>Top 1. (2025/6/20)
- <Prof. Glen Diesen> Hi everyone and welcome. Today we are joined by Michael Hudson, a professor of economy to disuses the strategies for the American empire. Now when we look at empire we tend often to look at military capabilities and deployment but as you know empires also require an economic foundation. So to explore this we're going to look into one of professor Michael Hudson's great books that is super-imperialism the economic strategy of American empire. So I will put a link to the book in the description. So please make sure to have a look and welcome back to the program.
- <Prof. Michael Hudson> Thanks for having me Glenn.
- <Prof. Glenn Diesen> And after we address the well look at the economic strategy for the American Empire, it would be interesting to get you take on how some of these I guess economic foundations are well less stable now than the war when your first version of this book came out. But I thought a good place to start would be how you see the well what you name one of the sections of your book the birth of the American world order. What is the foundation for the economic strategy of the American Empire?
- <Hudson> Well, the Americans never attempted apart from the war of 1898, they have not attempted military overt*3 colonialism in the sense that Europe did. It has turned out to be financial colonialism and financial imperialism. And the actual attempt to create an empire as such wasn't really ímpletmented until 1944 and 1945 when WWII ended. But the roots of all of it were founded in the end of WWI when the settlement of WWI ended up imposing American demands for repayment of the war debts that the US had lent to Britain, France, and other allies before the US had entered the war. Well, when the war ended, the Europeans expected what would be normal practice and what was the practice the Napoleonic wars, for instance, that the allies would forgive the debts to each other because this was all supposed to be part of the war effort, not only supplying armies, but supplying the funds, the money to buy the arms. But the US said, "Well, we agree with you. Of course, we will not think of charging you for all the expenses of the war once we entered it on you side against Germany.
- But before we entered the war, that was something else. We were a neutral party an we expect you to pay the war debts that you took on. A debt is a debt. Well the allies then turned on Germany and said,"Well, we don't want to have to pay the debts to the US. " Frankly, we don't have the money to pay the debts that the US has calculated that we owed. We'll make Germany pay reparations*5. " And by 1921 when all of this was set up that essential became the rule. I have to say that Europe was somewhat complicit*6 in this. All of the European countries, including Germany, believed that a debt was a debt. And if that was the official debt, if it was the reparations imposed on Germany to pay for the war by the allies against it, was clear beyond its ability. All of the parties in Germany, even the social democrats and anti-war parties, agree that the debts had to be repaid. Well, we know the result. German had only one way to pay, because it had lost its main most productive steel industry, its lands, Alsace-Lorraine. It was financially crippled by the Versailles treaty and the only way that it could pay the debts were to throw Deutsch marks its currency onto the foreign exchange market to buy the dollars to what ended up the dollars to repay its debts to the allies that the allies simply passed on to the US as their payment of the inter ally debts. Well, the result is that Germany had a hyperinflation.
- The US didn't want to enable Germany to earn the money to pay the allies to pay it because that would have threatened American industry. So the US passed a tariff against importing currencies with depreciating currencies namely Germany. So Germany was left without any way of paying. What happened was the American investors lent German cities and local states to borrow. The cities that borrowed their dollars in order to fund their own local budgets turned the dollars over to the Reichsbank. The Reichsbank used these dollars to pay the allies and the allies paid the US. So what was established was a circular flow and it was all based ultimately on the demand for gold and America's buildup of international power between WWI and WWII. All reflected it its increasing power of gold against which all of the major currencies were convertible. And during by the time that Germany collapsed into Nazism. There was a massive flight capital out of Europe to the US that led to the US gold supply growing even more. So that by the time WWII ended, the US controlled the great bulk of the world's monetary gold. And because Europe was dévastated, the US was also in a position to dictate how the international trade and financial system was going to operate upon the return to peace. And so the US used its power to create the International Monetary Fund, the Word Bank, the International Trade Organization and bilateral diplomacy. Basically to very quickly absorb what had been the British Empire, the US had kept sterling afloat by lending sterling the money to balance its international payments and recover after WWII. But the condition was that Britain had opened the sterling area to let India and other countries that had built up their gold their sterling balances during WWII to be able to spend these balances not limited to British industry but to the US. And the US basically there were a number of plans to try by John Maynard Keynes to create some assurance that the post-war order wouldn't be so unbalanced that all the gold and all the power would flow to the US.
- The US rejected them and they created the IMF and the World Bank basically to serve US national interests. I don't know if you want me to go into the details. For instance the World Bank was supposed to lend other countries money to develop their economies. But the first Europe, and then what are now the global south countries. They were called developing countries at that time. But the World Bank policy for ever from WWII ever down to today was not to provide loans for countries to be self-sufficient in any kind of commodities that the US controlled. And the US balance of payments since WWII has been was based very largely on food exports as well as control of the oil industry, as we're seeing today. And so there was no attempt at all by the World Bank to follow the recommendations of its own economists. The World Bank undertook a very series of country studies and every study that it did of Latin America or the Middle East said well you have to have land reform you have to enable farming to do in these countries what the US did in the US with its agricultural adjustment act very strongly organizing government support of farming to support grain to become independent and be able to feed yourself that was a prime aim of self-sufficiency. Historically the US the World Bank basically made loans to finance international trade dependency on the US and that was where the IMF came in. The monetary fund applied the same self-destructive economic philosophy that the US and Europe had followed after WWI.
- There was a great debate after WWI between John Maynard Keynes in England and the anti-German economists from France and from the US saying, yes the debts really are not unpayable. Any country can pay any foreign debt volume at all if it depreciates its currency to such a low point that its exports become competitive. And in practice the IMF philosophy is if countries would simply lower the cost of labor, it had a labor theory of value as it were. If countries can impose austerity and cut back the government budgets not to run a budget deficit to pump money into the economy, then deflation and low wages will enable these countries to pay their debt. That was the policy of the IMF ever since its foundation in 1945. And that deflationary austerity philosophy has been largely responsible for preventing the global south countries and the Middle Eastern and Asian countries from finance being able to finance themselves at the same time that they have to pay foreign debts to pay the loans that they had to undertake in order to finance their trade deficit with the US since WWII. And these as these trade deficits have grown and grown and grown countries have countries scrambles to obtain the dollars and in effect that meant the gold to pay the debts that they had to pay. Putting the interest of foreign creditors the US government above all but also US bond holders and banks above their own domestic development.
- Well, you can imagine what happened to threaten this dynamic that the US had put in place to make essentially to make itself the beneficiary of the division of labor and the specialization of production between the US as the leading industrial nation and other countries as suppliers of raw materials to it and low-wage manufacturers. There was a kind of it was called a dual economy structure. One economy for the US and to a lesser extent Europe and the other economy for countries that the global south countries and countires that were not self-sufficient.
- Well, what ended all of this started in 1950-51 with the Korean War. Between the end of WWI, WWII, I'm sorry, between 1945 and 1950, the US gold stock had actually increased to 80% of the world's monetary gold. Now that meant the the US owning gold and the insistence that all currencies of the major countries be defined in terms of gold meat that the US had an overwhelming financial power. In 1950, for the first time, the US moved into a balance of paymets deficit as a result of the its military spending connected to the Korean War. And from 1950s on, right down through the end of 1970s, the US moved into balance of payments deicit that was settled by having to pay gold to the countries that were receiving the dollars that the US was throwing off. And the entire deficit was a result of military spending. I worked for first for the Chase Manhattern Bank as their balance of payments analyst, and then for Arthur Anderson, the accounting firm analyzing the US balance of payments, showing that the entire deficit was military in character.
- Well, you can imagine what happened during the Vietnam War of the late 1960s. When I was at Chase, every Friday morning we woud look at the Federal Reserve reporting of what is the US gold stock doing this week? How much gold did America have to send to France when General De Gaulle was receiving? The dollars that America was throwing off what had been French Indo-China, Vietnam, Cambodia, Laos, these dollars were all sent to France that were cashed in for gold by France. Well, Germany was also obtaining a lot of dollars that other countries receiving the American military spending were spending on German industrial exports. So well we would watch week by week by week the claims on the American gold stock rising and it was obvious that if the America's cold war spending continued at the rate it was going at some point it could not it would run out of enough gold that was needed to legally cover the US paper currency. Every dollar prior to 1971 the dollar bills that you had in your pocket had to be backed 25% by the gold supply. And by 1971, President Nixon realized that this was no longer the case. He closed the gold window and said we cannot afford to pay the cost of our military spending in Asia and throughout the whole world and gold anymore. There was some panic within the US government.
- Well, a year after almost to the month, a year after the US went off gold in August 1971, my superimperialism was published in August September 1972. And it turned out that the largest purchaser, I'm told, were the CIA and the defense department who'd bought it through the Washington bookstores. And my friends at Drexel Burnham the investment bankers came to me and said "Look, what are you doing in academia? We're going to invite you to address our annual meeting. Herman Khan will be there. He's going to love your presentation and he's going to offer you a job except it leave academia. So indeed I explained to them that the ending of America's payment in gold did not have to mean the end of American power. Just the opposite that once foreign countries no longer could use their dollars to spend on US gold, they had only one practical choice given the arrangement of international financial diplomacy at the time. They now what did they use their dollars for? They bought the safest investment there was US treasury securities*16, treasure bonds, treasury bills. And so what happened as the US spent military spending abroad, it got in the reipients that turned their dollars over to the central banks for their own local currency. The central banks invested these dollars in US Treasury securities and that financed not only the foreign military spending by the US but it financed the budget deficit that within the US was primarily military-industrial complex. And I pointed that what had happened was that instead of being a disaster by ending the US control of the world economy through its gold supply, other countries really had no alternative but to have their own central banks themselves finace US militray spending domestically and foreign by recycling their dollars.
- Well, Herman Khan hired me. I went to work for this, Hudson Institute. He said, why are you hoping that your classes of maybe 50 graduate students at the new school are going to end up maybe somebody's going to be a senator or something later, if you join the Hudson Institute, I'll take you to the White House an, introduce you and we'll get a contract, and you'll become a government adviser in all this. And it seemed to make sense. And the defense department gave the Hudson Institute an 85,000 dollars grant, much more than I'd gotten as an advance*18 for superimperialism. For me to go back and forth to the War College and to walk to the White House and other venues*19 to explain what I just said. That other that the US dollar stabdard that I called the treasurey bill standard of international finance had replaced the gold standard, and that essentially locked other countries into the financial support of American spending abroad and that going off gold essentilly removed the limit on military spending.
- I gave one talk at the White House to Treasury officials with Herman Khan and we said gold is you can think of it as the peaceful metal because if other countries have to pay their balance of payents deficits in gold, any country waging war any country entailing*21 a very major military exenditure abroad and to fight a war always entails running a big deficit is going to have to run out of gold and lose its power in a system that's based on gold.
Well, immediately the Treasury people said, "Oh, we don't want that. We don't want because it's America that is going to war. It's America that's spending almost all of the world's military budget. And we don't want gold to play a role in any system that the US cannot control and we can't control gold outflows if we have to convert our dollars into gold. So actually to deprive other countries of any ability to cash in their dollars into gold means they've been co-opted*23 into a financial system. And it's at that point that America truly became an empire because the entire world's financial system, and it was therefore its tax system, its fiscal system, its money creation was basically directed by the US Treasury to finance the costs of what America claimed were the needs of its empire in creating its 800 military bases all over the world. And in waging the wars that it's been fighting since the 1970s. And that is until this year other countries were willing to part of this system because the facts of geopolitics led them to support the US military spending but also because there wasn't an alternative.
- Well, today, with President Trump's budget that he and the Republicans have sent to Congress, the American debt, domestic debt has been so great and its foreign debt, the foregin central banks and the foreign investors, including private quasi government funds such as Saudi Arabia and Norway be have realized that the foreign debt that central banks hold that was supposed to be as good as gold and the safest asset to buy it cannot be paid. There is no way that the US can or would or is willing to somehow pay the amount of money that it other countries hold as loans to the US; Many Treasury bills, but also US agencies, Fanny Many, goernment agencies pay a little bit more than the Treasury. And even corporate securities such as Saudi Arabia holds and Norway holds. There's no way that America is willing to pay these debts either by exporting because it's de-industrialized andd it can't it's not running an export surface anymore or by selling off its industry to foreign buyers. The US until this year has said that if foreign countries could not pay their finance their balance of payments deficits, they had to do so by privatizing their public utilities, seliing off their infrastructure to foreigners, selling off their mineral rights, selling off their land to foreign invetors. The US is not willing to do what it's insisted that other countries do as the basis of world trade and investment that it's created. So other countries realize this double standard that they're really not getting savings that can be converted into ownership of US industry or agriculture or infrastructure or anything else. They're just paper dollars. And so for the first time you're having a move to seek alternative to the US dollars.
- Well, the only alternative so far that people can agree upon is gold. And when Herman Khan and I went to the White House in 1973, Herman wrote a map of the world. And there was a map of countries that trusted govenments and that was northern Europe, Europe as a whole, the US, the English-speaking countries whose populations did not trust governments. Well, you could call them the global majority. Most people didn't. Then he had counties that supported the gold the commodity money. Well, there were countries like India, Asia, global south countries. They wanted something secure, not an IOU. The counties that rusted paper money were Northern Europe, and the English-speaking countries. So you have this faith in paper money that is a debt is a debt that and that was the principle on which America began to accumulate gold after WWI. But the US certainl the current budget that is before Congress is saying well yes a dbet is a debt on the balance sheet. Yes, on the balance sheet we owe foreign countries more money than there's any way we can see can be repaid, but that's it. It's a debt that never will be repaid. IOt's as if yuou went to the grocery store and tried to pay in an IOU and the gorcery store would say, "Well, you run up quite a tab*29 in the last week. You know, you got to pay." And the customer will say, "Well, I can't pay." But you can use this debt, maybe you can give this IOU to the farm that's giving you the eggs and the dairy or the vegetables that you're selling and somehow if only this IOU could be circulated is a claim on the customer then it would be technically it's a debt. Well a lot of the financial system and the world financial system is now based on that kind of debt that there's no ability to pay it behind it. And that is what has become the key you could say to American empire because it's the key to America's ability to spend abroad and be really the first nation in history that does not have to pay its war debts or other debts that it has run up to foreign countries. That's the double standard that America has been able to achieve to make it the unique nations or the indispensable nation. And that is why right now other countries are buying gold and you can see the gold price going up. And why they're trying to realize well that we can't spend all of our dollar holdings on gold. Isn't there some way we can create an alternative paper currency owed by other countries?
- Well, you have the bricks talking about that and you really can't have such a currency by other countries because to issue a currency you need a parliament to say, well, who's going to get the benefit of this currency? And if you issue the currency, what's it going to be spent on? Who's going to spend it? You'd have to be have something like a real Europe deciding who's going to get the result of Euros that are being created except the Euro the US created the Euro zone in a way that it really can't run enough of a deficit to recover from the downturn that it's now been forced into. So the world is in a con a quandry*31 and that's what my supsreimpreialism is all about an I've tried to update it to the the present that's the basic theme.
|
1. |
- a
- a
- overt |ouvə́ːrt|: あからさまな
- a
- reparation: 賠償金
- complícit: 共謀, 共犯の
- Reichsbank: ドイツ帝国銀行
- a
- a
- a
- a
- a
- a
- a
- US Treasury: 米国国際; T-Bills 1年以内短期債; T-Notes 1-10年中期債; T-Bonds 10+年長期債
- a
- advance: 前払い
- venue: 現場, 裁判
- a
- entail: 伴う, 引き起こす, 強いる
- a
- co-opt: 選ぶ, 支持を頼む
- a
- co-opt: 支持を頼む
- a
- run up quite a tab in the last: tab=勘定, つけ;
この所勘定がかなり積み重なる
- a
- in a con a quandary: 詐欺で困惑
- aa
- a
- a
|