Super Imperialism The Economic Strategy ... - Michael Hudson

1 Super Imperialism The Economic Strategy of American Empire Michael Hudson 2nd edition 2003 (1st edition 1972) PLUTO PRESS RELEASE 25 11 3 HOW AMERICA WILL GET EUROPE TO FINANCE ITS 2002-03 OIL WAR WITH 3 WHAT MAKES TODAY S Super Imperialism DIFFERENT FROM PAST PRIVATE ENTERPRISE 3 HOW THE UNITED STATES MAKES OTHER COUNTRIES PAY FOR ITS 4 AMERICA S FREE LUNCH AS EUROPE S AND ASIA S 5 PREFACE TO THE SECOND EDITION (2002) .. 7 15 THE DILEMMA OF AMERICAN Economic DIPLOMACY IN THE INTERWAR 16 AMERICAN PLANS FOR A POSTWAR FREE-TRADE Imperialism .

2 19 AMERICA EMBARKS ON A COLD WAR THAT PUSHES ITS BALANCE OF PAYMENTS INTO 23 THE NEW CHARACTERISTICS OF AMERICAN FINANCIAL 25 HOW AMERICA S PAYMENTS DEFICIT BECAME A SOURCE OF STRENGTH, NOT 30 IMPLICATIONS FOR THE THEORY OF 31 TODAY S SOURCE OF FINANCIAL INSTABILITY AS COMPARED TO THAT OF THE 33 THE WORLD S NEED FOR FINANCIAL AUTONOMY FROM 37 CHAPTER 1: ORIGINS OF INTER-GOVERNMENTAL DEBT, 41 CHAPTER 2: BREAKDOWN OF WORLD BALANCE, 1921-33 .. 56 CHAPTER 3: AMERICA SPURNS WORLD LEADERSHIP .. 75 ROOSEVELT MEETS WITH HOOVER TO DISCUSS THE DEBT 78 FRANCE DEFAULTS AND BRITAIN PAYS ONLY A TOKEN 81 MACDONALD AND HERRIOT VISIT 86 PREPARING FOR 89 ROOSEVELT S BOMBSHELL BREAKS UP THE LONDON Economic 91 CHAPTER 4: LEND-LEASE AND FRACTURING OF THE BRITISH EMPIRE, 108 CHAPTER 5: BRETTON WOODS: THE TRIUMPH OF GOVERNMENT FINANCE CAPITAL.

3 119 CHAPTER 6: ISOLATING THE COMMUNIST 141 CHAPTER 7: AMERICAN Strategy WITHIN THE WORLD BANK .. 155 THE BANK S TRANSITION FROM RECONSTRUCTION TO DEVELOPMENT 160 HOW WORLD BANK OPERATIONS ARE BIASED TO AID THE UNITED 169 CHAPTER 8: THE Imperialism OF FOREIGN 187 THE MILITARIZATION OF FOREIGN 190 THE ROLE OF AID RECIPIENTS IN AMERICA S BALANCE OF TRADE AND 193 2 HOW AMERICA S MILITARY SPENDING DERANGED ITS INTERNATIONAL PAYMENTS AND AID 194 HOW FOOD AID PROMOTES AGRICULTURAL 196 HOW FOOD AID HAS HELPED THE BALANCE OF 199 FOREIGN AID AND COLD WAR 202 THE THIRD WORLD S DOLLAR-DEBT 206 CHAPTER 9.

4 GATT AND THE DOUBLE STANDARD .. 213 CHAPTER 10: DOLLAR DOMINATION THROUGH THE IMF, 1945-1946 .. 227 HOW BRITAIN WAS 229 STABILIZING CURRENCIES TO PROTECT AGAINST COMPETITIVE 233 HOW FIXED CURRENCY PARITIES LED TO STERLING S 237 HOW THE UNITED STATES SET THE 238 THE MARGINAL CHARACTER OF EARLY IMF LOAN 241 ADD-ON FOR CHAPTER 244 CHAPTER 11: FINANCING AMERICA S WARS WITH OTHER NATIONS RESOURCES, 1964-1968 .. 248 CHAPTER 12: POWER THROUGH BANKRUPTCY, 1968-1970 .. 263 CHAPTER 13: PERFECTING EMPIRE THROUGH MONETARY CRISIS, 279 AMERICA S ILLEGAL TEXTILE QUOTAS SPUR FOREIGN 279 EUROPE S THREATS OF FINANCIAL AND TRADE 281 THE SUMMER 1971 DOLLAR CRISIS FORCES UP EUROPE S EXCHANGE 283 AUGUST 15 AND ITS 289 EUROPE S AUTUMN 1971 292 CHAPTER 14: THE MONETARY OFFENSIVE OF SPRING 1973.

5 297 CONDOMINIUM? .. 317 CHAPTER 15: MONETARY Imperialism .. 324 FOOD Imperialism VS. A NEW INTERNATIONAL Economic 326 THE MONETARY Imperialism IMPLICIT IN THE TREASURY-BILL 328 EPILOGUE .. 333 3 Pluto Press Release 25 11 2002 How America will get Europe to finance its 2002-03 Oil War with Iraq Michael Hudson Last time around, in the 1991 Gulf War, America got its allies to bear most of the costs voluntarily. After all, diplomats claimed, wasn t the war fought to protect Kuwait and the next petro-domino, Saudi Arabia, from Iraqi attack and in the process to protect Europe s oil and gas supplies from an aggressive grabber?

6 Wasn t it therefore fair to ask the Saudis and Kuwaitis, along with the Germans, British and other countries to bear the lion s share of the cost of the oil war fought for their own benefit? Europe and the Near East agreed to pay, and their central banks turned over some of the excess Treasury bonds they had accumulated by running year after year of trade and payments surpluses with America. And almost immediately, these central banks dollar holdings filled up again with dollars that were unspendable and had little value, except to give back to the United States or let accumulate for no real purpose.

7 This Treasury-bond standard of international finance has enabled the United States to obtain the largest free lunch ever achieved in history. America has turned the international financial system upside down. Whereas formerly it rested on gold, central bank reserves are now held in the form of Government IOUs that can be run up without limit. In effect, America has been buying up Europe, Asia and other regions with paper credit Treasury IOUs that it has informed the world it has little intention of ever paying off. And there is little Europe or Asia can do about it, except to abandon the dollar and create their own financial system.

8 Michael Hudson s Super Imperialism : The Origins and fundamentals of World Dominance explains how the dollar s being forced off gold in 1971 led to a new international financial system in which the world s central banks are obliged to finance the balance of payments deficit by using their surplus dollars in the only way that central banks are allowed to use them: to buy Treasury bonds. In the process, they finance the Government s domestic budget deficit as well. The larger America s balance-of-payments deficit becomes, the more dollars end up in the hands of European, Asian and Near Eastern central banks, and the more money they must recycle back to the United States by buying Treasury bonds.

9 Over the past decade American savers have been net sellers of government bonds, putting their own money into the stock market, corporate bonds and real estate. Foreign governments have been obliged to hold bonds whose interest rates have fallen steadily, while their volume now exceeds America s ability or willingness to pay. What makes today s Super Imperialism different from past private enterprise Imperialism Past studies of Imperialism have focused on how corporations invest in other countries, extracting profits and interest.

10 This phenomenon occurs largely via private-sector investors and exporters. But today s novel form of international financial 4imperialism occurs among governments themselves, and specifically between the Government and the central banks of nations running balance-of-payments surpluses. The larger their surpluses grow, the more dollars they are obliged to put into Treasury securities. Hence, the book s title, Super Imperialism . How the United States makes other countries pay for its wars Since Europe s Middle Ages and Renaissance, going to war has left nations with heavy public debts, which in turn have needed to be financed by raising taxes.