1
1
A "Super Imperialism" model "pressed foreign governments to regulate their nations' trade and investment to serve US national objectives...Washington Consensus (diktats) made aid borrowers more dependent on their creditors, worsened their terms of trade by promoting raw materials exports and grain dependency, and forestalled needed social modernization such as land reform and progressive income and property taxation."
US companies thus achieved a competitive advantage, not in the marketplace, but by Washington Consensus rules and the Bretton Woods institutions it controls - the IMF, World Bank, etc. What's good for US business benefits America overall and its Super Imperial ambitions.
Today's Source of Financial Instability Compared to the 1920s
The earlier period had a shortage of liquidity. By the early 1970s, it was in surplus, the result of the enormous volume of dollar inflows in world economies. The Korean War began shifting America's balance-of-payments from surplus to deficit. In 1971, Vietnam forced it off gold and "induced a US debtor-oriented international financial policy (with) the rest of the world" - something other nations have been trapped by ever since.
US deficits have disrupted world economies, but its character has changed. Not only does it finance US militarism, but it also "sustain(s) America's stock market and real estate bubble" while at the same time industrial America erodes. In addition, pressure is applied to privatize public enterprises to let this sector pass "into the hands of global finance capital....controlled and shaped by the Washington Consensus."
Under a "new state-capitalist form of imperialism," central banks, not industry, "are the vehicle for balance-of-payments exploitation" with the dollar as the world's reserve currency. It's Super Imperialism because one nation alone gets a Free Lunch right to benefit by getting others to finance its deficits and reckless spending.
The system's unique feature is that other countries may extract their citizens' wealth, but only America extracts theirs through the sale of its Treasury securities.
The World's Need for Financial Autonomy from Dollarization
In its relationship with client countries, America's dollarization policy imposes dependency, not self-sufficiency. It drains "the financial resources of its Dollar Bloc allies (and retards) the development of indebted third world raw-materials exporters...." But its gain isn't put to productive use. It's used instead for militarism and financialization at the expense of its former industrial strength.
It's an unsustainable system, but for other countries to break away, they'll have to renounce Chicago School alchemy, the austerity programs it imposes, and advantages it gives America in trade and other relations. It drains other nations' resources by trapping emerging economies in chronic debt and developed ones into forced buying of US Treasuries.
In return, America gets a Free Lunch. It rules as world debtor, forces other countries into creditor bondage, and threatens to bring down the global monetary system if enough of them balk. So far it's worked because Europe and Asia lack the political will to devise a "New International Economic Order" so nations producing economic gains can keep them and not let America use them to reinforce its "new kind of centralized global planning" - one based on financialization and a US Treasury securities standard, not industrial mechanisms. In WTO terms, it transfers foreign trade gains from other economies to the US, drains their resources overall, promotes dependency, not self-sufficiency, and backs it with hardline militarism and threats of systemic monetary collapse.
Eventually, exploited countries won't tolerate more "taxation without representation," a "quid without quo," a Free Lunch from "the world's payments-surplus nations." The longer America demands it by glutting world economies with dollars, the more likely disadvantaged nations will object. Hudson put it this way in his Project Censored award-winning article:
Today, "the only way a nation can block capital movements is to withdraw from the IMF, the World Bank and the World Trade Organization (WTO). For the first time since the 1950s, this looks like a real possibility, thanks to the worldwide awareness" of America's dirty game and how it harms them.
"De-Dollarization and the Ending of America's Financial-Military Empire"
In his June 14, 2009 article, Hudson explained that "Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO)" had a two-day June 15 - 16 meeting in Yekaterinburg, Russia, with Brazil attending on the 16th. SCO countries include Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan, Uzbekistan with Iran, India, Pakistan and Mongolia having observer status.
The meeting's stated purpose was "to discuss mutual aid," not challenge America's financial and military empire. Yet it potentially may be pivotal by doing just that.
