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Culture War Roundup for the week of January 16, 2023

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Why would EU want the poorest European country after Moldova, with the highest corruption and similar to Georgia problems(that of course could be theoretically solved in the near future but this is beside the point)?

Global food stability, advanced chip making, strategic depth, sentiment, internal European power struggles over the political center of gravity take your pick. The question is not 'why', but rather 'why are not you aware of the following?'

To start, being poor is not the issue for Ukraine. A poor GDP per capita in the European context is a cheap work force, which is a significant part of corporate viability in the European model. This is absolutely a mixed bag, but also kind of the point for the european economic model of the internal market and internal migration from east to west. Nor is the monumental costs of rebuilding Ukraine the objection- this is, after all, money that will be spent by European countries on their European companies to do business in Ukraine, in the name of integration. Different stakeholders have different interests, but no one expects Ukraine to circle a drain of constant recession and de-investment, which means there is profit to be made.

First, global food stability under European influence. Ukraine is poor in many things, but very, very rich in food, and had roughly a global share of nearly 9% global wheat, 10% barley, and 16% corn. This is 'regional famine prevention' levels of food production, and having it under European auspices- and not under Russian, where the food pressure has been used already for macroeconomic blackmail attempts- is a major global asset in the expected decades to come of global demographics. When the third rail fear of European politics is mass migration, having the food stability of the middle east not under Russian influence is rather important.

Second, Ukraine was responsible for 50% of global production of neon gas, which was a byproduct of industrial plants specifically built for it during the Soviet Union. This is relevant because industrial-grade neon is a key resource in high-value chipmaking. Any polity wanting to play for the advanced technology spheres needs a good source of neon, and while the war has degraded/destroyed a lot of Ukraine's, it's still a strategic interest to have regardless of corruption.

Third, strategic depth between Europe and Russia doesn't just go in Russia's favor. One of the key shocks to the European public was the realization that war was literally only a long day's car drive from Berlin, and the prospects of a Russian-dominated Ukraine on the border of Poland is a significant concern to countries like Poland. Among other things, Ukraine is a buffer, and like Finland a demonstrably capable buffer able between Russia and others.

Fourth, sentiment is not to be overlooked. European governments are broadly accountable to their voters, and the pursuit of re-election does mean that things that are popular with the voters will effect decision maker cost-benefits. This is most obvious in leading power Germany, where the government's obvious resistance to aiding Ukraine- from the helmet fiasco to stated fears of escalation- have been regularly overpowered by not just external pressure, but internal pressure. A German government whose voters supported neutrality would be much more resistant to pressure- a German government whose own voters want it to deliver arms finds itself backtracking its prior concerns. The same applies to corruption- corruption of Ukraine is not the most significant emotional concern European voters have about it, and corruption is only an obstacle in so much as people are otherwise neutral.

Fifth and finally, internal EU politics. There are two key nexus of interests that have an interest in resisting Ukrainian entry regardless of corruption- EuroFederalists, who fear a new nation will be too emotional to defer to the EUropean nationalism intended to replace nation-based nationalism, and the French-German axis, whose power within the EU frays as more members join, to the point that the French-German alignment is no longer the 'motor' of European policy in the way it once was. To those groups, any entry of a state of 40+ million people (half of Germany) would be a major barrier to the centralization of European Union power over European states, or the ability of France and Germany to jointly dominate that power over the other European states. To other countries, this isn't a bug, it's a feature, and expansion-of-the-EU-to-weaken-it has been a core policy of much of the European Expansion advocates, which has included powerful countries (UK, previously), weaker countries (who want to keep the EU loose instead of centralized), and especially the Eastern countries (who doubt Germany/France having their interests at heart vis-a-vis russia policy). Regardless of any level of corruption in Ukraine, people who want to move the political center of gravity eastward, or at least away from France and Germany, and who are not on board with a European unitary state will have an interest in Ukrainian ascession. Notably both parties are flexible on this as part of the give-and-take of European politics- the French and Germans have raised the prospects of watering down the veto as a precondition to allowing entry, others have used the Ukrainian issue to leverage the French and Germans into Russia policies that both were inclined to resist until dragged across the line.

There are plenty of reasons, and whether you find them compelling or not, you should at least be aware of other people's perspectives.

EU had enough of one Hungary with Orban stealing economic aid with his cronies, it doesn't need a second one. These internal problems will have to be corrected on their own, before, and not after, entry.

The EU's problem with Hungary and Orban isn't 'stealing economic aid,' it's that he uses the patronage network funding for non-pro-EU patronage networks. He's a fly in the ointment, but the ointment has always been largess to build patronage influence.

All in all, my position is you radically misunderstand the corruption dynamics involved in both Ukraine and in the EU itself, and are over-fixating on this issue. Corruption isn't why Ukraine will be barred entry by the likes of Germany or France- corruption will be the pretext used to facilitate, further, and defend their own interests within the European Union, that a Ukrainian entry might disrupt. The Europeans engage in their own corruption a plenty, and are quite willing to turn a blind eye when it suits them- what matters more is not that there is corruption, but the sort, and the tradeoffs.

Ukraine was responsible for 50% of global production of neon gas, which was a byproduct of industrial plants specifically built for it during the Soviet Union.

This is interesting, and I'm totally unfamiliar with neon production. What is the realistic medium term impact of, say, this production disappearing completely? Are there significant barriers to production being ramped up elsewhere? Is it mostly just some capital expenditure, and since the Soviets dropped das capital previously to build it, it hasn't been profitable to build much else, but if it disappeared, then within 5-10 years, new capital could be easily dropped to pretty much make up for the gap with some modest final price increase?

Not exactly an expert on neon production, though for a good pop-culture roundup on the importance of neon production that overlaps, try this-

https://www.rdworldonline.com/why-theres-a-neon-shortage-and-why-it-matters/

That is where the current situation in Ukraine enters the picture.

Air separation plants are expensive to build and operate. The products aren’t particularly difficult to transport, whether as a cryogenic liquid or compressed gas, but they are expensive to transport. Air separation plants generally serve a relatively local market or a large consumer. Distillation processes scale well, benefitting from what is commonly called the “two-thirds scale factor.” This is a mathematical relationship between how big something is and how much it costs to build. The capital investment to build an air separation plant grows at only 2/3 the rate of the capacity. Stated simply, bigger is better.

The neon industry in Ukraine takes advantage of very large air separation plants associated with steel manufacturing. These have economies of scale. They are a source of low-cost, crude neon-containing material that is a great starting point for making the purified neon used in lasers. Two manufacturers, Ingas and Cryoin, came to dominate the neon supply. They built on a feedstock advantage, gaining a further scale advantage. By some accounts, Ukraine was supplying about 70% of the world’s neon. Others estimate closer to 50%. No matter what the exact figure, the result is a dramatic and significant drop in the supply due to the war.

The current disruption is making many re-evaluate the global neon supply chain. It will likely lead to new entrants into the high-purity neon market. It is also causing a re-examination of neon use in excimer lasers. There is no replacement for neon, but use patterns are being examined in an effort to reduce consumption. Russia’s annexation of Crimea in 2014 prompted a flurry of research on reducing neon usage. Recycle systems for neon are commercially deployed, but are costly.

So to guess at your questions-

-From what I've read, the chip market is going to suck for the forseeable future, and this is separate from the US lawfare against Chinese chip-making capacity. (One may even suspect that it was timed and launched with this expectation.) Chip production bottlenecks for the next several years- easily 5-to-10?- are going to hurt a lot of industries, and compound the economic woes of anyone currently either unable to afford relevant industries (potentially Europe with energy prices), legally access relevant technologies (China and Russia), or just weren't a player.

-Ramping up production elsewhere is possible, but difficult, and it's unclear how fast/able anyone is able to do this. Ukraine was used during the Soviet Union for reasons including steel production and logistics. Steel production- which provided the economies of scale mentioned before- is very energy intensive. The European energy-intensive industries were based on assumptions of cheap Russian energy imports... which aren't here anymore. I'd bet my blouse that China and the US have efforts, but I'm not familiar with anything specific.

-While in the longer term I'm given to understand a lot more people will develop neon production capacity out of need, the issue isn't so much the final price of neon then, but what the dynamics of the interim are between now and then. By the time neon supply restabilizes, the world could go through some major economic transitions or inflection points that radically reshape the global economy. Europe's efforts to combat Russian energy warfare are disguising a lot of the industrial pain behind consumer price controls. China has basically given up deflating some serious economic bubbles in the name of social stability... which means worse effects if they pop. Global demographic changes are accelerating, as rich countries get older and smaller. This great chip disruption could be the sort of thing that snarls a lot of countries on that front for a few years... by which point it's too late.

Or maybe that's over-stating it. Regardless, having any sort of control over a vital high-technology input resource is useful.

Thanks!