Written by John Lounsbury
After the US came off the gold standard Michael Hudson wrote a book which became a handbook for the US government. The book was ‘Super Imperialism‘, published in 1973. It defined how the US became the dominant global monetary power following World War I and continued to build on that position through World War II and the years following.
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Prof. Hudson wrote a second edition, published in 2003. Later this year a third edition is expected. In January this year he made a presentation ‘Changes in Superimperialism‘ to the Oxford Economics Club discussing some of the material going into the 3rd edition.
Summary of the presentation from You Tube:
Nearly 50 years after the original publication of “Superimperialism”, Michael Hudson revisits how the lucrative dollar-based economic system that the US set up after WWII has evolved with the rise of China and the Covid-19 pandemic. What financial weapons is the US likely to use, and does China’s de-dollarisation protect it from such attacks?
The book provides a detailed analysis of how the US has used its economic might to control international relations. The book is complicated, but essentially documents how after WWII the US held an unprecedented amount of the world’s gold reserves (50%). These reserves were depleted with the incursion into Korea, and subsequent involvement in Viet Nam, requiring the US to abandon the “gold standard” for valuing world currencies. A failure that proved itself valuable, pushing the US to develop multiple strategies that today allow it to make other countries pay for its military dominance.
From Amazon (about the 2003 2nd edition):
Michael Hudson’s brilliant shattering book will leave orthodox economists spluttering. Classical economists don’t like to be reminded of the ugly realities of Imperialism. Hudson is one of the tiny handful of economic thinkers in today’s world who are forcing us to look at old questions in startling new ways. —Alvin Toffler, best-selling author of Future Shock and The Third Wave
This new and completely revised edition of Super Imperialism describes the genesis of America’s political and financial domination. Michael Hudson’s in-depth and highly controversial study of U.S. financial diplomacy explores the faults built into the core of the World Bank and the IMF at their inception which — he argues — were intended to preserve the US’s financial hegemony.
Difficult to detect at the time, these problems have since become explicit as the failure of the international economic system has become apparent; the IMF and World Bank were set up to give aid to developing countries, but instead many of the world’s poorest countries have been plunged into insurmountable debt crises.
Hudson’s critique of the destructive course of the international economic system provides important insights into the real motivations at the heart of these institutions – and the increasing tide of opposition that they face around the world.
From Wikipedia:
Michael Hudson (born March 14, 1939) is an American economist, Professor of Economics at the University of Missouri – Kansas City and a researcher at the Levy Economics Institute at Bard College, former Wall Street analyst, political consultant, commentator and journalist.
Hudson graduated from the University of Chicago (B.A., 1959) and New York University (MA, 1965, PhD, 1968) and worked as a balance of payment economist in Chase Manhattan Bank (1964 – 1968). He was assistant professor of economics at the New School for Social Research (1969 – 1972) and worked for various governmental and non-governmental organizations as an economic consultant (1980s – 1990s). [2]
Hudson has extensively studied economic theories of many schools, including Physiocracy, classical political economy (Adam Smith, David Ricardo and Karl Marx, among others), neoclassical, Keynesian, post-Keynesian, Modern Monetary Theory and many others. He identifies himself as a classical economist. His interpretation of Marx is almost unique to him and differs from major Marxists.
Hudson devoted his entire scientific career to the study of debt, both domestic (loans, mortgages and interest payments) and external. In his works, he consistently advocates the idea that loans and exponentially growing debts that outstrip profits from the economy of the real sphere are disastrous for both the government and the people of the borrowing state as they wash money (going to payments to usurers and rentiers) from turnover, not leaving them to buy goods and services and thus lead to debt deflation of the economy. Hudson notes that the existing economic theory (the Chicago School in particular) is in the service of rentiers and financiers and has developed a special language designed to create the impression that the current status quo has no alternative. In a false theory, the parasitic encumbrances of a real economy, instead of being deducted in accounting, add up as an addition to the gross domestic product and are presented as productive. Hudson sees consumer protection, state support of infrastructure projects and taxation of parasitic rentier sectors of the economy instead of taxing workers as a continuation of the line of classical economists today.
This video is 57 minutes long. Prof Hudson starts speaking at 2:16, following an introduction by Oxford Economics Club Co-President Oscar Brisset. The presentation ends at 40:10, followed by Q&A.
Source: YouTube
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