UK Elite Navy Officer EXPOSES Crisis of Western Decision Making | Steve Jermy

## Intro: Tripolar World & Peak Oil The conversation surfaces a startling proposition: the post–Cold War unipolar moment is over, replaced not by a comfortable multipolarity but by a sharper tripolar rivalry among the United States, China and Russia. This matters because each pole runs on a different economic logic. One is predominantly financialized, leveraging credit, services and global finance; the other two remain rooted in industrial capacity and secure energy flows. The practical upshot is that western security assumptions—built on the premise of perpetual growth, cheap energy and preponderant technological advantage—are fraying at the edges. The debate in the exchange presses this point hard: strategic choices made in a world of abundance and unchallenged naval, air and industrial superiority look increasingly like ill-fitted garments when the underlying economics and energy supplies are shifting beneath policymakers’ feet. The conversation draws attention to what Steve Jermy calls a convergence of three structural forces. First is the geopolitical realignment: a tripolar distribution of power with distinct industrial and energy models. Second is the mounting fragility of the global financial order, reflected in high public and private debt and strained dollar-euro dynamics. Third is the long-run trajectory of energy availability—peak oil in a meaningful sense—implying real constraints on the energy-driven growth that Western economies have taken for granted. Taken together, these trends suggest a world in which brute economic measures and market-based levers will increasingly clash with hard industrial realities. ## Crisis of Western Leadership The conversation repeatedly returns to leadership as both symptom and cause. Western elites, it argues, suffer not only from policy mistakes but from an epistemic collapse: an inability to think strategically and to face uncomfortable trade-offs. This is framed as more than mere incompetence. It is portrayed as a cultural phenomenon—what the speakers describe as “cult thinking”—where political spin, moral certainty and electoral short-termism substitute for lucid strategy. The result is policy that is performative rather than instrumental: loud declarations of values and punishment, but weak mechanisms for achieving durable outcomes. A striking element of the critique is the claim that senior circles—civil service, media, military and political elites—have converged on a narrative that omits crucial realities about industrial capacity, energy dependencies and the limits of financial coercion. That convergence creates a closed epistemic environment in which dissenting, empirically grounded analysis is marginalized. The conversation suggests that this is not merely an informational failure but a systemic one: institutions designed for a different global economy and media ecosystem are ill-equipped to absorb or act upon complex, counterintuitive strategic assessments. When leaders are incentivized to maintain appearances, admit little, and avoid costly adjustments, policy becomes self-reinforcing and increasingly brittle. ## Real Economy vs. Financial Sanctions One of the most consequential points raised is the mismatch between western leverage and Russian resilience. The dominant instinct in Western capitals has been to weaponize finance—sanctions, asset freezes, exclusion from markets—on the theory that cutting an adversary off from cash flows will force political change. The exchange pushes back forcefully: for an industrial, resource-rich economy that can sustain its manufacturing and energy sectors domestically or through alternative partners, financial measures have limited bite. Russia, it is argued, remains an autarkic producer of inputs that matter in war: energy, metallurgy, munitions-capable industrial plants and human capital. The distinction between the “real economy” and “financial capitalism” is central here. Financial tools can inflict pain, constrain investment and disrupt supply chains, but they do not directly translate into factories turning out artillery shells or into barrels of fuel for mechanized forces. If industrial output, energy production and the ability to mobilize labor are preserved, then sanctions may hobble some facets of an opponent’s economy while leaving its warfighting core intact. The upshot is that policymakers who place disproportionate faith in financial coercion risk both strategic failure and domestic self-harm when sanctions boomerang—damaging supply chains, energy security and industrial capability at home more than they cripple the target. ## Analyzing Russia’s 5-Phase Strategy The conversation teases analytical rigor from a practitioner’s perspective by outlining a phased understanding of Russian strategy. Rather than seeing events as random, the approach advocates starting from first principles: what are the ends a state seeks, what means are available, and how does geography, industry and historical experience shape the sequence of operations? This approach treats Russia’s actions as the product of deliberate planning calibrated to its strengths—industrial production, energy leverage, and relative strategic depth—rather than as the outcome of irrational aggression. What emerges is a reading of Russian strategy as sequential and adaptive: secure logistics and production, consolidate territorial and buffer advantages where possible, use energy and diplomatic ties to fragment opposing coalitions, and maintain a warfighting posture that exploits Western weaknesses in munitions, air-defense and anti-access/area-denial technologies. The conversation stresses that such a strategy is coherent when measured against the constraints and capabilities available to Moscow: limited dependence on external finance, robust domestic supplies, and the ability to pivot trade flows to alternative markets. Understanding the strategy in these terms reframes questions about “who is winning” not as a contest of narratives, but as an empirical contest over production, logistics and political cohesion. ## Can Europe Actually Fight Russia? This is the central, existential question raised in the dialogue: does Europe possess the material capacity and political will to prevail in a protracted conflict with a state that has prioritized industrial output and energy self-sufficiency? The conversation warns that current European efforts look structurally deficient. Military debates framed around deterrence and moral clarity often mask a deeper incapacity: shortages of ammunition, lagging air-defense capabilities, and fundamental energy vulnerabilities. Europe’s recent defense efforts, while rhetorically forceful, may be insufficient when measured against a state capable of mass-producing conventional munitions and fielding asymmetric technologies such as hypersonic systems. The exchange suggests that remedying this requires a grim honesty about industrial base revival, energy security, and production resiliency—not just additional sorties of training missions or incremental procurement commitments. Reindustrialization is neither fast nor cheap. It requires long-term public investment, reorientation of supply chains, and political courage to sacrifice consumption and some comforts in service of strategic resilience. The alternative, the conversation warns, is to sustain a posture of bluff and bluff alone: outward displays of unity that unravel under the pressure of material scarcity and battlefield attrition. ## The Rise of the "Securitocracy" 00:45: A closing theme in the conversation is the domestic political transformation that accompanies sustained external threats: the emergence of what the speakers term a “securitocracy.” This is a polity in which security logic pervades decision-making, media, and civil liberties, justified by existential narratives about foreign adversaries. The danger, the conversation notes, is twofold. First, securitization can institutionalize

UK Elite Navy Officer EXPOSES Crisis of Western Decision Making | Steve Jermy Is the West steering its ship of state directly into an iceberg while the captain refuses to turn the wheel? Can a financialized economy fueled by debt ever hope to defeat an autarkic industrial powerhouse fueled by real energy? And why does our leadership seem paralyzed by a collective delusion rather than guided by strategy? To parse through this fog of war, I turned to Commodore Steve Jermy. A retired British Navy officer who spent his career commanding destroyers, Steve doesn't just theorize about strategy—he has lived it. He joins me to dismantle the myths of the current conflict, applying the rigorous logic of a military commander and energy expert to explain why the current Western approach isn't just failing, but is mathematically impossible to sustain. Links: Articles by Steve: NATO – https://responsiblestatecraft.org/nato-war-with-russia/ Balance of Power – https://braveneweurope.com/steven-jermy-russia-is-in-the-driving-seat Neutrality Studies substack: https://pascallottaz.substack.com (Opt in for Academic Section from your profile settings: https://pascallottaz.substack.com/s/academic) Merch & Donations: https://neutralitystudies-shop. fourthwall.com Timestamps: 00:00:00 Intro: Tripolar World & Peak Oil 00:07:43 Crisis of Western Leadership 00:12:49 Real Economy vs. Financial Sanctions 00:18:21 Analyzing Russia’s 5-Phase Strategy 00:27:08 Can Europe Actually Fight Russia? 00:38:24 The Rise of the "Securitocracy" 00:45: 11 Elite Capture of Mainstream Media #Pascal Hello everybody, and welcome back to Neutrality Studies. Today I’m joined by Commodore Stephen Jeremy, a retired British Navy officer. We want to discuss the general situation in international politics. So, Steve, welcome. #Steve Jermy Very, very great pleasure to be here, Pascal. I follow your work a lot, and I particularly like the title *Neutrality Studies*, because we ought to be talking a lot more about neutrality and a lot less about war. #Pascal People often think neutrality means doing nothing, but it's the exact opposite. It means doing a lot and trying, at the end of the day, not to end up in war—which I think should be the job of all military people. And you, as a former Navy officer—you know, you commanded ships, and as a Commodore you commanded several ships—what’s your analysis of what’s currently going on? In my view, things are just falling apart left and right. I feel like a little sugar cube dissolving in water -- 1 of 16 -- because there are so many problems at the same time: Venezuela, Iran, EU sanctions, British sanctions, the genocide in Palestine, and so many others. How are you making sense of everything? #Steve Jermy I've been sort of seeing it, and sort of expecting it to go this way for a few years, Pascal. When I left the Navy in 2010, I had just about completed a book I called *Strategy for Action*. It’s not available at the moment because it’s out of print, although I’m hoping to get a second edition out. What I was trying to do in the book was address a problem I’d noticed—that the West seems appallingly bad at doing strategy. At the time, we were struggling in Afghanistan and Iraq, and since then we’ve had Libya, Syria, and now the Russia–Ukraine war, and finally Venezuela. It seems to me there’s very little evidence of real strategic thinking in any of those cases. What I had missed, though, were other things. I was fortunate because the Navy sent me off for a year to Cambridge in the ’90s, where I did an MPhil in international relations. I'm nowhere near your level of erudition, but I do have a really good feel for economics, international economics, international law, and the theory of international relations. I'm very much in the realist camp, I suppose—although perhaps not quite as defined as John Mearsheimer is, even though I'm a great fan of his work. I think there are three things going on in the world, and I've been thinking this since about 2015, when I began to see, in my second career in the energy sector, a close relationship between energy, geopolitics, and all these other things. So I think the first thing is that we're seeing a shift from a unipolar world—not to a multipolar world, but rather to a tripolar one. It seems to me that we now have three great powers operating. The first is obviously the United States, the second is China, and the third is Russia. What’s interesting about those three powers is that two of them are operating on different industrial–economic models from the United States. I’m a great fan of Michael Hudson’s work—I don’t know if you’ve come across him; I’m sure you have—but he talks about the difference between industrial capitalism and financial capitalism. I think we in the West have been shifted onto the financial capitalism model, whereas the Chinese and the Russians are very much in the industrial capitalism model. I read an article about six months ago, Pascal, in which I talked about the balance of power. I was actually doing it in the context of the Russia‑Ukraine war. In that balance‑of‑power article, I suggested—and this is a slight advance, I think, on John Mearsheimer’s work—that the critical issues in terms of military power were twofold. The first was industrial capacity issues. And the second was energy, and I still stand by that analysis. What we’re starting to see, I think, at a higher level, is that Russia has very strong industrial capacity, as indeed does China. And we know that America would like a stronger industrial capacity because it’s trying to reindustrialize. So I think the balance of power between these three axes is important. That’s the first part of it. But I think -- 2 of 16 -- there are two other things going on, perhaps more subtle ones. The first is that the global economy doesn’t look in good shape to me, and I think there are a lot of indicators. We know that the Western nations are heavily indebted, particularly the United States. There are issues going on within the, uh, the euro‑dollar sector. I'm invested in gold and silver, and I'm shocked at how quickly it's moving. That might be good for me because I'm invested in it, but to me it's the canary in the coal mine. So I think what we're seeing is really interesting problems with economics, and probably we're going to see—if things go as I think they will—I would not be at all surprised if there's another great financial crisis this year, or perhaps next year. And it could have a greater impact than the one in 2007–2008. If that plays out, it would not surprise me at all, for reasons I'll come on to, if it led us into a deep recession, possibly even a depression. So that's the way I've been thinking about it. I first introduced these ideas in a lecture in Oxford around 2015. But the third thing that's going on— and I think this is fundamental—is that we're at the period of peak oil. Peak oil is the point where energy, hydrocarbon supplies, reach their maximum and then start to decline. It comes from the thinking of Marion King Hubbert, who was the great oil geologist that forecast, in 1956 I think it was, that American oil supplies would peak in 1971—and they did. There was subsequently a shale oil spike, although that won’t last long. He also forecast that global oil supplies would peak around 2010. The best evidence I’ve seen suggests this happened around 2017. My go‑to person on this is a guy called Art Berman, who’s a petroleum geologist working in the States. He’s brilliant. And he too, I think, understands this. The reason energy and economics are important is that there’s a mathematical correlation between the use of energy and economic growth, and the correlation is close to one. So it follows that if we are indeed at peak oil and energy supplies start to decline—and I think that will happen from about 2030—then at that stage we simply cannot grow economies. It’s not a terribly good idea anyway, but we cannot grow economies. So I think we’re starting to move from a world of increasing prosperity and increasing energy supplies to one of decreasing prosperity and decreasing energy supplies. And I just think that explains a lot of the fractiousness that’s going on around the world. It’s quite subtle and underneath, but the model seems to work for me. #Pascal Hey, very brief intermission because I was recently banned from YouTube. And although I'm back, this could happen again at any time. So please consider subscribing not only here but also to my mailing list on Substack—that’s pascallottaz.substack.com. The link will be in the description below. And now, back to the video. At the same time, though, we see how a lot of the political actions taken—especially in Europe, and I include Britain, of course, as part of the European continent—are so harmful. They’re so harmful to themselves, so many of these decisions. And maybe I’d just like to benefit a little from your experience as a ship captain and a commodore. I mean, if you’re on a ship, you can’t immediately turn the thing around; you can’t just go into reverse and park as you wish, right? -- 3 of 16 -- You need to do a bit of planning to land where you actually want to be. I mean, how is it possible that we see things like the Germans shooting themselves in both feet with Nord Stream 2, with their energy dependence on the U.S.? And also Britain, which seems joined at the hip to the United States, even when it really, really hurts. We’ve seen that—how Keir Starmer was humiliated in the Oval Office by Donald Trump, and he just sat there, you know, shrugged his shoulders, and laughed it off. How do you explain that to yourself? And as a captain, how do you think about steering large groups of people? #Steve Jermy I think what you're pointing toward is a crisis of leadership in the West, and I think that runs across almost all Western countries, with one or two exceptions. One of the problems is—I've been trying to think about this, like you, no doubt, for years—and I think we've actually reached a stage where what I see is evidence of what I can best describe as cult thinking in the Western world. That cult thinking is partly based on hubris, because we continue to believe that the West are the good guys and that we’re successful, having won the Cold War. That’s an open question, of course. The other thing I think you see is the culture of political spin—this idea that everything has to be spun so you can win your particular election. But the problem is that political spin leads to deception, because the information provided to the public is, at best, partial. There will no doubt be cases where Western leaders are lying to their populations, which I’d like to think is the minority, but I do think there are many times when the public is being deceived. And they’re being deceived because they’re only given a partial view of the picture, since it doesn’t suit leaders politically to expose the whole thing. I think we can see that in the Russia-Ukraine war. It's obvious to people like me, and to you and others, that the Russia-Ukraine war cannot be won. And yet European leaders continue on. It's a bit like having European leaders on the Titanic, continuing to steer it straight into the iceberg of Russia’s military-industrial capacity, making the holes even bigger. I think it’s all going to come apart. The problem, though, is that when I talk to the elites—certainly in my country—I’d say about 90% of them actually believe it. So it’s quite a struggle, because they believe it, and the mainstream media believe it as well. And all the public are fed is that same narrative. I said about—I think about... #Pascal How about your circle of Navy friends and colleagues—the people you know? Do they believe that too, in that circle? Are we talking about around 90%? #Steve Jermy I would say that of the former senior naval officers I know, about 90% of them believe that Putin is an evil, ambitious tyrant who’s trying to