In mid-April, we hosted renowned linguist, political analyst, and activist Noam Chomsky for a speaking and Q&A event at Lehigh University as part of the Douglas Dialogues forum. The event was attended by hundreds of students, faculty, and staff, and provided the Lehigh University community an opportunity to engage in contemporary political issues with Professor Chomsky, as related to the rise of global and domestic extremism. This reflection looks at some of Chomsky’s insights, and what they tell us about the state of democracy in America today.
It’s been over two years since the January 6th insurrection, where thousands of far-right rioters stormed our nation’s Capitol in an attempt to stop the peaceful transfer of executive power. FBI director Christopher Wray referred to the insurrection as an act of “domestic terrorism,” and reports suggest that far-right extremists have killed more people in our country than have domestic Islamist fundamentalists since 9/11. In this political environment, Chomsky exposes the causes of rising rightwing extremism, and spent much of his time with the Lehigh community discussing this issue of growing concern.
When asked what he thinks of the rise of the right in U.S. politics today, Chomsky points out that this isn’t simply an American, but an international phenomenon. Citing the rising popularity of rightwing ethno-nationalists across the world from Nigel Farage in the UK and Marine LePen in France to the AFD Party in Germany, Jair Bolsonaro in Brazil, Viktor Orban in Hungary, and religious nationalists in Israel, Chomsky recognizes that, while each nation has its own unique flavor of rightwing nationalism, rising extremism is happening all over the world.
Chomsky emphasizes the role of neoliberalism as a force that fuels rightwing, authoritarian, and fascistic politics. He points to rising inequality and worker insecurity across the globe in the last 40 to 45 years, highlighting a “bitter, savage class war” that’s being fought by both major U.S. political parties, on behalf of plutocratic elites, and against the large majority of Americans who have seen their economic positions stagnate or decline during this period. In the U.S., a corporate elite has imposed a political-economic system that institutionalizes stagnant wages and household incomes, pressures workers to increase productivity, fuels an assault on labor unions, does nothing to stop spiraling health care costs and rising mortality, and that has grown the incarceration state, as the profits hoarded from these practices accrue to the top one percent of wealthy Americans who own and control the economy.
Chomsky cites a report from the Rand Corporation, which finds that U.S. business elites have siphoned off an incredible $50 trillion in additional wealth over the last three decades, at the expense of working, middle class, and poor Americans. The Rand report uses polite academic language, talking about rising economic inequality from 1975 to 2018, in which income and wealth growth have “not been evenly shared,” and with inequality having “increased substantially by most measures” to the tune of an additional $47 trillion captured by the wealthiest Americans, at the expense of the bottom 90 percent of income earners.
Chomsky is more direct and blunt in his language. He talks about how this class war has “opened the doors for the sheer robbery of the American public” on behalf of plutocratic elites. Chomsky argues that the intensifying class war is a perfect environment for an authoritarian demagogue to rise to power, playing on the fears and anxieties of an increasingly insecure citizenry. This demagogue – Chomsky cites Trump as exhibit A – tells his supporters that he loves them, while stabbing them in the back by further intensifying neoliberal policies such as business deregulation and tax cuts for the wealthy, which fuel not only rising inequality, but the global environmental crisis that springs from a lack of regulations on the fossil fuel industry. In classic Chomskyian style, he points to the incredible power of propaganda, with the fossil fuel industry playing the role of “merchants of doubt,” muddying the waters of public discourse on whether climate change is even real, thereby blunting potential government action on this mounting crisis. Trumpian-style demagoguery, Chomsky argues, is instrumental to direct public attention away from an elite driven class war, with public anger being stoked via the shameless exploitation of hot button culture war issues. Among them Chomsky includes anti-vaxxerism – which he points out “has killed hundreds of thousands of Americans.” Another diversionary tactic is the mainstreaming of “great replacement” propaganda within the GOP and in rightwing media, which depicts white working-class Americans as under assault due to the immigration of non-white peoples, who threaten to make white people a minority. Finally, Chomsky talks about an authoritarian effort on the American right to demonize any group with expertise that might challenge the GOP, its deceptions, and its plutocratic supporters. These much-maligned experts include journalists, scientists, and medical professionals, among others with technical skills who may not echo GOP propaganda. As Chomsky argues, the message that’s delivered in this war on intellectualism is that “it’s not the corporate sector that is guilty” of shafting the American people, but rather “the liberal elites” and other technocrats, who are supposed appendages of the Democratic Party and working against normal Americans. Understandably, Chomsky finds this rising anti-intellectualism to be extremely disturbing, as it foments distrust, alienation, paranoid delusion, and isolation, which have undermined efforts to form progressive democratic social movements that might fight back against plutocracy in America.
One of the most important lessons Chomsky left his audience with is that the rise of extremism and plutocracy are not inevitable. If we want a more just society, we must organize and fight for one. It won’t just fall into our laps. Social movements have created change before, and they can do it again. But it’s up to us to make that dream a reality.
One of the first questions Chomsky was asked during the student Q&A was, “What do you see the future holding as tensions rise and class warfare becomes more pronounced?” He answered, “It’s up to you…. If only one side is engaged in class war, you know the outcome. If both sides are engaged, it’s quite different.”
Chomsky highlighted cycles of change in the 20th century. He described how labor unions were decimated by President Woodrow Wilson’s Red Scare and associated crackdowns from corporations in the 1920s. The decline of labor unions preceded the Gilded Age, a time of abject poverty and massive wealth inequality. Yet, the Gilded Age was met with an intense reaction from social movements. Labor unions and organizations like the AFL-CIO began to organize industrial actions and disruptive sit-down strikes. Such pressure, alongside a sympathetic White House under Franklin Roosevelt, led to the passage of the New Deal, which created the groundwork for social democratic institutions, including the welfare state, regulation of business, and worker protections. Take for example Social Security, which provides benefits to tens of millions of Americans today and is one of the most effective anti-poverty programs in U.S. history.
Yet, we don’t have to go back a century for examples of democratic movement successes. The Black Lives Matter (BLM) protests of 2020 were one of the largest, if not the largest, protests in U.S. history. As many as 26 million people reportedly participated in the protests. This was about 10 percent of the adult population. The protests preceded Executive Order 14074, which changed federal agency use-of-force policies. BLM also made significant changes to public awareness, and forced local police departments to confront their troubled histories of racism, racial profiling and police brutality. Research shows that the BLM protests shifted public discourse toward anti-racism. Analyses of social media searches and the news show an increased interest in terms like “mass incarceration,” “white supremacy,” and “systemic racism.” Such an interest was sustained even beyond the height of the protests during the summer of 2020. Other evidence suggests that the BLM movement increased perceptions of discrimination against Black people, and this prompted some vote switching from Donald Trump and third party candidates to Joe Biden in the 2020 presidential election.
A second major lesson from Chomsky’s talk is that violence is not the answer to fighting back against rising inequality and the assault on democracy. Chomsky was asked during the Q&A: “Is the threat of violence the only mechanism that we have to either establish peace or progressive revolution?” He answered, “Would violence help overcome these problems? There’s no reason to believe that. Resorting to violence is moving into the arena where the enemy has the power. If you’re a tactician, you don’t move into the arena where the opponent is powerful, you move into the arena where the opponent is weak.” The “enemy” in this reference would seemingly refer to a plutocratic political-economic elite, which Chomsky targeted throughout his talk as the primary threat to American democracy.
Chomsky discussed how those in political power use protest-related violence to justify their opposition to social movements. He used the BLM protests of summer 2020 as an example, pointing to how, despite BLM being overwhelmingly non-violent, a fringe of protestors, and in some cases agitators, rioted, looting stores and destroying property. This played right into the hands of media outlets like Fox News, whose pundits loved the riots because they gave them a chance to demonize the movement. As numerous studies documented (see here and here), Fox News consistently tied rioting to BLM to tarnish the movement and its social justice objectives. Even though the vast majority of BLM protests have been peaceful, examples of violent protests were used to increase perceptions of the criminality and violence of BLM. Such perceptions diminish support for BLM and their goals for police reform.
Chomsky referred to violence as “a gift to the enemy.” Instead, change must come from “active organization and activism.” As he reminded the audience, it was the peaceful protests of the 1960s Civil Rights Movement that led to the passage of the Civils Rights Acts of 1964 and 1968, and the Voting Rights Act of 1965. Martin Luther King (MLK) Jr. was inspired by Henry David Thoreau and Mahatma Gandhi’s advocacy for nonviolence, and used it as the organizing principle for the Civil Rights Movement. In the Social Organization of Nonviolence (1959), MLK criticized violence, describing it as an unattractive social force, and argued that only self-defense is morally justified and able to gain popular sympathy. Yet, MLK did not advocate for passive resistance or resignation. He advocated for “militant nonviolence,” the consistent pressure of civil protest in the form of mass marches, boycotts, sit-ins, and strikes. Reinforcing Chomsky’s and MLK’s point, contemporary research shows that civil resistance campaigns have been twice as successful as violent campaigns in achieving political change.
We believe that Chomsky makes a provocative and compelling argument about the vitality of social movements and nonviolence to change. He is also right to identify how wealthy elites are engaged in a class war that utilizes culture war propaganda. When party officials rile up their base by drawing on transphobia, cultivating fear about critical race theory, stoking fear about an assault on Second Amendment rights, and mainstreaming “great replacement” propaganda, the party’s base becomes increasingly radicalized. The GOP base falls into this culture war messaging, despite being the victims of an elite class war. As we have found in our own national polling data out of Lehigh University’s Marcon Institute, only about 1 percent of people identifying as Republican also identify as upper-class, and only 11 percent identify as either upper-class or upper-middle class, meaning they hail from professional backgrounds that are likely to be part of the corporate-business class, or the group of white collar professionals on the periphery of the corporate upper class. Fifty-four percent of Republican Americans identify as middle-class, with another 26 and 9 percent respectively identifying as lower-middle or lower class. This means that the lion’s share of the 89 percent of Republicans who identify outside the upper class are the sorts of people who are likely to have been hurt by rising worker insecurity and intensifying inequality in the neoliberal era. Yet, these individuals embrace the GOP’s culture war, which directs attention away from the party’s active assault on its own base.
But there’s more to this story. Our work at Lehigh’s Marcon Institute documents how white supremacy is a social force that exercises ideological power over the public. It has always been a power in its own right in a country that historically idealized and practiced slavery, and later Jim Crow segregation, and continues to indulge in ethno-nationalist rhetoric that elevates whites to a dominant status. White supremacy has been constant, in various forms, throughout American history, and we shouldn’t relegate this factor to secondary status in explaining continued inequality in America today. Chomsky is right that racism is utilized as a weapon to reinforce classism among modern operatives of the plutocracy within the GOP. But racism also operates independently to reinforce white privilege and power at a time when the population is rapidly diversifying demographically away from a Caucasian white-identifying majority. We are talking today about a population in which – depending on the survey question asked – a third to half of Americans, and most republicans now embrace a mainstreamed version of white supremacy that accepts Great Replacement propaganda, celebrates confederate iconography, and elevates white identity to a national ideal. These are terrifying trends.
Yes, GOP elites are intensifying these reactionary social values by selling culture war propaganda as they kick their base – the vast majority of which are not wealthy – in the teeth on economic issues. But this is such a brutally effective method of control precisely because of the long-standing history of xenophobia and white supremacy that defines American political culture.
Noam Chomsky is an inspiration in the fight against propaganda. Throughout the discussion, he encouraged students to ask questions about how and where we get our information, to think about power relationships, how events are framed, who is doing the framing, and what they stand to gain. Through this intentional and reflective process, we become critically educated. Chomsky’s critical insights provide an invaluable guide for helping to develop consciousness about the inequities in our world, their causes, and what we can collectively do about them.
Anthony DiMaggio is Associate Professor of Political Science at Lehigh University. He is the author of Rising Fascism in America: It Can Happen Here (Routledge, 2022), in addition to Rebellion in America (Routledge, 2020), and Unequal America (Routledge, 2021). He can be reached at: anthonydimaggio612@gmail.com. A digital copy of Rebellion in America can be read for free here. Raihan Alam is an incoming PhD student in Management at UC San Diego’s Rady School of Management. He will be graduating from Lehigh University in May 2023 with a B.A. in psychology and political science and a minor in philosophy. He studies the psychological factors that contribute to intergroup conflict and political extremism and ways to combat them.
إنّ التاريخ يأخذ وقته في حياكة الأحداث إلى أن تكتمل شروط التحوّل الكبير، والذي سوف يشهده ويعاصره ويعيشه العالم لحقب، وربما لقرون.
في تناول الأحداث الصغيرة منها والكبيرة، وتحليل أسبابها واستشراف نتائجها، يُثبت الإنسان في كلّ مرّة أنّه “خُلِقَ عجولا”، وأنّه رغم هذا التاريخ الطويل نسبياً للبشرية، فهو ما زال قليل الصبر والحكمة في تفكّره واستقراءاته. وإذا بدأنا هنا من الحرب الإرهابية، التي شنّتها الدول الاستعمارية الغربية وأتباعها، على سوريا عام 2011، وقام أحدنا بالعمل المضني في استعراض تيّار الإعلام الغربي والعربي بخصوص هذه الحرب، نجد أنّ التحليلات والاستقراءات التي نُشرت بصددها، والتي ساهمت في تضليل الكثيرين تفتقر إلى الاستفادة من التاريخ، كما تفتقر إلى نعمتي الحكمة والصبر. وإذا تناولنا الحرب على اليمن بعُجالة، نجد أنّ معظم ما قيل ونُشر عن الحرب على اليمن لا علاقة له بتاريخ اليمن، ولا بصفات الشعب اليمني الأصيلة والمثبتة، ولا بالحقائق الوجودية اليوم التي يعيشها هذا الشعب، بل تنطلق بمعظمها من استهداف عزيمة وثقة هذا الشعب بنفسه، ومحاولة إلحاق الهزيمة النفسية به من خلال التهويل الإعلامي الذي هو في الحقيقة أداة من أدوات هذه الحرب على هذا الشعب الشجاع والصابر والمؤمن بالله والوطن.
بعد سنة فقط من بدء هذه العملية في أوكرانيا، يجتمع الرئيسان الروسي والصيني ليناقشا مجالات التعاون
ولكنّ المثال الأكبر، والذي أودّ أن أتوقّف عنده وأقلّبه من كلّ زواياه وجوانبه، وذلك للأثر الشديد له على مصيرنا جميعاً، ومصير البشرية للعقود القادمة، هو العملية العسكرية الروسية في أوكرانيا، والتي رغم انطلاقها من نقطة نزاع بين روسيا والغرب إلا أنّ ارتداداتها ونتائجها ذات أثر بالغ على مستقبل وشؤون الدول، وعلى مستقبل العلاقات الدولية، وعلى مستقبل الإنسان في كلّ مكان، ولن تستكمل هذه الارتدادات دورتها ونتائجها إلا بعد عقود من الآن، وسيعيش أبناؤنا وربما أحفادنا التغيرات التي أطلقتها شرارة هذه الحرب فقط لإطلاق مسار تشعّب بعد ذلك وتطوّر في الميادين المختلفة وتطوّرت أهدافه وأصبح مثل كرة الثلج لا يمكن إيقافه بمكان ولا تحديده بموضوع أو مجال معين.
بعد سنة فقط من بدء هذه العملية في أوكرانيا، يجتمع الرئيسان الروسي والصيني ليناقشا مجالات التعاون بين بلديهما في الطاقة والصناعة وتبادل السلع بالعملات المحلية، والاستثمار في مجالات لم تخطر لهم على بال قبل عام فقط، دون أن يركّزوا على العملية العسكرية الروسية في أوكرانيا، والتي ربما تشكّل اليوم هامشاً صغيراً في إطار هذه العلاقات. وبعد عام من هذه العملية توقّع الهند مع الاتحاد الروسي اتفاقاً هاماً لتصدير الطاقة من روسيا إلى الهند بأسعار تفضيلية، (الأمر ذاته تمّ توقيعه مع الصين وبالعملة المحلية؛ أي استبعاد متزايد للدولار)، الأمر الذي سينجم عنه نهوضاً ملحوظاً في السنوات القادمة للصناعة الهندية والصينية، وتعزيز قدرتهما على منافسة المنتجات الأوروبية والأميركية.
وبعد عام من هذه العملية قامت الصين وروسيا وإيران بإجراء مناورات عسكرية بحرية مشتركة لضمان سلامة وأمن الممرات المائية، الأمر الذي لم يكن يخطر لأحد على بال قبل بدء العملية العسكرية الروسية في أوكرانيا. وبعد عام من هذه العملية قامت الصين برعاية أهمّ اتفاق في هذا القرن، وبالتأكيد أهمّ اتفاق لمصير منطقة غرب أسيا والوطن العربي، وهو الاتفاق الإيراني السعودي، والذي كان مجرّد الحديث عنه قبل عامين يُعتبر ضرباً من الخيال. وبعد عام من العملية أصبحت إيران عضواً في منظمة شنغهاي، وقد قدّمت السعودية مؤخراً طلباً للانتساب إلى منظمة شنغهاي، مما يجعل هذه المنظمة أهمّ منظمة لمنتجي الطاقة: روسيا وإيران والسعودية، وسوف يكون لها رأي هام في أسعار وتوريد الطاقة عالمياً، وتتعامل دول هذه المنظمة بالعملات المحلية، مرسلةً دولار الهيمنة الأميركية إلى حتفه.
وبعد عام من هذه العملية بقي الاقتصاد الروسي منتعشاً، بل ازداد تصديره للنفط والغاز لأنه سارع إلى إيجاد أسواق بديلة عن السوق الأوروبية، وازداد الدخل الروسي من تصدير النفط والغاز عمّا كان عليه قبل العملية العسكرية في أوكرانيا، رغم كلّ العقوبات التي يُمنّي الغرب نفسه بالحديث عنها، وتضخيم آثارها المأمولة بالنسبة لهم، بينما هي فاقدة الأثر والأهمية، بل أكثر من ذلك، لقد دفعت هذه العقوبات الظالمة على الشعوب والدول تجمع دول آسيان لاتخاذ قرارات جريئة بتبادل السلع بعملاتهم المحلية كي لا يتمكّن الغرب من التلاعب بأقدارهم حين يحلو له وللأسباب التي يرتأيها. أي إنّ هذه العقوبات قد ارتدّت على الذين أصدروها بأنها أفقدت ثقة العالم بهم وبعملتهم وبنظام المدفوعات الـ “سويفت”، ودفعت الدول للتفكير ببدائل متحرّرة تماماً من التأثير الغربي. الأمر الذي ينعكس حكماً على مكانة الدولار الأسطورية، كعملة دولية، والتي كانت سبباً أساسياً لهيمنة الغرب الاستعماري على العالم وسطوته على موارده ونجاح عقوباته.
هذا في الشرق، أمّا في الغرب، فقد أرغمت الولايات المتحدة الدول الأوروبية على بتر علاقاتها مع روسيا، رغم أنّ هذه العلاقة كانت تصبّ في صالح الدول الأوروبية من خلال توفير الطاقة الرخيصة لاستخداماتها ولزراعتها ولصناعاتها. وماذا كان البديل؟ كان البديل هو أن تبيع الولايات المتحدة هذه الطاقة للدول الأوروبية بأربعة أضعاف السعر الذي كانت تكلفه هذه الطاقة من روسيا، الأمر الذي سينعكس إفقاراً لهذه الدول الأوروبية، وتخلّفاً في صناعتها وزراعتها، وعجزاً عن منافسة المنتجات الصينية والهندية والإندونيسية والبرازيلية في المستقبل القريب، الأمر الذي سيكفل خروج أوروبا من لائحة الدول المتقدّمة صناعياً، والمنافسة اقتصادياً لدول الشرق التي تمارس الحكمة والصبر في علاقاتها أولاً، وببناء عالم جديد من الإنتاج والعلاقات يزيح بحكم وجوده وقدرته على المنافسة العالم الغربي الذي تصرّف بصلف واستكبار، فوقع في شرّ ما قدّمت يداه.
هذا على الصعيد الاقتصادي والإنتاجي والمالي، أمّا على الصعيد الأخلاقي والإنساني، فقد سقط الغرب سقوطاً مدوّياً في براثن الليبرالية الحديثة سيئة الصيت، وأخذت الإنسانية تعمل على حماية نفسها من تأثيرات الغرب القميئة على مستقبل أجيالها. ولكلّ هذا أقول لمن ما زال يؤمن بقوّة الغرب وحكمته، وأنه لا يُقهر وأنه الأنموذج والمثل، إنّ التاريخ يتشكّل ليبرهن عكس ذلك تماماً، ولكنّ التاريخ ليس عجولاً، بل يأخذ وقته في حياكة الأحداث إلى أن تكتمل شروط التحوّل الكبير، والذي سوف يشهده ويعاصره ويعيشه العالم لحقب، وربما لقرون بعد الإيذان بهذا التحوّل من خلال شرارة أطلقت في مكان ما ثمّ أخذت الأحداث مسارها ومجالاتها وتوقيتها بغضّ النظر عن مصير تلك الشرارة، وبشكل أكبر وأهمّ وأدهى مما يتخيّله كثيرون.
إن الآراء المذكورة في هذه المقالة لا تعبّر بالضرورة عن رأي الميادين وإنما تعبّر عن رأي صاحبها حصراً
The new foreign strategy says Russia is responsible for defending cultural and spiritual values against “pseudo-humanistic” and other “neoliberal ideologies”.
Russian President Vladimir Putin in Moscow, Russia in February 2022. (Reuters)
Russia adopted a new foreign policy doctrine on Friday that prioritizes reforming world politics away from the hegemony of the United States and its Western allies and supporting countries that choose to fight neocolonialists and foreign interference.
The new foreign strategy went into effect after being signed by Russian President Vladimir Putin.
“The Russian Federation intends to give priority to the elimination of vestiges of the dominance of the United States and other unfriendly countries in world politics,” the document said.
Russia would aim to “create the conditions for any state to reject neo-colonialist and hegemonic aims,” the 42-page policy read.
“Radical changes” in the world prompted the new policies, Putin said during a security council meeting, stressing that Russia’s engagement in the international arena must reflect its view on these changes.
Defender against neo-liberal ideologies
Russia views China and India as key allies in its new foreign doctrine and stresses the strategic importance of deepening relations and “coordination with friendly sovereign global centers of power and development located on the Eurasian continent.”
The war in Ukraine led to severe sanctions by the US and EU who lobbied countries around the world to join in on the unilateral sanctions, but many countries, including China and India, increased economic and bilateral relations with Moscow, reaching historic levels.
Chinese President Xi Jinping made a three-day official trip to Moscow earlier this month where he met with Putin and held what was described by the media as historic talks. The two presidents signed during Xi’s trip two joint strategic documents aiming to boost the two global powers’ economic and diplomatic partnership.
Russia, as per the document, is a “state civilization” and is responsible for protecting the “Russian world” – in reference to cultures that align with that of the country within Eurasia. Russia will be tasked with protecting “traditional spiritual and moral values” against “pseudo-humanistic and other neo-liberal ideological attitudes.”
Russia’s Foreign Minister Sergey Lavrov stated that the new foreign policy doctrine identified “the existential nature of threats to the security and development of our country, driven by the actions of unfriendly states.”
“The United States of America is directly named as the main instigator and driver of anti-Russian sentiment,” he added.
“The West’s policy of trying to weaken Russia in every possible way is characterized as a hybrid war of a new type.”
The wars we are witnessing, whether the military war in Ukraine, or soft wars in the China Sea, or cultural wars in what Neo-Liberalism is distorting and charting for humanity, are all manifestations of a strong opposition by the West to the establishment of this multipolar world.
The core problem humanity is facing nowadays can be summed up as follows:
There is no political or moral leader to this world, as the strongest militarily and financially are pursuing additional military and financial powers, and the system that was produced by the Second World War and established by the agreement of so many countries, is truly collapsing, with no alternative yet in place. The BRICS countries, the Shanghai Cooperation Organization, and many Asian countries are trying to establish a multipolar system in the world, where no opinion can have an absolute veto over the will of so many countries.
The wars we are witnessing, whether the military war in Ukraine, or soft wars in the China Sea, or cultural wars in what Neo-Liberalism is distorting and charting for humanity, are all manifestations of a strong opposition by the West to the establishment of this multipolar world. While Russia, Iran, India, Latin America, and Africa are trying their best to get rid of the hegemony of the Dollar, the hegemony of NATO’s will, the hegemony of the West that had been looting resources from all over the world over decades, the West is absolutely desperate to establish new alliances through which it may prevent the birth of this multipolar system.
From this very perspective, we can understand the persistent efforts the US is exerting with Japan, South Korea, the Philippines, and Taiwan to establish an alliance in the China Sea to threaten China and prevent whatever steps China wants to make in order to ensure the dawn of a multipolar system. The efforts of the US, and what they called an “echo alliance” with Australia and Canada can also be understood in the same context, in order to frighten China from any serious effort in aligning with other countries who might subvert the hegemony of the West in the world.
From the same perspective, we can understand the current competition in Africa between China, Russia, and the old colonialists: France and the United States, and of course the West is not interested in the rise or equality or prosperity of the Africans. All the West is interested in is what these countries have, how they can loot gold and other precious minerals, and how they can loot this wealth without paying anything in return in order to support their economies and build their countries at the expense of the lives and prosperity of Africans.
Latin America is no exception as well. While Chávez, Lula da Silva and other nationalist leaders tried and succeeded in shaking the fetters of the US off their countries, the United States is intensifying its efforts in Latin America to prevent the liberation of the will of all Latin American countries that had been considered for decades as the backyard of the United States.
As for our region, the Middle East, the United States has lately, or last year, added “Israel”, the Zionist entity, as a member of CENTCOM for the first time in history, which means that the US has appointed “Israel” as its military representative in the region in order to do what it sees fit so as to preserve the hegemony of the US, and extend Zionist hegemony over the will of the Arab and Iranian people in the Arab World and Iran. The issue here is not traditional: the Zionist entity is not launching wars on the border with its army and its tanks and airplanes; it is launching intelligence wars inside countries in an attempt to change the political systems in these countries, and turn them into satellite states that echo the will of the Israelis, and by default the will of the Americans and the West.
This, in essence, was the reason for the terrorist war that has been launched against the Syrian people for the last 12 years. This in essence is the reason why NATO countries destroyed Libya and betrayed Russia (and, in fact, did not fulfill their promise to Russia that it was going to be part of their alliance). The result is that Libyan oil is being divided between Italy, France, and the United States; it has been looted by these countries, while the Libyan people remain impoverished, scattered, and unable to secure their subsistence.
This, again, is what has been happening in Iran since last year. “Israel”, the Zionist entity, is using its intelligence to recruit Iranians and others probably, who will be its agents to fulfill its agenda in Iran, without launching a traditional war, and it is within this context that we can observe what is happening in Iran of claims about women’s freedom or other democratic appeals or whatever. If the Israelis and the Americans believe in freedom for women and women’s rights, then tell me what is happening to the 29 Palestinian women prisoners who are being harassed and subjugated in Israeli jails, in an unprecedented way crackdown on women.
The Israeli entity is the most racist occupation in history after South Africa. It is killing Palestinians Point Blank, it is destroying their houses, robbing their property, looting their lands, and perpetrating the worst crimes humanity is witnessing nowadays. Yet “Israel” is the partner of the West in trying to subjugate other countries and undermine the free will of any government and any person that refuses to be an agent of this power that is only interested in military industry, and accumulating more wealth, and bringing more money to the wealthiest in the world who made their wealth by looting other people and other countries.
Hence it is the duty of every truly free person to stand fast and firm against this horrifying process of the West to try and control the will of other countries. And from this perspective, I can certainly say that the war Russia is fighting in Ukraine against NATO is not only a Russian war; it is a world war, and it is not fair to let Russian soldiers and Russian people fight on their own in a war that the entire humanity needs to fight.
NATO has imposed this war on Russia, and it is desperate to defeat Russia in order to terrify any country that may think of standing up against Western hegemony. Russia is leading the way for a different world, and many Western leaders have announced that they are sending trillions of dollars and armaments in order to prevent Russian victory. Russian victory would mean Western defeat, and Western defeat would mean the end of Western hegemony over the world. This is what the West cannot afford, and this is why the West considers this war an existential war. In fact, it is a war for everyone in the world but for reasons different from those of the West.
في هذه المحاولة الاستشرافية في مطلع 2023 قراءة وتساؤلات لمرحلة ما بعد الحرب في أوكرانيا. ننطلق في هذه القراءة من فرضية نناقشها في ما بعد أنّ روسيا ستحسم المعركة العسكرية في أوكرانيا ما قبل نهاية ربيع 2023. لكن هذا لا يعني انّ الصراع مع الحلف الأطلسي بشكل عام والولايات المتحدة بشكل خاص قد ينتهي. فالسؤال يصبح كيف سيتعامل الحلف الأطلسي وخاصة الولايات المتحدة مع الحقائق الميدانية التي تكون قد تحقّقت في الميدان؟
هناك عدة حالات ممكنة ولكن باحتمالات متباينة مبنية على قراءة في ذهنية القيادات الغربية والإمكانيات المتوفرة ضمن ميزان قوّة مختلّ لصالح روسيا بشكل عام وخاصة لصالح المحور العالمي الرافض للهيمنة الأميركية و/ أو الأطلسية. وما يُعقّد المشهد هو اعتبار الطرفين المتخاصمين أيّ روسيا والحلف الأطلسي أنّ الحرب في أوكرانيا حرب وجودية وبالتالي لا يمكن لأيّ طرف أن يتصوّر مخرجاً إلاّ النصر القاطع. وبما أنّ فرضية هذه القراءة تتبنّى حتمية النصر الروسي ما يبقى علينا هو تصوّر ما يمكن أن يقدِم عليه الأطلسي. وعندما نتكلّم عن الأطلسي نقصد بالدرجة الأولى الولايات المتحدة، ثم الاتحاد الأوروبي كمؤسسة، ثم الدول الأوروبية التي تماهت مع سياسات الولايات المتحدة وأخيراً بيروقراطية الحلف الأطلسي كمؤسسة قائمة بحدّ ذاتها. غير أنّ الحلقة الأساسية هي الولايات المتحدة لأنّ ما يمكن أن تقدم عليه سينجرّ بشكل أو بآخر على مؤسسة الحلف الأطلسي والاتحاد الأوروبي.
أما الحلقة الأضعف فهي الدول الأوروبية التي ستتعرّض إلى اضطرابات اجتماعية وسياسية بسبب التراجع الاقتصادي الناتج عن سياسة العقوبات المفروضة على روسيا وخاصة في قطاع الطاقة التي كانت تستوردها بشكل رخيص من روسيا دون أن تجد البديل الاقتصادي الذي يحرّرها من الاتكال على روسيا. والنتائج البنيوية على الاقتصاد الأوروبي هي تفكيك البنية الصناعية التي كانت ركيزة الطبقة الوسطى والاستقرار الاجتماعي. ليس هناك من آفاق إيجابية للاقتصاد الأوروبي في ظلّ ذلك التحوّل البنيوي خاصة مع صعود دول الجنوب الإجمالي وفي مقدّمته الصين والهند والبرازيل الذين سيتقاسمون الناتج الصناعي العالمي. دول أوروبا قد تكون دول متاحف التاريخ وللسياحة والترفيه وليس أكثر. فتصبح دولاً لا وزن لها في إدارة شؤون العالم. وهذا الهبوط لن يكون سهلاً بل ترافقه توترات اجتماعية وانتفاضات سياسية تعيد النظر في البنى السياسة والاقتصادية والاجتماعية لهذه الدول. وما سيساهم في ذلك الانحدار الكارثي هو الرداءة غير المسبوقة للقيادات السياسية سواء كانت في الحكم أو في المعارضة. المشهد البريطاني يتلاقى مع المشهد الألماني والمشهد الفرنسي، تلك الدول التي كانت تتصدّر المشهد الأوروبي. فأما دول الأطراف في أوروبا فقد تغرق أيضاً في حروب عرقية ودينية دون أن تكون لها ركيزة تستند إليها. فعلى سبيل المثال وليس الحصر اسبانيا تواجه حركة انفصالية في منطقة كتالونيا، وإيرلندا الشمالية قد تنفصل عن المملكة المتحدة لتلتحق بالجمهورية الإيرلندية، واسكتلندا قد تستقلّ عن المملكة المتحدة، وكورسيكا عن فرنسا، وبلجيكا تنقسم إلى قسم فرنسي وقسم فلمنكي. وما تبقّى من أوكرانيا خارج القبضة الروسية قد يذهب قسم منه إلى بولندا، والقسم الآخر إلى رومانيا ومولدوفيا. خارطة أوروبا مُعرّضة لتغيير جذري أسوة بما نتج في الحروب الأوروبية في القرون الماضية. كما هناك كلام عن انشطار إيطاليا بين جنوب فقير وشمال ثري. أما النعرات الطائفية في منطقة البلقان فمن السهل إشعالها مجدّداً مع سقوط الحكومات المركزية في حقبة الضيق الاقتصادي. تصدّعات أوروبا
أما الاتحاد الأوروبي كمؤسسة فيشهد تصدّعات داخلية عززتها الإجراءات العبثية بحق روسيا وارتداداتها على الاقتصادات الأوروبية. فالزمرة الحاكمة في مؤسسة الاتحاد الأوروبي ملتزمة عقائدياً بمقرّرات دافوس لإعادة التعيين للاقتصادات القائمة نحو اقتصادات أكثر «لطفاً بالبيئة» على حدّ زعمهم. وهذا التوجه إلى مصادر طاقة نظيفة ومتجدّدة بشكل قسري وسريع سيؤدّي حتماً إلى تفكيك البنية الصناعية القائمة ما يوقع دول الاتحاد في حالة فقر وتراجع حضاري شبيه بالقرون الوسطى. فالطاقة هي مصدر الحضارة والعبث فيها له ارتدادات خطيرة على سكّان هذه الدول. لكن عدداً من حكومات دول الاتحاد يتململ من طغيان الزمرة المسيطرة على الاتحاد خاصة أنها لا تخضع لمساءلة ومحاسبة. وحكومة فيكتور اروبان المجرية تقود حملة التمرّد ضدّ الاتحاد قد تتبعها حكومة صربيا. من جهة أخرى أبدت بعض الدول الأوروبية كألمانيا وفرنسا امتعاضها من استغلال الولايات المتحدة للشحّ في قطاع الطاقة لفرض أسعار اضعاف ما كانت تدفعه لروسيا. ونعتت هذه الدول الولايات المتحدة بالتصرّف «غير الصديق» مع الحليف!
أما الدول الأوروبية فالتصدّعات التي أحدثتها الحرب الأوكرانية تتفاقم خاصة أنّ النموذج الاقتصادي النيوليبرالي المسيطر بعد سقوط الاتحاد السوفياتي وصل إلى طريق مسدود. كما أنّ النظام النيوليبرالي حوّل السلطة الفعلية للشركات الكبرى وخاصة بيوت المال التي لا تكترث لحال المواطنين. وهذه القوى المسيطرة على القرار السياسي والاقتصادي والثقافي في تلك الدول تستولد نخباً وقيادات من المستوى الرديء على صعيد العلم، والفهم، والأخلاق. وبالتالي ليس في الأفق المنظور إمكانية بروز قيادات أوروبية تضع مصلحة دولها فوق أيّ اعتبار وخاصة تلك الاعتبارات التي تريد إعادة الهندسة الاجتماعية وفقاً لمقرّرات منتدى دافوس. لذلك لا يمكن أن نتوقع خلال السنة الجديدة أيّ تغيير جذري في المشهد الأوروبي إلاّ ربما المزيد من التوترات والفوضى الأمنية والاقتصادية والاجتماعية ما يجعل أوروبا تفقد دوراً كانت تقوم به على الصعيد العالمي. فكيف يمكن وصف سلوك القيادات الأوروبية التي حوّلت أوروبا من ثاني كتلة اقتصادية في العالم، وربما في بعض الأحيان الأولى، إلى مجموعة دول مترهّلة. هذا انتحار جماعي أقدمت عليه قيادات حمقاء بكلّ معنى الكلمة.
تبقى الولايات المتحدة العنصر الأساسي في الحلف الأطلسي. والمشهد الأميركي معقّد حيث الخطاب السياسي السائد لدى المؤسسة الحاكمة وخاصة عند المحافظين الجدد الذين قبضوا على القرار السياسة الخارجية لا يسمح بأيّ تراجع أمام روسيا. لقد أصبحت الطبقة الحاكمة والمحافظون الجدد أسرى الخطاب السياسي حيث الانتصار على روسيا بات شرط ضرورة للبقاء. فلا يتصوّر المحافظون الجدد عالماً وروسيا موجودة على الأقلّ بشكلها الحالي. فلا بدّ من قلب النظام القائم في روسيا والإتيان بنخب سياسية تساهم في تقسيم روسيا إلى عدّة ولايات أو دول ضعيفة تحول دون إمكانية نهوض لدولة لها وزن على الصعيد الدولي. والمحافظون الجدد يحرصون على إجهاض أيّ محاولة للتفاهم مع روسيا تفادياً لحرب قد تخسرها حتماً الولايات المتحدة مهما كانت الكلفة عالية على روسيا. فعلى سبيل المثال وليس الحصر تسبّب المحافظون الجدود تسريب خبر لقاء بين مدير وكالة المخابرات المركزية وليم بيرنز ونظيره الروسي في أنقرة لإجهاض أيّ محاولة لمنع التصعيد في أوكرانيا الذي إذا ما استمرّ سيضع الجيش الروسي في مواجهة مباشرة مع الجيش الأميركي. وهذا الأمر لا يريده الطرفان سواء كان الرئيس الروسي بوتين أو الأميركي بايدن. لكن المحافظين الجدد لهم أجندة مختلفة ولا يكترثون لنتائج حتمية عن مواجهة عسكرية مباشرة بين الدولتين.
أجندة المحافظين الجدد!
السؤال المطروح هو هل يستطيع المحافظون الجدد تجاوز التحفّظات داخل الإدارة الأميركية التي لا تريد المواجهة المباشرة مع روسيا؟ ليس من السهل الإجابة خاصة أنّ المرحلة السابقة شهدت نصر المحافظين الجدد في توريط الولايات المتحدة في الصراع الذي كان بالإمكان تجنّبه مع روسيا. فهم من رفضوا التعامل مع العروض الروسية لحلّ الأزمة في أوكرانيا، وهم بالأساس من قام بالانقلاب على الحكومة المنتخبة شرعيا في أوكرانيا في 2014 وفي مقدمتهم فيكتوريا نيولند زوجة روبرت كاغان كبير المنظرين للمحافظين الجدد. وهم من استعمل اتفاقات منسك في 2015 للمراوغة لتمكين القوّات الأوكرانية لمواجهة روسيا. وهم من أجهضوا الاتفاق الذي تمّ الوصول إليه في أنقرة بين روسيا وحكومة زيلينسكي في نيسان/ ابريل 2022 بعد 3 أشهر من بدء العملية العسكرية الروسية في أوكرانيا. وهم من يدفعون إلى تفريغ ترسانات الدول التي كانت في كنف حلف وارسو وإرسال السلاح والذخائر لأوكرانيا. وهم من يدفعون البنتاغون لتفريع ترسانة الولايات المتحدة من الأسلحة المتطوّرة وإرسالها إلى أوكرانيا. النتيجة لكلّ ذلك هو تدمير كلّ السلاح المتوفر لأوكرانيا وقتل الجنود ودون تحقيق أيّ تقدّم على الأرض. فسجل المحافظين الجدد هو تراكم هائل من الفشل ولكن لا يوجد من يُسائل ويحاسب. ولذلك ستستمرّ إدارة بايدن في ارتكاب الحماقات تلو الحماقات دون تحقيق أي نتيجة لصالح الولايات المتحدة حتى يصبح تحطّم أوكرانيا أمراً واقعا لا يمكن الهروب منه.
المحافظون الجدد لهم أجندة من بند واحد وهي فرض هيمنة الولايات المتحدة على العالم وإنْ أدّى ذلك إلى تدمير الحلفاء وتهديد العالم بحرب نووية لن ينج منها أحد. فهم لا يكترثون لآثار سياساتهم طالما كانوا متمسكين بمفاصل صنع القرار في الولايات المتحدة سواء في الإدارة أو مراكز الأبحاث أو الجامعات أو الإعلام المرئي والمكتوب. وشبكة علاقات المحافظين الجدد لا تقتصر على الولايات المتحدة بل امتدّت إلى دوائر القرار في مكوّنات الحلف الأطلسي وإنْ كانت سياساتهم تدمّر تلك المكوّنات.
استطاع المحافظون الجدد أن يفرضوا سردية بين النخب الحاكمة في الولايات المتحدة والدول الأوروبية المتحالفة معها مفادها أنّ الصراع مع روسيا هو صراع بقاء بينما في الحقيقة هو صراع لتدمير روسيا والاستيلاء على ثرواتها الهائلة من المواد الخام، والطاقة، والمعادن الثمينة والنادرة. كما أنّ حجم روسيا الجغرافي يهدّد مصالح الولايات المتحدة فلا بدّ من تفكيك الدولة الاتحادية. وتعمّ مراكز الأبحاث في الولايات المتحدة عن خرائط محتملة لروسيا المفككة. وبالنسبة للولايات المتحدة فإنّ الهدف الحقيقي هو الحفاظ على هيمنتها وخاصة هيمنة الدولار الذي يواجه تحدّيات من اقتصادات ترفض تلك الهيمنة. والطابع الوجودي لهذا الصراع مبني على ثقافة الفكر الرأس المالي أن التوسّع هو الوسيلة الوحيدة للبقاء. وتاريخ الولايات المتحدة مبني على التوسّع الجغرافي، في البداية تجاه الغرب حتى الوصول إلى المحيط الهادي ومن ثمّ القفز إلى الجزر في ذلك المحيط وصولاً إلى الفليبين والشاطئ الشرقي للصين.
أما جنوباً، فكانت نظرية مونرو التي منعت الدول المستعمرة في القرن التاسع عشر من التواجد في أميركا اللاتينية وجعلها الحديقة الخلفية للولايات المتحدة. وتحفظ في أدراج الإدارات المتتالية خطط احتلال كندا إذا ما اقتضى الأمر! والآن تعمل الولايات المتحدة على التوسع في القطب الشمالي حيث توجد ثروات نفطية وغازية وشرقاً نحو القارة الآسيوية. وبالتالي لا بدّ من وضع اليد على روسيا.
المشروع الأميركي لوضع اليد على روسيا كان مكتوماً بعد سقوط حائط برلين. لكن سرعان ما تبدّدت الوعود المقطوعة للقيادات الروسية بعدم التوسّع شرقاً للحلف الأطلسي. وحجر الزاوية في مواجهة روسيا هو أوكرانيا وفقاً لنظرية زبغنيو بريجنسكي الذي اعتبر أوكرانيا ضرورة أساسية للقضاء على روسيا. المهمّ هنا أنّ التوسع الشرقي للحلف الأطلسي تجاه روسيا يشكّل خطراً وجودياً على روسيا لا يمكنها تجاهله خاصة إذا ما تمّ نشر الصواريخ البالستية النووية فيها كما يدعو إليه قادة النظام الانقلابي في أوكرانيا. حاولت القيادة الروسية إقناع الإدارات المتتالية بعدم التوسع شرقاً لكن العنجهية الأميركية لم تكترث للهواجس الروسية. لسنا هنا في إطار سرد تطوّر العلاقات الروسية الأطلسية/ الأميركية بل لنؤكّد أنّ صوغ الخطاب السياسي يدعو إلى المواجهة لدرء خطر وجودي يعني الوصول إلى الحرب لحلّ المشكلة. الحرب هنا لن تقتصر على الحرب بالوكالة كما هو الحال الآن في أوكرانيا أو ربما عبر بولندا في ما بعد بل في المواجهة المباشرة العسكرية مع روسيا.
ما يؤكّد عمق الأزمة بين النخب الأميركية مقال صدر يوم السبت في 7 كانون الثاني/ يناير 2023 في صحيفة «واشنطن بوست» والموقع من كوندوليزا رايس وزيرة الخارجية السابقة في ولاية بوش الابن وروبرت غيتس وزير الدفاع السابق في كلّ من ولايات بوش الابن وباراك أوباما. في المقال اعتراف واضح أنّ الوقت هو لصالح روسيا ولا بدّ من زيادة الجهود الأميركية (أيّ زيادة التمويل والإمداد لأنها مربحة للمجمّع العسكري الصناعي) وذلك لمنع النصر الروسي. فهذا الأمر سيكون له تداعيات كارثية بالنسبة للولايات المتحدة (خاصة للمجمّع العسكري الصناعي) وأنّ إمكانية تغيير تلك النتائج ستكون صعبة للغاية إنْ لم تكن مستحيلة. والهيمنة الأميركية على العالم أصبحت مطلباً «وجودياً» بالنسبة لتلك النخب التي لا تكترث لنتائج تلك الطموحات والتي لا تأخذ بعين الاعتبار التحوّلات التي حصلت في موازين القوّة. فمقال رايس وغيتس دعوة صريحة لاستمرار الحرب مهما كانت النتائج.
فما هي إمكانيات مواجهة مباشرة بين الحلف الأطلسي وروسيا، وبالأخصّ بين الولايات المتحدة وروسيا؟ حقيقة، إنّ المواجهة في أوكرانيا لها طابعان: الأول مع الحكومة الأوكرانية والثاني الذي تمّ إعلانه منذ بضعة أيام على لسان وزير الدفاع الاوكراني أنّ المواجهة هي بين روسيا والحلف الأطلسي. هدف العملية العسكرية الروسية في أوكرانيا هو تدمير الجيش الأوكراني وخلع النازيين من الحكم في أوكرانيا ومنع الحكومة من الالتحاق بالأطلسي. التطوّرات الميدانية أبرزت تدفق السلاح والذخيرة من مجمل دول الحلف الأطلسي دون أن يغيّر في ميزان القوّة في المعركة الذي كان ولا يزال لصالح روسيا. واليوم تعلن هذه الدول عن نفاذ سلاحها وذخيرتها لتزويد القوّات الأوكرانية بما كانت تملك من بقايا سلاح حلف وارسو. أما السلاح الغربي الذي يسيطر على معظم دول أوروبا الغربية فإنّ معرفة القوّات الأوكرانية بذلك السلاح ما زالت محدودة وتحتاج لوقت طويل للتتأقلم معها.
لكن هل تستطيع الولايات المتحدة الاستمرار بسياسة حرب رغم ضعف الجهوزية. ولا نقصد هنا الجهوزية العسكرية فحسب بل الجهوزية الاقتصادية. يشير الستير كروك وهو دبلوماسي سابق ومن أهمّ العقول السياسية المحلّلة للمشهد السياسي في آخر مقال له بتاريخ 13 كانون الثاني/ يناير 2023 على موقع «ستراتيجك كلتشار فوندشن» إلى أنّ الغرب يتجه تدريجياً لتحويل اقتصاداته لاقتصادات حرب وخاصة في ما يتعلّق بسلسلة التوريد في الإنتاج الصناعي. لكن في رأينا هذه عملية طويلة المدى خاصة بعد تفكيك البنية التحتية الصناعية في الولايات المتحدة والمملكة المتحدة وبالتالي القدرة على تحويل الطاقة الصناعية إلى طاقة إنتاجية حربية كما حصل في الحرب العالمية الثانية أمر مشكوك به في المدى المنظور. فاستبدال سلسلة التوريد التي اعتمدت خلال العقود الأربعة الماضية لتوطين مفاصل عديدة من القطاعات الصناعية في عالم الجنوب الإجمالي لا يمكن إنجازه بفترة قصيرة. فروسيا، ومعها الصين وسائر دول الجنوب الإجمالي لن يتركوا المجال لذلك التحويل.
لذلك نعتقد أنّ المعركة العسكرية الاستراتيجية بين روسيا وأوكرانيا قد حسمت في رأينا لصالح روسيا وأنّ ما تبقّى هو ترجمة الحسم الاستراتيجي إلى معالم مادية سواء في التقدّم الجغرافي أو في التغيير النظام السياسي في أوكرانيا وإنْ اقتضى الأمر دخول كييف لفرض نظام جديد. وقد يحصل ذلك خلال سنة 2023.
المواجهة مع الأطلسي طويلة
أما المواجهة مع الأطلسي فقد تطول خاصة أنّ الغرب يراهن على إطالة الحرب دون تدخّل مباشر للولايات المتحدة وسائر دول الحلف الأطلسي. ويعتمد المحافظون الجدد على سيطرتهم على الإعلام والسردية التي تقول بأنّ أوكرانيا «تنتصر» والقضية مسألة إمدادات فقط لا غير. لكن بدأت النخب الحاكمة تواجه معضلة تفسير انهيار خطوط الدفاع الأوكرانية وخاصة في منطقة سوليدار وباخوت. فهل ستتخذ الخطوة التالية بدخول جيوش الأطلسي بشكل مباشر في أوكرانيا؟
المزاج السياسي المعادي لروسيا في دول أوروبا غير مؤيّد للدخول في حرب مع روسيا. استطلاعات الرأي العام واضحة بهذا الشأن. فالمواطن الأوروبي بغضّ النظر عن رأيه في روسيا وحكّامها لا يريد ولا يتحمّل ثمن المواجهة. ولقد بدأت تظهر معالم «التعب» من أوكرانيا. ولكن المنحى الذي نشهده هو عدم اكتراث الحكومات الغربية للرأي العام الداخلي كما جاء على لسان وزيرة الخارجية الألمانية أنّ المانيا مستمرّة بدعم الجهود الحربية في أوكرانيا وأنها لا تكترث لآراء المواطنين وهذا بكلّ وضوح. لكن العديد من المؤشرات تفيد بأنّ الدول الأوروبية غير جاهزة وغير راغبة للدخول في حرب. أما الولايات المتحدة فهناك من يدفع إلى الدخول المباشر إلى أوكرانيا وإنْ كان الوجود العسكري الأميركي كـ «خبراء» و «مدرّبين» و «مستشارين» أصبح من المسلّمات. والمحافظون الجدد يدفعون إلى المواجهة المباشرة بعد استنفاذ الوكلاء علماً أنّ الجهوزية العسكرية الأميركية غير متوفّرة كما جاء على لسان رئيس هيئة الأركان المشتركة مارك ميلي في جلسة استجوابه في لجنة الدفاع في الكونغرس عند استلام مهامه. قال آنذاك في 2018 إنّ الجهوزية الأميركية لا تتجاوز 40 بالمائة وإنّ هدفه هو إيصال الجهوزية الأميركية إلى 60 بالمائة بحلول 2024.
وتأكيداً على ذلك يصدر معهد «أميركان هريتاج فونداشن» تقريراً سنوياً عن الجهوزية العسكرية الأميركية. وعلى مدى السنوات الخمس الماضية لم يتجاوز تقييم تلك الجهوزية مرحلة «الهامشية» أيّ لا تستطيع الحسم في أيّ مواجهة. وإذا أضفنا المحاكاة النظرية للمواجهة العسكرية مع أيّ من روسيا أو الصين أو إيران فكانت النتائج دائماً لصالح خصوم الولايات المتحدة. صحيح أنّ الولايات المتحدة تنفق أكثر من أيّ دولة في العالم لكن هذا الانفاق لا يعني تفوّقاً في الجودة كما تظهر التقارير حول فعّالية ركائز السلاح الجوّي أو البرّي الأميركي. وإذا أدخلنا في المعادلة السلاح المتفوّق الروسي خاصة في الصواريخ الفائقة لسرعة الصوت وغياب وسائل دفاع مضادة له فإنّ التفوّق التكتيكي والاستراتيجي للسلاح الروسي أصبح كاسراً.
وهناك خبراء عسكريون كـ اندري مرتيانوف يشكّكون بالقدرات البشرية لقيادة الأعمال العسكرية حيث خبرة القادة العسكريين الأميركيين في خوض حروب حقيقية ضدّ خصوم لديهم الحزم والعزم لا يُشجّع على إمكانية نصر عسكري. فتجربة الحرب الكورية والفيتنامية والعراقية والأفغانية تدلّ بوضوح إلى أنّ التفوّق الناري لا يعني بالضرورة النصر. لكن بعيداً عن هذه الاعتبارات ما نريد أن نقوله إنّ الولايات المتحدة غير جاهزة على الصعيد العسكري لخوض حرب طويلة مع دولة من طراز روسيا أو الصين على الأقلّ في المدى المنظور. لدى الولايات المتحدة قدرة نارية تدميرية هائلة تستطيع تدمير المعمورة آلاف المرّات ولكن ليس لديها كيف تترجمها في السياسة.
هناك عقول باردة خارج البنتاغون كدوغلاس مكغريغور او لاري جونسون أو فيليب جيرالدي أو راي مكغوفرن أو لاري ويلكرسون على سبيل المثال وليس الحصر تعي هذه الحقائق وتحاول ضبط إيقاع مسار السلطة السياسية. لكن المحافظين الجدد يتربّصون بها ويمنعون أن تصل تلك الآراء إلى مركز القرار. لذلك سيحتدم الصراع داخل الدولة العميقة بين من يؤيّد توجّهات المحافظين الجدد ومن يخشى من الوقوع في الهاوية. ولا نستبعد تكرار مشهد إنشاء لجنة بيكر ـ هاملتون جديدة التي كفّت يد المحافظين الجدد في إدارة بوش بعد الفشل في العراق. البديل عن كفّ يد المحافظين الجدد هو الحرب التي ستكون مدمّرة للولايات المتحدة وللعالم.
وهنا يكمن العامل الداخلي في الولايات المتحدة الذي قد يغيّر المعادلات بين الدولة العميقة والبيت الأبيض. مسلسل الفضائح التي تطال الرئيس الأميركي يتنامى ما يعني أنّ الدولة العميقة تريد التخلّص من إمكانية ترشّحه مجدّداً في 2024. فتعيين محقق خاص جمهوري الانتماء السياسي للكشف عن تفاصيل «الفضائح» يؤكّد أنّ المؤسسة الحاكمة بما فيها قيادة الحزب الديمقراطي تريد التخلّص من جوزيف بايدن والآتيان بـ كمالا هاريس في حال تنحّى بايدن عن منصبه، أو فتح الطريق لترشيح ميشال أوباما في 2024. في مطلق الأحوال فإنّ التطوّرات الداخلية قد تحوّل الأنظار عن الإخفاق في أوكرانيا ويتيح الفرصة لصوغ خطاب جديد يتجاهل الإخفاق في أوكرانيا. التغيير في السياسة التي تفرضه الوقائع يحتم تغيير في الأشخاص وهذا ما يمكن توقّعه في الأشهر المقبلة لمنع التدهور الذي الكارثي الذي يهدّد الجميع.
في الخلاصة نرى ما بعد الحرب في أوكرانيا الانتصار الكاسح لروسيا وتصدّع الاتحاد الأوروبي. كما سنرى تصاعد النقاش حول الدخول الأطلسي بشكل عام والولايات المتحدة بشكل خاص في حرب نووية محدودة بالنسبة للمحافظين الجدد. لكن في المقابل لا يستطيعون ضبط إيقاعها لأنّ روسيا لن تستجيب لرغبات المحافظين الجدد. فليس هناك من مواجهة نووية «محدودة»! لذلك لا نتوقع الوصول إلى تلك المرحلة بل ربما بداية تفكيك الحلف الأطلسي الذي فقد جدواه ومصداقيته. أما على صعيد الوضع الداخلي في الولايات المتحدة فتراكم الفشل في السياسة الخارجية سيظهر الحاجة للتغيير. من سيقود التغيير وكيف فهذا حديث ليوم آخر. الرهان هو على ما تبقّى من عقول باردة خاصة في أجواء التردّي لمستوى النخب السياسية في الغرب…
*باحث وكاتب اقتصادي سياسي والأمين العام السابق للمؤتمر القومي العربي وعضو منتدى سيف القدس
On December 1, 2018, the Yellow Vests announced themselves in France and the world, registering their name in history books with their revolutionary graffiti tagging of the Arc de Triomphe, one of the country’s most iconic monuments.
“The Yellow Vests will win” was a slogan that reverberated across the world, as the movement became the biggest, most organic, most devoted and truly revolutionary threat any Western country had faced for over half a century.
It was their third week of protest, and there was no going back now.
The world never expected a genuine resistance movement to sprout in France, a Western imperialist hub. The French were – many insisted – too self-righteous, too spoiled, too indoctrinated, and yet for the next six months every Saturday turned into a war zone across the country.
France was wholly gripped by the revolutionary frenzy at the time, and it was because the French way of life isn’t as extravagant as people may think.
The Yellow Vests didn’t bravely endure all this – at least 11,000 arrests, 1,000 political prisoners, 5,000 protesters seriously hurt, 1,000 critically injured, scores maimed for life and 11 deaths – because they have a luxurious lifestyle.
It is hard to say what was worse – the repression by the French regime, or the way Western media and NGOs slandered and ignored the weekly bloodletting, tear gas shelling and mass arrests.
The Yellow Vests are an immediate, permanent rejoinder to Westerners who claim that their governments are more protective of democracy and less brutal than those in non-Western countries. That’s one of the three great legacies of the Yellow Vests.
The key to understanding the Yellow Vests is this, and it’s implicitly understood by the average European, totally not understood in places like the United States, and has been intellectually mastered by the vanguard Yellow Vests.
Ever since the pan-European project was activated in 2009, it has failed to do anything. Prosperity, stability and democracy – none of these have been implemented. France is not really France anymore – not unless Brussels says so – and it’s becoming less like France with each passing day under a political system that is still new.
So the Yellow Vests were truly 10 years in the making. They even arrived after a decade full of major social movements, because the first war of the European Union wasn’t a proxy war against Russia but the social war it waged against its own citizens.
The problem was not just the Great Recession of 2008 but the fact that the European Union/Eurozone was the only macroeconomic bloc that implemented absolutely no major recovery plan.
Even worse, its response was to undemocratically ram through far-right austerity policies. The Yellow Vests were the “working-poor class” cemented by the changes in Brussels, and their opponents were the highly-unequal “bourgeois bloc” that only saw the pan-European project in a rainbow glow of total success.
The Yellow Vests disproved the insistence of the Anglosphere – whose cultures are politically conservative – that all populist groups in the West are necessarily on the far-right.
As soon as December 2018, it was clear in France that the Yellow Vests were steeped in left-wing economics, anti-imperialism and a non-Islamophobic, modern conception of healthy patriotism.
This explains the nearly 80 percent approval rate for the movement, and staggering popularity, especially in France which had grown extremely cynical due to undemocratic failures of the pan-European project.
If one word had to be given to describe the Yellow Vests, it would be “civic-minded”. Concern for fellow citizens and the downward spiral of non-elite masses is what basically propels such popular revolutions.
These simple, obvious and pro-community concepts are forbidden in the Western mainstream media. There is no “working-poor class” in France. There are only racist, backward, lazy, always-complaining Frenchmen. There is no “bourgeois bloc” but only an elite group of enlightened and deserving technocrats who decide for us what constitutes the “reality”.
These are truly the two classes of the 21st century West – forget “middle class”, because the pan-European project has dealt the final blow to what Reaganomics/Thatcherism began.
Fully understanding and opposing the West’s current social class reality is the second great achievement of the Yellow Vests, but of course, one cannot find class discussed in the English-speaking media.
However, there is another achievement that is even greater but less discussed, probably because it requires a complete overview of modern Western politics, which began in 1789 with the anti-monarchy/anti-aristocrat/anti-privilege French Revolution.
The arrival and the repression of the Yellow Vests remind us all of the undeniable failures of “liberalism”. The Yellow Vests aren’t actually new but are integral to French revolutionary history transported from 1848-71.
The struggle today is the same as it was back then. It’s a struggle against elitist liberalism and its attendants: oligarchical and anti-democratic parliamentarianism, free-market chaos, anti-government ideology encapsulated by austerity cuts to social services, and encouragement of a rat race to “become bourgeois”.
The Yellow Vests took France and Europe back to 1848 when the “Second Republic” re-ended the French monarchy and claimed the mantle of the French Revolutionary “First Republic”. Liberalism was installed for the first time and immediately proved that it was plagued by all the problems described above.
Liberalism has proved a failure since 1848, and the liberalist principles (“neoliberal” is more commonly used today to differentiate it from the discredited, original “liberalism”) that underpin the pan-European project have failed today. They always fail.
The arrival, desperate passion and durability of the Yellow Vests are proof of this, and showing the hypocrisy, brutality and ineffectiveness of always-unequal liberalism is the third and greatest and historical achievement of the Yellow Vests.
Liberalism, infamously, does not promise anyone the right to a decent existence. Back in 1848, Karl Marx and other socialists demonstrated these facts about Western liberal democracies. The Yellow Vests have brought us back to these inescapable political and social truths.
Why did the Yellow Vests “fail”? Quite simply because the French government scared people away from it through heavy-handed tactics such as violence, heavy fines, arrests and imprisonment. That’s why their protests slowly dwindled in scale and magnitude – owing to fear of state repression.
The fear has had dramatic, lasting consequences: the French have been reduced from the most politically-active nation in the West to being apathetic and uninvolved – typical of Western liberal democracies.
The apathy surrounding this year’s re-election of French President Emmanuel Macron was completely atypical for the country but it showed there was no stopping the will of the 1 percent and their fanatical “bourgeois bloc” toadies.
The Yellow Vests recently marched to commemorate their fourth anniversary, but you probably didn’t hear about it. You also likely haven’t heard that they’ve been marching every Saturday since “Season 2” began in October 2021, following a year-and-a-half coronavirus pause – which no world leader embraced with more joy and relief than Macron. However, the media blackout on them actually began way back in June 2020.
France is no longer gripped in revolutionary fervor, but the Yellow Vests haven’t gone anywhere. The average person has put their reflective yellow vest back where it belongs by law – in the car – but the network, relationships and experiences created by this extraordinary movement ensure that they will be back one day.
And they will be back. The history of Western liberalism has proven over and over again that the average person’s right to live decently will never be guaranteed.
Ramin Mazaheri is the chief correspondent in Paris for PressTV and has lived in France since 2009.
Press TV’s website can also be accessed at the following alternate addresses:
On December 1, 2018, the Yellow Vests announced themselves in France and the world, registering their name in history books with their revolutionary graffiti tagging of the Arc de Triomphe, one of the country’s most iconic monuments.
“The Yellow Vests will win” was a slogan that reverberated across the world, as the movement became the biggest, most organic, most devoted and truly revolutionary threat any Western country had faced for over half a century.
It was their third week of protest, and there was no going back now.
The world never expected a genuine resistance movement to sprout in France, a Western imperialist hub. The French were – many insisted – too self-righteous, too spoiled, too indoctrinated, and yet for the next six months every Saturday turned into a war zone across the country.
France was wholly gripped by the revolutionary frenzy at the time, and it was because the French way of life isn’t as extravagant as people may think.
The Yellow Vests didn’t bravely endure all this – at least 11,000 arrests, 1,000 political prisoners, 5,000 protesters seriously hurt, 1,000 critically injured, scores maimed for life and 11 deaths – because they have a luxurious lifestyle.
It is hard to say what was worse – the repression by the French regime, or the way Western media and NGOs slandered and ignored the weekly bloodletting, tear gas shelling and mass arrests.
The Yellow Vests are an immediate, permanent rejoinder to Westerners who claim that their governments are more protective of democracy and less brutal than those in non-Western countries. That’s one of the three great legacies of the Yellow Vests.
The key to understanding the Yellow Vests is this, and it’s implicitly understood by the average European, totally not understood in places like the United States, and has been intellectually mastered by the vanguard Yellow Vests.
Ever since the pan-European project was activated in 2009, it has failed to do anything. Prosperity, stability and democracy – none of these have been implemented. France is not really France anymore – not unless Brussels says so – and it’s becoming less like France with each passing day under a political system that is still new.
So the Yellow Vests were truly 10 years in the making. They even arrived after a decade full of major social movements, because the first war of the European Union wasn’t a proxy war against Russia but the social war it waged against its own citizens.
The problem was not just the Great Recession of 2008 but the fact that the European Union/Eurozone was the only macroeconomic bloc that implemented absolutely no major recovery plan.
Even worse, its response was to undemocratically ram through far-right austerity policies. The Yellow Vests were the “working-poor class” cemented by the changes in Brussels, and their opponents were the highly-unequal “bourgeois bloc” that only saw the pan-European project in a rainbow glow of total success.
The Yellow Vests disproved the insistence of the Anglosphere – whose cultures are politically conservative – that all populist groups in the West are necessarily on the far-right.
As soon as December 2018, it was clear in France that the Yellow Vests were steeped in left-wing economics, anti-imperialism and a non-Islamophobic, modern conception of healthy patriotism.
This explains the nearly 80 percent approval rate for the movement, and staggering popularity, especially in France which had grown extremely cynical due to undemocratic failures of the pan-European project.
If one word had to be given to describe the Yellow Vests, it would be “civic-minded”. Concern for fellow citizens and the downward spiral of non-elite masses is what basically propels such popular revolutions.
These simple, obvious and pro-community concepts are forbidden in the Western mainstream media. There is no “working-poor class” in France. There are only racist, backward, lazy, always-complaining Frenchmen. There is no “bourgeois bloc” but only an elite group of enlightened and deserving technocrats who decide for us what constitutes the “reality”.
These are truly the two classes of the 21st century West – forget “middle class”, because the pan-European project has dealt the final blow to what Reaganomics/Thatcherism began.
Fully understanding and opposing the West’s current social class reality is the second great achievement of the Yellow Vests, but of course, one cannot find class discussed in the English-speaking media.
However, there is another achievement that is even greater but less discussed, probably because it requires a complete overview of modern Western politics, which began in 1789 with the anti-monarchy/anti-aristocrat/anti-privilege French Revolution.
The arrival and the repression of the Yellow Vests remind us all of the undeniable failures of “liberalism”. The Yellow Vests aren’t actually new but are integral to French revolutionary history transported from 1848-71.
The struggle today is the same as it was back then. It’s a struggle against elitist liberalism and its attendants: oligarchical and anti-democratic parliamentarianism, free-market chaos, anti-government ideology encapsulated by austerity cuts to social services, and encouragement of a rat race to “become bourgeois”.
The Yellow Vests took France and Europe back to 1848 when the “Second Republic” re-ended the French monarchy and claimed the mantle of the French Revolutionary “First Republic”. Liberalism was installed for the first time and immediately proved that it was plagued by all the problems described above.
Liberalism has proved a failure since 1848, and the liberalist principles (“neoliberal” is more commonly used today to differentiate it from the discredited, original “liberalism”) that underpin the pan-European project have failed today. They always fail.
The arrival, desperate passion and durability of the Yellow Vests are proof of this, and showing the hypocrisy, brutality and ineffectiveness of always-unequal liberalism is the third and greatest and historical achievement of the Yellow Vests.
Liberalism, infamously, does not promise anyone the right to a decent existence. Back in 1848, Karl Marx and other socialists demonstrated these facts about Western liberal democracies. The Yellow Vests have brought us back to these inescapable political and social truths.
Why did the Yellow Vests “fail”? Quite simply because the French government scared people away from it through heavy-handed tactics such as violence, heavy fines, arrests and imprisonment. That’s why their protests slowly dwindled in scale and magnitude – owing to fear of state repression.
The fear has had dramatic, lasting consequences: the French have been reduced from the most politically-active nation in the West to being apathetic and uninvolved – typical of Western liberal democracies.
The apathy surrounding this year’s re-election of French President Emmanuel Macron was completely atypical for the country but it showed there was no stopping the will of the 1 percent and their fanatical “bourgeois bloc” toadies.
The Yellow Vests recently marched to commemorate their fourth anniversary, but you probably didn’t hear about it. You also likely haven’t heard that they’ve been marching every Saturday since “Season 2” began in October 2021, following a year-and-a-half coronavirus pause – which no world leader embraced with more joy and relief than Macron. However, the media blackout on them actually began way back in June 2020.
France is no longer gripped in revolutionary fervor, but the Yellow Vests haven’t gone anywhere. The average person has put their reflective yellow vest back where it belongs by law – in the car – but the network, relationships and experiences created by this extraordinary movement ensure that they will be back one day.
And they will be back. The history of Western liberalism has proven over and over again that the average person’s right to live decently will never be guaranteed.
Ramin Mazaheri is the chief correspondent in Paris for PressTV and has lived in France since 2009.
Press TV’s website can also be accessed at the following alternate addresses:
What we are witnessing today is a natural reaction to the level to which Western systems and Western media have used ordinary people and their lives, their well-being, and even their subsistence in order to launch wars.
When the General Assembly was in session, the Italian elections came to prove that the Western rhetoric at the UN, especially that of Joe Biden and Liz Truss, has nothing to do with the reality and aspirations of their people.
Western rhetoric tried to show that the West is absolutely united and that the path they are treading is the one that their people want and are determined to tread. However, the Italian elections, preceded by elections in other European countries, proved that Western officials are in one place, and their people, who they are supposed to represent, are in a totally different place.
A lot of narratives and counter-narratives will prevail in the following weeks about the ascent of the right in Europe. Of course, the ruling oligarchy is trying to describe the right as the far right, the extreme right, perhaps verging on calling the right the terrorist right in an attempt to frighten people from the rise of right movements in Europe. These are nationalist movements saying that the aspirations and the lives of our people should precede liberal doctrine and liberal ideas, which have a frightening social agenda that may prove to be incompatible with the rights and happiness of people.
We all saw the danger of neo-liberalism, especially in the last two years, trying to define human nature by spreading concepts, arguments, and narratives that have nothing to do with the spontaneous lives and feelings of people everywhere. Besides, Covid-19 proved to most people that the solidarity required from them during wars to pay for armaments and to pay for raging wars anywhere in the globe is not matched by the solidarity these people receive at times of plague. Italy, in particular, was struck hard by Covid-19 but received hardly any help either from the US or from other European countries, with whom it is aligned at times of wars of aggression. In the meantime, it received great help from Cuba, China, and Russia. So the Italian people see and understand what is happening to them.
This was aggravated by the economic difficulties caused by the proxy war these countries are fighting in Ukraine against Russia and against the emergence of a multipolar world. Western reports show that inflation is rife and people are getting impoverished and suffering from huge expenses exacerbated by an unprecedented rise in prices and fall in their currencies. Why? Because they are required to feed a nonsensical war in Ukraine and destroy a country, which they have nothing to do with, in order to preserve the American hegemony on other countries and other people
So, for the first time, probably since the second world war, we are witnessing today a real rift between Western people and their true interests on the one hand and those who are supposed to represent them, on the other. In order to fight this trend, and perhaps to corner it, Western media, of course, dictated by Western policymakers, is giving these national trends in most European countries titles that have negative connotations with the aim of frightening people from these movements. They are accusing them of hatred of Muslims, hatred of refugees, wanting to establish Christian states, and being only interested in white and Christian countries. The funny thing about these claims is that they make it seem as if Europe now stands as a paradise for refugees and for Muslims and as if equality is absolutely prevalent and no racism can be traced whatsoever in Europe. When the Ukrainian refugees started to flee into Europe, European commentators and program anchors were saying: those are not Syrians, they are not Iraqis; those are white people with blue eyes. If this is not racism, I don’t know what is?!
I am not saying that the rising movements in Europe or right-wing movements or national movements in Europe do not have a negative attitude toward Arabs and Muslims, but I am saying even if they have, which is regrettable of course, there will be nothing new in that. We have been suffering from these attitudes for decades. But the difference between what Giorgia Meloni, the new Italian representative, and Liz Truss and Joe Biden, for example, is that the Italians say things as they are; honestly, clearly, and straight to the point; whereas Liz Truss and Joe Biden have a double-faced, hypocritical rhetoric that is supposed to address one reality, while brushing under the carpet a very different reality concerning the lives of people, both in the West and across the world.
When I read the Western narrative that is meant to frighten everyone from the emerging national movements in Europe, I remembered the importance of naming, and how sometimes naming things or trends or movements is meant to hide the essence of these entities rather than to express their real nature. I remember when I got my MA, I was offered a place to do my Ph.D. at Warwick University in the UK, where I met the head of the English Department. He asked me, “What is the subject you want to work on for a Ph.D.?” I said, “I want to work on the influence of Romantic poets, particularly Percy Bysshe Shelley on the Chartist Movement.” He was shocked and he immediately retorted: “What the hell do the Romantic poets have to do with the Chartist Movement?!” I said, “Well, that is what I want to find out.” The Chartist Movement is the first working-class movement in the world in 1848. It took place about 20 years after the death of Romantic poets; particularly: Percy Bysshe Shelley and Lord Byron.
Through four years of research in newspapers, books, philosophy, literature, and politics, I discovered that the name romantic has nothing to do with the reality of those poets, who were extremely active in the political domain. Lord Byron was killed fighting a war in Greece to liberate it from the Ottoman occupation, and Shelly spent his life trying to liberate Ireland from British rule. Shelly’s poem “Queen Mab” was called “The Chartist’s Bible.” I am relating this incident to show how important naming is and how much the West, particularly the UK, uses naming things or trends or people in order to project the reality it wants rather than the authentic reality that these names should truly reflect.
The war that is still raging in Ukraine is causing the impoverishment of Western people; it is causing great hardships for the majority of Western people. But there are beneficiaries of this war: arms industrialists and senior officials in all domains; whether army, intelligence, or politics… they are the ones who are increasing and multiplying their financial fortunes. Thus, what we are beginning to witness with the rise of the right movements or national movements in Europe are the first indications of real rebellion against these unfair and authoritarian autocratic systems that are calling themselves democracies. The upcoming winter may generate different means that people in Western countries are going to use in order to reach their objectives.
Besides Covid-19 and besides the war in Ukraine, I think that there is a third factor that is motivating people to think deeply about their lives, about the future of their children and their grandchildren. The third factor is the narrative of neo-liberalism that is ignoring all real issues – issues of families, working women, elderly people, poverty, education, childhood, and health – and focusing instead on issues that are almost invented and fabricated by a certain interest group for reasons that have nothing to do with the real lives of people. We all followed the huge concentration in the Western narratives on gay and lesbian relations and same-sex marriages, which in essence contradict human nature. Perhaps there are some people who find themselves in a different boat from most people, but to project this as a necessity and a subject to be forced on the throats of nine-year-olds at schools is something sinister and vicious.
There is no doubt that the destruction of the family nucleus in the West is a huge social problem that most people are suffering from, while yearning to restore the feeling of family and the normal feeling of affection and care among family members. This should be the case instead of putting such a huge stress on the individual and ignoring that the individual is always much happier and performs much better when he/she is raised by a loving family and a loving community and by a social matrix that provides him/her with all the support, love, and affection that help these individuals excel in their lives.
So, what we are witnessing today is a natural reaction to the level to which Western systems and Western media have used ordinary people and their lives, their well-being, and even their subsistence in order to launch wars and make the arms industry the best-thriving industry in the West, through conquering other countries and stealing their resources.
The antithesis for all this is what we read and hear of narratives coming from the East; from China, Russia, Iran, the BRIKS, member countries of the Shanghai Cooperation Organization, especially the narrative expressed and confirmed by Xi Jinping over the last decade that we are all living on one planet and that we have to share the resources of this planet and jointly be responsible for the welfare of this planet, without any of us trying to impose things on the other. We have to establish security for all, integrity for all, and prosperity for all because we all share this earth and we should join ranks in order to make sure that people on this earth live well and have the right opportunities to express themselves, build their future, and work hand in hand for the welfare of everybody everywhere.
Of course, this does not suit systems that encourage apartheid and occupation in Palestine and elsewhere… this doesn’t suit racist systems that see white-skinned men and women as superior to black- or brown-skinned people and want to use brown or black-skinned people as slaves; i.e. modern slaves for accumulating more wealth at the expense of other people and other countries.
So, what most people in the world aspire to is a welfare system; a truly fair system. The people crave for justice and not for claims of democracies that have no positive effect on their lives. Democracies had been used as slogans in order to suppress both peoples of these countries and people of other countries as well. Perhaps the cycle of history has reached a point where change is absolutely imperative. People have reached a conviction that this road, which has been charted by Western powers, is an extremely dangerous road, and has led to a dead-end. So, we better stop here and make a U-turn in order to ensure that we restore the balance; the logical balance to human lives.
Establishment version: modern free market freedom, practised by freedom loving people, to freely create freedomaceous wealth everywhere! Woohoo!
Real World Translation: rigged system to funnel wealth from the poor to the rich by imposition of slave wages and debt servitude = economic enslavement of the 99%
Disinformation:
Establishment version: anything contrary to the “truthiness” narrative espoused by Western Mainstream Media Patriots. Is Israel an apartheid state? That’s disinformation!
Real World Translation: anything which portrays the AngoEuroZionist Empire in a bad light and their enemies du jour (Russia, China, Iran etc) in a neutral or favourable light. Absolutely nothing to do with truth or facts.
National Endowment for Democracy:
Establishment version: benevolent fund by the USA to promote rule by, for and of the ordinary people in foreign countries. Yay!
Real World Translation: CIA cutout to finance astroturf campaigns to destabilise foreign governments that do not bend to the US will, in order to install US puppet regimes that will funnel wealth to the USA.
US invasion of Iraq in 2003:
Establishment version: act of “liberation” to save the world from Saddam’s WMDs and bring democracy to the Iraqi people.
Real World Translation: WMD story was a fucking LIE, invasion was done to preserve the US petrodollar and control Iraqi oil assets and give massive contracts to US corporations. Killed more than a million Iraqis by 2010, so I guess you could say those Iraqis were “liberated” (from life).
Russian invasion of Ukraine:
Establishment version: unprovoked aggression by Russian dictator Vlad-the-Impaler Putin on 24 Feb 2022 because he is just plain crazy (also a vampire). So naturally the West needed to ban Russian cats and Tchaikovsky in response.
Real World Translation: belated response by Russian Duma (democratic parliament) to relentless aggression by the US/NATO since 2014 – including the murder of 14,000 civilians in Donbass, ie Russia was forced to intervene to protect Russian speaking Ukrainians from genocide by the US proxies. Also more than 30 bio-pathogen labs funded by the USA (by Victoria Nuland’s own admission) were discovered in Ukraine, so there WERE WMDs in-the-making in Ukraine.
International “Rules based order”:
Establishment version: even the USA cannot properly define WTF this crapulent term means.
Real World Translation: USA makes up their one-sided rules (to always benefit itself) and orders everybody else about, otherwise foreigners face sanctions or coups or assassination of their leaders or invasion. Nothing to do with United Nations International Law.
Far too many Newspeak and Doublethink terms to itemise here!!
Commenters can think of many more!!
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH
Speaking Truth is an act of Treason in an Empire of Lies.
Putin called the USA an Empire of Lies.
Who is the most prominent Truth speaker in the Empire?
Julian Assange – who is now being suitably punished for such Treason.
A central tenet of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture to prevent family-owned farming of food, to grow plantation export crops and they become dependent on the United States for their grain.
[00:00:22.610] – Steve Keen [intro/music]
If you look at just the shipping involved in international trade, it’s something of the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet. And we realize we’ve massively overshot the capacity of the biosphere to support our industrial sedentary civilization. So, one way to reduce that is by reducing international trade.
[00:01:35.130] – Geoff Ginter [intro/music]
Now, let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.
[00:01:43.110] – Steve Grumbine
All right. And this is Steve with Macro N Cheese. Another great episode for everyone today. I have two guests, two very good friends, and very happy to have them join me today. Professor Steve Keen and Michael Hudson. You can’t get two better guys than this. And we’re going to have a very action packed conversation.
We’re going to be talking about central banking, the IMF, World Trade Organization, World Bank. And we’re going to be looking at how the US uses the monetary system to bring about its imperial powers that it exerts on the world. And we’re going to look at some of the things that are happening with Russia and Ukraine right now that ship the US control over the global commerce and the behaviors of non US countries.
They’re starting to think for themselves and make some decisions, and we’re watching the facade crack a little bit. Steve Keen, who is the author of the book Debunking Economics and more recently The New Economics: A Manifesto, is joining me, as well as Michael Hudson, who has just recently written the book The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism. So, without further ado, Michael and Steven, welcome to the show, sirs.
[00:03:04.530] – Michael Hudson
Good to be here.
[00:03:05.800] – Steve Keen
Thank you indeed.
[00:03:06.960] – Grumbine
So the reason why I brought us together, you guys are both phenomenal on your own, but together, I think that we can maybe tackle this. As an MMT advocate, I find myself friends with an awful lot of people, and you gentlemen have been doing this for a long time, and I know that you have some pushback within the MMT community.
In particular, this concept of “imports are a benefit and exports are a cost.” This is a core MMT staple. And some of the concerns that came out as a result of the Covid crisis showed us the resource based failures of a global supply chain and how some of the aspects of our financial system and the shipping of real resources from areas that had high Covid, how it impacted our abilities to take care of life on life’s terms.
It also became quite clear that the US hegemony over the world using dollar diplomacy is starting to show cracks in the foundation as well, as we watch Russia thumb its nose at US sanctions. So, getting into this, Steve Keen, I know that you have taken some issue with Warren Mosler’s prescription that imports are a benefit and exports are a cost.
Taking Warren’s position on this, I believe Warren is saying exports are real goods and services we’re sending out, whereas imports we’re handing pieces of paper to people. And this is a win for the importing nation. And we’ve seen the power of the US dollar and the ability to basically create colonial outposts, colonized communities living and dying off of US dollars. So there’s a power dynamic as well. What is your pushback with Warren’s import/export model?
[00:05:03.270] – Keen
There are quite a few elements to it. First of all, the idea that exports are a cost and imports are a benefit. One term that I’ve seen one Modern Monetary Theory advocate used to explain is to say, the opportunity cost is all theirs. In other words, they have therefore gone by sending a good to us like an automobile to the buyer in return for currency.
They’re doing without the opportunity of the vehicle. And when you take a good look at the manufacturing side of things, the reality for most firms is they have diminishing marginal cost and excess capacity. So the standard thing when you’re competing in a domestic market is you have spare capacity you’re not using, but you can’t get enough demand domestically.
Now, I know MMT can say that should be handled by the government using additional spending power and creating the spending power to absorb the excess capacity. But they don’t at the moment. So what tends to happen instead is that countries will use export-oriented industrialization to use their additional capacity more effectively, which is what’s led to the industrialization of China and in many ways the de-industrialization of America.
Personally, I don’t think the opportunity cost is the right way to think about international trade at all. It’s a neoclassical way of thinking. It assumes neoclassical conditions about production which are empirically false. I don’t think anything in MMT should be based on bad foundations and I think that is a bad foundation.
Then when you see the discussions about monetary sovereignty and saying that countries who don’t have to issue debt in the currency which is not their own currency, they have monetary sovereignty, those who have to issue debt in a currency which is not their own don’t have monetary sovereignty. One way you end up in not having monetary sovereignty is running large balance of trade deficits and not being the reserve currency of the planet.
So I think the advice that exports are a cost and imports are a benefit doesn’t make sense for countries which have been running a trade deficit, are importing more than they’re exporting, so they’re using their own pieces of paper fundamentally, initially, but if they keep on doing it, they’ve got to start using American pieces of paper, and then they’re in deep trouble. So I just think it’s a nice slogan, but I think it’s a bad idea.
[00:07:20.250] – Grumbine
So it makes sense to me given the nature of the pandemic. You and I spoke, I guess it was almost two years ago, about supply chains and pandemics, and we talked at length about how the iPhone is made in some 37 different countries – and countries that were isolated due to the pandemic. It also impacted production in general. Right now I’m in Information Technology, and I work with Cisco, and Cisco being the backbone of the entire Internet globally.
They have lead times even today of up to a year for some of the equipment, partially because of semiconductor shortages. But this is a piggyback to that in that there is the accounting identities of trading paper for goods and services, but then there is the actual functional output of that. And for countries like the United States, we do have Most Favored Nation status in the sense that we are the primary world reserve currency.
And I think part of that has to do with the fact that the price gas and gas purchases are done through US dollars as well. But overall, I think that we have to be aware that we’re not being a very good partner on the planet in general. A lot of the power plays the United States uses to be able to get those goods and services into the US Is done through warfare and sanctions, as we’ve seen all around the world. We use them to great harm in the global South.
However, we saw Russia here recently thumb their nose at us and say, the only thing we’re really lacking is high tech products, and we got China that can hook us up with that. All you’ve done is accelerated our departure from a dollar denominated world, which I guess brings us to you, Michael. Your book talks extensively about this. Can you help piggyback off of what Steve said regarding the supply chains and the impact of that import/export dynamic with what’s going on right now with Russia, China and Ukraine?
[00:09:34.590] – Hudson
Well, MMT has not spent much time talking about the balance of payments. It’s basically a theory of the domestic economy. The problem of the whole discussion that just took place is that trade is not the most important element of the balance of payments. For the United States, the trade balance has been just about in balance for almost 50 years, 70 years, actually.
What’s in balance is America’s military spending abroad. That’s the deficit that is pumping dollars into the world economy. But now to get back to Steve’s point, realizing that we’re dealing with trade, only a small portion of the balance of payments, Steve’s point is, let’s ignore all the other elements of the balance of payments – the debt service and the capital accounts and others.
If you import more than you export, and you have to actually pay cash for the imports and get cash for the export, then you have to borrow money. And once you borrow money, because most trade is denominated in dollars, this means you have to borrow US dollars. You don’t buy imports with your own currency. Now, MMT is all about how sovereign governments can create their own money and create their own currency, but they can’t print their foreign currency.
That’s the problem with having more imports than exports. And once you begin to borrow dollars, you have to pay interest on it. And all of a sudden, they’re running a deficit, it’s going to reduce your foreign exchange rates. Well, let’s look at what’s going to happen this summer as an example. We know that energy prices, oil prices are going way up.
And President Biden just says they’re going to be with us for a very long time because his major contributors are the oil companies, and he’s promised them that he’s going to enable them to make super profits to help raise the Dow Jones average. And the other element is food. Well, America is going to make a killing on oil exports because the United States controls the world oil trade.
The United States is also a major agricultural exporter, and it’ll make a killing because NATO has imposed sanctions on Russia, preventing Russia from exporting oil and food – it’s the largest grain exporter – into the economy. So you’re going to have South America, Africa, and the global South countries all of a sudden running big deficits.
Well, at the same time, there’s an enormous deficit of debt service that they owe to finance all of the trade deficits that they’ve been running ever since they followed neoliberal ideals to open their markets to depend on foreign food and basically US manufacturers. The Federal Reserve has just begun to raise interest rates. And the result of raising interest rates has been the dollar is going way up against the Latin American currencies, the African currencies, the South African rand, the Brazilian currency.
So you’re going to have the global South being in an absolute currency squeeze this summer. What are they going to do? Well, President Putin has said, well, we’re going to offer an alternative in the form of the BRICS bank. Well, it’s true that a bank can’t create foreign currency. The BRICS bank can enable countries to run a deficit in two ways.
Number one, the bank can be fueled by each member giving, say, a trillion dollars or some kind of proportional currency to the bank. So currency swap agreements, just like the United States has been negotiating for the last 50 years. You can all have a currency swap. Also, the BRICS bank can create its version of Special Drawing Rights – IMF SDRs – or what John Maynard Keynes proposed in 1944: “bancors.”
It can create paper gold of its own and distribute to countries. Well, the problem is, Putin said, we’re willing to sell your grain and oil and to take your currency in exchange, but we don’t want to save your balance of payments simply so that now you can afford to pay the debt service that you owe to US dollar bond holders, bank holders, and the IMF and the World Bank that got you into the mess you’re in to begin with.
So the problem is the stability of insulating your trade from the foreign exchange going up and down requires a split of the world into two different economic zones: US/NATO, the white people’s economic zones, and let’s call it the nonwhite economic zones. And remember, the Ukraine say that Russians are not white and racially different. Basically, the Nazi ideology is that any country that’s not neoliberal is not white.
So you’re going to have the world splitting, and we’re really talking about how to create a monetary system for the world splitting. I want to get back to one other thing Steve said about the opportunity cost. If imports are a great advantage to the United States, is it worth having American corporations move to low wage labor abroad, shifting the production abroad so that America is deindustrialized?
Has that been an advantage? Or let’s look at it from Russia’s point of view. Until this last spring, Russia was importing food, cheese, raw materials. And because of the sanctions, Russia has had to all of a sudden develop import substitution. It’s producing its own cheese. It produced its own agriculture that’s thriving.
And President Putin has said that Russia is going to spend more and more of its oil export receipts on funding import-replacing industry. Well, that sounds like a good idea, because we’re really talking about independence. And the balance of payments ultimately determines a constraint on domestic policy. I think that’s what Steve was talking about for opportunity costs.
You can’t just look at the flows on a balance sheet: “Well, we’re getting something for nothing.” If you import more than you export, you’re running up foreign debt, and you’re becoming more and more dependent on foreign countries who are acting in their own interests, not your own interests. So you have to put this whole discussion in the political context.
[00:16:15.210] – Grumbine
So I would see this as a national security issue in that with these essentials – Fadhel Kaboub talks about the spectrum of sovereignty: energy sovereignty, food sovereignty, technological sovereignty, the ability to live without external supports. And each country has varying levels of that. And so each country would have to be looked at differently just based on what they’re even capable of producing.
I guess my question to you, as we think about countries in the global South that have had the kiss of the IMF on them and the debt peonage that they have been laboring under. In Africa, Sankara’s speech talking about “I can either pay you or I can feed my people.” You can see the role that US interests through the IMF have had to import their goods and services into our country.
They don’t have a choice. They are basically colonial states that have the US thumbprint on them. So the United States has exerted this imperial power in this geopolitical nightmare. We are watching them break away from that today.
[00:17:34.050] – Hudson
But you’re leaving one of the real villains in the piece, and that’s the World Bank.
[00:17:38.290] – Grumbine
Oh, yes.
[00:17:39.020] – Hudson
A central element of the World Bank from the beginning is to convince countries not to grow their own food, but to create plantation agriculture, to prevent family-owned farming of food, to grow plantation export crops, and to become dependent on the United States for their grain. Well, if imports are a benefit and imports mean that the United States can put a sanction on you and starve your people like the United States tried to do in China in the 1950s, do you really want to become import dependent on food?
Let’s compare the World Bank to the Chinese Belt and Road and the BRICS bank that’s proposed. The World Bank would only make foreign exchange loans. That meant it would only make loans to countries who would invest in infrastructure that would help its exports. Well, imagine how this works for agriculture.
If you were going to develop your agriculture in the global South countries, you’d do pretty much what the United States did in the 1930s that had the most rapid increase in productivity of any industry in the last few centuries. And that was because the government took the lead in agricultural extension services, seed testing, educating farmers as to seed variety, setting up local farm management organizations.
Before the time that Cargill and Archer Daniels Midland became the great intermediaries in promotion of domestic self-sufficiency for farms, the World Bank wouldn’t make any loans at all for this, even though the World Bank local commissions and reports all said that this is what they need. The World Bank was almost always headed by someone very close to the US Military, starting with John J. McCloy at the beginning and going through McNamara and all of the subsequent Pentagon people who were put in charge of the World Bank.
And above all, they wanted to continue to base America’s export boom in agriculture and to make other countries food dependent. And that is one of the things that has led them into debt. So if you have a country like Chile that has the richest land in the world because it has the richest supply of guano deposits in the world. It also has the most unequal land distribution in Latin America – latifundia and microfundia – not any kind of balanced food production.
So that all of Chile’s exports and copper, by specializing, have been overwhelmed by the costs of importing food that it could have grown all by itself. So the idea of free trade is shaped by what will the international organizations controlled by the US give credit for, ends up to create underdevelopment and dependency instead of development. And that developmental aspect is a different story from MMT money creation. And we’re talking about something else that is part of a much bigger system.
[00:20:43.410] – Grumbine
Steve, based on what Michael just said, I know that you are concerned with the environment and bringing production back home. And around the world, people that are not hip to the US empire are trying to convince countries to look at building bonds between each other to create trade zones that mitigate some of the US power over dominating their countries.
We’ve got a very tiny window to solve climate crisis as well. So all these things are converging at one time trying to deleverage US interests from the world interests and watching as the nonwhite countries are banding together and the white countries are banding together. And it seems like the opportunity to save ourselves from extinction is passing before our very eyes.
In the vein of what he just said, how do we marry some of the ideas that we have, the climate crisis with the geopolitical crisis that we’re battling here?
[00:21:49.110] – Keen
Well, the large part of it is that the focus of neoclassical economics has always been on specialization and doing it with so-called comparative advantage. And what that gives you is an incredibly fragile system, as we’ve seen with Covid, because if you actually distribute production across the planet and you have a long supply chain, then of course that can collapse in an instant with something like Covid coming along.
And equally, if you have a famine, if the major food baskets get wiped out by a famine or a war. We’ve got the war already. The famine may well come by a drought and a crop failure as well. Then suddenly you can’t feed your people and you have no domestic alternative. So I think we have to get away from the focus on efficiency and even in that sense, the gain of swapping paper for goods, which is part of the MMT slogan.
Start thinking: no, we need to be resilient and capable of handling a range of different disturbances which could come our way. And on that basis you need to have your production local.
[00:22:47.310] – Grumbine
So within that space mitigating some of the travel carbon footprint expenses that clearly solves one problem. But where you had smokestacks to create basic amounts of goods and services in one country, now you’re building smokestacks across the globe and I don’t see any meaningful effort to green technology to make those things happen.
I am curious what decentralizing production does in terms of the carbon footprint and how developing local supply chains will in turn impact our ability to stave off climate crisis.
[00:23:30.090] – Keen
Yeah, if you look at just the shipping involved in international trade. It’s something at the order of 20%, I think, of our carbon production comes out of the entire mechanics of shipping goods around the planet, and we realize we’ve massively overshot the capacity to support our industrial sedentary civilization. So one way you can reduce that is by reducing international trade.
I think that’s what’s going to start happening, partly because you have the example of Cisco. You suddenly wait a year to get a piece you used to wait two weeks for because of the breakdown of the supply chain. The same thing will become even, I think, even more extreme when climate change forces us to drastically reduce our production levels.
If you don’t have the domestic production capability, you’re going to lose the possibility of those goods. And in some cases, we have to drastically reduce our consumption of a range of goods. Automobiles is an obvious instance of that. But in others, we want to continue – and food production is one of those. Clearly, you want to produce your food locally.
So, again, I think we’ve been very blase about the physical side of production, and that’s what I would like MMT to start looking at. And in that context, I think it might change the attitude about imports and exports.
[00:24:57.730] – Intermission
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[00:25:49.010] – Grumbine
Michael, in the Russia example, where in one fell swoop they get cut off from the SWIFT system and the US is beating their chest, “We’ve got Putin on the run.” It doesn’t look like Putin is on the run at all right now.
[00:26:02.900] – Hudson
I’m glad you’re bringing up the NATO war against countries resisting neoliberalism, because you use the word “green.” And the European Greens basically are advocating two fuels of the future: coal and cutting down the forests. Germany, by blocking Russia’s gas, they are essentially replacing Russian gas and oil with Polish and Ukrainian coal – and digging down the forest.
I’ve walked very often through German villages, and most houses have whole stacks of cut-down lumber that they essentially burn in their fireplaces for heat. You’re having an enormous deforestation and replacement of gas with coal. And the Green Parties are the advocates for the major polluters in the world, and they’re the advocates for global warming.
And that’s because they’re part of the Cold War attack on Russia. And they say it’s worth having global warming as long as we can fight against countries that resist neoliberalism and resist the American European takeover. So you want to realize the politics – that the Greens of Europe are not friends of the environment.
Now, to get back to your question about the isolating of Russia. Isolating Russia hasn’t isolated it at all. It’s driven Russia together with China, in the first instance, and then China and Russia together have joined with India, Iran, Syria, they’re now joining with Brazil and Argentina all to create an alternative economic order and social order and political order.
And the political order is basically based on the main distinction between the non-neoliberals and the neoliberals, and that is: who will control the money supply. And China is the prime example. Instead of private banking creating the credit to create loans basically for financial reasons, China will create credit to spend into the economy the way that MMTers hope to see credit created.
Namely, spend to hire labor, to make new means of production, hopefully in an environmental way, as opposed to the commercial banks that look at “how do we make money in the short term?” Well, you make money in the short term by cutting down the forest of the Amazon. You don’t look at global warming.
And already you’ve had the heads of American oil companies and investment firms say “what do we care about global warming ten years in the future? We care about the next three months’ earning statement, and the next year. Ten years from now, the sea levels go up. We can deal with it then.” So you’re dealing with two different economic philosophies and as the world divides into these two different economies, this is an important element.
And as Steve just pointed out, neoliberal economics doesn’t take into account the environment because that’s long term. Economists call that exogenous, meaning it’s outside our tunnel vision. And the question is whether you’re going to look at the world economy as the overall system interconnected, which is what Steve and I do, or whether you’re going to say we’re going to just cut the financial sector apart and only look at the corporate and financial sector of how to make money quickly.
That’s really the difference. So obviously Russia was not really troubled very much by being cut off – or even by being isolated. What America is doing is driving Russia together with all of the countries that have refused to condemn it. And America basically is creating an iron curtain, locking these countries – isolating them from Europe and the United States – going their own way, which I don’t think Russia and China are unhappy to see occurring.
[00:29:54.480] – Grumbine
I completely agree with that. The idea that the US thinks they are going to knock these giants down and they’ve just said we’re going to invest in our own country. Instead of being a cooperative society, we see this as a combative society. We decided we have to fight them and create cold wars to isolate them so we can catch up.
But you nailed it with the concept of the private short-term thinking that private collateral, banking, loans, filling short-term needs because we can’t see out as far as those folks because they aren’t living and dying the same capitalist way that we do things here in the United States. They have invested in the public purpose.
China has got the ability to do just about everything. Do you think it’s going to take us getting our proverbial asses handed to us by the rest of the world to wake up? Do you think we’ll ever wake up? Or this is just the way it will always be, at least until tsunamis take us out?
[00:30:56.870] – Hudson
Who is the we? Who’s going to wake up? When you say we, it’s as if you mean American citizens in the population. But we are not the government who makes the policy. We are not the Davos Group and the campaign contributors. Their “we” are the oil industry, the big agricultural monopolies, the other monopolies, and Wall Street. That’s the finance, insurance and real estate sector [FIRE].
And they are going to just continue doing what they want. And you’ve seen from the recent Supreme Court rulings in the United States that the government is not permitted to enforce any climate preservation rules. That has been ruled unconstitutional unless Congress can pass environmental law. And in order for Congress to pass a law, as opposed to just an executive branch joining the environment, you have to have 60 out of 100 votes.
American dual politics doesn’t permit either party to get 60 votes unless there’s a landslide. And the only party that has a prospect of getting 60% would be the Republicans. So basically, even if the people wake up, the government people and their campaign contributors are just going to continue to make money to live in the short term. That’s what differentiates neoliberalism and socialism.
[00:32:17.630] – Grumbine
Very well stated. To me, I think of this as war. Murder. I don’t think of this as some polite gentleman’s disagreement. I see this as wanton death and destruction, all in the name of profit. How do we stop this? Can we stop this? Congress is bought and paid for. Our government, our Supreme Court doesn’t represent the people, and the President has proven to be a feckless neoliberal as well.
I see nothing to feel any sense of hope, and I’m not sure that hope is a requirement. It seems like the only alternative we have is in the street, is to become ungovernable, is to get rid of a government that is no longer representative of the people.
[00:33:04.010] – Hudson
[laughs] Well, Steve’s gone to Thailand and I’m dealing mainly with China. That’s how we’ve coped. [laughter] Neither of us are going to be President of America.
[00:33:15.690] – Keen
No. The American political system is almost designed to stop anything being done. I was involved in the Australian election recently, as you probably remember. And though my party did extremely badly and money still was obviously vitally necessary to get a political profile, even in countries with good electoral systems, Australia does have a good electoral system, and America has got the best electoral system money can buy, and that’s a disaster.
It’s hard to get away from money enabling parties to have political position to be seen in the media. And that’s actually a great reason for MMT: create money for publicly financed election campaigns rather than having it out of private pockets. But given that, you have an electoral system where you don’t actually vote for anybody, the electoral college piece of nonsense, which itself is crazy.
Every state has got a different system, which is crazy. You don’t have the central bureaucracy handling the voting system, which is crazy. And you have gerrymandering because the boundaries are decided by local political groups, which is crazy. So the extent to which America needs to reform its political structure to approximate a democracy is ridiculous. And that’s partly why money interests can so easily dominate what happens in the American political sphere. And right-wing religious ideology as well.
[00:34:43.950] – Grumbine
Absolutely. The Calvinistic bullshit in this country is over the top. But there’s a tone policing aspect to this. I think there are people out there who don’t understand that this election system that we have in the United States isn’t getting us what we want or need. They think they just need to phone bank harder, vote harder.
Fact is, in my 53 years, I have not seen any meaningful legislation passed. I do not consider the ACA meaningful legislation. I’ve seen a lot of bad legislation pass that hurts us. And this is not really intended to be an America-centric show, except that America seems to be the big bully. It’s creating a lot of the problems. It’s got its own citizens in hell and it’s trying to create hell on earth for the rest of the world.
I spend a lot of time trying to get this information out the door. It’s very important information, but it’s only important in the sense that it’s good to know. I don’t see any of it amounting to a movement, a passing of legislation. We can tell people that if we don’t consider the economy in the world as a superorganism and degrowth, we don’t have anybody thinking this way.
[00:36:00.090] – Keen
There is actually – I don’t know the name of it, but I do know that there’s a political group in America which is campaigning to have Australia’s electoral system adopted by America. Have it include an electoral commission that determines borders between one electorate and another, a single centralized system that counts the votes rather than the crazy range of stuff you have at the state level.
And controls on the size of electorates so they can be no more than 20% larger or smaller than a target – and they should be 10%. And then preferential voting so you don’t just vote for one candidate, like if you vote for the Greens in America, you guarantee the Republicans win the election because the Green votes are taken away from the Democrat.
So have preferential voting, which means you can actually put the party you prefer first and know that the party that’s your fallback will actually get the vote if your first party doesn’t get up. So all these sorts of reforms. I know that there are people who are campaigning about it because the frustration that you’re expressing is very widely felt in America. But of course, try getting that through a Republican-dominated Congress. It ain’t going to be easy.
[00:37:01.170] – Grumbine
No. It does leave you wondering if this is not just political theater. I talked to Warren the other day and Warren asked the question to me. He said, “you ask, are they doing a good job? And I answer back, well, for whom?” Somebody’s doing okay right now. It just isn’t the regular people in society. Somebody’s doing great, though. And I don’t see a path. As much as I want to, I see no path forward.
I don’t want to feel this way, but I don’t see a path forward. Michael, with your international perspective, I guess my question to you, given the fact that you’re focusing on China and you see the US through the lens that we’ve just discussed, do you see an ending to this that is positive for the world, that gets us to a successful conclusion, meaning we survive? Do you see any hope whatsoever in changing that narrative? And if not, what’s next?
[00:38:01.530] – Hudson
There’s no path forward in the way that we’ve been talking about because the suggestions that Steve makes cannot be legislated by Congress. They are limited by the Constitution. And in order to do what Steve recommends – very good ideas – you would need a new Constitutional Convention. The right-wing, the polluters, the monopolists, the bankers, have been preparing for a Constitutional Convention for about 30 years, and it wouldn’t be very nice.
[00:38:32.370] – Grumbine
Yep.
[00:38:32.370] – Hudson
Our Constitution in America was written for the slave owners to permit any states to block any federal power because they worried that the federal power might try to free the slaves. Well, now that element of the Constitution, of state’s rights, is enabling the oil industry, the polluting industry, the banks, the credit card companies to essentially prevent any solution along any lines except those of the ultra right-wing.
But the problem goes beyond America and beyond Europe. Western civilization took a wrong track about 3000 years ago. The Near East and almost all of Asia had a tradition of canceling the debts when they threatened the economy. In Japan, you had revolutions, you had the Near East rulers canceling the debts. That’s what my books are about.
And you had essentially the jubilee years throughout the Near East. And this promotion of economic growth and in effect, prosperity, was always run by a central ruler. There had to be a ruler, the job of divine kingship or undivine kingship, throughout the Near East, Asia, all the way to China. And India. All of these cultures sought to prevent a commercial class and a financial class from emerging and taking over.
And the merchant class was realized as playing an important role, but it was not allowed to dominate society. But around the 8th century BC, when Syrian traders began to move into the Aegean and Mediterranean to Greece and Italy. There weren’t any kings. The west didn’t have kings. They had local chieftains who were a Mafia-type society.
And the result is that ever since Greece and Rome, you had a completely different set of laws and legal philosophy than what you had in the Near East and Asia. You had pro-creditor laws making what is called the security of contracts and the irreversibility of land being forfeited to creditors. And the result is you had creditors oligarchy evolving.
So when President Biden said the current war of NATO against Russia and China is a war of democracy against autocracy, what it means by democracy are Western civilization’s oligarchies. There haven’t been any democracies, really – maybe very briefly in Athens – but the Western cultures are all oligarchies. What he calls an autocracy is a government strong enough to prevent a financial oligarchy from developing and taking over the land and taking over politics and making its own laws for itself.
And it’s a civilizational difference. And both Steve and I have spent a lot of our time talking about how the Western economies cannot evolve further without a debt write-down, without writing down the debts that are of the 99%, they’re owed to the 1%, the oligarchy that’s controlling all of Western politics. Asia has a way to go a different way.
China doesn’t have a financial oligarchy because it treats money and credit as a public utility through the Bank of China. And so the Bank of China, as we said, makes loans to actually develop the economy. And that’s what Russia says it’s going to begin doing, not to create a financial class to make money at the expense of the 99%. So we’re dealing with a civilizational problem.
And the question is, which form of civilization? Can you rescue Western civilization from the wrong track? Well, only by creating an alternative on the right track and leaving Western civilization and say, well, you’re missing out on the development. Do you want to continue in poverty or are you going to have a revolution?
[00:42:31.650] – Grumbine
You’ve seen yellow and blue profile pictures for everybody totally sympathetic to Ukraine. And our government saying “we are not going to abandon them no matter what.” Biden has signaled that we have unlimited money to give to Ukraine, and he can’t possibly write down $2 trillion in student debt. This weird split dichotomy of truth and lies passes right by the average person.
With what you just stated, which side is going to win? Sadly, the bad guys seem to always win. I rarely see the good guys win. Who is “the good guys”? In full disclosure, I’m a socialist. We don’t even have a left party in the United States. There’s no appetite for that kind of thing in the United States. And those of us that want it are the minority. How do you envision this playing out?
[00:43:26.670] – Hudson
I thought I just said it: a different civilization going its own way.
[00:43:31.740] – Grumbine
Well, what you said was the question of good and evil, basically, which one is going to win? I’m asking you, how do you see it playing out? Because the US can’t continue doing what it’s doing and grow. You need the debt jubilee. We’ve chosen not to. Asia has those systems built and they have choices. So the question I’m proposing, given that, do you see any chance of the US coming to grips with itself? Or do you see this being a one-way trip to destitution?
[00:44:03.570] – Hudson
The latter.
[00:44:05.010] – Grumbine
Fair enough.
[00:44:05.830] – Hudson
That’s all I can say. There is no sign at all of a change. The fact that Steve and I can be on your show – we are not published in the major magazines anymore. We’re not on the major network shows. What you call the bad guys always call themselves the good guys. What you call evil calls itself good. So the question is, what kind of good guys you’re going to have?
The good guys that want to blow up the world and impoverish society, which is what neoliberalism says are the good guys or the good guys for the 99%, which America says are autocracies that we have to fight?
[00:44:41.830] – Grumbine
Yeah.
[00:44:42.670] – Keen
I think I might put a bit of a perspective. People often say, “what’s your alternative?” And what they really mean is “what’s your alternative that I’m going to like?” And I think there is an alternative, but as people feel, “I don’t like it” then other people won’t like it as well. And that is that given the scale of the environmental crisis we’re facing and the fact that it’s coming far sooner than we’re being led to believe, because courtesy of believing their classical economists on it.
When it hits, the countries that are most likely to survive will hold together are those that the West calls authoritarian. And the defining feature of those cultures when you’ve actually been inside them, is that, yes, there is a very strong state and yes, it tends to get its own way and people do what they’re told to some extent, but it’s because at the same time they know they’ve benefited from that state.
So back in China, when you talk to people in China, they will be critical of the Communist Party and say at the same time, the industrialization since then has been incredible and their lives have improved radically over that period of time. I know people who were literally in Mao suits in 1969 who are having a very comfortable retirement when they faced far worst terms back under the old strictly communist regime.
But what you have with a country like that is if China decides it has to radically ramp up renewable energy resources, also install nuclear if necessary, it’s going to do it and not face the opposition the German Greens give to new nuclear power stations, for example. So the capacity to have a top down society is more likely to be then you’re going to survive the crisis that comes forward from climate change.
I can’t see countries that call themselves democracies succeeding in that situation because they will not be able to agree on the level of cutback that’s necessary and who it gets imposed upon. We’re a more centralized society. We’re more successful at doing that and more likely to hold together during the downturn the climate will cause.
[00:46:40.110] – Hudson
You need a strong enough government to check the power of an oligarchy and to prevent a creditor landowner oligarchy from developing. And libertarians, while pretending to be for liberty, they’re for a centrally planned economy, but a centrally planned economy by the oligarchy, by the financial sector, and by the real estate owners. So every economy is planned. And the question is, who’s going to do the planning?
[00:47:05.190] – Grumbine
Yes. And with that in mind, I want to read to you some stuff that came out of this NATO 2022 Strategic Concept – just so that people understand exactly how bad it is. Document defines Russia as the most significant and direct threat to the allies’ security while addressing China for the first time and the challenges that Beijing poses towards allies’ security interests and values.
Documents also state that climate change is a defining challenge of our time. Strategic Concept is updated roughly every decade as NATO’s second most important document. It reaffirms the values of the alliance, provides a collective assessment of security challenges, and guides the alliance’s political and military activities. Previous version was adopted at the NATO Lisbon Summit in 2010.
Point I’m making is they’re bringing more countries in and now setting up China and Russia as the bad guys. This has been going on for a long time, I guess Reaganism with the Cold War. And you brought it up, I think it’s worth mentioning, towards the end of the Chinese Revolution and the US efforts back then to do these same things to China then.
All these institutions, World Bank, IMF, the Peace Corps, all these different NGOs, these were brought out as a direct counter to Russia’s communism and a fear that communism would spread to the global South to prevent them from getting in bed with the Russians. But our country, the United States in this case, has been instrumental in setting up these shadow organizations to prevent any kind of socialism or people-led initiatives around the world.
And it seems like this is going to become the next war. If it’s not going to be just another Cold War, it’s definitely going to be some war because they are lining up the Axis and allies already. I guess. Take us out on this note.
[00:49:13.290] – Keen
I think I take it over a different angle and say that the global politics we’ve had over the last 80-100 years, actually, since the dominance of America, which we pretty much say from the end of the Second World War, has been completely oblivious to the impact we’re having on the planet. The biosphere itself. And the biggest political player on the planet is the biosphere.
And that’s going to start determining what the wars are in future. And I don’t think any country in the world is prepared for that battle. China has maybe probably the most effective capacity to respond to the challenges that are coming this way, but there’s no way America or Russia or anywhere in Europe are aware of the threats they face.
This is a warfare against an implacable foe which we’ve created by destroying the sustainability of the biosphere, by expanding human industry to three to four times the scale that the planet could actually support. That’s the real war that is coming our way.
[00:50:08.600] – Hudson
And Steve, you mentioned how global shipping and trade adds to the global warming. Obviously, the military spending is a huge, huge factor. So the Americans and the Green Parties of Europe are on the wrong side of history. They are doing just the opposite of preserving de-development. They are the advocates of more and more global warming. So literally, you have a group, a bloc, wanting to destroy the environment and a bloc trying to protect itself from the Western destruction.
[00:50:40.830] – Grumbine
Yeah, very scary. And then we’ve got a lot of folks that think that they’re going to appeal to their greater sense of reason to get them to suddenly stop all this, vote their way to a Green New Deal, and it’s all just going to go away. Gentlemen, thank you so much for this time. I really appreciate it. It’s rare to have two such phenomenal guests at once, so I really do appreciate this immensely. Michael, tell us where we can find more about your work.
[00:51:07.230] – Hudson
Well, on my website, michael-hudson.com, and on my Patreon account. Steve also has a Patreon account. He got me onto Patreon. And the books that I describe what we’re talking about are available on Amazon. The Destiny of Civilization and Super Imperialism.
[00:51:27.450] – Grumbine
Very good. Steve, I know we got you on Patreon, but tell us a little bit about your books and where we can find more of your work.
[00:51:33.710] – Keen
Okay, well, again, my main recent book is The New Economics: A Manifesto, and that’s published by Polity press. So you can get it through Polity or you can get it through Amazon. There’s more than one way to get a hold of it. And the main thing I’m doing is developing the software package to enable us to think about the economy the way we should think about it, which is dynamically, non equilibrium, monetary and so on.
And that’s Minsky, which people can find at SourceForge, the open source software package site, SourceForge. Search for SourceForge and Minsky together and you’ll find it. But those are my main two things. I’ve also opened up a substack account recently – profstevekeen.substack.com – mainly because Patreon loses a lot of customers by stuffing up their credit cards. So Patreon, Substack and Minsky.
[00:52:18.030] – Grumbine
Very good. All right. And with that, my name is Steve Grumbine. My special guests, Steve Keen and Michael Hudson. This is the podcast Macro N Cheese. We’re out of here.
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.
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.
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.
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.
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?
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.
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.
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.
If we say that the Yellow Vests are not socialist revolutionaries even latently, then what are they protesting about?
To put it the most simply: they are protesting the end of European Social Democracy, with the limited protections it provided.
(This is the seventeenth chapter in a new book, France’s Yellow Vests: Western Repression of the West’s Best Values. Please click here for the article which announces this book and explains its goals.)
The Yellow Vests intuited that the pan-European project has ended the era of European Social Democracy (1945-75) and replaced it with elite-driven, free market, winner-take-all Liberalism.
Seeing that their list of 43 demands doesn’t include the word “Europe” once, however, the Yellow Vests don’t really grasp that the European Union represents the organisational assassin of European Social Democracy. The European Union and Eurozone’s response to the Great Recession made it entirely clear: these are institutions which are perfectly hostile to Social Democracy’s minor redistributions and protections which fundamentally embolden the average worker and citizen.
Social Democracy was not born after World War II, just as “neoliberalism” was first on display back in 1871, with what was imposed after the destruction of the Paris Commune. Marx chronicled the birth of European Social Democracy, in 1848, when the Mountain Party (which initially claimed the mantle of neo-Jacobinism) sided with the small-traders in the June Days massacre instead of with the urban proletariat and rural peasantry, as the Jacobins had done in 1789. They went from supporting Socialist Democracy to calling themselves Democratic Socialists (Démocrate-socialistes) and this – and not the downward slope from Napoleon Bonaparte to Louis-Napoleon Bonaparte – should be considered the truest essence of Marx’s famous line of history repeating itself as farce.
“The revolutionary point was thereby broken off from the social demands of the proletariat and a (social) democrat turn given to them….”
That was the birth of Social Democracy: an ideology where the social demands of the recently-feudal masses (decent pay, health care, education, pensions, etc.) get only partially addressed while the political demands of an aristocracy opposing an absolute monarch (free speech, property rights, trial by jury, etc.) are fully met. Liberalism has always sought to limit progressive changes to the political question of how to move on from feudalism, and to stop progressive changes to the social question of how to move on from feudalism. The reformist ideology of Social Democracy has operated within Western Liberal Democracy for nearly 175 years and only partially prevailed for 30 of them.
The sooner the Yellow Vests realise that Social Democracy will never be a harmonious solution to the elitism dominant in Liberalism, the better, as Marx did:
“The peculiar character of Social Democracy is epitomised in the fact that democratic-republican institutions are demanded as the means, not to remove the two extremes – capital and wage-slavery – but in order to weaken the antagonism and transform them into a harmonious whole.”
Putting capital primarily in the hands of the recently-feudal masses so they can provide the broad economic stability and success which would end wage- and debt-slavery has never been a goal of Social Democracy, from the Mountain Party to Leon Blum to Francois Mitterrand to Francois Hollande to the “Democratic Socialists of America” led by Bernie Sanders in the 21st century United States.
Yellow Vest: “We are not beggars! What is 100 euros only given one time? State taxes compose 60% of the price of gasoline, so calling it 100 euros is totally false – the people truly only receive 40 euros. This is election nonsense, but Macron won’t win votes with these crumbs.”
Marx continued in his examination of France and gave us the key to the capitalist culture of both Liberal and Social Democracies: “This substance is the transformation of society along (Social) democratic lines, but a transformation within the boundaries of the small-trader’s class.” One extraneous sentence later: “It believes rather that the special conditions for its own emancipation are the general conditions under which alone modern society can be saved and the class struggle be avoided.”
Trotsky and the Yellow Vests saw that, due to the rise of financial capitalism, a leftist alliance must include the small businessman, but they reject the goal of Social Democracy to elevate their virtues and needs over those of the average worker and citizen.
Thus even when Social Democracy prevails in Liberalist capitalist cultures the virtues of the usually bourgeois-aspiring, individualistic, managerial small-trader class become the highest virtues to be promoted. Everyone must be a self-interested, competitive entrepreneur who aspires to be a boss and a “job creator”. This veneration of the small trader is the most obvious in American culture, and it is American culture which has been imposed on France via the pan-European project: at the alleged “end of history”, with the fall of the USSR, the United States shepherded the pan-European project, which is rightly said to be even more Liberalist (i.e. Bankocratic) than anything which could be created in the United States.
What we see in the modern era, and as this book proves, is that Liberalism, Social Democracy and Fascism have all joined together and “become bourgeois”. This amalgam of 18th century Liberalism, 19th century Social Democracy and 20th century fascism is ultimately not different from the aristocracy of the 17th century and earlier, which which ruled the 99% in an entirely autocratic manner. The extremely modest expansion of wealth and political power from a blood/marriage line to a line of the super-wealthy 1% still results in the exclusion of the recently-feudal masses from policy making, and this is what the Yellow Vests emphatically reminded. Their primary demand was not Socialist revolution but merely to get more public opinion into public policymaking.
The bourgeois bloc continually dangles Social Democracy as a reformist possibility, and thus they secure the loyalty of both the big and the small bosses and owners. However, when the moment of implementation comes, amid the next guaranteed bust in Liberalist capitalism, the response is the anti-Socialist virulence of Liberalism via the ruthless elite domination of a Fascism which has made peace with big capital.
Yellow Vest: “Macron’s repeatedly evaded the main problems. His solutions are not concrete, and it is certain that in a few months we will just be in the same situation. This is why we will keep protesting, for certain.”
Baudelaire wrote, “The most beautiful trick of the devil is to persuade you that he does not exist,” and this is what modern Western Liberal Democracy has done with the elitism, arrogance and autocracy which is the basis of absolute monarchy. Macron’s “Jupiterian” remove has pulled the sheet off of Western Liberal Democracy, again, and reminded that the idea of an autocratic ruler remains the preference of a Western elite which has always been totally opposed to Socialist-inspired measures.
The republican lie of Liberalism
When Western leaders communicate among themselves and with their foreign counterparts they use the language of Liberalism; when they implement policy they use the ruthlessness of Fascism; but when they communicate with the masses they know that republican language is paramount.When Western leaders communicate among themselves and with their foreign counterparts they use the language of Liberalism; when they implement policy they use the ruthlessness of Fascism; but when they communicate with the masses they know that republican language is paramount.
This is especially true in France and the United States, where royalism has been fully discredited from holding public power. Thus, there is a constant emphasis by contemporary French leaders and their mainstream media on maintaining “republican” values.
However, the republicanism of both is an antiquated one as it is based on Liberal and not Socialist Democracy. A perfect example of the inadequacy of their elite-led republicanism is found in the Orwellian name of the group which wages the actual physical repression of the Yellow Vests: the detested CRS riot police (Compagnies républicaines de sécurité – Republican Security Companies.) A woman wearing a full-body bathing suit – a “burkini” (combination of “burqa” and “bikini”) is breathlessly presented as a bigger threat to French republicanism than the repression of the Yellow Vests. Most obviously, there is the mainstream conservative party’s name change shepherded by Nicolas Sarkozy in 2015 – from L’Union pour un mouvement populaire(UMP) to lesRépublicains: the party had so many corruption scandals that a rebranding was deemed unavoidable.
Such is the false republicanism in Liberal Democracies.
The lip service towards republicanism allows the perpetuation of the outdated notion in France that the world still views them as the brightest beacon of progressive politics. They are different than almost all of Northern Europe, where royals still – bewilderingly – remain on thrones which hide mountains of the public’s rightful riches and influence. Indeed, an Iranian can find in France a refuge from the common Western toleration and whitewashing of monarchism.
The elite in the United States uses “freedom”, while monarchies like the UK use “human rights” in the same way – to insist that freedom and human rights for their modern aristocracies still represents the pinnacle of progressivism.
The legacy of 1789 exists in France today only in this constant demand to uphold “republicanism”, even if it is not at all the spirit of 1789 and only mouths its forms. The Yellow Vest repression will remind all of history that the freedoms offered by the republicanism of Western Liberal Democracy with French characteristics are a fantasy – there is only the autocracy of the bourgeois bloc.
France’s 21st century belief that “the republic” must jingoistically unite the French is ultimately a means used to falsely claim the legacy of 1789 while also ensuring that talk for progressive politics ends with this very initial answer to the “political question”, and with no answer to the “social question”, as well.
This also explains why there is so much forced discussion in France about what a huge threat Islam poses to this immoral republicanism: Islam correctly insists on God and morality being the highest allegiance, and certainly not laws forced through by a Fascist-allying, imperialist bourgeois bloc.
Nothing is more Liberalist than the European Union, and thus the ‘Social Fascist’ repression of anti-austerity movements and the Yellow Vests
We have already linked the European Union with the birth of neoliberalism and neo-imperialism, we have established how Fascism was subsumed and its tactics adopted, and we have shown how the goal of the third restoration of Western Liberalism is to roll back the modest gains of Social Democracy.
All that’s needed is to show how Western Liberal Democracy wields the power of the state as autocratically as royal families and their coteries used to – for this we simply have to look to the Yellow Vests.
Western Liberal Democracy and pre-1789 autocracy – there is no real difference.
Whether the form is a parliamentary republic based on Liberalism, or an executive-led republic based on Liberalism, or a constitutional monarchy based on Liberalism – the autocracy has been the same. Only the truly elite have the money to buy Liberalist rights and influence in public policy.
Yellow Vest: “As usual, no prison for the rich – everything goes fine for them, always. They never know hunger or poverty, but put everything on the average person’s back. Benalla should have been treated like anyone else – justice should be equal for everyone.”
Just as the trends of 250 years of Iranian or Chinese history can be summarised so too can the trend of the past 250 years of French and Western history, and this book has aimed to do that. Above all the trend of moving away from an autocratic monarch and towards an empowered people’s republic is discerned. The problem has been Western Liberal Democracy’s conception of a republic: what they have always had is an oligarchic republic, inspired by the English, which aims for perpetual repression of the recently-feudal (to Asian conceptions of time!) Western masses.
The early years of all revolutionary republics are always fraught with missteps and mistakes, but made with the sincere goal of broad societal progress. In 1789 the move away from absolute monarchy was met with great difficulty and international opposition. In 1848 the move away from a limited monarchy was met with great difficulty, also caused by great inexperience. In 1871 the move towards a social republic was met with great difficulty and international opposition, also caused by great inexperience. But inexperience is not the primary difficulty of the people today – they know how to rule, but they still face great international opposition. As Marx wrote:
“The cry of ‘social republic’with which the February Revolution (of 1848) was ushered in by the Paris proletariat, did but express a vague aspiration after a republic that was not only to supersede the monarchical form of class rule but class rule itself. The Commune (i.e. the first appearance of Socialist Democracy) was the positive form of that republic.”
However, the social republic was annihilated by neoliberalism and would not appear until 1917 in the eastern frontier of Europe – Russia.
The Yellow Vests reminded those in the 21st century who believe that the “end of history” had occurred in 1991 that the people’s desires for a social republic are no longer vague. However the Yellow Vests have had the misfortune of living in the world’s only region – the West – where socialist-inspired revolutionary cultures have never won implantation.
To their great credit, the Yellow Vests created a revolutionary condition for all of France. When it was thwarted by Liberal Democratic politicians, media and unions the Yellow Vests continued to march to keep promoting what may truly turn into a revolutionary culture at the next major uprising over Liberalism’s endemic failures. The Yellow Vests have created a vast and reliable network – there’s no doubt they will spring into action at the next opportunity.
The next political progression for the Yellow Vests is the realisation that the pan-European project only dangled the illusion of mere Social Democracy, but that its “neoliberal” basis is actually Fascist and autocratic to its very core.
The analysis of that splendidly successful revolutionary Bolshevik, Trotsky, must be remembered today if the Yellow Vests are to break with the perpetual illusion of mere Social Democracy:
“The program of the Communist International has the following to say on this subject: ‘Side by sidewith the Social Democracy, which assists the bourgeoisie to stifle the proletariat and to lull its vigilance, Fascism appears.’ The Communist International failed to understand that it is not the mission of Fascism to functionside by sidewith the Social Democracy, but to destroy all the existing workers’ organizations, including the reformist. The task of Fascism, in the words of the program, is to ‘annihilate theCommuniststrata of the proletariat, and their leading cadres.’ Fascism, then, does not at all threaten the Social Democracy and the reformist trade unions; on the contrary, the Social Democracy itself plays a “Fascist” role to an ever increasing degree. Fascism achieves nothing more than the consummation of the labours of reformism, by functioning ‘side by sidewith the Social Democracy’.” (Emphasis his)
The Communist Bolsheviks rejected mere Social Democracy and instead used Socialist Democracy as their guiding structure ideology, as do Socialist-inspired countries today, who then adapt its primary economic and political imperatives to local cultures and mores. They saw that Social Democracy and Fascism work together to destroy not just Socialist Democracy-inspired groups, unions, parties, countries, etc, but also groups, unions, parties and countries which attempt Social Democratic reforms of Liberalism. As time goes on the Yellow Vests will realise, thanks to their own repression, that Liberal Democracy and Social Democracy offer them no solution except the destruction of the Yellow Vests.
One sentence later – in which Trotsky expressed his usual disapproval with the Moscow-based Comintern – Trotsky continued:
“We have here before us all the basic elements of the theory of social fascism. The leaders of the Communist International failed to understand that capitalism in decay is no longer able to come to terms with the most moderate and most servile Social Democracy, either as a party in power, or as a party in opposition. It is the mission of Fascism to take its place not ‘side by side with the Social Democracy’, but on its bones. Precisely from this there flows the possibility, the need and the urgency for the united front.” (Emphasis his)
(Recall that a united front (joining together in society’s leftist struggles), is not the same as a popular front (an electoral alliance).)
Call it what you want: Social Fascism, Liberalism, autocracy, Fascism, constitutional monarchy, rule by the 1% – it is all the same oligarchic autocracy for the recently-feudal masses. I call it Western Liberal Democracy to properly place it in a geographic and historical context.
As soon as the Yellow Vests stop trying to win back the Social Democratic measures which Nicolas Sarkozy, Francois Hollande and Macron rolled back, the sooner they will realise that Socialist-inspired countries have shown a better way, method and goal. Without a major reformulation of the pan-European project – which seems impossible to get off the ground in a Liberalist-dominated media – the pan-European project’s initial lure of even greater Social Democratic gains should be seen only as a chimera.
The Yellow Vests know enough to reject existing establishment institutions, as well as pathetic PFAXIst (Popular Fronts Against Xenophobia but for Imperialism) electoral strategies – they must realise the monarchist-elitist-reformist-fascist alliance which is Western Liberal Democracy must be rejected in favor of Socialist Democracy.
That, of course, will lead to even more repression.
But their bravery will earn them more and more comrades; their correctness will only increase as the repression accumulates; the guaranteed cycles of failure in capitalism and the clockwork greed of high finance all make the move away from autocratic Liberalism certain.
The combination of royalism, Liberalism and Fascism is doomed, but people must be liberated from the long-outdated and pernicious influence of Liberalism before the next political advancement can take place. Thus the Yellow Vests, and thus this book, which is another humble tally of Liberalism’s failures.
Yellow Vest: “The people I speak with express absolutely no desire to stop the movement and remain very positive. The Yellow Vests are, above all, the French people, and the French people recognize this and this is why the movement will have a second wind.”
So admirably, The Yellow Vests have cleared the path for France: the despairing working poor, middle and lower classes have a fighting force which can never, ever be called Fascistic. France is back to being the West’s leaders of progressive politics.
Marx’s most important passage on France – guiding France from 1789 to 2022 and beyond
Here we have the most important passage in Marx’s writings on France – from his writings on the Paris Commune – because it historically summarises a century of turbulent political and socio-economic changes and pinpoints the establishment of modern Western Liberal Democracy.
The passage covers the vital and obscured history of France for a century after 1789. The short parentheticals are mine and designed to add clarity to Marx’s meaning:
“If the parliamentary republic, as M. Theirs said, ‘divided them least’ (the different factions of the French ruling class in 1850), it opened an abyss between that class and the whole body of society outside their spare ranks. The restraints by which their own divisions had under former regimes still checked the state power were removed by their union; and in view of the threatening upheaval of the proletariat they now used that state power mercilessly and ostentatiously as the national (and imperialist) war engine of capital against labor.
In their uninterrupted crusade against the producing masses they were, however, bound not only to invest the executive with continually increased powers of repression, but at the same time divest their own parliamentary stronghold – the National Assembly – one by one, of all its own means of defence against the Executive. The Executive, in the person of (President) Louis(-Napoleon) Bonaparte, turned them out. The national offspring of the ‘Party of Order’ (the dominant political party of the 2nd) Republic was the Second Empire (of Emperor Louis-Napoleon Bonaparte).
The (Second) empire, with the coup d’etat for its birth certificate, universal suffrage for its salvationand the sword for its sceptre, professed to rest upon the peasantry – the large mass of producers not directly involved in the struggle of capital and labor. Itprofessed to save the working class by breaking down parliamentarianism and, with it, the undisguised subserviency of government to the propertied classes. It professed to save the propertied classes by upholding their economic supremacy over the working class; and, finally, it professed to unite all classes by reviving for all the chimera of national glory.
In reality it was the only form of government possible, at a timewhen the bourgeoisie had already lost, and the working class had not yet acquired, the faculty of ruling the nation. (As they would acquire, starting with the Paris Commune and then later the USSR, China, Iran, etc.) It (the 2nd French Empire) was acclaimed throughout the world as the saviour of society. Under its sway bourgeois society, freed from political cares, attained a development unexpected even by itself. Its industry and commerce expanded to colossal dimensions; financial swindling celebrated cosmopolitan orgies (Marx uses this last word literally, per scandals of the time); the misery of the masses was set off by a shameless display of gorgeous, meretricious and debased luxury. The state power, apparently soaring high above society, was at the same time itself the very scandal of that society and the very hotbed of all its corruptions. Its own rottenness, and the rottenness of the society it had saved (i.e. the bourgeois elite of the 2nd Republic), were laid bare by the bayonet of Prussia, herself eagerly bent upon transferring the supreme seat of that regime from Paris to Berlin.”
The globalist descendants of the victors of 1871 would eventually comprise on Brussels instead of Berlin. Belgium – the country fabricated so that France and Germany would have a place to fight their wars, it is often joked – became “the seat of that regime”.
Yellow Vest: “We are not proud, at least not yet, because we have many more victories to accomplish. We insist on having referendums initiated by citizens, in order to democratically give a voice to all of France and to the Yellow Vests. We will keep marching to ensure that our common future is serene and peaceful.”
If we make only minor substitutions in Marx’s passage to include contemporary developments, does this not make an up-to-date history of France and Europe covering over two centuries?
“If the pan-European project “divided them least” (the different factions of national ruling classes in Europe) least, it opened an abyss between that class and the whole body of society outside their spare ranks. The restraints by which their own divisions had under former regimes still checked the state power were removed by their union; and in view of the threatening upheaval of the Yellow Vests they now used that state power mercilessly and ostentatiously as the international war engine of capital against labor.
In their uninterrupted crusade against the producing masses they (the pan-European project) were, however, bound not only to invest the national executive branches with continually increased powers of repression, but at the same time divest their own national parliamentary branches, one by one, of all its own means of defence against the Executive. The Executive, in the person of amodern Louis Bonaparte (or something new and revolutionary, perhaps similar to the Supreme Leader branch of government in Iran), could not be allowed to have turned them – Brussels – out. The national offspring of the pan-European project was the neoliberal Empire of the European Union.
The empire, with the fall of the USSR for its birth certificate, denying the national referendums which rejected the European Union and which were based on universal suffrage for its salvation and the sword for its sceptre, professed to rest upon the neo-peasantry – the large mass of producers not directly involved in the struggle of capital and labor and whodesired to avoid more intra-European wars, free movement around Europe and the strengthening of a Social Democratic safety net. It also professed to save the working class by breaking down national parliamentarianism and, with it, the undisguised subserviency of government to the propertied classes. It professed to save the propertied classes by upholding their economic supremacy over the working class; and, finally, it professed to unite all classes by reviving for all the chimera of supranational glory via colluding with the United States to enforce Liberalist values worldwide.
In reality it was the only form of government possible, at a time when the bourgeoisie had fully acquired the faculty of ruling the nation, something they had no experience with in 1848. It (the pan-European project) was acclaimed throughout the West as the saviour of European society. Under its sway bourgeois society, freed from political cares, such as the profit drags and democratic nuisances created by the era of Social Democracy, attained a development unexpected even by itself. Its industry and commerce expanded to colossal dimensions; financial swindling celebrated cosmopolitan orgies; the misery of the masses was set off by a shameless display of gorgeous, meretricious and debased luxury. The state power, apparently soaring high above society, was at the same time itself the very scandal of that society and the very hotbed of all its corruptions. Its own rottenness, and the rottenness of the society it had saved –the royals threatened by 1789, the bourgeois threatened by 1848, the colluding Social Democrats threatened by 1917 and the Fascists threatened by 1945 – were laid bare by the bayonet of the Yellow Vests, herself eagerly bent upon transferring the supreme national seat of that regime from Brussels back to Paris.”
France is not Cuba, Iran, China or even Southern Lebanon – it will likely take a civil war for the Yellow Vests to ever use bayonets to finally win political and economic redistribution. However, the Yellow Vests emphatically prove the willingness of Western Liberal Democracy to use violence just as brutally as the autocracies of 1788.
The Yellow Vests also remind that Western Liberal Democracy does not even allow the rights which Liberalism claims to protect – how long can that persist in a country which regularly demands the right to publicly exercise such rights, and whose pens have been freed by the digital era?
If the French elite is not going to permit even the basic rights of Liberalism, then France needs a defensive force which can protect the Liberalist rights of protesters. That is the subject of the next chapter.
<—>
Upcoming chapter list of France’s Yellow Vests: Western Repression of the West’s Best Values.
Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. His new book is ‘France’s Yellow Vests: Western Repression of the West’s Best Values’. He is also the author of ‘Socialism’s Ignored Success: Iranian Islamic Socialism’ as well as ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’, which is also available in simplified and traditional Chinese.
Part 1 discussed how a “hung parliament” isn’t going to happen in France. President Emmanuel Macron won enough seats and can find plenty of allies among the mainstream conservatives, as well as the Socialist Party and Green Party. Thus, on all issues involving far-right economics, neoliberalism and the pan-European project Macron will proceed without parliamentary difficulty.
Part 1 ended with my pointing out how Macron’s coalition-building is actually unimportant.
Because the Mainstream Media is fine with his ends, they rarely discuss how Macron often used the 49-3 executive decree in his first term even when he had an absolute majority. Macron bypassed parliament just to avoid public discussion in Parliament on his hugely unpopular austerity “reforms” – i.e. right-wing rollbacks.
And then the guy would actually sign these bills – which were also entirely written by his own coterie – live on television, rubbing it in everyone’s faces! The French, of course, can’t stand this obviously autocratic – and certainly not democratic – behavior. The elite-driven “bourgeois bloc”, however, adored it.
So who cares about the French legislature? Certainly Macron has not.
Francois Hollande used the 49-3 executive decree multiple times as well, so this is clearly a long-running issue of executive branch power grabs.
The MSM doesn’t want to focus on these facts because they so obviously reveal the incredibly low quality of French democracy and of the pan-European project.
Therefore, even if Macron can’t create a majority to pass neoliberal legislation why would he allow parliament to restrain hims now? In the coming years we should expect his rationalisations along the lines of, “We must avoid dysfunction and stagnation, therefore I decree…”.
All the above explains why the democratic absolute majority winner of the legislative vote was “none of the above” – abstention won 54%. The French know that modern autocracy – rule by the 49-3 executive decree and the overruling of national sovereignty by Brussels – rules, thus rendering Europe’s national parliaments a waste of time, breath and attention. Remember Syriza of Greece, or the “bomb” Jean-Claude Trichet, President of the European Central Bank, promised Ireland? Many European citizens have not.
Elections at just 46% turnout are a hair’s breadth away from not having democratic credibility, but that must be added with the constant use of the 49-3 executive decree and the certainty of a Brussels’ veto for any legislation they don’t like. It combines to modern autocracy – rule by an oligarchical elite.
When is the broad prosperity and stability which Western Liberal Democracy promises ever going to arrive? When is the broad prosperity and stability of the pan-European project ever going to arrive? Certainly the latter’s short tenure has been marked by nothing but economic disaster and democratic repression.
Because Western Liberal Democracy took the defeated fascists of World War II under their wing they also subsumed many of their ideas. One of them is identity politics: the average Frenchman is now being told to focus on the paltry 15% score of the National Front and not the larger issues presented in the paragraph above. It’s nonsense, and to do that would be to play into the hands of the bourgeois bloc.
All of these realities should be clear to people who cover French politics.
Macron has to actually pay attention to parliament now and work a little harder to win over some votes (but only if he actually feels like it) – I guess that’s democracy, but it’s not much. The MSM and bourgeois bloc elite is worried that “reforms” – i.e. rollbacks to the Social Democratic advances implemented from 1945-75 – won’t get through, but after 13 years here, and over 1,500 2-3 minute television reports for PressTV, which includes over 3,000 soundbites from French people, and hundreds of written columns, I’m worried about the democratic will of the French people.
But it’s been foolish to look for the democratic will in Western Liberal Democratic parliaments and in French parliament ever since 1848, when they did away with unelected monarchy.
France’s parliament is going to get louder, but that’s about it. It’ll be more like the United States in that there will be a lot of grandstanding and big talk, and then the same right-wing conclusions will arrive exactly as predicted. If it somehow doesn’t – Macron will use the executive decree. If Macron somehow doesn’t use the executive decree – Brussels will step in to forbid, sanction or legislate around the democratic will of any member nation.
As time goes on this reality will become clear and clearer. Some in the NUPES alliance and some in the National Front will actually say such things in Parliament. Macron promised to govern in a way to decrease “extremism” – i.e. those who point out the failures of Liberalism – but he clearly achieved the exact opposite.
Macronism is my generation’s type of conservatism, but that doesn’t mean it was ever built to last. The former Rothschild banker was a candidate who was fabricated at the last moment of 2016 by the intensely monied powers who have always governed in Western Liberal Democracy. He’s not as all-powerful as he was in his first term, but how could he be, given his discrediting behavior, his lack of merit and the arrogant elite he chooses to guide him? How could Western Liberal Democracy not keep proving to the masses their lack of concern for the problems of the working poor and middle classes?
However, since 2009 France does not control its currency, prices, budget, laws, rails, skies and obviously much, much else. A major failure of the Yellow Vests was to focus their attention entirely on Macron and on parliament and not on the pan-European project. The Western media tells them deceptive lies, but this column has laid out solid conclusions drawn from close observation. The Yellow Vests have protested every Saturday since October 2021 – you likely haven’t heard about that because the MSM refuses to tell the truth about that, too. When the next inevitable bust period occurs in Liberalism, they are ready to be there.
Will France descend into chaos shortly, as many predict? My God – how can it get more chaotic than every single Saturday from November 2018 through June 2019? All that’s left is for the forces of order to open fire on protesters – massacres!
That would change things – at least I hope it would. The West, ever-grandstanding about their moral superiority, certainly ignored the occasionally-lethal brutality towards the Yellow Vests.
The French elections have ended – major changes were not made. Since the Great Recession, and subsequent undemocratic installation of the pan-European project, the world’s third-largest but weakest and least-sovereign economy has only gotten weaker. After damage so great we don’t even know how bad it is, the coronavirus fog has lifted – remember that it was instituted just weeks after the failure of France’s longest labor movement ever, the general strike of 2019-20. France and the EU are marching to war over the unrest in Ukraine, and also sacrificing their economies for that cause.
Such is France today.
No Bonapartism – either Napoleonic or Louis-Napoleonic – is coming to save them from the autocratic bourgeois bloc. They have no revolutionary “Supreme Leader branch” of government, either – they don’t even want to understand what that term means. The French don’t believe in the goodwill of the leadership of the United States, but they follow them anyway. China, which since 2008 has soared in direct inverse proportion to the demise of Europe, is following an independent path, just as Iran has done since 1979. Now Russia appears to be doing the same after three decades of Liberalism.
The world needn’t worry about the results of French parliament, but they should worry for the French.
France’s election season finally got interesting, but only marginally.
Even though his brutal repression of the Yellow Vests should disqualify him from being a public servant ever again, Emmanuel Macron was re-elected president, incredibly. However, he has finally been reprimanded at the voting booth – his parliamentary coalition just lost its absolute majority.
The Yellow Vests can claim wresting yet another concession. Unfortunately – like most of their concessions – it’s rather minor.
The Mainstream Media is in a tizzy over an allegedly “hung parliament”, but don’t they always do that when the working-poor class rebels against Western Liberalist diktats?
The man initially hailed as the “new leader of the free world” by Politico (how badly does that hold up four years later?), and who then obviously became a “liberal strongman”, now has to actually acknowledge the National Assembly’s existence after ruling by executive order for five years.
This is such a bad thing? The entire start of modern global politics, in 1789, was the move away from absolute monarchy via the demand for a parliament – a representative body which can, finally, exert some influence over the policy-making of the executive branch.
To the Western elite: yes, this is a very bad thing.
They don’t want absolute autocracy anymore, but they certainly don’t want the poor, working-poor and middle classes exerting any influence over policy-making. They are continually appalled at how the French masses – from the Yellow Vests, to the 2005 “No” vote on the European Constitution, to the election of anti-austerity candidates like Francois Hollande and Francois Mitterrand – keep rejecting the “bourgeois bloc’s” insistence that neoliberalism is the greatest thing since pockets.
The dominant analysis in France now is that it is divided into three blocs: the far-right of Le Pen, a left wing (represented by the NUPES “popular front”, which just over-promised and under-delivered) and a “center” of Macronistas. This is wrong. The best description of French divisions is between a bourgeois bloc (the 25% which supports Macron) and everyone else (the 75% which supported the Yellow Vests/the 70% which didn’t want Macron to have another absolute majority in parliament).
The bourgeois bloc is obviously full of pro-elite, pro-privilege, right-wing ideas – neo-imperialism, free market economics, perpetual austerity, a poor social safety net, regressive taxes on the average person but tax evasion for the rich and corporations, the idea that citizens should vote once every 4 or 5 years for elite politicians and then stop being involved in politics – but what it is actually presented as is “radical centrism”. Much like the idea of the “bourgeois bloc”, such terms are gaining popularity in recent years.
“Radical centrism” is the idea that mainstream Western thought is the only “right” way to view reality. The ideology of Liberalism is “centrist”, or so they allege, but they definitely make this claim with a virulence that is truly radical.
This started post-1991 with TINA – There Is No Alternative. The great unsaid to that popular phrase is that There Is No Alternative to Neoliberalism and Neo-imperialism. Radical centrism has become – to them – “the truth”. Criticise their policies – such as the false benevolence, and certainly the false success, of the pan-European project – and you are classified as “disinformation”. Affirm these policies and you’re a blue-checked “expert” and “independent”.
It’s all nonsense of course, but ever since 1789 created a bourgeois bloc they have always been out of touch with the average person’s experiences and beliefs.
This brings us back to the legislative vote: the Western MSM, owned by the bourgeois bloc in a West which eschews state media, is now worried that without an absolute majority Macron won’t be able to force through his “radical centrist” policies as easily as he did for the past five years.
The Western MSM is, of course, totally unconcerned about the fact that Macron forced through his policies only on top of the broken bones, lost eyes and blood of the Yellow Vests. They only worry about protesters in right-wing places like Hong Kong, or Ukraine, or the MKO, etc.
The intellectual state of France has now been established – are the MSM’s worries justified? Does the vote signify a huge change?
No, but not for the reasons expected by people who don’t closely follow French politics.
Firstly, ignore the usual French drama: Of course newspapers want to sell papers by inflaming the results. The far-right’s Marine Le Pen wants to act like 15% is a parliamentary majority, leftist Jean-Luc Melenchon wants to believe that 25% of seats earns him the prime minister post, and the mainstream conservative Republicans are talking about “still being an opposition party” but these are all lies, exaggerations and self-delusions.
The biggest delusion outside of France since 2017 is that Macron was ever a “centrist”. His subsequent legalisation of Islamophobia and the state of emergency, his far-right economic policies and his authoritarian style all disproved that indisputably.
Macron was always a mainstream conservative, just with a new logo and of his generation. Somehow this eluded many commentators, and I attribute this – among the misled older commentators – to a generation gap.
Macron’s generation was raised to be entirely pro-Europhile, and also to reject xenophobia. Some in the mainstream conservative party are pro-globalisation and some aren’t so much, and some in the mainstream conservative party are Islamophobic and some aren’t so much, but those in les Républicains haven’t joined the National Front (now the National Rally) for a reason, and that reason is: these are not their main issues.
So we should add together the seats of Macron’s coalition and those of the mainstream conservatives – and we get an absolute majority of 53%. Thus, on all issues involving far-right economics, neoliberalism and the pan-European project Macron will proceed without parliamentary difficulty.
People are acting like Les Républicains haven’t been going along with pan-European project diktats since Nicolas Sarkozy? It’s crazy. He’s the one who engineered the passage of the Lisbon Treaty in 2009, which was rejected in that 2005 vote mentioned above, and which put the installation of the European Union in the hands of national parliaments (run by the bourgeois bloc) and not in the hands of voters.
Macron’s coalition won enough seats to avoid a crisis. He’ll be able to win over just 2/3rds of Republicans (or 44 seats) for a majority on anything of economic and political importance to conservatives (and to pan-Euroepans).
However, one must realise that Macron will also win over many in the Socialist Party and the Green Party, as well! They are plenty of them who are totally on board with neoliberalism and the pan-European project. The NUPES left-green alliance is already fracturing.
Allow me a short victory lap: in already-published chapters of my new book (France’s Yellow Vests: Western Repression of the West’s Best Values – out July 1) I predicted the formation of AND the failure of the NUPES “popular front”. I understand Western fake-leftism – what can I say? This electoral alliance was always just that – to win votes – and it’s already breaking apart. Many in NUPES only put away their Europhilia to keep their seat, after all.
This certainly cannot be argued with, as well: There simply has not been a huge influx of parliamentarians who are anti-EU, anti-Liberalist, anti-austerity and anti-bourgeois bloc, and certainly not any majority. It will be business as usual in Western Liberal Democracy.
However, all of these facts are entirely moot!
You haven’t wasted your time, however, but you do need to please read Part 2 of this column, out soon.
Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. His new book is ‘France’s Yellow Vests: Western Repression of the West’s Best Values’. He is also the author of ‘Socialism’s Ignored Success: Iranian Islamic Socialism’ as well as ‘I’ll Ruin Everything You Are: Ending Western Propaganda on Red China’, which is also available in simplified and traditional Chinese.
The Federal Reserve Board’s ostensible policy aim is to manage the money supply and bank credit in a way that maintains price stability. That usually means fighting inflation, which is blamed entirely on “too much employment,” euphemized as “too much money.”[1] In Congress’s more progressive days, the Fed was charged with a second objective: to promote full employment. The problem is that full employment is supposed to be inflationary – and the way to fight inflation is to reduce employment, which is viewed simplistically as being determined by the supply of credit.
So in practice, one of the Fed’s two directives has to give. And hardly by surprise, the “full employment” aim is thrown overboard – if indeed it ever was taken seriously by the Fed’s managers. In the Carter Administration (1777-80) leading up to the great price inflation of 1980, Fed Chairman Paul Volcker expressed his economic philosophy in a note card that he kept in his pocket, to whip out and demonstrate where his priority lay. The card charted the weekly wage of the average U.S. construction worker.
Chairman Volcker wanted wages to go down, blaming the inflation on too much employment – meaning too full. He pushed the U.S. bank rate to an unprecedented 20 percent – the highest normal rate since Babylonian times back in the first millennium BC. This did indeed crash the economy, and with it employment and prosperity. Volcker called this “harsh monetary medicine,” as if the crash of financial markets and economic growth showed that his “cure” for inflation was working.
Apart from employment and wage levels, another victim of Volcker’s interest-rate hike was the Democratic Party’s fortunes in the 1980 presidential election. They lost the White House for twelve years. The party thus is taking great courage – or simply being ignorant – by entering on this autumn’s midterm election by emulating Mr. Volcker’s attempt to drive down wage levels by financial tightening, which already has crashed the stock market by 20 percent.
President Biden has thoroughly backed up Republican-appointed Federal Reserve Chairman Jerome Powell in endorsing a financial crash in hope that it will roll back U.S. wage levels. That is the policy of the Democratic Party’s donor class and hence political constituency.
……………
To Wall Street and its neoliberal policy backers … the solution to any price inflation is to reduce wages and public social spending. The orthodox way to do this is to push the economy into recession in order to reduce hiring. Rising unemployment will oblige labor to compete for jobs that pay less and less as the economy slows.
This class-war doctrine is the prime directive of neoliberal economics. It is a feature of the tunnel vision of corporate managers and the One Percent. The Federal Reserve and IMF are are the operating arms for impoverishing the masses. Along with Janet Yellen at the Treasury, public discussion of today’s U.S. inflation is framed in a way that avoids blaming the 8.2 percent rise in consumer prices on the Biden Administration’s New Cold War sanctions on Russian oil, gas and agriculture, or on oil companies and other sectors using these sanctions as an excuse to charge monopoly prices as if America has not continued to buy Russian diesel oil, as if fracking has not picked up and as if corn is not being turned into biofuel. There has been no disruption in supply. We are simply dealing with monopoly rent by the oil companies using the anti-Russian sanctions as an excuse that an oil shortage will soon develop for the United States and indeed for the entire world economy.
Covid’s shutdown of the U.S. and foreign economies and foreign trade also is not acknowledged as disrupting supply lines and raising shipping costs and hence import prices. The entire blame for inflation is placed on wage earners, and the response is to make them the victims of the coming austerity, as if their wages are responsible for bidding up oil prices, food prices and other prices resulting from the crisis. The reality is that they are too debt-strapped to be spendthrifts.
The Fed’s Junk Economics of What Bank Credit Is Spent On
The pretense behind the Fed’s recent increase in its discount rate by 0.75 percent on June 15 (to a paltry range of 1.50% to 1.75%) 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 in the United States is now less than student loans and automobile loans.
Banks lend almost entirely to buy real estate, stocks and bonds, not goods and services. Some 80 percent of bank loans are real estate mortgages, and most of the remainder are loans collateralized by stocks and bonds. So raising interest rates will not lead wage-earners to borrow less to buy consumer goods. The main price effect of less bank credit and higher interest rates is on asset prices – deterring borrowing to buy homes, and arbitragers and corporate raiders from buying stocks and bonds. So the main price effect of less bank credit and higher interest rates is to reduce stock and bond prices and demand for home mortgages.
Rolling Back Middle-Class Home Ownership
The most immediate effect of the Federal Reserve’s credit tightening will be to reduce America’s home-ownership rate. This rate has been falling since 2008, from nearly 68 percent to just 61 percent today. The decline got underway with President Obama’s eviction of nearly ten million victims of junk mortgages, mainly black and Hispanic debtors. That was the Democratic Party’s alternative to writing down fraudulent mortgage loans to realistic market prices, and reducing their carrying charges to bring them in line with market rental values. The indebted victims of this massive bank fraud were made to suffer, so that Obama’s Wall Street sponsors could keep their predatory gains and indeed, receive massive bailouts. The costs of their fraud fell on bank customers, not on the banks and their stockholders and bondholders.
The effect of discouraging new home buyers by raising interest rates is to lower home ownership – the badge of being middle-class. The Fed’s policy of raising interest rates will greatly increase the interest charges that prospective new home buyers will have to pay, pricing the carrying charge out of reach for many families. The United States is turning into a landlord economy.
As the United States has become more debt-ridden, more than 50 percent of the value of U.S. real estate already is held by mortgage bankers. That means that homeowners are left with only a minority share in the value of their homes; most is owed to their banks. The remaining homeowners’ equity – what they own net of their mortgage debt – has fallen even faster than home ownership rates have declined.
Real estate is being transferred from “poor” hands to those of wealthy landlord corporations. Private capital companies – the funds of the One Percent – are going to pick up the pieces from the coming wave of foreclosures to turn homes into rental properties. Higher interest rates will not affect their cost of buying this housing, because they buy for all cash to make profits (actually, real estate rents) as landlords. Within another decade the nation’s home ownership rate may fall toward 50 percent (and homeowners’ equity even lower), turning the United States into a landlord economy instead of the promised middle-class home ownership economy.
The Coming Economic Austerity (Indeed, Debt-Burdened Depression)
While home ownership rates have plunged for the population at large, the Fed’s “Quantitative Easing” has increased its subsidy of Wall Street’s financial securities from $800 billion to $9 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. But the Fed’s support of asset prices has saved many insolvent banks – the very largest ones – from going under. Sheila Bair of the FDIC singled out Citigroup, along with Countrywide, Bank of America and the other usual suspects. The working population is not considered to be too big to fail. Its political weight is small by comparison to that of Wall Street banks and other FIRE-sector beneficiaries.
Lowering the discount rate to only about 0.1 percent enabled the banking system to make a bonanza of gains by making mortgage loans at around 3.50 percent. The banks kept credit-card rates high – and made even more money on penalty fees for late payment than they “earned” on interest charges (in the range of 18 percent). And despite the stock market’s plunge of over 20 percent from nearly 36,000 to under 30,000 on June 17, America’s wealthiest One Percent, and indeed the top 10 Percent, have vastly increased their wealth in stocks, while the bond market has had the largest boom in history. But most Americans have not benefitted from this runup in asset prices, because most stocks and bonds are owned by only the wealthiest layer of the population. The Fed is all in favor of asset-price inflation. But For most American families, corporations and government at all levels, the financial boom since 2008 has entailed a growing debt burden. Many families face insolvency as Federal Reserve policy aims to create unemployment. Now that the Covid moratorium on the evictions of renters behind in their payments is expiring, the ranks of the homeless are rising.
The Biden Administration is trying to blame today’s inflation and related distortions on Putin, even using the term “Putin inflation.” The mainstream media follow suit in not explaining to their audience that Western sanctions blocking Russian energy and food exports will cause a food and energy crisis for many countries this summer and autumn. And indeed, beyond: 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 portends a long depression. But as Madeline Albright would say, they think that the price is “worth it.” As seen by the Biden regime, the New Cold War is a fight between the “democratic” United States, with its privatized economic planning in the hands of the financial class, and “autocratic” China and Russia, where banking and money creation are treated as a public utility to finance tangible economic growth instead of serving the financialization of the economy.
There is no evidence that America’s neoliberal-neoconservative New Cold War can restore the nation’s former industrial and related economic power. The economy cannot recover as long as today’s debt overhead is left in place. Debt service, housing costs, privatized medical care, student debt and a decaying infrastructure have made the U.S. economy uncompetitive. There is no way to restore its economic viability without fundamental changes in economic policy. But there is little “reality economics” at hand to provide an alternative to the class war inherent in neoliberalism’s belief that the economy and living standards can prosper by purely financial means, by debt leveraging and corporate monopoly rent extraction while the United States has made its domestic manufacturing uncompetitive – seemingly irreversibly. To reduce their labor costs, U.S. corporations moved manufacturing offshore, thereby depriving the American work force of high value-added, high productivity jobs.
The Rentier Class Has Sought to Make America’s Neoliberal Privatization and Financialization Irreversible
It has succeeded to such a degree that there is no party or economic constituency promoting the policies needed for an industrial recovery. Yet the Democratic Party leadership, subjecting the economy to an IMF-style austerity plan, will make this November’s midterm elections unique. For the past half century, the Fed’s role has been to provide easy money for the economy, to give the ruling party at least the illusion of trickle-down prosperity to deter voters from electing the opposition party. But this time the Biden Administration is running on a program of financial austerity.
The Party’s identity politics address almost every identity except that of wage-earners and debtors. Advocating lower wages, more expensive financial charges for home mortgages and credit-card loans, and broken promises for student-debt writedowns does not look like a platform that can attract many voters, especially as the administration pours money into Ukraine. Republicans such as Tucker Carlson are appealing to the “deplorables” majority that the Democrats have left behind.
Addendum: Yves Smith of Naked Capitalism reminds me that: “Paul Volcker made it explicit that the Fed is in the business of crushing labor. As reported by William Greider in Secrets of the Temple, when Volcker was driving interest rates to the moon, he kept a note card in his pocket. It was a record of weekly average construction wages. Volcker wanted them to go down as proof his harsh medicine was working.”
M.K. Bhadrakumar, “West at inflection point in Ukraine war,” Indian Punchline, June 19, 2022
“Fundamentally, the Western economies are facing a systemic crisis. The complacency that the reserve-currency-based US economy is impervious to ballooning debt; that the petrodollar system compels the entire world to purchase dollars to finance their needs; that the flood of cheap Chinese consumer goods and cheap energy from Russia and Gulf States would keep inflation at bay; that interest rate hikes will cure structural inflation; and, above all, that the consequences of taking a trade-war hammer to a complex network system in the world economy can be managed — these notions stand exposed.”
Venezuelan President Nicolas Maduro said the ‘Axis of Resistance’ is not just confined to certain countries across the world, but it refers to all those fighting colonialism and hegemonic powers.
“The Axis of Resistance exists throughout the world; it exists in Africa, in Asia, in the Middle East, in Latin America and in the Caribbean. The Resistance also belongs to the people who are fighting against neoliberalism, racism and various forms of colonization, political, economic, cultural colonization and cyber colonization,” Maduro said in an exclusive interview with the official website of Leader of the Islamic Revolution His Eminence Imam Sayyed Ali Khamenei that was published on Monday.
“All of us who fight against colonialism, all of us who fight to decolonize our minds and our people, are part of the Axis of Resistance that stands against the methods of the imperialists for imposing hegemony on the world,” he added.
Lauding the deeds of the Axis of Resistance throughout the years, Maduro said, “The 21st century is our century. It is the century of the unity of the people. It is the century in which people will be liberated. It is the century of justice and truth. Empires are in decline, and people’s projects for well-being, development and greatness have just begun. This century is our century.”
Pointing to a recent meeting with Imam Khamenei and the His Eminence’s statement about the very close relationship between Iran and Venezuela, Maduro said, “Since Commander Hugo Chavez’s first visit in 2001, Iran and Venezuela have established exemplary political, diplomatic, moral, and spiritual ties.”
“During this current trip, I’ve witnessed how there is an exemplary relationship between us in terms of our increasing cooperation. We’ve had many successes. So Imam Khamenei is right when he states that the relationship between the two countries is quite unique and extraordinary,” he noted.
Asked about his latest assertion regarding the Zionist occupation regime’s conspiracies against Venezuela through Mossad, Maduro said, “Imperialism and Zionism are conspiring against the progressive, revolutionary processes taking place in Latin America and the Caribbean, especially the Bolivarian Revolution.”
The Venezuelan president stressed, “This is because we are a true alternative, an alternative of truth and justice, an alternative of freedom, an alternative of democracy, and an alternative for realizing projects that are fully humane in the Latin American region and the Caribbean Sea. In addition to this, Mossad’s conspiracies are due to our strong position of solidarity with the Palestinian people and our support of them for their regaining their historical rights and for the Palestinian Resistance. Our support of them is strong and unique, and we will continue supporting them in this manner.”
Asked about the role of Iran’s anti-terror commander General Qassem Soleimani and the Quds Force over the last 20 years in strengthening the relationship between Tehran and Caracas, Maduro said he met General Soleimani in March and April of 2019 when he came to Venezuela during the time of US’ cyberattacks against the country’s power plants.
“I really didn’t know. I didn’t know him. I didn’t know how amazing he was, but the discussion I had with him was very pleasant. We reviewed everything during our meeting and he immediately suggested we get help from Iranian experts. Two or three days later, Iranian experts came to repair electrical services in Venezuela,” he added.
In response to a question regarding a saying by Imam Khamenei that, “If Prophet Issa [Peace upon Him] were among us today, he wouldn’t miss a moment to fight the leaders of global oppression and arrogance,” Maduro said, “We’re believing Christians. We’re the type of Christians who take action while praying and thinking. And Christ came into this world to fight the Empires. He came to confront the Roman Empires. He risked his life. He sacrificed his life to fight the Roman Empire.”
The Venezuelan leader said, “If there’s one good thing I can say about Christianity, it is its anti-imperialist nature and its seeking of truth and justice against the oppressors. I have no doubt that if Christ were among us today, he would have been at the forefront of the battle against imperialism, colonialism and all forms of oppression.”
During the interview, Maduro pointed to several meetings he had had with Imam Khamenei over the years as well as the meeting between Chavez and the Leader of the Islamic Revolution.
“I’ve always admired Imam Khamenei’s excellent memory. That he recalls the memories of those days is important. In the talks that I have had with him, he has recalled some of the conversations he had with Commander Chavez where Commander Chavez shared some of his memories about Cuba and Commander Fidel Castro. There was a time when a hurricane was heading straight toward Cuba. It was a Category 5 hurricane. A conversation took place between Fidel and Chavez. Fidel said, “Chavez! What you need to do right now is to pray. Pray for us!” Chavez started praying. That day passed and the hurricane changed its course. It didn’t cross over Cuba. Chavez called Fidel and said, “It’s a miracle!” Fidel replied, “Yes, it’s because God helps Chavez and Chavez’s friends.” In the last talk that I had with Imam Khamenei, he told me this story in a friendly, kind way in memory of Commander Chavez and Commander Fidel Castro,” he said.
“Holding a conversation with Imam Khamenei truly fills one with spirituality and wisdom. He likes the Venezuelan people. He likes the people’s ideals, and he always offers us great ideas and recommendations,” Maduro underlined.
“Taken from an interview with the newly founded German magazine “ViER” which will be published in August 2022.” ViER (FOUR), stands for the media as fourth power in checks and balances.
(1.) Prof. Hudson, your new book “The Destiny of Civilization” is out now. This lecture series on finance capitalism and the New Cold War presents an overview of your unique geo-political perspective. You talk about an ongoing ideological and material conflict between financialized and de-industrialized countries like United States against the mixed-economies of China and Russia. What is this conflict about and why is the world right now at a unique “point of fracture” as your book states?
Today’s global fracture is dividing the world between two different economic philosophies: In the US/NATO West, finance capitalism is de-industrializing economies and has shifted manufacturing to Eurasian leadership, above all China, India and other Asian countries in conjunction with Russia providing basic raw materials and arms.
These countries are a basic extension of industrial capitalism evolving into socialism, that is, into a mixed economy with strong government infrastructure investment to provide education, health care, transportation and other basic needs by treating them as public utilities with subsidized or free services for these needs.
In the neoliberal US/NATO West, by contrast, this basic infrastructure is privatized as a rent-extracting natural monopoly.
The result is that the US/NATO West is left as a high-cost economy, with its housing, education and medical expenses increasingly debt financed, leaving less and less personal and business income to be invested in new means of production (capital formation). This poses an existential problem for Western finance capitalism: How can it maintain living standards in the face of de-industrialization, debt deflation and financialized rent-seeking impoverishing the 99% to enrich the One Percent?
The first U.S. aim is to deter Europe and Japan from seeking a more prosperous future to lie in closer trade and investment ties with Eurasia and the Shanghai Cooperation Organization (SCO, a more helpful way of thinking about the global fracture from the BRICS). To keep Europe and Japan as satellite economies, U.S. diplomats are insisting on a new economic Berlin Wall of sanctions to block trade between East and West.
For many decades U.S. diplomacy has meddled in European and Japanese internal politics, sponsoring pro-neoliberal officials into government leadership. These officials feel that their destiny (and also their personal political fortunes) is closely allied with U.S. leadership. Meanwhile, European politics has now become basically NATO politics run from the United States.
The problem is how to hold the Global South – Latin America, Africa and many Asian countries – in the US/NATO orbit. Sanctions against Russia have the effect of hurting the trade balance of these countries by sharply raising oil, gas and food prices (as well as prices for many metals) that they must import. Meanwhile, rising U.S. interest rates are drawing financial savings and bank credit into U.S.-dollar-denominated securities. This has raised the dollar’s exchange rate, making it much harder for SCO and Global South countries to pay their dollarized debt service falling due this year.
This forces a choice on these countries: either go without energy and food in order to pay foreign creditors – thereby putting international financial interests before their domestic economic survival – or defaulting on their debts, as occurred in the 1980s after Mexico announced in 1982 that it could not pay foreign bondholders
(2.) How do you see the ongoing war/special military operation in Ukraine? Which economic consequences do you foresee?
Russia has secured the Russian-speaking Eastern Ukraine and its southern Black Sea coastline. NATO will continue to “poke the bear” by sabotage and new ongoing attacks, especially by Polish fighters.
NATO countries have dumped their old and obsolete weapons into Ukraine, and now must spend immense sums modernizing their military hardware. The outflow of payments to the U.S. military-industrial complex will put downward pressure on the euro and British sterling – all coming on topo of their own rising energy and food deficits. So the euro and sterling are headed down toward parity with the U.S. dollar. The euro is almost there now (about $1.07). This means sharply rising price inflation for Europe.
I read and hear conflicting information on the new sanctions. Some experts in the East and West believe this will harm the national economy of the Russian Federation tremendously. Other experts tend to believe this will backfire or have a huge boomerang-effect on the Western countries indeed.
The overriding U.S. policy is to fight against China, hoping to break of the Western Uighur regions and divide China into smaller states. To do that, it is necessary to break away Russian military and raw-materials support for China – and in due course to break it up into a number of smaller states (the Western large cities, northern Siberia, a southern flank, etc.).
Sanctions were imposed in hopes of making living conditions so unpleasant for Russians that they would press for regime change. The NATO attack in Ukraine was designed to drain Russia militarily – by having the bodies of Ukrainians deplete Russia’s supply of bullets and bombs by giving their lives simply to absorb Russian arms.
The effect has been to increase Russian support for Putin – just the opposite of what was intended. There is a growing disillusion with the West, after seeing what the Harvard Boys did to Russia when the United States backed Yeltsin to create a domestic kleptocrat class that tried to “cash out” its privatizations by selling shares in oil, nickel and public utilities to the West, and then spurring military attacks from Georgia and Chechnya. There is a general agreement that Russia is making a long-term turn Eastward instead of Westward.
So the effect of U.S. sanctions and military opposition to Russia has been to impose a political and economic Iron Curtain locking in Europe to dependency on the United States, while driving Russia together with China instead of prying them apart. Meanwhile, the cost of European sanctions against Russian oil and food – much to the benefit of U.S. LNG gas suppliers and agricultural exporters – threatens to create long-term European opposition to U.S. unipolar global strategy. A new “Ami go home” movement is likely to develop.
But for Europe, the damage already has been done, and neither Russia nor China are likely to trust that European government officials can withstand the bribery and personal pressure brought to bear by U.S. interference.
Here in Germany I’m listening to the new Minister for Economy, Mr Robert Habeck from the Green Party, who talks about activating the federal “emergency gas” and asks the Emirates for resources (this “deal” seems to be failed already, news say). We see the end of North Stream II and huge dependency for Berlin and Brussels on Russian resources. How this will all sum up?
In effect, U.S. officials have asked Germany to commit economic suicide and bring on a depression, higher consumer prices and lower living standards. German chemical companies have already begun to shut down their fertilizer production, given Germany’s acceptance of trade and financial sanctions that prevent it from buying Russian gas (the raw material for most fertilizer). And German car companies are suffering from supply cut-offs.
These European economic shortages are a huge benefit to the United States, which is making enormous profits on more expensive oil (which is controlled largely by U.S. companies, followed by British and French oil companies). Europe’s replenishment of the arms that it donated to Ukraine also is a boon to the U.S. military-industrial complex, whose profits are soaring.
But the United States is not recycling these economic gains to Europe, which is looking like the big loser.
Arab oil producers already have rejected U.S. demands that they charge less for their oil. They look to be windfall gainers from the NATO attack on the Ukraine proxy battlefield.
It seems unlikely that Germany can simply give back to Russia Nord Stream 2 and the Gazprom affiliates that have conducted trade with Germany. Trust has been broken. And Russia is afraid to accept payments by European banks since the theft of $300 billion of its foreign reserves. Europe is no longer economically safe for Russia.
The question is just how soon Russia will simply stop supplying Europe altogether.
It looks like Europe is becoming an appendage of the U.S. economy, in effect bearing the fiscal burden of America’s Cold War 2.0, with no political representation in the United States. The logical solution is for Europe to join the United States politically, giving up its governments but at least getting a few Europeans in the U.S. Senate and House of Representatives.
(3.) Which role does the a) New Cold War and the b) neoliberal finance capitalism play in the current war between Russia and Ukraine? According to your recent research.
The US/NATO war in Ukraine is the first battle in what looks like a 20-year attempt to isolate the Dollar Area West from Eurasia and the Global South. U.S. politicians promise to keep the Ukraine war going indefinitely, hoping that this may become Russia’s “new Afghanistan.” But this tactic now looks like it may threaten to be America’s own Afghanistan. It is a proxy war, whose effect is to lock in Europe’s dependency on the United States as a client oligarchy with the euro as a satellite currency to the dollar.
U.S. diplomacy tried to disable Russia in three major ways. First, isolating it financially by blocking it from SWIFT bank clearing, system. Russia responded by smoothly moving over to China’s bank-clearing system.
The second tactic was to seizing Russian deposits in U.S. banks and holdings of U.S. financial securities. Russia responded by picking up U.S. and European investments in Russia on the cheap as the West dumped them.
The third tactic was to block NATO members from trading with Russia. The effect has been that Russian imports from the West have declined, while its exports of oil, gas and food are soaring. That has raised the ruble’s exchange rate instead of hurting it. And as sanctions block Russia’s imports from the West, President Putin has announced that his government will invest heavily in import substitution. The effect will be a permanent loss of Russian markets for European suppliers and exporters.
Meanwhile, the Trump tariffs against European exports to the United States remain in place, leaving European industry with shrinking business opportunities. The European Central Bank may continue to buy European stocks and bonds to protect the wealth of the One Percent, but if anything will cut back on domestic social spending so as to comply with the 3% limit of budget deficits that the eurozone has imposed on itself.
In the medium and long run, the US/NATO sanctions are therefore aimed mainly against Europe. And Europeans don’t even seem to see that they are the primary victims of this new U.S. economic war for self-serving energy, food and financial dominance.
(4.) In Germany the stopped energy project Nord Stream II is still a big political issue. In your recent online article “The Dollar Devours the Euro” you wrote: “It is now clear that today’s escalation of the New Cold War was planned over a year ago. America’s plan to block Nord Stream 2 was really part of its strategy to block Western Europe (“NATO”) from seeking prosperity by mutual trade and investment with China and Russia.” Could you explain this to our readers? source: https://michael-hudson.com/2022/04/the-dollar-devours-the-euro/
What you characterize as “blocking Nord Stream 2” is really a Buy-American policy. The United States has persuaded Europe not to buy in the lowest-price market, but to pay as much as seven times more for its gas from U.S. LGN suppliers, and to spend a reported $5 billion on expanding port capacity – that will not even be available for a year years.
This threatens a very uncomfortable interregnum for Germany and other European countries following U.S. dictates. Basically, national parliaments are now subservient to NATO, whose policies are run from Washington.
One price that Europe will pay, as noted above, is declining exchange rate against the U.S. dollar. European investors are likely to move their savings and investments out of Europe to the United States in order maximize their capital gains and simply avoid price declines for their stocks and bonds as measured in dollars.
(5.) Prof. Hudson, let’s take a look at further developments in Germany. In May the German parliament – Bundestag – passed a new bill: German lawmakers approved possible expropriation of energy companies. This could enable the Berlin government to put energy companies under trusteeship if they can no longer fulfil their tasks and if the security of supply is at risk. According to REUTERS, the renewed law – which still needs to pass the upper house of parliament – could be applied for the first time if no solution is found on the ownership of the PCK Refinery oil refinery in Schwedt/Oder (East Germany), which is majority-owned by Russian state-owned Rosneft.
It looks like Europe and America will confiscate Russian investments in their countries, and sell off (or have Russia confiscate) NATO-country investments in Russia. This means a de-linking of the Russian economy from the West, and a closer linking with China – which looks like the next economy to be sanctioned by NATO as it becomes an Eastern Pacific Treaty Organization involving Europe in tis confrontation in the China Sea.
I would be surprised if Russia resumes selling oil and gas to Europe without being reimbursed for what Europe (and also the United States) has seized. This demand would help bring European pressure on the United States to give back the $300 billion in foreign reserves that it has grabbed.
But even after such a give-back and reparations settlement, trade seems unlikely to be resumed. A phase change has occurred, a change in consciousness as to how the world is splitting up under U.S. diplomatic attacks on allies and adversaries alike.
My question would be: Socialism is a big topic in your new book. What’s your view on those “socialist” measures taken now by a capitalist country like Germany?
A century ago, the “final stage” of industrial capitalism was expected to be socialism. There were many different kinds of socialism: State socialism, Marxian socialism, Christian socialism, anarchist socialism, libertarian socialism. But what occurred after World War I was the antithesis of socialism. It was finance capitalism and a militarized Finance capitalism.
The common denominator of all socialist movements, from the right to the left of the political spectrum, was stronger government infrastructure spending. The transition to socialism was being led (in the United States and Germany) by industrial capitalism itself, seeking to minimize the cost of living (and hence the basic living wage) and the cost of doing business by government investment in basic infrastructure, whose services were to be provided freely, or at least at subsidized prices.
That aim would prevent basic services from becoming opportunities for monopoly rent. The antithesis was the Thatcher-neoliberal doctrine of privatization. Governments turned over public utilities to private investors. Companies were bought on credit, adding interest and other financial charges to profits and payments to management. The result has been to turn neoliberal Europe and America into high-cost economies unable to compete in production prices with countries pursuing socialist polities instead of financialized neoliberalism.
This opposition in economic systems is the key to understanding today’s world global fracture.
(6.) Especially Russian oil and gas are in the focus right now. Moscow demands payments in Rouble only and is expanding their field of buyers filling it with China, India or Saudi-Arabia. But it seems Western buyers can still pay in Euro or US Dollar. What is your take on this ongoing war on resources? The Rouble appears to be a winner.
The rouble certainly is rising. But this does not make Russia a “winner” if its economy is disrupted by the sanctions blocking its own imports needed for its supply chains to operate smoothly.
Russia will end up the winner if it can mount an industrial import-substitution program, and re-create public infrastructure to replace what has been privatized under U.S. direction by the Harvard Boys in the 1990s.
Do we see the end of the petro-dollar and a rise of a new financial architecture in the East accompanied by a strengthening of BRICS and Shanghai Cooperation Organization (SCO)?
There will still be petrodollars, but also a variety of currency-area blocs as the world de-dollarizes its international trade and investment arrangements. In late May, Foreign Secretary Lavrov said that Saudi Arabia and Argentina want to join BRICS. As Pepe Escobar recently noted, BRICS+ may expand to include MERCOSUR and the South African Development Community (SADC)
These arrangements probably will call for a non-U.S. alternative to the IMF to create credit and provide a vehicle for official foreign-exchange reserves for the non-NATO countries. The IMF will still survive to impose austerity on U.S. satellite countries while subsidizing capital flight from Global South countries and creating SDRs to finance U.S. military spending abroad.
Summer 2022 will be a testing ground as Global South countries suffer a balance-of-payments crisis from the rising oil and food deficits alongside the higher domestic-currency costs of carrying their foreign dollar debts. The IMF may offer new SDRs for them to pay US dollar bondholders to keep the illusion of solvency going. But the SCO countries can offer oil and food – IF countries give assurances of repaying credit by repudiating their dollar debts to the West.
This financial diplomacy promises to introduce “interesting times.”
(7.) In your recent interview with Michael Welch (“Accidental Crisis?”) you have a specific analysis on the current events in Ukraine/Russia: “The war isn’t against Russia. The war isn’t against Ukraine. The war is against Europe and Germany.” Could you please elaborate on that?
As I explained above, the U.S. trade and financial sanctions are locking in Germany to dependency on U.S. exports of LNG, and purchases of US military arms to upgrade NATO into the de facto European Governing Authority.
The effect is to destroy any European hopes for mutual trade and investment gains with Russia. It is being turned into the junior partner (very junior) in its new trade an investment relations with the increasingly protectionist and nationalistic United States.
(8.) The real problem for United States seems to be this: “The only way of maintaining prosperity if you can’t create it at home is to get it from abroad.” What is Washington’s strategy in there?
My book Super Imperialism has explained how, for the past 50 years, ever since the United States went off gold in August 1971, the U.S. Treasury Bill standard has given the United States a free ride at foreign expense. Foreign central banks have recycled their dollar inflow resulting from the U.S. balance-of-payments deficit into loans to the U.S. Treasury – that is, to buy U.S. Treasury securities to hold their savings. This arrangement has enabled the United States to undertake foreign military spending for its nearly 800 military bases around Eurasia without having to depreciate the dollar or tax its own citizens. The cost has been borne by countries whose central banks have built up their dollar loans to the U.S. Treasury.
But now that it has become unsafe for countries to hold dollar-denominated U.S. bank deposits or government securities or investments if they “threaten” to defend their own economic interests or if their policies diverge from those dictated by U.S. diplomats, how can America continue to get a free ride?
In fact, how can it import basic materials from Russia to fill parts of its industrial and economic supply chain that is being broken down by the sanctions?
That is the challenge for U.S. foreign policy. One way or another, it aims to tax Europe and make other countries into economic satellites. The exploitation may not be as blatant as the U.S. grabbing of Venezuelan, Afghan and Russian official reserves. It is likely to involve undercutting foreign self-sufficiency to force other countries into economic dependency on the United States, so that the U.S. can threaten these countries with disruptive sanctions if they seek to put their own national interests over what U.S. diplomats want them to do.
(9.) How will all this affect Western Europe’s (Germany / France / Italy) balance of payments and hence the euro’s exchange rate against the dollar? And why do you think the European Union is on a path to become new “Panama, Puerto Rico and Liberia”?
The euro already is a satellite currency to the United States. Its member countries cannot run domestic budget deficits to cope with the coming inflationary depression resulting from the U.S.-sponsored sanctions and resulting Global Fracture.
The key is turning out to be military dependency. This is “cost sharing” for the U.S. sponsored Cold War 2.0. That cost sharing is what has led U.S. diplomats to realize that they need to control domestic European politics to prevent its populations and businesses from acting in their own interests. Their economic squeeze is “collateral damage” to today’s New Cold War.
(10.) A philosopher from Switzerland wrote a critical essay in mid of March for the German socialist newspaper „Neues Deutschland“, a former news outlet for the GDR government. Ms Tove Soiland criticized the international Left for current behaviours regarding Ukraine crisis and covid management. The Left, she says, is too much pro authoritarian government/state – and thereby copying methods of the traditional right-wing parties. Do you share this view? Or is it too harsh?
The State Department and CIA’s “mighty Wurlitzer” has focused on gaining control of Europe’s Social Democratic and Labour parties, anticipating that the great threat to U.S.-centered finance capitalism will be socialism. That has included the “green” parties, to the point where their pretense of opposing global warming is shown to be hypocritical in light of the vast carbon footprint and pollution of the NATO military warfare in Ukraine and related air force and naval exercises. You can’t be pro-environment and pro-war at the same time!
This has left the right-wing nationalist parties less influenced by U.S. political meddling. That is where the opposition to NATO is coming from, as in France and Hungary.
And in the United States itself, the only votes against the new $30 billion contribution to military spending against Russia came from Republicans. The entire “left wing” Democratic Party “squad” voted for the war spending.
The Social Democratic parties are basically bourgeois parties whose supporters have hopes of rising into the rentier class, or at least becoming stock and bond investors in miniature. The result is that neoliberalism has been led by Tony Blair in Britain and his counterparts in other countries. I discuss this political alignment in The Destiny of Civilization.
U.S. propagandists call governments that keep natural monopolies as public utilities “autocratic.” To be “democratic” means to let U.S. firms by control of these commanding heights, being “free” of government regulation and taxation of finance capital. So “left” and “right,” “democracy” and “autocracy,” have become an Orwellian Doublespeak vocabulary sponsored by America’s oligarchy (which it euphemizes as “democracy”).
(11.) Could the war in Ukraine be a landmark to show a new geopolitical map in the world? Or is the neoliberal New World Order on its rise? How do you see it?
As I explained in your Question #1, the world is being split into two parts. The conflict is not merely national by the West against the East, but is a conflict of economic systems: predatory finance capitalism against industrial socialism aiming at self-sufficiency for Eurasia and the SCO.
The non-aligned countries were not able to “go it alone” in the 1970s because they lacked a critical mass to produce their own food, energy and raw materials. But now that the United States has de-industrialized its own economy and outsourced its production to Asia, these countries have an option not to remain in dependency on U.S. Dollar Diplomacy.
World War II saw massive political gains by the lower classes and average person, but only via their own mass-murder. Many socio-economic demands which go back to 1789 and which animated the Revolutions of 1848 were put in place, finally.
(This is the ninth chapter in a new book, France’s Yellow Vests: Western Repression of the West’s Best Values. Please click here for the article which announces this book and explains its goals.)
The three biggest changes were that socialism was now firmly implanted on the global scene, women got the right to vote in France in 1944 and that the Western Liberal Democratic elite were discredited worse than ever.
That forced Western elite, who were now allying with fascists to forestall further socialist and anti-imperialist victories, to make political and economic concessions which they had resisted for a century. These subsequent 30 years – from 1945 to 1975 – are known as the “30 Glorious Years” in French history. During this period a broad economic stability was founded upon the stability, productivity, joy and long-sightedness which can only be provided by worker rights and influence, and by socialist-inspired levers and organisations.
The brief era of “Social Democracy” was officially terminated by the introduction of the euro (1999) and then the European Union (2009). EU citizenship was introduced in 1992 but its official installation was not until 2009, with the elite-only ratification of the Lisbon Treaty, which amended the constitutional basis of the EU, the Maastricht Treaty (1992) and the Treaty of Rome (1957). The Yellow Vests would be the flaming leftist economic and political reaction to this political-economic regression away from Social Democracy. The introduction of this version the pan-European project was a major regression in the threat of modern political history: to reduce the autocratic rights of elite and to increase the empowerment of the average person.
Sadly, it was only 30 years – one generation – before the autocratic and oligarchical elite began to retake power. When they do this effort is called “neoliberalism”, even though the first “neoliberalism” was with the start of 3rd Republic (1871-1940), which restored the immediately discredited and popularly rejected Liberalism of the 2nd Republic (1848-52). The goal of today’s “3rd-liberalism” is to end the Social Democracy era and to redistribute its gains back to the Liberalist 1%.
This book ignores the upheaval of 1968 in France – when a General Strike attracted 8 million workers in a country of 50 million people – for this reason: This is a book is about political changes, and the rebellion of 1968 only produced cultural changes. It was indeed a cultural revolution, but because it was not state-sponsored, as in China, where cultural changes were embraced by leaders like Mao Zedong, the Western Liberal Democratic elite successfully broke any chance of fully democratising from Social Democracy to Socialist Democracy. There’s no denying that this era’s cultural revolution (note the lower case) won advances in everyday culture but that is not the same as formal political-economic changes.
The political failures/cultural gains of this era would eventually reveal the continued rightward shift within the elite of the French left, and this can be illustrated by the path of Daniel Cohn-Bendit, the most prominent of the student leaders in 1968. In his memoirs he wrote that he was not seeking Marxist-inspired equality but simply more control over his personal life. These freedom of expression types of changes can perhaps be encapsulated in the freedom of students to now question their teachers in class. Cohn-Bendit would quit the Trotskyists, switched to the Green Party, became a devoted Europhile, reject the Yellow Vests and is now a close advisor to Emmanuel Macron – it’s an incredibly representative political trajectory of this era. Ecology is a subject completely neutered of class politics (even though the idea of a capitalist/competitive solution to ecological issues, and not socialist/cooperative solution, is an obvious absurdity) and thus is the political outlet most encouraged by contemporary Western Liberal Democratic elite.
However, we should note that for many decades already French socialism was primarily intellectual, and dominated by right-wing socialists: “Before the war of 1914-1918 only 20% of socialist deputies were workers while they had been 80% of the German socialist party (SPD), and they represented the totality of the English Labor party. The socialism ofJaures andBlum is, when it comes to leaders, a socialism of intellectuals and liberal professions,” wrote Romaric Godin in La guerre sociale en France (The Social War in France – 2019). Jean Jaures and Leon Blum were the right-leaning socialist leaders of their respective generations. Jaures is notable in that both Francois Hollande and Nicolas Sarkozy both claimed to be continuing his legacy. Also notable is that whether worker or intellectual – 20th century West European socialists failed.
Between the USSR’s fall (1991) and China’s rise (starting in 2008) the French left’s economic ideology was in disunity and disarray at best and total betrayal at worst. Many also went whole-hog over to neo-imperialist culture, espousing right-wing “universal values” and embracing neo-colonial wars in the former Yugoslavia and the Muslim world.
The change began in 1974 with the death in office of President George Pompidou, Charles de Gaulle’s successor in the 5th Republic (1958-today), just a month before the presidential vote.
Neoliberalism starts to win over elites from Paris to Moscow, but the French keep protesting
Pompidou’s death effectively ended Gaullism, which had helped win World War II, presided over the “30 Glorious Years” and insisted on French sovereignty. The closet election in French history saw the victory of the aristocrat Valerie Giscard d’Estaing, a politician who was thus extremely familiar but also a new breed: Giscard d’Estaing was liberal on social issues, rejected Gaullist Euroscepticism and was extremely close with high finance – he served as Minister of Finance twice. We see how the “Bankocracy” has gone from not existing in 1789 France to running the executive branch. He marks the start of the third restoration of extremist Liberalist thought.
Liberals had been waiting decades to restore firm control, and they salivated at the prospect of dividing up the spoils created by the 30 Glorious Years. Using the excuse of inflation cased by a rise in oil prices in 1973, free competition was reimposed after decades of abandonment, austerity was imposed for the first time, salaries were frozen, compulsory salary taxes soared ten points to nearly 30% and the despised CDD work contract was created. (The despised contrat à durée déterminée is a temporary employment contract which renders life in France extremely difficult and unstable. It’s usual length is one month and then it is renewed endlessly, without ever becoming a long-term contract. As the French do not have hourly wages, the CDD can perhaps be thought of as “part-time work”.) Seigniorial dues and tithes were not restored.
It would not be until 2016 that a team of economists at the International Monetary Fund would release a paper which admits that austerity doesn’t work. The economic massacring of the lower and middle class which is austerity would be the reason for the upcoming years recession, although the mainstream history is that it was entirely due to the rise in oil prices.
France was not alone in its first steps towards the restoration of Liberalism. The United States responded to energy inflation with the “Volcker Shock” in March 1980: a huge rise in interest rates which gutted the average person’s primary asset class – the housing market. The UK and Germany turned to wage suppression. It’s vital to note that the same elite capture was also occurring in the USSR. By Christmas 1991 it would be imploded from the top: their elite infamously ignored a high-turnout referendum in March in which 80% of the nation voted to preserve the USSR.
Unsurprisingly, the French voter rebelled: Giscard d’Estaing was voted out in 1981. A socialist-communist backing of Francois Mitterrand’s economic platform – the most socialist economic plan ever promoted in the non-Eastern Bloc Europe – was a repeat of 1936. However, by 1983 he infamously made his U-turn back to austerity (more on this shortly) – French elites had fully accepted the terms of Liberalism.
Yellow Vest: “I worked from the age of 14 until the age of 60, and in my entire life I accepted only 1 month of unemployment insurance. And yet, in the last 4 years I have seen my pension lowered from 1,150 euros to 1,050 euros. My rent is 800 euros a month, so I cannot afford to live, and I will never accept this injustice.”
(Note: this book intersperses over 100 quotations taken from actual, marching Yellow Vests which were originally published in news reports on PressTV.)
By 1986 French neoliberalism was in full swing: the abolishment of price controls, the end of controls on exchange rates and the deregulation of financial markets in order to do what modern Western financial markets do – divert the wealth produced by people who actually work into the bank accounts of the 1%. Mass de-nationalisations began: General Electric Company, Suez, Paribas and Société Générale (banks), Saint-Gobain and Matra (industrial giants).
The average Frenchman would not accept the death of Social Democracy as complacently as in the rest of the West, and that fact is certainly in keeping with the line of West European history since 1789 – the Yellow Vests only confirm this line further. The French responded to the restoration of Liberalism over socialist-inspired ideas with massive, broadly-encompassing and successful social movements: protests against proposed university reforms in 1986 and rail reforms in 1987. The “Touche pas à mon pote” (Don’t touch my buddy) movement marked the introduction of French Muslims into French political movements.
Godin, who is also the economics reporter for France’s top media, Mediapart, wrote: “The error of (then prime minister) Jacques Chirac in 1986 was to think that he could force through a new culture which could sweep away the past, as Margaret Thatcher did across the Channel. However, the French showed their capacity to resist the complete destruction of their social model.”
In France from 1986 until 1995 efforts at restoring liberalism were stopped by massive social movements: against worse work contracts in 1994, retirement and social security cutbacks in 1995. The 1995 General Strike was the largest since 1968, and the political introduction for a new generation. Starting in 1992, the excuse of the need to “qualify” for the euro currency – and thus right-wing rollbacks were needed – was unconvincing to the average Frenchman as well.
From 1995-2007 the attempts at major neoliberal reforms were less ambitious and, crucially, began to offer some monetary redistribution efforts as compensation for right-wing deforms. This is partially explained by the inflation which immediately followed the introduction of the euro in 1999. The reforms of 1994 would fail again in 2006 when they were attempted to be rammed through, due to more protests.
But by 2002 the leftist voter had partially revolted against the traitorous French left – the National Front made it to the 2nd round at the expense of the ever-more un-socialist Socialist Party. The far-right party – totally neoliberal in economics – was led by Jean-Marie Le Pen, a former intelligence officer in Algeria. Like with Cavaignac in 1848, once again Algerian colonisation has provided the entry point for the most extreme-right and anti-socialist elements in French domestic politics.
The National Front’s advancement to the runoff was precisely due to the left’s now two decade-long embrace of neoliberalism despite the rejection of neoliberalism by its constituents. The French mainstream media like to blame Mitterrand’s party-gerrymandering, but that’s a distant secondary reality from the fact that voters opposed this third return of liberalism. However, unlike in 1852 there was no Bonapartism to send Liberalists packing, and unlike in 1945 liberalists had not yet had a long-running economic crisis deep enough and/or war to fully discredit them.
The 2005 French European Constitution referendum was essentially a referendum on neoliberalism, and it lost by a 55-45% margin. The majority of the French Socialist Party would vote yes, and that effort would be led by future president Francois Hollande. Three days later the Netherlands would also vote no, by a 62-38% margin. Aghast, Western Liberal Democrats decided that this would essentially be the end of putting the concept of the European Union to popular votes.
Yellow Vest: “The government doesn’t listen to us at all. The economic situation keeps getting worse, the prices are rising, and the government’s response is to attack the Yellow Vests to keep us from telling the truth.”
In May of 2007 neoliberalism made a huge inroad in France with the election of Nicolas “l’Américain” Sarkozy, the son of a Hungarian nobleman. Sarkozy was the first French politician since World War II to break totally with even lip service to being an anti-monarchist in style and ideology. Giscard d’Estaing at least made regular and often poorly-received efforts to shed his aristocratic pretensions and appear close with the average person. The pernicious influence of monarchy was still grasped in France then, but the new millennium has seen Western culture re-cultivate the idea that greed is good and that the aristocracy are our betters.
Sarkozy would make France the first major European power to approve the new Lisbon Treaty, which put the installation of the European Union into the hands of the elite: the Maastricht Treaty was reformed to allow the installation of the EU via the approval of national parliaments and not popular referendums. French Socialist MPs overwhelmingly voted in favor of this coup in plain sight.
The method (oligarchical approval) and context (an economic collapse unseen since 1929) of the ratification of the Lisbon Treaty cannot be stressed enough, as it unmistakably reveals that in the history of Western Liberal Democracy the installation of EU was the latest in a never-ending line of autocratic decisions by their oligarchical elites. Again, by understanding modern political history (which began in 1789) as a move away from autocracy and towards democracy we see how the EU is a regression and not a progression.
Only Ireland was able to achieve a popular referendum on the Lisbon Treaty: when the first vote produced a rejection a re-vote was forced the following year, when it passed. Every other member approved the installation by a vote in their national parliaments, as well as six royal assents.
This is a precise repeat of when the parliamentarians of the French 2nd Republic, the continent’s first Western Liberal Democracy, committed coups against the people via voting to submit the 1848 Constitution to the majority approval of parliament, and then to gut the primary advance of the 1848 Revolution, universal male suffrage. The populist reaction then was the democratic approval of the re-installation of Bonapartism in 1852, with Louis-Napoleon Bonaparte, who restored universal suffrage and ended the disastrous first foray of Western Liberal Democracy.
The vast majority of nations would ratify the Lisbon Treaty between February and July of 2008, a disastrous year. The collapse of Lehman Brothers investment firm that September is the official start of the Great Recession, but the US Federal Reserve held its first emergency weekend meeting in 30 years back in March, to negotiate the shocking collapse of the Bear Stearns investment group. Thus, it’s not as if European elite weren’t aware of major issues brewing. Four countries, including Germany, would not fully ratify the treaty until after the fall of Lehman Brothers. We can certainly call it an amazing coincidence: how the elite Liberalist politicians successfully forced through the European Union mere weeks before economic collapse struck?
The Treaty would be fully ratified in November 2009 amid mass bankruptcy, home foreclosures, unemployment and that slogan which is the essence of British conservatism: “Keep calm and carry on”. The pan-European project was now complete and – as we’ll see – largely unchangeable. The European Union thus joined only Saudi Arabia, Israel, San Marino and the UK Commonwealth as having citizenry but no constitution.
The European Union thus was born amid the Great Recession – it has never been willing or able to end it.
The next chapter will deal with three related events – the Great Recession, the European Sovereign Debt Crisis and the Age of Austerity – which left the French populace too skeptical, resentful and experienced to allow the extremist Liberalist policies and autocratic personality of Emmanuel Macron to go uncommented upon, as he apparently had assumed.
This chapter has thus far shown how the French people, but not the elites, successfully fought the 3rd restoration of liberalism which so many other countries embraced even before the implosion of the Soviet Union. We should now turn to these new Liberalist structures.
I should note that in this era of Socialist Democratic collapse the last great progressive revolution of our contemporary times – the Iranian Islamic Revolution – victoriously emerged from the ashes of the Western-imposed Iran-Iraq War in 1988. They found very few sympathisers to the socialist-inspired country it had just forged, and then 9/11 would create not just skepticism but violent animosity towards seemingly all things Islamic.
The European Union – capitalist cartel or France’s idea of a progressive & united continent?
Yes, it’s pathetically easy to dismiss any discussion of the European Union as being merely an extension of aristocratic autocracy: since 1992 there have been eight national referendums which rejected key aspects of the European Union only to be either ignored or subverted by oligarchical elites. Nonetheless, if we insist (rightly) that another version of the pan-European project is possible then we need to see how France has repeatedly proposed an alternative vision of a united Europe, and one which wouldn’t have been embraced by the liberalists of 1848 or 1871.
Just as Lenin saw that the principal feature of modern capitalism is monopoly, so the EU began in 1951 as an undemocratic cartel to fix prices for coal and steel. The European Coal and Steel Community also included a multinational bureaucracy which was empowered to ignore national parliaments and laws.
Was the EU always intended to be just a capitalist cartel? It’s possible, but we cannot completely ignore France’s historical trend since 1789, which is to be more often than not at the progressive forefront of the West.
In the WWII postwar reckoning France was excluded: de Gaulle was famously not invited to the Yalta Conference in February 1945. Thus, France immediately saw that the US and UK liberalists were only dealing with the head of Western leftism since 1917, the USSR. After the Labor Party defeated Winston Churchill in July 1945, just two months after the defeat of the Germans, the rabidly anti-socialist US called off the in-progress plan to de-industrialise Germany and instead tapped West Germany for their imperial collaborators in Europe. That is why Germany is the industrial powerhouse of Europe today even though they provoked and lost WWII: Western Liberal Democracy’s alliance with postwar fascists couldn’t be more clear. This was a crucial historical decision which laid the foundation for German domination of the Eurozone and EU today. Many would add that it is a US domination of the Eurozone and EU, and via their longtime dependant in Germany.
By the 1960s French elites were well aware that they could not compete industrially with America’s creation of a German Frankenstein, so in their conception of a pan-European project they wanted to join with – not conquer – Germany. In some ways this is a continuation of the Franco-German elite alliance in 1871, but there is a very different factor this time: the imperialist United States.
Historically, no country’s elite has pushed harder for European unification than France, and that’s because the European Union was seen by many French elite as something which could serve as a Franco-German bulwark against imperial domination – that of the United States. The idea of total French enmity with Germany since 1871 is a short-term view – the two neighbors share a tremendous number of cultural similarities, values, multiple regions and several millions of Franco-German citizens in Alsace, Lorraine and in Alpine regions. France uniquely combines both the cultures of Latin/Mediterranean Europe and Northern Europe, after all. Some further add that France is a Latin country but run by a Northern elite. European unification was seen by many in Paris as an effort to preserve the sovereignty of both nations and to create a counterbalance to the obviously domineering US. In this way we can say that the European Union was the latest in two centuries of effort by France to unite Europe in a more progressive way – the problem is the awful, undemocratic structures which this version of a pan-European project would ultimately adopt.
The foundational Élysée Treaty of friendship between France and Germany, signed in 1963, was a clear attempt to separate West Germany from the Anglosphere. The US was livid at France’s attempt at undermining the US-imposed postwar order: “I can hardly overestimate the shock produced in Washington by this action or the speculation that followed, particularly in the intelligence community,” said top US diplomat and banker George Ball.
The French understood that the 1944 Bretton Woods monetary system (when accounts began being regularly settled not in gold but in dollars) was not meant as a balanced system of international trade and financial flows but as an instrument of US domination via the dollar. Europe’s participation meant it supported American living standards and subsidised American companies. That the US could print unlimited dollars for unlimited imports was famously deemed an “exorbitant privilege” by France, but postwar France could do nothing about it until 1965.
The US deficit exploded in the mid-1960s, mostly due to their imperialist wars in East Asia. France and de Gaulle openly demanded a reform of the Bretton Woods system, a return to the gold standard and began repatriating French gold from New York City banks. “Perhaps never before had a chief of state launched such an open assault on the monetary power of a friendly nation,” wrote Time magazine in February 1965. In 1967 France was the first to withdraw from the West’s London Gold Pool, hastily constructed in 1961 to defend Bretton Woods. Unlike the UK and Germany, France was not always so subservient to the United States.
The truth which financial media never wants to tell is that France had a genuine commitment to a pan-Europeanism guided by a mixed socialist/pro-growth/not-rabidly-capitalist economic plan. This mirrors France’s own postwar “Mixed Economy” model, in which the state gives short- and long-term targets for industry to meet, and aids them to achieve it. There’s planning and state ownership – not at the level of a communist state but enough to enrage liberalists. There is also a commitment to a social safety net because endless austerity is simply not sustainable if French elite wish to avoid further revolutions. France’s Mixed Economy is also not at the level of Japan, where the state’s role was much larger (until the Plaza Accord of 1985, signed by Japan, the US, France, West Germany and the UK), and where economic success was spectacularly greater.
France’s contemporary effort to fight far-right economics and austerity did not begin with Francois Hollande’s 2012 election campaign campaign but began three decades earlier. So why did Mitterrand’s anti-3rd liberalist “Common Project” culminate in a U-turn in in 1983? Of course, just like in 1936, 1871 or 1848 the primary reason is that Western Liberal Democracy is an oligarchy which refuses to listen to the majority will of the people (as in a normal democracy). But in 1983 the power of a completely united globalist rich class – one undivided by royalist squabbles or support for the national sovereignty proposed in fascism – could be wielded as one. This same tool – the “Bankocracy” of international high finance – would also be used to provoke the 2012 European Sovereign Debt Crisis.
Despite a huge democratic mandate to end Giscard d’Estaing’s austerity and restore growth polices, France was immediately foiled by high finance and currency speculators. Capital flight from France to Germany immediately took place and long-term borrowing rates (10-year bond) went from 9.6% in March 1979 all the way to 17.3% in May 1981, when Mitterrand was elected. Government bonds, as Marx foresaw, are the indispensable lifeblood of the biggest economic actor in any capitalist country: the government. After devaluing the franc three times Mitterrand was forced into submission. He made his U-turn and by March 1986 10-year bonds were at 9.3%.
Yellow Vest: “The British have shown us that it is possible to obtain a referendum on leaving the European Union. However, the French media refuses to ever discuss the issue at all, but many in France will not stop demanding a Frexit.”
What happened was that Germany and the Bundesbank, knowing that Western high-finance was philosophically in their corner and willing to destroy France’s democratic will with every dollar they could borrow, joined with global high finance and professional currency speculators to strangle France into backtracking on socialist-inspired policies. If high finance cared at all for democracy they would have supported France’s anti-austerity plan. However such an idea is as absurd today as it was to socialists, fascists and even the apolitical in the 1930s, and also to those opposing the nouveau riche backers of the House of Orleans in 1830’s July Revolution.
France could not boldly defy high finance and keep devaluing their currency until growth took hold for another crucial reason: they would have had to abandon the 1979-inaugurated European Monetary System (EMS), the financial predecessor of the euro. This was an adjustable exchange rate agreement which linked 10 Western European currencies to prevent large fluctuations. It was France’s brainchild for their long-term goal: wooing Germany away from the US and towards a genuinely European integration. Preferring to stay in the EMS meant violating the people’s democratic will demanding an anti-austerity agenda – this process would obviously be repeated ad nauseam.
By 1993 the European Union would begin, which replaced the European Economic Community, which in 1957 had replaced the original European Coal and Steel Community. The euro currency would arrive six years later – the new structures would fully end the Social Democracy era.
In 2012 Hollande was the hope of an entire “Latin Bloc” against Germanic austerity, once again, but he would do the exact same U-turn. However, he showed far less resolve than Mitterrand and faced far less pressure: 10-year bonds stood at 2.75% when Hollande was elected and and they fell immediately – high finance seemed to know the longtime Europhile Hollande’s anti-austerity promises were election nonsense. French 10-year bonds stood at 0.81% when he left office, in total disgrace and with the Socialist Party perhaps permanently smashed.
More important than the EU – the Eurogroup
Part of the problem of talking about the “pan-European project” is that you have multiple bodies which overlap. You also have some nations which are part of one, but not another. Or which pay into one body, but abstain from another.
The Eurozone is more important than the European Union because it controls the money in the world’s second largest macro-economic bloc behind the US (in 2008). By comparison, the EU is mainly a regulatory body, and their modest annual budget – about the size of Denmark’s – reflects that.
All serious studies of the eurozone – from Nobel Prize-winning economists, such as Joseph Stiglitz, to those with insider knowledge of how it operates, such as former Greek Finance Minster Yanis Varoufakis – stress that there is nothing in its structure which allows for the possibility for change. That’s a pretty vital and damning conclusion to be consistently reached, especially when post-1991 Europe loves to stand on its hind legs and lecture the rest of the world about democracy. Objective studies reach another regular conclusion, and it’s one which is shared by the lower- and middle-class: the euro has totally failed in its promise to bring about prosperity and economic security.
The Eurozone was a clear replication of the German Zollverein, led by Prussia during the 19th century, which was the world’s first example of independent states creating a full economic union without also creating a political union. Germanifying an area of German-speaking peoples and cultures is one thing, but trying to replicate that for all of Europe has only led to dramatic inequalities.
The Eurozone thus embodies the victory of Germanic economic ideology in tandem with the victory of English oligarchic parliamentarianism in political ideology – this is perhaps the simplest essence of Western Liberal Democracy: England’s Glorious Revolution of 1688 combined with the Germanic commitment to the economic autocracy of the elite. The French are often called the intellectuals of Europe, but it’s far more accurate to call them the ignored intellectuals of Europe: the history of Europe since 1789 is the defeat of French intellectual egalitarianism and the victory of the aristocratic thought of Anglo-Germanic intellectuals.
To examine the Eurozone you have to bring up something which mainstream media is instructed to ignore – the Eurogroup.
The Eurogroup rules the Eurozone and its 19 member states, and it also governs the “bailouts” to member nations like Greece. The Eurogroup is, at face value, an informal monthly meeting of the finance ministers of the euro member countries.
However, it is no exaggeration to say that the Eurogroup is the banker cabal hidden in plain sight. It is truly the expression of the autocratic and oligarchical forces which go back to 1788. Gone are the Bourbons and Orleanists, though of course they remain on the boards of banks and hedge funds.
In his 2017 book And The Weak Suffer What They Must? Varoufakis provided a wealth of insider knowledge on how the Eurogroup operates.
“Moreover, the Eurogroup, where all the important economic decisions are taken, is a body that does not even exist in European law, that operates on the basis that the ‘strong do as they please while the weak suffer what they must’, that keeps no minutes of its proceedings, and whose only rule is that its deliberations are confidential – that is, not to be shared with Europe’s citizenry. It is a set-up designed to preclude any sovereignty traceable back to the people of Europe.”
What can we say of Western Liberal Democracy when their most advanced economic achievement is governed by an entity with no rules, no records, no democratic process and no democratic accountability? It is truly a return to 1788 – the time when the average person had no say in politics or economics. Every French person should be able to recognise in 21st century Western Liberal Democracy the autocratic domination which even the many European kings of today recognise is no longer unacceptable.
Thanks to the whistle-blowing of Varoufakis we also know that there is also essentially no discussion at Eurogroup meetings: The Troika (the International Monetary Fund, European Central Bank and European Commission) initiates, dominates and outlines the terms and then the finance minister-members vote. The overwhelming majority of participants in this group which governs eurozone economic policy (and thus social policy) are bankers, former bankers or intimately tied to high finance.
When bankers run economic policy, one shouldn’t be surprised if the resulting social policy is for the benefit of bankers and their biggest aristocratic clients. Yes, the EU is obviously a Bankocracy, but Bankocracy is simply the modern form of rule by an oligarchy of the rich and powerful. It is as if the new banker class in 1830’s France didn’t just put the House of Orleans on the throne and boot out the House of Bourbon, but as if the new banker class assassinated all Houses, restored serfdom and declared that they had a divine right to rule. Their obvious goal is the rollback of mere Social Democracy, and to reattempt a destruction of any Socialist Democracies.
The Eurogroup is not an EU institution and cannot declare any legally-binding decisions. It can never be blamed for a bad decision, nor held accountable, because it is not answerable to any parliament or body politic whatsoever. Many are increasingly asking in France and Europe: What’s the point of voting for any national or EU politician if they have little to no chance of influencing policy? Many don’t even realise that the highest level of policymaking is actually the Eurogroup.
Yellow Vest: “In France’s 5th Republic when someone is elected president they can do whatever they want for five years because we truly have no way to influence them. This is why the Yellow Vests are insisting that Macron accept regular citizen referendums on his policies, because he is destroying French society.”
(Of course, what will occur when citizen referendums oppose the decisions of the Eurogroup? The European Union will step in and either totally ignore the referendum, call it illegal or regulate them away.)
It is self-evident that that when politics does not rule – where there is no law or regulation – the rich are the rulers. It is also self-evident that in a climate of total deregulation the richest nations and persons will benefit the most, thus inequality will increase. It is also self-evident that when billionaires and hedge funds own the bulk of a deregulated and denationalised media there will be very little discussion of the Eurogroup in the mainstream media. This is what has happened throughout the history of the Eurogroup, which operated without formal recognition until the Lisbon Treaty.
Unsurprisingly, the US pioneered the concept of mass deregulation in the early 1980s, which they foisted on Europe as much as possible when their academics, think tanks and intellectuals helped oversee the writing of the new structures of the pan-European projects. It is thus no exaggeration to say that – coming after the so-called “end of history” and Liberalism’s alleged total victory following the fall of the USSR – the Eurogroup has achieved the American dream of total deregulation even more than in America.
For the Eurogroup to become remotely democratic and not autocratic/oligarchic a Eurozone constitution would have to be created, an executive would seem useful, a legislative branch would be indispensable and approval power over national budgets would seem necessary. Only the last is already in existence, but why would they add any Liberal or Socialist Democracy to this Bankocracy? Answer: they never will create this in any sort of equitable format.
Such facts make it clear why the Eurogroup cannot be considered compatible with democracy, and thus cannot be supported. One might support creating a new Eurozone or changestothe Eurozone structure, but supporting the current Eurozone is simply indefensible. The European corollary to the post-1991 dictum of TINA (There Is No Alternative (to imperialism and liberalism)) is that there is no alternative permitted to this version of a pan-European project.
Because change is impossible the elites’ goal is thus forced ignorance and silence, and when that fails, deflection: “To believe that Europe’s problem was debt. Not the architectural design of the Eurozone. Not its unenforceable rules. But debt. Debt was never Europe’s problem. It was a symptom of an awful institutional design,” wrote Varoufakis.
From 1999 until 2007 it’s said that the Eurozone had a short period of success in redistributing wealth. This is based on the fact that rich Eurozone countries decided to loan to their Eurozone brethren in poorer countries. As is always the case in capitalist countries, and as was seen in previous recessions, and as is evidenced in the history of countless Western Third World client states – once economic troubles hit these loans were called in and could no longer be repaid, creating even more crisis.
Liberalism fully restored for the third time – exact same result: immediate failure
The 2009 European Sovereign Debt Crisis will go down in history as the time when the EU both started working and then immediately started dying. The response to the crisis by Brussels and the newly rammed-through governmental structures made clear that the economic solidarity which would be required of richer nations to make “more Europe” work simply does not exist.
The parallel of its literally-immediate democratic discrediting with France’s 2nd Republic should be striking to all readers of this book, and should remind that Western Liberal Democracy has only produced failure. This is especially true when the outlet of imperialist war is not an option for this structure – France’s 3rd Republic (when Liberalism was re-imposed) took advantage of this option to the maximum, as the 3rd Republic’s imperial empire was one of history’s most expansive.
As the European Sovereign Debt Crisis turned into the Age of Austerity Europe’s richer nations got what they wanted from weaker Eurozone countries – ports, airports, water departments, laws favouring their own industries against local industries, etc. They did this all while claiming that Western Liberal Democracy was so much more just than any ideological competitors!
Pro-capitalist American media may be persuaded by the German accusation of profligate smaller countries, but most of Europe saw the democratic will of nation after nation get strangled until their national politicians surrendered. Around the continent (and the UK) many realised that the EU and Eurozone was sucking the lifeblood of White locals the way White colonialists used to suck the lifeblood of Brown locals. Some understood that the forcing of the governments of Greece, Ireland, Portugal and other weak countries to assume the private debts of French and German banks was simply a repeat of what happened all over the 3rd World since the late 19th century – neo-imperialism was not just for Brown puppets anymore, but White puppets too.
2009 thus became the historical bookend to 1871’s siege of Paris, when the elite of France and Germany colluded to destroy the first flowering of Social Democracy and Socialist Democracy in the Paris Commune. French and German banks were the most leveraged in Greece; are the two biggest funders of the European Central Bank; were the most insistent that promises of borrowers to their bankers are sacrosanct while the promises of national politicians to their voters are not. The victory of the neoliberal and neo-imperial EU empire was thus fully imposed, and – amid the heat – Bismarck and Thiers looked up and smiled.
None of this was missed by the as yet unformed Yellow Vests.
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Upcoming chapter list of the brand-new content in France’s Yellow Vests: Western Repression of the West’s Best Values. The book will also include previous writings from 2018 through the 2022 election in order to provide the most complete historical record of the Yellow Vests anywhere. What value!
Publication date: July 1, 2022.
Pre-orders of the paperback version will be available immediately.
By Michael Hudson and posted with the author’s permission
It is now clear that today’s escalation of the New Cold War was planned over a year ago, with serious strategy associated with America’s plan to block Nord Stream 2 as part of its aim of blocking Western Europe (“NATO”) from seeking prosperity by mutual trade and investment with China and Russia.
As President Biden and U.S. national-security reports announced, China was seen as the major enemy. Despite China’s helpful role in enabling corporate America to drive down labor’s wage rates by de-industrializing the U.S. economy in favor of Chinese industrialization, China’s growth was recognized as posing the Ultimate Terror: prosperity through socialism. Socialist industrialization always has been perceived to be the great enemy of the rentier economy that has taken over most nations in the century since World War I ended, and especially since the 1980s. The result today is a clash of economic systems – socialist industrialization vs. neoliberal finance capitalism.
That makes the New Cold War against China an implicit opening act of what threatens to be a long-drawn-out World War III. The U.S. strategy is to pry away China’s most likely economic allies, especially Russia, Central Asia, South Asia and East Asia. The question was, where to start the carve-up and isolation.
Russia was seen as presenting the greatest opportunity to begin isolating, both from China and from the NATO Eurozone. A sequence of increasingly severe – and hopefully fatal – sanctions against Russia was drawn up to block NATO from trading with it. All that was needed to ignite the geopolitical earthquake was a casus belli.
That was arranged easily enough. The escalating New Cold War could have been launched in the Near East – over resistance to America’s grabbing of Iraqi oil fields, or against Iran and countries helping it survive economically, or in East Africa. Plans for coups, color revolutions and regime change have been drawn up for all these areas, and America’s African army has been built up especially fast over the past year or two. But Ukraine has been subjected to a U.S.-backed civil war for eight years, since the 2014 Maidan coup, and offered the chance for the greatest first victory in this confrontation against China, Russia and their allies.
So the Russian-speaking Donetsk and Luhansk regions were shelled with increasing intensity, and when Russia still refrained from responding, plans reportedly were drawn up for a great showdown to commence in late February – beginning with a blitzkrieg Western Ukrainian attack organized by U.S. advisors and armed by NATO.
Russia’s preemptive defense of the two Eastern Ukrainian provinces and its subsequent military destruction of the Ukrainian army, navy and air force over the past two months has been used as the excuse to start imposing the U.S.-designed sanctions program that we are seeing unfolding today. Western Europe has dutifully gone along whole-hog. Instead of buying Russian gas, oil and food grains, it will buy these from the United States, along with sharply increased arms imports.
The prospective fall in the Euro/Dollar exchange rate
It therefore is appropriate to look at how this is likely to affect Western Europe’s balance of payments and hence the euro’s exchange rate against the dollar.
European trade and investment prior to the War to Impose Sanctions had promised a rising mutual prosperity between Germany, France and other NATO countries vis-à-vis Russia and China. Russia was providing abundant energy at a competitive price, and this energy was to make a quantum leap with Nord Stream 2. Europe was to earn the foreign exchange to pay for this rising import trade by a combination of exporting more industrial manufactures to Russia and capital investment in developing the Russian economy, e.g. by German auto companies and financial investment. This bilateral trade and investment is now stopped – and will remain stopped for many, many years, given NATO’s confiscation of Russia’s foreign reserves kept in euros and British sterling, and the European Russophobia being fanned by U.S. propaganda media.
In its place, NATO countries will purchase U.S. LNG – but they will need to spend billions of dollars building sufficient port capacity, which may take until perhaps 2024. (Good luck until then.) The energy shortage will sharply raise the world price of gas and oil. NATO countries also will step up their purchases of arms from the U.S. military-industrial complex. The near-panic buying will also raise the price for arms. And food prices also will rise as a result of the desperate grain shortfalls resulting from a cessation of imports from Russia and Ukraine on the one hand, and the shortage of ammonia fertilizer made from gas.
All three of these trade dynamics will strengthen the dollar vis-à-vis the euro. The question is, how will Europe balance its international payments with the United States? What does it have to export that the U.S. economy will accept as its own protectionist interests gain influence, now that global free trade is dying quickly?
The answer is, not much. So what will Europe do?
I could make a modest proposal. Now that Europe has pretty much ceased to be a politically independent state, it is beginning to look more like Panama and Liberia – “flag of convenience” offshore banking centers that are not real “states” because they don’t issue their own currency, but use the U.S. dollar. Since the eurozone has been created with monetary handcuffs limiting its ability to create money to spend into the economy beyond the limit of 3 percent of GDP, why not simply throw in the financial towel and adopt the U.S. dollar, like Ecuador, Somalia and the Turks and Caicos Islands? That would give foreign investors security against currency depreciation in their rising trade with Europe and its export financing.
For Europe, the alternative is that the dollar-cost of its foreign debt taken on to finance its widening trade deficit with the United States for oil, arms and food will explode. The cost in euros will be even greater as the currency falls against the dollar. Interest rates will rise, slowing investment and making Europe even more dependent on imports. The eurozone will turn into an economic dead zone.
For the United States, this is Dollar Hegemony on steroids – at least vis-à-vis Europe. The continent would become a somewhat larger version of Puerto Rico.
The dollar vis-à-vis Global South currencies
The full-blown version of the New Cold War triggered by the “Ukraine War” risks turning into the opening salvo of World War III, and is likely to last at least a decade, perhaps two, as the U.S. extends the fight between neoliberalism and socialism to encompass a worldwide conflict. Apart from the U.S. economic conquest of Europe, its strategists are seeking to lock in African, South American and Asian countries along similar lines to what has been planned for Europe.
The sharp rise in energy and food prices will hit food-deficit and oil-deficit economies hard – at the same time that their foreign dollar-denominated debts to bondholders and banks are falling due and the dollar’s exchange rate is rising against their own currency. Many African and Latin American countries – especially North Africa – face a choice between going hungry, cutting back their gasoline and electricity use, or borrowing the dollars to cover their dependency on U.S.-shaped trade.
There has been talk of IMF issues of new SDRs to finance the rising trade and payments deficits. But such credit always comes with strings attached. The IMF has its own policy of sanctioning countries that do not obey U.S. policy. The first U.S. demand will be that these countries boycott Russia, China and their emerging trade and currency self-help alliance. “Why should we give you SDRs or extend new dollar loans to you, if you are simply going to spend these in Russia, China and other countries that we have declared to be enemies,” the U.S. officials will ask.
At least, this is the plan. I would not be surprised to see some African country become the “next Ukraine,” with U.S. proxy troops (there are still plenty of Wahabi advocates and mercenaries) fighting against the armies and populations of countries seeking to feed themselves with grain from Russian farms, and power their economies with oil or gas from Russian wells – not to speak of participating in China’s Belt and Road Initiative that was, after all, the trigger to America’s launching of its new war for global neoliberal hegemony.
The world economy is being enflamed, and the United States has prepared for a military response and weaponization of its own oil and agricultural export trade, arms trade and demands for countries to choose which side of the New Iron Curtain they wish to join.
But what is in this for Europe? Greek labor unions already are demonstrating against the sanctions being imposed. And in Hungary, Prime Minister Viktor Orban has just won an election on what is basically an anti-EU and anti-U.S. worldview, starting with paying for Russian gas in roubles. How many other countries will break ranks – and how long will it take?
What is in this for the Global South countries being squeezed – not merely as “collateral damage” to the deep shortages and soaring prices for energy and food, but as the very objective of U.S. strategy as it inaugurates the great splitting of the world economy in two? India has already told U.S. diplomats that its economy is naturally connected with those of Russia and China. Pakistan finds the same calculus at work.
From the U.S. vantage point, all that needs to be answered is, “What’s in it for the local politicians and client oligarchies that we reward for delivering their countries?”
From its planning stages, U.S. diplomatic strategists viewed the looming World War III as a war of economic systems. What side will countries choose: their own economic interest and social cohesion, or submission to local political leaders installed by U.S. meddling like the $5 billion that Assistant Secretary of State Victoria Nuland bragged of having invested in Ukraine’s neo-Nazi parties eight years ago to initiate the fighting that has erupted into today’s war?
In the face of all this political meddling and media propaganda, how long will it take the rest of the world to realize that there’s a global war underway, with World War III on the horizon? The real problem is that by the time the world understands what is going on, the global fracture will already have enabled Russia, China and Eurasia to create a real non-neoliberal New World Order that does not need NATO countries and which has lost trust and hope for mutual economic gains with them. The military battlefield will be littered with economic corpses.
UPROOTED PALESTINIANS: SALAM ALQUDS ALAYKUM 