A comment on yesterday’s blog on the impact of the Ukrainian war on our pensions
What was invested in your funds is no longer relevant – what is invested now is to all intents and purposes zero.
So for individuals , so for mighty pensions
Calstrs said it’s exposure to Russia has been reduced through “both selling of assets and the continued decrease in the price of the Russian assets broadly”.
— Josephine Cumbo (@JosephineCumbo) March 4, 2022
This is called “value destruction”. There is no transfer of value, no winners to counter the losers.
The financial consequences of war are just a shadow to the personal consequences. What we lose in our pensions, only a reminder of what people in Ukraine are experiencing.
And now the most agonising of choices faces Western leaders. Do we commit to the safety of those struggling to survive underground in the cities and towns of Ukraine, and risk the widening of the war. Do we accept that this is not a localised conflict but the start of WW3?
For that means value destruction that goes way beyond what we have seen so far.
A man alone at a long table
Two nights ago, I woke at 3.30pm , plugged in my pods and listened to what was happening. A nuclear reactor had a fire, it seemed that we were on the brink of a second Chernobyl. A few days before, Putin had put his country’s nuclear capability on a heightened state of alert, previously he had talked of consequences the like of which we had never seen.
What the West has lacked so far, is a failure of the imagination. We cannot imagine what it is like to have no fear of the consequences of actions, until that is, we see a man with no fear of the consequences of actions – a man sitting alone at a long table.
I have lived long enough: my way of life
Is fall’n into the sear, the yellow leaf;
And that which should accompany old age,
As honour, love, obedience, troops of friends,
I must not look to have; but, in their stead,
Curses, not loud but deep, mouth-honour, breath,
Which the poor heart would fain deny, and dare not
Heading for action
And to this maelstrom of a war, ex-pat Ukrainians, spoiling Chechnyans and random Britains, head for action. The common theme is “we cannot stand by“.
And yet we have stood by when the same thing happened in Aleppo, and is happening in Yemen and in Indonesia and in China. Moral relativism tells me that I am no less or more guilty for standing aside and not engaging. Buying a Ukrainian flag is not enough to assuage guilt. As was said last night by a Ukranian “we know we have your prayers, but your prayers are not enough”.
But if we head for action, if we enforce a no fly zone over Ukraine, what of it? Will a direct intervention in the war, (rather than the provision of arms), excuse a further escalation from a Russian President who has so little to lose.
Macbeth knew there came a time when further slaughter had no personal consequence
I am in blood
Stepped in so far that, should I wade no more,
Returning were as tedious as go o’er.
Watching Macbeth’s journey to his death never seemed to me to warrant the word “descent” since Macbeth seemed more the hero , the further stepped he was in blood.
The mind I sway by and the heart I bear
Shall never sag with doubt nor shake with fear.
And I fear that is how millions of Russians will see Putin, in what appears to me the denouement of his and his regime’s tragedy. Putin’s victims are as inconsequential to him as Stalin’s were, such is the asymmetry of autocracy – we can only watch and wonder.
Will the liberal order re-assert?
The liberal values of the West have made many, like me affluent. I am perhaps facing a diminution of my affluence, through the value destruction of this war but I am not facing the loss of loved ones or even the loss of my dwelling.
The assumption so far, is that while this war will go on some time, it will not destruct the fundamental order of things, the liberal democracy in which we live, this side of Ukraine.
But liberalism can be uninspiring to many people. A doctrine that deliberately lowers the sights of politics and enjoins tolerance of diverse views often fails to satisfy those who want strong community based on shared religious views, common ethnicity or thick cultural traditions
More than a generation has passed now since the fall of the Berlin Wall, and the virtues of living in a liberal world have been taken for granted by many. The memory of destructive wars and totalitarian dictatorship has faded.
The travails of liberalism will not end even if Putin loses. China will be waiting in the wings, as well as Iran, Venezuela, Cuba and the populists in western countries.
A fight for our value
As I see the investments in my pensions and ISAs written down to nothing, I ponder how much of that value belonged to me, and how much depended on the fragile values that we hold on to. The values of ES and G.
We have no right to those values, we hold them sacred, in our secular way, but they are not enshrined. A call from Putin could render part of Europe uninhabitable, it is not too far fetched to imagine a nuclear missile falling on the City of London.
For the first time in my (adult) life, I face the possibility that I am about to become part of a war that could destroy me. This time there is no failure of imagination, the consequences are being played out on my phone, laptop and television.