(Transcript of a discussion on the Moderate Rebels podcast. This has been edited by us for reasons of space. The original is available on The Grayzone website. – Editors.)

Ben Norton

We are joined today by the economist Michael Hudson, one of the most important economists in the world, honestly, in my view.

I don’t think he needs introduction. He has written many books, and has been an economic adviser for multiple governments, and has a long history on Wall Street and academia. And you can find his work at Michael-Hudson.com.

Today, we’re going to talk about an issue that Michael Hudson has been writing about for decades, and something that you’re never really going to hear from other economists, especially mainstream neoliberal economists, and that’s what he calls super imperialism.

So today, Michael Hudson, I want to start just talking about what super imperialism looks like today, in the new cold war. This is something that we talk a lot about.

We saw that Joe Biden gave his first major speech to Congress–we’re not supposed to call it a state of the union because it’s still his first year–but Biden gave a joint speech to Congress in which he declared that the United States is in competition with China to own, “to win the 21st century,” as he put it.

And we’ve seen that the U.S. government, under Biden, and of course before under Trump, has imposed several rounds of sanctions on Russia and on China.

So Professor Hudson, let’s just start today talking about what you think the posture has been of the Biden administration, vis a vis Trump. We saw that the Mike Pompeo State Department essentially declared a kind of new cold war on China. Pompeo gave a speech at the Richard Nixon library in which he said that the famous Nixon visit to China was a mistake, and that we have to contain China and eventually overthrow the Communist Party of China.

And some Democrats hoped that the Biden administration would kind of take a step back. But we’ve seen that the Antony Blinken State Department has continued many of these aggressive policies, accusing China of genocide.

And we’ve seen that the Treasury Department just imposed several new rounds of sanctions on Russia. So what is your view on the new cold war that’s going on right now?

Michael Hudson

Well, I had originally wanted to call my book “Monetary Imperialism.” The publisher wanted to call it “Super Imperialism,” in 1972, because it was really the U.S. moving towards a unipolar order, where it was not competing with other imperialisms; it wanted to absorb European colonialism, absorb European imperialism, and really be the single unipolar power.

And of course that is what really has come about. The United States is trying to become the only dominant power in the world. And in today’s Financial Times [on May 5], one of the reporters said, it’s as if the United States wants to be the world’s absentee landlord, and rent collector. So we’re dealing with a monetary and a rentier phenomenon.

And when Biden gave his speech last week, there was a very marked change, right in the middle of it. The very beginning was very calm, offering means of improvement for the American economy, and a set of proposals that were so wonderful that they don’t have the chance of being enacted. And that was simply to co-opt what calls itself the left wing of the Democratic Party, if that’s not an oxymoron.

And then all of a sudden, his body language changed, his voice changed, and there was just an anger towards Russia and towards China, a visceral anger that brought back the whole 30 years of his tenure in Congress. And he was the leading cold war proponent, the leading proponent of the military, and of course now he wants to increase the military budget.

So while on the one hand, he’s continuing the nationalistic trade policies of the Trump administration, he’s escalating the cold war against Russia and China, in the belief that somehow if he can impose sanctions and punish them economically, that will lead to a fall of the government. Well, you can see what he’s projecting here.

It’s obvious that the United States economy is going to be in real trouble. Once the Covid crisis stops uniting the country in a feeling that we’re all in this together–and certainly in New York, where I live, in August, the freeze on real estate evictions, by renters, and foreclosures on mortgagees is going to end, and it’s expected there will be 50,000 New Yorkers thrown into the street. They’ve very kindly decided to postpone this until August, so at least they can sleep in the park, and don’t have to begin sleeping in the subways until maybe October.

There’s no way that any Wall Street economist that I know can see if the economy is really going to recover. The stock market is going way up, thanks to a Federal Reserve policy of subsidizing bonds and stocks, with 83% owned by the 1% of the population. But the Federal Reserve is not backing any spending into the actual economy.

Well that’s where the first part of President Biden’s speech came in. He was talking about building infrastructure and somehow reviving the economy. But it doesn’t look like he’s going to get much support from this from the Republicans, and he wants to be bipartisan.

In other words, he says the Democratic Party, as always, won’t do anything that Republicans wouldn’t agree on. Because the Democrats are an arm of the Republican Party. Their role is to protect the Republican Party from left-wing criticism.

So you can expect a wishy washy sort of slow decline with a few rapid spikes in decline as the Covid crisis ends. And you’re having almost a preparation for this by–I think Biden and the government people realize that the economy cannot regain its former industrial position, because it’s a rentier economy now.

Money is not made by companies investing in industry and factories and means of production. When companies do make profits, they are largely monopoly rents, or resource rents, or other forms of rent extraction.

And 90% of corporate income in the United States is spent on share buybacks and dividend payouts, not on investing in new production. So nobody’s really expecting new private investment to occur in the United States, that is private capital investment in means of production.

So Biden says, well, if the private sector won’t do it, then the government can do it. But his idea of the government doing it is to give government money to private companies that will build industrialization. And he wants to essentially replicate the military-industrial complex into an enormous public-private partnership, to build very, very high-cost infrastructure that will make it almost impossible for Americans to have any trade competitiveness with other countries.

Well if you’re going to create a high-cost rentier economy, that is post-industrialized like that, what do you do? You say it’s not our fault, foreigners are doing it to us; it’s all China’s fault–as if China had something to do with American de-industrialization.

China’s trying to avoid the rentier policies, avoid the financialization, avoid the privatization that has made America so high cost and so ineffective. And the [US] government is trying to sort of blame it.

But I think there is something else behind this fight against China and especially Russia. The Democratic leadership seems to have an almost emotional, passionate antagonism towards Russia that can’t be explained on objective grounds. But it’s obviously there.

Their attempt to isolate Russia is as if somehow they can recapture the dream of the Yeltsin 1990s, the dream of somehow replacing Putin with a pliant alcoholic kleptocrat like Yeltsin who will resume the sale of Russia’s national resources and public utilities to Americans. There’s no way that’s going to happen.

The actual effect of the sanctions on Russia and China has been to drive them together into a unit, into a critical mass. And ironically, America’s attempt to isolate other countries is turning into an attempt to isolate itself.

The question in this is, what about Europe? In the last few days, there has been a lot of discussion about cutting Russia off from the SWIFT bank clearing system, and of other sanctions against Russia.

Russia has already worked with China to develop their own alternative to the SWIFT banking clearing system. So Russian domestic payments are not going to be that disrupted, after a week or two that they say it’ll take the put the new system in.

But what cutting Russia off in the SWIFT system does is block its trade and its community, its economic relations with Western Europe. The United States, I think, realizes that if it can’t get through, if it can exploit Third World countries, or Russia or China, at least it can make Europe permanently dependent, and drawn, and really under U.S. control.

So if you look at the sanctions against Russia and China as a way to split Europe and make Europe increasingly dependent on the United States, not only for gas, and energy, but also for vaccines.

These are the two issues that have been in the news in the last few weeks. Blinken and other U.S. officials said that Russia offering its Sputnik V vaccine to Europe is divisive, is an attempt to break up the world’s “rules-based order.”

This is amazing, that Russia’s attempt to–now that Pfizer and the other American companies are not producing enough vaccine to provide to Africa, South America, and Asian countries, the United States is attacking Russia, and Cuba, and China for offering other vaccines and saying they’re trying, their attempt to save lives through the rest of the world is an attempt to divide and break up the American order.

Because only the Americans can have the intellectual property monopoly, something that Blinken mentioned in his speech, and that President Biden mentioned. The intellectual property monopoly means that America gets to tell other countries, our firms have the right to say, “Your money or your life” to Third World countries.

And that will be our means of, “Well, you can’t pay, well, why don’t you sell off some more of your infrastructure? Why don’t you sell off more of your oil or mineral resources to us?”

So what we’re seeing is an intensification of economic warfare against almost all the other countries in the world, hoping that somehow this will divide and conquer them, instead of driving them all together.

Max Blumenthal

Yeah, hi Professor Hudson, I totally agree with you about the Democrats, at least the political class and their perspective on Russia.

But this is just a marketing strategy to me. I mean, there’s something that you’ve spoken about written about in Super Imperialism and in recent talks that I think lurks behind what both the Trump and Biden administrations call “great power competition.”

And that is, while this political class sees a national rivalry with Russia and uses it to unite its own constituency, a very fractious constituency, there is what you called the conflict of economic and social systems.

And I fully understand this with respect to China. You see industry journals, even rail journals in the U.S. talking about the fear of the Chinese rail system “not playing by the rules,” which means the free market, because they’re receiving state subsidies and kicking the ass of the American rail system, expanding infrastructure.

But you have also included Russia into this counter-hegemonic system, which some would call state capitalist or socialized system, versus the financialized system–where that land, basically, that giant landmass, which the state in China, certainly, and you seem to be saying Russia, is socializing, is seen as an existential threat to the very essence of what the U.S. has been constructed as, as an empire, where finance, industry, corporations have merged with the state.

I think you understand where I’m going here. How can–maybe you can explain a little bit more about how this is actually, when we see Russiagate or this cold war rhetoric, it’s actually kind of a marketing device for the real conflict of economic and social systems.

Michael Hudson

Well the real existential threat isn’t a trade rivalry; it’s not one of technology at all. The existential threat is to the idea of an economy based on completely a rentier system. In today’s world, the banks play the role that landlords played from the feudal epoch through the 19th century.

And all the classical economics, the whole concept of free markets, from the physiocrats, with their laissez faire to Adam Smith, through John Stuart Mill, the whole of classical economics was to free industrial capitalism from the rentier class, from the landlords, and from banking and the monopolies that banks created in organizing trusts.

So the U.S. realizes that the economy has been transformed in the last 40 years, since the 1980s, since Ronald Reagan and Margaret Thatcher, when Margaret Thatcher said, “There is no alternative.” Of course, there were many alternatives.

But the United States says, if we can create, if we can turn the “rules-based order” of free markets and classical economics upside down, and say our rules-based order means no government power to regulate, no government progressive taxation, but a flat tax–like we convinced Russia to have, that they still have, by the way–if we can have a rules-based order that backs the rentier class–a hereditary, financial, wealthy 1% of the population–holding the rest of the economy in debt peonage, or reducing them to other forms of dependency in a patron-client relation, then we’ve restored essentially the feudal economy.

But in order for us to do that, we have to make sure that there’s no alternative; we have to prevent any alternative. And China is an existential threat, because what it is doing–its policy, which is very largely ad hoc, and purely pragmatic–China’s policy is exactly the policy that made the United States the industrial power of the world in the 19th century.

China, like the United States, built public utilities to provide public services at low, subsidized costs, so as to enable its private industry not to have to pay for the costs of education, for high rental costs and housing costs, and high monopoly rents.

China is doing exactly what the United States did, and what the United States now says, no other country can do what we did; we’ve pulled up the ladder, and our wealthy rentier layer of the population that got rich, now, having gained control of the United States, and its politics, we want to control the whole world.

And if there is another successful economy, whether it is China, or Russia, or Iran, or Venezuela–if there’s any other economy that retains a strong state power, strong regulatory power, progressive taxation, preventing a landlord class from somehow increasing housing costs, privatizing medical and health insurance, so instead of making it a public right–well, if we can prevent that from occurring anywhere, then people will really believe there is no alternative but to let our takeover that reverses the entire last two centuries of free market economics, and now the economy has to be free for the 1% to take over government enterprise, to privatize every part of government, including government itself, including the central banks especially, and including the health system, the educational system–all running either for profit or at a cost that has to be paid by credit creation, and essentially recreate the economy of the 13th century.

Ben Norton

Yeah, Professor Hudson, the argument that you’re making here, which I have seen very few people make, is–I mean, I think it’s a correct argument–but it’s interesting because it contradicts this claim that we’ve seen from even a lot of people on the left, who argue that the new cold war, or in general just the conflict between Washington and Beijing, is not a clash of systems; rather, their argument is that China is yet another capitalist power, and it’s an inter-capitalist rivalry, similar to the rivalry that led to World War One, and that China and the U.S. have very similar economic systems. But you’re arguing, in fact, the exact opposite.

On your website, Michael-Hudson.com, you have an interesting quote here from a U.S. government advisor for the Reagan administration, Clyde Prestowitz, who wrote, kind of complaining, saying:

China’s economy is incompatible with the main premises of the global economic system embodied today in the World Trade Organization, the International Monetary Fund, the World Bank, and a long list of other free trade agreements. These pacts assume economies that are primarily market based with the role of the state circumscribed and micro-economic decisions largely left to private interests operating under a rule of law. This system never anticipated an economy like China’s in which state-owned enterprises account for one-third of production; the fusion of the civilian economy with the strategic-military economy is a government necessity; five year economic plans guide investment to targeted sectors; an eternally dominant political party names the CEOs of a third or more of major corporations and has established party cells in every significant company; the value of the currency is managed, corporate and personal data are minutely collected by the government to be used for economic and political control; and international trade is subject to being weaponized at any moment for strategic ends.

Now in your column, you pointed out how this is actually a pretty funny comment coming from a U.S. trade adviser, because some of those same things that the U.S. is accusing China of–like namely weaponizing international trade, or fusing the civilian economy with the military economy–of course Washington embodies that really better than any other country in the world.

But he is confirming the point that you argued is correct. His complaint was that China still has state-owned enterprises accounting for 1/3 of production, and that the Communist Party of China still guides the economy. And in old-school terms, going back to Lenin, they would say controls the commanding heights of the economy.

So do you think that, when people on the left in the U.S. and other countries argue that this is all just a rivalry, an inter-capitalist rivalry between the capitalist class in China and the capitalist class in United States, what do you think of that argument?

Michael Hudson

Well I have spent a great deal of time in China, and I have professorships at a number of universities there. It certainly is fundamentally different from the United States.

You may have noticed in the last month, China has moved against Jack Ma, who was developing his information technology system into a credit system. They knocked him down, stopped the issue of new shares, the IPO, and said only the government can keep finance and credit as a public utility.

Now what Prestowitz calls state-owned enterprises used to be called public utilities in the United States. And in Europe, most public utilities were government owned, like the National Health System.

In the United States, it broke away from that government direct ownership and management of many public utilities, but the electric utilities, the gas utilities, almost all public utilities providing natural monopoly services were regulated. Now they have been deregulated. In the last 40 years, you have almost no regulation at all.

So China is, by keeping public utilities in the public domain, that means that these are not vehicles for rent extraction, that is for charging monopoly rents such as we pay in New York for cable services, such as Americans pay for the internet, such as Americans pay for public health, such as Americans pay for education.

China provides free education. China provides, and Russia basically, free public health. Unfortunately, Russian public health means giving you an aspirin if you have a problem, but at least it is not privatized.

So the United States is a rentier economy. And when left-wingers–or people who call themselves left-wingers, they’re really not left-wingers at all; they’re, I don’t know what, post-left–very few people who call themselves left-wingers distinguish between industrial capitalism and finance capitalism. Well, that’s the distinguishing feature of the last century.

Ever since World War One, there has been a movement away from industrial capitalism, towards financialization of the economies, towards finance capitalism, based on a merger between the financial sector and the rent extraction sector, mainly the FIRE sector–finance, insurance, and real estate–and also the natural monopolies where the banks have taken the lead in organizing trusts and organizing monopolies.

And so the basis of most bank credit in the United States is to provide the ownership of companies or monopoly rights. Now, China doesn’t make loans for these things. The People’s Bank of China is the central bank. And the central bank doesn’t create credit for corporate takeovers; it doesn’t create credit for speculation; it doesn’t provide an economy that enriches itself off economic rents and exploitation.

But, obviously, there are many successful billionaires in China, many successful entrepreneurs, but these are largely industrial entrepreneurs who have actually created something.

China managed to avoid the Russian Stalinist micromanagement that blocked any kind of market feedback, or any kind of spontaneous innovation. China let 100 flowers bloom; it let innovation take place. It let individuals get rich off innovation, as long as they conducted their business, and production, and wealth in the public interest, defined as uplifting the quality of labor and contributing to the economy’s long-term growth.

Well finance capitalism, such as we have in the US, doesn’t live in the long run; its timeframe is short term, one quarter at most, three months. And the timeframe is, how can we increase the price of our stock so that we can sell out and jump out of the sinking boat, when the time comes.

They are not concerned with making the economy richer; they’re not concerned with making their labor force happier, better paid, or with a better standard of living, or even getting long-term pensions, which have been replaced by defined contribution plans instead of defined benefit plans. It’s basically an exploitative system.

And China’s whole management system, although it’s centrally managed, you need a strong state in order to prevent an independent rentier class, an independent financial class, from emerging and doing to modern economies what it did to the Byzantine Empire, and tried to do in the Bronze Age Near East: take over the government.

China does not want a rentier class to do what they have done in the United States and make America into a centrally planned economy. We’re now more of a centrally planned economy than Nazi Germany was. But the centrally planned economy is in Wall Street, in the financial system, not the government.

So when Biden and Blinken talk about a free market, they mean a market centrally planned by the financial sector, with the government and elected officials not having any role to play except to decide whether they want to vote for the Democratic or Republican sponsors and backers of the rentier interests.

Max Blumenthal

How do you think the pandemic, and–well I guess I could say there is a class in Washington that believes that COVID-19 was deliberately cooked up in a lab in Wuhan, because financial capitalism has performed so poorly in this pandemic and has suffered such a setback, in contrast to China’s economy, which is the only major economy in the world to have grown. And they fostered this conspiracy theory, because they can’t really understand why that is.

So maybe you can explain how the pandemic has accelerated the trends that you have been elucidating, and the contrast between financial and industrial capitalism?

Michael Hudson

Well I’m shocked to hear you say that finance capitalism has performed badly. The 1% have made a trillion dollars since the Covid crisis began. The Covid crisis is the best money-making opportunity. This is a bonanza for finance capitalism; it’s wonderful, because they’re pulverizing economy, they’re picking up all the marbles.

Max Blumenthal

I meant for people who are not reptilian shapeshifters.

Michael Hudson

Ah, I know. You’ve gotta be careful about what’s working, you know… They have to somehow prepare the ground for the fact that things are not going to get better.

Nobody knows whether they’re going to go back to offices or not; they probably won’t be able to go anywhere near the levels that they were before this fall, because the schools and the offices don’t have the ventilation systems to stop aerosol transmission. They don’t have fans; most of them don’t have windows.

So the result is they’re expecting a crash in commercial property values in the major cities. I know New York landlords who are trying to sell out their buildings here, anticipating that well, things are not going to get back to normal, and they’re not being offered any money at all.

Because all the buyers, the money, the new private capital funds that have all been created, with trillions of dollars in the last few months, are waiting for the crash to pick up office buildings, commercial real estate, foreclosed homes, foreclosed rental properties, all at pennies on the dollar–and to do essentially what Blackstone did after Obama’s 2008 crisis, of the 10,000 families he affected, and created a bonanza for his backers, who elected him, the banking sector.

So they’re expecting another Obama-type disaster that will make finance capitalism even more successful in reducing the rest of the economy to a state of dependency.

Max Blumenthal

Do you think that the lockdown policies has benefited this class that has earned trillions and trillions of dollars?

Michael Hudson

Well what is the alternative? I think there had to be a lockdown. We have seen what happened in Asia and countries that did have a lockdown; they didn’t get sick. You had to have a lockdown not to get sick.

The problem is not the lockdown. The problem is that other countries are not doing the evictions and the foreclosures that the Americans have.

Things like this happened way back in the Bronze Age, which is what I’ve written a number of books on, in Babylonia–and I think we’ve spoken about this before. When there was a drought, or an economic crisis, or a disease, and debts couldn’t be paid, rents weren’t due, debts weren’t due.

America could have avoided the whole problem that the lockdown had by saying, ok, nobody is able to go to work; it’s obvious they can’t make, most people can’t make enough money to pay the rent and the mortgage payments on their homes, or even get by, so we’re going to say this is a time out of time; we’re not going to enforce the enormous backlog of unpaid rent and unpaid debts that have occurred.

Now, to some extent, the problem has been mitigated by first Trump and then Biden giving a more stingy CARES Act giveaway to families, that were able to use the $1400 and the $600 that they got, or $1200, basically to pay their landlords, and to pay the credit card companies, and to pay the banks.

But once the Covid crisis is over, there’s not going to be any more bailout of people and they’re still going to have all of the arrears that they’ve been running up. And they’re going to be even more debt-strapped after this September than they were before the crisis.

And what the crisis really did was just accelerate the polarizing trend that you have in the United States, between creditors and debtors, between property owners and renters, and between consumers and monopolists. These trends have been exacerbated.

And it doesn’t look like the government is going to find an alternative because they say there isn’t any alternative; iff you don’t like it here, why don’t you go to China? Whereas Americans are not good enough in language to go en masse to China.

Max Blumenthal

Last summer, Venezuela applied for an IMF loan. It was a small loan, something like $20 million, to allow it to buy medical supplies, because the pandemic had begun, and they were locking down their population.

And of course the IMF said no. It wasn’t difficult to understand why. And we’ve seen this same rejection applied to Iran.

However, in early 2015, I believe it was February, Joe Biden went to Kiev–it was his first trip to Kiev as the kind of imperial lord of the post-Maidan [coup] order–and he boasted that he had secured a gigantic IMF loan of billions of dollars for Ukraine.

This is a country that already at that point was notorious for corruption, ranked as one of the most corrupt countries in the world. And that loan money went straight to Swiss banks, through the pockets of the few, 10 or 11 sweaty oligarchs that controlled the country.

So how do you explain this? You have written that “the IMF is basically a small room in the Pentagon’s basement.”

So how do you explain this disparity in treatment between countries like Ukraine, which are absolutely incapable of paying back these loans, are so notoriously corrupt, and countries like Venezuela and Iran, which are obviously targets of U.S. empire?

Michael Hudson

Well my book Super Imperialism is all about how the IMF was created as an arm of U.S. foreign policy. And it still is an arm.

And there’s a mentality that the IMF has; it’s a pro-creditor mentality, and it’s dominated thoroughly by the United States, in a cold war modality. That’s why Russia and China are seeking to create their own international bank.

And the even more vicious arm of American imperialism, probably the most deadly, is the World Bank, which is enormously destructive, throughout the former Soviet Union, in the Third World, by pushing micro-currency loans that are aimed at essentially making loans to women as heads of families, 70%, 80%, and then breaking up the family, foreclosing on them–essentially using microcredit loans as a way of evicting masses of families from their property, and turning it over to the client oligarchies in these countries.

And in blocking countries from developing their own food self-sufficiency in grain, making them dependent on U.S. grain exports, that has been a central aim of the World Bank ever since its inception, fighting against land reform.

So the World Bank and the IMF have always been probably the most viciously pro-rentier, anti-progressive institutions in the world. And as such, they’re guided by essentially America’s deep state, as an arm of subjugating other countries, preventing their self-sufficiency.

The idea is, if you can impoverish them, you will somehow lead to a regime change and put in a client oligarchy that will be willing to make their economy dependent on the United States. That’s a U.S. foreign policy in a nutshell since 1945.

Ben Norton

Yeah, Professor Hudson related to Venezuela, you were talking about the impact of sanctions, and there’s a de facto blockade of Venezuela–a Venezuelan economist, named Pasqualina Curcio, recently wrote an article in a Venezuelan media outlet in which she estimated that $350 billion of Venezuelan assets have been stolen or frozen from the Venezuelan public. And they’re currently held in foreign banks, in the she calls it transnational private sector.

And she points out that this number–I don’t believe it’s adjusted for inflation–but this number, $350 billion, is equivalent to 25 times what was invested to rebuild Europe after World War Two.

So this reminds me of a term that I think you pioneered or you popularized: grabitization. You talk about how, after the U.S. plundered the former Soviet Union, Russia and the former Soviet republics, forcing neoliberal shock therapy, that it wasn’t just privatization, it was grabitization; it was grab as much as you can, as quickly as you can.

It seems to me that that kind of model has been applied to Venezuela, with Juan Guaidó, the attempt to impose a fake interim government that was never elected. Do you think that that parallel of grabitization is is appropriate for Venezuela?

Michael Hudson

Well you’ve seen it very clearly, when its gold reserves were seized by the Bank of England, which said, America is really the democratic center of the world, and as the democratic center, because we’re the democracy we get to say who is the president of any country in the world; and we have found a nasty little opportunist that you just mentioned, and we have decided he is the head of it, and we’re giving all of Venezuela’s gold supply to him, even though the the Venezuelan people didn’t elect them.

Well Chileans didn’t elect Pinochet either. As the “democratic center of the world,” America gets to designate the heads of any given country, by military force when necessary. And so of course, the gold supply was simply grabbed by England–which again, is a small branch, totally dependent on the United States–and grabbed the gold; they grabbed all of Venezuela’s holdings, its oil company’s distribution network and gas stations in the United States.

And the problem goes back–Venezuela was tied in a knot long before [Hugo] Chávez. And it’s when the United States backed a series of dictators, ever since [Marcos] Perez Jiménez in the 1950s, who essentially drew up international loan contracts, not only pledging sovereign debt to whoever the bondholders were, but collateralizing Venezuela’s debt with all of its oil reserves, and all of the holdings of its oil company, including the U.S. affiliates of all this.

And so Venezuela is still suffering from the era of colonialism that America is trying to blame on Chávez and his successors and on socialism, instead of on the American assassination teams and killer squads that put in the dictators that pledged all of Venezuela’s oil reserves to the foreign bondholders.

Max Blumenthal

It was recently reported that Bill Gates–besides creating this global Earth surveillance system, and having contracts with the NYPD for mass surveillance, and then asking for privacy in his divorce–has because become the largest landowner in the United States, the largest landlord, the largest owner of agricultural land.

He also presides over the vaccine distribution system or program that the U.S. is employing, GAVI. His apparatchiks, and people who came through the Gates network populate the World Health Organization. He is donating millions and millions of dollars to mainstream U.S. media organizations.

He is regarded as sort of, almost a scientific expert. Whereas when Joe Rogan says something that might be seen as sensible about vaccination, Anthony Fauci comes out and condemns him as not a scientific expert. I don’t even believe Bill Gates has a college degree.

But I just was wondering, because of the dominant position that Bill Gates enjoys over all of these multilateral, international institutions, as well as internally within U.S. domestic politics, where do you think he fits into your analysis of super imperialism?

Michael Hudson

Well certainly, the private sector is trying to merge with government to the largest extent possible. I think it’s very interesting, what is the real effect of Gates’s purchase of American land? What he’s doing is not developing agriculture; he’s poisoning the land that he’s on.

He is promoting the use of pesticides and herbicides that are destroying the soil quality of the land. If he were an agent of the KGB, trying to destroy American agriculture, to make it dependent on Russia’s resurgence in agriculture, you couldn’t ask for a better foreign agent, because the policies he’s footing are so destructive of soil fertility, so destructive of the bee population, so destructive of the biological element of the soil.

And in fact, Gates is making the same mistake with his foundation that Khrushchev made in Russian agriculture, when he began to develop Siberia, thinking that that would restore Russia’s self-sufficiency and grain to get free of America’s threats of the grain embargo.

The development of Siberian land under Khrushchev worked very well for three years, and then it collapsed. Because they didn’t use crop rotation; they didn’t use natural fertilizers; they didn’t use any replenishment of the soil.

And the policy that Gates is promoting in agriculture, instead of replenishing the soil is poisoning it. So if you wouldn’t want your worst enemy to be in charge of taking over American agricultural land, you wouldn’t want him to have any role in that whatsoever.

The fact is, he’s really stupid. Once you get $100 billion, your IQ drops 30%. And so he’s suffered from that. You want to just sort of belong. You’re not the same person anymore. And once you inherit money, right there, your IQ goes down 20%. So now he’s operating with 50% of an IQ.

So of course, when you have his money wield influence over international organizations, you have a “democracy” taking over.

Max Blumenthal

My last question – it’s a little bit confounding, as you know, that there has been this trans-atlantic alliance that the U.S. has marketed, but now it is threatening sanctions on the most powerful economy of Europe, Germany, for the Nord Stream 2 pipeline.

And the U.S. has, it seems–and I want to get your view on this–successfully disrupted this massive EU-Chinese trade deal by weaponizing human rights allegations, talking about the treatment of the Uighurs in Xinjiang, or the supposedly poisoning of Sergei Skripal, the poisoning of Alexei Navalny.

These have all been weaponized to try to interrupt these deals with what were seen as core post-war U.S. allies. How is Europe going to respond to this?

I mean, they seem to be pretty much buckling under U.S. pressure. But how is the EU and Europe responding to this obvious attack on their independence? And how could this alter the contours of super imperialism?

Michael Hudson

The German elections that you mentioned, are coming up this fall. And the Americans are putting enormous pressure to push an anti-Russian, pro-NATO puppet, I think largely from the Green Party–which is the anti-green, right-wing military party in Europe, unlike the United States–the Green Party is all for sanctions against Russia, and saying you have to treat any socialist in the same way that we’ve treated Julian Assange.

I mean Julian Assange is an example of America’s commitment to intellectual freedom and to personal freedom. And the assassination teams that it has been sending out to Ecuador. other Latin American countries recently are more examples of this.

Max Blumenthal

The German Green Party sort of represents everything that’s fraudulent about what we consider green politics. It’s a pro-NATO, pro-war, pro-surveillance state green party.

And there is a–I don’t want to call it a conspiracy theory–a suspicion, based on the appointment of Armin Laschet to Germany’s CDU party, the Christian Democratic Union of Angela Merkel, which has been the dominant party in Germany, that he is too pro-Russian, he’s made some comments criticizing U.S. conduct in Syria, that the U.S. is sort of quietly backing the Green Party and then we see the Green Party surging.

What do you make of that? And what do you make of the idea of the U.S. sort of backing this pro-NATO form of green politics, or a NATO-oriented Green New Deal to reestablish, or to retrench global U.S. financial control?

Michael Hudson

This has been consistent and unbroken U.S. policy since World War Two. After World War Two, the United States interfered with Italian politics to keep the Italian communists out of power; it interfered in Greece by wholesale assassinations, both by England and America, of Greek communists; it interfered in Yugoslavia.

What it has done in Germany is the same as it has been doing throughout Latin America, and the Third World, and other countries for the last 75 years. So this should not be surprising at all.

What is appalling is that the European press is not dealing more with this, and that the American press isn’t picking up the little bit that the European press is commenting on.

So even the Financial Times is saying what you just said about the German politics in the Green Party. The major German papers are–I mean, I’ve had numerous interviews with the Christian Democratic Party newspaper, the Frankfurter Allgemeine Zeitung, and other groups there.

It’s appalling that the Germans are almost like the English in believing that because they were defeated in World War Two, there’s still a reliance not only on the United States, but also the resentment by the East Germans over the Russian occupation of East Germany, and the appalling conditions there, that Germany still is as if it’s juxtaposing East Germany to the United States without realizing how much the world has changed in the last 30 years.

Ben Norton

We have a few questions here on our Patreon; I’ll kind of combine them. One of them is about Modern Monetary Theory, MMT. And another one is about Dr. Stephanie Kelton’s book The Deficit Myth. So I’m wondering if you just want to briefly address Modern Monetary Theory, Stephanie Kelton, his work, and what you think about it?

And then I would add my own question to that briefly: How does Modern Monetary Theory fit into super imperialism? Because the point I would add is that you can only do Modern Monetary Theory-style spending if you have a sovereign currency, and if that sovereign currency is backed by a military, and you don’t have to do trade in the U.S. dollar.

So in many ways, it seems to me that Modern Monetary Theory is only really possible for the U.S. because of super imperialism.

Michael Hudson

Well, Stephanie, has been the major promoter of the now obvious idea that governments do not have to borrow from bondholders in order to finance their budget deficits; they can simply print the money, and the effect of printing the money is no more inflationary than borrowing from billionaires.

If you borrow from a billionaire, money that they would not have spent, and spend it into the economy, the monetary effect is exactly the same as simply printing the money and creating it.

And Stephanie used to be the number one promoter of Modern Monetary Theory until of course she was overtaken by Donald Trump, who said, we can cut taxes, run an enormous deficit, and as long as we give all of the deficit to the wealthiest 1%, by using $8 trillion to bid up stock and bond prices, and only $2 trillion into the economy, we can create all the money we have.

And of course, he has a larger audience than Stephanie has. We’ve gone around the world giving speeches together, but I think the largest audience we had was maybe 40,000 in a sports stadium in Italy once, where people came to hear us talk about Modern Monetary Theory. But we didn’t have Donald Trump’s constituency.

And he has shown that Modern Monetary Theory works. The difference is that the Republicans’, and now the Democratic, and the Federal Reserve’s idea of monetary theory is, of course the government can create all the money it wants, simply by printing it, but because the government has been privatized by the commercial banks and the financial sector. And so when we do create money, we’re going to create it to enrich the 1% not the 99%.

Well of course Stephanie and me, and the rest of the University of Missouri at Kansas City staff, Randy Ray, and the others, we all wanted–our whole idea of printing money to finance deficits was to spend it into the economy, to create a full-employment economy, like Pavlina Tcherneva has been urging.

Our idea was not to create money to give it to create a stock and bond bubble. And so somehow, the idea of MMT has been hijacked by the right-wingers and the Federal Reserve that are running away wild with it beyond anything we could have imagined.

Ben Norton

Well really quickly, Professor Hudson, I think there is a lot of value to Modern Monetary Theory, and you just articulated that. But at the same time, I’ve seen this, this argument, and I’m curious about your thoughts that–you could say that, for instance, Venezuela tried Modern Monetary Theory, but because the currency was totally devalued by an economic war by the United States; it doesn’t have the same kind of financial, international economic power that the United States has, or that a currency like the euro would have.

So of course a country like Greece can’t do MMT because Greece doesn’t have a sovereign currency. And a country like Venezuela can do MMT. It seems to me that only a major economic power that other countries might use their currency to trade in, like the United States, would be able to carry out these policies.

Michael Hudson

The key is the balance of payments effect. No country can go broke if its debts are denominated in its own currency. Venezuela can print all the domestic currency it needs to pay its debts to keep the economy going. But it can’t print dollars. Only the United States government can create dollars, and in as much as Venezuela’s foreign debt is in dollars, that is beyond the ability of its government and treasury to print.

Ben Norton

Well and Greece can’t print euros.

Michael Hudson

That’s right. It can’t do that either. And when the United States structured the Eurozone, it made sure that no central government, no national government could create its own national currency, so they can’t run budget deficits to spend into the economy to help a recovery.

The Eurozone has turned Europe into a dead zone, because it is unable to use Modern Monetary Theory, because the European Central Bank–the terms of the Eurozone agreements are that no government can run a deficit of more than 3%.

Well obviously if the United States functioned under the Eurozone rules, we couldn’t have had the Trump policies; we couldn’t have had the policies that President Biden is suggesting.

So the Eurozone has committed economic suicide by following a pro-creditor, deflationary policy on the logic that, if the government doesn’t create credit, there’s only one source of financing for the economy, and that source is private banks. So the Eurozone economic philosophy is designed to enrich private banks and their credit creation, not the government credit duration.

And that’s the key of Modern Monetary Theory. Either credit is going to be created by private banks and interest for the things that private banks lend credit for, or it will be created by government, for the public interest and the kinds of things that governments run deficits for, if they’re good governments, to spend into the economy.

Ben Norton

We were talking in our discussion before the interview and Professor Hudson said he doesn’t follow cryptocurrencies a lot, but I’m just curious because we got a question over at Patreon, Professor Hudson, what do you think about cryptocurrencies like Bitcoin, also Dogecoin has become popular. And this is related to non-fungible tokens, NFTS.

There has been an argument that all of this is just a new form of speculation for rich people who have nothing to invest in. And there’s another argument, especially for NFTs is that this is a new way to launder money. But I’m wondering what you think about cryptocurrencies and these new technologies.

Michael Hudson

Well I think that, functionally speaking, cryptocurrencies are like Andy Warhol etchings; they have no intrinsic value, except the fact that other people want to buy them, and enough other people may them as trophies.

As people get richer and richer, they want to buy trophies. Andy Warhol etchings and other bad art is one example of a trophy, and having money in a cryptocurrency, like Bitcoin, is another kind of a trophy.

I think its main function is either money laundering or tax evasion. And certainly the amount of energy that it uses to mine Bitcoins makes it impractical as any actual means of payment.

So you have essentially cryptocurrency only as a means of storing your liquid money in an asset that you think other people will buy, so it’s all based on expectations, nothing intrinsic at all. It gives new meaning to the phrase fictitious capital.

Ben Norton

So someone asked here, over a Patreon, do you think that cryptocurrencies like Bitcoin could be a way to help get off the dollar, to de-dollarize?

Michael Hudson

No, they have no effect at all. It’s just shunted aside. If everybody would put their money on Andy Warhol etchings, that wouldn’t have anything to do about the dollar; it wouldn’t affect–money put in Bitcoin doesn’t affect international trade, or international investment, or tourism, or any of the actual payments among countries. It’s completely separate; it’s like money held in a Caribbean offshore banking center.

Ben Norton

How do you think that China can deal with a problem like extremism, especially in regard to the China-Pakistan Economic Corridor, CPEC, in neighboring volatile countries like Afghanistan and Pakistan. Because we’ve seen that a key part of the Belt and Road Initiative has been to better integrate Central Asia and South Asia, some of these countries that do have a problem with extremism and secessionist movements. And that’s really at the heart of the New Silk Road.

Michael Hudson

China is not as interfering as the United States is. It is trying to carefully avoid taking sides, for better or worse, in any of this. Pepe Escobar follows all of this pretty closely.

It’s certainly not going to get militarily involved, as the United States does. Its main concern is that the United States foreign legion, essentially America’s major ally, is Saudi Arabia.

America has an alternative to socialism, and the alternative is Wahhabi fanaticism. And it has worked for Saudi Arabia to use ISIS and other Wahhabi terrorist organizations to try to destabilize Russia from the south, which was Stalin’s great fear in World War Two, and to destabilize China from the Uighur section.

So what China is trying to do is to prevent foreign-backed terrorism and sabotage in its own country, while trying to just make a modus vivendi with other countries that have problems and not to try to engage in the kind of regime change, much less military occupation, that is the centerpiece of American policy.

Ben Norton

There’s another question here–we’ll probably just ask two more, two or three more here just to wrap up–but this could be an entire interview, so of course, we can keep it brief, and maybe we can have you back another time to talk about this.

One of our patrons asked about “Socialism with Chinese Characteristics,” and said, from your experience working with the Chinese government and other education systems, do you see the political will from the Xi Jinping administration to keep toward on the socialist path? Or do you feel that China is having a new battle with capitalists and financialized forces within the system since Deng Xiaoping’s reforms?

Michael Hudson

Well in the late 19th century, everyone viewed socialism as the more efficient evolution of industrial capitalism. So I don’t think it helps to say whether China is socialist or capitalist. The famous phrase from Deng went, “White cat, black cat, it doesn’t matter as long as it catches mice.”

I think the Chinese are sort of in the process continually of reinventing their economy, of seeing what works and what doesn’t. I think they’re operating on a pragmatic, ad hoc basis, and that pragmatism doesn’t lead them to think, is this capitalist or socialist?

They don’t think in terms of an abstract generality; they think very specifically, does this particular industry help develop China or not? Is it part of our overall long-term plan for 2025, 2030, and beyond? How does this fit into developing the economic structure of our economy to make it more practical?

So I don’t think labels really help in this at all. They present themselves as a Marxist country, but Marx didn’t talk about the kind of problems that they’re handling now. And as one of my fellow professors at the Peiking University said, Marxism is the Chinese word for politics.

And they’re political; they’re pragmatic; and you should think really in terms of what are they doing structurally, and not thinking, what label, especially what Western label, are we going to print or paste on what they’re doing?

Labels don’t help; you actually have to get into the nitty gritty, looking at how they’re handling tax policy, how they’re handling land ownership and credit policy, how they’re handling the budget deficits of rural communities–these are the problems that they’re dealing with right now.

Ben Norton

Final question. Can any country attempt to move away from the dollar? Or does the economy need to be of a certain size? And does the country have to have specific resources to do so?

Michael Hudson

Any country can move away from the dollar as long as they they are part of a system that has a critical mass. So the great threat to the dollar hegemony is that China, Russia, Iran, and the Shanghai Cooperation Organization countries are going to be a critical mass, that Venezuela, much of Latin America, Africa, and the rest of Asia can all join.

So, yes, as long as you’re part of, as long as there’s a viable alternative with a critical mass–the fact is, if you rely on the dollar, you’re probably going to get screwed. Because with the dollar, as we discussed earlier in the show, the U.S. can grab your bank account, at any point; they can grab your gold reserves at any point.

Even Germany is now asking for its gold reserves to be flown black slowly, month by month.

Max Blumenthal

They can grab you. They can literally grab you. Look at Alex Saab.

Michael Hudson

Right, indeed. So yes, any anyone can–within a few years, you’ll have an alternative economic order to the dollar, so that things don’t have to be the way they are.

There is an alternative; Margaret Thatcher was wrong. And so is Biden and Blinken.

Ben Norton

Excellent, well, thank you so much, Professor Hudson, for joining us.

[Ben Norton is a journalist, writer, and filmmaker. He is the assistant editor of The Grayzone, and the producer of the Moderate Rebels podcast, which he co-hosts with editor Max Blumenthal. Max Blumenthal is the editor-in-chief of The Grayzone, Max Blumenthal is an award-winning journalist and the author of several books, including best-selling Republican Gomorrah, Goliath, The Fifty One Day War, and The Management of Savagery. Courtesy: The Grayzone, an independent news website dedicated to original investigative journalism and analysis on politics and empire.]