The destruction of a great empire

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By MICHAEL HUDSON*

US attempts to trap the world in an antithetical imperial system, face their reckoning

Herodotus (History, Book 1.53) tells the story of Croesus, king of Lydia (c. 585-546 BC), an ancient state located in what is now the westernmost part of Turkey, on the coast of the Aegean Sea. Croesus conquered Ephesus, Miletus, and the neighboring Greek-speaking kingdoms, obtaining booty and tribute that made him one of the richest rulers of his time. But these victories and wealth led him to arrogance and excess. Croesus then turned his eyes to the east, with the ambition of conquering Persia, ruled by Cyrus the Great.

Having endowed the cosmopolitan Greek temple at Delphi with a substantial quantity of gold and silver, Croesus resolved to consult his oracle as to whether he would succeed in the conquest he envisaged. The Pythian priestess replied, "If you go to war against Persia, you will destroy a great empire."

So Croesus left to attack Persia in 547 BC. C. Marching east, he attacked Phrygia, a vassal state of Persia. Cyrus mounted a special military operation to repel Croesus, defeating Croesus' army and capturing him. He took the opportunity to seize Lydia's gold and introduce his own Persian gold coinage. Thus, as the oracle predicted, Croesus did indeed destroy a great empire: his own.

Looking at the current campaign of the Joe Biden administration to advance American military might against Russia and, after it, China, it seems that this president also asked for advice from his contemporary analogues of the oracle of Delphi: the CIA and the think tanks from its orbit. But instead of warning against arrogance, they encouraged the neoconservative dream of attacking Russia and China, in the outlandish hope of consolidating US control of the world economy once and for all and achieving the “End of History”.

Having staged a coup d'état in Ukraine in 2014, the United States sent its NATO proxy army eastwards, giving Ukraine weapons to wage an ethnic war against its Russian-speaking population, hoping also to transform the Russian naval base. of Crimea in a NATO stronghold. In the same perspective as Croesus, this ambition aimed to draw Russia into combat and exhaust its ability to defend itself, destroying its economy in the process and, in addition, its ability to provide military support to China and other countries targeted by the United States for seek self-sustainability as an alternative to US hegemony.

After eight years of provocations, a new military attack against Russian-speaking Ukrainians was very conspicuously prepared, to be launched towards Russian borders in February 2022. Russia has protected its ethnic Russian compatriots from further violence by mounting its own Special Military Operation. The United States and its NATO allies immediately seized Russia's foreign exchange reserves held in Europe and North America, and demanded that all countries impose sanctions against imports of Russian energy and grain, hoping that this would bring down the exchange rate of the ruble.

The Delphic Department of State also hoped that this would cause Russian consumers to revolt and overthrow the government of Vladimir Putin, paving the way for North American maneuvers to install a clientel oligarchy, like the one it had sustained in the 1990s, under the presidency by Boris Yeltsin.

One of the by-products of this confrontation with Russia would be to guarantee US control over its Western European satellites. The purpose of this intra-NATO maneuver was to thwart Europe's dream of profiting from closer trade and investment relations with Russia by trading its industrial manufactures for Russian raw materials. The United States derailed that expectation by blowing up the Nord Stream gas pipelines, cutting off access to cheap Russian gas by Germany and other countries. That left Europe's main economy reliant on the higher-cost US liquefied natural gas (LNG).

In addition to having to subsidize European domestic gas to avoid widespread insolvency, a large proportion of German Leopard tanks, US Patriot missiles and other NATO “miracle weapons” are being destroyed in combat against the Russian army. It has become clear that the US strategy is not just to “fight to the last Ukrainian”, but to fight to the last tank, missile or other weapon that is available in NATO stockpiles.

This depletion of NATO weapons was expected to create a vast replacement market to enrich the US military-industrial complex. Clients in NATO are being told to increase their military spending to 3 or even 4% of GDP. But the poor performance of American and German weapons on the Ukrainian battlefield may have shattered that dream as Europe's economies plunge into depression. And with Germany's industrial economy troubled by the cut off of its trade with Russia, German Finance Minister Christian Lindner told the newspaper The World on June 16, 2023 that your country cannot commit more resources to the budget of the European Union, to which, for a long time, it has been the largest contributor.

Without German exports to support the euro's exchange rate, the currency will come under pressure against the dollar as Europe buys LNG and NATO replenishes its depleted weapons stockpiles with the purchase of new US weaponry. A lower exchange rate will reduce the purchasing power of European labor, while reduced social spending to pay for rearmament and provide gas subsidies is already plunging the continent into a depression.

A nationalist backlash against US dominance is growing across European politics, and instead of the United States retaining its grip on European politics, it may end up losing it – and not just in Europe, but especially across the world. Global South. Instead of turning the “ruble into rubble,” as President Joe Biden promised, Russia's trade balance soared and its gold supply soared. The same happened with the gold reserves of other countries whose governments now intend to de-dollarize their economies.

It is US diplomacy that is pushing Eurasia and the Global South out of US orbit. The country's arrogant drive to dominate a unipolar world could only have been so quickly dismantled from within. The Biden-Blinken-Nuland administration has done what neither Vladimir Putin nor Chinese President Xi Jinping could have hoped to achieve in such a short period of time. Neither was prepared to issue the gauntlet and create an alternative to the US-centered world order. But the US sanctions against Russia, Iran, Venezuela and China had the effect of protective tariff barriers to force self-sufficiency, in that space that the European Union diplomat, Josep Borrell, called the world “jungle”, outside the “garden”. ” of the United States/NATO.

While the Global South and other countries have complained about US dominance since the Bandung Conference of Non-Aligned Nations in 1955, they lacked the critical mass to create a viable alternative. However, their attention was now focused on the US confiscation of Russia's official dollar reserves in NATO countries. This dispelled any image of the dollar as a safe resource for maintaining international savings. The Bank of England's earlier seizure of Venezuela's gold reserves held in London - promising to donate them to any unelected opponents (to its socialist regime) that American diplomats would designate - shows how the pound sterling and the euro, as well like the dollar, they were turned into weapons. By the way, what happened to Libya's gold reserves?

US diplomats avoid thinking about this scenario. They rely on the only advantage the United States still has to offer: refraining from bombing their victims, from staging color revolutions to “pinochet” them at least. National Endowment for Democracy, or install new “Yeltsins” that hand over local economies to clientelistic oligarchies. And such an abstention is all the United States can offer. They have deindustrialized their own economy, and their idea of ​​foreign investment is nothing more than creating monopoly income opportunities, concentrating technological monopolies and control of the oil and grain trade in American hands, as if this were economic efficiency, not mere wealth predation.

What happened then was a shift in consciousness. We are watching the global majority seek to create an independent and peacefully negotiated option as to what kind of international order they want. Its aim is not just to create alternatives to the use of the dollar, but a whole new set of institutional alternatives to the IMF and World Bank, the SWIFT bank clearing system, the International Criminal Court and the full range of institutions that US diplomats have hijacked. of the United Nations.

The result will be civilizational in scope. We are not seeing the “End of History”, but a new alternative to US-centered neoliberal financial capitalism and its ruinous economy of privatization and class war against work. The idea that money and credit should be privatized in the hands of a narrow financial class, rather than being a public utility to finance economic needs and raise living standards, is finally facing its reckoning.

The irony is that the historic role of the United States has been that, even if they themselves have not been able to lead the world in this regard, their attempts to trap the world in an antithetical imperial system, intending to beat Russia on the plains of Ukraine and isolating Chinese technology (in its effort to break the US IT monopoly) were the major catalysts that ended up driving the global majority away from the US.

*Michael Hudson is a professor at the University of Missouri, Kansas City. Author, among other books by Super Imperialism: The Economic Strategy of the American Empire (Island).

Translation: Ricardo Cavalcanti-Schiel.

Originally published on website by the author.


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