Michael Hudson – Chaos As US Power

This is an interview from 13 March 2026

Robinson Erhardt You’ve been on the show and joined me a number of times now, but we’ve rarely spoken about the contemporary situation in the United States in our foreign policy. We tend to talk more about history, I’d say. So, I wanted to ask — just to begin — why it is that you’re more interested in talking about the present today.

Michael Hudson Well, I’d originally planned when you suggested talking about US foreign policy. I was going to go through my usual approach, which we’ve discussed, starting in the Bronze Age for, debt and debt financial policy and say, well, here’s how American foreign policy has evolved. And here is why we don’t have the world that we helped create in nineteen forty five. But I think that what has happened in the Middle East in the last few days, has shown how really fictitious the whole National Security Strategy report that the government published last December is in its historical description.

And I think I want to begin today by saying, look at the mess that American foreign policy has created today. How did we get here and what are the policies that have created this? Because obviously, no announcement or explanation of American foreign policy by the Americans is going to say, here’s how we’ve pursued a policy that’s splitting the world in two between the United States and NATO, Europe and our allies in Japan and South Korea, on the one hand, and the whole rest of the world against which we’ve weaponized our foreign trade. The use of the dollar and weaponized warfare itself with the attack on the Near East.

So I think, just to begin with, what’s happening today shows that US foreign policy has become so self-serving, so insistent that, as Donald Trump says, America has to be the winner. We’re in a win-lose situation. And that is a basic strategy. And as we trace this, how the strategies worked out really from nineteen forty five, when the United States could appeal to market forces to have other countries rely on the United States and after World War Two for their industrial support and monetary support, at least under the creditor-oriented rules that the IMF and the United States laid down. All of these factors that had favored the United States have been undercut by the fact that the United States has deindustrialized and weaponized the US dollar. And that word weaponized, I don’t think was ever used in relation to foreign policy before, last year. And I think that the fact that now almost every major media, newspapers are using the word weaponization of foreign trade, weaponization of the dollar, I think that that indicates the adversarial position of American foreign policy and the fact that basically it’s the opposite of what it claims to do. For instance, just in the last twenty-four hours, President Trump has announced — let me quote — “If necessary, the United States Navy will begin secure escorting tankers through the Strait of Hormuz as soon as possible. And, he posted this on his Truth Social blog today. He said, ‘No matter what, the United States will ensure the free flow of energy to the world.”  Well, the entire thrust of the United States foreign policy for the last seventy years is to prevent the free flow of oil to other countries.

It’s been to isolate access to all the countries that are not willing to give up control of their foreign policy or agree to price their oil in dollars. And since nineteen seventy four, when OPEC quadrupled its oil prices, to agree that they’re going to save all of the export earnings in dollars by recycling them to the United States to invest in US Treasury securities as their savings, US bonds, and US stocks. The petrodollar trade. And if you look at what the United States has done, look at the history of the US vis-à-vis other oil-producing countries. Iran was overthrown in nineteen fifty three for trying to nationalize its own oil trade. Then you have the two wars in Iraq, by George Bush around nineteen ninety and then by his son, George W Bush. Then you have Libya under President Obama.

Then you have the isolation of the Russian oil and gas trade in twenty twenty two as a result of the war in Ukraine. Then you have Syria, in the last two years, being torn up, and Venezuela most recently. So if you look at the fact that here are all of these countries that would like the free flow of oil, but they’ve said a number of things. They don’t want to price their oil in dollars. They want to use their, they want to trade with China and with, regimes that the United States says, well, they are rivals, they are existential enemies. You can’t trade with them. That was the whole aim of Trump’s Liberation Day tariff policy. So you have the United States essentially using oil as the basis of its international diplomacy. Really, throughout the twentieth century, and especially since nineteen forty-five, because all countries need oil. And, if you’re the United States, and of course, you want to use market forces that you can, create a system of international law to shape the market forces that are in ways that benefit the United States. But at the same time, you want to maintain your ability to be very coercive in all of this. Well, that’s basically, basically what’s been happening, the US policy from the very beginning, certainly in, after nineteen forty five, has this coercive element, and the United States basically said there are a number of buttresses for our foreign policy. Number one, we won’t join any organization, any international organization in which we don’t have veto power. So the United States insisted on veto power within the United Nations Security Council. It insisted on a strong enough stock ownership of the International Monetary Fund and World Bank so it could veto things, and it wouldn’t join the international court or other international regulatory organizations or things like the Paris climate Agreement, unless it had veto power. And it is at the same time that it says, well, I think the national security study that was published, as I said, in December, said our security depends on — basically, to paraphrase — denying other countries their sovereignty. We don’t feel secure if other countries are able to pursue policies that are adverse or threatening to the United States. So you had Marco Rubio, the Secretary of State, saying that, well, the United States national security is threatened by the International Criminal Court and its authority. because it’s accused Netanyahu of being a war criminal, and for what Israel has done in Gaza, and the other statements by the Trump administration are, well, our national security is threatened by the United Nations and the whole principle of international law.

Ever since the Peace of Westphalia in sixteen forty eight, right down through the United Nations Security Council, it is illegal under international law to interfere with the politics and the internal administration and freedom of other countries. Well, that’s exactly what the United States has been doing ever since World War Two, meddling in foreign elections, in Greece, fighting against the Communist Party that was the main partisans, in Italy under Operation Gladio. The whole National endowment for democracy, has been basically to bring about regime change of unpopular governments. So you have the whole U.S. foreign policy of trying to control other countries, being adverse to the United Nations principles of international law. And that’s just what Donald Trump explained a few months ago when he said,

“Well, the United Nations is obsolete. I’m going to create the Board of Peace that I’ll be in charge of.” I wrote a long piece that was just published a few days ago by Democracy Collaborative, that goes over and describes this whole fight by US foreign policy against the principles of international law. And what that does is essentially make the United States, instead of protecting the world from attack and terrorism, become just the opposite. And if you look at what the United States has, essentially claiming today, in NATO, Europe, and other countries, is essentially a declaration of World War three. And so let’s say, how is U.S. foreign policy leading towards World War three? Well, the attack on Iran is to be looked at in the same view of NATO and the United States mounting a coup. Coup d’etat in Ukraine to fight Russia, in using Ukraine as a battlefield, the the fight in Afghanistan. All of these fights that the United States has gone through are essentially threatening the whole world with war. We, I think we’ve discussed briefly before how the whole fight in Iran, I’m sorry, in Ukraine now you have Merz in Germany and Macron in France saying, well, we want to provide Ukraine with atomic missiles to defend itself against Russia. And President Putin responded, if that’s the case, then we are going to preempt this, meaning war with Russia. The enabling fiction of all of Trump’s demands on NATO and other countries.

You have to support the United States. You have to pay the equivalent of economic tribute to the United States so that we can afford to have enough money to invest in the eight hundred military bases we have all around you and protect you from the fact that Russia may be deciding it wants to recreate the Soviet empire by marching right back through Poland and Germany to conquer all of Europe. This is such an obvious fiction. It’s so crazy. And yet it’s being used as the narrative to, try to justify, Europe’s, moving towards a very heavy, armament spending, raising its military spending from two percent before to five percent that is supposed to be spent largely on buying American munitions now that Germany and Europe are industrially injured by the fact that they’ve isolated themselves from importing Russian energy. You’re having the threat of war between Russia and Western Europe rise, and you’re having it in Iran, too.

Now, the whole Middle East is being engulfed in war, and this war because it’s about oil, and because all of the countries of the world need oil in order to power their factories and heat their homes and provide electricity and provide fuels, and use gas as the basis for their chemical industry, their fertilizer industry. All of this is paralyzing the world’s industry, especially in the last two days, when you’ve had Qatar and others, I think the United Arab Emirates, stopping their gas exports and shutting them down in the last day or two. And it’ll take, it takes a few weeks to restart all of these things. So you’re having the whole world face a choke point. And in the United States, foreign policy has been based on creating choke points and maintaining the ability to weaponize these choke points and to use them to say that, well, if other countries deviate from our rules-based order and they follow their own, economic interests and, sovereign power, then, we’re going to impose sanctions on them, just like we’ve imposed sanctions on Russia and China and Iran and Venezuela and other countries that, disagree with this.

So you cannot say that the United States foreign policy is based on promoting free trade, whether in oil or anything else, it’s not based on free capital movements because we’ve seen the sanctions that it’s imposed upon Russia, including the confiscation of Russia’s three hundred billion dollars in foreign exchange savings that it had in euroclear in, in, in Belgium. So, you’re having the actual practice of American foreign policy being diametrically opposed to the US narrative of foreign policy being we’re the peaceful country protecting the world from war instead of bringing war wherever it, feels necessary and protecting the world’s trade, free trade and free movements and, essentially protecting the democracy of other countries to act in their own self-interest.

Robinson Erhardt Well, one of the things that I love about having you on the show is that I get to be the audience to these spontaneous lectures. One of the problems with that is that there are always too many questions I have after each time you speak to get them all out. But I mean, one of the things. Yeah, one of the things that really jumps out at me, though, is you said a few minutes ago that you interpret the US’s behavior as a declaration of World War three, or our intent on World War three. And because — even though I’m an American — I’m kind of an outsider of the decision-making apparatus. It’s hard for me to imagine why anyone in power or why any American at all would want World War Three. So it’s a basic question. It’s a speculative question, but who would benefit from it and how?

Michael Hudson The benefit, ultimately, is ideological. What this fight is about — between, as I said, the American NATO, West, Western Europe, and its allies, and the global majority. It’s about what kind of economic system we’re going to have. Is it going to be one of neoliberal financialization, privatization, and the kind of policies that were started in the nineteen eighties by Margaret Thatcher in Britain and Ronald Reagan in the United States, where essentially you dismantle government infrastructure, you privatize it, you sell it off. And instead of government infrastructure being used to subsidize economic growth and to lower the cost of living and the cost of doing business by avoiding natural monopoly charges, for instance, in water, you’ve replaced government supply of water at cost or at subsidized rates with Thames Water in Britain. That’s the perfect example of the Western version of the alternative to how the West, Western industrial nations developed themselves in the nineteenth century. And if you look at, you know, how Britain and Germany and the United States developed all of their industry? Well, I think we’ve discussed before how the whole spirit of industrial capitalism was revolutionary, first in Britain.

They said, if we want to make Britain the workshop of the world, we have to lower our cost of food, our cost of living, so that our employers do not have to pay our labor force enough money to rely on British landlords making enormous land rents by blocking foreign trade. We need to free the economy from economic rent of all forms, and every economist from Adam Smith through John Stuart Mill and Marx. and the whole movement to, essentially, break the power of landlords and the power of monopolists, to create rent-extracting monopolies and prices that raise the cost of living and the cost of production. The whole fight against them was a movement to strengthen governments, authority to lower the cost of production, and essentially to do what China’s doing today. And when today you have the United States saying, well, we’re a democracy. China is an autocracy.

And yet what China has done is reinvent the same wheel that, Britain, Germany, France, the United States all followed to get rich government subsidy, protective tariffs, import control, minimizing the ability of monopolies, to be created, such as the Americas, antitrust act of eighteen ninety, and the protective tariffs and the one thing that China has done that was not done in Europe, in the United States was to treat money itself as a public utility to be provided to finance industrial growth. Germany began to do this in the nineteenth century. And you had German banking evolve along very different lines from British and American English-speaking banking. German banking essentially, wanted to create money and banking in a kind of in conjunction with heavy industry and with the government. So you had a three-way, between governments, banks, and industry. And that’s what led Germany to become so successful in catching up and surpassing Britain so rapidly with its industry. Same thing in the United States, in the United States and Europe, the whole movement towards government regulation to prevent rent seeking and exploitation was called socialism, and socialism wasn’t a bad word. You had the leading American protectionists.

I think I’ve mentioned Simon Patton before. The first American, an economics professor at the first business school, the Wharton School, said that government infrastructure spending, public spending, is different from industrial capitalist spending. The industrialist wants to make a profit, and the industrialist earns that profit by organizing, industry, organizing the supply, organizing the production, organizing the market. But a government infrastructure, first of all, is mainly natural monopolies, like transportation, such as the Erie Canal, or its public improvements. that are, basically lowering the cost of doing business, and providing basic needs at the lowest cost possible to make the economy low cost. So the return on government investment, Patten said, is the degree to which it lowers the cost structure of the private sector. And to him, that was socialism. It was social spending.

And, Patton was one of the many leading American economists who had been trained in Germany with the historical school. And Patton essentially broke away from the American Economic Association. That was very narrow minded free trade, very, on the way to today’s neoliberalism, and it founded the American Sociological Association. You had a whole extension of national strategy and economic thought into the social consequences, which were called externalities by economists and what Patton said. Well, government, regulation, and government investment is all about externalities, in the way that he said. So, leading up to World War I, the whole world thought that it was moving towards socialism.

Then you had the rentier interests fight back. The landlord interests, the financial interests, and the monopoly interests all got together. And, I described this in my book, Killing the Host. John Bates Clark in America said no such thing as economic rent. There is no distinction between value and price. Everybody earns whatever they want. It doesn’t matter how they earn it, as long as they earn it, it’s their income. And all wealth is earned by being productive. And that’s the opposite of what classical economics is all about. Well, your question relates to the modern world — the modern world wants to go back to the fact that said, well, wait a minute, there is a difference as to how you make your wealth. And, we in other countries don’t want to let, the neoliberal free market enable, companies to come in, create, absorb rivals, create monopolies, extract monopoly rents, use their, the wealth that they gain by monopolistic ways and by financial ways to buy control of government and to lower the taxes on financial wealth, on real estate wealth and shift them on to labor and industry. We want free labor in industry from the tax burden and, and you make the government either self-financing or creating our own money, which is what China does.

So you’re having two different philosophies and the economic philosophies of how to develop. And that’s really what this whole World War three is all about. Is the United States going to do what Donald Trump says it’s about to prevent other countries from decolonising their economies and creating trade in their own currencies, and avoid having to send their foreign export earnings to the United States? And essentially use their savings to finance their own industrial growth and their own development. So successfully by following, you could call it the Chinese model. And before that, it was the Japanese model. But the one thing these. The most rapidly growing economies. And now it seems, Russia. Also, if you’re looking at GDP, it’s part of it. The other countries of the world are growing and industrializing rapidly, raising their living standards, living conditions, and social conditions, while the United States and Europe, and its allies are going in the other direction there. loading their economies down with debt. they’re, essentially have such a, they’re polarizing so that almost all of the growth in wealth that is financial fortunes since the two thousand and eight junk mortgage crisis.

All this growth of wealth has been to the financial sector, finance, insurance, and real estate, the fire sector, in the United States, other countries have not followed this. Other countries have used their wealth essentially to the wealth that’s been recycled into new research development, the building of new factories and tools, and means of production to increase their productivity. Whereas the industrial productivity and labor force, and research and development in the United States and Europe have all been cut back. So the what’s the what does that leave the United States with only the ability to try to monopolize, foreign, foreign trade to say, well, all right, we’re going to try to, not only monopolize oil, but also information technology and, the, the whole, Silicon Valley companies of social media platforms, we’re going to have, we can make monopoly rents off the rest of the world as long as we can prevent other countries from producing these same products abroad in their way, which would make them independent of the United States.

Well, you can imagine how the gauntlet that this has thrown down with other countries. Are you going to develop your own technology for your own use to enrich your own populations and recycle into economic growth? Or are you going to let your main choke points, information technology, oil, and other exports controlled by the United States, be a means of subsidizing and essentially paying tribute to the US economy? That’s what, that’s what the fight is all about.

Robinson Erhardt So it seems like it’s all about this, which is sort of what you said at the beginning. It’s an ideological war about the global economic structure. One problem that I see with this hypothesis, just facially, when I first look at it, is that it seems, at least the media portrays it in this way, that this is really Donald Trump’s war. He called the shots, and I just don’t see him as being this ideologically savvy that he really cares so much about this ideological, global economic war. So I just wonder where you see him and his administration fitting into why this is happening right now.

Michael Hudson I think you’re quite right. In practice, Trump is following exactly the same policy that the Biden administration was following. And it’s the neocon strategy. I mean, you have way back in two thousand and one, General Wesley Clark said, well, we’re going to invade, seven Near Eastern countries in five years, and we’re going to control the Near East, because if we can control the Near East, we can control the world oil as long as we can block other countries from trading with any other oil-producing areas.

So you have this is a quarter century policy in the making. And what Trump has made a difference. You could say that one of the main aims of US foreign policy under Trump is to make personal gains for himself and his family and his coterie of insiders. And the way of doing this is not only to go to the Saudi Arabians and the United Arab Republics and say, ” Will you make big loans to my family, for real estate? will be glad to support your countries and give you defense against Iran. If you make loans that’ll help us become millionaires, so that Trump can become a millionaire, just like the Clintons became. So you have, you have Trump essentially putting foreign policy up for sale to the highest bidder.

And of course, the highest bidders are the people who’ve been the neocons, who’ve been controlling American foreign policy all along. And I think, Trump’s mega policy, Make America Great Again has been called “Miriam Adelson Governs America,” because she paid him two hundred and fifty million dollars, a quarter of a billion dollars to name Marco Rubio Secretary of State — to back Israel and the single largest backer of the senators and congressmen, has been, AIPAC and its allied, you know, pro-zionist, political action organizations. So, yeah, you’re having that degree of, what used to be called corruption, putting economic and political policy up for sale, is the characteristic of American policy. And the only thing that makes Trump different from the other, the former neocons and the Democrats, and even former Republicans, is the degree to which he wants his family and friends to benefit personally, from all of this. But the policy is unchanged. Only his personal benefit, and let’s call them idiosyncrasies are there.

Robinson Erhardt Well, since you mentioned Israel, another question I have is, at least naively, what I’ve always been told and what I’ve thought is that our alliance with Israel is largely based on the need for the United States to have a strategic foothold in the Middle East. But many people I’ve spoken to have told me that this is wrong and it is naive. So I wanted to ask you — [interrupted]

Michael Hudson Absolutely not. Okay, so I’ll give you an example. I worked with the Hudson Institute from nineteen seventy two through about nineteen seventy five, and that was a major national security institute today. And one of my colleagues was Uzi Arad, who became the head of Mossad and the head of Netanyahu’s chief national security advisor. And one day — I think it must have been nineteen seventy-three or seventy-four — we were, we’d made a number of trips to Asia together to Japan and Korea, and we had a stopover in San Francisco. And there we met a number of generals and usual military types.

One general ran over, threw his arm around his Israeli colleague Uzi, and said, Here is a landed aircraft carrier over there. You know, we depend upon you to, you know, control the whole region so that we don’t have to. Uzi looked quite uncomfortable for the whole thing, but what could he say? So the United States, from the very beginning, has said, well, we don’t want to have to bear the expense of fighting with our own army in foreign countries, because our own army loses every fight we’re in. We lost in Vietnam. We lost in Afghanistan. We don’t want to get involved in the Near East because it’s a hornet’s nest. So we have two client Armies. First of all, they depended on Israel to control the region, and now, with Israel, which is allied with al-Qaeda. So America’s essentially fight, under Brzezinski in the Carter administration, the Russophobia, which led Brzezinski to fight in Afghanistan, led to the creation of al Qaeda. And America has thrown its whole support for the last few decades behind al Qaeda to essentially terrorize, first Iraq and then, tear Syria apart, from that side.

al Qaeda and ISIS have worked hand in hand with Israel, never ever attacking each other. So both of these countries are using ethnic terrorism to essentially dominate the region on behalf of the United States. So, of course, there’s, let’s say, a harmony of interest between Israel and the United States. And that harmony of interest goes way beyond merely the fact that Israel and Zionists contribute a lot to American political candidates, because essentially, Congress gives large monetary grants to Israel. Israel takes some of the monetary grants and recycles them into AIPAC and other groups to back the politicians who’ve given Israel the money that ends up partly recycled into their own pockets. Well, look at what was said yesterday or two days ago. He said, ” Well, we knew that Israel was going to attack Iran because for the last fifteen years or so, Netanyahu said again and again the fiction, the great lie, that it was about creating an atom bomb. Israel wants to conquer the oil-producing areas for itself.

Way back in the seventies, I knew a number of Israeli security people, and they were all joking. How did God not lead us to Saudi Arabia? You know, why didn’t he put it there? I mean, they want control of the oil. And the United States is quite happy to let Israel take control of this oil as long as it administers it on behalf of the United States, along the same lines or similar lines that Saudi Arabia is indeed doing. So, yeah, it’s, Rubio said, well, we knew that the, that Israel is going to attack Iran. And so we think that Iran feels for some reason that America is so close to Israel that America will attack us. So we wanted to attack Iran before it had a chance to respond to us fighting it. And we attacked Iran because Israel attacked at first, and we. And Israel has created such a big problem for us by inflaming the Near East that we would have been collateral damage. And we want the Iranians to be the collateral damage. I mean, I’m paraphrasing him, but it’s all. The quote has gone all over the media. So just listen to what the Americans say.

Robinson Erhardt I also like this phrase that you used harmony of interests. And we, we know that Israel exerts a lot of political influence in the United States. But I’m wondering if a very simple way of putting it is that you think this would be reasonable. Reasonable: insomuch as we’re construing this war as the United States’ interest, as an ideological war about global economic structure, is the main harmony of interest that we use Israel to advance these goals, and Israel uses us to help with their national security and other, maybe domestic political interests.

Michael Hudson It’s way beyond Israel. Look at you. Could you say the same thing about Ukraine? Ukraine is a terrorist country indulging in ethnic terrorism, saying, we are human beings. Russian speakers are subhumans. They are not human beings that we have to exterminate them — our fight against Russian-speaking Ukrainians is a fight to exterminate them, to essentially ban their speech. Essentially, you could say that Ukraine is Europe’s and America’s Gaza area. Very similar. It’s a similar ethnic cleansing.

It’s a similar philosophy and a similar behavior of foreign policy that goes way, way beyond Israel. You can look at the other terrorist groups that America supported al Qaeda, in Afghanistan, another, a terrorist group, that the whole Taliban, movement, the whole religious extremist movement that you have everywhere from, the, the, Wahhabi Sunni Arab countries, to, make an ethnic, war against, other, Islamic groups and anyone who’s not a Salafist, law, to the Israeli war against the Palestinians, to the Ukrainian, war against, the, the Russian speakers, they’re all very, very similar and they have the same approach. And that’s what makes American foreign policy terrorist. It’s not protecting the world against terrorism. It is the terrorist policy threatening the whole rest of the secular world, saying, wait a minute, everybody’s a human being. It’s a crime against humanity to do what Ukraine is doing against Russia.

It’s, it breaks all the rules of war that are laid down by the UN charter, just as they’ve accused Israel of doing it, and you could say they could bring the same charges against the Saudi Arabian Wahhabi group for financing al Qaeda. So all of these terrorist groups that are America’s alternatives to socialism, it’s America’s alternative to other countries acting democratically in their own interests to support their own national growth instead of that of the United States. This is what, What other countries are finally coming to realize? And it’s such an in such a contrast to the narrative that we’re the good guys, we’re protecting you from terrorism when we’re the terrorists.

Robinson Erhardt I’m surprised to hear you so strongly condemning Ukraine, just because most commentators, especially those on the left, that I hear are much quicker to talk about Russia as the absolute unmitigated evil in this conflict. So I’m just wondering if you could explain a bit more about how you view that conflict more broadly, especially because, as we continue to talk, I imagine it’ll be one of the conflicts that is most vital to contemporary US foreign policy.

Michael Hudson Well, I think. The Soviet Union fell apart in the late nineteen eighties because there was a universal perception that Stalinism didn’t work, that it just didn’t work. And they, and they were invited, the, they thought, well, what’s the opposite of Stalinism? They fell for the fake Russian narrative that, well, Stalinism is communism, Russia’s communist, Russia’s socialist. Well, it’s not at all. It was Stalinist. It was a bureaucratic collectivism. It was managerialism. You could call it. But the one thing you could hardly say is that it was socialism. Unless you want to identify socialism as everything that’s bureaucratically inept and bad.

They invited the Americans and the IMF, and the world Bank to try to redesign Russian society. And the hope was that the Americans and Europeans would help make Russia recover and create an industrialization along the lines that Europe and the United States did. But that’s not what the United States did at all. They created a kleptocracy, a disaster of economic crisis, essentially broke down the government, and put in a kleptocracy. Register the factories, the oil reserves, the nickel companies, and the electric utilities in their own name. And, you had the population fall by so many, far over ten million people, that when President Putin came to office in two thousand, two thousand, he said, almost as many Russians lost their lives as a result of depending on the United States for that, it was going to help Russia develop industrially instead of dismantling it. is, Russia lost in World War two. So, Russia had no, gradually, Putin realized, well, Europe is not trying to help us at all. It just wanted to disengage.

The United States kept pushing NATO forward. I’ve been reading the speeches of Foreign Minister Lavrov and President Putin for years. and I’ve followed Russian history very closely from, the time that I was a child, because of my family and, the, Russia, the last thing Russia wanted was to re-create the Soviet empire because actually, Russia had made sacrifices, bizarre as it seems, and is oppressive and inept, as inept as Russian administration of Central Europe and, was, and from East Germany to Hungary and Poland, Russia had sacrificed much of its own wealth to help support the, the communist countries, to the west, although obviously the support was, not appreciated because it was so inept and inherently bureaucratic and corrupt. So, it was the United States, deciding, well, now that communism has fallen.

Now, let’s extend NATO eastward, and they turned NATO instead of a defensive organization into an offensive organization with the idea of recreating a Yeltsin-type kleptocracy in Russia and, ideally, breaking Russia into five different regions. and that became especially the case after the effect of the US, NATO expansion was to drive Russia together with China. And that made the United States Redouble its efforts against Russia, thinking that if we can drain Russia’s economic energy by fighting in Ukraine, it would. Peter and go broke. And this will lead the population of Russia to want to overthrow the Yeltsin regime, overthrow the Putin regime, and overthrow the existing regime, and bring back a US-oriented Russia.

That was the dream. And it was a silly dream. But that’s what they believed. And they said also that by draining Russia’s military power, it won’t be able to really support China, which is our real enemy, because China provides not simply a rival, but an alternative form of economic organization, industrial socialism. That is the real threat because of America, were it to follow the same logic that has made China so successful and industrial. Then there goes the fire sector’s control. There goes the financial control. There goes the real estate, rentier capitalism, rentier finance, and capitalist control. So I think Russia was under attack. And, the result is that just reading the speeches of the Russians, you can find, if anything, a disgust that Putin feels with the behavior of Germany, France, and Britain, and all that, all that Russia wants to do is say, well, you know, we’re turning our eyes eastward.

We don’t, you know, you America, you can have Europe. We don’t need it. I think yesterday, Putin said we’re now, Europe doesn’t have to impose sanctions on Russia’s gas and oil. We’re stopping our gas exports to Europe. Now that Iran has essentially destroyed much of the Middle Eastern gas export capacity, we’re now shifting our gas exports to our more friendly allies in the east. So, you know, this is the basic geopolitics, and there’s just a Russophobia in Europe, in the American press. It’s, it’s, and you’re right, much of the left is the Democratic Party. They’re not really the left at all. There’s, they’re it’s Russophobic.

Robinson Erhardt Again, to use your phrase, on a very large scale. You view World War three as being about ideology and global economic structure. But then you also said more locally within Iran. This war is about oil. First and foremost, is that correct?

Michael Hudson Yes, yes, because oil is such a key to the American balance of payments. And I mean, for one thing, economists don’t really know when they talk about trade theory, it’s all general. It’s an export or something they’ll call widgets, but they don’t look at the actual statistics for oil. That was my job on Wall Street at Chase Manhattan in the nineteen sixties, to study oil in the balance of payments. And then, the same for Arthur Andersen and for the United Nations. So I and I worked very closely. I think the balance of payments is something that isn’t taught in universities and certainly not, specifics like the form of the oil industry. You almost have to work in the field. And I was walked through it by the treasurer at Standard Oil of New Jersey. That was one of the backers of the statistical studies that I was doing for Chase. Well, I became, I was the only guy working on it.

Robinson Erhardt What I was going to ask, though, is granted, we’re not actually at war in Ukraine and Russia. What is this war about for us? For Trump.

Michael Hudson The attempt to hurt Russia, the only way, the only tool that America has left to it, is the ability to hurt other countries to create chaos. And so the Americans say we have something to offer you and the other countries that no other country has to offer. And you’re really going to want to take our offer? What we can offer you is to refrain from deranging your economy and causing chaos by suddenly closing the American market to you, which you’ve come to depend upon. imposing sanctions on you or overthrowing you with regime change. So if you back us, we will agree not to hurt you. We’ll stop hurting you if you give in to joining our sanctions policy so that we can break up Russia, break up Iran, and then finally confront China and try to break it up. Break it up. I mean, that’s the big picture.

Robinson Erhardt So at the outset of our conversation today, you mentioned that in discussing America’s foreign policy and how we got here, we wanted to begin by laying out sort of where we are today, and then turning to how we got here. And I’m wondering what the other critical elements or events of foreign policy are today. So we’ve got the war with Iran. We have our relationship with Israel. We have the Russia-Ukraine war. I also imagine maybe we should talk a bit more about our relationship with China, but I also wanted to ask what other events or situations we should be discussing before we turn to how we got here.

Michael Hudson It’s whatever you really find important. I mean, there are so many dimensions of this. It’s like an onion. I think the original hatred of Russia was the hatred of socialism. And the fact that Russia really did not provide anywhere near a real socialism that you had at least in Yugoslavia under Tito, was much more successful in that. And, the Chinese, when they decided to develop their socialism or industrial capitalism with Chinese characteristics, the last thing they ever wanted was any was to talk to Marxists from the West. They made that very clear to me, way back in the nineteen seventies. They, they. And the irony is that that was Milton Friedman, from the University of Chicago, going to Shanghai and, essentially, talking about how you need a free market. Government planning cannot possibly be innovative.

You need to let a hundred flowers bloom. And it was a sort of adopting this, flexibility of a mixed economy, a strong, social, socialist, social democratic, infrastructure. And that would give free rein to a private initiative and enterprise. And, that’s, that was the perfect mix. China achieved the very mix that Europe and America were going through in the late nineteenth century. So, this is basically it. The United States, when they de-industrialized, when, they de-industrialized and offshored the industry to China under the Clinton administration, they thought, okay, now we’ll just have Chinese cheap labor.

We’ll, have American companies come in, they can hire labor and factories over there to produce the goods that were not being made anymore. We’ll import them at a much lower cost than if we had to pay the high costs of American labor. And that was what America actually welcomed. They called it the post-industrial society. So they didn’t call it deindustrialization. There was already in the nineteen seventies, nineteen eighties, a whole discussion. Daniel Bell and others are talking about the post-industrial economy, post-industrial society.

There won’t be a working class anymore. No more blue-collar labour. Everybody will be a member of the professional managerial class, basically. And that was, that was sort of the imagery. Well, America’s been trying to maneuver to say, well, if another country, if China, industrializes, you know, let it industrialize and we’re all for it, but we have to be able to get the profits. It has to let American banks create credit and loans to, potential monopolies. Like we American banks would have loved to have financed. Jack Ma’s monopoly and others ended up with all of the stock market and financial gains that they did. But that’s not what China did. China wanted to keep its technology and its innovations, and in itself, and to create an institutional environment that prevented billionaires from becoming, let’s say, what Americans would call filthy rich.

Robinson Erhardt I can’t help but think that it’s important to ask, so long as we’re talking about the balance of global economic power, where you see AI fitting into the conflict to come, and our foreign policy, especially with a place like China.

Michael Hudson I really think it’s not my specialty. And I really can’t tell, the AI that the Americans are doing is very different from what the Chinese are doing. They focused on robotics, obviously, to a much greater extent. Robotizing factories, the, the, the key to artificial intelligence. Well, it’s precondition is electricity because there are just enormous requirements for electricity to run all of these computers. And secondly, the design of computer chips that America so far has had a monopoly and was hoping on, to have Nvidia show the enormous ability of to make hundreds of billions of dollars by innovating on computer chips.

The United States has tried to prevent the Dutch company that’s developed the ultra, Ultra violet etching machinery that costs, I think, twenty million dollars or so for each machine that’s sold. The United States has tried to keep that out of Chinese hands. And the United States, in the last year, has pressed Europe not to permit any Chinese company to own more than fifty percent of a company in China, because China is the enemy. This is a racist policy.

The first effect of this was that it said, well, you, to the Dutch government, you’ve got to close down. I’m sorry, I’m not pronouncing it right. Next. That is essentially, battery making, machinery because they’re, they’re keeping control in Chinese hands. And, if, if a company is owned by a Chinese. China is the existential enemy and is a threat to you. instead of looking at China as here’s our growth area that we can partner with China and let it, and we can both benefit. The United States has tried to block it. And the result is that battery makers throughout Europe right now are having real problems getting all of these very simple battery projects that the Nexperia company was, was producing. So, and you’re having a similar, you had a similar fight here over TikTok, where America said, we cannot have a Chinese media platform that is so successful in making so much money.

It must be controlled by Americans so that we can use TikTok to censor the discussions there were discussions on TikTok about American foreign policy. There were even criticisms that you shouldn’t have genocide against the Palestinians. And so that new buyers at TikTok had said we were going to, you know, they were going to block certain words. Like if they see the word Israel in anything, they block it. You having, you’re using AI to thought control and essentially, to impose fascism, cultural fascism on the country to prevent any kind of political discussion or economic discussion and analysis that is not America’s mainstream discussion.

You had the same thing with Paramount’s degree to take over, which Time Warner let. We have to control all of the media, and we’re going to use automatic intelligence to control the media, to, to scan the internet and to see who’s saying what and to block things you’re having. There was talk way back in the nineteen seventies about, well, the American and the Soviet economies converging. They’re all going in the same way.

Well, it turns out they are converging, but people thought that the convergence would be the Soviet Union breaking up and becoming more democratic. And it turns out that the American culture is becoming much more Soviet when it comes to the mass media, who’s who, the centralized control of the mass media in the United States, and the internet, TikTok and, the, the the entertainment and the news that you see on CBS. These days, you have all of this, a heavy degree of censorship. So AI in the United States is used very, very heavily for censorship. I suspect something similar occurs in every other country with AI, and it’s not necessarily very democratic. And it looks like the effect of AI is going to be to polarize economies and to create quite a bit of unemployment of those kinds of labor that can be replaced by AI, such as warehousing.

I think Amazon is trying to use AI to replace labor in its warehouses. And, you’ve seen factories in China where entire automobiles are made. The whole assembly line is done by robotics. That’s AI. So it’s transforming things. But to really develop it into something so-called supercomputing requires energy. And the fact that the United States is so committed to letting the oil industry dominate its policies across the board is that Donald Trump has said, well, we don’t want any alternative to oil in the United States or by the green policies of Europe. Talking about climate, control, and getting rid of carbon fuels.

Trump – one of the first things he did was to close down the wind energy, windmills, investments that were taking place in the United States, and to prevent solar energy from being developed here, very largely because China has taken the lead in making windmill blades and solar energy panels. So China has used much of the Gobi Desert area is essentially huge solar energy accumulation system to power its AI. Whereas the United States has a problem. How are they going to get the existing electricity that’s needed to operate AI without causing such an overload, low demand for electricity that you’re bidding up the electric prices, and it’s going to cost American workers and American businesses much more money to turn on the lights and operate their machinery? And to run the home.

So Trump has said, well, AI companies are going to have to produce their own electricity. And so far, this has turned out to be something very difficult to do in practice because of all of the administrative hurdles that are required to either to create a new electric utility extension or to create even independent sources of sulfur for the company. AI companies are producing their own energy. So America has a huge bottleneck blocking this. And as an economist, I can study the bottlenecks and I can look at the, wealth and income distribution patterns and stock market patterns without knowing that much about actually how the computer systems themselves work and whether it’s all self-referential and, AI, computers tend to make up fictions of their own and can make really, really big mistakes so that, you know, they end up, looking about as sophisticated as Donald Trump.

Robinson Erhardt When I asked you how you thought AI would figure into the economics of the future and how it figures into foreign policy, I had not expected that it would be your answer would be so closely related to energy, but it makes total sense, given that a lot of the news that I hear today about AI is. Oh, they’re building these huge warehouses in some rural area that’s causing tremendous power demands, surging power prices, and power surges in nearby areas. So it makes sense that energy is going to be so vital. And I wonder then, though, how this also fits into the shifting energy landscape in that energy today is being increasingly, or it increasingly comes from renewable sources. So how does this fit into the global landscape and dependence on oil, and how is power balanced because of the same?

Michael Hudson The United States is a single major backer of exacerbating global warming. Trump is absolutely, set against, withdrawing from the Paris Agreement on climate, as being the, as fighting any non-carbon energy. He’s totally; he acts as if a total lobbyist for the oil industry. And, is this policy one of the most dangerous American foreign policies? I didn’t get into the fact that supporting oil, and controlling the oil trade means, well, what’s the point of controlling the oil trade if there’s an alternative to oil to produce electricity and power? Well, solar energy, windmill energy, and renewable energy is a threat to the American control of that. So the byproduct of this American attempt to use oil is a choke point for the world. The world’s energy is creating a choke point in the form of all of this extreme weather that is sweeping across the entire world right now, causing such destruction.

Robinson Erhardt I guess I’d, I’d like to transition now from talking about the present to how we got here.

Michael Hudson I know much more about something.

Robinson Erhardt Well, then maybe I should let you take it from here. Then. What do you think are the crucial things that we should be looking at first when we ask this question, which is how we got here with our foreign policy?

Michael Hudson Well, how I got here from where the last time you asked me a question like that, I began by talking about the Bronze Age for forty five minutes.

Robinson Erhardt Well, I feel like two good periods to begin with. Granted that a lot of what we’ve been discussing has revolved around World War three is, maybe it would be good to start around World War One or World War Two, whichever you think makes more sense.

Michael Hudson Well, the aftermath of World War I was largely financial, and that was the fact internationally. The Inter-Allied debts. The Americans insisted that Europe pay for the arms that it had bought from the United States before the US entry into the war. My book, Super Imperialism, starts by explaining this whole period and the only way that Britain, France, and other allies could pay their debts that the United States ‘ insistence. That was unique in the past. After the Napoleonic Wars and other wars, allies usually forgave the war debts of each other’s countries because they were all together. But the United States said, ” We’re different, we’re not going to forgive. A loan is a loan. And so the Allies turned to Germany to impose reparations. That created an absolute economic crisis.

There was this idea, you could say that the legacy of World War One was to establish that once debts are undertaken, countries have an obligation to pay their foreign debts even before using their, Income and their fiscal resources to, for their own purposes and the fiction that governed economic thought, at the end of World War One, the, the financial sector got together with such a, thought control, such an intolerant autocracy that said, any country can repay its debts if you only cut back your payments to labor enough, if you can only impoverish your labor and industry by enough, you can pay your debts. This is the theory that David Ricardo developed of, it is saying that in Britain can of course, paper credit can be created, but other countries cannot create paper credit. And, the way to pay your foreign debt is to oppose austerity.

So Britain, forced into austerity, ended up with a general strike, and I think nineteen twenty-six France imposed austerity, had hyperinflation, and Germany imposed austerity. and by essentially throwing it, Deutschmarks onto the foreign exchange markets, which plunged the market exchange rate against in order to buy dollars to pay the allies to pay the United States. So, you had this, financial dominance of the world economy with one consequence of World War One, and that led to the economic collapse in nineteen of the stock market in nineteen twenty nine, and then the depression that led to World War Two. So you could say World War Two, and fascism was the product of the instability caused by the financial demands by the financial sector to get paid, specifically by the United States financial sector.

Therefore the legacy of World War Two was that the United States had ended up with three-quarters of the world’s gold stock, and that enabled it to use gold and bullion as a choke point in the economy. And it said, well, we’re creating the IMF and the World Bank, and, you know, we’re willing to lend you money, in order that you can recover. But you have, you’re not allowed to create your own money. You’re not allowed to do what Britain did with the Bank of England, which created paper currency. You’re not allowed to do what America does. You have to base all of your currency on hard money, on gold or on the US dollar. That was as good as gold. So the result of World War Two was, once again, to create a world economy centered on the financial power of the United States, which initially thought that, well, we can avoid what we did in World War One. We’re not going to insist on moving directly into a depression.

We’re going to say that, well, you can depend upon the dollar and, do your trade in dollars in a way that will enable you to develop at the same time. And, the but in order to join this American-centered world order, you have to agree on free trade. Well, the, the, the first geopolitical aim of American foreign policy after World War, during the closing days of World War two, nineteen forty four, was to break up the British Empire. America wanted to absorb it into the American economic area. Dollar area. We won’t call it an empire. I have a whole chapter, two chapters on this in my book, Super Imperialism. And so the United States said, well, the were for, one of the principles of the international order that we’re sponsoring is free trade. Countries can spend their savings wherever they want.

Well, that meant the end of Britain’s sterling area during World War Two. India and other British colonies had accumulated very large foreign reserves as a result of their supply of raw materials. So did Argentina and other Global South countries had that. Many of these were sterling area countries. And the Americans made an agreement as a condition for the British loan of nineteen forty four that Britain would not block these foreign savings by its colonies from being spent in Britain. They ended up being spent on the United States because the United States had the industrial power that Britain didn’t have. And other countries were not allowed to devalue their currency in order to gain an industrial advantage.

Britain had to promise not to devalue its sterling to a degree that would be competitive with American industrial exports. So you could say that the post-World War II order started with America destroying the British economic empire and also that of France, and other countries that were, and it was founded on pro-creditor rules that ended up with the fact that international debts grew exponentially at compound interest. And by the nineteen eighties, nineteen, you had the whole breakdown of the Latin American debt bomb, the whole Latin American default, the whole nineteen eighties were a period of default among internet among countries. And all the countries wanted to get free from the IMF at that time. They, they, they realized that if they, if a country was having to borrow from the IMF and it said, you have to impoverish your labor force. This is class war. This is America’s foreign policy is a class war against labor, above all. And, in order to pay your foreign debts, you have to agree to reduce your labor. wages of labor. As if that will make you more competitive. Well, of course, it didn’t make them more competitive.

The lower the labor costs you pay, the less productive it is. If you impose austerity, you don’t have the money to mechanize production to increase industrialization. The whole of America started World War two with the post-war period, with the ability to crush other countries’ ability to develop. So you had a dual economy developing during the whole post-1945 period. You had more industrialized economies in the West, Europe, the United States, and its allies. And you had the global South countries, the raw materials exporters that dissipated the foreign exchange savings that they’d accumulated during World War Two by essentially being forced to follow free trade, and were blocked from imposing protective tariffs, as the United States and all the European countries had done to build up their industry. They had to agree not to use government subsidy of industry like the United States was doing. And they had to agree not to produce their own food. That was the central role of the World Bank, which was willing to lend money for port development, road development, electrification, and other public infrastructure. But this would mean countries could not develop family farming. They could not undertake land reform to develop their own food production.

The tropical countries were obliged to focus on plantation crops from large plantations, largely foreign-owned, such as, most notoriously, the United Fruit Company in Guatemala, and the American government said we will assassinate any foreign leaders or governments that wanted to take control of their own land to feed themselves. They are. Feeding yourself is an. Viewed not only as a threat to American security, meaning our dominance, but as an act of war and it. Wage a war against Guatemala, Nicaragua, and the whole. Almost the whole of Latin America is dependent on the United States for its food. So the United States added foreign food dependency to the foreign oil dependency, that it had, and it fought against any socialist regimes in these countries, culminating in the fight against the Chilean regime, the destabilization of Latin American countries. So you had an increasingly belligerent American foreign policy that was designed to prevent any kind of socialist opposition. And in fact, any kind of attempt by countries to use government to develop their economies along the same industrial, strong government lines that the United States, Britain, and Germany had used to develop their own industry in the nineteenth century. That was, you could say, the shaping force of the world after nineteen forty-five.

Robinson Erhardt You mentioned that the post-World War II era was founded on sort of the destruction of the British Empire and the French Empire and these European empires. And I’m wondering if we could just briefly, I know it’s a distraction, I guess, from our main topic, which is US foreign policy and its place in the world order. But what has Europe’s trajectory been since this period, and where is it going today? How relevant is it?

Michael Hudson It’s a bit of a diversion. The question is: what is Europe? So that’s a trick question. On the one hand, you have what do the European voters want? They didn’t want a continued war with Russia. They didn’t. They wanted to heat their homes with inexpensive Russian gas. And they wanted to keep being employed by the industrial companies, the chemical companies, and the fertilizer companies importing Russian oil and gas. And so they’re against the Cold War conflict. The new Cold War conflict with post-Soviet Russia. But the leaders of these countries are Merz in Germany, Starmer in Britain, and Macron in France.

Look at the first wave of demonstrations by the farmers in France with their tractors against Macron. I think last summer and before, Macron is incredibly unpopular in France. Then you have Starmer in Britain, and you wonder how he ever could have gotten there. You have, the Labour Starmer has destroyed the Labour party, as being the apotheosis, the ultimate trajectory of where Tony Blair had been taking it. And so, Labour just came in third, after the Conservative Party, and even the Greens won, the last by election last week in, in Britain. So, Starmer has essentially ended the Labour Party’s role in Britain. And yet, he’s the prime minister. And then you have Merz in Germany, the hyper, Russophobe, and, you and you have the heads of the European Union, von der Leyen, and both of whom are extreme Cold War Russophobes, and their policies are to intensify the Cold War against Russia to the point of scaling back social spending programs.

Also, scaling back the subsidies that European governments have given to homeowners so that, well, it’s true. Now we know that it’s more expensive now that you’re buying U.S. liquefied natural gas, and four times the price that Russian gas would have cost. So we’re going to give you a subsidy so you can afford to heat your homes without suffering a decline in your living standards. Well, the, the, the, the Russophobe leaders have said, well, it’s, we’re, we’re going to end that. We’ve really got to devote our GDP much more to the GDP that in the past was based on social spending and helping your standard of living and keeping your employment going. Now we’re abandoning all this.

We’re sacrificing ourselves in the same way that our Ukrainian Democratic friends have done by engaging, accelerating our Cold War against Russia, because if we don’t fight them, you know, who knows? They’re going to be walking right through us on their way to Britain. So, what is Europe? Is Europe what the people want? Or is it that the governments of these countries, especially the European Union, are so anti-labour, so anti-industry, so willing to sacrifice German industry and European industry in general in order just to indulge in their hatred of Russia, that they’re willing to impose chronic depression on European industry? That, of course, now is greatly exacerbated by what’s happening in, in the Middle East, the, There’s a question of whether the European Union can remain.

The European Union has just said, we’re abolishing the principles of the Constitution. Forget what we wrote. If the Americans can ignore their constitution, we can do the same thing. We’re a democracy. We’re whatever the leaders tell us to do, we will do and forget the Constitution. Forget the written law. We’re essentially going to prevent the main constitutional feature of the EU was that it has to be unanimous, in that any country has the right to veto war spending and war power. Well, you have Hungary and Czechoslovakia. I’m sorry. The Czech Republic, slip of the tongue from my childhood usage, thing. Well, wait a minute. We don’t we cannot afford to go to war with Russia, and we need Russian oil. The Ukrainians have just blown up the Russian pipeline that was feeding oil to Hungary, threatening to cause a whole crisis there. And, the Europeans are essentially have just, abandoned NATO. They said NATO knows the rules of NATO no longer apply. The whole Enabling fiction of NATO was that if one country was attacked by an outside, we would all support it. They now say we will not support you if you’re attacked by a country that we like, like Ukraine, and we don’t like you. So, of course, any European country can be attacked at will by Ukraine or us or whoever wants, as long as they’re not a right-wing, financialized, neoliberal country. Well, this is not what the EU was supposed to be.

It wasn’t supposed to be a neoliberal, polarizing country. As an adjunct of NATO. And now that you have, the EU foreign policy leadership and the, the, fight, the, you could call it a legal civil war of the, of NATO against Hungary and the Czech Republic and other countries, members that want to say we don’t want to sacrifice our economic growth, just to fight Russia when Russia hasn’t attacked us. And it’s all a myth. You’re making up all these stories. This is all a fiction. The emperor has no clothes.

You know, the reality is we were doing just fine. Getting inexpensive Russian oil and gas and making Russia a profitable market for the industrial exports that we were making. There was a circular flow that was very good. And now you stopped it just because you personally and ethnically hate Russians and you’ve. You’re in. You’ve recovered the neo-Nazi. The old Nazi fight that the Russians and the Slavs are genetically inferior to the rest of the human race. We don’t believe in that genetic inferiority. This is. This is abhorrent. The reality is that the World Bank and every other observer says Ukraine was the most corrupt country in the Northern Hemisphere, that is, in America, says Ukraine is the democracy that we’re fighting for, just as Israel is the democracy that we’re fighting for. And the third great democracy we’re fighting for now is al-Qaeda in Syria.

Well, look at the three democracies that America’s holding up to protect the world and its allies against autocracy, which are involved in racist ethnic cleansing. What does that tell you about how the world is splitting up? So any rate, that was a long answer to, to Europe. Europe one has the European leaders have decided that, the wrong country, one or, one World war two and that, they’re going to refight World War two. And this time the Germans are going to win. I’m paraphrasing. I think that’s the inner meaning of chancellor emeritus, speak. Germany is going to win the war against Russia this time. And this is crazy, but that’s, that’s our ally. Germany is our land. An aircraft carrier. You could say, or an atom bomb carrier now, along with France, in the war against Russia.

Robinson Erhardt Again, I’m taken by your description or discussion of racism and ethnic cleansing in Ukraine, because, I mean, I’ve done a number of dedicated episodes about Israel and Palestine. And for those, I read many books. So I’m at least aware of this. I have a basic awareness of the issues going on. I’m not a scholar in these subjects, but I haven’t done that with Russia and Ukraine. And I remember at the outset of the war, hearing that this was one of Putin’s motivations, that there was persecution of Russian speakers in Ukraine. But I thought.

Michael Hudson And persecution, murder, mass murder, and bombing of their apartments. Destruction, killing. open killings.

Robinson Erhardt And what I had heard, though, at the time was that this was overblown. And not actually the case. And it was just an excuse for Putin to annex territory. So it’s interesting for me to hear from you that this is very much the case.

Michael Hudson Well, read the speeches of Zelenskyy. And, I think, Lavrov has certainly given his speeches. Describe the history, case by case, in great detail, the burning of all Russian language books, in public. The banning of the performance of Russian music by Russian composers. The banning of plays written by Russian playwrights. I mean, all of that is so well documented.

Robinson Erhardt Yeah. Well, I mean, one thing it tells me is that I need to do some dedicated episodes on this topic, just so that I have an excuse to spend more time studying it. But you mentioned earlier, you alluded to Europeans alleging that we’re ignoring the Constitution, so why can’t they ignore the Constitution, their own constitutions? And I happen to be taking a constitutional law course here right now. So I’m just particularly curious what about our Constitution? Do they or do you think that we’re ignoring right now that’s particularly relevant to our discussion?

Michael Hudson Well, in both cases of Europe and the United States. The First Amendment protects free speech. You can look at what the United States has done to punish the judges of the International Criminal Court who ruled that Netanyahu and Israel were war criminals, and against the UN, the United Nations rapporteur, who essentially presented the case against Israel. America has blocked the judges and the UN rapporteur from traveling to the United States has frozen, all of their assets in the United States has prevented the judges from, using, credit cards, for instance, has done, essentially has waged a personal war against them saying if any member of the quorum of the International Judiciary or the United Nations takes the policy that criticizes the United States, we will make life personal hell for them.

They do not have free speech. There’s also the move in the last month against a Swiss military historian — Baud — whose work was very good. They’ve essentially confiscated all of his money and banned him from the internet. You have, you have in Britain, the criminalization of making a public speech, criticizing Israeli policy against Palestine, or criticizing Ukrainian policy against the Russians. You’ve had a criminalization of free speech from the, in Europe, From Europe, the EU, to the United States and Britain. So you’re having all of these principles of constitutional law in these countries. And I wrote in my article that I wrote on Democracy Collaborative a few days ago. I go into all of the elements of international law and the Constitution that the United States has banned in its fight against the United Nations. Reporter and judge.

Robinson Erhardt Well, thank you for entertaining these digressions and tangents going back to — I mean, sorry — the United States’ trajectory from World War One to the present. When exactly was the apex of American and Geopolitical American economic and geopolitical power in this time period throughout the world? In the world. Well.

Michael Hudson The idea convinced the Europeans that what was at issue was private property, in debt, and that Europe’s government debts to the United States were, if the debts were not paid, that was a threat to the private property system. And that was socialism. So every means that Europe had for economic survival of its economies to avoid economic collapse that led to fascism was deemed socialism, just as, in Latin America, every attempt that governments made to achieve self-sufficiency in trade, self-sufficiency in their food that they could produce at home instead of importing, was called, socialism, and the demonization of, any government investment itself, any price regulation, any anti-monopoly or, action was considered an interference with the free market, the free market, meaning, there are no rules at all to provide, rentier exploitation, no rules to prevent monopoly rent, no rules to tax away land rent, which was the core policys.

As I said, from Adam Smith through John Stuart Mill to the Communist Manifesto to the entire, nineteenth century liberal movement of a free market, meaning a market free from rent seeking a market free from landlordism. A market free from monopolies. The whole economic vocabulary was transformed. And you could say the apex of American policy was to create a new fictitious narrative of how economies really developed, how Europe and the United States had successfully industrialized their own economies as a whole. And as we discussed in one of our first interviews, a rewriting of the origins of civilization, as if it all began as if Margaret Thatcher and Ronald Reagan got in a time machine and went back to Sumer and Egypt and created a free market. And that’s what created money and interest and all of civilization, whereas there never would have been a civilization if Margaret Thatcher and Milton Friedman had been advising the kings of Mesopotamia, Babylonia, and Egypt.

Robinson Erhardt Well, I imagine it is quite, quite difficult for you to predict the outcome of current events quite specifically, like what’s going to happen over the next week or two, let alone a few months in Iran, for instance. But I wonder, given that we’ve spoken about the trajectories of the United States of Russia, of Europe over the last hundred years or so, how do you see that playing out today and in the years or decades to come, like what’s happening in this global conflict over economic structure?

Michael Hudson Well, Donald Trump, in the last week, has said this war is going to be over in four weeks. But it’s not going to be over in four weeks. It’s going to go on to the point where it creates an economic depression in Western Europe, and in other certain other oil using countries. Now it’s true, they all have oil reserves. America has huge oil reserves. Europe has it. They’re going to, there’s going to be enough transition to avoid a quick depression because Europe is going to use up its oil reserves to prevent economic collapse, which would mean the political collapse at the polls of the leading Russophobic policies.

But the fact is that the whole financial trajectory that the West has taken since the nineteen eighties is, is going to break down. It’s been polarizing all the growth in wealth in Western Europe and the United States has accrued to the mainly to the wealthiest one percent of the population and at most the wealthiest ten percent. The ninety percent are being impoverished. Something has to give. Well, there really isn’t any left wing anymore. That’s the left wing. Doesn’t the ideology and the the the. Based on the value and rent theory that used to be socialism. Value, price, and rent. How do we bring prices in line with the actual cost value to minimize the cost of living and doing business?

So we can use the economic surplus to finance our own growth? All that’s gone. So you’re going to have China and other countries trying to pull ahead further and further by using government as the coordinator and engine of growth, and the Western countries opposing government, with neoliberalism, shifting economic planning away from the government sector to the financial sector. So you’re going to have a Financialized West, becoming increasingly polarized and impoverished compared to a more balanced public-private, throughout the Asian countries and Russia, that are joining together, more and more. And, the focus really is going to be on China, Russia, and Iran.

It’s not possible, really, to see what the other BRICs members are going to be; there really isn’t a BRICS ideology yet. There’s no ideology. It’s as if the rest of the world is acting just improvisationally on an ad hoc basis, without any kind of economic or theoretical context for what the purpose of our growth is. What’s the purpose of government, and for that matter, what’s the purpose of this Cold War? What does America want to achieve by conquering the war with Iran, except to carve it up and end up making Iran look just like Syria? We’ve destroyed Syria, Iraq, and Libya. Is the world going into the Middle East and end up like Libya and Syria, with al Qaeda and Israel together governing it? Or is it going to become more self-sufficient?

Saudi Arabia and the other Arab countries said, well, America promised that it would protect us. And that’s why we made all these loans to the United States and kept all our investments in the United States. But the United States didn’t protect us. Look, Iran has blown up our gas export capacity. They’ve blown up our oil world. They’re they’re, hitting us, at, well, maybe, we cannot depend on the United States in Europe anymore. And Europe apparently has said we’re going to join the United States, attack Iran, and come in.

And so that, you’re going to have the threat of it spreading. And, if Macron and Mertz succeed in actually giving Iran an atomic missile, to say, you know, now send it to Moscow and Saint Petersburg, Russia’s already said we’re going to retaliate against the countries that produced the missiles, and Iran, we realized our fight isn’t with Ukraine. Ukraine is merely the battlefield, the arena. Our fight is with Western Europe acting as a U.S. proxy. And, if we’re really threatened, existentially, with an atomic bomb from Europe. There won’t. I think Putin said, the war will last one day, there won’t be any more Europe. So, you know, that’s what it’s all about, confrontation. I think this time you’ll have, just as Iran is fighting back, you’ll have Russia fighting back and China fighting back, a spreading conflagration, at the same time that there’s a, a polarization and deindustrialization and economic depression in the West.

Robinson Erhardt So given that we’ve spoken so much about Iran today, maybe it would come as a surprise to you that I’m surprised to hear you say that the focus going forward will be on China, Russia, and Iran. But China and Russia, for a long time, have been discussed as I mean, these other crucial powers in the world order. And I’m wondering if Iran is so important just because there’s this war going on there right now, or if it’s because it’s important for the balance of powers in the Middle East, or because of its connection to oil, or just because it’s representative of something larger.

Michael Hudson Eighty percent of Iran’s oil exports go to China. Now, it’s true that only five percent of these exports are imports of oil from Iran. But China is dependent on Near Eastern oil, as are other countries. And it realizes that this fight in the Near East is for American control of oil with the intent of depriving China of oil from either Iran or the OPEC countries generally. And just I think in the last twenty-four hours, you had Britain, I think, a Russian tanker off Gibraltar and carrying oil that, Europe has said we’re going to block Russian tankers from access to the Baltic so that other countries cannot import Russian oil. And, all of this is an attempt to squeeze China.

China will be hurt by the inability to obtain access to oil, which drives its industry despite all of its leadership in creating alternatives to carbon fuels; it still needs it. So China needs Iran, and to use Iran is the protection against al Qaeda and the crazy, vicious Wahhabism that is being used to train, what? Thinking, Uyghur areas, too, have terrorism. Do you have Syria and Ukraine training, anti-Chinese figures to try to break the Uyghur area, Xinjiang province, away from China right there? So, this, this fight, in Ukraine and Iran directly affects China’s integrity because the intent is to break up, to use the Islamic terrorism and the US terrorism and the Israeli terrorism and the Ukrainian terrorism all together to break up, Russia, China, and Iran into component parts. This is a purely destructive core of American policy and European and Western policy that is forcing China to make this a world conflict. So, all the to answer your questions, all three, it’s about oil. It’s about the military. It’s about the larger picture, and it’s about the whole, whether there’s going to be, in fact, an economic freedom of countries to act in their sovereign self-interest or whether America will succeed in using terrorism to prevent countries from doing that.

Robinson Erhardt Well, the last question I will ask you for today is, you and I, a little over a year ago, we had a joint conversation with Rick Wolfe. And I’ve had many conversations with him about the, quote unquote, American empire and its decline. And I’m just wondering if how you how you see the American empire going forward? Is it declining precipitously? What are things going to look like in five, ten, and fifteen years?

Michael Hudson Well, it’s already transformed into the opposite strategy of what it was after World War Two. That was what the national security strategy said last December. We’re no longer basing ourselves on the international law of the sovereignty of nations. We’re asserting American dominance. So, this transformation is a sign that the positive basis that enabled America to create an empire by being industrially and financially strong, it no longer exists. And so, you could say that the turn into saying all that we have left is America’s ability to create chaos in other countries. This is not a long-term solution.

At some point, other countries are going to say, we want to avoid chaos. We have to act on our own to prevent chaos in the way that we do, that we’re not going to fight with America. We’re not going to fight with Europe. We’re just going to decouple. You go your way, and we get our way.

So instead of the United States succeeding in isolating Russia, China, and Iran, the United States will end up isolating itself from the global majority. And that’s essentially like once you’ve isolated yourself from the majority of the world, and all you’re left with is Western Europe that you’ve impoverished by, dragging it into the Cold War, sanctions against Russia, then you’re economically shrinking. And if you’re economically shrinking, then your ability to finance your world military presence by other countries. Transferring their wealth to you is all over. And that’s what empires are all about. Empires impose tribute. America has lost its ability to extract tribute, except by threatening to cause chaos in other countries. And other countries are now trying to decouple as radical as rapidly as they can. That’s why Merz has gone to China. Starmer has gone to China. And why the Europeans are saying, maybe we made a wrong, we backed the wrong horse.

Robinson Erhardt Well, Michael, as always, it’s been an absolute pleasure talking to you. So thanks so much for joining me today.

Michael Hudson Well, it was a far ranging discussion. Thanks for having me, Robinson. I’m glad we could tie all these different strands together into a system.

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