Michael Hudson interviewed by Ben Norton (Multipolarista) Update with transcript

June 30, 2022

Economist Michael Hudson on inflation and Fed plan to cut wages: A depression is coming

Transcript:

BENJAMIN NORTON:

Hey, everyone, this is Ben Norton, and you are watching or listening to the Multipolarista podcast. I am always privileged to be joined by one of my favorite guests, Michael Hudson, one of the greatest economists living today.

We’re going to be talking about the inflation crisis. This is a crisis around the world, but especially in the United States, where inflation has been at over 8%. And it has caused a lot of political problems. It’s very likely going to cause the defeat, among other factors, of the Democrats in the mid-term elections in November.

And we’ve seen that the response of the US government and top economists in the United States is basically to blame inflation on wages, on low levels of unemployment and on working people.

We’ve seen that the chair of the Federal Reserve, Jerome Powell, has said that inflation is being caused by wages supposedly being too high. We’ve also seen that the top economist and former Clinton administration official Larry Summers has claimed that the solution to inflation is increasing unemployment, potentially up to 10%.

So today I’m joined by economist Michael Hudson, who has been calling out this kind of neoliberal snake oil economics for many years. And Professor Hudson has an article he just published that we’re going to talk about today. You can find this at his website, which is michael-hudson.com. It’s titled “The Fed’s Austerity Program to Reduce Wages.” and I’m going to let Professor Hudson summarize the main points of his article.

Professor Hudson, as always, it’s a pleasure having you. Can you respond to the decision by the Federal Reserve to increase interest rates by 0.75%? It doesn’t sound like a lot – it’s less than 1% – but this was the largest rate hike since 1994.

And now we’ve already seen reports that there’s going to be a depression. The Fed chair is blaming this on wages. Can you respond to the position of the Fed and the inflation crisis in the US right now.

MICHAEL HUDSON:

For the Fed, the only two things that it can do is, number one, raise the discount rate, the interest rate; and number two, spend $9 trillion buying stocks, and bonds, and real estate mortgages to increase real estate prices, and to increase the amount of wealth that the wealthiest 10% of the population has.

To the wealthiest 10%, especially the 1%, it’s not only inflation that’s a problem of wages; every problem that America has is the problem of the working class earning too much money. And if you’re an employer, that’s the problem: you want to increase your profits. And if you look at the short term, your profits go up the more that you can squeeze labor down. And the way to squeeze labor down is to increase what Marx called the reserve army of the unemployed.

You need unemployment in order to prevent labor from getting most of the value of what it produces, so that the employers can get the value, and pay that to the banks and the financial managers that have taken over corporate industry in the United States.

You mentioned that while the Fed blames the inflation it on labor, that’s not President Biden’s view; Biden keeps calling it the Putin inflation. And of course, what he really means is that the sanctions that America has placed on Russia have created a shortage of oil, gas, energy, and food exports.

So really we’re in the Biden inflation. And the Biden inflation that America is experiencing is the result basically of America’s military policy, its foreign policy, and above all, the Democratic Party’s support of the oil industry, which is the most powerful sector in the United States and which is guiding most of the sanctions against Russia; and the national security state that bases America’s power on its ability to export oil, or control the oil trade of all the countries, and to export agricultural products.

So what we’re in the middle of right now isn’t simply a domestic issue of wage earners wanting higher salaries – which they’re not particularly getting; certainly the minimum wage has not been increased – but you have to put this in the context of the whole cold war that’s going on.

The whole US and NATO confrontation of Russia has been a godsend, as you and I have spoken before, for the oil industry and the farm exporters.

And the result is that the US dollar is rising against the euro, against sterling, and against Global South currencies. Well, in principle a rising dollar should make the price of imports low. So something else is at work.

And what’s at work, of course, is the fact that the oil industry is a monopoly, that most of the prices that have been going up are basically the result of a monopolization, in the case of food, by the marketing firms, like Cargill and Archer Daniels Midland, that buy most of the crops from the farmers.

The irony is that while food prices, next to oil prices, are the major factor that is soaring, farmers are getting less and less for their crops. And yet farmers’ costs are going up – up for fertilizer, up for energy, up for other inputs – so that you’re having enormous profits for Archer Daniels Midland and the food monopolies, of the distributors, and enormous, enormous gains for the oil industry, and also of course for the military-industrial complex.

So if you look at what’s happening in the overall world economic system, you can see that this inflation is being engineered. And the beneficiaries of this inflation certainly have not been the wage earners, by any stretch of the imagination.

But the crisis that the Biden policy has created is being blamed on the wage earners instead of on the Biden administration’s foreign policy and the basically the US-NATO war to isolate Russia, China, India, Iran, and Eurasia generally.

BENJAMIN NORTON:

Professor Hudson, I want to talk about the increase in interest rates by the Fed. There has been a lot of attention to this, although, again, it’s 0.75%, which is not that big. But it’s of course going to have an outsize impact on the economy.

In your article, again, this is your column at michael-hudson.com, “The Fed’s Austerity Program to Reduce Wages,” you talk about the Fed’s “junk economics,” and you say that the idea behind raising interest rates by 0.75% is that:

raising interest rates will cure inflation by deterring borrowing to spend on the basic needs that make up the Consumer Price Index and its related GDP deflator. But banks do not finance much consumption, except for credit card debt, which is now less than student loans and automobile loans. Banks lend almost entirely to buy real estate, stocks and bonds, not goods and services.

So you argue that one of the effects of this is that it’s actually going to roll back homeownership in the United States. You note that the rate of homeownership has been falling since 2008.

So can you expand on those arguments? What will be the impact of the increase of the interest rates by the Fed?

MICHAEL HUDSON:

Well, in order to get an economics degree which is needed to work at the Fed or at the Council of Economic Advisors, you have to take economics courses in the universities, and all of the textbooks say just what you quoted me as saying they say.

The pretense is that banks actually play a productive role in society, by providing the money for factories to buy machinery, and build plants, and do research and development, and to hire labor; and that somehow the money that banks create is all lent out for industrial economy, and that that will enable companies to make more money that they’ll spend on labor; and of course, as they spend more money on labor, that supports to bid prices up as the reserve army of the unemployed is depleted.

But that’s all a fiction. The textbooks don’t want to say that banks don’t play a productive role like that at all. And the corporations don’t do what the textbooks say.

If you look at the Federal Reserve balance sheet and statistics that it publishes every month, you’ll see that 80% of bank loans in the United States are mortgage loans to commercial real estate and mostly for home real estate. And of course the home mortgage loans have been nothing, like under 1% for the last 14 years, since 2008.

Only the banks and the large borrowers, the financial sector, have been able to borrow at these low rates. Homeowners all along have had to pay very high rates, just under 4%, and now it’s going above 4%, heading to 5%.

Well, here is the situation that the Federal Reserve has created. Suppose that you’re a family right now going out to buy a home, and you find out that in order to borrow the money to buy the home – because if the average home in America costs $600,000 or $700,000, people haven’t saved that much; the only way you can buy a home is to take out a mortgage.

Well, you have a choice: you can either rent a home, or you can borrow the money to buy a home. And traditionally, for a century, the carrying charge for financing a home with the mortgage has been about the equivalent of paying a rent. The advantage is, of course, that you get to own the home when it’s over.

Well, now let’s look at what’s happening right now. All of a sudden, the carrying charge of mortgages have gone way, way up. The banks are making an enormous gap. They can borrow at just around 1%, and they lend out at 4.5%. They get a windfall gain of the markup they have in mortgages, lending to prospective homeowners.

And of course, the homeowners don’t have enough money to be able to pay the higher interest charged on the mortgages that they take out. So they are not able to buy as expensive a home as they wanted before.

But they’ve been a declining part of the population. At the time Obama took office, over 68% of Americans owned their own home. Obama started the great wave of evictions, of 10 million Americans who lived in homes, essentially to throw them out of their homes, especially the victims of the junk mortgages, especially the lower income and racial minorities who were redlined and had to become the main victims of the mortgages.

America’s homeownership rate is now under 61%. What has happened? You’ve had huge private capital firms come into the market thinking, wait a minute, we can now buy these properties and rent them out. And we can buy them for all cash, unlike homeowners, we’re multibillionaires, we Blackstone, BlackRock.

You have these multibillion-dollar funds, and they say, well, we can’t make much money buying bonds or buying stocks that yield what they do today, now that the Federal Reserve has ground down interest rates. What we can do is make money as landlords.

And so they’ve shifted, they’ve reversed the whole shift away from the 19th-century landlordism to an economy based on financialization, and the wealthy classes making money on finance, to go back to making money as landlords.

And so they are buying up these homes that American homeowners can’t afford to buy. Because when you raise the mortgage rate, that doesn’t affect a billionaire at all. Because the billionaire firm doesn’t have to borrow money to buy the home. They have the billion dollars of their own money, of pension fund money, of speculative money, of the money of the 1% and the 10% to spend.

So what you’re having by increasing the interest rates is squeezing homeowners out of the market and turning the American economy into a landlord-ridden rental economy, instead of a homeowners economy. That’s the effect.

And it’s a windfall for the private capital firms that are now seeing that are making money as landlords, the old fashioned way, it worked for 800 years under feudalism. It’s coming back in style.

BENJAMIN NORTON:

Professor Hudson, you point out in this article at your website that more than 50% of the value of U.S. real estate already is held by mortgage bankers. And of course, that percentage is increasing and increasing.

Now, you, Professor Hudson, have argued a point that I haven’t seen many other people make, although it’s an obvious, correct point, which is that there has actually been a lot of inflation in the United States in the past several years, but that inflation was in the FIRE sector: finance, insurance, and real estate.

We see that with the constant increase in real estate prices; they go up every single year; rent goes up every single year. The difference now is that there’s also a significant increase in the Consumer Price Index.

And there is an interesting study published by the Economic Policy Institute, which is, you know, a center-left think tank, affiliated with the labor movement; they’re not radicals, they’re progressives. And they did a very good study.

And they found – this was published this April – they found that corporate profits are responsible for around 54% of the increase of prices in the non-financial corporate sector, as opposed to unit labor costs only being responsible for around an 8% increase.

So they showed, scientifically, that over half of the increase of prices in the non-financial corporate sector, that is in the Consumer Price Index, over half of that inflation is because of corporate profits.

Of course, that’s not the way it’s discussed in mainstream media. That’s not the way the Fed is discussing it all. We see Larry Summers saying that we need to increase unemployment. Larry Summers, of course, was the treasury secretary for Bill Clinton.

He’s saying that the U.S. has to increase unemployment; the solution to inflation is increasing unemployment. Even though these studies show that over half of inflation in the Consumer Price Index is because of corporate profits.

I’m wondering if you can comment on why so many economists, including people as revered as Larry Summers, refuse to acknowledge that reality.

MICHAEL HUDSON:

Most economists need to get employment, and in order to be employed, you have to give a picture of the economy that reflects how well your employer helped society at large. You’re not allowed to say that your employer is acting in ways that are purely predatory. You’re not allowed to say that the employer does not earn an income.

You talked about corporate profits and the classical economists. If you were a free-market economist like Adam Smith, or David Ricardo, or John Stuart Mill – these are monopoly rents. So what you call corporate profits are way above normal corporate rates of return, normal profits. They’re economic rents from monopoly.

And that’s because about 10 or 15 years ago, the United States stopped imposing its anti-monopoly laws. It has essentially let monopolies concentrate markets, concentrate power, and charge whatever they want.

And so once you’ve dismantled the whole legal framework that was put in place from the 1890s, from the Sherman Antitrust Act, down through the early 20th century, the New Deal, once you dismantle all of this state control, saying – essentially what Larry Summers says is, we’re for a free market.

A “free market” is one in which companies can charge whatever they want to charge for things; a free market is one without government regulation; a free market is one without government; a free market is a weak enough government so that it cannot protect the wage earners; it cannot protect voters. A “democracy” is a country where the bulk of the population, the wage earners, have no ability to affect economic policy in their own interests.

A “free market” is one where, instead of the government being the planner, Wall Street is the planner, on behalf of the large industries that are basically being financialized.

So you’ve had a transformation of the concept of what a free market is, a dismantling of government regulation, a dismantling of anti-monopoly regulation, and essentially the class war is back in business.

That’s what the Biden administration is all about. And quite frankly, it’s what the Democratic Party is all about, even more than the Republican Party. The Republican Party can advocate pro-business policies and pro-financial policies, but the Democratic Party is in charge of dismantling the legacy of protection of the economy that had been put in place for a century.

BENJAMIN NORTON:

Yeah, and this is an article in Fortune that was originally based on an article in Bloomberg: “5 years at 6% unemployment or 1 year at 10%: That’s what Larry Summers says we’ll need to defeat inflation.” That’s how simple it is, you know, just increase unemployment, and then inflation will magically go away!

Now, I also wanted to get your response, Professor Hudson, to these comments that you highlighted in a panel that was organized by the International Manifesto Group – a great organization, people can find it here, their channel here at YouTube. And they held a conference on inflation. And you were one of several speakers.

And you highlighted these comments that were made by the Fed chair, Jerome Powell. And this is according to the official transcript from The Wall Street Journal. So this is not from some lefty, socialist website. Here’s the official transcript of a May 4 press conference given by the Fed chief, Jerome Powell.

In this press conference, he said, discussing inflation, he said, in order to get inflation down, he’s talking about things that can be done “to get wages down, and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially.”

So this is another proposal. Larry Summers says 6% unemployment for five years, or 10% unemployment for one year. The Fed chair, Jerome Powell, says the solution is “to get wages down.” I’m wondering if you can respond to that as well.

MICHAEL HUDSON:

Well, the important thing to realize is that President Biden re-appointed Jerome Powell. President Biden is a Republican. The Democratic Party is basically the right wing of the Republican Party, the pro-financial, the pro-Wall Street wing of the Republican Party.

Why on earth, if the Democrats were different from the Republicans, why would would Biden re-appoint an anti-labor Republican, as head of the Federal Reserve, instead of someone that would actually try to spur employment?

Imagine, here’s a party that is trying to be elected on a program of, “Elect us, and we will create a depression and we will lower wages.” That is the Democrat Party slogan.

And it’s a winning slogan, because elections are won by campaign contributions. The slogan is, “We will lower wages by bringing you depression,” is a tsunami of contributions to the Democratic Party, by Wall Street, by the monopolists, by all the beneficiaries of this policy.

So that’s why the Supreme Court ruling against abortions the other day is a gift to the Democrats, because it distracts attention from their identity politics of breaking America into all sorts of identities, every identity you can think of, except being a wage earner.

The wage earners are called deplorables, basically. And that’s how the donor class thinks of them, as sort of unfortunate overhead. You need to employ them, but it really it’s unfortunate that they like to live as well as they do, because the better they live, the less money that you will end up with.

So I think that this issue of the inflation, and what really causes it, really should be what elections are all about. This should be the economic core of this November’s election campaign and the 2024 election campaign. And the Democrats are leading the fight to lower wages.

And you remember that when President Obama was elected, he promised to increase the minimum wage? As soon as he got in, he said the one thing we cannot do is raise the minimum wage. And he had also promised to back card check. He said, the one thing we must not do is increase labor unionization with card check, because if you unionize labor, they’re going to ask for better wages and better working conditions.

So you have the Democratic Party taking about as hard a right-wing position as sort of Chicago School monetarism, saying the solution to any any problem at all is just lower wages and somehow you’ll be more competitive, whereas the American economy is already rendered uncompetitive, not because wages are so high, but because, as you mentioned before, the FIRE sector, the finance, insurance, and real estate sector is so high.

Rents and home ownership, having a home is too expensive to be competitive with foreign labor. Having to pay 18% of GDP on medical care, privatized medical care, prices American labor out of the market. All of the debt service that America has paid is pricing America out of the market.

So the problem is not that wages are too high. The problem is that the overhead that labor has to pay in order to survive, for rent, for medical care, for student loans, for car loans, to have a car to drive to work, for gas to drive to work, to buy the monopoly prices that you need in order to survive – all of these are too high.

None of this even appears in economic textbooks that you need to get a good mark on, in order to get an economics degree, in order to be suitably pliable to be hired by the Federal Reserve, or the Council of Economic Advisers, or by corporations that use economists basically as public relations spokesmen. So that’s the mess we’re in.

BENJAMIN NORTON:

Professor Hudson, in your article at your website, michael-hudson.com, you have an important section about the quantitative easing policies. We were talking about how there has been inflation in the past decade, but then inflation was largely in the FIRE sector, pushing up, artificially inflating the prices of real estate and stocks.

You note that:

While home ownership rates plunged for the population at large, the Fed’s “Quantitative Easing” increased its subsidy of Wall Street’s financial securities from $1 trillion to $8.2 trillion – of which the largest gain has been in packaged home mortgages. This has kept housing prices from falling and becoming more affordable for home buyers.

And you, of course, note that “the Fed’s support of asset prices saved many insolvent banks – the very largest ones – from going under.”

I had you on to discuss, in late 2019, before the Covid pandemic hit, we know that the Fed had this emergency bailout where it gave trillions of dollars in emergency repo loans to the biggest banks to prevent them from from crashing, trying to save the economy.

I do want to talk about this as well, because sometimes this is used by right-wingers who portray Biden hilariously as a socialist. You were just talking about how the Democrats have a deeply neoliberal, right-wing economic program.

But of course, there is this rhetoric that we see from Republicans and conservatives claiming that Biden is a socialist. They claim that the reason there is inflation is because Biden is just printing money and giving money to people.

Of course, that’s not at all what’s happening. What has happened is that the Fed has printed trillions of dollars and given that to stockholders, to big corporations, and to banks.

And this is a point that I saw highlighted in that panel I mentioned, the conference on inflation that was organized by the International Manifesto Group. A colleague of yours, a brilliant political economist, Radhika Desai, she invited everyone to go to the Fed website and look at the Fed balance sheet.

And this is the Fed balance sheet from federalreserve.gov. This is the Board of Governors of the Federal Reserve System website. And it is pretty shocking to see this graph, which shows the total assets of the U.S. Federal Reserve.

US Federal Reserve assets balance sheet 2022

Back in 2008, the Federal Reserve had around $900 billion in assets. Now it’s at nearly $9 trillion in assets.

And we can see, after the financial crash, or during the financial crash, it increased to around $2 trillion. And then around 2014, it increased to around $4.5 trillion. And then especially in late 2019 and 2020, it skyrocketed from around $4 trillion up to $7 trillion. And since then, it has continued skyrocketing to $9 trillion in assets.

Where did all of that money go? And what was the impact on the economy, of course?

MICHAEL HUDSON:

Well, the impact on the economy has been to vastly increase the wealth of the wealthiest 1% of Americans who own most of the stocks and bonds.

Sheila Bair, the former head of the Federal Deposit Insurance Corporation, pointed out that a lot of this $8 trillion is spent to buy junk bonds.

Here’s the problem. The problem really began with President Obama. He inherited a system where you had the largest wave of commercial bank fraud in American history.

As my colleague Bill Black at the University of Missouri at Kansas City has pointed out, everybody knew that there was a bank fraud on. The newspapers referred to junk mortgages and “NINJA” borrowers: “no income, no jobs, no assets.”

So banks had written mortgages way above the actual value of homes, especially to racial and ethnic minorities, without any ability of the borrowers to actually pay.

And then these banks had packaged these mortgages, and sold them to hapless pension funds, and other institutional investors and to the European banks that are always very naive about how honest American banks are.

You had this whole accumulation of what the 19th century called fictitious capital. Mortgages for property that wasn’t worth anywhere near as much as the mortgage is for.

So if the mortgage was defaulted, if homeowners had jingle mail – in other words, you just mail the keys back to the bank and say, ok, take the house, I find I can buy a house now at half the price that Citibank or one of these other banks lent out.

Well, normally you’d have a crash of prices back to realistic levels, so that the value of mortgages actually reflected the value of property, or the value of junk bonds issued by a corporation reflected the actual earning power of the corporation to pay interest on the junk bonds.

So by the time Obama took over, the whole economy was largely fictitious capital. Well, Obama came in and he said, my campaign donors are on Wall Street. He called in the Wall Street bankers and he said, I’m the guy standing between you and the crowd with the pitchforks, the people who voted for me. But don’t worry, I’m on your side.

He said, I’m going to have the Federal Reserve create the largest amount of credit in human history. And it’s all going to go to you. It’s going to go to the 1% of the population. It’s not going to go into the economy. It’s not going to build infrastructure. It’s not going into wages. It’s not going to reduce the price of homes and make them more affordable to Americans.

It’s going to keep the price of these junk bonds so high that they don’t crash back to non-fictitious values. It’s going to keep the stock market so high that it’s not going to go down. It’s going to create the largest bond market boom in history.

The boom went from high interest rates to low interest rates, meaning a gigantic rise in the price of bonds that actually pay interest that are more than 0.1%.

So there was a huge bond market boom, a huge stock market, a tripling of stock market prices. And if you are a member of the group that owns 72% of American stocks, I think that’s 10% of the population, you have gotten much, much richer.

But if you’re a member of the 90% of the population, you have had to go further and further into debt just in order to survive, just in order to pay for medical care, student loans, and your daily living expenses out of your salary.

So if American wages were at a decent level, American families would not be pushed more and more into debt. The reason the personal debt has gone up in the United States is because families can’t get by on what they earn.

So obviously, if they can’t get by on what they earn, and they have to borrow to get by, they are not responsible for causing the inflation. They’re being squeezed.

And the job of economists, and of Democratic Party and Republican politicians, is to distract attention from the fact that they’re being squeezed and blame the victim, and saying, you’re doing it to yourself by just wanting more money, you’re actually creating the inflation that is squeezing you.

When actually it’s the banks, and the government’s non-enforcement of the monopoly policy, and the government support of Wall Street that is responsible for what is happening.

BENJAMIN NORTON:

Very, very well said.

Professor Hudson, I should have highlighted another part of this graph here. This is, again, this is at the Federal Reserve Board website. It’s even more revealing when you look at the selected assets of the Fed, and you see that all of these assets basically are securities, securities held outright by the Fed.

We see that around 2008, the Fed had less than $500 billion in securities. And you have this policy of quantitative easing. And since then, basically all of the increase has been in securities. Of the roughly $9 trillion in assets the Fed holds, about about $8.5 trillion is in securities.

US Federal Reserve assets securities balance sheet 2022

I’m wondering if you can compare this to central banks in other countries. We’ve seen, for instance, that the Western sanctions on Russia were aimed at trying to destroy the Russian economy.

President Biden claimed they were trying to make the ruble into rubble. In fact, the ruble is significantly stronger now than it was before the sanctions. To such a degree that the Russian government and Russian national bank are actually trying to decrease the value of the ruble, because they think it’s a little overvalued; it makes it a little harder to be competitive.

So how does this policy of the US Fed having $8.5 trillion worth of securities compare to the policies of other central banks?

You have experience working with the Chinese government as an advisor. Do other governments’ central banks have this policy?

And and that $8.5 trillion in securities, what are those securities? Even from the perspective of these neoliberal economics textbooks that you were talking about, that people are taught in universities, this seems to me to be totally insane. I don’t see how there is even an academic, neoliberal textbook explanation for this policy.

MICHAEL HUDSON:

Very few people realize the difference between a central bank and the national treasury. The national treasury is what used to perform all of the policies that central banks now do. The national treasury would be in charge of issuing money and spending it.

Central banks were broken off in America in 1913 from the Treasury in order to shift control of the money supply and credit away from Washington to New York. That was very explicit.

The original Federal Reserve didn’t even permit a Treasury official to be on the board of directors. So the job of a central bank is to represent the interest of the commercial banks.

And as we just pointed out, the interest of the commercial banks is to produce their product: debt. And they create their product against existing assets, mainly real estate, but also stocks and bonds.

So the job of the central bank here is to support the financial sector of the economy, and that sector that holds wealth in the form of stocks, bonds, and loans, and especially bank bonds that make their money off real estate credit.

Same thing in Europe, with Europe’s central bank. Europe is going into a real squeeze now, and has been going into a squeeze ever since you had the Greek crisis.

In Europe, because right-wing monetarist designed the euro, part of the eurozone rule is you cannot run a budget deficit, a national budget deficit of more than 3% of gross domestic product.

Well, that’s not very much. That means that you can’t have a real Keynesian policy in Europe to pull the economy out of depression. That means that if you’re a country like Italy right now, and you have a real financial squeeze there, a corporate squeeze, a labor squeeze, the government cannot essentially rescue either Italian industry or Italian labor.

However, the European central bank can, by the way that it creates credit, by central bank deposits, the European central bank can vastly increase the price of European stocks, bonds, and packaged mortgages. So the European central bank is very much like the commercial bank.

China is completely different, because, unlike the West, China treats money and credit as a public utility, not as a private monopoly.

And as a public utility, China’s central bank will say, what are we going to want to create money for? Well, we’re going to want to create money to build factories; we’re going to want to create money so that real estate developers can build cities, or sometimes overbuild cities. We can create money to actually spend in the economy for something tangible, for goods and services.

The Chinese central bank does not create money to increase stock market prices or bond prices. It doesn’t create money to support a financial class, because the Communist Party of China doesn’t want a financial class to exist; it wants an industrial class to exist; it wants an industrial labor force to exist, but not a rentier class.

So a central bank in a Western rentier economy basically seeks to create credit to inflate the cost of living for homebuyers and for anyone who uses credit or needs credit, and to enable corporations to be financialized, and to shift their management away from making profits by investing in plant and equipment and employing labor to produce more, to making money by financial engineering.

In the last 15 years, over 90% of corporate earnings in the United States have been spent on stock buybacks and on dividend payouts. Only 8% of corporate earnings have been spent on new investment, and plants, and equipment, and hiring.

And so of course you have had the economy deindustrialized. It’s this idea that you can make money financially without an industrial base, without a manufacturing base; you can make money without actually producing more or doing anything productive, simply by having a central bank increase the price of the stocks, and bonds, and the loans made by the wealthiest 10%.

And of course, ultimately, that doesn’t work, because at a certain point the whole thing collapses from within, and there’s no industrial base.

And of course, when that happens, America will find out, wait a minute, if we close down the economy, we’re still reliant on China and Asia to produce our manufacturers, and to provide us with raw materials, and to do everything that we need. We’re really not doing anything but acting as a world – well, people used to say parasite – as a world rentier, as getting something for nothing, as a kind of financial colonialism.

So America you could look at as a colonial power that is a colonial power not by military occupation, but simply by financial maneuvering, by the dollar standard.

And that’s what’s being unwound today as a result of Biden’s new cold war.

BENJAMIN NORTON:

Professor Hudson, you criticized the strategy of simply trying to increase the interest rates to bring down inflation, noting that it’s going to lead to a further decline in homeownership in the United States. It’s going to hurt working people. I think that’s a very valid criticism.

I’m curious, though, what your take is on the response of the Russian central bank to the Western sanctions. We saw that the chair of the Russian central bank, Elvira Nabiullina, she – actually this is someone who is not even necessarily really condemned a lot by Western economists; she is pretty well respected by even, you know, Western neoliberal economists.

And she did manage to deal with the sanctions very well. She imposed capital controls immediately. She closed the Russian stock market. And also, in a controversial move, she raised the interest rates from around 9% up to 20%, for a few months. And then after that, dropped the rates.

MICHAEL HUDSON:

A few days, not a few months. That was very short. And now she has moved the interest rates way down.

BENJAMIN NORTON:

Back to 9%.

MICHAEL HUDSON:

She was criticized for not moving them further down.

BENJAMIN NORTON:

Yeah, well go ahead. I’m just curious. So she immediately raised it to 20%, and then has dropped the interest rates since then. I’m curious what you think about that policy. Yeah, go ahead.

MICHAEL HUDSON:

There is very little that a central banker can do when the West has declared a war, basically, a war on a country that is completely isolated.

The response has come from President Putin and from Foreign Secretary Lavrov. And they pointed out, well, how is Russia going to going to trade and get what it needs. And this is what the recent meetings of the BRICS are all about.

Russia realizes that the world is now broken into two halves. America and NATO have separated the West. Basically you have a white people’s confederation against all the rest of the world.

And the West has said, we’re isolating ourselves from you totally. And we think you can’t get along without us.

Well, look at the humor of this. Russia, China, Iran, India, Indonesia, and other countries are saying, hah, you say we we can’t get along without you? Who is providing your manufacturers? Who is providing your raw materials? Who is providing your oil and gas? Who is providing your agriculture, and the helium, the titanium, the nickel?

So they realize that the world is breaking in two, and Eurasia, where most of the world’s population is concentrated, is going to go its own way.

The problem is, how do you really go your own way? You need a means of payment. You need to create a whole international system that is an alternative to the Western international system. You need your own International Monetary Fund to provide credit, so that the these Eurasian countries and their allies in the Global South can deal with each other.

You need a World Bank that, instead of lending money to promote U.S. policies and U.S. investments, will promote mutual gains and self-sufficiency among the countries.

So already, every day in the last few weeks, you have had meetings with the Russians about this, who said, ok, we’re going to create a mutual trading area, starting among the BRICS: Brazil, Russia, India, China, and South Africa.

And how are we going to pay? We can’t pay in dollars, because if we have money in a dollar bank, or a euro bank in Europe, they can just grab the money, like they grab Venezuela’s money. They can just say, we’re taking all your money because, essentially, we don’t want you to exist as an alternative to the finance capital world that we are creating.

So essentially, Russia, China, and these other countries are saying, ok, we’re going to create our own international bank. And how are we going to fund it? Well, every member of the bank will contribute, say, a billion dollars, or some amount of their own currency, and this will be our backing. We can also use gold as a means of settlement, as was long used among countries.

And this bank can create its own special drawing rights, its own bank order, is what Keynes called it. It can create its own credit.

Well, the problem is that, if you have Brazil, for instance, or Argentina, joining this group, or Ecuador, that sells almost all of its bananas to Russia, how is it going to get by?

Well, if there is a BRICS group or a Shanghai Cooperation Organization bank, obviously the Western governments are not going to accept this.

So Russia realizes that as a result of Biden’s Cold War Two, there is going to be a continued rise in energy prices. You think gasoline prices are not high now? They’re going up. You think food prices are not high now? They’re going up more.

And Europe is especially the case, because Europe now cannot buy Russian gas to make the fertilizer to make its own crops grow.

So you’re going to have a number of countries in the Global South, from Latin America to Africa, being squeezed and wanting to trade with the Eurasian group.

And the problem is Russia says, all right, we know that you can’t afford to pay. We’re glad to give you credit, but we don’t want to give you credit that you’re going to simply use the money you have to pay your dollar debts that are coming due.

Because one of the effects that I didn’t mention of the Federal Reserve raising interest rates is there is a huge flow of capital from Europe and England into the United States, so that if you’re a billionaire, where are you going to put your savings? You want the highest interest rates you want. And if the United States raises interest rates, the billionaires are going to move their money out of England, out of the euro, and the euro is going back down against the dollar. It’s almost down to a dollar a euro.

The British pound is heading downwards, towards one pound per dollar.

This increase in the dollar’s exchange rate is also rising against the currencies of Brazil, Argentina, the African countries, all the other countries.

So how are they going to pay this summer, and this fall, for their food, for their oil and gas, and for the higher cost of servicing their dollar debts?

Well, for Eurasia, they’re going to say, we want to help you buy our exports – Russia is now a major grain exporter, and obviously also an oil exporter – saying we want to supply you and give you the credit for this, but you’re really going to have to make a decision. Are you going to join the U.S.-NATO bloc, or are you going to join the Eurasian bloc?

Are you going to join the White People’s Club or the Eurasian Club? And it really comes down to that. And that’s what is fracturing the world in these two halves.

Europe is caught in the middle, and its economies are going to be torn apart. Employment is going to go down there. And I don’t see wages going up very much in Europe.

You’re going to have a political crisis in Europe. But also you’ll have an international diplomatic crisis over how are you going to restructure world trade, and investment, and debt.

There will be two different financial philosophies. And that’s what the new cold war is all about.

The philosophy of US-sponsored finance capitalism, of making money financially, without industrialization, and with trying to lower wages and reduce the labor force to a very highly indebted workforce living on the margin.

Or you’ll have the Eurasian philosophy of using the economic surplus to increase productivity, to build infrastructure, to create the kind of society that America seemed to be growing in the late 19th century but has now rejected.

So all of this is ultimately not simply a problem of interest rates and central bank policy; it really goes beyond central banks to what kind of a social and economic system are you going to have.

And the key to any social and economic system is how you treat money and credit. Is money and credit going to be a public utility, or will it be a private monopoly run for the financial interests and the 1%, instead of a public utility run for the 99%?

That’s what the new cold war is going to be all about. And that’s what international diplomacy week after week is trying to settle.

BENJAMIN NORTON:

Very, very well said. And I really agree about this increasing kind of bipolar order, where the US-led imperialist system is telling the world they have to pick a side. You know, as George W. Bush said, you’re either with us or you’re against us; you’re with us or you’re with the terrorists.

That’s what Biden is saying to the world. And we see the West has drawn this iron curtain around Russia. And now they’re threatening to do the same around China.

Now, of course, the difference is that China has the largest economy in the world, according to a PPP measurement. It’s even larger than the US economy. I don’t know how they can try to sanction the Chinese economy, considering China is the central factory of the world.

But this is related to a question I had for you, Professor Hudson, and this is from a super chat question from Manoj Payardha, and it’s about how Chinese banks say they’re not ready yet to develop an alternative to the SWIFT. He asked, how will the Third World pay Russia for resources?

And we’ve seen, maybe you can talk about the measures being implemented. India has this rupee-ruble system that they’ve created.

But I want to highlight an article that was published in Global Times. This is a major Chinese newspaper, and this is from April. And it quotes the former head of China’s central bank, who was speaking at a global finance forum in Beijing this April.

And basically he said, we need to prepare to replace Swift. He said the West’s adoption of a financial nuclear option of using SWIFT to sanction Russia is a wake up call for China’s financial development. And he said, “We must get prepared.”

So it seems that they’re not yet prepared. But this is something that you’ve been talking about for years. Or maybe you disagree and maybe you think they already are prepared with the SWIFT alternative?

MICHAEL HUDSON:

Well they’re already using an alternative system. If they weren’t using an alternative system – Russia is adopting part of the Chinese system for this – they wouldn’t be able to have banks communicate with each other.

So, yes, they already have a rudimentary system. They’re making it a better system that can also be immune from U.S. computer espionage and interference. So yes, of course there’s already a system.

But I want to pick up on what you said about Biden, how Biden characterizes things.

Biden characterizes the war of the West against Eurasia as between democracy and autocracy. By “democracy,” he means a free market run by Wall Street; he means an oligarchy.

But what does he mean by autocracy? What he means by autocracy, when he calls China an autocracy, an “autocracy” is a government strong enough to prevent an oligarchy from taking power, and taking control of the government for its own interests, and reducing the rest of the economy to debt peonage.

An “autocracy” is a country with public regulation against monopolies, instead of an oligarchic free market. An “autocracy” uses money and credit, essentially, to help economies grow. And when debts cannot be paid in China, if a factory or a real estate company cannot pay debts, China does not simply say, ok, you’re bankrupt, you’re going to have to be sold; anybody can buy you; the Americans can buy you.

Instead, the Chinese say, well, you can’t pay the debts; we don’t want to tear down your factory; we don’t want your factory to be turned and gentrified into luxury housing. We’re going to write down the debt.

And that’s what China has done again and again. And it’s done that with foreign countries that couldn’t pay the debt. When a debt that China has come due for China’s development of a port, or roads, or infrastructure, it says, well, we understand that you can pay; we will delay payment; we will have a moratorium on your payment. We’re not here to bankrupt you.

For the Americans, to the international funds, they’re saying, well, we are here to bankrupt you. And now if we lend you, we the IMF, lends you money to avoid a currency devaluation, the term is you’re going to have to privatize your infrastructure; you’re going to have to sell off your public utilities, your electric system, your roads, your land to private buyers, mainly from the United States.

So you have a “democracy” supporting bankruptcy, foreclosure, financialization, and privatization, and low wages by a permanent depression, a permanent depression to keep down wages.

Or you have “autocracy,” seeking to protect the interests of labor by supporting a living wage, to increase living standards as a precondition for increasing productivity, for building up infrastructure.

You have these two diametrically economic systems. And, again, that’s why there’s a cold war on right now.

BENJAMIN NORTON:

And there’s another super chat question here, Professor Hudson. You mentioned the International Monetary Fund, the IMF. We have talked about that many times. This is from Sam Owen. He asked, why do countries continue to accept bad IMF loans when they have such a poor track record? Is it just the US government meddling in the national politics? Are there cases of good IMF loans?

MICHAEL HUDSON:

Well, what is a country? When you say a country to most people, people think, ok, let’s talk about Brazil; let’s talk about all the people in Brazil; you have a picture in the mind of the Amazon; you have a big city with a lot of people in it.

But the country, in terms of the IMF, is a group of maybe the 15 wealthiest families in Brazil, that own most of the money, and they are quite happy to borrow from the IMF, because they say, right now there’s a chance that Lula may become president instead of the neo-fascist Bolsonaro. And if Lula comes in, then he is going to support labor policies, and he may stop us from tearing down the Amazon. So let’s move our money out of the country.

Well, normally this would push the exchange rate of the cruzeiro (real) down. So the IMF is going to make a loan to Brazil to support the cruzeiro (real), so that the wealthy 1% of Brazil can move their money into dollars, into euros, into foreign currency and offshore bank incentives, and load Brazil down with debt, so that then when there is an election, and if Lula is elected, the IMF is going to say, well, we don’t really like your policies, and if you pursue a pro-labor, socialist policy, then there’s going to be a capital flight. And we’re insisting that you pay all the money that you borrowed from the West right back now.

Well, that’s going to lead Lula either to sit there, follow the IMF direction, and let the IMF run the economy, instead of his own government, or just say, we’re not going to pay the foreign debt.

Well, until now, no country has been in a strong enough position not to pay the foreign debt. But for the first time, now that you have the Eurasian group – we’ll call it BRICS, but it’s really Eurasia, along with the Southern groups that are joining, the Global South – for the first time, they can say, we can’t afford to stay in the West anymore.

We cannot afford to submit the economy to the IMF demands for privatization. We cannot submit to the IMF rules that we have to fight against labor, that we have to pass laws banning labor unions, that we have to fight against laborers’ wage, like Western democracies insist on. We have to go with the Chinese “autocracy,” which we call socialism.

And of course, when America accuses China being an “autocracy,” autocracy is the American word for socialism. They don’t want to use that word. So we’re back in Orwellian double-think.

So the question is what, will the Global South countries do when they cannot afford to buy energy and food this summer, without an IMF loan? Are they going to say, ok, we can only survive by joining the break from the West and joining the Eurasian group?

That is what the big world fracture is all about.

And I described this global fracture already in 1978. I wrote a book, “Global Fracture,” explaining just exactly how all of this was going to happen.

And at that time, you had Indonesia, you had Sukarno taking the lead, the non-aligned nations, India, Indonesia, were trying to create an alternative to the financialized, American-centered world order. But none of these countries had a critical mass sufficient to go their own way.

Well, now that America has isolated Russia, China, India, Iran, Turkey, all these countries, now it has created a critical mass that is able to go its own way. And the question is, now you have like a gravitational pull, and will this Eurasian mass attract Latin America and Africa to its own group, away from the United States? And where is that going to leave the United States and Europe?

BENJAMIN NORTON:

And we saw one of the clearest examples yet of this bipolar division of the world between, you know, the West and the rest, as they say, with this ridiculous meeting that was just held of the G7.

Of course, the G7 are the white, Western countries. And then they’ll throw in U.S.-occupied Japan in there, to pretend they’re a little more diverse.

But we saw that the G7 just held a summit, and basically the entire summit was about how can we contain China? How can we expand the new cold war on Russia into a new cold war on China?

And here’s a report in BBC: “G7 summit: Leaders detail $600bn plan to rival China’s Belt and Road initiative.” Now, I got a chuckle out of this. The idea that the US government is going to build infrastructure in the Global South, I mean, it’s pretty laughable.

It’s also absurd considering that China’s Belt and Road Initiative, which involves over half of the countries on Earth, is estimated at many trillions of dollars in infrastructure projects. So the US and its allies think that they can challenge that with $600 billion in public-private partnerships.

I should stress, of course, what they announced is going to be a mixture of so-called public initiative and then contracts for private corporations.

So it’s yet another giveaway to the private sector, in the name of building infrastructure.

But I’m wondering if if you can comment on the G7 summit that just was held.

MICHAEL HUDSON:

Well, nothing really came out of it. They all said that they could not agree on any more sanctions against Russia, because they’re already hurting enough. India, in particular, stood up and said, look, there’s no way that we’re going to join the sanctions against Russia, because it’s one of our major trading partners. And by the way, we’re getting a huge benefit from importing Russian oil, and you’re getting a huge benefit by getting this oil from us at a markup.

So the G7 could not get any agreement on what to do. It is already at a stalemate. And this is only June. Imagine the stalemate it’s going to be in September.

Well, next week, President Biden is going to Saudi Arabia and saying, you know, we’re willing to kill maybe 10 million more of your enemies; we’re willing to help Wahhabi Sunni groups kill more of the Iranian Shiites, and sabotage Iraq and Syria. We’ll help you back al-Qaeda again, if you will lower your oil prices so that we can squeeze Russia more.

So that’s really the question that Saudi Arabia will have. America will send give it more cluster bombs to use against Yemen.  And the question is, is Saudi Arabia going to say, ok, we’re going to earn maybe $10 billion less a month, or however much they’re making, just to make you happy, and so that that you will kill more Shiites who support Iran?

Or are they going to realize that if they throw in their lot with the United States, all of a sudden they’ll be under attack from Iran, Russia, Syria, and they’ll be sitting ducks? So what are they going to do?

And I don’t see any way that Biden can actually succeed in getting Saudi Arabia to voluntarily earn less on its oil prices. Maybe Biden can say it’s only for a year, only for one or two years. But as other countries know, when America says only for a year or two, it really means forever. And if you don’t continue, then somehow they have a regime replacement, or a regime change and a color revolution.

So Biden keeps trying to get foreign countries to join the West against Eurasia, but there is Saudi Arabia sitting right in the middle of it.

And all that Europe can do is watch and wonder how it’s going to get by without without energy and without much food.

BENJAMIN NORTON:

Yeah, in fact, Venezuela’s President Maduro just confirmed that the Biden administration has sent another delegation basically begging Venezuela to try to work out some deal because, of course, the U.S. and the EU have boycotts of Russian energy.

So it’s really funny to me that, after years of demonizing Venezuela, portraying it as a dictatorship and all of this, the U.S. had to decide, well, the war in Venezuela is not as important as the war on Russia right now; so we’re going to temporarily pause our war on Venezuela to stick the knife deeper into Russia.

But on the on the subject of the the G7 meeting, this was the hilarious comment made by the European Commission President Ursula von der Leyen, in an article in Reuters titled “Europe Must Give Developing Nations Alternative to Chinese Funds.”

So echoing the same perspective that we hear from Biden, U.S. government officials constantly say that the US needs to challenge China in the Global South. So Europe pledged €300 billion – however, once again, important asterisk – “in private and public funds over five years to fund infrastructure in developing countries.”

So once again, we see another neoliberal private-public partnership. It’s going to be another public giveaway to private corporations.

And “she said that this is part of the G7’s drive to counter China’s multitrillion-dollar Belt and Road project.”

Now, this is really just tying everything together that we have been talking about today, Professor Hudson – in your article “The Fed’s Austerity Program to Reduce Wages,” you conclude the article noting that the depression that people in the United States are on the verge of facing because of these neoliberal policies – telling workers in the U.S. that they need to decrease their wages and be unemployed in order to stop inflation – you point out that:

Biden’s military and State Department officers warn that the fight against Russia is just the first step in their war against China’s non-neoliberal economy, and may last twenty years. That is a long depression. But as Madeline Albright would say, they think that the price is “worth it.”

And you talk about the new cold war against the socialist economy in China and the state-led economy in Russia.

So you predict not only a depression is coming. We have seen that in mainstream media outlets. Larry Summers said, you know, a depression could be coming for a few years. But you say, no, not only is a depression coming; it’s going to be a long depression. We could be seeing 20 years.

And basically the U.S. government and other Western leaders, as we see Ursula von der Leyen from the EU, they’re basically telling their populations, tighten your belts; we have decades of depression coming, because we have collectively decided, as Western leadership, that we are going to force the world through a long depression economically, or at least forced the West through a long economic depression, in order to try to halt the rise of China and Russia.

They’re basically telling their populations, suck it up, tighten your belts for decades, because in the end, the price is worth it in order to prevent the collapse of our empires.

MICHAEL HUDSON:

That’s right. When they’re talking about private-public initiatives, they’re talking about Pentagon capitalism. That means the government will give trillions of dollars to private firms and ask them to build infrastructure.

And if they build a port or a road in a Global South country, they will operate this at a profit, and it will be an enormously expensive infrastructure, because to make financial money off this infrastructure, you have to price it at the cost of production, which is Pentagon capitalism, hyper inflated prices; you have to pay management fees; you have to pay profits; you have to pay interest rates.

As opposed to the Chinese way of funding as equity. The Western mode of funding is all debt leverage. China takes as collateral for the infrastructure that it pays, an equity ownership in the port or whatever infrastructure in the Belt and Road that it’s building.

So you have the difference between equity ownership, debt-free ownership, where if it can afford to pay, fine; if it doesn’t make an income, there are no dividends to pay.

Or you have the debt leverage that is intended that the government cannot pay it, so that the government that will be the co-signer for the debt for all of this infrastructure will somehow be obliged to tax its whole population to pay the enormous super-profits, the enormous monopoly rents, the enormous debt charges of von der Leyen’s Margaret Thatcher plan.

Von der Leyen thinks that she can do to Europe and to America what Margaret Thatcher did to England. And if she does, then then America and Europe deserve it.

BENJAMIN NORTON:

And Professor Hudson, as we start wrapping up here, I know you have to go pretty soon, just a few short questions here at the end.

I’m wondering if what we’re also seeing is not only this fundamental crisis in the Western neoliberal, financialized economies, but it’s also this bubble that has burst, or at least this phase that is over.

At least this is my reading, I’m curious if you agree. In the 1990s, the peak of, you know, the so-called golden age of neoliberalism; we had Bill Clinton riding this wave, and it was the “end of history,” in Francis Fukuyama’s nonsense prediction and all that.

How much of that was not only based on this exorbitant privilege, as the French call it, of the dictatorship of the US dollar – we talked about that based on your book “Super Imperialism,” how the US was given this massive global free lunch economically because of dollar hegemony – but how much of it was not just that, but also the fact that in the 1990s and the first decade of the 2000s, the US and Western Europe had access to very cheap consumer goods from Asia and very cheap energy from Russia?

To me, it seems like those two factors are some of the most important reasons why this golden age of neoliberalism in the ’90s and early 2000s was even possible.

It was on the back of low-paid Asian workers, and based on this idea that Russia would permanently be, what Obama called it: a gas station.

Well, we’ve seen that, one, East Asian economies have lifted themselves up of poverty, especially China has ended extreme poverty and raised median wages significantly.

And now, of course, the West has sanctioned itself against buying Russian energy, massively increasing the cost of energy around the world.

So do you think that that bubble, or that brief moment of the end of history, the golden age of neoliberalism, that can never come back?

Because unless the West can succeed in overthrowing the Russian government and imposing a new puppet like Yeltsin, and overthrowing the Chinese government, it seems like that that the golden in the 1990s is never going to come back.

MICHAEL HUDSON:

Well, you’ve left out the key element of the golden age: that is military force, and the willingness to assassinate any foreign leader that does not want to go along with US policy.

BENJAMIN NORTON:

Of course.

MICHAEL HUDSON:

You’re neglecting what America did to [Salvador Allende]; you’re neglecting how America took over Brazil; America’s meddling and control, and in Europe, the wholesale bribery and manipulation of Europe’s political system, to put in charge of the [German] Green Party a pro-war leadership, an anti-environmental leadership, to put in charge of every socialist party of Europe right-wingers, neoliberals.

Every European socialist and labor party turned neoliberal largely by American maneuvering and meddling in their foreign policy.

So it’s that meddling that was intended to prevent any alternative economic philosophy from existing to rival neoliberalism.

So that when you talk about the end of history, what is the end of history? It means the end of change. It means stop; there will be no reform; there will be no change in the neoliberal system that we have locked in.

And of course, the only way that you can really end history is by what Biden is threatening: atomic war to blow up the world.

That is the neoliberal end of history. And it’s the only way that the neoliberals can really stop history. Apart from that, all they can try to do is to prevent any change that is adverse to locking in the neoliberal order.

So the “end of history” is a declaration of war against any country that wants to go its own way. Any country that wants to build up its own economy as a way that will keep the benefits of its economic growth in its own country, instead of letting it go to the global financial class centered in the United States and Britain.

So we’re talking about, neoliberalism was always a belligerent, implicitly military policy, and that’s exactly what you’re seeing in the proxy war of US and NATO in Ukraine today.

BENJAMIN NORTON:

Yeah, very well said. That’s the other key ingredient: overthrowing any government that is a challenge, that shows there is an alternative, to try to prove the maxim that “there is no alternative.”

MICHAEL HUDSON:

Yes.

BENJAMIN NORTON:

Here’s an interesting comment from Christopher Dobbie. He points out that in Australia, the average age for their first homeowner was 27 in 2001; now it’s 35, and increasing more and more by the year.

Now, in the last few minutes here, Professor Hudson, here’s another brief question that I got from someone over at patreon.com/multipolarista – people can go and support this show. One of my patrons asked this question: who who is hurt most by the Fed or other central banks raising interest rates? People, average consumers, or companies?

And obviously, you talked earlier about how the US Federal Reserve is different from other central banks, but it’s kind of an open question. Who is hurt more by raising interest rates?

MICHAEL HUDSON:

Well, companies are certainly hurt because it means that any possibility of getting productive credit is raised. But they’re also benefited, because if interest rates raised go up high enough, then it will not pay corporate raiders to borrow money to take over and raid companies and empty them out, like they did in the 1980s.

So everything cuts both ways. Raising the interest rates have given commercial banks an excuse to raise the interest charges on credit card loans and mortgage debts.

So raising interest rates, to the banks, have enabled them to actually increase their margin of monopoly profits on the credit that they extend.

And that certainly hurts people who are reliant on bank credit, either for mortgages or for consumer debt, or for any kind of loans that they want to take out.

Basically, raising interest rates hurts debtors and benefits creditors.

And benefiting creditors very rarely helps the economy at large, because the creditors are always really the 1%; the debtors are the 99%.

And if you think of economies, when you say, how does an economy benefit, you realize that, well, if the economy is 1% creditors and 99% debtors, you are dealing with a bifurcation there.

And you have to realize that the creditors usually occupy the government, and they claim we are the country. And the 99% are not very visible.

Democracy can only be afforded if they population’s voting has no effect at all on the government, that it’s only symbolic. You can vote exactly which oligarch you want to rule your country. Ever since Rome that was the case, and it’s the case today.

Is there really any difference between the Republicans and Democrats in terms of their policy? When you the same central bank bureaucracy, the same State Department blob, the same military-industrial complex, the same Wall Street control, what does democracy mean in a situation like that?

The only way that you can have what democracy aims at is to have a government strong enough to check the financial interests, to check the 1%, acting on behalf of the 99%. And that’s what socialism is.

BENJAMIN NORTON:

Very well said.

Here is another brief question from patreon.com/multipolarista – people can become a patron and help support the show over there.

This question, Professor Hudson, is about the proposal of an excess profits tax as an alternative to try to contain inflation. What do you think about the proposal of an excess profits tax?

MICHAEL HUDSON:

Well, only the little people make profits. If you’re a billionaire, you don’t want to make a profit; you want to essentially take all of your return in the form of capital gains. That’s where your money is.

And the way you avoid making a profit is you establish an offshore bank or creditor, and you pay out all of your profits in the form of interest, which an expense. You expense all of what used to be, what really is, income. And you show no profits at all.

I don’t think Amazon has ever made a profit. You have huge, the biggest corporations, with all the capital gains, have no profits. Tesla is a gigantic stock market presence, and it doesn’t make a profit.

So the key is capital gains, is financial gains, stock market gains, gains in real estate prices, unearned income. That’s what the free lunch is.

You want to prevent profits being paid out in the form of interest. So I would vastly increase profits, by saying you cannot deduct interest as a business expense. It’s not a business expense. It’s a predatory parasitic expense. So you’re going to have to declare all of this as profit, and pay interest on it.

Pricing your output from a foreign offshore banking center, so that you don’t seem to make any profit, like Apple does, pretending to make all its money in Ireland, you can’t do that anymore. You’re going to have to pay a real return.

So the accounting profession has made profits essentially tax free. So the pretense of making money by taxing profits avoids talking about capital gains and all of fictitiously low profits that are simply pretended not to be profit, like interest, depreciation, amortization, offshore earnings, management fees.

All of these should be counted as profits, and taxed as such as they were, I’d say back at the Eisenhower administration levels.

BENJAMIN NORTON:

And finally, the last question here, Professor Hudson, someone asked about the U.S. government pressuring countries in Africa not to buy Russian wheat. And the U.S. is, of course, claiming that this wheat is supposedly stolen from Ukraine.

This article, this headline at Newsweek, it summarizes pretty well: “U.S. Warns Starving African Nations to Not Buy Grain Stolen by Russia.” Again, that “stolen” is alleged by the U.S.

But you actually have a really good column about this over at your website, which again is michael-hudson.com: “Is US/NATO (with WEF help) pushing for a Global South famine?

I know this could be a long point of discussion; it could be the entire interview. And I know you have to go soon. But just concluding here, I’m wondering if you could comment.

The United Nations itself has warned that there could be a famine, especially in Global South nations.

What do you think the role of these neoliberal policies and Western sanctions are in fueling that potential crisis?

MICHAEL HUDSON:

Well, the wealthiest families in the world used to go every year, now they go every few years, to Davos, to Klaus Schwab’s Davos World Economic Forum. And they say, the world is overpopulated; we need about 2 billion human beings to starve, preferably in the next year or two.

So it’s as if the wealthy families have got together and say, how can we thin out the population that really we, the 1%, don’t need?

And in all of their policies, it is as if they’ve decided to follow the World Economic Forum and deliberately shrink the world population, especially in Africa and Latin America.

Remember, these are white people at the World Economic Forum, and that is their idea of how to retain equilibrium.

They’re always talking about “equilibrium,” and equilibrium is going to be for countries that cannot afford to grow their own food, because they have put their money into plantation crops and cotton to sell to the West, instead of feeding themselves – they’re just going to have to starve to contribute to world “equilibrium.”

BENJAMIN NORTON:

And while we’re on the subject of the World Economic Forum, I guess I should just briefly add – we’ve talked about this a little bit, but I just feel remiss not mentioning it – it’s interesting to see how right-wingers have seized on the World Economic Forum and begun criticizing it a lot.

Obviously, it’s worth criticizing. It’s a horrible neoliberal institution that represents the Western capitalist class. But we’ve even seen, you know, Glenn Beck, the right-winger, former Fox News host, he published a book about the Great Reset and the World Economic Forum.

I’m just wondering really quickly if you could respond to the idea that the World Economic Forum is like some “socialist” organization. Obviously, it’s the exact opposite.

But what do you say to these conservatives who have a right-wing critique of the World Economic Forum, and think it’s like secretly socialist, and Biden is a socialist.

MICHAEL HUDSON:

They look at any government or managerial power as socialist, not drawing the distinction between socialism and oligarchy.

The question is government power can be either right-wing or left-wing, and to say that any government power is socialist is just degrading the word.

However, as I mentioned before, almost all of the European “socialist” parties are neoliberal. Tony Blair was the head of something that called itself the British Labour Party. Gordon Brown was the head of the British Labour Party.

You can’t be more neoliberal and oligarchic than that. And that’s why Margaret Thatcher said her greatest success was creating Tony Blair.

You have the same thing in France; the French “socialists” are on the right-wing of the spectrum. The Greek “socialist” party, on the right-wing of the spectrum.

You have “socialist” parties around the world being neoliberalized.

So what does the word socialism mean? You want to go beyond labels into the essence.

And the question is, in whose interest is the government going to be run for? Will it be run for the 1% or the 99%?

And the right wing wants to say, well, the 1% can be socialist, because they’re taking over the government and that’s the big government, and we’re against it.

Well, the right-wing is taking over the government, but it’s not really what the world meant by socialism a century ago.

BENJAMIN NORTON:

Yeah, very well said. I just always laugh when I see these right-wing critiques of the World Economic Forum. I mean, the World Economic Forum is the embodiment of capitalism. It is the group of the elite capitalists who get together to talk about how they can exploit the working class and help monopolize the global economy on behalf of Western capital.

So with that said, there still are many questions, but I know you have to go, and we’re already at an hour and a half.

I do want to thank everyone who joined. We’re at 1200 viewers right now, so it has been a really good response.

Professor Hudson, you’re very popular. You should do your own YouTube channel. Maybe we can talk about that, because every time I have you on, it’s always an amazing response that I get. And hopefully we can do this again more in future.

Aside from people going to your website, michael-hudson.com, is there anything else that you want to plug before we conclude?

MICHAEL HUDSON:

Well, the book that I just wrote, “The Destiny of Civilization,” is all about what we’ve been talking about. It’s about the world’s split between neoliberalism and socialism. So that was just published and is available on Amazon. And I have two more books that are coming out very shortly.

BENJAMIN NORTON:

Yeah, for people who are interested, I did an interview with Professor Hudson here at Multipolarista a few weeks ago about his new book, The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism.”

And of course, anyone who wants to support this show, you can go to patreon.com/multipolarista. And as always, this will be available as a podcast, if you want to listen to the interview again. I’m certainly going to listen to this discussion again. You can find that anywhere there are podcasts.

Professor Hudson, it’s always a real pleasure. Thanks so much for joining me.

MICHAEL HUDSON:

I enjoyed the discussion.

BENJAMIN NORTON:

And like I said earlier at the beginning, for me, I truly think it’s always a privilege, because I do think you’re one of the greatest living economists. So I always feel very privileged to have the opportunity to pick your brain about all of these questions.

And I want to thank everyone who commented, who watched, and who listened. I will see you all next time.

أميركا تحزم أمرها: نحو عسكرة العالم

الجمعة 1 تموز 2022

 سعيد محمد

أهمّ القرارات الصادرة عن القمة كان زيادة تعداد القوّة الضاربة للحلف في أوروبا من 40 ألف جندي إلى 300 ألف (أ ف ب)

لندن انتهت قمّة «حلف شمال الأطلسي» (الناتو) المنعقدة في مدريد، مع انتصاف نهار أمس، وغادر رؤساء دول وحكومات الغرب إلى بلدانهم، وفي جُعبهم خطط لمزيد من الإنفاق الحربي والتجنيد والتصعيد، فيما تُواجه اقتصاداتهم أزمات تضخّم وركود لم يشهد مثلَها العالم منذ الحرب العالمية الثانية. وبدت الولايات المتحدة، في خلال إعلان مخرجات القمّة، وكأنها ألقت على نفسها رداء العسكرة، وعزمت على أخذ العالم برمّته نحو الحرب، وذلك بعدما بثّت الروح في جسد «الناتو»، وفرضت تضخيم عديده في شرقيّ أوروبا إلى ضِعف حجم الجيش الروسي، وأعادت توجيه بوصلته نحو عدوّ مباشر آنيّ (روسيا)، وتحدّ استراتيجي (الصين)، إضافة إلى تجديد الالتزام بـ«مكافحة الإرهاب» في العالم العربي والساحل

وافق رؤساء دول وحكومات «حلف شمال الأطلسي»، في قمّتهم الطارئة التي عُقدت في العاصمة الإسبانية مدريد، على صياغة جديدة لفلسفة الحلف، تُحدّد استراتيجياته ومهامه الأساسية للعقد المقبل. وفي تحوُّل كبير عن وثيقة الاستراتيجية السابقة (قمّة لشبونة 2010) التي كانت اعتبرت روسيا شريكاً محتملاً، فإن موجز الوثيقة التي تمّ التوافق عليها في مدريد يقول إن روسيا تظلّ «التهديد الأكثر أهمية ومباشرة لأمن الدول الأعضاء وللسلام والاستقرار»، كما يضع الصين، لأوّل مرّة، في خانة «التحدّي الرئيس لأمن الحلفاء ومصالحهم وقيمهم». واعتَبر المجتمعون أن بيئة الأمن الأوروبي تغيّرت كليّاً نتيجة «العدوان» الروسي على أوكرانيا، و«انتهاك المعايير والمبادئ» التي ساهمت في ضمان استقرار تلك البيئة لعقود، ولم يستبعدوا «احتمال شنّ هجوم روسيّ في أيّ وقت ضدّ سيادة الحلفاء وسلامة أراضيهم»، مستشهدين بجهود موسكو لتحديث قوّتها النووية، ورفضها الامتثال للالتزامات الدولية للحدّ من التسلح، وما وصفوه بمحاولاتها «زعزعة استقرار الدول المجاورة على الجناحَين الشرقي والجنوبي للناتو».

كما تعهّدوا بـ«العمل معاً في التصدّي للتحدّيات المنهجية التي تفرضها الصين على الأمن الأوروبي – الأطلسي جرّاء طموحاتها المعلَنة وسياساتها القمعية التي تهدّد مصالح الغرب، ومحاولاتها الحثيثة للسيطرة على التقنيات والصناعات الرئيسة، مع تجاهل القواعد واللوائح الدولية». ومع ذلك، لم ينصّ الاتفاق على وصف الصين بالعدو، بل أكد أن الحلف لا يزال منفتحاً على إمكانية بناء علاقات بنّاءة معها، ربّما في حالة تخلّيها عن شراكتها الاستراتيجيّة مع روسيا، والتي عدّها المجتمعون «طليعة التصدّي الاستبدادي» لقواعد النظام الدولي. وفي الواقع، فإن الشراكة الصينية – الروسية تبدو أخطر تهديد لهيمنة الغرب منذ انهيار الاتحاد السوفياتي، وانتهاء الحرب الباردة، إذ نجحت روسيا في عقدَين من حُكم الرئيس فلاديمير بوتين في استعادة حيويتها، فيما تقدّمت الصين بشكل مطّرد لتُنافس الولايات المتحدة اليوم على مكانة أكبر اقتصادات العالم، وهما اليوم تتعاونان في غير مجال، في ما من شأنه التمهيد لنشوء بيئة بديلة لا تخضع لرغبات نُخبة واشنطن، وقادرة على استيعاب شعوب أخرى في الجنوب.

ستتعيّن على ستولتنبرغ متابعةُ الحلفاء للحصول على تعهّدات منهم بالمساهمة بقوات إضافية ومعدّات وتمويل


وبالعودة إلى الوثيقة الصادرة عن القمّة، فإن «الإرهاب لا يزال يشكّل تهديداً مستمرّاً غير متكافئ لأمن الدول الأعضاء» (الثلاثين)، فضلاً عن تغيّرات المناخ، والتكنولوجيات الحديثة المخلّة بالاستقرار، وانتشار الأسلحة. كما شدّد المجتمعون على حق الردّ المسلّح على الهجمات الهجينة (السايبرية وعبر الفضاء) التي قد تستهدف دول الحلف، وعلى دور الأخير في الردع والدفاع ومنع الأزمات وإدارتها، كما التعاون الأمني (الاستخباراتي)، والذي يقتضي استدامة عملياته. وتضمّنت الوثيقة عدّة إشارات إلى شمال أفريقيا والشرق الأوسط ومنطقة الساحل، بحجّة أن أيّ «صراع أو عدم استقرار» في هذه المناطق يمكن أن «يؤثّر بشكل مباشر على أمننا»، وهو ما سيثير ارتياح أعضاء «الناتو» في جنوبي أوروبا، ولا سيما إسبانيا وإيطاليا واليونان التي طالما طالبت بدعمها لمواجهة تدفّق اللاجئين من الجنوب. كذلك، أشار الموجز إلى أن المناطق المذكورة تُواجه «تحدّيات أمنية وديموغرافية واقتصادية وسياسية عميقة ومترابطة ومرشّحة للتفاقم»، مضيفاً أن «هذه الديناميكيات توفّر أرضاً خصبة لانتشار الجماعات المسلحة، بما في ذلك المنظّمات الإرهابية، وتشرّع الأبواب لتدخّلات تزعزع الاستقرار من قِبَل المنافسين الاستراتيجيين» – في إشارة إلى الصين وروسيا -.
إلى جانب ذلك، قرّرت القمّة دعوة فنلندا والسويد، رسمياً، للانضمام إلى «الناتو»، علماً أن التحاقهما به سيعزّز تواجده في بيئة بحر البلطيق، ويسهّل «الدفاع» عن لاتفيا وليتوانيا وإستونيا القابعة تحت هاجس «الغزو» الروسي. لكن أهمّ القرارات الصادرة عن المجتمعين في مدريد، كان زيادة تعداد القوّة الضاربة للحلف في أوروبا من 40 ألف جندي حالياً، إلى 300 ألف، وفق مقترح الأمين العام لـ«الناتو»، ينس ستولتنبرغ. على أن هذا القرار يظلّ مجرّد إطار عمل، فيما ستتعيّن على ستولتنبرغ متابعة الحلفاء للحصول على تعهّدات منهم بالمساهمة بقوات إضافية ومعدّات وتمويل. وقالت ألمانيا إنها ستخصّص 15 ألف جندي لهذه الغاية، وتعهّدت كندا برفع تواجدها الأوروبي من نحو 1375 جندياً حالياً إلى مستوى لواء. لكنّ الاندفاعة الأكبر أتت من الرئيس الأميركي، جو بايدن، الذي أعلن أن بلاده ستُعزّز تواجدها في كلّ أوروبا، وستُخصّص أسلحة ومعدّات متطوّرة لدعم حضور «الناتو» بحراً وبرّاً وجوّاً في مواجهة روسيا. وتشمل الخطط الأميركية المعلَنة مقرّاً دائماً في بولندا، و5000 جندي إضافي في رومانيا، وسربَين من طائرات «إف-35» في المملكة المتّحدة، ومعدّات دفاع جوي متقدّم في إيطاليا وألمانيا، ومدمّرتَين بحريتَين في إسبانيا. وتمتلك الولايات المتحدة وجوداً عسكرياً دائماً في 13 بلداً أوروبياً، ويصل تعداد جنودها في مختلف القطاعات عبر القارّة إلى 70 ألفاً الآن، فيما يمكن أن يبلغ بعد القمّة 100 ألف، وفق تقديرات الخبراء.

من جهتها، أعربت إسبانيا عن راحتها لحصولها على ضمانات من «الناتو» لحماية سبتة ومليلة، وهما مدينتان عربيتان تحتلّهما في شمال أفريقيا. ونُقل عن رئيس هيئة الأركان الإسبانية، تيودورو لوبيز كالديرون، قوله إن التزام الحلف بالدفاع عن «السلامة الإقليمية» للدول الأعضاء يشمل أيضاً ممتلكات إسبانيا في القارة الأفريقية. بريطانياً، أعلن بوريس جونسون، رئيس الوزراء، عن دعم مسلّح إضافي بقيمة مليار جنيه إسترليني لأوكرانيا، وهو ما من شأنه أن يرفع مجموع ما قدّمته لندن لكييف منذ شباط الماضي، إلى 2.3 مليار جنيه إسترليني (2.8 مليار دولار أميركي)، الأمر الذي يجعلها أكبر مموّلي النظام الأوكراني بعد الولايات المتحدة. وتعهّد جونسون، الذي يواجه ضغوطاً داخلية شديدة للاستقالة، بزيادة حجم الإنفاق العسكري لبلاده داخل «الناتو»، إلى 2.5% من مجموع الناتج القومي، أي بزيادة 20% عن الحد الأدنى. لكنّ سخاء الرئيس من جيوب البريطانيين لن يكون من دون عواقب محلّية على الأقل، حيث يشتكي وزير الدفاع من عدم توفّر الاعتمادات الكافية للجيش البريطاني، فيما تملأ الصحفَ التي سيقرأها أثناء رحلة العودة إلى لندن تصريحات محبطة من أندرو بيلي، محافظ بنك إنكلترا (المركزي)، الذي قال في مؤتمر في البرتغال إن المملكة المتحدة – من الناحية الاقتصادية – في أسوأ وضع ممكن -، وتعاني من أزمة طاقة أكثر من بقيّة أوروبا، وقد تعيش حالة تضخّم أعلى لفترة أطول.
وحضرت اليابان – مُمثَّلة برئيس وزرائها فوميو كيشيدا – القمّة، وذلك لأوّل مرّة في تاريخ الحلف الذي تأسّس قبل 73 عاماً. وشارك كيشيدا زعماء الحلف مخاوفهم من صعود الصين، وقلقهم على مستقبل تايوان، لكنّ مراقبين أعربوا عن خشيتهم من أن الأميركيين سيعيدون عسكرة اليابان، كما شرعوا بالفعل في عسكرة ألمانيا، مع كلّ ما يحمله هذا من كوابيس فاشيات القرن العشرين. وحضرت القمّةَ أيضاً مجموعة ممّن تسمّيهم واشنطن شركاء «الناتو»، ومن هؤلاء رؤساء دول وحكومات أستراليا، وأوكرانيا (عن بعد)، وجورجيا، وكوريا (الجنوبية)، فضلاً عن رئيس المجلس الأوروبي ورئيس المفوّضية الأوروبية والسويد وفنلندا. وتَمثّل الأردن وموريتانيا من خلال وزيرَي خارجيّتهما، في حين سُجّل حضور وزير الدفاع في البوسنة والهرسك.

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Source

By Batiushka

‘The next war in Europe will be between Russia and Fascism, except that Fascism will be called Democracy.’

Fidel Castro, c. 1992

Introduction

Europe is a serial suicide. The first attempt began in Sarajevo in 1914 and finished in Versailles in 1919. The second began a generation later in Warsaw in 1939 and ended in Berlin in 1945. Having very nearly succeeded at the second attempt (it missed atomic bombs by mere months), Europe sobered up and slowed down, waiting till the centenary of 1914 before it tried for the third time. This attempt began in Kiev, again in Eastern Europe, in 2014 and is continuing in the Special Military Operation (SMO). At every attempt Europe has lost. The first time it lost three empires (the Russian, the Austro-Hungarian and the German), the second time two Empires, the fatally weakened British and French, so ensuring the supremacy of the American Empire in Europe, as in the rest of the world.

What will Europe lose this time? It will lose the only Empire remaining – the EU. When? Only some time after the conclusion of the SMO. Now, it would be foolish to predict with exactitude when that, which is the culmination of Europe’s third attempted suicide, will be. It could all be over in early July. Alternatively it could drag on for years. However, both those outcomes are extreme possibilities and there are other possibilities inbetween. Nevertheless, some tendencies are clear. It is only the extent and speed at which they will progress that is uncertain. In any case, whatever happens in the Ukraine, Europe will be reformatted. It will never be the same again. The seed sown by the Western elite in Kiev in 2014 is being reaped today in the harvest of division, discontent and poverty in Europe.

If we look at the three aims of the Special Military Operation, we can see that the first and second aims, the liberation of the Donbass and demilitarisation, are both 75% done, despite new arrivals of Western arms to prolong the agony. However, the reality is also that the operation has had to be much extended from the Donbass to the east and south of the Ukraine and there we are not even 50% done. However, the third aim, the denazification of the Ukraine, has not even begun and cannot begin until the murderous Zelensky regime has been replaced with a government which actually cherishes the independence and cultural traditions of the Ukraine. Then it will no longer be a servile chimpanzee of the LGBT West and its Nulands who, very politely speaking, have no time for Europe.

Military

Some have criticised the Allied Special Operation in the Ukraine. After four months, they say, not even the whole of the Donbass has yet been liberated. Such critics should get out of their armchairs and go and fight against NATO. We would soon see how fast they would go. Why has progress been ‘slow’? Firstly, because though the Allied Forces are small in size, they are fighting against the vast bulk of the Kiev Army, which has been trained, retrained, supplied and resupplied and dug into its fortified positions by NATO over eight years. Secondly, because the Allies are trying to avoid civilian casualties and of course casualties to themselves. That is not easy when Kiev is using civilians as human shields and shelling from residential areas. The Allies will not carpet-bomb like the West. There is no hurry.

However, with the very recent events in Severodonetsk and Lisichansk, the gateway to the whole of Central and Western Ukraine is being opened. Thus, we read the report on 25 June: ‘The Office of the President ordered the transfer of all reserves from the Mykolaiv/Odessa/Kharkiv direction for a counterattack in the Severodonetsk direction’. In other words, Kiev has only reserves left and it wants to transfer all of them. This sounds like desperation – the end is near. Judging by the quality of Kiev’s reserves so far, this will be a walkover. And that firstly presumes that the reserves will be willing to be massacred. And that secondly presumes that they can be transferred when all around the roads are occupied by Allied troops, or are controlled by Russian radar, artillery, drones and aircraft.

Most significantly of all, this means that Mykolaiv/Odessa/Kharkiv will be left more or less defenceless, without even reserves. According to serious Western data, Ukrainian military losses are about 200,000 killed with nearly three quarters of military equipment and ammunition destroyed. In just four months. This is catastrophic. If even Western spies from MI6, the BRD and Poland say this, then there is little future or hope for the US puppets in Kiev. We can only expect military collapse and the formation of a new government, authentically pro-Ukrainian (that is anti-American) and therefore pro-Russian. What happens after the liberation of the Ukraine? The liberation of Moldova? Of the Baltics? We do not know. But if aggressive NATO/EU sabre-rattling continues, all is possible.

Economic, Political and Ideological

As we know, the Western anti-Russian sanctions, have been a self-imposed economic disaster, an own goal. Blowback has been nasty. Dedollarisation is happening. Pay in roubles, please. Now. Food, fertiliser, oil, gas, all are rocketing in price, and it is not winter. Popular discontent and street demonstrations in Western Europe are mounting. In France the Rothschild candidate Macron has lost control of the French Parliament to the left and to the right. In the UK the ‘delusional’ (the word of members of his own Party) Johnson (a man condemned by his own as ‘an opportunistic journalist who has at his heart a moral vacuum’) is seen as a liability, who will lead the Tory Party to annihilation in any election. We will not speak here of other nonentities like Scholz, Draghi, Trudeau and Biden.

Then there is the formation of alternatives to the Western bloc. A new G8/BRICS+? Russia has seen plenty of discreet and not so discreet support from China, India, Kazakhstan, Brazil, Iran, Indonesia, Africa (from Egypt to South Africa), Saudi Arabia, Venezuela, Argentina, Hungary…. That is, from the aptly-named ‘emerging’ world on all five Continents, from those who have raw materials and manufacturing infrastructure. They want to emerge from the ruins of colonialism and neo-colonialism. The isolated West, the US, Canada, UK, EU, Australia, has few friends outside its inward-looking little world. There are just a few occupied vassals in Asia, like Israel, Japan, Taiwan and South Korea, who are forced to buy Western arms in order to stop themselves being liberated from themselves, and that is it.

Even the mercenaries of the State-controlled Western media are beginning to go back on their State-paid lies. They are used to turning everything on its head, to inverting it all. Thus, the Russian Army was composed of ‘demoralised and untrained raw conscripts’, who had suffered ‘massive losses’ and ‘lacked fuel and ammunition’, ‘raped children and murdered’, were ‘in full retreat’ and bombed and shelled ‘residential areas and civilians’. Just change the word ‘Russian’ to ‘Kiev’ and we are a lot nearer the truth. Does anybody believe these media lies any more? Surely only the living dead? It must be embarrassing for these hacks who have been telling, or rather were ordered to tell, the opposite of the truth. They used to report their dreams as reality. Now they have to report reality – their worst nightmares.

Conclusion: The Age of Empires Is Over

After the Western defeats, or rather routs, in Iraq and Afghanistan, NATO has no military or political future. In fact, it should have been abolished after the fall of the USSR. The Ukraine (or whatever it will be called in whatever borders it will have when its liberation is complete) is Russian. Just forget it, NATO. You have already lost. The expansion of NATO into Asia? What a joke. Taiwan is Chinese, as will be all the Western Pacific. Just forget it, NATO. You have already lost. The American Century which began in February/March 1917 with the palace revolt by corrupt aristocrats and generals in the Russian Empire, carefully orchestrated from London and New York, is over. Europe no longer needs to attempt suicide, let alone succeed. You are free to restore the sovereignty of your nation states.

The fact is that the Age of Empires is over. 1917 signalled the beginning of this. In 1991 the Red Star (USSR) Empire collapsed. Today the White Star (USSA) Empire, with its Twelve-Star EU (USSE) vassal Empire in tow, is collapsing, and for exactly the same reason: because nobody believes in their ideologies any more. Both Communism and Capitalism have failed. Now is the Age of Free Alliances of Sovereign Nations. What is the future of Europe after its third failed attempt at suicide? It is in reintegrating the Sovereignty of Eurasia, protected by the Russian resource umbrella. The Atlantic never united Europe, it divided Europe. If those who live across the Atlantic want to rediscover from us how to start living normal lives again, they can. But it will be on our terms, those of our Sovereignty, not on theirs.

We have spoken of the Special Military Operation as the culmination of Europe’s third attempted suicide. We have said that Europe will never be the same again after it. This is because, unless Europe is really serious this time about suicide (and it has managed to avoid it twice before), this Operation Z is going to split up the tyrannical Western world, EU and UK Europe, from the USA. It is Operation Z+. And who are we, those who will survive? We are Generation Z+. We are those who will come ‘out of great tribulation’ and survive. We are those who are going to live in the real Global world, not in the Western bubble Globalist world. We are the real Europeans of ancient and new European history, who refused to commit suicide, the Sovereign Europeans. Reality is dawning at last.

Oh Now They‘re Banning China Spreading Chinese In The UK!

June 26, 2022

Source

There is a concerted effort by the Western powers to contain the spread of Chinese and to prevent China from teaching Mandarin in the West

By Thorsten J. Pattberg

Much of the global media attention is on the sabotaging of everything ‘Russian’ in the West. However, at the same time there is a concerted Western attack on everything ‘Chinese’.

The UK now is basically saying: ‘Chinese’ is the property of the West, and China has no business in teaching Chinese in the West. Something like that. It is definitely spooky.

A British Member of Parliament (MP), Alicia Kearns, recently delivered a strong message to China at the Palace of Westminster, which was attended by maybe 20 of her social mores:

“Our students, our kids, our under-18-years olds are taught Mandarin by the Confucius Institutes which are the arm of the Chinese state.”

She goes on and bashes a 1.4 billion Chinese state just like that, for click-bait and going viral. So we believe MP Kearns is what the UK deserves, and want to promote her. She calls China “a genocidal regime” and demands the 30 UK Confucius Institutes to be punished or “banned.” Wow.

Not knowing Mandarin, many British elites fear Chinese. Fear is a German concept: Angst. And Angst leads to OhnmachtOhnmacht means “without power.”

Did I just use a foreign language and it sounded like a political statement?

The MP knows the effect a foreign language has on fearful natives. To her, language is of course always politics. Therefore, China must not spread Chinese, because it‘s all politics.

She continued: “We recently discovered that Edinburgh University‘s Confucius Institute has representatives of the Chinese Communist Party‘s embassy on its board.“

Oh there are Chinese on the board of the Confucius Institute for Scotland—is that it?!

But the director is a German woman, trained and funded all her life by the powers in Berlin, and Berlin wants Scotland to break off from the UK and join the EU. Think about that, MP Kearns.

British China Studies is heavy stuff, compared to German China Studies, I mean.

This has to do with the British having bombarded Chinese ports in Guangzhou in 1839, the capture of Hong Kong in 1842, the burning down of the Summer Palace in 1860, and the drugging of 30 million Chinese with heavy narcotics.

During the last 150 years of “exchange,” the British meddled in Tibet, Taiwan, Peking, Shanghai and Canton, but never learned Chinese. Call it an “import ban.”

So the past is the past, and now ‘Global Britain’—the official UK slogan under MP Kearns—has this huge pent-up demand for Chinese culture, concepts and terms, right?

Those Confucius Institutes our British MP wants to ban are providing the most authentic, accredited and prestigious Chinese language training there is.

China has the best China Studies universities in the world, and the Confucius Institutes are the best places for learning Chinese outside of China. Period.

I know that many British imperialists still believe No we British are China. But sorry, you are not—China is!

Mastering Chinese requires thousands of hours of hard recitation, rote learning and love for China. Before the arrival of the Confucius Institutes in Europe in 2004, Western professors could not read or write Mandarin. Now they have to.

And the MP continued, that China is “undermining the integrity of the Mandarin education in our country.”

Mandarin education in your country can keep up with China precisely because it cooperates with China, for instance the London School of Economics or the School of Oriental and African Studies.

Read the latter school’s slogan—’SOAS, the world’s leading institution for the study of Asia, Africa and the Middle East’.

Well, SOAS wasn’t the world’s leading institution in any of these things, and certainly not China. China has the world’s leading institutions for the study of China. But now SOAS has a real Confucius Institute and things look much better.

Back to our MP’s politics fear. She went on about how China’s Ministry of Education is a threat to freedom because it only selects qualified teachers.

Think, what she is indirectly saying about UK teachers. She is saying that the UK does not vet its teachers! Just like that German director at Edinburgh University, got it? And just like MP Kearns, who doesn‘t know Chinese but wants to ban it.

The British MP must know that the Confucius Institutes are partly funded by China and partly funded by the host university, and that they generate tuition fees and partner up with British culture makers. All this is transparent, so MP Kearns demands more transparency. She could also have demanded more weather.

There are 100 million Mandarin learners in the world, and most will achieve proficiency when they visit China eventually. About 40% of them study Chinese not in China, and the best place for them to do that is with an accredited Confucius Institute. Britain has no expertness in teaching Chinese, China is best at that. Britain can teach… I don’t know, Irish best?

British educators also fear its name—Confucius. Confucius lived some 2500 years ago, and this could indeed cause misunderstanding. We don’t name European institutes the “Jesus Christ Institutes.” Just saying.

Last, a fair criticism is spies. Britain indeed has a James Bond agent 007 obsession with spies, which is a fiction. Here is how it really works. Before 2003, there were at most 300 China Studies masters graduates in the UK, and MI6, MI5 and DI intelligence services recruited from those because they could read Mandarin, also in Edinburgh.

On the other hand, there were years with 100,000 Chinese students in the UK who could all read English, so everyone is paranoid now.

Well done, if the British MP succeeds in keeping China out of China Studies, this could cancel ‘Global Britain’ once and for all. And Scotland is probably on its way out too.

End.


The author is a German writer and cultural critic.

A LEMMING LEADING THE LEMMINGS: SLAVOJ ZIZEK AND THE TERMINAL COLLAPSE OF THE ANTI-WAR LEFT

JUNE 23RD, 2022

JONATHAN COOK

Have you noticed how every major foreign policy crisis since the U.S. and U.K.’s invasion of Iraq in 2003 has peeled off another layer of the left into joining the pro-NATO, pro-war camp?

It is now hard to remember that many millions marched in the U.S. and Europe against the attack on Iraq. It sometimes feels like there is no one left who is not cheerleading the next wave of profits for the West’s military-industrial complex (usually referred to as the “defense industry” by those very same profiteers).

Washington learned a hard lesson from the unpopularity of its 2003 attack on Iraq aimed at controlling more of the Middle East’s oil reserves. Ordinary people do not like seeing the public coffers ransacked or suffering years of austerity, simply to line the pockets of Blackwater, Halliburton, and Raytheon. And all the more so when such a war is sold to them on the basis of a huge deception.

So since then, the U.S. has been repackaging its neocolonialism via proxy wars that are a much easier sell. There have been a succession of them: Libya, Syria, Yemen, Iran, Venezuela and now Ukraine. Each time, a few more leftists are lured into the camp of the war hawks by the West’s selfless, humanitarian instincts – promoted, of course, through the barrel of a Western-supplied arsenal. That process has reached its nadir with Ukraine.

NUCLEAR FACE-OFF

recently wrote about the paranoid ravings of celebrity “left-wing” journalist Paul Mason, who now sees the Kremlin’s hand behind any dissension from a full-throttle charge towards a nuclear face-off with Russia.

Behind the scenes, he has been sounding out Western intelligence agencies in a bid to covertly deplatform and demonetize any independent journalists who still dare to wonder whether arming Ukraine to the hilt or recruiting it into NATO – even though it shares a border that Russia views as existentially important – might not be an entirely wise use of taxpayers’ money.

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It is not hard to imagine that Mason is representative of the wider thinking of establishment journalists, even those who claim to be on the left.

But I want to take on here a more serious proponent of this kind of ideology than the increasingly preposterous Mason. Because swelling kneejerk support for U.S. imperial wars – as long, of course, as Washington’s role is thinly disguised – is becoming ever more common among leftwing academics too.

The latest cheerleader for the military-industrial complex is Slavoj Zizek, the famed Slovenian philosopher and public intellectual whose work has gained him international prominence. His latest piece – published where else but The Guardian – is a morass of sloppy thinking, moral evasion and double speak. Which is why I think it is worth deconstructing. It encapsulates all the worst geostrategic misconceptions of Western intellectuals at the moment.

Zizek, who is supposedly an expert on ideology and propaganda, and has even written and starred in a couple of documentaries on the subject, seems now to be utterly blind to his own susceptibility to propaganda.

COD PSYCHOLOGY

He starts, naturally enough, with a straw man: that those opposed to the West’s focus on arming Ukraine rather than using its considerable muscle to force Kyiv and Moscow to the negotiating table are in the wrong. Opposition to dragging out the war for as long as possible, however many Ukrainians and Russians die, with the aim of “weakening Russia”, as US Defense Secretary Lloyd Austin wants; and opposition to leaving millions of people in poorer parts of the world to be plunged deeper into poverty or to starve is equated by Zizek to “pacifism.”

“Those who cling to pacifism in the face of the Russian attack on Ukraine remain caught in their own version of [John Lennon’s song] ‘Imagine’,” writes Zizek. But the only one dwelling in the world of the imaginary is Zizek and those who think like him.

The left’s mantra of “Stop the war!” can’t be reduced to kneejerk pacifism. It derives from a political and moral worldview. It opposes the militarism of competitive, resource-hungry nation-states. It opposes the war industries that not only destroy whole countries but risk global nuclear annihilation in advancing their interests. It opposes the profit motive for a war that has incentivised a global elite to continue investing in planet-wide rape and pillage rather than addressing a looming ecological catastrophe. All of that context is ignored in Zizek’s lengthy essay.

Instead, he prefers to take a detour into cod psychology, telling us that Russian president Vladimir Putin sees himself as Peter the Great. Putin will not be satisfied simply with regaining the parts of Ukraine that historically belonged to Russia and have always provided its navy with its only access to the Black Sea. No, the Russian president is hell-bent on global conquest. And Europe is next – or so Zizek argues.

Even if we naively take the rhetoric of embattled leaders at face value (remember those weapons of mass destruction Iraq’s Saddam Hussein supposedly had?), it is still a major stretch for Zizek to cite one speech by Putin as proof that the Russian leader wants his own version of the Third Reich.

Not least, we must address the glaring cognitive dissonance at the heart of the Western, NATO-inspired discourse on Ukraine, something Zizek refuses to do. How can Russia be so weak it has managed only to subdue small parts of Ukraine at great military cost, while it is at the same time a military superpower poised to take over the whole of Europe?

Zizek is horrified by Putin’s conceptual division of the world into those states that are sovereign and those that are colonized. Or as he quotes Putin observing: “Any country, any people, any ethnic group should ensure their sovereignty. Because there is no in-between, no intermediate state: either a country is sovereign, or it is a colony, no matter what the colonies are called.”

SOVEREIGN OR COLONIZED?

The famed philosopher reads this as proof that Russia wants as its colonies: “Bosnia and Herzegovina, Kosovo, Finland, the Baltic states … and ultimately Europe itself”. But if he weren’t so blinded by NATO ideology, he might read Putin’s words in a quite different way. Isn’t Putin simply restating Washington realpolitik? The U.S., through NATO, is the real sovereign in Europe and is pushing its sovereignty ever closer to Russia’s borders.

Putin’s concern about Ukraine being colonized by the U.S. military-industrial complex is essentially the same as U.S. concerns in the 1960s about the Soviet Union filling Cuba with its nuclear missiles. Washington’s concern justified a confrontation that moved the world possibly the closest it has ever come to nuclear annihilation.

Both Russia and the U.S. are wedded to the idea of their own “spheres of influence”. It is just that the U.S. sphere now encircles the globe through many hundreds of overseas military bases. By contrast, the West cries to the heavens when Russia secures a single military base in Crimea.

We may not like the sentiments Putin is espousing, but they are not especially his. They are the reality of the framework of modern military power the West was intimately involved in creating. It was our centuries of colonialism – our greed and theft – that divided the world into the sovereign and the colonized. Putin is simply stating that Russia needs to act in ways that ensure it remains sovereign, rather than joining the colonized.

We may disagree with Putin’s perception of the threat posed by NATO, and the need to annex eastern Ukraine, but to pretend his speech means that he aims for world domination is nothing more than the regurgitation of a CIA talking point.

Zizek, of course, intersperses this silliness with more valid observations, like this one: “To insist on full sovereignty in the face of global warming is sheer madness since our very survival hinges on tight global cooperation.” Of course, it is madness. But why is this relevant to Putin and his supposed “imperial ambition”? Is there any major state on the planet – those in Europe, the United States, China, Brazil, Australia – that has avoided this madness, that is seeking genuine “tight global cooperation” to end the threat of climate breakdown.

No, our world is in the grip of terminal delusion, propelled ever closer to the precipice by capitalism’s requirement of endless economic growth on a finite planet. Russia’s invasion of Ukraine is causing great ecological damage, but so are lots of other things – including NATO’s rationalization of ever-expanding military budgets.


UKRAINIAN HEROISM

But Zizek has the bit between his teeth. He now singles out Russia because it is maneuvering to exploit the consequences of global warming, such as new trade routes opened up by a thawing Arctic.

“Russia’s strategic plan is to profit from global warming: control the world’s main transport route, plus develop Siberia and control Ukraine,” he writes. “In this way, Russia will dominate so much food production that it will be able to blackmail the whole world.”

But what does he imagine? As we transform the world’s climate and its trade routes, as new parts of the world turn into deserts, as whole populations are forced to make migrations to different regions, does he think only Putin and Russia are jostling to avoid sinking below the rising sea waters. Does he presume the policy hawks in Washington, or their satraps in Europe, have missed all this and are simply putting their feet up? In reality, maneuvering on the international stage – what I have called elsewhere a brutal nation-state version of the children’s party game musical chairs – has been going on for decades.

Ukraine is the latest front in a long-running war for resource control on a dying planet. It is another battleground in the renewed great power game that the U.S. revived by expanding NATO across Eastern Europe in one pincer movement and then bolstered it with its wars and proxy wars across the Middle East. Where was the urge for “tight global cooperation” then? To perceive Ukraine as simply the victim of Putin’s “imperialism” requires turning a blind eye to everything that has occurred since the fall of the Soviet Union three decades ago.

Zizek gets to the heart of what should matter in his next, throw-away line:

Those who advocate less support for Ukraine and more pressure on it to negotiate, inclusive of accepting painful territorial renunciations, like to repeat that Ukraine simply cannot win the war against Russia. True, but I see exactly in this the greatness of Ukrainian resistance.”

Zizek briefly recognises the reality of Ukraine’s situation – that it cannot win, that Russia has a bigger, better-equipped army – but then deflects to the “greatness” of Ukraine’s defiance. Yes, it is glorious that Ukrainians are ready to die to defend their country’s sovereignty. But that is not the issue we in the West need to consider when Kyiv demands we arm its resistance.

The question of whether Ukrainians can win, or whether they will be slaughtered, is highly pertinent to deciding whether we in the West should help drag out the war, using Ukrainians as cannon fodder, to no purpose other than our being able to marvel as spectators at their heroism. Whether Ukrainians can win is also pertinent to the matter of how urgent it is to draw the war to a close so that millions don’t starve in Africa because of the loss of crops, the fall in exports and rocketing fuel prices. And arming a futile, if valiant, Ukrainian struggle against Russia to weaken Moscow must be judged in the context that we risk backing Russia into a geostrategic corner – as we have been doing for more than two decades – from which, we may surmise, Moscow could ultimately decide to extricate itself by resorting to nuclear weapons.

INTELLECTUAL CUL DE SAC

Having propelled himself into an intellectual cul de sac, Zizek switches tack. He suddenly changes the terms of the debate entirely. Having completely ignored the U.S. role in bringing us to this point, he now observes:

Not just Ukraine, Europe itself is becoming the place of the proxy war between [the] U.S. and Russia, which may well end up by a compromise between the two at Europe’s expense. There are only two ways for Europe to step out of this place: to play the game of neutrality – a short-cut to catastrophe – or to become an autonomous agent.”

So, we are in a U.S. proxy war – one played out under the bogus auspices of NATO and its “defensive” expansion – but the solution to this problem for Europe is to gain its “autonomy” by …

Well, from everything Zizek has previously asserted in the piece, it seems such autonomy must be expressed by silently agreeing to the U.S. pumping Ukraine full of weapons to fight Russia in a proxy war that is really about weakening Russia rather than saving Ukraine. Only a world-renowned philosopher could bring us to such an intellectually and morally barren place.

The biggest problem for Zizek, it seems, isn’t the U.S. proxy war or Russian “imperialism”, it is the left’s disillusionment with the military industrial complex: “Their true message to Ukraine is: OK, you are victims of a brutal aggression, but do not rely on our arms because in this way you play into the hands of the industrial-military complex,” he writes.

But the concern here is not that Ukraine is playing into the arms of the war industries. It is that Western populations are being played by their leaders – and intellectuals like Zizek – so that they can be delivered, once again, into the arms of the military-industrial complex. The West’s war industries have precisely no interest in negotiations, which is why they are not taking place. It is also the reason why events over three decades have led us to a Russian invasion of Ukraine that most of Washington’s policy makers warned would happen if the U.S. continued to encroach on Russia’s “sphere of influence”.

The left’s message is that we are being conned yet again and that it is long past the time to start a debate. Those debates should have taken place when the U.S. broke its promise not to expand “one inch” beyond Germany. Or when NATO flirted with offering Ukraine membership 14 years ago. Or when the U.S. meddled in the ousting of the elected government of Ukraine in 2014. Or when Kyiv integrated neo-Nazi groups into the Ukrainian army and engaged in a civil war against the Russian parts of its own populace. Or when the U.S. and NATO allowed Kyiv – on the best interpretation – to ignore its obligations under the Minsk agreements with Russia.

None of those debates happened. Which is why a debate in the West is still needed now, at this terribly late stage. Only then might there be a hope that genuine negotiations can take place – before Ukraine is obliterated.

CANNON FODDER

Having exhausted all his hollow preliminary arguments, we get to Zizek’s main beef. With the world polarizing around a sole military superpower, the U.S., and a sole economic superpower, China, Europe and Russia may be forced into each other’s arms in a “Eurasian” block that would swamp European values. For Zizek, that would lead to “fascism”. He writes: “At that point, the European legacy will be lost, and Europe will be de facto divided between an American and a Russian sphere of influence. In short, Europe itself will become the place of a war that seems to have no end.”

Let us set aside whether Europe – all of it, parts of it? – is really a bulwark against fascism, as Zizek assumes. How exactly is Europe to find its power, its sovereignty, in this battle between superpowers? What vehicle is Zizek proposing to guarantee Europe’s autonomy, and how does it differ from the NATO one that is – even Zizek now seems to be conceding – actually just a vassal of the U.S., there to enforce Washington’s global-spanning “sphere of influence” against Russia and China.

Faced with this problem, Zizek quickly retreats into mindless sloganeering: “One cannot be a leftist if one does not unequivocally stand behind Ukraine.” This Bushism – “You are either with us or with the terrorists” – really is as foolish as it sounds.

What does “unequivocal” mean here? Must we “unequivocally stand behind” all of Ukraine’s actions – even should, say, neo-Nazi elements of the Ukrainian military like the Azov Brigade carry out pogroms against the ethnic Russian communities living in Ukraine?

But even more seriously, what does it mean for Europeans to stand “unequivocally” behind Ukraine? Must we approve the supply of U.S. weapons, even though, as Zizek also concedes, Ukraine cannot win the war and is serving primarily as a proxy battleground?

Would “unequivocal support” not require us to pretend that Europe, rather than the U.S., is in charge of NATO policy? Would it not require too that we pretend NATO’s actions are defensive rather intimately tied to advancing the U.S. “sphere of influence” designed to weaken Russia?

And how can our participation in the U.S. ambition to weaken Russia not provoke greater fear in Russia for its future, greater militarism in Moscow, and ensure Europe becomes more of a battleground rather than less of one?

What does “unequivocal” support for Ukraine mean given that Zizek has agreed that the U.S. and Russia are fighting a proxy war, and that Europe is caught in the middle of it? Zizek’s answer is no answer at all. It is nothing more than evasion. It is the rationalization of unprincipled European inaction, of acting as a spectator while the U.S. continues to use Ukrainians as cannon fodder.

MUDDYING THE WATERS

After thoroughly muddying the waters on Ukraine, Zizek briefly seeks safer territory as he winds down his argument. He points out, two decades on, that George W. Bush was similarly a war criminal in invading Iraq, and notes the irony that Julian Assange is being extradited to the U.S. because Wikileaks helped expose those war crimes. To even things up, he makes a counter-demand on “those who oppose Russian invasion” that they fight for Assange’s release – and in doing so implicitly accuses the anti-war movement of supporting Russia’s invasion.

He then plunges straight back into sloganeering in his concluding paragraph: “Ukraine fights for global freedom, inclusive of the freedom of Russians themselves. That’s why the heart of every true Russian patriot beats for Ukraine.” Maybe he should try telling that to the thousands of ethnic Russian families mourning their loved ones killed by the civil war that began raging in eastern Ukraine long before Putin launched his invasion and supposedly initiated his campaign for world domination. Those kinds of Ukrainians may beg to differ, as may Russians worried about the safety and future of their ethnic kin in Ukraine.

As with most things in life, there are no easy answers for Ukraine. But Zizek’s warmongering dressed up as European enlightenment and humanitarianism is a particularly wretched example of the current climate of intellectual and moral vacuity. What we need from public thinkers like Zizek is a clear-sighted roadmap for how we move back from the precipice we are rushing, lemming-like, towards. Instead he is urging us on. A lemming leading the lemmings.

Feature photo | Graphic by MintPress News

Jonathan Cook is a MintPress contributor. Cook won the Martha Gellhorn Special Prize for Journalism. His latest books are Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East (Pluto Press) and Disappearing Palestine: Israel’s Experiments in Human Despair (Zed Books). His website is www.jonathan-cook.net.

The views expressed in this article are the author’s own and do not necessarily reflect MintPress News editorial policy.

A quick update from Andrei, with a few additional notes

June 23, 2022

Dear friends,

It has now been a month since my last update, so I have decided to post this note to share a few thoughts with you.

First, the boring stuff: my health is definitely doing better and, while I very much regret having had to take that time off, I now am sure that it was the right decision, both for me and the blog.  I hope to come back to full-time blogging by the end of July.  Again, I apologize to you all for my absence, and I ask for your understanding.

Second, and as I had predicted, the situation in the world and in the Ukraine has changed a great deal over the past couple of months.  I will just mention a few bullet-points of what I see as the highlights:

  • The “the glorious Ukrainians are winning” narrative has now quasi-officially faceplanted (heck, even the NYT changed its tune) and nobody sane is spewing this nonsense anymore.  The reality is that the Ukrainians are, on average, losing about one battalion per day, and this is why they are now sending barely trained civilians to the East: most of the (often very well-trained and courageous) Ukrainian combat units are even dead, prisoners, MIA or in “cauldrons” (actual or by firepower) with no chance to escape.
  • It is now also undeniable that what began as a special military operation (SMO) has now turned into a open and full-scale war between the consolidated West (aka the Anglo-Zionist Empire) and Russia: the Empire has now “hit” Russia with everything it had short of a direct military attack.  The (originally 200’000+ strong) Ukrainian military, arguably the strongest NATO military force (which is otherwise mostly composed of small and thoroughly woked-out “parade militaries”!), especially with the full support of the West (intelligence, weapons, money, political, etc. etc. etc.) is being “demilitarized” and “denazified” by a vastly superior Russian military force (but not one bigger in size: Russia has used only a fraction of her full military power).  The outcome here is not in doubt.
  • This reality has now been fully accepted by the Russian society which now stands behind the Kremlin (at 80%+) which has made no secret that it is now locked into an existential war against the West.  This has been the case since at least 2013, but now the original ratios (roughly 80% informational, 15% economic and 5% military) have shifted to what I would call “total war by proxy“.
  • The hardcore crazies in the West (US Neocons, UK, Poland and the 3B) are trying hard to trigger a fullscale war between NATO and Russia and, so far, the spineless Eurolemmings have let them set the agenda, however suicidal it might be for the EU and NATO.  Frankly, my disgust with western Europe is total – I never had any illusions about the “new” Europeans – and all I can say is that they all richly deserve each other and what is coming their way.  All I can say is this: continue to act like Nazis and you shall be denazified.  It is really that simple.
  • The leaders of the Empire know that they lost yet again, and they are seeking refuge in their usual coping mechanisms: ideological self-gratification and deep, deep denial.  While the EU is committing a straightforward economic, political and social suicide, the Biden Administration has gone “full woke”, as did corporate “America”(meaning the USA, of course, not the American continent): the so-called “minorities” are now shoved down the collective throats of the US people now, no matter how small, or freaky, the said “minorities” are.  This is especially striking in the kind of advertisements the US corporations are now unanimously producing.   I think, for example, of the morbidly obese black women in diapers (!!!) taking “ballerina poses” YouTube is now regularly showing.  Watching these ads, one would think that blacks in the USA occupy all positions of authority and prestige, that most US women are lesbians, and millions of US kids (and even infants!) urgently need a sex change (watch the excellent “What is a Woman?” documentary to see how insane this has all become).  When I see this collective woke insanity, I cannot help but wonder whether corporate “America” is not deliberately trying to really piss off the vast majority of US Americans and trigger some kind of major and violent internal crisis.
  • The Russians, in the meantime, are passing new laws against the propaganda of homosexuality: while in the past, such propaganda was only banned if directed at children, now this expanded to the entire population of Russia.  Just to clarify: Russia is not banning homosexuals and their sexual practices, however pathological, remain fully legal.  But what Russia IS doing is refusing to consider homosexuality as a “normal and natural variation in human sexuality” (Wikipedia).  In other words, the Russians still consider homosexuality as a psychological disorder which might deserve compassion, but not affirmation (nevermind encouragement).  Since “inclusiveness” and “positivity” are now key western “values” this is also a message from Russia: keep your woke-freaks and their ideology to yourselves, we want none of it!
  • In the meantime the Euroukrainians are now planning to ban and destroy over 100’000’000 copies of Russian language books.  Hitler would be proud.  The Eurolemmings have nothing to say.  You know, “#cancelRussia” thingie (meaning both Russians themselves and the Russian culture in all its forms) and all that “it’s okay when we do it” or “our SOBs” stuff.
  • The Western economic Blitzkrieg against Russia has totally failed and the joke in Russia is that while McCain famously once said that “Russia is a gas station masquerading as a country” with contempt, “Biden” is now saying the same thing, but with deep envy 🙂
Translation: for our Fatherland

I could go on and on, but the bottom line is this: the West has declared total war on Russia (and, de facto, to all of Zone B) and Russia has accepted this.  For a decade and more the West has tried hard to wake up and provoke the proverbial Russian bear and these efforts have finally been successful: the bear is now out, and he is very, very angry.  To clarify, by this I am not referring to former Atlantic Integrationists like Medvedev now “coming out” as a Eurasian Sovereignist hardliner (he is clearly setting himself up for a future Presidential election and says all the “right things”), but about the Russian people which are now in what I call a full “WWII” mode (“Rise up immense country” and all that).  To the right is the kind of images now circulating on the Russian Internet and which expresses the awareness that Europe was never truly denazifed, at least not in the US occupied countries.

Russia is now determined to finish this ugly job, once and forever.  You want to “cancel Russia”?  In your dreams only, but Russia can, and will, “cancel Nazism” once and or all.  1000 years of that crap is enough!

From the first Crusades to the invasion of the USSR by the united Europe under Hitler’s command, the West has always has some kind of ideology to justify its wars of imperialist aggression.  The interesting thing is that now this is over and rather than justify is acts of aggression in the name of some putatively universal religion or ideology, the western elites (and, alas, much of its population) have now finally shown their true face which is:

  • Virulent anti-Russian racism in its purest form (again, Hitler would be proud)
  • Pure and overt Satanism under the label of “Woke” ideology (the last western ideology it appears) with its focus on the destruction of the family and, especially, children (Satanists know that they cannot do anything against the Creator of all, hence they try to take out their hatred and revenge against His creatures, especially children)
  • Overt and even “in your face” hatred to any and all who oppose that agenda (as the French revolutionary Louis Antoine de Saint-Just famously declared “No freedom for the enemies of freedom“, right?!)

The truth is that the real West, the one born from the Middle-Ages (and *not* from the Roman or Greek civilizations!) has always been ruled by cynical, evil, thugs.  In the past, these thugs always concealed their real worldview and agenda under all sorts of pious pretexts, now its only “ideology” left is pure hatred and wokism (same thing, really).

I submit that it is impossible to predict what will happen in the coming months and years – there are simply too many variables which can dramatically affect our future.  What began as a special military operation (as opposed to a combined arms operation) has now morphed into what one could call WWIII or even WWIV (depending on your definitions).  This war will last for several years unless, of course, the Neocons and their associated crazies in the EU get their way and trigger a nuclear conflict: in the latter case it will be short and very final.

Right now the focus is on the Donbass and the southern Ukraine, but we have to understand two things about this:

  • The Ukronazis and their NATO bosses have already long lost that war, and all the West and its Nazi puppets in Kiev are doing is trying to prolong this unwinnable war for as long as possible to get a maximum number of Ukrainians killed or maimed and to destroy as much of the Ukraine as possible and make Russia “pay the highest price” for her (quite inevitable) victory on the battlefield.  What a paradox!  The Russian “aggressors” are trying as hard as they can to save as many Ukrainians as possible (even at the cost of their own lives!) along with whatever is left of the Ukrainian infrastructure after 30 years of “independence”, while the western “defenders” and even “allies” of the Ukraine want to turn it into a desolate moonscape covered with corpses.
  • This is not a war about the Ukraine, at least not anymore, this is now a war for the future of the European continent and even the future international order.  As I have said many times already, the Russians fully intend to denazify at least all of the European continent, preferably by economic and political means but, if needed, by military means too.  Why?  Because the West has left Russia no other choice.  For Russia and, I would argue, all of Zone B the choice is both stark and simple: true and full sovereignty (economic, of course, but also cultural, spiritual and civilizational) or subjugation.

In other words, this is not a war Russia can afford to lose and the Russian people know it.

Last time around, Russia lost about 27 million people while China lost about 35 millions.  That a total of 62 million people, about two thirds of which were civilians.  Keep these figures in mind when you look at the quick and quite radical modernization of the Russian and Chinese armed forces (btw – the Chinese people also “get it” and they fully support Russia, as does the Chinese leadership, even if they try to keep a low profile for the time being and let Russia carry the burden of being on the frontline of this war: simply put, the Chinese are buying time which, frankly, they still need to achieve parity, or better, against the US and its protectorates in Asia such as Taiwan, Japan, ROK or Australia.  The Russians also understand that as they themselves were in a similar position between 2000 and 2018.  But they know that the Chinese Dragon will have to fully “wake up” sooner rather than later.

Yeah, I know, most folks in the West don’t know that, or don’t care, but the point is now what the folks in the West do not know, but rather it is what the people of Russia and China know and understand quite well.  Only an utter fool would doubt or disregard the kind of determination which sits deep inside the souls of the Russian and Chinese people to never allow the West to subjugate them again.  Ever.

[Sidebar: yes, I know, the Japanese Empire which attacked China was not part of the West (yet), but that is an extremely superficial argument which fails to understand that it was precisely western imperialism which created the conditions, in both China and Japan, which resulted in the Japanese imperialist attacks against the entire Asian-Pacific region!]

The above does not even begin to cover all the amazing developments which have taken place in the last few months.  Not only have there been truly huge changes INSIDE Russia (and they are only accelerating), but also in Latin America, Africa and the Middle-East.  And I will revisit all these topics in about a month or so, when I will come back to full-time blogging.  Besides, in a month or so many of the things I mentioned above will become even more obvious for all to see so rather than trying to establish “fact X” we will be able to actually discuss and analyze it, its reality having been quite established.

[Sidebar: please remember who told you the truth and who lied to you over the past months.  There were many, many such liars, ranging from the official propaganda machine (aka the “free press”) to the “Putin has lost it all” emo-Marxists and assorted 6th columnists who, whether they understood it or not, served the purpose of the Empire’s PSYOPs.  Also please remember that Andrei MartynovBernard and Gonzalo Lira not only spoke truthfully, but they were right and their detractors totally wrong.  We all owe them an immense debt of gratitude!]

Frankly, before my forced break, I was getting really frustrated trying to prove to misinformed or even fully brainwashed commentators that the official narrative (produced by the biggest strategic PSYOP in history) was a load of bull, based on lies and/or on a total “misunderstanding” (and I am being kind here!) of the real world outside the “mental Zone A”.  Now most of that narrative has collapsed.

I am also confident that a month from today, things will be even more obvious than they are today.

So, my friends and readers, I leave you in the (very competent) hands of Amarynth, Herb and the rest of the Saker team and I very much look forward to my full return, God willing, in a month or so.

Kind regards to all, and many thanks for your support!

Andrei

PS: yesterday I was re-watching the superb movie by Costa Gavras “Z” which, at the end, lists all the works of art, literature, music, etc. which the (US CIA backed) Greek “colonels” banned and I thought to myself: “what leftist director would make such a movie today about how the entire West is now doing the same with all things Russian?“.  None, of course.  I also noticed the sweet irony of Costa Gavras’ movie being called “Z” (which in Greek stands for “Ζει” or “he lives”) and I wondered if the copyright owners of the movie will now have to rename it since the letter “Z” is now banned amongst doubleplusgoodthinking russophobes.  Finally, there are some in the West who want to create two categories: “good Russians”, who are expected to publicly denounce their country and President, and “bad Russians” who refuse to do so.  Hitler wanted Jews to wear a star of David, so could we see a day when “bad Russians” in Zone A will be told to wear a “Z”.  Right now, no T-shirt or mugs printing companies in Zone A will accept to print a “Z” on their items (I know, I tried and failed!), but considering the collective rage and insanity of the western ruling elites, maybe the letter “Z” will become obligatory for “bad Russians” in Zone A?  Just kidding, of course, but rewatching the movie “Z” felt quite eerie anyway.

Let’s Not Obsess Over Julian Assange’s Job Title, but Consider What Is the Real Story About His Extradition

June 23, 2022

By Martin Jay

Source

Assange will battle on now with an appeal against the UK decision to extradite him to the U.S. It’s time now for his own team to play the same dirty game which they have fallen victim to and forget about the foibles of journalists and the media

Is Julian Assange a journalist or a publisher? It’s a divisive question which usually draws the wrath of an entire legion of on-line haters, mainly in Australia, who assume the author is attacking the founder of Wikileaks and so rationale is lost to nationalistic vitriol and score settling. The so-called supporters usually fail to see how if that energy was put into campaigning rather than just letting off steam on Twitter against total strangers, then Assange might have a chance of attaining something akin to justice.

A gripping interview recently between George Galloway and the former UK ambassador Craig Murray, who I seem to recall on Twitter once used to call himself a journalist based simply on writing blog posts, is worth a watch. Murray points out like an erudite hack he yearns to be, a number of pertinent issues which might have escaped the attention of media who are apparently incapable in the UK of reporting on the Assange affair diligently – namely that the U.S. spied on Assange while he was in the Ecuadorian embassy and then, amazingly, stole all of his evidence which he was keeping with him, the moment the UK police went in and arrested him. This alone he argues, would be enough for any court in the free world to throw the case out. He also argues that in the past decade or so the relationship between the British press and the establishment – read intelligence community – has never been so partisan which is another reason why Assange’s case is not being treated correctly. Yet Murray refers to Assange as a “publisher and a journalist” which is interesting as the case against Assange, if he is to be deemed a journalist, will have wide ranging implications to regular journalists if won by the U.S. – i. e that the Americans win their legal battle in the UK to extradite him on what they believe are essentially spying charges. If Assange is to be called a journalist by his supporters, then does it follow that the legal basis against him will be one of a journalist who has brought the profession into disrepute? Shouldn’t the journalists on the Guardian who published the polemic material that Assange and Wikileaks gave them, also be facing U.S. extradition for being partisan to publishing material, which in a third world country, would no doubt be deemed “likely to threaten the stability of the state”.

But the U.S., although a young country, is not a poor one and we are led to believe a great democracy. The case against Assange, no matter how vile it is, we should not forget is about his role in obtaining and disseminating state secrets. Journalists will no doubt follow the case with eagerness as many will wonder if they will face the same treatment if they handle a document which is protected by the UK’s official secrets act, which is why so many are part of the hue and cry about it being a dark day for journalism. They will reflect on how they will be arrested and extradited if they handle such ‘documents’ even if they are British subjects living in the UK.

Yet the case against Assange is surely about more than merely publishing the incendiary cables which exposed America’s dirty wars but in the role that he played in assisting Chelsea Manning in obtaining them. It is also about point scoring with Russia as the U.S. believes that Assange also leaked the Clinton emails, which played a decisive role in Trump winning the U.S. presidential race in 2016 against the odious former First Lady and Secretary of State.

The problem that Assange – or his supporters have – with the ‘journalist’ argument which points out the harm the case will do towards the fourth estate is flawed twofold. Firstly, the fear has already been installed by the UK and U.S. governments towards journalists who handle contentious documents which reveal state secrets about conflict, for example. And secondly, the respect and reverence that people placed on the profession of journalism is so little that it is hardly surprising the shameful role that the UK press has played recently in failing to rally behind Assange.

Assange’s people almost put the final boot in, when it comes to destroying the credibility of the press by calling him a journalist (out of respect) when even his own wife calls him a publisher. The distinct ubiquitous lack of respect towards bona fide journalists and their work, which is more often than not tedious, repetitive and pretty mundane, perhaps is linked to a more modern idea that anyone with a laptop who writes a blog can call themselves a journalist – and underlines the lack of credibility that media has in general, which we can see when its workers come under fire.

Of course the arrest of Assange in the first place is wrong on so many levels. As one of his many journalism awards he won by media institutions points out though he is not a journalist but more an enfant terrible of the media bubble who delivers the explosive brown envelope with the grainy photographed photocopies of documents which can easily bring down a government or even the neo-liberal new world order. It is more about the thief who breaks into the house and cracks the safe, rather than the actual items he has taken, in the U.S. mindset.

Institutions which dish out press awards often give them to non-journalists. It’s the fashion. But when you glance at the awards themselves, it’s not hard to see the political ardour behind them. Many of his awards are for “contribution towards journalism”, “activism”, “human rights” or even “defenders of the right to information” etc and only confirm his important role is supplying journalists with the material that they couldn’t lay their hands on themselves. Perhaps this makes him a subject of jealously and vitriol, which might explain how the Guardian stabbed him in the back when he wanted to share his work with the New York Times or when their editors clashed with him when he (Assange) wanted to scan documents to blank out names to protect those whose lives could be threatened once going to press, if we are to believe Murray’s claims (there are equally a great many who claim that Wikileaks compromised lives by not protecting identities with the rush to publish).

We should never forget though that the U.S. and UK government both have an impressive loathing of journalists and so if this narrative of being one and exercising free speech etc is sustained, many will argue that it is a dead end and will only end badly – perhaps this is why his wife referred to him in a BBC interview as a “publisher”. Assange may well be a genius, but he never sat down and wrote a regular article for publication with his own explosive material in front of him. Perhaps he never had the patience for journalism or the time. We should follow his wife Stella Moris’ lead and call him a “publisher” and leave the whole journalism and free speech debate alone as, in reality, hardly anybody these days gives a shit about such notions – except politicians who harp on about them but then turn their back on such lofty ideas the moment a journalist digs up some shit on them. One tends to think of labour leaders like Neil Kinnock in the past. These days however few politicians even jump on this bandwagon as they know that hardly anybody really cares about this subject, although it is interesting that the current Labour leader Keir Starmer has an odd obsession with Assange whose revelations tarnish Tony Blair and his labour party’s time in power.

Perhaps Assange’s team and his supporters should spend more time absorbing themselves with the notion of the politics of his case as surely therein lies the heart of his extradition being annulled. Every time I see an article in the UK press about the implications of the Assange against journalists, I want to cry as this is the conscious reckoning which journalists and politicians effect to kid themselves that they have done something to help Assange, when in reality they are merely helping the Americans with their dirty game to get Assange to a jail in the U.S. where almost certainly he will be assassinated just as Epstein was in his cell. The only way Assange can hope to get a really fair trial with his appeal is if politicians like Boris Johnson and others feel that they will lose their support and the history books will be unkind to them. Politics is a dirty game and no one knows that more than Assange. Such a shame that there aren’t enough supporters who are prepared to play the same dirty game. Or not even one journalist in Fleet Street who is prepared to lose his job and be singled out for putting his weight behind an online campaign from the media itself which would spook the political establishment.

Myths from the Past and the Third Incarnation of Russia since 1721

June 22, 2022

By Batiushka

The First and Second Incarnations of Russia

The Russian Lands existed for well over a thousand years before 2022 and took on many highly significant political and geographical forms. These could be described at another time; here we do not have space. However, in the last 300 years, between 1721 and 24 February 2022, they had known only two incarnations: The Russian Empire (1721-1917), and the Soviet Union with the Post-Soviet Russian Federation (1917-2022). The USSR and its totalitarian faults are fairly well known in the West, but even here the West still refuses to believe in the many ‘Soviet’ social virtues, its free medicine, education and culture, which were all inherited from the Empire. The West has blinded itself with its own anti-Russian (disguised as anti-Communist) propaganda. The continuation of a weakened USSR in the Post-Soviet Federation was initially loved by the West, as it was its own creation. Indeed, in many respects the post-Soviet Federation appeared to have adopted the worst of the West and rejected the best of the Soviet Union. By reaction, some suggested that the Federation should return to the USSR. That was never on the agenda. That was an experiment that had failed. On the other hand, the idea that the Federation would become just another Western chimpanzee like Japan was never going to happen either. The Russian Lands have their own identity, their own civilisation.

On the other hand, the Russian Empire is virtually unknown in the West, as the West still believes its own ignorance and lies about it. After all it was the West which destroyed it, with the help of internal traitors and decadent aristocrats, who cruelly exploited the poor and so guaranteed the fall of the Empire. Unsurprisingly, many of these traitors soon afterwards emigrated to the West, given the disaster that they had created in Russia with Western backing. We will therefore spend some time below disillusioning those who still believe in the racist Western/Soviet propaganda stereotypes of ‘tyrannical Asiatic autocracy’, ‘backward obscurantism’, which kept its people in a state of poverty and ignorance. The condescending West said: ‘If only they had been like us clever Western people, all would have been well’. We will look at these realities (1) firstly because they are so little known and many still actually believe in the myths, and secondly because the positive aspects of the pre-Revolutionary Empire are at the heart of the USSR and will also be at the heart of today’s Third Incarnation (see further). Below we look at the real Russian Empire.

The Economy

In the 20 years before 1917 the population of the Empire increased by 62 million, some 50%. It was a time when industrialisation and modernisation accelerated very sharply. National income and productivity increased at a rate unrivalled anywhere else in the world and the budget increased threefold. Personal taxation in the Russian Empire was half the level of that in France and Germany and a quarter of that in Great Britain.

Average earnings were higher than those in any Western European country, less only than those in the USA. Prices were among the lowest in the world and inflation and unemployment were practically non-existent. Thanks to the monetary reform that the Tsar personally insisted on carrying out in 1897, the rouble was guaranteed by gold. The Empire had the largest gold reserves in the world and the Russian gold rouble remains one of the safest investments in the world.

Between 1890 and 1913 GNP increased fourfold. There was a fourfold increase in the extraction of coal and the production of cast iron, and a fivefold increase in that of copper. Between 1911 and 1914 investment in engineering increased by 80% and electrification had begun in many cities. In 1901 the USA extracted 9.9 million tons of oil, Russia 12.1 million tons. Between 1908 and 1913 productivity surpassed that of the USA, Great Britain and Germany. The Empire was the biggest exporter of textiles and one of the biggest of metals and engineering. Russia was on course to becoming the leading world economy by 1950, surpassing both Europe and the USA.

Infrastructure and Agriculture

The Trans-Siberian Railway was completed at the insistence of the last Tsar despite opposition. In 20 years the length of railways and telegraph networks doubled, indeed, the rate of railway construction was one of the highest in the world, the later Soviet rate being a mere fraction of it. Its locomotives were among the best in the world. This was why armoured trains appeared in Russia. The largest fleet of river ships in the world doubled in tonnage during that period. The plane industry was on a par with that of the American.

The car industry was in a similar situation to the German, Russian cars winning races at rallies in Monte Carlo and San Sebastian. Indeed, Mercedes and Daimler engines were invented by the Russian engineer Boris Lutskoy. Pre-Revolutionary Russia also invented: the wireless telegraph, the helicopter, the television, cine-news, the tramway, hydroelectric power stations, the electric plough, the submarine, the parachute, the radio, the electron microscope, the powder fire extinguisher, the astronomical clock, the seismograph, the electric omnibus, the flying boat, the icebreaker, the motorcycle, the airship and double-decker railway carriages.

Thanks to the Agrarian Reform, by 1914 100% of usable land in Asian Russia and 90% in European Russia belonged to the people. The Empire was the biggest exporter of cereals, flax, eggs, milk, butter, meat and sugar in the world. The wheat harvest was one third larger than that of the USA, Canada and Argentina combined. Cereal production doubled during the reign and the number of cattle increased by 60%. The Empire was also first in the world for the numbers of horses, cows, sheep and one of the biggest for the numbers of pigs and goats.

Social Justice, Health and Education

From June 1903 all employers in the Russian Empire were obliged to pay benefit and pension to all employees and their families who had suffered an accident. This amounted to between 50% and 66% of their salary. Trade Unions were formed in 1906 and from June 1912 compulsory health insurance at work was introduced to cover illness or accident. Social insurance legislation was introduced before other European countries and the USA. The US President William Taft declared that: ‘Your Emperor has created such perfect labour legislation which no democratic state can boast of’.

In 1898 the Empire introduced a universal medical welfare system that cost the tiny sum of one rouble per year. The Swiss hygienist Friedrich Erismann praised this system as ‘the greatest achievement in the world in the field of social medicine’. Russia was third in the world for the number of its doctors. The Tsar personally insisted on introducing economic reforms and measures against alcohol abuse, often in spite of the Duma. Alcohol consumption per head was one of the lowest in the world and the lowest in Europe outside Norway. In 1913 the number of mentally ill was 187 in every 100,000, compared to 5,598 per 100,000 in the Russian Federation in 2013. The number of suicides in the Empire was 4.4 per 100,000. In the Russian Federation in 2012 it was 19.5 and 12.1 in the USA.

Compulsory primary education was introduced in 1908, over a generation later than in the West. However, by 1916 literacy in the Empire had already reached 85%. By 1914 there were 150,000 students studying at university institutions. In terms of numbers of students the Russian Empire was joint third in the world with Great Britain. Another 300 million roubles was spent in 1913 on country schools, a budget up from 70 million in 1894. In less than 20 years the education budget rose by 628%. By 1913 there were 130,000 schools in the Empire with 6 million pupils. All education, primary, secondary and tertiary, was free.

The Internal Situation

The pogroms of the late nineteenth century and very early twentieth century, basically race riots, led to the deaths of nearly 3,000 people, about half of them Non-Jews and about half of them Jews. Similar to the Catholic-Protestant race riots in Northern Ireland in the late 20th century, some were started by one side, others by the other. There is no recorded instance of them being encouraged by the State, which built many large synagogues for the Jewish population. None of the pogroms occurred in Russia, but only in what are now Lithuania, Poland, the west of the Ukraine and Moldova. Many Jews lived there because they had been chased out of Western Europe by Anti-Semitism centuries earlier. Sadly, Western propaganda on this subject is still widely believed in the West. It is notable that where the race riots took place were the same places as where the Nazis received help from the local population when they invaded from 1941 onwards.

Another piece of Western/Soviet mythology is the ‘Bloody Sunday’ march in 1905. In this event it was revolutionaries who opened fire and troops defended themselves. There were 130 victims – not 5,000, as invented by Western propaganda. All victims were given immediate medical care. The Tsar was not even in the city at the time. When he learned of it, horrified, he sacked the officials who should have been in charge and at once gave each family that had suffered the enormous sum of 50,000 roubles from his personal money.

Crime was lower than in Western Europe and the USA. In 1908 56 people per 100,000 were imprisoned. In the Soviet Union in 1949 the figure was 1,537 per 100,000 and in the Russian Federation in 2011, 555, with 724 per 100,000 in the USA in the same year. There was a free press and freedom of speech, unlike in the West where strict ‘editorial policies’ (= censorship) were pursued. The Tsar never rejected a single petition for pardon. Fewer death penalties were carried out during his whole reign than in any single day in the Soviet Union until the death of Stalin.

International Relations

The Hague International Tribunal of Justice, suggested in 1898 to prevent wars, but derided by other European leaders, was the personal brainchild of Tsar Nicholas. If it had been implemented as he had wanted, there would never have been any First World War, let alone later wars. Thus, those who had derided it, notably the British and the Germans, signed their own death warrants.

When in February 1904 Japan, urged on, financed and armed to the teeth by the geopolitical imperialists of Great Britain and the USA, treacherously attacked the small and poorly-armed Russian Navy without first declaring war (as it later did at Pearl Harbour), it only took the non-militaristic Russian Empire eighteen months to recover. However, instead of continuing the war and crushing the by then bankrupt Japan militarily, Russia entered peace negotiations, but imposed such terms at the talks in the USA that Japan, forced to agree to them, went into mourning.

During the Great Patriotic War (as the First World War was then known) the Tsar constantly visited the Front. After less than a year, in 1915, given the incompetence of the former supreme commander, his arrogant and foul-mouthed uncle, he took on supreme command, against the advice of all, showing his strength of will. Russia began winning the greatest victories of the War, advancing huge distances and taking huge numbers of prisoners, for example the Tsar Nicholas Offensive, euphemistically known in the West as the ‘Brusilov Offensive’. This was undreamed of by the jealous Western Allies, who were bogged down in immobile and bloody trench warfare, where millions were dying. On the Russian Front, facing far more enemy troops, deaths amounted to fewer than 700,000.

The Armed Forces

In 1914 the Russian Empire was able to 2,000 engineers to help the USA at its request to set up a heavy armaments industry. The Russian Air Force, founded in 1910, was by 1917 the largest in the world, with 700 planes and by 1917 the Russian Navy, reformed and modernised after the dreadnought-armed Japan’s victories, was one of the strongest in the world. Had it not been for the treason of the Allies, of most of the aristocracy and many in the middle class, historians consider that Russia would have occupied Vienna and Berlin in 1917, thus ending the murderous war at least a year early and saving millions of lives. Over 95% of the 2,417,000 captured enemy soldiers returned home safely after the War.

Only 39% of males aged between 15-49 were mobilised in the Russian Empire, as against 81% in Germany, 79% in France, 74% in Austro-Hungary, 72% in Italy and 50% in Great Britain. Per 100,000 of its population, the Empire lost 11 people, as against 34 in France, 31 in Germany, 18 in Austria and 16 in Great Britain. (Reported very high Russian losses are propaganda myths of the anti-Russian West). The military reform was creating one of the strongest and best-equipped armies in the world, which would have been the best by 1917 if Germany had not started the First World War. It was the officers trained in the Imperial Army who in their forties and fifties won the Second World War.

Church Affairs and Culture

By 1913 the Russian Orthodox Church had 67,000 churches and 1,000 monasteries. It had great influence in the Holy Land, Asia and seventeen Russian churches had been built in Western Europe. The Tsar personally paid for the building of St Nicholas Cathedral in New York and ensured that the number of bishops in North America went from one to three. In 1916 there were plans to make sure that every Western capital would have a church and that the service-books of the Church would be translated into all the main Western languages.

Russian culture went through a period known as the Silver Age, with developments in science, philosophy, art, architecture, music and literature. The French writer Paul Valery stated that Russian culture at the beginning of the 20th century was ‘one of the wonders of the world’. Two of the five founders of Hollywood came from Russia. Chanel No 5 was invented by the Russian émigré Verigin.

The Third Incarnation

So much for the little-known past. Of course, there were many iniquities in the Russian Empire. Otherwise, it would not have fallen. The corruption of the parasitic aristocratic class (oligarchs) and the neglect of the working poor were too great. The gap was too large and the Tsar’s move to social justice did not go fast enough to keep pace with the challenges of rapid industrialisation. However, the positive aspects of the Empire and its huge advances and industrialisation, were retained by the Soviet Union. Despite the huge step backward wrought by the Civil War, Bolshevik persecution and artificial famines, by 1930 the USSR was back where Russia had been in 1916. Only in the last generation since the fall of the Soviet Union have those positive aspects been threatened. However, we will talk no more of the past, but of the future, of Russia’s Third Incarnation, of post-24 February 2022 Russia, the New Russia. This Incarnation has realised that it must keep the best of all previous Incarnations in order to survive and to move forward.

We are able to speak of this now only since the campaign of liberation of the Ukraine began on 24 February. Initially, this was launched to free only the Donbass and prevent the planned NATO-sponsored attack on it, set for early March 2022. This liberation campaign has been so successful that it has had to be extended. It seems certain now that all of Novorossiya (the east and south of the Ukraine) will be liberated, enabling Transdnestria to join the Russian Federation. However, given the continued aggression of the rest of the Ukraine and NATO threats from elsewhere, Russian military success may have to be extended.

Until the whole of the Ukraine is demilitarised, and it is continually being remilitarised by the West, the liberation cannot stop. Moreover, with potential threats from NATO-armed Poland and Lithuania towards Kaliningrad and from Romania towards Moldova, from arms shipments from Bulgaria, Slovakia, the Czech Lands and the Baltic States, especially from the US puppet-government in Lithuania, with threats from Sweden and Finland to join NATO, where will it stop? The West has to be freed from Nazism/woke liberalism (it is the same thing. As they say: there is nothing so intolerant as liberalism). True, Germany, France and Italy, their economies crippled by US-imposed, anti-Russian sanctions, are showing reason. This is unlike the laughable bluster coming from the militarily feeble Johnson-regime in the UK, which may well be toppled by popular internal discontent and a wave of strikes.

The Global Implications of the Third Incarnation of Russia

However, it is the economic aspect, with its international dedollarisation, of the Third Incarnation of Russia which is truly world-changing. In the light of the speech of Vladimir Putin at the Saint Petersburg Economic Forum of June 2022, we can say that Russia is returning to its historic path. It wants to leave aside the errors of the past, become a sovereign nation again and no longer be a Western colony. This is unlike the EU, which is clearly just a US vassal, both economically and politically. The future world order will be formed only by strong sovereign states, independent of the dollar and the massive debts of Western countries. These have been caused by their inflationary printing of money that is not based on real commodities such as cereals, oil, gas, minerals, metals, rare earth elements, fertilisers, timber, manufactured goods and gold.

The break with the West and the ‘obsolete geopolitical illusions’ of its elite’s superiority complex, essentially a form of Nazism, is irreversible. Russia will invest in internal economic development in microeconomic and macroeconomic terms, ensuring ‘technological sovereignty’ (which means for instance that Russia already has unique hypersonic missiles), encouraging free enterprise against bureaucracy, improving infrastructure, but also ensuring social justice, fighting against poverty and supporting the family, encouraging far more ‘families to have two, three or more children’. The ideal of social conservatism together with social justice is what is intended. Russia will also help nations in Africa and the Middle East to avoid Western-imposed famine. True, this is an ambitious programme for the future, but this Third Incarnation of Russia is beginning now.

Note:

1. As the definitive statistical source, compiled by my friend A. A. Borisiuk, see The History of Russia Which They Ordered to be Forgotten, Veche, 2018. This for the first time conveniently collates all Pre-Revolutionary, Soviet and Emigré Statistics (in Russian).

هل اقتربت الحرب العالميّة الثالثة؟

الثلاثاء 21 حزيران 2022

العميد د. أمين محمد حطيط

كان لافتاً ما جاء في كلام قائد الجيش البريطاني الى جنوده غداة تعيينه في منصبه الجديد و»تنبيههم» لا بل «إنذارهم» بأنهم سيجدون أنفسهم قريباً في خضمّ حرب عالمية ثالثة بدأت تتوالد عناصر اندلاعها بسرعة منذ اللحظة التي اندلعت فيها نار حرب برية في أوروبا لأول مرة منذ العام ١٩٤١، تحذير او تنبيه يطلقه المسؤول العسكري البريطاني في لحظات أوروبية وغربية وعالمية حساسة وحرجة وفي ظلّ مشهد أوروبي عملاني بدأ بالتشكل مع بدء العملية العسكرية الروسية الخاصة في أوكرانيا، مشهد يوحي تشكله بأنه يسير في غير الاتجاه الذي أراده أو شاءه المحور الانكلوساكسوني بقيادة أميركا ودفع أوروبا والحلف الأطلسي لاعتماده نهجاً وسلوكاً في مواجهة روسيا، فهل يصدق القائد الإنكليزي وينفجر الوضع الدولي حرباً عالمية ثالثة؟

في البدء لا يمكن لأحد أن يجادل في مسألة اتساع دوائر التوتر والاحتكاك في العالم، ولا يمكن أيضاً إغفال ما نجم على الصعيد الدولي من قواعد ومفاهيم جديدة بعد الحرب الكونية التي استهدفت سورية وأعقبت الانسحاب الأميركي الفوضوي من أفغانستان والأهمّ بعد الصورة التي ارتسمت دولياً اثر العملية الروسية الخاصة في أوكرانيا.

وإنّ مراجعة موضوعية شاملة لخريطة الاشتباك او النزاع الدولي تشي بأنّ منسوب التوتر العالمي بات في مستوى متقدّم بعد أن فشل الغرب بقيادة أميركية في تحقيق أهدافه التي اعتمدها وأعلنها منذ انحلال الاتحاد السوفياتي، ذاك الانحلال الذي أنهى الحرب الباردة لصالح أميركا التي خرجت منها منتصرة بغير كلفة تذكر، انتصار جعلها ترفع سقف طموحها وتتطرف في سياستها لتظهر كما قال رئيسها بوش الابن «بأنّ الرب اختارهم ليحكموا العالم ويسيروا به وفقاً للإرادة الإلهية». قول ترجم قاعدة جديدة في القانون الدولي أطلقتها أميركا واعتمدتها ضمناً الأمم المتحدة تقول بـ «الحق في التدخل الدولي الإنساني» الذي يستبيح سيادة الأمم والدول والشعوب، وتفرض أميركا إرادتها لأنها كما ادّعى رئيسها تترجم الإرادة الإلهية.

بيد أنّ أميركا ومعها الغرب الأطلسي عجزا عن تحقيق أهدافهما رغم ما اعتمدا في سبيلها من استراتيجيات متعددة بدءاً بـ «القوة الصلبة» مروراً بالقوة الناعمة، وصولاً الى القوة الناعمة الذكية والقوة الإرهابية المركبة، كلّ هذه الوجوه في استعمال القوة لم تؤدّ إلى إرساء النظام العالمي الأحادي القطبية، لا بل حدث شيء نقيض تمثل أولاً في الشرق الأوسط بقيام محور المقاومة الذي منع المحور الآخر من تحقيق أهدافه، وبشكل خاص أفشله في كلّ من سورية واليمن، وتبلور ثانياً في الجرأة الروسية في إطلاق العملية الخاصة في أوكرانيا والتي لها خصوصية تهز هيبة الأطلسي وفعاليته.

لقد أرادت أميركا ومعها الحلف الأطلسي الذي تحوّل بالسلوك العملي من حلف دفاعي، كما ينصّ ميثاق إنشائه الى تكتل عسكري هجومي عدواني تستعمله أميركا لتنفيذ سياساتها الاستعمارية وطموحاتها العدوانية ضدّ الدول والشعوب. أرادت أميركا أن تجرّ روسيا الى حرب تستنزف فيها قدراتها وتكسر هيبتها وتشلّ اقتصادها وتشطبها عن المسرح الدولي باعتبارها دولة من الصف الأول لتحوّلها الى دولة شبه إقليمية عاجزة محاصرة، فردّت روسيا بعمل عسكري مدروس يدفع عنها الخطر ويجنّبها الوقوع في الفخّ الذي نصبته أميركا لها في أوكرانيا.

لقد عرفت روسيا كيف تستغلّ الظرف الدولي وتتعامل مع نتائج الحروب الأميركية في العالم وبخاصة الحرب الكونية التي استهدفت سورية وعجزت أميركا عبرها عن إسقاط الدولة او تفكيكها أو جعلها في الموقع الذي تريده، عرفت روسيا كيف تقتنص الفرصة لتظهر قدرتها على المواجهة وشجاعتها في القرار وعدم تهيّبها أو خوفها من التهويل الغربي، ووضعت خطة التعامل مع التهديد الأطلسي من الباب الأوكراني تمكنها من العمل المسيطر عليه، وتمنع انزلاقها بعيداً الى حيث يريد العدو، وها هي بعد أربعة أشهر من بدء العملية وعلى أبواب نهاية المرحلة الثانية منها تستطيع، أيّ روسيا، أن تدّعي وبموضوعية أنها أنجزت معظم ما ذهبت الى تحقيقه هناك والأخطر مما في الأمر أنها فضحت العجز الغربي، وأسّست لواقع دولي لا يناسب في شيء أحلام أميركا وأتباعها من شركاء أو حلفاء.

لقد شكلت نتائج العملية الروسية الخاصة في أوكرانيا حتى الآن صفعة للغرب وجعلته يعاني مما هدف الى دفع روسيا الى المعاناة منه، يعاني من الاستنزاف المتعدّد الوجوه، ومن الاختلال في دورته الاقتصادية، والتصدّع في علاقاته البينية حتى تشكل على الأقلّ محوران فيه المحور الانكلوساكسوني الذي يدعو الى إطالة أمد الحرب في أوكرانيا وإحداث بؤر توتر جديدة أيضاً مع التهويل بالحرب العالمية الثالثة، ومحور لاتيني جرماني يقرّ بالنتائج السلبية عليه للأزمة الأوكرانية وبعجزه عن الاستمرار في تغذية الصراع وتقديم المساعدات لأوكرانيا لمواجهة روسيا، ويدعو للتسليم بهذا الواقع والذهاب الى التفاوض الذي ينهي الحرب بعد الاستجابة للمصالح الأمنية والاستراتيجية الروسية.

ورغم واقعه غير المريح فإنّ المحور الغربي الانكلوساكسوني يرى انّ الأزمات الدولية تفرخ كالفطر وانّ حرباً عالمية ثالثة بات لا بدّ منها لحسم النزاعات وإرساء استقرار المنتصر في الحرب كما فعلت الحرب الثانية نوعاً ما، لكن هذا المحور الذي يهوّل بالحرب تلك ينسى او يتناسى انّ ظروف المواجهة العالمية لم تعد تخدم أهدافه في ظلّ متغيّرات أساسية ثلاثة تحكم أيّ مواجهة مستقبلية، أولها تنامي نزعة المقاومة القوية الفاعلة لدى الدول والشعوب المناهضة للغرب، وثانيها كسر احتكار الغرب لمصادر التسليح، وثالثها عجز الغرب عن التحكم بمصادر الطاقة العالمية. متغيّرات يقود الأخذ بها الى القول بعدم مصلحة الغرب في أيّ حرب ثالثة لأنها إذا وقعت لن تفضي رغم ما ستحدثه من تدمير هائل مع إمكانية تحوّلها الى مواجهات نووية، لن تفضي الى انتصار الغرب فيها.

وعليه نقول انّ بؤر التوتر الدولية رغم تعدّدها وتكاثرها من تايوان شرقاً الى الشرق الأوسط غرباً وأوكرانيا شمالاً مع ما يحتمل ظهوره من الجديد منها، فإنها تبقى دون مستوى القدرة على إحداث حرب عالمية ثالثة في ظلّ المتغيّرات الثلاثة التي ذكرت؛ ويضاف إليها التراجع الحادّ في الوضع الاقتصادي الدولي بشكل عام والوضع الأوروبي والأميركي بشكل خاص، لذلك نرى انّ البديل للحرب الثالثة هو النزاعات المتفرّقة والمتزامنة التي تتبادل التأثير دون أن تتطوّر الى صراع واسع يشمل المعمورة تحت عنوان حرب عالمية ثالثة. وانّ التحذير البريطاني الانكلوساكسوني جاء للتهويل وإظهار القوة والجهوزية وهما غير موجودين في عالم الحقيقة الفعلية الغربية.

وعلى هذا الأساس لن نستغرب كما لا نستبعد انفجاراً ميدانياً هنا او اندلاع نار هناك خاصة في قارات العالم القديم الثلاث، ولا نستبعد صراعاً أو حرباً محدودة على الطاقة او المياه او الغذاء لكن كلّ ذلك سيبقى تحت سقف السيطرة المعقولة، لأنّ الدول الأقوى عسكرياً في العالم والتي تملك السلاح النووي وتهدّد باستعماله حفاظاً على وجودها تعلم أيضاً حقائق ثلاث أوّلها حجم التدمير الهائل المتبادل في أيّ حرب عالمية شاملة، تدمير قد يكون من طبيعة الإفناء للبعض، وثانيها العجز عن الحسم وفقاً لإرادة المهاجم، وثالثها العجز عن السيطرة على دورة الاقتصاد العالمي. ومع استبعاد هذه الحرب والقول بتواصل النزاعات المتفرّقة لا بدّ من الانتباه الى انّ الخاسر في الشأن هو الذي كان يطمح للسيطرة الشاملة وسيجد نفسه في نهاية المطاف يفقد الجزء الأكبر منها مع تقدّم الدول والشعوب الصاعدة التي تكتب تاريخاً مناقضاً لتاريخ الاستعمار بوجهيه القديم والحديث.

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*أستاذ جامعي ـ باحث استراتيجي.

IAEA claims Iran is preparing to increase uranium enrichment

The only activity Iran has confirmed is the ‘passivation of the cascade, a process that precedes enrichment and also involves feeding UF6 into the machines’

June 21, 2022

A uranium enrichment centrifuge cascade. (Photo credit: US Department of Energy/The LIFE Picture Collection/Getty Images)

ByNews Desk

According to an International Atomic Energy Agency (IAEA) report obtained by Reuters, the Islamic Republic of Iran is allegedly preparing to increase nuclear enrichment with advanced centrifuges at the Fordow underground nuclear facility.

The Reuters report, released on 20 June, cites IAEA allegations that Iran is getting ready to use advanced IR-6 centrifuges at the Fordow facility. The report states such centrifuges allow operators to easily switch between enrichment levels.

This is one of many gradual steps Iran has stated it will carry out in retaliation for Washington’s unilateral withdrawal from the 2015 Joint Comprehensive Plan of Action (JCPOA) under then president Donald Trump, as well as the subsequent US sanctions placed on Iran regularly since then.

The IAEA alleges that Iran is “ready to feed uranium hexafluoride (UF6) gas, the material centrifuges enrich, into the second of two cascades, or clusters, of IR-6 centrifuges installed at Fordow,” according to the report.

The only activity that Iran has directly confirmed, according to the report, is “passivation of the cascade, a process that precedes enrichment and also involves feeding UF6 into the machines.”

Iran has not confirmed as to what purity the cascade will enrich to. In the past, Iran had informed the IAEA that IR-6 cascades can enrich either 5 percent or 20 percent purity.

The Fordow nuclear facility was targeted for a sabotage attack on 15 March, but the Islamic Revolutionary Guard Corps (IRGC) thwarted the plot, which they claim was orchestrated by Israeli spies.

On 17 June, Iran informed the IAEA that it is moving some of the nuclear activities from the facility in Karaj to the facility in Natanz, despite not having an obligation to disclose this information.

The Karaj facility was subject to a sabotage attack in June 2021, which damaged several cameras. Iranian authorities asserted that Israel was behind the attack on the site infrastructure.

On 9 June, Iranian media reported on the expansion of the production and installation of advanced IR-6 centrifuge networks in the underground Natanz nuclear facility.

The decision to expand came one day after the IAEA Board of Governors passed an “anti-Iran” resolution introduced by the US, UK, France, and Germany.

The head of the AEOI, Mohammad Eslami, said on 9 June that the IAEA has been hijacked and is being exploited by Israel.

The anti-Iran resolution was adopted just days after IAEA chief Rafael Grossi traveled to Israel to meet with outgoing Prime Minister Naftali Bennett.

Israel has a semi-secret arsenal of several hundred atomic weapons. Its nuclear program – which includes both commercial and military applications – is not subject to inspections nor scrutiny by the IAEA.

In response to the US-backed IAEA resolution, on 8 June, Iran shut down several IAEA-owned CCTV cameras that surveil the activities of Iran’s nuclear facilities. The Iranian foreign ministry stated that their response was “decisive and appropriate.”

The Islamic Republic has previously presented evidence that the IAEA sends in spies and saboteurs under the guise of nuclear inspectors, who allegedly pass sensitive information on to Iran’s adversaries.

Skepticism towards the neutrality of IAEA also increased after the assassination of Iranian nuclear scientist Mohsen Fakhrizadeh.

Andrei Martyanov: Artillery of June

June 20, 2022

Please visit Andrei’s website: https://smoothiex12.blogspot.com/
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‘Nothing Will Be As Before’

June 20, 2022

Source

By Batiushka

Western Europe and North America are now in dire economic straits. Four EU leaders, from Germany, France, Italy and Romania, have just been to Kiev to plead with Zelensky to start negotiating again and make territorial concessions. The Western media did not much report on the fourth Romanian/German leader, Klaus Iohannis, and showed few photograph of him; possibly because the racists who work in the Western media despise Romania (https://www.bing.com/news/search?q=Romanian+Leader+In+Kiev&qpvt=romanian+leader+in+kiev&FORM=EWRE). What they all forgot to mention is that Russia has no need to negotiate and, given the way that it has been treated since 2014 (indeed, since 1991), it is not going to make concessions.

The EU leaders once more made the illusory promise that the Ukraine might soon become a candidate for EU membership (despite the Dutch veto), if it restarts negotiations. This old carrot dangled before the Ukrainian donkey is irrelevant. The EU has more than four countries and four leaders, whatever promise that the Ukraine may become an EU member in 20 years time. Long before that, there will be no Ukraine and probably no EU. The day after their visit, the Johnson clown went to Kiev too, though we do not know what he spoke of. Presumably, he just wanted to show that the UK is a ‘Great Power’ – like the EU?

It is all too late. Negotiations on the Donbass failed for eight years because the West forbade them. They failed again last March in Belarus and Istanbul, for the same reason. The West in its arrogance believed that it could crush Russia using its Ukrainian cannonfodder. This has been displayed for nearly four months now by the reports of State propaganda mouthpieces like CNN, the BBC etc. with their nonsense that President Putin is dying and that Russia is running out of fuel and ammunition! Wishful thinking all the time. Originally Russia just wanted to liberate the Donbass. However, pig-headedness in Kiev means that they will now be forced to take control of the whole country – and perhaps more, if aggression from outside the Ukraine continues. It was all so unnecessary…

The West cannot go on with its suicidal and illegal sanctions against Russia – or rather against itself. The lack of oil, gas, fertilisers and essential raw materials is biting. Inflation is taking off all over the West. In the UK a wave of strikes is threatened. The incredibly unpopular Johnson’s days are numbered. The only problem for Russia is that the rouble keeps rising. Despite interest rate cuts from 15% to 8.5%, the rouble is again at 56 to the dollar. Clearly, further Russian interest rate cuts are, forgive the pun, in the pipeline. Meanwhile, African and Asian leaders have told Zelensky to stop fighting. They want grain (https://news.mail.ru/politics/ 51814770/ ?frommail=1).

Of course, it is true that many of the West’s woes began well before this year, not least with the absurd and totalitarian ‘covid’ restrictions from 2020 on, which bankrupted many companies and led to it printing ever more money and to ever higher and unpayable debts. The West is desperate for the conflict in the Ukraine to end before the autumn cold sets in. Otherwise there are going to be popular revolts in Western countries, with scenes of looting on the streets.

Western arms, usually third-rate from stocks anyway, are making hardly any difference in the Ukraine. Most, together with munitions, get destroyed before they can be used. Much that has been promised cannot be used because it will take months to instruct Ukrainians on how to use them. The rate of attrition of the Kiev Army, up to 1,000 a day according to Kuleba, the Kiev Interior Minister, is simply unsustainable. Once the fortifications in the Donbass, built by Kiev and NATO over the last eight years, have been overwhelmed, there will be a clear run to Odessa, Transdnestria, Kharkov and Kiev or indeed anywhere that Russia wants. This could happen soon.

Yesterday, the Russian Ministry of Defence released figures on mercenaries (https://news.mail.ru/incident/51803470/?frommail=1). The picture is dismal for the Ukraine. Of some 6,000 mercenaries in the Ukraine from 64 different countries, some 2,000 have been killed and some 2,000 have fled. Perhaps they thought that they were going to fight in a Third World country, where the enemy just had Kalashnikovs and not world-beating hypersonic missiles? How long the remaining 2,000 or so will remain alive remains to be seen.

Poland supplied the greatest number of mercenaries, with 1,831. Presumably as with other countries like Canada (601 mercenaries), USA (530), Romania (504), Germany and France, the majority of these were actually Ukrainians who have lived outside the Ukraine for some years, rather than native people. In third place for mercenaries from Europe comes the UK with 422, of whom 102 have been killed and 98 have fled. According to General Konashenkov who released the figures, the number of mercenaries coming has stopped and indeed been reversed. It is too dangerous to stay and get killed in the Ukraine.

This leaves the two foolish British mercenaries, not killed in action with the 102 others, but taken prisoner. And also it leaves two captured US mercenaries. There is speculation that the British might plea for their release in exchange for Julian Assange. That would upset the Americans. On the other hand, the British mercenaries, Eslin and Pinner, have already been sentenced to death. If that sentenced is carried out, it is going to make Johnson even more unpopular than he already is. Perhaps that is why Johnson went to Kiev to plead.

Thus, the first or military stage is coming to an end and should be over later this summer. However, this is only the start. The New Ukraine has to be formed. Then there is the demilitarisation and denazification of the rest of Eastern Europe. And there is the economic war, declared by the West, to be finished. On 17June at the International Economic Forum in his native Saint Petersburg, President Putin said:

‘After the Cold War the USA declared itself to be the emissaries of God on Earth, without any responsibility, only with interests….Today’s changes in economics and in international politics are tectonic and revolutionary. The Western elites are in a state of delusion, clinging on to the shadow of the past and denying changing reality…Nothing will be as before…The EU has definitively lost its political sovereignty. The current situation in Europe will lead to an outburst of radicalism and in the probable future a change of elites’.

Here is the future.

Sitrep Operation Z: 💥 Theme Kalibr Kaboom!

June 19, 2022

Source

By Saker Staff

This is about the most significant of the last two quiet days. But the silence is over. Some may remember that Military Summary said about two days ago, that there is little to report as there is very little movement on the front. Wait for it, I think we now know why.

Let’s take some extracts, somewhat cleaned up, from the Russian MoD report today which is noticeably longer than the previous reports.

https://t.me/mod_russia_en/2282

https://t.me/mod_russia_en/2283

At 12.30 PM, Kalibr high-precision long-distance sea-based missiles were launched at a command post of the Ukrainian troops near the village of Shirokaya Dacha (Dnepropetrovsk region).

At that moment a working meeting of the commanders of the Aleksandriya operational-strategic group was in progress.

More than 50 generals and officers of the AFU was eliminatedThis included the General Staff of the Kakhovka group, airborne assault troops and units that operate towards Nikolayev and Zaporozhye.

(Also confirmed by RT: https://www.rt.com/russia/557428-50-ukrainian-generals-officers-killed-russia/ )

▫️At 08.20 AM, Kalibr high-precision long-distance missiles destroyed 10 M777 155-mm howitzers and up to 20 armoured combat vehicles delivered by the West to the Kiev regime over the past 10 days that were located in a transformer plant in Nikolayev.

And further on in that same report, we see the results of AFU friendly fire, destroying about 40 of their own.

❗️Big losses of the AFU in manpower force the Ukrainian command to involve unprepared personnel in combats, despite their lack of necessary skills in using armament and military equipment.

▫️At 01.30 PM, 2 Su-25 assault fighters of the Ukrainian Air Force launched an attack at the positions of its units near Shirokoye (Dnepropetrovsk region).

Mr Putin’s world changing address at the SPIEF supplies another KABOOM with his announcement that The era of the unipolar world is over. The future world order, currently in progress, will be formed by strong sovereign states. This is nothing less than declaring victory.

As to the front line, after checking a number of sources, Military Summary from end of the day yesterday still brings the most accurate details.

Do go and read the two sections of the Russian MoD report. It is quite stunning. And then for some color, scroll through Intel Slava Z – https://t.me/intelslava/31469

And for a laugh, see Liz Truss: ❗️UK Foreign Office Says Ukraine Should Return to Negotiations with Russia https://t.me/rtnews/25747

(How the worm has turned and how are they trying to rescue something from their failed operation!)

As to the future, we have the head of the DPR Denis Pushilin:

🇷🇺Russia and the republics need to liberate the whole of Ukraine, including Kiev and Lviv, says Denis Pushilin at SPIEF-2022.

So, now we know what the thinking is and we know why it was quiet for two days. I do not put it beyond the realm of possibility that the Russian MoD has new instructions, and this already is being acted upon in terms of current actions, shaping future actions. This war is not over unless the Ukraine collapses or further tranches of 50 at a time command and control of the AFU gets taken out with one fine Kaboom of a Kalibr.

Foreign Minister Sergey Lavrov’s interview with the BBC TV channel, St Petersburg, June 16, 2022

June 18, 2022

Ed Note:  This transcript is not complete and we will issue an update when it is completed.  We post it now because of the renewed DDoS attacks on Russian infrastructure.

In addition, Mr Lavrov had two more quite serious interviews.  They are available here:


https://www.mid.ru/en/foreign_policy/news/1818228/

Question: Did President Putin, before taking the decision and announcing the start of what he calls a special military operation, consult you on whether he should?

Sergey Lavrov: Every country has a decision-making mechanism. In that case, the mechanism existing in the Russian Federation was fully employed.

Question: Did he consult you?

Sergey Lavrov: Again, there are things we do not speak about publicly. There is a mechanism for taking decisions. It was followed in full.

Question: I am asking because you have been foreign minister for 18 years, and invading a sovereign neighbouring state is a foreign matter. The President surely assumed that there would be international repercussions. I thought he would consult you.

Sergey Lavrov: You are an experienced journalists well-aware of the realities in Russia, around Russia, and in the post-Soviet space. Your question seeks to cancel everything prior to February 24 of this year. For eight years, we had been promoting the necessity of implementing the Minsk agreements, unanimously endorsed by the UN Security Council, with the help of our intelligence agencies, Foreign Ministry, and Defence Ministry.

Throughout those eight years, we were insisting that Donetsk and Lugansk (which initially, as you may remember, in 2014, declared their independence in response to the neo-Nazi coup d’etat in Kiev) should sign the Minsk agreements, which guaranteed Ukraine’s territorial integrity and sovereignty. When nowadays Chancellor Olaf Scholz claims that Russia must be forced to reach agreements with Ukraine, agreements that would respect the territorial integrity and sovereignty of the Ukrainian state, I have a feeling that he is not of this world but someone from “outer space.” Because all those eight years we were trying to ensure the implementation of agreements which guaranteed the territorial integrity of the Ukrainian state.

Question: But the situation changed four months ago …

Sergey Lavrov: The situation has not changed. We are going back to what the Minsk agreements were coordinated for: protecting Russians in Donbass, who have been betrayed by the French and Germans. The British also played a leading role. All our Western colleagues kept saying they were unable to make Kiev honour the Minsk agreements.

Question: If the goal is to protect Russians in Donbass, why have more civilians been killed in the DPR and LPR in the four months since the start of the special military operation than in all of last year?

Sergey Lavrov: Did you also watch German ARD television and the main French TV channel, which declared recently that a maternity clinic and a marketplace had been shelled by the Russian army killing dozens of civilians? They declared without any qualms that this had been done by the Russian military. Just like they claimed some time ago that a railway station in Kramatorsk had been hit by Russia. Although the Western journalists proved that the missile had come from the territory controlled by the Armed Forces of Ukraine.

Question: Last year, eight civilians were killed in the LPR and DPR, and seven the year before. While every death is a tragedy, that did not constitute the genocide Russian officials often invoke. With these numbers in mind, can you say that invading Ukraine was a reasonable decision?

Sergey Lavrov: We did not invade Ukraine. We announced a special military operation after being left with no other means to make it clear to the West that it is engaging in criminal activity by dragging Ukraine into NATO, by coddling and doting on a neo-Nazi regime, whose president Vladimir Zelensky said in September 2021 (you didn’t tell your viewers about it, did you?) that, if someone in Ukraine feels Russian, they should leave for Russia. He said that publicly. When a CNN correspondent told him that the Azov Regiment was listed as an extremist and terrorist organisations by some Western countries, the US, and Japan, Vladimir Zelensky shrugged his shoulders and said they had many such battalions and regiments, and they were what they were.

Question: Let’s look at the consequences. Four months have passed. The result: thousands of civilians have been killed; over 14 million Ukrainians have fled their homes; Russian troops sustained considerable losses and a host of sanctions have been imposed on Russia. Do you still call it the right decision?

Sergey Lavrov: I will tell you again: we didn’t have any other choice. We have explained this many times, a thousand times. Today, the Ukrainian regime is attacking civilians with your Western weapons just like they did in 2014 when the putschists came to power, when the centre of Lugansk was bombed by aircraft and 50 people were burned alive in Odessa. Does anyone recall this now?

Question: If you didn’t attack, there wouldn’t have been any weapons from the West.

Sergey Lavrov: We didn’t attack anyone. Russians were attacked in Ukraine. Imagine you are English. English or Scottish?

Question: I mentioned the figures to you. Eight dead in the past year, seven…

Sergey Lavrov: I am telling you that the Ukrainian regime is bombing its own population and you are selling weapons to it so it can continue doing this. Now about genocide. Are you English? What if Ireland (not Northern Ireland but the Republic of Ireland) banned the English language? How would the English feel?

Question: They wouldn’t invade Ireland for certain.

Sergey Lavrov: Wouldn’t you feel humiliated? The Russian language is banned in Ukraine. Try to speak Russian in a street in Kiev when young people with a certain look are walking there.

Question:Why do you consider NATO a threat? Why do people in Russia often talk about five waves of NATO’s expansion?

Sergey Lavrov: I think that NATO is a threat because we have been close friends with Serbians for a long time. They told us what the North Atlantic Alliance is about. The Afghans with whom we maintain relations in Afghanistan (and that includes practically all ethnic groups) also told us about the alliance and how it bombed wedding ceremonies. Just because these pilots wondered why some people had got together. They must be bombed, just in case.

I will explain to you why NATO is a threat. Talk to citizens of Iraq and Libya. Their countries were razed to the ground. After this, NATO still claims to be a defensive alliance. We are told not to worry, that Ukraine’s accession to NATO wouldn’t pose a threat to the Russian Federation. This is what we were told. With all due respect for our colleagues from the North Atlantic Alliance, I must say that Russia has the right to decide for itself what threatens its security and what does not.

Question: There were no NATO troops in Eastern Europe before the annexation of Crimea in 2014…

Sergey Lavrov: Moreover, there was no annexation of Crimea, either.

Question: As a result of Crimea’s annexation, there appeared 4,500 troops in 2016, and 40,000 after February 24, 2022. This is the result of Russia’s actions.

Sergey Lavrov: You are a clever man. These are facts. I will cite different facts for you. Your entire analysis is based on “cancel culture.” You are changing everything that preceded the event that you call an invasion or annexation. What happened in Ukraine on February 21, 2014? What we call a coup d’etat. How do you call it?

Question: I was the first to ask you. How do you call it?

Sergey Lavrov: I’ve already said that this was a coup d’etat that took place the morning after France, Poland and Germany affixed their signatures under the agreement between the then president and the opposition leaders. In the morning, the opposition leaders spat in the faces of Germany, France and Poland which  swallowed it. We called this a coup d’etat. And how did you call it?

Question: Do events of eight years ago give you the right to do what you are doing?

Sergey Lavrov: This is not about the right. I want to hear your honest response. We called it a coup d’etat. How do you call it in Britain?

Question: I wanted to ask you about this.

Sergey Lavrov: I want to understand your logic because if you want me to give you clear answers you must clearly explain to me what you are talking about.

Question: I want to grasp your logic. You say that NATO is a threat. Now you are saying that there is too much NATO on Russian borders. And yet now “there is even more NATO” as a result of Russia’s actions. Finland and Sweden are joining the alliance.

Sergey Lavrov: Finland and Sweden have long been subordinate to the Anglo-Saxons as the EU and NATO have drawn closer together. The EU has lost its meaning.

Question: Is the fact that Finland and Sweden are becoming NATO members a failure of Russian diplomacy?

Sergey Lavrov: Sweden and Finland are exercising their sovereign right and they are acting according to their governments’ decisions. They also are not overly concerned with public opinion, just as they didn’t concern themselves with public opinion in different countries as they carried out the objectives set by NATO.

Question: Does that mean it is not a threat to Russia?

Sergey Lavrov: We shall see how it will end. When and if Sweden and Finland join NATO, we will see what will go into effect on the ground. Whether weapons are delivered there and new contingents deployed. That said, I assure you that nobody is going to listen to either Europeans, or Finland or Sweden. They are telling us now that they will have no foreign troops or military bases. Meanwhile, US Defense Secretary Lloyd Austin that the US intends to increase its military presence in Europe, they have not yet decided if it will be permanent, rotational or permanent-rotational. He never said the EU should be consulted. He does not want to hear from European allies. He just decided, and announced that decisions will be made in Washington.

Question: Russia says that Ukraine is fighting Nazis.

Sergey Lavrov: Ukraine is not fighting Nazis. Nazism is flourishing in Ukraine.

Question: Listen to what the UN High Commissioner for Human Rights says. She spoke in May following a monitoring mission and said that the Russian military kept 360 people including 74 children and 5 disabled persons for 28 days in a school basement in the village of Yagodnoye, Chernigov Region, without a toilet and water. Ten elderly people died. Is this fighting Nazism?

Sergey Lavrov: International bureaucrats, including the UN High Commissioner for Human Rights and, to my immense disappointment, the UN Secretary-General and many other UN representatives, are being put under pressure by the West and are often being used to amplify fake news spread by the West.

Question: So Russia is squeaky clean, isn’t it?

Sergey Lavrov: Russia is not squeaky clean. Russia is what it is. And we are not ashamed of showing who we are.

May I inquire with you to better understand your media outlet’s policy on the Bucha tragedy? Did you report on the frame-up job in Bucha? You definitely said it had been carried out by Russia, right? The Guardian newspaper published in London later got preliminary forensic results which showed that most people whose dead bodies were shown by all the world’s TV channels got their wounds from artillery shrapnel.

Question:  Why do you ask? We have little time.

Sergey Lavrov: We have little time but you do not want to tell me why you keep saying untruths, to put it mildly. I asked you a question about how the BBC had covered the events in Bucha.

Question:  I wasn’t in Bucha. I am in Russia and this is why I am asking you about Russia’s position. The purpose of the operation as it was stated by President Putin back then is regime change, isn’t it?

Sergey Lavrov: The purpose of the operation is to protect the rights of Russians which have been blatantly ignored not only by the Kiev regime but also by the entire West and the civilised community which refused to implement the Minsk Agreements.

If you did not want to secure the rights of the Russians in Donbass through Kiev’s adherence to a UNSC resolution, we will ensure the rights of Russians ourselves. That is what we are doing.

Question: On February 25 of this year, Vladimir Putin addressed Ukrainian soldiers and urged them to take power in their hands because it would be easier for Russia to come to terms with them than with this gang of drug addicts and neo-Nazis in Kiev. This sounds like a direct call for a military rebellion.

Sergey Lavrov: No, it sounds like a direct call for fulfilling their military duty instead of serving Nazis who are cancelling everything that their regime doesn’t like, including Russian education, culture and media. They didn’t cancel BBC because you haven’t told the truth about what was happening there for eight years. I asked you a question: Did you or any of your BBC colleagues go to Donbass during the eight years when Kiev soldiers were bombing civilians there?

Question: Over the course of six years, the BBC had many times contacted the leadership in the separatist-run areas asking for permission to go and see what was happening. We were refused entry every single time. I think if genocide had really taken place there, they would have been interested in letting us come and see but no. Why were we denied entry?

Sergey Lavrov: I don’t know why you were denied entry. Our journalists worked there 24/7 and showed the results of bombing by Kiev battalions. You should have gone to the Ukrainian side of the contact line. They do not have such destruction there.

Question: Recently, your President praised Peter the Great for reclaiming primordial Russian territories and even added that “to return and strengthen is also our lot.” How many more territories and what territories are you going to reclaim?

Sergey Lavrov: President Vladimir Putin said it all. I have nothing to add. I will tell you again: you want to forget everything that preceded this event. You deny, cancel and do not want to hear what happened before February 24 of this year, what happened before the voting in Crimea. You cannot accept that we are very patient. But when our patience runs out, we respond to rudeness and the humiliation of the Russian people, like the coup in February 2014 when power was taken by people who cancelled the regional status of the Russian language and were going to oust Russians from Crimea (they sent armed people there). What did BBC report about this? Nothing at all. You said this was a normal democratic process.

Question: Can you say categorically that Russia won’t launch another special operation and won’t invade neighbouring territories?

Sergey Lavrov: We believed words for a very long time. Your comrades-in-arms, your compatriots together with other members of the North Atlantic Alliance solemnly proclaimed a principle of indivisible security where nobody has the right to enhance their security at the expense of the security of others. When we said that NATO’s five expansions undermines our security, we were simply ignored. Now President of France Emmanuel Macron said they must talk to Russia and should not humiliate the Russians. Do you know who replied to him? Some Czech Foreign Minister Jan Lipavsky. He said Macron didn’t understand anything, implying that Russians must be humiliated. What is your attitude to this?

Question: I want to ask you about the Brits who recently got a death sentence …

Sergey Lavrov: You should do an interview in the Donetsk People’s Republic about it.

Question: Russia is the only country that recognises the DPR.

Sergey Lavrov: No, it is not the only one, several more countries have recognised them.

Question: I think the DPR has a lot of influence in Russia.

Sergey Lavrov: We are friends and allies.

Question: In the eyes of the West, Russia is responsible for these people. Do you think the death sentence …

Sergey Lavrov: I am not interested in the “eyes of the West” at all. I am only interested in international law, according to which mercenaries are not combatants. So nothing in your eyes matters.

Question: They are not mercenaries, they were serving in the Ukrainian Armed Forces.

Sergey Lavrov: This should be determined by the court.

Question: Do you think the court there is independent?

Sergey Lavrov: I am confident they have independent courts there. Do you think your courts are independent? After Alexander Litvinenko’s death your “independent” court announced “public process,” that is, had the case classified. You did the same with the Skripals. That’s your law.

Question: Did the UK government contact you about the fate of these boys?

Sergey Lavrov: I have no information about their contacting us. They are used to doing everything publicly. They began saying they are worried about the fate of their subjects. I do not know if they contacted us or not. They should contact the DPR.

Question: How would you characterise relations with the UK now? Saying they are bad would be putting it mildly.

Sergey Lavrov: I think there is no room for manoeuvre left in the relationship. Boris Johnson and Elizabeth Truss say publicly that they must defeat Russia and bring it to its knees. Come on, do it!

Question: How does Moscow view Great Britain now?

Sergey Lavrov: This is a country which is once again sacrificing the interests of its people for the sake of politicians’ ambitions, who only think about the next election and nothing else.

Question: You criticise the countries, which are supplying weapons to Kiev. Who is more to blame – the countries supplying weapons to a country, which is defending its lands, or the country that has attacked it?

Sergey Lavrov: How is it defending its lands, when it bombs its own citizens? Let me remind you once again: Vladimir Zelensky said in September 2021 that those who think in Russian and feel they are Russian should beat it back to Russia. Why don’t you talk about that? Why do you ignore past events? Now, when they are shelling their own cities, towns, markets, maternity homes, and hospitals – everything is all right [with you]. You ask me why Russia is waging a “war” – in response to what we are showing. If they do not show in Britain the aftermath of the [Ukrainian] shelling of Donetsk, Kramatorsk and other places, you can certainly watch it here. Do you report anything on that?

Question: You said that you are defending Donbass and the people in Donbass. I told you that since the start of the operation twenty times more people had died …

Sergey Lavrov: And I told you that those people are being killed by neo-Nazis. I ask you: Do you show the results of the AFU’s shelling of towns and villages? Or you don’t show them in your reports? You don’t show it, correct? That is why you want to squeeze some words of regret from me about the current developments so as to send a report to London and use my words to back up the false version of events in Ukraine, which you keep broadcasting.

Question: You are wrong about that.

Sergey Lavrov: Being in Moscow, you cannot fail to see what journalists in Donbass are showing, what is happening as a result of [Ukrainian] artillery attacks on  peaceful towns and civilians. Do you report on that or not?

Question: I want to ask you…

Sergey Lavrov: So that means you don’t.

Question: I have been in Russia for almost 30 years. I have toured the country. The phrase I heard most in the villages and cities I visited was “if only there is no war.” I understand that your country suffered terrible losses, that is why it beggars belief that your country has “unleashed a war” in Ukraine. I don’t understand why it was needed. To ruin Ukraine and the future of your own country?

Sergey Lavrov: I got your point. You have no problems with understanding the political course pursued by Kiev in the past ten years – to cancel anything Russian – do you? You think “if only there is no war” means a possibility to humiliate Russians and Russia (as the Czech foreign minister said replying to Emmanuel Macron who had spoken out against humiliating the Russians). For some reason, nobody is speaking about that. You grabbed what you needed for your line, for the narrative of your broadcasts.

The phrase “if only  there is no war” is deeply ingrained in the Russian people. But it also has pride ingrained, what we call self-respect, which they are trying to take away from all the Russians in Ukraine, with your support.

To be continued…

Economic Rent and Exploitation: Michael Hudson, Shepheard Walwyn

June 18, 2022

Michael Hudson, Shepheard Walwyn recording May 23, 2022
Part one:  https://www.youtube.com/watch?v=XDo7HykYN9k

Part two here:  https://www.youtube.com/watch?v=I-xWgLertkg

Jonathan Brown
Michael, welcome to the podcast.

Michael Hudson
It’s good to be here. I’m looking forward to it.

Jonathan Brown
Michael, I think you have one the most extraordinary upbringings and journeys into economics. And I just wanted to give our listeners just some sense of how you got from being the godson of Leon Trotsky all the way to what I consider to be probably the most important economist in the world today.

Michael Hudson 00:23
There’s no direct causality there that could have been anticipated. I never studied economics in college, because I went to school at the University of Chicago. We know that there were some students at the university who were at that business school. They were such strange people that we never even thought of going near them, because there was something otherworldly about them, something abstract.

My degree was in German language and history of culture, because the head of the History of Culture Department was Matthijs Jolles, a German professor and translator of von Clausewitz, On War. And in at the time, my intention was to become a musician. And I had to learn German in order to read the works of Heinrich Schenker. In music theory, my teachers were German. And for the History of Culture, most of the books that I was reading were, were all in German. And the German professors were also heads of the Comparative Literature Department and other departments. That meant that I could take all the courses cafeteria style at the university that I wanted.

I had to go to work when I graduated. I went to work for a while for direct mail advertising for the American Technical Society, a publisher a block away from the university, and then went to work for Free Press that was headed by Jerry Kaplan, a Trotskyist follower of Max Shachtman. And he wanted to send me to New York to help set up Free Press there.

Soon after I came to New York, Trotsky’s widow died. And Max Shachtman was the executor of her estate. He thought I should go into publishing by myself. And I had already had the copyrights for George Lukacs, the Hungarian Marxist and I thought tried to get funding for a publishing company with Trotsky’s works and other works. I’ve been writing a history of music and art theory. And needless to say, I didn’t get any funding because nobody was at all interested in publishing the works of Trotsky. I even tried to get Dwight Eisenhower the write the introduction to his military papers, wouldn’t work.

I was urged to meet Terence McCarthy, the father of a girlfriend of one of my schoolmates, Gavin MacFadyen. He was the first English-language translator of the first history of economic thought that was written: Karl Marx’s Theories of Surplus Value (Mehrwert), reviewing the value theory of classical economics. Terence said that he would help guide me in economic thinking if I’d get a PhD in economics and go to work on Wall Street to see how the world works. But I had to read all of the bibliography in Marx’s Theories of Surplus Value. So I had to begin buying the books, and ended up working as a sideline with one of the reprinters, Augustus Kelly, who was reprinting many of the classical economists. He was a socialist. There were other dealers in New York: Samuel Ambaras, Sydney Millman. I began buying all of the 19th-century classical economic books that I could, sinse that was the only way that I could get copies.

I took graduate classes in the evening while working at a bank for three years, the Savings Banks Trust Company. It was a commercial bank, but was acting as a central bank for the savings banks that in America finance mortgages. All their savings are reinvested in mortgages. So for three years my job was to track the real estate market, the mortgage market, interest rates, the funding of mortgages, the growth of assets by the savings banks, all growing at compound interest. All the growth in savings in the New York savings banks in the early 1960s was simply the accrual of dividends. So you’d have a step function at dividend time every quarter, going up exponentially. There was hardly any new savings inflow. It’s as if you’ve just left a given amount of savings in 1945, and let the amount rise exponentially. All this increase in savings was recycled into the real estate market.

The New York banks wanted to extend their market so they couldn’t just keep bidding up New York housing prices. They won the right to lend out of state, especially the Florida. So my job was basically seeing that real estate prices were whatever a bank would lend. At that time, banks would not lend you a mortgage if the debt service exceeded 25% of your income. And you had to put up usually 30% of the purchase price as a down payment, but possibly 10%. So housing was affordable. You could buy a really nice house for you know, $20 or $30,000. Now, it costs $400,000 to buy just a one room apartment in a condominium.

I bought a house for $1 down – it was $45,000 total. I took out a mortgage from Chase for half the price, and the other half was a purchase-money mortgage. So it was easy. Anybody coul get a house in New York at that time. Housing was readily affordable.

After I finished my PhD courses, I changed jobs. My real interest at the time was international finance and the balance of payments. So I went to work at Chase Manhattan as their balance of payments economist. This was at a time when the balance of payments and even balance-sheet analysis was not taught in schools. It was very specialised. I realised that what I was taught, especially in monetary theory, had nothing at all to do with what I was learning in practice.

In monetary theory, for instance, that was the era of Milton Friedman in the 60s and 70s. He thought that when you create more money, it increases consumer prices. Well, I thought that obviously was not how things worked. When banks create money, they don’t lend for people for spending. About 80% of bank loans in America, as in England, are mortgage loans. They lend against property already in place. They also lend for corporate mergers and acquisitions, and by the 1980s for corporate takeovers.

The effect of this lending is to increase asset prices, not consumer prices. You could say that money creation actually lowers consumer prices, because 80% is to increase housing prices. Banks seek to increase their loan market by lending more and more against every kind of real estate, whether it’s residential or commercial property. They keep increasing the proportion of debt to overall real estate price. So by 2008 you could buy property with no money down at all, and take 100% mortgage, sometimes even 102 or 103% so that you would have enough money to pay the closing fees. The government did not limit the amount of money that a bank could lend against income. The proportion of income devoted to mortgage service that was federally guaranteed increased to 43%. Well, that’s a lot more than 25%. That’s 18% of personal income more in 2008 than in the 1960s – simply to pay mortgage interest in order to get a house. So I realised that this was deflationary. The more money you have to spend on mortgage interest to buy a house as land and real estate is financialized, the less you have left to spend on goods and services. This was one of the big problems that was slowing the economy down.

Well, it was obvious to me that rent was being paid out as interest. Rent is for paying interest. If I talked with various developers about buying buildings, they said, “Well, we try to buy our buildings without any money at all. The banks will lend us the money to buy a building, and they calculate how much is your rental income going to be? That rental income will carry how much of a bank loan at a given interest charge, and lend the money to buy it.” That is how real estate rent was financialized.

Democratization of real estate on credit means turns rental income into interest, not taxes
This meant that the role that had been played in the 19th century by landlords is now played by banks. In the 19th century, the problem was absentee landlords, the heirs of the warlords who conquered England or other European countries in the Middle Ages. You had hereditary rent. Well, now our rent has been democratised. But it’s been democratised on credit, because obviously, the only way that a wage earner can afford to buy is is on credit. For an investor you can buy whole buildings on credit.

Finance has transformed real estate into a financial vehicle. So that that’s what rent is for paying interest means. There’s a symbiotic sector, Finance, Insurance and Real Estate – the FIRE sector. It’s the key to today’s financialised economy. Most real estate tax in America is at the local level, because after the income tax was introduced, commercial real estate was made tax exempt by the pretence that buildings depreciate in value, as if they don’t in fact rise in price. The pretence is that they wear out, even though landlords normally pay about 10% of the rental income for repairs and upgrades to keep the building from wearing out.

Today in New York, and I’m sure in London too, the older a building is, the better it’s built. Real-estate developers have crapified building codes so that the newer the building, the more shoddily it’s built. They call shoddy buildings “luxury” real estate, meaning is built with really not very thick walls. I think the junkiest building in New York is Trump Tower, which is sort of the model of shadiness which they call luxury. It’s very high-priced.

The academic economics curriculum finds unproductive credit to embarrassing to acknowledge
While I saw the importance of finance and real estate, none of that was discussed in the university’s economics courses at all. The pretense is that money is created by banks lending to investors who build factories and employ labour to produce more. All credit is assumed to be productive, and taken on to finance productive investment in the form of tangible capital formation. Well, that that was the hope in the 19th century, and actually was the reality in Germany and in Central Europe, where you had banking becoming industrialised. But after World War I, you had a snap back to the Anglo-Dutch-American kind of banking, which was really just the Merchant banking. It was bank lending against assets already in place.

Classical economics as a reform program to free economies from economic rent and rentier income

I realised that the statistics that I worked on showed the opposite of what I was taught. I had to go through the motions of the PhD orals. and avoided conflict by writing my dissertation on the history of economic thought, because anything that I would have written about the modern economy would have driven the professors nutty. Needless to say, none of the academic professors I had ever actually worked in the real world. It was all very theoretical. So that basically how I came to realise that the 19th century fight for 100 years – we can call it the long 19th century, from the French Revolution, up to World War I, and from the French Physiocrats, to Adam Smith, Ricardo and Malthus, John Stuart Mill, Marx, Simon Patton and Thorstein Veblen – was the value and price theory of classical economics to quantify economic rent as unearned income.

The purpose of value and price theory was to define the excess of market price over actual cost value. The difference was economic rent. The essence of classical economics was a reform campaign – that of industrial capitalism. It was a radical campaign, because the basic cost-cutting dynamic of industrial capitalism was radical. It realised that in order to make Britain, France or Germany, or any country competitive with others, you had to get rid of the landlord class and its demands for economic rent. You also had to get rid of monopolies and their economic rent. You had to get rid of all payments of income that were not necessary for production to take place. The aim was to bring prices in line with the actual cost value of production, to free economies from this rake-off to unproductive investment, unproductive labour and economic rent – land rent, monopoly rent and financial interest charges. Those were the three basic categories of rent on which classical political economy focused.

To translate classical rent theory into practice, you needed a political reform, You had to get rid of the landlord class’s political power to block reform. It wasn’t enough simply to say that economic rent was not a necessary cost of production, not part of real value. The landlord class would simply say, “Well, what are you going to do about it?”

The proponents of industrial capitalism saw that the constitution of England, France and America required giving governments the power to pass laws to free economies from economic rent. in order to do that, they needed democratic reform of the political system. In England they needed to empower the House of Commons over the House of Lords. That effort led to a constitutional crisis in 1909 and 1910, when the House of Commons, Parliament, passed a land tax. That was rejected, as I’m sure you know, by the House of Lords. The crisis was resolved by saying the Lords could never again reject a Revenue Act passed by the House of Commons. That political reform was part and parcel with classi9cal economic theory defining rent as an unnecessary cost of production.

But where did this leave the interests of labor – the majority of the population? As a broad social reform, classical economics began to falter by 1848. You had revolutions in almost every European country. These revolutions were not fully democratic in the sense of they weren’t really for wage labour, which was the bulk of society. They were bourgeois revolutions, including land reform. They were all for getting rid of the landed aristocracy and the special privileges that the aristocracy held. But they were not very interested in helping consumers, and labour’s working conditions, shortening the workweek, shortening the workday and promoting safety. There was nothing really about public health, or public social infrastructure spending. So things began to falter by 1848.

But they still made progress through the balance of the 19th century. By the time World War I broke out in 1914, it looked like the world was moving towards socialism. Almost everybody in the 19th century, across the political spectrum, whatever you were advocating was called socialism.

Socialism and strong government as the program of post-rentier industrial capitalism
At the broadest level, socialism meant collecting economic rent and getting rid of the landlords and the aristocracy, either by taxing away rent or nationalizing land and natural monopolies, in hope that that by itself would create a viable industrial economy. you had libertarian socialism, Marxist socialism, anarchist socialism, industrial socialism and Christian socialism. Almost every reformer wanted that as a label. The question is, what kind of socialism were are you going to have?

That was what the aftermath of World War I was fought about. The fight was largely shaped by the Russian Revolution, which unfortunately went tragically wrong under Stalin and gave socialism and communism a bad name. But it still had a good name in England after World War II. And also in America in the 1930s, as a result of Franklin Roosevelt’s New Deal that saved capitalism by investing in public infrastructure.

I can give you an example of where pro-capitalist theory was in the 1890s. In the United States. The industrial interests in America faced a problem once the Civil War ended in 1865. They wanted to create an industrial society – ideally, a fair society with rising living standards. How do you do that without training people to administer such an economy? You need to train people in a university. You have to teach them how economies worked. But the main universities in America were religious colleges, founded to train the clergy. Yale, Harvard, Princeton and most taught British free-trade theory, which trivialized economic theory.

So the business interests and the government saw the need to teach reality-based economics. They saw that there was little hope in trying to reform the existing universities. Their economics departments – called moral philosophy – were unreformable. So it was necessary to create new universities. All through America, each state was given a land grant to enable it to create a new university and teach reality economics. They also would teach economic history and how the world actually works. Most of all, they would teach protectionist trade theory and how to create a society and economy that is more efficient than other economies?

Well, the first business school in America was the Wharton School at the University of Pennsylvania. Its first economics professor was Simon Patton, a protectionist. And he explained that if you’re going to make industrial products at prices that outcompete those of England, you need public infrastructure spending. You need as much of the cost of living as possible to not to be paid by the employers to factor into the price of their products, but to be paid by the government.

Patten cited public roads and canals to lower the cost of doing business. He also noted that every time you build a road or railroad, you’re going to raise the land value along these routes – and lower land prices for areas replaced by the now-more-accessible producers. You can simply self-finance the cost of these by taxing the rent.

You also need public education, and that should be free so that you don’t have like today, to earn enough money to pay an enormous student debt – and receive a high salary to afford to pay that. If the government would provide free education, you wouldn’t have to pay workers enough to pay this student debt, so they wouldn’t need such high wages simply to break even.
Today 18% of America’s national income is from medical insurance. If you have a public health system and socialized medicine, as England had after World War II and as Bernie Sanders advocates today, then you wouldn’t have to pay workers a high enough salary to afford this enormous medical expense. England realised this already in the 1870s and ‘80s, when Benjamin Disraeli campaigned as a conservative for health.

So the movement towards public infrastructure towards government spending was led by the industrialists. It was they themselves who wanted strong government. The common denominator of politics from Adam Smith through all of the 19th century was to free economies from the unnecessary economic rent, to free them from unearned income, from the free lunch. To do that, you have to have a government strong enough to take on the vested interests – first the landlord class in the House of Lords, and then the financial class behind it.

Jonathan Brown 26:00
Well, just to clarify that, Michael, I think what you’re, what you’re saying is, I know in some of your writing you talk about the view of government or the public sector was it was a fourth means of production. So you got land, labour, capital and the public sector.

Michael Hudson 26:16
That was the term that Simon Patten used. Government infrastructure is a fourth means of production. But what makes it different from profits and wages is that if you’re a wage earner, you want to make as high a wage as possible. If you’re a capitalist, you want to make as high a profit as possible. But the job of public investment is not to make an income, not to do what was done under Thatcher and Tony Blair, not to treat public utilities, education and health as profit making opportunities. Instead, Patten said, you should measure their productivity by how much they lower the cost of doing business and the cost of living for the economy at large.

Jonathan Brown 27:03
And what that allows a country to do, so if you’re good at it, is to get together and ask how to educate our people, lower the cost of transportation so we’ve got we’ve got a mobile workforce, all those things. We can then start to compete against other nations who are ahead of us, who may have more expensive means of production, and we can maintain that advantage. We’re not stuck in a lower level of the economy where we’re basically working for someone else. We’re able to develop ourselves as a nation. And I guess the benefit of us doing it collectively is that we can minimise the cost, then use a natural monopoly power in government hands to provide efficient services across the board. Is that right?

Michael Hudson 27:46
Yes, but they went further. Protectionists in America said the way to minimise costs – and it may seem an oxymoron to you – the way you minimise costs is to have high-wage labour. You raise the wages of labour, or more specifically, you want to raise the living standards, because highly paid labour, highly educated labour, well fed labour, well rested labour is more productive than pauper labour. So they said explicitly, America’s going to be a high wage economy. We’re not like Europe. Our higher wages are going to provide high enough living standards to provide high labour productivity. And our higher labour productivity, shorter working day, better working conditions, healthy working conditions, public health, well educated labor will undersell that of countries that don’t have an active public sector.

Jonathan Brown 28:45
and Henry Ford being the poster boy for that approach, of doubling his employees’ salaries and so on.

Michael Hudson 28:53
Yes.

Jonathan Brown 28:54
Amazing.

<h4>The fight against classical economics and its concept of rent as unearned income</h4>
Michael Hudson 28:55
Needless to say, the fight for the kind of democracy that will free economies from economic rent was not easy. By the late 1880s, and especially the 1890s, you had the rentiers fighting back. In America the fight was led by John Bates Clark. There was a movement, which today is called neoliberalism, to deny the entire thrust of classical economics. Clarke said that there is no such thing is unearned income. That meant that economic rent does not exist. Whatever a businessman makes, he is said to earn. Whatever a landlord makes, he earns – so there was no unearned income.

This came to a head around 1890 the Journal of Ethics. Clark wrote the first essay, and it was refuted by Simon Patton. There was a fight against the concept of economic rent by academic economics, especially in New York City at Columbia University, where Clark ended up, This is really the dividing line: You recognise that much of the economy is unearned income and you want to get rid of it. To do that, you have to pass laws that will tax away the unearned income, or better yet, you put land and other natural resources and natural monopolies in the public domain where the public sector directly sets prices. That was what Teddy Roosevelt did with his trust busting.

Jonathan Brown 31:13
Michael, I just want to say reading your work is something of a revelation. I’ve got a degree in economics for what it’s worth. And I would say the only valuable thing that I found from a getting a degree in economics is that I know, resolutely when an economist is talking bullshit. How do you know that? It’s when his lips move.

Michael Hudson 31:32
If it’s an economist, they’re talking bullshit – let me make it easy, right!

Jonathan Brown 31:36
And then the thing is, that reading your work, for example, going back to Thorstein Veblen, his work, which only made it into the mainstream when I was getting a degree in the 90s, was conspicuous consumption. It had nothing to do with absentee landlords or, and the profound importance of that, and then I’m looking in J is for Junk Economics, and you talk about the free lunch, and how Milton Friedman said that there’s no such thing as a free lunch.

When you look at your work, you prove that actually there is, and that he’s having it! And you say, “Most business ventures seek such free lunches not entailing actual work or real production costs, and to deter public regulation or higher taxation of rent-seeking recipients of free lunches. They have embraced Milton Friedman’s claim that there’s no such thing as a free lunch”.

And you talk about: “Even more aggressively rent extractors accused governments of taxing their income to subsidise freeloaders, pinning the label of free lunches on public welfare recipients, job programs, beneficiaries of higher minimum wage, when the actual antidote to free lunches is to make governments strong enough to tax economic rent, and keep the potential rent extracting opportunities and natural monopolies in the public domain.”

Michael Hudson 32:51
Veblen was indeed was the last great classical economist. He coined the term neoclassical economics. I think that’s an unfortunate term. When I went to school in my 20s, I thought neoclassical meant ‘Oh, it’s a new version of classical economics’. It’s not that at all. What Veblen meant was there used to be the old classical economics of Adam Smith, John Stuart Mill and Marx, all about economic rent and exploitation. “Neo” means there’s a new body of completely different, post-classical economics aiming to make classical economics obsolete. That is the new mainstream economics of today, trying to make itself “classical.” So Veblen he should have used the terms post-classical or anti-classical economics.

Jonathan Brown 33:44
Or even pseudo classical?

Michael Hudson 33:49
It’s antithetical, because the root of classical value and price theory was to isolate and define economic rents statistically. To deny economic rent is to deny the whole point of classical value and price theory. That is where economics became untracked.

Unfortunately, it became untracked largely by Henry George, who rejected classical economics and very quickly followed J.B. Clark and accepted his mushy value and price theory. Removing all elements the cost of production from value theory, analysing prices simply in terms of consumer demand and what people want, and not analysing what determines land and other asset prices, loses focus.

George became very popular as a journalist. He wrote wonderful journalism to expose the railroads in California as landlords, and he wrote a wonderful book on the Irish land question. But when he tried to talk about the whole economy, he didn’t want any competition. He said, in effect, “Economics begins and ends with me. Forget everything, Adam Smith and classical economics.” He’s sort of an early Margaret Thatcher. There’s no such thing as society or the economy. Only “tax the landlords.”

Jonathan Brown 35:35
What are you doing? You’re destroying my view of Henry George! He’s an early Margaret Thatcher? How, how could that possibly be?

Michael Hudson 35:47
Well, in two ways. The first way is that in the 19th century, in order to tax the land rent, you had to take on the most powerful vested interests of all: the real estate interests and the financial interests. But Henry George was a libertarian. He was for small government. He broke with the socialists, because he warned that socialism had a potential for authoritarianism. Well, we know that he was right in that warning, because we saw what happened in Stalinist Russia. But obviously, what you want is a government that is strong and democratic, and with enough authority to tax and regulate the vested interests. (That term is Veblen’s, by the way.) That was the ideal in America, but it needed a strong enough government so that Teddy Roosevelt could come in and be able to bust the trusts.

The government was strong enough in 1913-14 to impose an American income tax that fell just on 1% of the population, almost entirely on economic rent, on land rent, mineral rent on monopoly rent of the big corporations. If you’re a libertarian, your government is too small to take on these vested interests. And you’ll never win. You’ll end up like the Social Democrats or like today’s Labour Party under Mr. Starmer, not able to be very efficient. So that was George’s first problem.

The second problem was when he said that all you have to do is tax the land and everything else will take care of itself. Well, as you know, he was nominated as a celebrity candidate by the socialist and labour groups in New York City in 1876 to run for mayor. They gave him their programme – safe housing, workers housing, safe working conditions, food laws that protect people from poison, like you don’t want to use chromium for cake frosting to make it yellow.
Well, George threw out the whole labour programme and said that there’s only one thing that mattered: If you tax the land rent, the cakes will take care of themselves, worker safety conditions will take care of themselves. You don’t need socialism; just tax land rent.

Well, the word “panacea” came into popular use in the English language at that time, because George didn’t see the economy as a whole. That was a tragedy. He was great as a journalist describing rent and the machinations of the railroads. But once he tried to talk about the economy, without really describing how it worked as a system, saying there really isn’t any economic system, it’s just about land rent. That separated him from the other reformers.

By the 1890s you had many of reformers in America, who had been inspired by George’s journalism in the 70s and early 80s, including attacks on the oil monopoly and the Rockefellers. They asked what happened to George? Well, he became a sectarian. He formed his own party and said, we’re only going to talk about land rent. This diverted attention away from how the overall economy works. And if you don’t understand how the economy is all about providing a free lunch in one way or another, not only to landlords but to the financial sector primarily, then you’re really not going to address the interests of most of the population.

So his sectarian party shrank. Still, in the first decade of the 20th century you had followers of Henry George and socialists going around the country debating each other. They had great debates, they spelled out the whole problem. I wanted to reprint all these debates somewhere, what both the socialists and the Georgists said: “One thing we can agree on is that society is going to get go either your way or our way. We’re talking about how is the future of the political system and the economic relations and taxes that follow from this system. How are they going to evolve?”

The socialists focused on labour’s working conditions, because these were getting worse and worse. In America the fight for labour unionisation got quite violent, and corrupt. The abuse of consumers, the growth of monopolies, all these were growing problems. The socialists focused on these problems – and decided to leave the discussion of rent to followers of George. I think that was very unfortunate, because George had pried the discussion of economic rent away from the classical value theory and its political dimension, which was socialist.

I find little interest in today’s socialist movement or the socialist movement 50 years ago about land rent. They are more concerned about international issues, about war, about almost everything except land rent. And today I find the greatest interest in rent theory as a guide to a tax system in the context of an overall economic system to be in China. So that’s really where the debate over how to keep the price of housing down by keeping the financial sector from trying to capitalise the land rent into a bank loan.

That’s a big fight in China today. It should have been also in Russia. Fred Harrison, in the early 1990s, brought a group of people including me over to Russia. We made two trips to the Duma and did everything we could to explain that Russia could have a great advantage to rebuild its industry into a productive economy. The first thing that it should have done was to keep housing prices down. It could have given everybody their houses, free and clear, without any debt. Of course, some places would be more valuable than others, but Russia would have had the lowest-priced economy in the world. In America, the rent can take up to 43% of a home buyer’s income.

Well, there was pushback from the Russians. They had no rent in a socialist economy. Ted Gwartney, an American real estate appraiser, walked down the streets of St. Petersburg with the local mayor, I think on a fall or winter days. He pointed out that one side of the street was very sunny. The other street was in the shade. That’s how the sun is in the northern latitudes in the winter. Most people were walking on the sunny side of the street. That means that if you’re going to have a store, whether it’s a bakery, a food store or a restaurant, the store on the sunny side of the street is going to be able to attract more customers. Their site has more economic rent than the dark side of the street. Same thing with buildings near a subway. They will be worth more than sites far away from transportation.

The mayor said understood the point, and asked how to actually make a land value tax so to collect this rent? Ted explained that St. Petersburg’s layout was much like that of Boston, where a land map was easy to make. It showed that there was a peak centre of values near the subway, with rents tapering off further away. He suggested to apply Boston as a scale model to St. Petersburg. Just plug in a few prices, and you have a land-valuation map.

Russia could have been a low-cost economy. It could have kept the oil and gas, Yukos, GazProm, nickel and platinum resources all in the public domain to finance investment in re-industrialization, to become independent of the West. But as we all know, Ted and the people that Fred Harrison bought were completely overwhelmed by the billions of dollars that U.S. diplomats spent on promoting kleptocracy and shock therapy in Russia. Its officials and insiders worked for themselves, not Russia.

And it wasn’t only Russia that missed opportunities. I brought Ted Gwartney and his mathematical model-maker to Latvia, where I was Economic Research Director of the Riga Graduate School of Law. I was asked by the leading political party of Latvia, the Centre Party – basically the party of Russian speakers, with 1/3 of the population and votes – to draw up a model for how Latvia could restructure its post-Soviet economy and industry. Ted met with the tax authorities and housing authorities and explained how to use land rent as the tax base. They were amazed and said, “This is great. We can hire a separate appraiser for every single building. This will create a lot of employment”. No he said. He had been the appraiser for Greenwich, Connecticut, the state’s wealthiest city. He said, “We can do a whole city in about one week.” They couldn’t believe this in Latvia.

Around the time of his visit there was a meeting in Boston of the Eastern Economics Association. It was largely created by John Kenneth Galbraith to go off the economic mainstream. I think the Schalkenbach Foundation had a session on political critics of Henry George, so there were a lot of Georgists. Other people who came to the Eastern Economic Association meeting were socialists, including Alan Freeman who was the assistant to Ken Livingston, the Mayor of London.

When everybody was having lunch after the economic meetings, I brought Alan over to sit down with Ted Gwartney. Ted explained what he did, and Alan said, “Oh, I’ve never heard of this! I’ve got to come and meet you some more.’ So he came to New York and we went up to visit Ted in Connecticut. He explained how to make a land value map. Alan said, “You should win the Nobel Prize for this! This is amazing! There’s nothing like this in England.”

Ted explained that there are about 20,000 appraisers in America that do what he did. There are abundant statistics. Every city has a map of land and building appraisals: here’s the value of the building, here’s the value of the land. So smoothing out a land value map is pretty easy to do. Alan could hardly believe it.

Well, I went back to London shortly and met with Alan. It turned out that political pressures in England, especially from the Labour Party, led London to hire Weatheralls, a real estate company, do appraisals. So we never got to do our version of a real estate appraisal of London to calculate land rent.

But this is what all of the theories of the Physiocrats, Adam Smith, Ricardo, John Stuart Mill, Marx, Veblen, Alfred Marshall, all of them were focusing on. Yet this idea is so alien that from London to St. Petersburg, they don’t have any idea of how the simple concept can be done. The economics profession is in denial. It’s followed the idea that there’s no such thing as unearned income, everybody gets what they make.

The National Income and Product Accounts treat rent as a product, not a subtrahend
A byproduct of this value-free doctrine is how countries calculate their national income and product accounts. And if you look at the GDP accounts for the United States (and I’ve published a number of articles on my website and in major economic journals), rent is counted as part of GDP.

This is easiest to see in real estate and finance. The Bureau of Labor Statistics sends its employees around to ask homeowners what the rental income of their home would be if they had to rent it. If you were a landlord and rented yourself how much rent would that be? This appears in the NIPA statistics as “homeowners imputed rent.” That’s 8% of GDP. But it is not really income, because it is not actually paid. Nobody gets it. But value-free designers of GDP want to describe all of the income that landlords make as contributing to GDP. They say that landlords provide a productive service, they provide housing to people who need it, and they provide commercial properties to businesses that need it. Well, that’s not exactly how John Stuart Mill put it. He said that rent is what landlords make ‘in their sleep’. So how can you rationalize how productive landlords are?

Another element of American GDP is financial services. I called up the Commerce Department where they make the NIPA statistics and asked what happens when credit card companies increase their interest charges. And where do penalty charges for late payments appear? Credit card companies in America make billions of dollars in interest a year and even more billions in fees, late fees and penalties. Most of the income that credit card companies make are actually on these fees and penalties. So where does that appear in that GDP? I was told, in “financial services.’ So the “service” of calculating how far the debtors must pay for falling behind in their payments. They typical charge 29%. That’s all counted as a contribution to GDP. But in reality it is a subtrahend, leaving less to spend on real “product.”

This raises the question of just what income and product actually mean. Well, this brings us back to what classical economics is all about. The “product” should be measured by what its actual necessary cost of production is. But there’s a lot of income over and above this necessary cost of production. Namely, economic rent, that’s unearned income. But the income and product accounts don’t say how much is “earned” and how much is “unearned” land rent, monopoly rent, natural resource rent, interest and financial charges.

A classical economic accounting format would show how much of the prices for what our society produces is actually necessary, and how much is a subtrahend. Classical economists treat the land rent that you pay, interest charges and monopoly prices as a rake-off. So not all of your income is income equals “product,” because only a portion of that income represents a real product.

In America, the head of Goldman Sachs a few years ago said Goldman Sachs partners – a financial management firm – make more money than almost anyone else in America, because they’re the most productive. If you make a lot of money, by definition, you make it by being productive. That’s the false identity.

Jonathan Brown 55:25
That’s really the John Bates Clark idea that if you make the money, you’ve earned it. And it’s not just because you control the gate. You’re the gatekeeper, to stop people and make them pay the toll. You’re the troll under the bridge, taking people’s money as they cross, which is essentially what financial economics is about.

Michael Hudson 55:48
Right. I have spoken with a number of political advisors, many of whom were followers of Henry George. They’ve described to me how political all of this definition of the economy is. A number of friends of mine have been trying to show how much of what the United Nations calculates as income and product is actually economic rent. Steve Keen, Dirk Bezemer and Jacob Assa are in this group. There are a number of others who do it. We publish in places like the Review of Keynesian Economics, Journal of Economic Issues and other not-mainstream journals. A lot of this was taught where I was a professor for decades, at the University of Missouri in Kansas City.

Our graduates had problems getting jobs, because in order to get an appointment at a university, you have to publish articles in prestige journals. The University of Chicago, the Milton Friedman boys, the Chicago Boys control the editorial boards of all these prestige magazines, just like they control the Nobel Economics Prize Committee. The prize basically is given to Chicago Boys every year for not explaining how the economy works.

A precondition for what you call an economist, especially a Nobel Prize winning economist, is not to understand how the economy works. Because if you understand that, you’re going to threaten the vested interests that are getting the free lunch. You have to say there’s no such thing as a free lunch, everybody earns whatever they can get. Robbers and criminals like that idea. “Yeah, we stole it fair and square!”

Crime pays, and rent seeking also pays.

You can get much more money quicker by extractive means – by rent extraction – than you can by investing in plant and equipment and developing products and marketing them and making a profit over time, and spending on research and development. That’s why in today’s United States, 92% of corporate revenue, called earnings, (although not all of it is earned – that’s a euphemism) is spent on stock buybacks and dividend payouts, not on new capital investment.

So the way that the economy works today is no longer industrial capitalism; it is finance capitalism. Instead of Industrial Engineering, making society produce more with all of the environmental protection cost included, you have financial engineering, making wealth by increasing stock-market prices. Wealth is not achieved by earning it. You don’t save up your earnings and get wealthy. I think half of Americans are unable to raise $400 In an emergency. They have no savings at all.

For most people it’s very hard to save up money, especially if they have student debt, credit-card debt, medical debt and mortgage debt. After paying this, there’s really no income left to be saved. So you have the 1% of society, the rentier portion that had to pay income tax back in 1914, getting huge amounts of income and the rest of the society getting less and less. The result is economic polarisation. The dynamics of society are financial and basically rely on rent seeking that has been financialized.

I’ll give you another example of the GDP. One of the problems that makes GDP statistics meaningless is depreciation, the idea that buildings depreciate. When Ronald Reagan came in, the real estate interests and their banks basically took over the government. Henry George and the Libertarians oppose central planning by elected democratic governments, and that leaves central planning to Wall Street’s financial interests. Every economy is planned, and if you don’t have a government strong enough to do the planning, then the planning is done by the financial sector and the real estate sector, and they were given free rein under Ronald Reagan.

Under Reagan’s 1981 tax “reform” you could pretend that if you buy a big commercial building, you can write off 1/7 of the entire costs every single year as tax deductible income. At the end of seven years, you change your ownership from one name to another name, and you start all over again. The same building can be re depreciated again and again and again.

Donald Trump wrote in his autobiography, he loves depreciation, because he said thanks to the pretence of depreciation, his buildings are all going up in value, but he gets to pretend they’re falling, and deduct all of that fictitious over-depreciation from his taxable income. It’s actually economic rent. But if you look at the national income statistics, you can’t find economic rent in them at all. I was able to piece it together by adding up what goes into economic rent: Real estate taxes are part of economic rent, and also interest payments, because interest is paid out of economic rent. But fictitious depreciation tax loopholes also should be there.

But nowhere in the national income statistics is a report of how much income real estate owners actually claim as depreciation. They haven’t done that because if they showed this, people would think, ‘Wait a minute, this is a giveaway. This is utterly unrealistic.” So they only put in a figure for how much they [think] buildings are actually depreciating over a period of decades. So you have a fictitious national income accounting format that makes it impossible to calculate what land rent is – and that was the major focus of classical economics.

How are you going to get a statistical system that actually reflects this? Well, one associate of mine, Jacob Assa, has written a few books on this criticising economic rent. He worked in the United Nations here in New York until quite recently. But as I said, our graduates can’t publish in the University of Chicago economic journals whose party line is that ‘there’s no such thing as economic rent’, just like there’s no such thing as society is beyond “the market.”

I wanted to publish statistics on this and in 1994 the Henry George School in New York asked me to calculate what rent was and the land value. I found out that the value of land, the market price of land in the United States was twice what the government reported.

The government pretends that real estate prices rise mainly because buildings keep growing in value, even though they’re supposed to depreciate. They pretend that buildings grow in value by taking the original cost of the building, and multiplying it by the Construction Price Index. Whatever is left is reported as land value. Well, in 1994 the Federal Reserve reported that the land value of all of the commercially owned real estate in the United States was negative $4 billion. This is crazy.

The statistics are drawn up by a methodology that the real estate interests lobbied for. When I calculated this, the Georgists in America got furious. They said that I was showing that land value and rents were much higher than they thought. They worried that this might lead people to want to tax real estate. Lowell Harriss of Schalkenbach explained that Georgists today represent mainly real estate developers, and that their major audience was local mayors, whose biggest campaign funders are the real estate interest.

These Georgists called themselves “two raters,” wanting to keep overall real estate taxes unchanged (“revenue-neutral”) but shift the tax from commercial landlords onto homeowners by taxing land, not buildings – e.g., electric utilities, office buildings and other capital-intensive structures.

By representing the developers, Georgists proposed to save society by having the developers build up those slums, build up those vacant lots. Like George, they said that there was no need to worry about ecology or any problem except cutting property taxes for large real estate owners. You don’t need to worry about workers conditions or anything else. Let’s just give an economic incentive (i.e., a tax cut) to help contractors build up those vacant lots.

I was told if I published a new explanation of my statistics showing that most rent was paid out as interest, I could never have any relations with Schalkenbach and the Henry George school again. So I published them in a Harper’s Magazine cover story and have lived happily ever after.

Jonathan Brown 1:06:13
And was that “The New Road to Serfdom”?

Michael Hudson 1:06:22
Yes. I chose that title because the purpose of industrial capitalism was to free economies from the legacy of feudalism. And the legacy of feudalism was the landlord-warrior class collecting hereditary rent and the predatory banks that were not making loans for industry. None of the industrialists got their money to invest in banks. The inventors of the steam engine couldn’t get loans except by mortgaging their houses. Banks don’t lend money to create capital, only for the right to foreclose on it.

Jonathan Brown 1:07:02
This is all included in your in your latest book that just came out, The Destiny of Civilization: Finance Capitalism, Industrial capitalism, or Socialism, which I gather was a series of lectures to a Chinese University. Is that correct?

Michael Hudson 1:07:16
Yes. There were 160,000 viewers for the first lecture, and there’s a huge interest in this in China, because they realise that higher housing prices make them poorer and more highly indebted, not richer. What is pushing up housing prices in China is the amount of credit that banks will lend against the property.

A land tax would keep housing prices down, because the rent could not be available, to be capitalized into a bank loan. As China gets more productive and more prosperous, people obviously are going to be able to afford housing, which is how most people define their status. If a site gets more valuable because of public investment in transportation, or schools or parks nearby, that’s going to make it more valuable. But if you tax this rental income, then you’re going to keep the housing price down.

I think Fred Harrison and Don Riley wrote a book Taken for a Ride where they show that the money that London spent on extending the Jubilee Line increased real estate prices by twice as much as the line cost. London could have simply collected the land’s increase in rental value that this public investment created and made it self-financing.

Instead it was a giveaway.

They ended up taxing labour and business, and the effect was to increase Britain’s cost of living and hence the cost of production, which is why Britain is de-industrialising. It’s been de-industrialising because despite the attempts through 1909 and 1911, to free itself from landlordism, the bankers have taken the place of the landlords. They are the class today that the landlords were in the 19th century. So we’re back on the revival of what really was feudalism – a rake-off by a hereditary privileged class.

America’s monetary imperialism coming to an end with de-dollarization
Jonathan Brown 1:09:47

I’m wondering where we go next. I want to get into the conversations that you started with the 1972 first edition of Super Imperialism. I know we had a third edition fairly recently, with your prescience of the predictions in analyzing the situation for America, and how the balance of payments deficit was a result of U.S. expenditure by the military. Getting into the current manifestation of the de-dollarization challenge that seems to be accelerating through the Ukraine and Russia crisis, I wonder what background we need to give the listeners just to tell them about how that system works.

Michael Hudson 1:10:39
One of the things that most people don’t understand is money, largely because of the academic discussion confusing matters. Until 1971, countries running a balance of payments deficit would have to settle it either in gold or by selling off their industry to investors in the payments-surplus countries. Well, beginning with the war in Korea in 1950-1951, the U.S. balance of payments moved into deficit. The entire U.S. balance of payments deficit from the Korean War to the 1970s was a result of its foreign military spending.

By the time the Vietnam war was ending, the Americans had to sell its gold every month. Vietnam had been a French colony, so the banks there were French. As America spent more dollars in Southeast Asia, these dollars were sent from local French bank branches to their head offices in Paris. The Paris bank would turn over these dollars to the central bank for francs, and the central bank, under General de Gaulle, would cash in these dollars for gold.

Germany was doing the same thing, using its export proceeds that were paid in dollars to buy gold. So America’s gold stock was steadily going down, until finally it had to withdraw from the London Gold pool and stop making the dollar gold convertible. Back in 1950 when the Korean War began, the American Treasury had 75% of the world’s monetary gold. It had used this monetary power to control diplomacy in other countries. The basis of America’s political power was its gold stock.

Once they left the gold-exchange standard there was hand wringing. How was the United States going to dominate the world if it didn’t have gold anymore, if the military spending abroad had made it run out of gold? My Super Imperialism pointed out that henceforth when foreign central banks got more dollars, what were they going to use them for? Well, there’s only one thing that central banks at that time did: That was to buy government securities. So the central banks of France, Germany and other payment-surplus countries had little option except to buy U.S. Treasury bills and bonds. Some of these were special non-marketable bonds that they couldn’t sell, but they were stores of value.

So the money that America was spending abroad was simply recycled to the United States. It didn’t mean that America had to devalue the dollar through running a balance-of-payments deficit, like today’s Global South countries do, or do as England had to do with its’ stop-go policies, always raising interest rates to borrow when its deficits threatened to force the pound sterling to depreciate.

Jonathan Brown 1:13:57
Michael, this insight was that was that when you were working at Chase Manhattan, and you were advising the State Department on what to do with the fact that they were having these balance of payments problem, because of military spending?

Michael Hudson 1:14:07
My job at Chase was to analyse basically the balance of payments of Third World countries and then of the oil industry. I had to develop an accounting format to find how much does the oil industry actually makes in the rest of the world. I had to calculate natural-resource rent, and how large it was. I did that from 1964 till October 1967. Then I had to quit to finish my dissertation to get the PhD. And then I developed the system of balance-of-payments analysis that actually was the way it had been calculated before GDP analysis.

I went to work for Arthur Andersen and spent a year calculating the whole U.S. balance of payments. That’s where I found that it was all military in character, and I began to write in popular magazines like Ramparts, warning that America’s foreign wars were forcing it to run out of gold. That was the price that America was paying for its military spending abroad.

I realised as soon as it went off gold in 1971 that America now had a cost-free means of military spending. Suppose you were to go to the grocery store and just pay in IOUs. You could just keep spending If you could convince the owner, the grocer to use the IOU to pay the farmers and the dairy people for their products. What if everybody else used these IOUs as money? You would continue to get your groceries for free.

That’s how the United States economy works under the dollar standard, at least until the present. This is what led China, Russia, Iran and other countries to say that they don’t want to keep giving America a free ride. These dollarized IOUs are being used to surround them of military bases, to overthrow them and to threaten to bomb them if we don’t do what American diplomats tell them to do.

That led already a few years ago to pressure to de-dollarize the world economy and make it multipolar, not simply an extension of the U.S. military, U.S. investors, mining and oil companies. The post-dollar aim was for other countries to keep their economic surplus among themselves to promote their own economic growth, instead of imposing IMF dictated austerity programmes to impose austerity so that they can pay foreign dollarized bondholders.

Just about everybody thought that it would take many years for China, Russia, Iran, India, Indonesia and other countries to get their act together and create an alternative. But this year the Biden administration itself destroyed America’s free ride for the dollar. First the United States grabbed Venezuela’s foreign exchange, then Biden grabbed all of the foreign exchange of Afghanistan, just confiscated it. And then a month ago he confiscated $300 billion of Russia’s foreign exchange reserves. He said, in effect, that we are the leading democracy in the world, and global democracy means that America’s military gets to appoint foreign presidents.

And so we don’t like the person you’ve voted in as president for Venezuela. We’re going to hire this little nitwit that we bought out, Juan Guaido, and appoint him president. To force you to accept this, we’re going to take away all of your gold reserves held in the Bank of England, and we’re going to give it to Mr. Guaido as our nominee for the bastion of democracy, to do what a democratic regime is supposed to do: hiring terrorist groups to kill all land reformers and labour leaders, to finance a neo-Nazi takeover like we did in Chile under Pinochet, and just like we’ve done in democratic Ukraine with our funding of neo-Nazis to fight against the Russians there.

This confiscation of foreign reserves and foreign money held in U.S. banks shocked the rest of the world. Nobody had believed that countries would actually grab other countries’ financial savings. If you go back to the wars in the 19th century, the Crimean War and others, countries would continue to pay their foreign debts.

All this was ended by President Biden rejecting the international rule of law. He said that “We have a ‘rules-based’ order, in which we can make up the rules. Number one, we are exempt from the rules. Only you have to follow them. Number two, the rules or whatever we say.” China, Russia and India would have taken years by themselves to denominate their trade in their own currencies. Biden’s money grab has impelled them to create a new economic order independently of the United States and Europe, whose euro and sterling are satellite currencies of the United States.

Jonathan Brown 1:19:54
So Michael, this is a crazy situation that we’ve got. Even If you have deposits in a bank, the deposits don’t really belong to you, but they used to be respected.

Michael Hudson 1:20:07
Well they belong to you, but they can be stolen.

Jonathan Brown 1:20:09
Yeah, but then they don’t belong to me, do they? They’re kind of mine, but not. Likewise, if I annoy the wrong person, I could have my car impounded, because I’ve just annoyed the local politician, which is essentially what’s happened to a Russian oligarch. Now, whether or not the oligarch deserved that $500 million yacht, obviously, they didn’t, but it was technically theirs. So what Americans are doing is showing that if you piss them off, they will take all your resources, which has happened in other countries, right? We’ve stolen it.

The British did that, right? We appropriated resources and stole resources from other nations. If you want the best example of that, you can just go into the very beautiful British Museum and see all the artefacts that we’ve appropriated, one of which was a Rosetta Stone, which I know you write about.

So we’ve got this situation now that the Americans have declared the most profound economic war on Russia, threatening China that we can do the same. China’s got trillions of U.S. dollars. And one of the things that I don’t quite understand, looking at your philosophy and Super Imperialism, was in demonstrating that the Americans can have a free lunch by getting people to buy U.S. Treasury bonds. How is it that the U.S. dollar has gone up against all currencies pretty much other than the rouble since declaring war in Ukraine?

Michael Hudson 1:21:43
Europe has committed economic suicide, United States offered its leaders a lot of money in their offshore accounts, and made sure that their kids got free education in the United States. But in return, they would have to represent the United States, not Germany, France or other countries. The Americans have been meddling in European politics for years. European politicians do not represent their own countries. They represent the American State Department and American diplomacy. And they were told to lock their countries into the U.S. economy.
For instance, European businesses had a hope that Americans really hated. The Europeans hoped that after 1991, now that communism was over, they could invest in Russia to make money. They could sell exports to Russia and make mutual gains from each other. But the Americans wanted to make all the money off Russia for themselves, mainly by using the kleptocrats they backed to sell the natural resources that they grabbed to U.S. investors. The Harvard Boys wanted to make sure that rent-yielding natural resources were given the kleptocrats – who could only make their money in hard currency by selling shares abroad in the assets they grabbed, keeping their payments in England or the United States.

So they’ve asked Europe not to buy Russian gas, but to spend seven times as much buying American liquefied natural gas, and spend $5 billion to build the ports to accept this gas – while going without gas for about three or four years…let their pipes freeze… stop making fertiliser… Don’t feed your land, we’ll take it on the chin for America. Your standard of living is going to have to drop by 20%, but it’s all for American democracy. And the European heads said that’s fine.

America said that you Europeans are bothering them by trying to stop global warming. That’s a direct attack on a major arm of U.S. diplomacy, the oil industry. American companies control almost all the world’s oil trade. It’s the highest rent-yielding sector in the world. And it’s income-tax free. It’s politically powerful, and as long as America can control the oil trade, it can talk to Latin American countries or African countries and say if they elect a leader that U.S. officials don’t like, it can impose sanctions and stop exporting oil to them to freeze them out. They won’t get fertilizer, so the U.S. can starve you out. It can put a sanction on their food trade. 

Agriculture is Americans biggest trade surplus.

Jonathan Brown 1:25:14
That’s what they’re doing with the conflict in Ukraine to Russia, and also China as well. Are there other major sources of grain, wheat and rice?

Michael Hudson 1:25:26
Yes. But President Biden has blamed Putin for creating a world food shortage and threatening to cause a famine, because Ukraine can’t export its grain. Ukraine, at American direction, has put mines all over the Black Sea. So the Black Sea’s ports have mines around them. If a ship hits them, it’ll blow a hole in the hull and will sink.
As a result, if you’re a shipping company and want to transport grain, you have to get insurance, because if you don’t have insurance, then you’re in danger of going bust if your ship goes under. But no insurance company will insure it until the Ukrainians remove the mines that they put. You need minesweepers for that. Needless to say, Russia doesn’t want American minesweepers in, because they may very well attack as there’s a war on.

So you have the United States blocking Ukrainian grain exports, which was a huge export. You’ve had the American dollar area, the NATO countries, refusing to import food from Russia, which is the world’s largest agricultural exporter. This is creating a crisis for Global South countries, for Latin America and Africa.

Meanwhile, global warming is causing droughts that are reducing the harvest. The Green Party in Germany has a pro-war policy that is making global warming rise faster. By supporting military warfare against Russia, and U.S. military adventurism in general, they are becoming major lobbyists for the air polluters. The largest air polluter is the American military. The Green Party in Germany advocates fighting Russia more, providing it with more arms, and thus supporting the military that is now the largest new contributor to global warming. In effect, this means that Europe is willing to say, ‘Okay, we are willing to have the sea levels rise another 10 feet, as long as we can help America dominate Russia’.

Europe even is letting America keep the Trump tariffs on its exports, in place, so it can’t export more for America. It looks like Europe will have to de-industrialize, maybe we’ll go back to the 19th century and become a country of farmers. That basically is the situation that its subservience is imposing.

Jonathan Brown 1:28:49
I’d like to come back to the just what China and Russia can do, given their reserves. They understand they’ve got… they’ve got lots of reserves of gold, and also large grain stores, China having the most as I understand it, but can you help me understand why all these nations around the world have U.S. dollar reserves in some form or other, most of it in bonds? Why is the dollar still increasing at this moment in time?

Michael Hudson 1:29:28
Because the Euro was going down. The Japanese Yen is going down. The Yen is the worst performing currency, because they’ve held their interest rates very low. Their aim is for banks to make money by borrowing low at low rates and lending to foreign countries at a higher rate. Europe is also keeping its interest rates low. The American Federal Reserve is raising the interest rate, and that is money from low interest rate countries. Capital from Europe and Japan is flowing to America.

Currency values are primarily set by relative interest rates and capital flows. They’re not set by the cost of production for imports and exports. They are not caused by trade, unless there’s a radical breakdown of trade. All these zigzags that you see are short-term capital movements. America tells other countries to keep their interest rates low, so that money will flow from their banks and financial to the United States to buy American securities that yield higher returns. As long as the Euro is a satellite currency to the dollar, it’s going to continue to go down. So the both the euro and the British Sterling are now moving towards $1 per pound and $1 per euro.

Jonathan Brown 1:28:49
That’s a short-term measure. The long-term measure is that countries have to start selling the bonds that they’ve got in U.S. currency. So long term, it has to come down. Is that right?

Michael Hudson 1:29:28
Yes. They’re going to hold each other’s currencies. Especially now that Russia is denominating its exports, in roubles instead of dollars. The American banks have lost the trade financing of the world oil trade, certainly Russian oil and agricultural trade. Instead of holding dollars, countries will hold rouble reserves to stabilise their currencies via the rouble, China is holding rouble reserves, and Russia is holding Chinese yuan reserves.

The balance will be held more in gold and some kind of assets without a liability attached to them. I think the logical direction in which this is moving is that the non-dollar countries will create their own version of the International Monetary Fund, their own World Bank, their own trade organization. So there will be one set of trade and financial and development organisations and military organisations in the U.S. and Europe, in NATO, that is, in the white countries, and another set of relations and the non-white countries that are actually developing while America and Europe shrink.

Jonathan Brown 1:33:06
So what’s your idea of how much gold China actually holds, because there’s the published numbers [which] are really extraordinarily small aren’t they for an economy that’s so big.

Michael Hudson 1:33:18
I don’t know. Governments can hold gold not only through their own treasury, but through some subordinate agency. I no longer go into the financial statistics like I used to, because it takes a whole year to do a balance sheet that is comprehensive. All I know is that they saw how America simply grabbed Russia’s dollar holdings, and they don’t want the same thing done to them. President Biden has said China is America’s number one long-term enemy, and he wants to destroy the Russian economy first and then attack China after prying them apart.

Obviously, China is reading the newspapers and wants to avoid that fate.

Jonathan Brown 1:34:16
The other thing that I find utterly remarkable, for example, is that Biden in his speech said that he wants to get rid of Putin. I think if it was a U.S. Defence Secretary or Secretary of State saying that he wants to arm Taiwan……. If I ran China and I said I want to arm Mexico, or if anyone in South America wants any weapons then my doors open to you, I would expect the Americans to be very upset with that because I’m breaching the Monroe Doctrine. Can you help me understand, having been in the corridors of power, whether Chase Manhattan or the contacts you’ve got, how can …. how can politicians be so delusional to think they can say stuff like that without having a negative consequence?

Michael Hudson 1:35:18
Well you know who’s really upset by that? The Taiwanese! They say, Oh, they want to make Taiwan into another Ukraine, to fight to the last Taiwanese, just like the Ukrainians have been used. They see two choices before them. If they do arm and get weapons that can hit China, then China is likely to bomb them. On the other hand, I’ve met Taiwanese officials for 40 years, and many have said that their long-term hope is to be reintegrated. They want to be investors in China, but they want to merger under terms where they can be sort of like Hong Kong, able to have a merger that will make them prosperous too.

So Taiwan’s choice is between following the Americans and becoming the Ukraine of the Pacific, or joining with China. Given the fact that China is growing and America is shrinking, what are they going to choose? Well, I would imagine that you will see a strong, peaceful integrationist movement with China. But China remembers that Chiang Kai Shek massacred the communists in 1927.

Jonathan Brown 1:36:47
So what are we looking at then, who is in charge, President Biden or other people?

Michael Hudson 1:36:56
President Biden is a front man. They’re all the front men for the faceless people in the State Department, the neocons who are controlling things. Biden has always been right-wing, just a corrupt party politician. He does what he’s paid to do. He’s unimaginative. He’s brought in some real Russia haters – people who have a visceral hatred of Russia because of their family background under the tsars or under Stalin. Blinken said that his family was Jewish and lost under the tsars, and maybe under Stalin. He wants to kill Russians because he’s so angry at what they did to his ancestors. That is the neocon mentality in a nutshell. It’s a crazy mentality.

The Federal Reserve and the Treasury officials say they were not consulted in the political moves that Biden and Blinken and the neocons are making. There is the kind of single-minded tunnel vision at work. They really are Russia haters and China haters. There is a lot of racism you’re seeing in New York, where it’s very dangerous for Asian women to take a subway. Almost every week, the lead news item is yet another Asian woman attacked or pushed in front of a subway. There’s a there’s a new race hatred in America. And they are treating Russians as the Ukrainians do, as if Slavic speaking people are a separate race.

Jonathan Brown 1:38:49
Extraordinary. So Super Imperialism came out, as I understand it, and was used by the State Department to figure out how to continue running their economics …

Michael Hudson 1:39:04
At first U.S. officials thought that going off gold was going to be a disaster. Herman Khan told me, “You’ve shown that we’ve run rings around the British Empire.” He hired me for the Hudson Institute, which is a national security institute, and brought me to the State Department for meetings and to Army War colleges and Air Force war colleges to talk about it. I guess I shouldn’t be surprised that the main people who wanted to learn how imperialism works were the imperialists themselves. I had thought that the anti-imperialists were going to be my main audience, but the imperialists really needed to know what was new.

Jonathan Brown 1:39:50
They took your book, Super Imperialism and they read it as a love letter, right.

Michael Hudson 1:39:56
Not a love letter. They saw it as a “how to do it” book. I was a technician.

Jonathan Brown 1:40:04
Right. And working for Herman Kahn, he’s a powerful guy that people don’t talk about so much anymore, but he was, he was extraordinarily influential at the time, right?

Michael Hudson 1:40:14
Yes, he had a great sense of humour. He was a great speaker. He was absolutely brilliant. He wrote a book on thermonuclear war, saying that even if there were to be a war, somebody would be left to survive. That made him one of the models for Dr. Strangelove in the movies. I would sit and hear Herman talk about military strategy, and was awed by how he thought it all through. He was a brilliant military tactician. He would bring me and sit down with generals, and they would explain things. I don’t have a good military sense, or any military training at all. He wrote that, personally, he wanted to be right under the first hydrogen bomb. He didn’t want to live in the post-nuclear world. But there would be some survivors somewhere. That made him notorious. He was so reviled for even having brought up discussion of the topic that needed to be discussed, that he wanted to have ideas that people liked. And that was the corporate environment study. That was what I was pretty much in charge of. I was the economist, he was the military. We had the same salary there.

We would go around the world disagreeing with each other. It would be like a show. He’d talk about the world being a cup half full. I talked about the cup being half-empty, as he put it. I talked about the debt overhead, and how debt was growing and would ultimately stifle the economy. He talked about how productivity would be sufficient to pay debt, although productivity doesn’t necessarily give you the money to pay the debt. Productivity does not grows exponentially, but tapers off. As debt grows, any rate of interest is a doubling time. And it doubles quicker than the economy can double.

Jonathan Brown 1:42:24
And this is really coming back to one of your initial questions from Terrence McCarthy, which was to focus on productivity, wasn’t it?

Michael Hudson 1:42:33
Yes. And the idea was focusing on productivity, you realise that it all comes down to labour ultimately. How do you make labour more productive? How do you make industry more productive? You get rid of what is unproductive – and the unproductive overhead is rent. So how much corporate spending is just plain overhead? How much is unnecessary for corporate industry to take place? That line of questioning brings you back into the classical economics.
Marx is really the last great classical economist who pushed it all to its logical end. His contribution was to explain that just as the landlord exploits by taking rent, the industrial capitalist exploits labour by charging more for the products of labour than it costs to hire labour to produce.

However, unlike the rentier, unlike the landlord, the capitalist uses this economic surplus value to expand production, to build yet more factories, to employ yet more labour. This is an expanding society, whereas the rent paid to landlords is a kind of exploitation that is pure overhead and shrinks industrial capitalism. That’s why Marx said that the political aim of industrial capitalism was to free society from the landlords, predatory bankers and monopolists. That’s why the Communist Manifesto‘s program begins with collecting rent for the public sector. You can tax the land as a transition to socialising it. That was the Communist Manifesto’s classical economics.

Jonathan Brown 1:44:26
You have these views, and yet you were still a valued member of the team at the Hudson Institute.

Michael Hudson 1:44:33
Yes, because I was explaining how the world worked. Herman and I disagreed so much, we were genuine friends. I liked him, and we couldn’t believe that the other would actually believe something so different. But we said okay, if the arguments that we’re having is the “big argument,” it’s going to determine where the economy is going. Either he’s right or I’m right.
This is like the debates between Henry George’s followers and the socialists in the early 1900s. It was going to be one world or another.

What is the key to analysing the economy? Is it to focus on rent and finance, or on technological potential? My point is that technological potential can be smothered by so much overhead paid to the rentier class via the FIRE sector – finance, insurance and real estate – that there’s no money left to invest, no income left for wage earners to spend on buying the goods and services that they produce.

Jonathan Brown 1:45:48
And yet the technology sector in my opinion is actually the new monopolist. Instead of having a competition, in that sense they’re the new landowners. So Google is a spectrum landowner. If I want to host these videos, then I’ve got to negotiate or accept the terms of the landowner YouTube. I’m posting them there, but I won’t be making any money on it. Because I’m one of the serfs on YouTube.

Michael Hudson 1:46:16
This is the problem that China is dealing with in its own way. What do you do when Jack Ma and other IT specialists end up as billionaires? Well, China did not have an anti-monopoly group. It let 100 flowers bloom and let billionaires develop, but would then have them transfer their money to the government in one way or another. They haven’t done this in the way that Western economies do, by an anti-monopoly tax, but by a political consensus way.

In countries like Russia, I’m trying to get them to formalise this into formally calculating the magnitude of economic trends. You want innovation to take place, you want people to make the fortune, but at a certain point they can’t somehow make so big a fortune that it ends up crashing the economy.

Jonathan Brown 1:47:37
But looking at your writing from the Byzantine times and the ancient Near East, is the importance of the leader of that particular economy or society to make sure that no one got so rich that they could overthrow the leader? Which is really what you’ve got with someone like Zuckerberg, the power that he was able to wield in the election, whether you agree with him or not, was extraordinary. And likewise, if you look at the fight that’s currently going on with Elon Musk and Twitter, is to recognise that actually we want, we want our people to own these resources that we pretend are private, but actually have tremendous social power.

Michael Hudson 1:48:24
Yes, they financialized politics in America, by the Supreme Court’s Citizens United ruling. Anyone can contribute as much as they want, if you’re a corporation. The rentier interests give to pro-rentier politicians to act as their puppets. The money goes for advertising airtime on television and the media to overwhelm all the people who normally would want to minimise the rentier class. So essentially, you’ve financialized politics in America much more than has occurred in Europe. But in Europe, it’s the right wingers who basically control the press, commercial television and media. So if the media are controlled by the right wing with their own agenda, they frame the economic issues from the vantage point of the rentier class instead of from the vantage point of how an economy actually develops and grows wealthier in a fair manner.

Jonathan Brown 1:49:48
I know we need to need to wrap up. Just thinking about the scenarios for Russia and China currently. Everybody who is part of the original white economies of Europe, realises that if they don’t side with America, they get overthrown. But also right now they have a short-term challenge that the Americans are going to let them starve because they’re stopping wheat exports coming through the European ports. But then you’ve also got Russia with resources, you’ve got China with grain resources.

So there is a potential that when people start to starve, and you look at the challenges in Sri Lanka, with politicians being murdered and people running out of food, there’s a chance for China to step in and say, we can send you grain exports. And by lucky coincidence, because of the all the lock downs that China’s got right now, a lot of the world’s boats and ships are currently waiting outside ports in China.

Michael Hudson 1:50:54
[Missing part here] Computer chips are part of the problem. And that’s probably going to make them friendlier with Taiwan. Taiwan has the computer chips.

Jonathan Brown 1:51:03
And by your assessment, because Taiwan do not want to be another Ukraine, American actions are likely to accelerate the reintegration.

Michael Hudson 1:51:12
There’s a bell shaped curve, I haven’t met with the Taiwanese in quite a few years so I don’t know, up to date what the dynamic is. But just by logic, you can see the international environment in which they’re operating. You wonder how they are going to calculate the plusses and minuses of the U.S. versus China? What economy do they want to attach themselves to so that they can get richer fastest?

Jonathan Brown 1:51:46
And also stay safe and not get involved in unnecessary wars. When you look at the tragedy in Ukraine, all these people dying when you’ve got such a strong opponent in Russia, how can you go to war with them for any period of time?

Michael Hudson 1:52:07
Well, that’s what the world is divided into. The U.S. and European society is built on war. It’s the only foreign policy they have, because they don’t have an economic power anymore. They’ve de-industrialised and the rest of the world that is trying to industrialise and trying to feed itself. China, Russia, India, the Global South are the anti-war part of the world. So the world is dividing into two parts: a rentier part supporting finance capitalism [that] is trying to impose it on other countries, to financialize China and Russia to make them put a Margaret Thatcher or Boris Yeltsin in charge of China. While they try to put their own candidates in charge, a la General Pinochet, the rest of the world is trying to defend itself against this terrorism.

So the Western world that calls itself democracy is the terrorist military world. The nations that it calls authoritarian are any authority strong enough to control and tax the financial interests – that is, any government strong enough to regulate finance and real estate. Such an economy is by definition authoritarian as opposed to a democracy, where Wall Street and the financial centres are the democratically elected central planners. So what’s at issue is who’s going to plan society: the financial sector, or the people as in China and other countries.

Jonathan Brown 1:53:41
I think that says it. From a Western lens it’s a different type of democracy.

Michael Hudson 1:53:48
Yes. But democracy really means an economy run to benefit the great bulk of the population, who happen to be wage earners? Or is it going to be for the 1%? Is the economy run for on behalf of the 99% and the 1%? Well, the 99% need a strong government to run it in their own interests and cope with the counter-revolutionary policies, the neo-feudal rentier policies of the 1%.

Jonathan Brown 1:54:22
Okay, so knowing China, then your take on its zero-COVID policy that the authorities are implementing in some parts of the country?

Michael Hudson 1:54:32
The more I read about long COVID here, the worse it seems. I’m 83 years old, so my wife and I have not gone to a restaurant since 2020. We haven’t even gone to our friends’ houses for dinner. We’re isolating ourselves. China has isolated itself at great cost, but it saved the population not only from having COVID itself, but from having long COVID. There are now a million Americans with long COVID. They also say that long COVID lowers your, your IQ by 10%.

It’s almost as dangerous is inheriting a trust fund when it comes to impairing your IQ. It’s debilitating.

My webmaster in Australia and his family have COVID. So I’m very sympathetic with what China’s doing, even though it means that I can’t go there, because I’d have to be isolated in a hotel room for two weeks just to give a few days’ meeting – and then be isolated again when I come back. So China is making a huge effort not to sicken its population with COVID. And now of course, since the Russians have began to publish all their findings of the US bio-warfare labs in Ukraine that were designed to spread a COVID like diseases by migrating birds and bats and manmade aircraft over Russia.

Now, they’ve reopened the question ‘was COVID a US bio-warfare from the very beginning’? And the Chinese are looking at it and saying ‘was it engineered’? If the Americans are trying to engineer COVID to affect mainly Slavic population and their DNA signatures, could they have been doing the same thing against Asians? So all of this is suddenly opened up. The World Health Organisation has refused to divulge any of the USA biowarfare efforts, and the U.S. has stonewalled all efforts to find out about the bio-warfare. This is isolating America and Europe.

If American Europe is left with its current foreign policy, biowarfare and atomic bombs, NATO will be shunned by the civilised world. As Rosa Luxemburg said a century ago, the choice is between socialism or barbarism. NATO, Europe and America represent the new barbarism. The alternative is socialism. That is how the world seemed to be developing in Europe and America until World War I untracked everything. The rest of the world now has a chance to get back on track. I don’t know what’s going to happen in the West.

Jonathan Brown 1:57:47
Michael, as always, you always get more into your stuff than I expected. Are there any things that you’d like to say to our listeners, before we finish up,

Michael Hudson 1:57:56
I’ve probably said too much. And I hope you can edit out anything that’s embarrassing.

Jonathan Brown 1:58:01
I may get thrown off YouTube for publishing some of your comments. So you may have to go back and review a few of them. But as always, Michael, thanks so much your time what we’ll do is we’ll send a link to everybody for the website and also for the new book, as well which I think and those series of lectures when I was researching for this conversation were the single best economic lectures I’ve ever listened to – truly extraordinary levels of insight and real economics rather than theoretical or textbook stuff. So as always from ShepherdWalwyn, thanks so much for your time and for your contribution.

Michael Hudson 1:58:41
Well, if you transcribe it all in will be worth it. \

Jonathan Brown 1:58:45
That’s, that’s our promise 100%. So thanks very much.

Michael Hudson 2:00:05
Thanks a lot.

Lavrov: Russia does not care about “the eyes of the West”

June 18, 2022

Source: Agencies

By Al Mayadeen English 

The Russian Foreign Minister interrupts a BBC reporter and says that Donetsk People’s Republic courts are as legitimate as British courts , and Russia has no interest in what the West has to say about that.

Russian Foreign Minister Sergey Lavrov (R) and BBC reporter Steve Rosenberg (L) in an exclusive interview

Russian Foreign Minister Sergey Lavrov told BBC in an interview, on Thursday, on the sidelines of the annual St. Petersburg International Economic Forum (SPIEF), that the fate of the British mercenaries captured in Ukraine and sentenced to death is a matter pertaining to the Donetsk People’s Republic (DPR), an independent state as recognized by Russia. Ultimately, the DPR, under international law, has the right to make the decision on their fate and Russia does not care how that looks “in the eyes of the West.”

Steve Rosenberg, the BBC reporter, attempted to hold Russia accountable for the fate of the captured Brits beginning with “In the eyes of the West, Russia is responsible for the fate of these people,” but Lavrov cut him off.

The Russian FM said that he is not interested in the West’s perception of Russia, rather he is only interested in international law. According to international law, said Lavrov, mercenaries are not combatants and in that regard, the opinion of the West is of no interest to Russia.

Read more: Russian Ambassador: Pumping Kiev with weapons could lead to major war

Rosenberg once again attempted to protest Russia and the DPR’s conviction of British fighters as mercenaries, arguing that they were fighting with the Ukrainian Army. However, Lavrov interrupted him once again and told him this is a matter for the DPR courts, ones as legitimate as the British courts.

When asked about whether the British government enquired about its captured citizens, Lavrov said he is unaware of such communications and insists this is a matter for the DPR and Russia will not interfere in it.  

The FM added that relations between Moscow and London were dreary and described Britain as “a country that once again tries to sacrifice the interests of its people for the ambitions of politicians, who only think about the next election and nothing else.”

DPR captures two UK mercenaries

Three mercenaries, two from the UK and one from Morocco, were sentenced to death on Thursday in the DPR for fighting alongside Ukrainian militias and armed forces.

The president of the Donetsk People’s Republic, Denis Pushilin, has accused the three of “monstrous crimes”.

British mercenaries Aiden Aslin, 28, and Shaun Pinner, 48, in addition to Moroccan Saadun Brahim, were convicted by a Donetsk court on charges of terrorism.

The three defendants plead guilty to the charges. Russian media outlet RIA Novosti reported that the three are set to face a firing squad.

Read more: City of Donetsk targeted by Ukrainian troops again

Have Europeans Been Profoundly Deceived?

17/06/2022

Written by Eric ZUESSE 

During the period from 28 April to 11 May of 2022, the European Council on Foreign Relations polled 8,172 respondents who were in ten European countries, on the question “Who is mainly responsible for the outbreak of the war in Ukraine?” and here were the options that were presented:

“Russia”

“Ukraine, the EU, or the US”

“None of these”

“Don’t know”

And these were the poll’s results, which the ECFR published on June 15th:

all surveyed countries

73% Russia

15% Ukraine, the EU, or the US

Finland

90% Russia

5% Ukraine, the EU, or the US

Great Britain

83% Russia

5% Ukraine, the EU, or the US

Poland

83% Russia

10% Ukraine, the EU, or the US

Sweden

83% Russia

10% Ukraine, the EU, or the US

Portugal

81% Russia

9% Ukraine, the EU, or the US

Spain

76% Russia

14% Ukraine, the EU, or the US

Germany

66% Russia

20% Ukraine, the EU, or the US

France

62% Russia

18% Ukraine, the EU, or the US

Romania

58% Russia

21% Ukraine, the EU, or the US

Italy

56% Russia

27% Ukraine, the EU, or the US

Here is the actual historical evidence regarding the question that was polled:

coup occurred in Ukraine during February 2014 under the cover of pro-EU demonstrations that the U.S. Government had been organizing ever since at least June 2011, which U.S. coup even top officials in the EU didn’t know about until they found out about it on 26 February 2014, right after this illegal coup had been successfully completed, and which coup shocked them to discover, but they kept silent about it instead of exposing it to the world. (This coup was subsequently called “the most blatant coup in history”, by the head of the ‘private CIA’ firm Stratfor.)

The main evidence of the coup was a phone-conversation on 27 January 2014 between U.S. President Barack Obama’s appointee to plan and run the coup, Victoria Nuland, speaking to Obama’s appointed Ambassador to Ukraine Geoffrey Pyatt in Kiev, in which Nuland selected whom for Pyatt to get appointed to lead the post-coup Ukraine. Here is that phone-conversation, and here is its transcript along with explanations (to enable understanding of whom she was referring to in it, and why).

The second main evidence displayed that it was a specifically U.S. Government coup (and that the EU were merely America’s vassal-nations who didn’t know about it until it was already over) was a phone-conversation between the EU’s Foreign-Affairs chief, Catherine Ashton, and her investigator in Ukraine reporting to her from Kiev on 26 February 2014, to tell her what he had found had actually happened there, Urmas Paet. Here is that phone-conversation, and here is its transcript along with explanations (to enable understanding of what he was telling her, and of what her response to it indicated — that though it was a disappointment to her, she wouldn’t let the fact that it had been a coup affect EU policies).

And here is yet more evidence. It indicates that the main purpose of the coup was for the U.S. ultimately to place its nuclear missiles on Ukraine’s border a mere five-minute-missile-flight-distance away from being able to nuke Moscow in order to prevent Russia from being able to retaliate against a planned blitz-U.S. nuclear attack. And it also documents that a more immediate U.S. goal was to steal Russia’s major naval base, which is in Crimea, and to turn it into a U.S. naval base. But Russia was able to block that part of the plan. However, the main objective, to place U.S. missiles five minutes away from Moscow, remains unwavering.

On 17 December 2021, Russia delivered to both the U.S. Government and its NATO anti-Russian alliance Russia’s red-line demands to stop further aggressing against Russia; and, on 7 January 2022, both America and its NATO finally and clearly said no to those demands (which were basically for U.S./NATO finally to honor its verbal commitments on the basis of which Mikhail Gorbachev had ended the Soviet Union in 1991). On February 24th, Russia invaded Ukraine, in order to prevent U.S. nuclear missiles from ever being posted in Ukraine, just five minutes away, at the nearest place anywhere, to Moscow on Russia’s borders.

This was like the 1962 Cuban Missile Crisis, but this time with America posing the unacceptable nuclear threat (not the Soviet Union) — and just five minutes away (instead of being 30 minutes away).

The U.S., and its “Special Relationship” partner UK, are now trying to replace NATO by an alliance of only rabidly anti-Russian countries that border on Russia, in order for the U.S. to become allowed to place its missiles in Ukraine, so as to checkmate Russia and make it, too, become a part of the U.S. empire.

Does all of this evidence prove that Europeans have been profoundly deceived? How can it not? Have not even the most stringent of standards for a criminal conviction been met in this particular case? In addition, there have been participants in the coup who have publicly admitted that it was a coup (even though they didn’t know what the top of it had been). What more evidence could possibly be needed in order to conclude that Europeans have been profoundly deceived?

So, please spread this article (with its linked-to evidences) to all of your European friends and acquaintances, so that they too will know.

Reposts are welcomed with the reference to ORIENTAL REVIEW.

UK approves Wikileaks founder Julian Assange’s extradition to US

June 17, 2022

Source: Agencies

By Al Mayadeen English 

In a blow to press freedom around the world, London bows to US pressure and approves the extradition request for Wikileaks founder Julian Assange.

A dark day for press freedom: UK approves Assange’s extradition to US

UK Home Secretary Priti Patel has approved the US government’s request to extradite Wikileaks publisher Julian Assange, according to her department.

The interior minister “must sign an extradition order if there are no grounds to prevent the (extradition) order from being made,” and the courts had found none. Assange has 14 days to file an appeal, according to the Home Office. 

A dark day for press freedom

In a tweet, WikiLeaks wrote that his extradition is a “dark day for press freedom and for British democracy The decision will be appealed.”

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