what it was blundering into when it started this war. … We have a mindset of ‘perfect competition’ which implies numerous different sources, if one supplier gets knocked out then others can [immediately] take its place [as in the case of the New Zealand apple crop after Cyclone Gabrielle in 2023]; there’s no sense of urgency for the physical imports to production. … [Most] economists are completely naïve about the production systems. … There is such a thing as a critical input, and four of them pass through the Strait of Hormuz. … Yes, it’s too late to fix it, you cannot make up for missing ships.”

Keen: “I’m not overstating the potential. It might not happen, we might be lucky, shipments might arrive just in time. … The other possibility is still there. Now what happens if you don’t talk about it. … I would rather have people be too alarmed than too ignorant.”

Keen: “We think we eat green stuff. Ever since we invented fertiliser, we’ve been eating brown stuff. The green wrapping on the outside is basically us turning fossil fuels into food. … We think we have enormous resilience, but in fact we have enormous fragility. This was going to be exposed by global warming, but Donald Trump is like a Force Six cyclone coming in before the natural ones start turning up. … Our production systems are very dependent on specific inputs from specific locations. They cannot be easily replaced once damaged, and at the moment the supply is shut down completely.

Avinash Kishore, from the Indian ‘Food Policy Research Institute’: “The worst outcome would be if production itself suffers and then trade also suffers; [for example] with export bans. … China is the largest producer of fertilisers. If it restricts exports of both urea and phosphate … that makes the situation [much] worse. If trade keeps flowing, we’ll have less vulnerability, as we saw after the Ukraine crisis.”

Interviewer: “If the Strait of Hormuz were somehow to open tomorrow, and calm somehow holds, does this crisis end quickly, or has lasting damage already been done?”

Keen: “Lasting damage. One of the urea plants has already been damaged, and is not producing urea. We have to replace that facility, and these things take time. … This is showing the danger of the ‘just in time’ efficiency versus robustness [business model].’

I would note that ‘just-in-time’ can be robust, given the prevalence of the specific conditions which Keen mentioned; the conditions that most economists presume to be almost always true.

But geography can be capricious, and so can concentration of production reflecting the giant international economies of scale we see in production and transport; economies which minimise cost when disruptive forces are not at play. I would also note that many components of supply chains come as complements; thus, air freight remains largely a complement of passenger movements, fertiliser is a complement of fuel, and shipping works best when ships can carry a return load or an onward load.

New Zealand’s food security depends on its exports continuing to justify high two-way shipping capacity. What if, due to consumer prioritisation, demand in say China for New Zealand’s exports falls away; the reverse of the recent booms? This is the capriciousness of ‘income elasticity of demand’.

Some sobering statistics about New Zealand’s food and fertiliser imports

These ‘harmonised trade’ data (from Statistics New Zealand’s soon-to-be discontinued Infoshare database) cover, for us, in particular the period from 2000 to 2025. Inflation for imported food has been low for that period, given that the exchange rate for the $NZ was at an all-time low in 2000, and that not-so-high New Zealand inflation has been consistently dominated by non-tradable items. We also note that New Zealand’s population has grown by 40% since 2000.

These data are ‘value-for-duty’, meaning for our purposes (and given that New Zealand is a free-trading nation) that they are exclusive of transport and insurance costs. Of course, we now know that transport and insurance costs are going to increase dramatically; especially for a geographically marooned population.

New Zealand’s spending on imported staples has increased from 3½-fold to five-fold since 2000. Annual increases in spending on food imports were even more dramatic in the 1990s, though tradable CPI-inflation will have been higher then. (New Zealand’s data on tradable inflation only commences in the late 1990s.)

New Zealand is dependent on Australian wheat. For other staple food items, the huge increases in food imports have come from other countries. Rice, the best staple food of all, soon will become much harder to get from the non-Australian sources we now prevail upon. Pasta, rice, and pre-prepared vegetables have become dinner-staples of student flats and other income-poor or time-poor households. Further, firms which process New Zealand grown vegetables – Watties and McCain – are planning to scale back their domestic operations. (See my Frozen Vegetables, Food Security, and the New Zealand Dollar, Scoop, 312 March 2026.)

Three other points are noteworthy.

First, spending on imported fodder – imported animal food – has increased dramatically, nearly fourteen-fold, since the three years centred on 2000.

Second, most imports of fertiliser, which have increased more than threefold since 2000, are not from our neighbour across the ditch. (They – the unassembled food matter which underpins the supermarket food we eat – are byproducts of the petroleum industry; hence they come to us from Singapore and South Korea.)

Third, total imported food is now 12% of all imports, up from 6% in 1990 and from 7% in 2001; and now less than 30% of it comes from Australia. ‘Total food’ includes a huge category of imported food simply labelled ‘miscellaneous’. (We also note that little more than ten percent of New Zealand’s total goods’ imports now come from Australia.)

New Zealand’s ‘Perfect Storm’ of food vulnerability

New Zealand’s worst – or at least most immediate – problem might not be fertiliser. Rather, it might be dependence on imports of both human food staples and animal feed. New Zealand’s food production system is now so specialised re the international marketplace, that the short-run and even medium-run supply costs of pivoting to a robust more domestically-oriented model are probably prohibitive.

New Zealand’s main source of staple food is still Australia, but to a much lesser extent than in the 1990s. (Before the 1980s, New Zealand produced most of its own starch-carbohydrates.) How well will we be able to persuade Australia to keep sending us food when there will be many more other mouths to feed in the Indo-Pacific region? And how much will Australia’s food production be curtailed by restricted fertiliser and other supplies?

In terms of the Indo-Pacific food and fuel supply chain, we already see most other (indeed much bigger) nations facing major impacts from the supply-chain crisis, and putting their domestic interests ahead of international considerations; they are effectively queue-jumping, undermining the rationing process by reducing fuel taxes and by increasing food subsidies and export barriers. (Note RNZ today about Asia.)

Not all governments are as complacent as New Zealand’s. The reduced fuel taxes do not only lead to queue-jumping; they also constitute a fiscal stimulus which may help in the process of a reorientation towards more secure staple food supplies. The New Zealand government is obsessively and irrationally opposed to any kind of fiscal stimulus.

Since 2000, New Zealand has enjoyed an export windfall and rising terms of trade, thanks to the high income elasticity of demand for dairy and other protein-rich foods. That’s due in particular to high per capita growth in East and South Asia. The problem for New Zealand is that when those economies stop growing – indeed when they recess – the fall in demand for luxury foods can be equally dramatic.

On RNZ’s Business News this morning, Corran Dann noted: “For a country like New Zealand, we’re a trading nation, we need to see growth in our trading partners because they buy our goods. That is how we make our way in the world. And likewise, for them.”

Reciprocal trade – ie multilateral exchange – is economics’ foremost example of a win-win ‘game’. But humans can be capricious, narcissist, supremacist. ‘Win-win’ competitive games can be disrupted by stupid players, or even by advocates of disruption as a greater good; giving way to rivalrous zero-sum, negative-sum, or ‘lose-lose’ games. (On ‘stupid players’, we may note, in passing, Carlo Cipolla’s 1976 essay – recently republished – The Basic Laws of Human Stupidity.)

New Zealand’s highly specialised export-oriented food production system can be expected to face sudden and simultaneous supply and demand shocks. Supply shock because New Zealand farming is now so dependent on imported fuel, fertiliser, and fodder. Demand shock because New Zealand specialises in the production of luxury foods, not staples, and faces a steep fall in the demand for luxury foods.

So, in terms of Steve Keen’s comments, New Zealand is arguably much more food-vulnerable than the United Kingdom, which Keen cites. And note Avinash Kishore’s comment about the food consequences of a general breakdown in international trade. (Unlike Keen, Kishore is an optimist!)

A crisis on top of a crisis

On present food insecurity in New Zealand, this from Google’s AI overview (search: ‘NZ food insecurity’): “Food insecurity is a widespread issue in New Zealand, affecting 1 in 3 households (33%) in 2025, with 18% facing severe insecurity.” See One in Three New Zealand Households Faced Food Insecurity in 2025, IPSOS, published by Scoop15 April 2026.

It can only be regarded as disgraceful that when, under the most favourable of circumstances in the food-supply system, a food-specialising country such as New Zealand has such record-high levels of food insecurity before the coming food crisis. This ‘insecurity despite abundance’ reality is not helped by Australia also having higher levels of food insecurity than most so-called developed nations. Continued access to Australian-produced staples is New Zealand’s main means to famine-avoidance.

Another part of the possible perfect storm is New Zealand’s lack of inclination and ability to queue-jump. When staples are scarce, ‘game theory’ comes into play. The staples of game theory are scarce-product-hoarding, joining queues to gain access to these staples, and a willingness to pay a bounty for such scarce essentials. New Zealand – marooned in the South Pacific – can expect to be at the end of the queues this country finds itself having to join.

(Other concepts of game theory include: ‘arms race’, ‘race to the bottom’, ‘prisoners dilemma’, ‘tragedy of the commons’, ‘survival of the fittest’, and Hobbes’ ‘war of all against all’. Game theory assumes that individuals and nations adopt ‘economic man’ postures of ‘rational self-interest’; meaning selfish strategies. Other thought perspectives suggest that such strategies are ‘stupid’ rather than ‘rational’, and that they miss out the widely-held concept of enlightened self-interest which incorporates visions of the public good and the public interest. Adherents of rationalism usually dismiss their academic adversaries as ‘altruist’; whereas they are really public-minded, not the same thing.)

Historical Points of Reference

New Zealand faced a similar trading and shipping crisis almost exactly 100 years ago. Though it was not a food crisis then; New Zealand was not then reliant on imported food staples, though it was reliant on other imports.

The issue was the 1926 British General Strike, which focussed minds in New Zealand then on how dependent New Zealand had become in its crucial trading relationship with the far-side if not the dark-side of the world. The New Zealand economy started to tank in late-1926. 1927 then became New Zealand’s own particular annus horribilus.

New Zealand already faced very high levels of private debt, falling export prices, and a tightwad government. With the shipping constraints tipping the country over the edge, farmers walked off their farms in greater numbers than during the later Great Depression, rural New Zealand depopulated, bank balances plummeted, and the country went into a sharp recession.

The Reform (think National) government had been elected in 1925 with 47% of the votes and 69% of the seats. In the 1928 election, that government was unceremoniously turfed out of power, falling to 34% of the vote and 34% of the seats. The faded Liberal Party – under the new name of United – formed a government with the support of the new Labour Party. The economy recovered. Though the new governing arrangements didn’t last; Reform came back into government as the junior coalition partner. Eventually – in 1936 – United and Reform joined forces to create the National Party.

Another historical story of relevance is about how Germany lost World War One, through hunger. That war, in full, lasted 4¼ years; an amount of time the present Russia-Ukraine War will soon surpass. Essentially, Germany – on the battlefield, and with its lethal submarines – won the first four years (including a comprehensive defeat of its main adversary, the Russian Empire) but lost the last three months.

The critical factors in the end were the British Royal Navy blockade on German shipping, a staunch French fightbackin July 1918, and an influenza pandemic arising from an existing battlefield flu strain combining with a new strain brought over by greenhorn the American latecomers. The shipping blockade induced severe famine in Germany. That famine was so severe that it was later used to justify carpet bombing (aka area bombing) in World War Two, on the basis that no amount of RAF bombing could be as bad for German civilians as that blockade-induced famine.

Finally

The supply chokepoints around the Arabian Peninsula – the southwest of Southwest Asia – might ease sooner rather than later. Though I, unlike New Zealand’s Prime Minister, wouldn’t bet on it. New Zealand has engaged in a slow game of Russian roulette; there is now an extra bullet in the revolver’s chambers, and the pace of the game has quickened.

Will New Zealand, having played its game of chance, become collateral damage? New Zealand almost certainly was not Binyamin Netanyahu’s target.

Steve Keen focussed on the fertiliser chokehold; the core of the world’s food supply which is in fact a byproduct of the petroleum industry (and of the discussion about refined oil supplies). New Zealand’s plight is actually significantly worse than that; it’s a potential and dramatic shortfall of imported human and animal feed – a shortfall that would precede a fertiliser shortage.

What happens if or when the food ships are redirected elsewhere? Those ships burn a lot of fuel coming to and going from New Zealand. Would the world prioritise five million whitish lives, marooned in the South Seas, over ten million brown lives more easily saved? Should it? I guess not. Will future historians refer to the Great Aotearoa Famine of 2027?

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

On 14 April, TV3 News ran an item (15 minutes in, not in the sports section) about how the Crusaders rugby team will, with the new Christchurch stadium, no longer be able to parade its horses and knights circuiting the sportsfield. Many of the fans, despite now having a more spectator-friendly stadium, were quite upset about this; they loved the pageantry of medieval knights heading off to invade the Levantine lands occupied by the infidel (meaning Arabic people whose ancestors had converted to Islam).

At the end of the story, the reporter said: “The horses’ symbolism has created controversy. The sword-wielding knights represent the Crusades, a series of religious wars between Christians and Muslims dating back to the 11th and 13th centuries. In 2019 the Crusaders dropped the horses following the Christchurch Mosque attacks, but reinstated them later that year minus the knights.”

So, from 2011 to 2026 they have been cowboy knight-lookalikes brandishing flags rather than swords. It was never enough to cleanse Canterbury rugby of its imagery of religious imperialism. At the very least, the Crusaders needed to change their name – and image – immediately after the 2011 terror attack. The new stadium has given them another opportunity to remove the crassness from the Crusader brand, by no longer using the ‘Crusader’ moniker.

In the twentyfirst century, the crusader-problem continues to be more real than ever to the Muslim populations of the ‘Middle East’; of Southwest Asia. And those present populations continue to understand the occupiers and interferers of their lands as Crusaders. The Crusader issue is far from being an issue confined to the Middle Ages.

We can think of there being three series of Crusades: in the Middle Ages, the Modern Age, and the Current Age.

Crusader History: Medieval Era

The first series of Crusades were the Catholic Crusades of the late Middle Ages.

The first of these – which was largely a French crusade – ran from 1096 to 1099, and resulted in the conquest and brutal genocide of Jerusalem; and the establishment of a Crusader-state – Outremer – which lasted in its full form for 88 years.

The next crusade – ‘Second’ Crusade (1147 to 1149) – was a major failure, led by the French King and the Holy Roman Emperor, in response to the Crusader State’s loss of some of its northern territory. It was a major failure.

The ‘Third’ Crusade was waged in the time of Robin Hood (1189 to 1192), by the French king of England Richard Coeur de Lion. It was an attempt to resuscitate the Crusader State, and was partially successful, though failed to recapture Jerusalem.

The ‘Fourth’ Crusade of 1202 to 1204, waged largely by the Doge of Venice, was the most historically consequential of all the Medieval Crusades. It was effectively diverted to the one city which had been the beacon for western civilisation for over 1,000 years; Constantinople, formerly Byzantium – only half the way from Venice to Jerusalem – now Istanbul.

Constantinople was the capital of the Eastern Roman Empire, and the religious centre of Orthodox Christianity, the dominant branch of the Christian Church before 1204. Constantinople was comprehensively sacked by the Crusaders in that year. So, from 1204, the Roman Catholic branch of Christianity became dominant within Christendom. And the now latinised Christian ‘Middle East’ became so weakened that it was only a matter of time before the Ottoman or some other Muslim warlord conquered the lands of the Eastern Roman Empire; creating – in 1453 – the Ottoman Empire. The 1204 inter-Christian ‘event’ became Christianity’s eastern suicide debacle.

From 1453 to 1915, the Muslim Ottomans reigned in that part of the world; a Turkic Muslim caliphate.

Crusader History: the modern British Era

The next epoch of Western Crusading was the Anglo-French era of 1915 to 1948. It started with the Dardanelles Campaign (Gallipoli); meaning that the ANZAC soldiers had effectively become mercenary Crusaders, enlisted by Winston Churchill. Gallipoli was a failed Anglo-French operation, whose aim was the reconquest of Constantinople/Istanbul. New Zealand soldiers fighting for Britain’s crusade fought alongside, among others, Senegalese solders (fighting under the banner of France) in the bloody Second Battle of Krithia (6 May to 8 May, 1915).

There was much British Empire action in the whole of the ‘Middle East’ during World War One. This included Kiwi troops (who were heavily involved in at least one massacre of Muslims; at Surafend in 1918), Australian ‘Light Horsemen’, and Britain’s successful invasion of Iraq in 1917.

After WW1, Britain – the United Kingdom – formally occupied the lands that are now Israel, Palestine, Jordan, and Iraq. Iraq was occupied by Britain, in various guises, from 1917 to 1947, with a brief intermission from 1 April to 2 May 1941. And Iran from 1941 (with the Soviet Union) and, among other things, creating the conditions for a famine in 1943 which killed perhaps 300,000 Iranians.

France’s interests were particularly in the lands that are now Lebanon and Syria; the Northern Levant; including the early bronze and iron age Phoenician ports of antiquity, Tyre and Sidon, which are now being battered to a pulp by Israel.

This series of Crusades was a less overt religious conflict than the earlier and the more recent series. The major ‘religions’ were Empire and Oil; with the whole of Southwest Asia being of strategic significance to the United Kingdom in the context of India being the Jewel in the Crown of the British Empire.

Crusader History: the current Israeli-American Era

In 1948, the British/French crusader imperium gave way to the creation – with massive impetus from the United States – the new Crusader State of Israel. In many ways, 1948 was a repeat of 1099.

Like its Christian forebear (1099-1187) the present Crusader State has never considered itself to be secure; and once again the main reason for its insecurity is its overt belligerence towards both its indigenous population and its neighbours; a belligerence which precedes the formation of the stroppy United States’ client state. As in the 1099 to 1187 case, the present Crusader State has tenuous trumped-up historical claims to exclusive ownership of the site it occupies, and has deep financial and technical support from the furthest reaches of the (then and now) West.

In the case of the present Judeo-Christian Crusader Empire, the Americans have deep presence beyond the periphery of the formal Crusader State; as the British did from 1915 to 1948 re Mandatory Palestine. In particular the countries of the Arabian Peninsula have been deeply penetrated by the United States and/or Israel; most particularly the Gulf States, and noting that the United Arab Emirates presently acts very much as an under-the-radar proxy of Israel. These states –  ‘beyond the periphery’ of Lebanon and Jordan – now constitute the present American Crusader Empire. They are the most significant Eastern Hemisphere components of the United States’ contemporary geopolitical empire, a Southwest Asian empire that it’s currently trying to expand.

The events of this decade constitute the most momentous events since 1948 in the history of the current Crusader State and Crusader Empire.

Property Rights

The Crusader meme is far from a nostalgic looking back to the times of Robin Hood. It’s today’s very consequential conflict of religion, theft, unipolar ideology, and naked technological power. For the city whose mosques featured New Zealand’s worst ever terrorist attack, direct association with crusader Judeo-Christendom is not a good look. That association is illiberal, insensitive, disrespectful, and Euro-supremacist.

Western crusaders – including religious and secular imperialists – have been a major source of trouble for West Asia and West Asians, through the ages. The DNA of present-day Palestinians is remarkably close to the ancient DNA of people who died in the Levant thousands of years ago.

Indigenous Southwest Asians deserve better today, including freedom of choice of religion; and the established political right to resist, and defend themselves. Today, almost all New Zealanders respect the Ottoman (Turkish and Syrian) forces (and their leaders, such as Ataturk) which, in 1915, resisted ANZAC attempts to conquer them.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

On 14 April 2026 I heard this on TV3 News (about 8 minutes in):

Sharon Zollner, ANZ Bank chief economist: “We were earlier picking that the Reserve Bank wouldn’t need to hike until December, but the news out of the Middle East has kept getting worse. It does seem clear that disruption is going to continue for quite some time. Oil prices are going to remain elevated. It is counterintuitive that you would raise interest rates when the economy is already struggling, but that’s why these people are appointed, they don’t need to worry about getting elected because they are basically paid to take the longer-term view; to accept the short-term pain for the long-term gain.”

What!!! We should have been thoroughly alarmed by such anti-democratic anti-liberal pro-bureaucratic sentiment, justifying reckless technocratic adventurism. And we note that the long-term gain never seems to come for the populace; only for the elites who inflict the pain. (Zollner, by the way, has had a past record of pressurising the Reserve Bank to go early, by making similar ‘predictions’, and has been willing to apologise later for inaccurate predictions.)

Towards the end of an earlier interview Zollner (RNZ, Morning Report, 14 April 2026) said: “How high inflation goes in the initial direct impact isn’t the key point for the Reserve Bank. The key point for the Reserve Bank is how quickly it comes down again.”

Let’s look at some facts, using Trading Economics’ 10-year charts for interest rates and inflation. Take United Kingdom, Australia, and Norway. Their interest rates stayed high after their 2024 peak, and their CPI-inflation rates stayed high too. Now consider New Zealand, Canada, Sweden, Denmark, and Finland. Their interest rates came down much more from their 2024 highs, and their CPI-inflation rates came down much more as well. This is simple comparative economics; economics that any schoolgirl could do. This directly contradicts what Zollner has been saying.

There’s more. On RNZ’s Business News this morning:

John Campbell: “Kiwibank is coming out swinging against interest rate hikes. They are essentially having a go at the ANZ, right, and Sharon Zollner in a way; the economists.”

Coran Dann: “Yes, sort of the hawks versus the doves, and Kiwibank would sit in that dove category. They are basically saying that it’s way too soon to be calling the potential interest rate hike in July, there’s not enough data, it runs the risk of throwing New Zealand back into a recession, it’s just too fragile to do that. The Kiwibank chief economist, he’s saying that it would heap pressure on already struggling households and businesses.”

Kiwibank chief economist [Jarrod Kerr]: “I think that, given the shock that we’re feeling, what we are hearing from our customers – businesses and households – is that this is just another cost that they [must] absorb; this is not a demand-push [sic; should have said ‘demand-pull’], this is a supply-shock, and its hurting … So, to increase interest rates at this time we think could be reckless [emphasis added], actually, and it’s definitely unwarranted.”

Two-and-a-half years of government idleness, following one very bad call

The worst thing the present NZ Government did was the first thing it did; ie after the 2023 election. The government changed the (monetary) Policy Targets Agreement to require the Reserve Bank to do what it believed it had to do to keep CPI-inflation between one and three percent, and to follow no other objective.

The government knew that the Reserve Bank (and most of the other banks’ economists) believed that – and as a matter of faith, not evidence – whatever the actual state of the economy was, CPI-inflation rates above three percent should trigger a policy intervention in the capital market to raise the cost of capital. So, it was the government’s intent that, in the event of a situation like we have at present, the Reserve Bank should override an otherwise efficient market to raise one of the most critical costs in any capitalist economy. As the common-sense ‘schoolgirl’ data mentioned above shows, this policy increases CPI-inflation (or keeps it high when it otherwise would fall) when we are fraudulently told that it will decrease inflation. It’s a wonderful game for the loud-squawking hawks within the economic-policy community; their policy generates the very inflation expectations that the policy is supposed to snuff out. It keeps them in work; at the centre of public attention as ‘experts paid [well] to inflict pain for long-term objectives which never seem to materialise.

The government does not know that such interest-raising policies raise CPI-inflation (above what it would otherwise have been) – not lower it. But it should know that; this is the ignorance of convenience. Like Donald Trump, on certain matters our governments just listen to a very close coterie of self-promoted advisers. A coterie whose advice would have been considered mad by most mid-twentieth-century economists. A coterie who waged a successful academic coup d’etat in the United States and United Kingdom in the 1970s, and in New Zealand in the 1980s.

This kind of monetary policy doublethink and groupthink is an example of orwellian tyranny. See my Binyamin, Adolf, and Benito, Scoop, 10 April 2026. War is peace. ‘Higher costs’ is ‘lower inflation’. Israel is conducting a defensive war.

Don’t believe the veracity of what Binyamin Netanyahu says. Don’t believe what Donald Trump says. And don’t believe Sharon Zollner either. All three talk the totalitarian talk, while pretending to be in some sense liberal or democratic.

PS: Heavy Lifting

Some other strange language came from that same TV3 story. This time it is the suggestion that increased ‘fuel costs’ have done ‘heavy lifting’! Zane Small: “The retail association … has looked at electronic card spending data … which showed a 0.5% increase in spending in March. Their analysis has found that it’s actually fuel costs that are doing the heavy lifting. After accounting for that rise in fuel costs, retail spending has actually dropped by 1.2%.”

At least Zane Small did not try to deceive TV3 viewers. But the framing here was quite confused.

The story is that, while retail purchases have decreased by 1.2% in March, higher prices have created the illusion of a spending increase. While more money may have been parted with, that’s entirely illusory and largely misses the point. Consumers spent more to buy less; inflation and recession in one hit. Stagflation.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Recorded Live – A View from Afar podcast. Series 06, Episode 03 – In this episode, political scientist and former Pentagon Analyst Paul Buchanan and Selwyn Manning deep-dive into: The End of the Liberal Internationalist Order and the Rise of Illiberalism.

The topics discussed include:

• A Global Transition Process – What is this exactly and Why is this happening?
• Why is conflict used as a global systems regulator and agent of change? And what does this mean for 2026?
• The US has been the core of two pillars of liberal internationalism – its security system and system of trade.
• Why then has the United States decided to break the very system it has benefitted from, and risk advancing its own demise?

Paul and Selwyn invite you to subscribe, like, and click notifications in the YouTube link so that you don’t miss another live episode.

Remember, if you are joining us live , you can comment and lodge questions but remember we may include your comments and questions in our programmes.

Also, we encourage you to join us via YouTube, as on YouTube live interaction is especially efficient. See you there.

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Despite the mega-commentary about the Israel-Iran war, and especially the United States’ participation in that war, almost nothing is being debated about how the war is being funded.

I’ll make some comments about Iran later. But we need to focus on the United States, which is by far the most profligate party to this war. And Israel is being funded, like a charismatic and entitled teenage brat, by its (American) sugar daddy.

Most of us should have noticed that, with the exception of new tariffs which are not a significant source of United States government revenue, there has been no move to raise taxes. (The President has clearly invoked the use of tariffs as means of leverage through extortion; though he doesn’t properly appreciate that these taxes are paid by American residents.) Nor has any explicit ‘war loan’ or ‘war bond’ been floated in Wall Street.

The United States is ‘printing money’ to fund the war. This expression is both pejorative and a misnomer. Because printing money is an unmentionable, it’s hardly ever mentioned! Though it should be, because it’s an important financial mechanism, and it is not as sinful as it’s made to sound.

‘Printing money’ is not a literal expression; actually printed (or photocopied) money, counterfeit money, is illegal. Printing money, a figurative moniker, is in fact the day-to-day business of banking, with billions of dollars printed every day (and a near-similar number of dollars unprinted). The technology of printing money is that of double-entry-bookkeeping. Money is a social technology, as is double-entry bookkeeping.

What matters most to us is the role of the central bank – the Reserve Bank – in creating new money. And in particular the relationship between the Reserve Bank and its privileged customers, most of which are governments’ Treasuries and commercial banks. Even more particularly, we are interested in the most highly privileged relationship of all, that between the United States Federal Treasury and the United States Federal Reserve Bank. This exceptional relationship arises because the United States Dollar is the world’s reserve currency.

The War

Here are two quotes from Al Jazeera’s This is America: War on Iran: Cost of weapons and shift in the nature of warfare, 1 April 2026

Richard Gaisford: “It’s a significant contribution being made to the US economy by the defence industries. The last figures we have were for 2024, and that showed that it generated [?] something near one trillion dollars …”.

This comment reflects a wide belief that money is made by economic activity, and that the United States makes money by making, among other things, military hardware and software. The reality, of course, is that the money is made first, and is then used to purchase such hardware and software.

Interviewer: ‘Who has got the means to keep fighting at those levels the longest?’ Kenneth Katzman (a former senior analyst on Iran at the US Congressional Research Service): “The US Dollar is the main reserve currency of the globe, which means that the United States basically has the capability to manufacture money. Your viewers may not understand the mechanics of it, but basically the United States can print money.” (Actually, not only the United States.)

He goes on to address the military asymmetry between Iran and the United States: “The United States is a 28-trillion-dollar economy; Iran is a 400-billion-dollar economy”. Here he is talking about each country’s capacity to produce goods and services; not its capacity to manufacture money. Any amount of money can be made by any country’s banking-government nexus, and at trivial cost.

The interviewer (New Zealand’s Anna Burns Francis), and the other panellist did not respond to that seemingly provocative comment about printing money; there was no further discussion about how the war is being financed, only about how much it is costing. Discussion about the mechanics (and constraints) of printing money would go against the grain that most of us are fed. The public is not supposed to know – and generally does not know – that money is itself costless and can be manufactured, at will, in smaller or larger quantities.

Kenneth Katzman’s comments are not controversial; they are a statement of fact that no economist would disagree with. All countries’ banking systems (of which the central government is a component) have the capacity to print money; indeed, the New Zealand system (and other countries’ systems) necessarily did so in 2020.

The United States has fewer constraints on printing money than do other countries, but not zero constraints.

We note that money, like all financial and financialised assets, is not wealth; it is claims on wealth. So, the affordability of money – in practice – is measured by the ability of the economy to meet those claims, in the event that those claims are presented. (Indeed, the world can afford an octillion dollars’ worth of financial claims if it can be 100% certain that those claims will not be exercised; will not be spent on goods or services. The current world is awash with massive private holdings of financialised assets which, for the most part will not be spent on anything other than other financial assets. In technical language, such money has a very low ‘velocity’.)

We note also that newly printed United States’ dollars permeate into New Zealand through exports, including New Zealand made supplies to America’s war industry; to the United States’ military/industrial complex, which includes the space industry.

How does a country fund a war by printing money?

There are two key issues: rationing, and responsiveness.

The liberal critique against governments’ printing money is a general claim that governments are untrustworthy and spendthrift. In the eighteenth century when the liberal critique emerged, one principal concern was government adventurism in the form of warfare. This classical liberal critique presents one consequence of such government largesse as inflation (extra spending coming up against finite resources), and also presents any instance of general price increases as a consequence of government largesse. When governments consume relatively more resources, then – through the catalyst of inflation – private households and businesses consume relatively less.

The classical liberal critique emphasises this rationing issue, known as crowding out; in doing so, that critique presumes that private spending on goods and services is, per se, more efficient than public sector spending and redistributive transfers. There are two parts to this rationing argument: first, private parties are deemed to better assess (compared to bureaucrats and politicians) which items of spending translate to greater utility (ie happiness); second that relatively more private spending can be classified as ‘investing’, meaning spending for future rather than for present happiness. (Neither of these two propositions is generally true.)

The second issue, less emphasised by classical liberals, is responsiveness or ‘supply elasticity’. Classical liberals tend to assume that spending enabled by printed money does not elicit new production; ie does not bring-about a supply response. While this is true by definition for a hyper-taut economy, for the most part, economies are not hyper-taut and are indeed responsive to additional spending.

In the present case of the United States, the Israel-Iran War – on the pro-Israel side – is being funded substantially by new money printed for the United States government by the United States federal banking system; in the public accounts, this shows up directly as a huge increase in the United States’ fiscal deficit.

While prices are rising faster in the United States than before, this increase in general prices would appear to be substantially due to the supply-side cost-impact of the war itself, and not by increased aggregate demand inside the United States and the countries the United States imports goods and services from.

The United States domestic economy is not as supply-elastic as it might have been, given what ICE is doing to that country’s labour force. Nevertheless, the United States’ economy has been sufficiently depressed that it is now able to increase output without much difficulty. Hence, extra United States’s government spending has not in itself caused consumer prices in the United States to rise. The present chokehold on imports – a result of the war – is however causing CPI-inflation in the United States and the rest of the world. Prior domestic underemployment is one reason why money-printing may not be inflationary.

The second component of a country’s economic responsiveness to wads of newly printed money is that much production can be outsourced to the rest of the world. Thus, United States’ imports increase, the United States’ current account deficit increases, and the rest of the underemployed world gets to benefit from this as an economic stimulus. So, if the New Zealand banking-government nexus refuses to print money as a form of stimulus, the present Trump-printed money does create an alternative stimulus in New Zealand.

Certainly, New Zealand has very high visible and hidden unemployment, so (at present) is easily able to respond to the Trump stimulus. On that basis, New Zealand’s economic growth this year may not be as slow as is widely anticipated; though domestic confidence – in itself, a form of stimulus – may be countering the stimulus coming from the United States. In New Zealand too, any rise in CPI-inflation will be almost entirely due to the global supply chokeholds, and not to the American president’s money printing largesse.

Essentially, the United States is funding its war through its twin deficits: the United States fiscal deficit, and the United States current account deficit. The war is being funded through increased utilisation of underemployed resources throughout the world. In New Zealand’s case, we can see this easily and directly, by observing New Zealand’s increased exports to the United States.

How easily can other countries print money?

Technically, it’s as easy to print money in New Zealand as it is for the United States. However, the New Zealand dollar is not a global reserve currency, so a flood of new New Zealand dollars into the global economy is likely to generate financial risk; or at least perceptions of financial risk. ‘Investors’ – that is, financial traders – out there most likely would be more cautious about holding large quantities of New Zealand dollars (or $NZ assets) than they would be about holding large quantities of United States dollars. That caution generates an exchange rate risk; a risk that would be communicated to financial-asset-holders by the New York based rating agencies such as Standard and Poors.

When the exchange-rate risk is not widely seen as a matter of concern, New Zealand benefits mainly through its routinely-high current account deficit; that is, just the same way as the United States is able to benefit from printing money and enjoying the economic bounty of the world.

If the exchange rate risk becomes a concern however, the world would discount New Zealand dollar assets, and New Zealand would experience high levels of domestic inflation; that is, higher inflation than most other countries. The resulting low New Zealand dollar would confer a ‘competitive advantage’ on New Zealand; the current account deficit would close, exports increase, and reduced imports would create an increased demand for New Zealand- made goods and services.

The issue then becomes how responsive (ie supply elastic) the New Zealand economy is. If the domestic economy is able to respond to these new circumstances (which is the more common experience of other countries), then New Zealand would recover and soon prosper. The alternative is that New Zealand would go into an inflationary tailspin; that is, if its productive system is so hamstrung that it cannot respond to the stimulus of a low dollar exchange rate. One bad sign is over-dependence (as distinct from over-reliance) on imports. A dependent economy cannot switch away from imports. A country which relies on imports by choice, because imports are easily funded by exports, can usually pivot – if required to do so – towards more ‘tradable production’.

So, New Zealand can print money too, though printing in the proportion that the United States does certainly would be unadvisable. However, if a country overprints money, the normal situation is that the extra money just sits there in the banking system. (The brief real estate boom of 2021/22 has been widely attributed to excessive printed money stimulating a process of real estate speculation; though the unique circumstances of that few months – including labour and capital pandemic lockdowns – have not been properly researched. The government could easily have borrowed and then parked that money, but chose not to.)

Generally, the rest of the world is accommodating when some countries print more money (though not when all countries print too much money). The world has been very responsive to the United States for the entirety of post-WW2 history; it was American spending of new money that drove the economic growth of the capitalist world for 80 years.

The present US money printing to fund a globally-significant regional-war can be expected, sooner or later, to encounter an inflationary wall of its own making. The consequences of this war are to make the world economy much less responsive (ie are breaking the world’s economy) just as the American military-industrial complex – indeed the world’s expanding military-industrial complexes – are placing so many extra demands on the world’s economic environments.

War funding under pressure

Countries’ invaded or otherwise attacked on the perception that they are ‘easy meat’ tend to be much more capable of defending themselves than is widely understood. Their monetary systems are not integrated into the orthodox channels of the wider capitalist system; but their domestic monies work to keep domestic economies fully employed while on a war-footing. Yes, Iran will be printing money, and Iranians will be facing substantial visible and suppressed inflation. For Iran, that monetary process is a necessary part of its own defence. Money printing facilitates both necessary rationing in favour of the public sector, and also necessarily pushes the production system to its limits.

War times, historically, have shown that our economic systems are generally much more responsive than we presume them to be. Surprisingly often, the bullies neither win nor even achieve a limited range of objectives. Syria may be coming right today, despite rather than because of the nation which set off that 2010s’ war; a war which cruelly sandwiched the Syrian people between foreign bullies and a consequently more oppressive domestic tyranny.

We note that, when the United Kingdom was under threat during the first years of World War Two, it was able to import much on credit – especially from the United States, which was then a neutral country. China has played a large role in facilitating the United States’ more recent wars, through its current account surpluses. This time China will be helping to fund Iran’s war; as well as accommodating the United States through its ongoing – almost infamous – trade relationship with that country.

Indeed, when the Israel-US-Iran War is eventually over, it will be China’s version of the Marshall Plan which will revive the degraded world economy; part of that revival will be to write-off war debts, just as the United States – through plenty of printed money – eventually accommodated Germany’s reparations bill after World War One, and the West’s war debts after World War Two.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

It’s time that the obvious is stated explicitly. Binyamin Netanyahu and 2020s’ Israel need to be compared with Adolf Hitler and Nazi Germany. And consider the narcissist, Italy’s dictator Benito Mussolini. On the matter of language, we may call Benito Mussolini a fascist leader, and the Italian state under Mussolini – indeed the Italian Empire, which expanded under Mussolini – as history’s Fascist State.

While Nazi Germany is generally regarded as having been more extreme than the Fascist State, the word ‘fascist’ has commonly been applied to the former National Socialist regime of Germany. My language preference is to designate Nazi Germany as an ‘ultra-fascist’ state. (I would also note that Bolshevik Russia – the Soviet Union from November 1917 until the death of Josef Stalin in 1953 – might best be designated as an ‘orwellian tyranny’; and that there is a considerable overlap between an ultra-fascist state and an orwellian tyranny.)

Stacking-up Binyamin Netanyahu in 2026 against Adolf Hitler in 1940

Before conducting this simple exercise, we should note that the best perspective is one of academic detachment. Such detachment can be difficult in times of global conflict, in which most governments and probably most people take sides, explicitly or implicitly; the sides they take tend to be based upon the narratives which they have been repetitively exposed to.

We might imagine, as a detached observer in 1940, a Professor of World Affairs at the University of Chicago. And, for 2026, a Professor of World Affairs at the University of Guangzhou.

Having already designated Adolf Hitler as ultra-fascist, here are the three principal points that I would argue define ultra-fascism:

• a deep and intense racism
• an expansionist agenda, in the sense of Lebensraum
• a genocidal mix of hatred and indifference to selected other ‘peoples’ (where ‘peoples’ most commonly represents a conflation of ethnicity and religion)

It’s easy to see that Adolf Hitler ticks all three boxes, though, by 1940, Hitler had not yet committed genocide.

It’s also easy to see that Binyamin Netanyahu also ticks all three boxes; indeed, Netanyahu has already committed genocide. Unlike Hitler, Netanyahu’s career is not over, and we can have little confidence that he will not direct future genocides.

On these three bases, there can be no question that Binyamin Netanyahu and the present state which he presides over are ultra-fascist; worse than the Fascist State (and Italian Empire in Africa and the Mediterranean Sea) which Emperor Mussolini presided over.

Additional features of ultra-fascism

My first such feature is the use of pogroms, acts of terror by loyal private militias and hooligans acting with impunity. Germany before the 1940s was, in particular, characterised by judeophobic pogroms; the most famous being Kristallnacht (with at least 90 deaths) in November 1938. (There had been a substantial nineteenth century history of judeophobic pogroms in the former Russian Empire, especially in places like Ukraine with large Jewish population clusters. And also, in Western Europe in late medieval times; Jews were often blamed for the Black Death of 1347 to 1352, especially in lands which today would be classed as western Germany.)

In East Jerusalem and especially the West Bank (of the Jordan River), Netanyahu-supporting militias and hooligans commit regular and frequent pogroms on the indigenous Palestinian population, who in the main resist passively. The Palestinian death toll from these pogroms, just since October 2023, has been well over 1,000 people.

And, over the years, there have been no shortage of pogroms in Lebanon, many of which have been Israeli-incited. The worst was probably the Sabra and Shatila massacre in 1982, which precipitated the formation of the Lebanese Shia resistance organisation Hezbollah. The 1982 pogrom death toll, mainly Palestinian refugees, was almost certainly in excess of 3,000; the principal perpetrators were Christian Lebanese Phalangists of the Kataeb Party, though aided by the Israel Defence Forces.

My second such feature is that these leaders – Hitler and Netanyahu – had and have extreme ultra-fascist henchmen. Most obvious were Goebbels and Himmler on the Nazi side; BenGivr and Smotrich on the present ultra-fascist Israeli side. These henchmen tend to blunt the malign edge of the leaders of their packs.

My third such feature is the role of propaganda and incitement through propaganda; in particular the context is that the propaganda of ultra-fascists includes overt and blatant lying – complete indifference to factual accuracy – and not simply the omission of inconvenient truths. The incitement includes, through precisely targeted narratives, the secretive and personalised incentivisation of historically allied regimes and potential new allies to participate in the ultra-fascist project.

My fourth such feature is the widespread use of assassination squads, and execution squads, to enforce a terror regime – especially but not only with respect to occupied populations. Hitler’s execution squads did most of their worst after 1940. We note that 2026 Israel has just last week passed the legislation to impose the death penalty on non-Jewish resistors and dissidents. And Israel is world-famous for its Mossad-facilitated assassination squads, even before the ascendancy of the Netanyahu regime.

Assassination was and is a terror tactic

Assassination came to be a favourite terror tactic of the Russian terrorists whose ideology found fertile ground there from the 1860s. Given that most of the most ardent of Israeli citizens today are descendants of people well familiar with the Russian political and literary landscape, the awareness and adoption of this terror tactic should be no surprise to us today.

We might note that Vladimir Lenin’s terrorist brother Alexander was executed for attempting to assassinate the Tsar of Russia, Alexander III, in 1887. A member of the same terrorist organisation, Narodnaya Volya, had successfully assassinated Tsar Alexander II in 1881. Lenin (aka Vladimir Ilyich Ulyanov) himself adhered to the same terrorist principles as his brother, as is reflected in his disturbing parody of the equally disturbing What Is to be Done, 1863, by Nikolay Chernyshevsky.

(The dark character of Chernyshevsky’s book is called Rakhmetov. When reading about Rakhmetov last year, I was eerily reminded of another malign character I had read about earlier in 2025; Friedrich Lindemann. And, in Rakhmetov delighting in Isaac Newton’s obscure work Observations upon the Prophecies of Daniel and the Apocalypse of St. John, I am reminded of Peter Thiel and his obsession with the Antichrist. See my Barbecued Hamburgers and Churchill’s Bestie 17 April 2025, and Peter Thiel: Was The John Key Led Government Taken For An April Fool? 1 April 2026.)

Two other assassinations to note are that of Pyotr Stolypin – Russia’s modernising Prime Minister, Russia’s greatest reformist politician before Gorbachev – in Kiev in 1911; perpetrated by Dmitry Bogrov, a Ukrainian Jewish leftist revolutionary lawyer. And that of Winston Churchill’s friend Walter Guinness, 1st Baron Moyne, British Minister of State in the Middle East, who was assassinated in Cairo in 1944 by two members of the terrorist group Lehi.

Outline of a wider comparison

My comparison here is between the two current Eurasian geopolitical conflicts and the two historical Eurasian geopolitical conflicts which conflated into World War Two.

Re World War Two, the two Eurasian conflicts were of course Japan’s war on China and Southeast Asia, which, after Pearl Harbour, became the Pacific War. And the war of aggression by Nazi Germany which began in 1938 with the annexations of Austria and Czechoslovakia.

Today the Russia-Nato conflict in Ukraine is one of the two Eurasian geopolitical conflicts. The other of course is the Israel-Iran-Lebanon-Gulf conflict, aided and abetted by the United States.

Re World War Two, I’ll rate some of the leading figures on a ‘badness’ or ‘malignity’ scale – some may call it a scale of ‘evilness’ – in which a ten is the absolute maximum (which might be applied to a person of power attempting to use that power to achieve Armageddon, the end of the world) and zero represents the most saintly version of Jesus Christ. Considering the four protagonists of the European War of World War Two, I would rate Josef Stalin a 9, Adolf Hitler an 8, Benito Mussolini a 7.5, and Winston Churchill a 7. While Churchill is the one whose terror crimes have been the least acknowledged so far, he still comes out as the least malign – the lesser evil – of these four characters.

In relation to the present situation, and by virtue of my analysis above, Binyamin Netanyahu comes out as at least an 8. I will also mention some of the henchmen. Goebbels, Himmler, BenGivr, and Smotrich would each come out as a 9 by my estimation. Two people would qualify for a 9.5 rating: Stalin’s henchman Lavrentiy Beria, and Churchill’s little known close friend and advisor Friedrich Lindermann (aka Lord Cherwell). German-born Lindemann – an Oxford University Professor of Physics, and a deep racist – engineered the massive 1943 famines in India and Iran through contemptuous indifference to those populations. He was the principal voice in Churchill’s ear; advocating the carpet bombing of German civilians (euphemism: dehousing) and civilian infrastructure, and the erasure of German civilisation.

WW2 analogues

The analogues which I suggest are as follows (and relating in particular to the years 2026 and 1940): Israel is an analogue to Germany, the United States maps to the Italian Empire, Iran (plus proxies) maps to the (white) British Empire, China maps to the United States, Nato (at least its core 16 members) maps to Japan, Russia maps to Nationalist China (including Vladimir Putin as an analogue of Chiang Kai-shek), India in a few respects maps to Soviet Russia (especially its initial uncertain alignment), Ukraine maps to Romania, and the Gulf States map to occupied Western Europe (with UAE mapping to Vichy France).

This becomes a useful thought-exercise, in that it can help us today to see some of the possibilities and outcomes arising from possible escalations in the present conflicts.

A word of note. In 1940 and 1941, it was said that it was just the British Empire resisting the German-Italian Axis. There is much truth in that. Churchill’s United Kingdom did not appease Nazi Germany, just as Iran in 2025 and 2026 refused to appease Israel. Britain paid for its non-appeasement by enduring The Blitz. Both resistances to ultra-fascism contained a mix of characters with a mix of agendas. For most of the first three years of the WW2, the British did not take the fight directly to Germany (the defensive Battle of the Atlantic excepted).

Most of Britain’s fighting was against Italy, at least before and upto the 1942 invasion of Madagascar; be it in Greece, North Africa, or Mandatory Palestine. In Libya, initially at least, Germany was fighting alongside Italy and under Italian command.

And the Italian Air Force bombed the then ‘British’ city of Tel Aviv in 1940. Italy effectively withdrew from the war in 1943, and, for its troubles, was occupied by Germany; hence the 1944 Battle of Monte Cassino. Note that 1940 bombing of Palestine; the victim was the United Kingdom (analogue today of Iran), and the perpetrator was Italy (analogue today of the United States).

The final important learning from my analogy between the present conflicts and World War Two, is that – if the wars escalate and conflate – then China will emerge as the big winner (as the United States was in and after 1945) and the Axis-forces (and their allies such as UAE and Ukraine) and Nato will be the losers.

Important Note

I must emphasise that, while the two ultra-fascist regimes discussed here had and have many domestic supporters, there can be no conflation between regime-supporters and the ethnic or cultural groups which those ultra-fascist adherents identify with. ‘Germans’ as a collective never were ultra-fascist because of their nationality or their faith; though some Germans and non-German fellow travellers were, like the nazi regime, ultra-fascist. Likewise, in 2026, neither Jewish citizens of Israel, nor the wider Jewish population, can be characterised as ultra-fascist (or ‘far-right’ of any form) just because the present leaders of Israel are ultra-fascist.

Conclusion

We need to call a spade a spade. When too many good people pretend that ultra-fascists are not ultra-fascists – or choose to look away when ultra-fascism is gaining ascendancy – the world can too easily cross over a totalitarian tipping point, into something like orwellian tyranny.

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.