[News] How the Global Majority can free itself from US financial colonialism

Thu Jul 17 13:58:58 EDT 2025

Economist Michael Hudson describes how China created an alternative to 
the Western neoliberal order, and how the Global South can challenge the 
rent extraction of US-centered financial colonialism.
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  Michael Hudson: How the Global Majority can free itself from US
  financial colonialism
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      Economist Michael Hudson describes how China created an
      alternative to the Western neoliberal order, and how the Global
      South can challenge the rent extraction of US-centered financial
      colonialism.

Jul 17, 2025

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By Michael Hudson 
<https://substack.com/redirect/02fcb653-0b21-4c01-bbc0-e3ce21294beb?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>

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Industrial capitalism was revolutionary in its fight to free Europe’s 
economies and parliaments from the hereditary privileges and vested 
interests that survived from feudalism. To make their manufactures 
competitive in world markets, industrialists needed to end the land rent 
paid to Europe’s landed aristocracies, the economic rents extracted by 
trade monopolies, and interest paid to bankers who played no role in 
financing industry. These /rentier/incomes add to the economy’s price 
structure, raising the living wage and other business expenses, thus 
eating into profits.

The 20^th century saw the classical aim of clearing away these economic 
rents rolled back in Europe, the United States, and other Western 
countries.

However, today, land and natural-resource rents in private hands are 
still rising and even receiving special tax advantages. Basic 
infrastructure and other natural monopolies are being privatized by the 
financial sector — which is largely responsible for carving up and 
de-industrializing economies on behalf of its real estate and monopoly 
customers, who pay out most of their rental income as interest to 
bankers and bondholders.

What has survived from the policies by which Europe’s industrial powers 
and the United States built up their own manufacturing is free trade. 
Britain implemented free trade after a 30-year fight on behalf of its 
industry against the landed aristocracy, aimed at ending the 
protectionist agricultural tariffs, the Corn Laws, which had been 
enacted in 1815 to prevent opening the home market to low-priced food 
imports, which would have reduced farming rents.

After repealing these laws in 1846 to lower the cost of living, Britain 
offered free-trade agreements to countries seeking access to its market 
in exchange for these countries not protecting their industry against 
British exports. The aim was to deter less industrialized countries from 
working up their own raw materials.

In such countries, Europe’s foreign investors sought to buy 
rent-yielding natural resources headed by mineral and land rights, and 
basic infrastructure headed by railroads and canals. This created a 
diametric contrast between rent-avoidance in the industrial nations and 
rent-seeking in their colonies and other host countries, while European 
bankers used debt leverage to gain fiscal control of former colonies who 
had won independence in the 19^th and 20^th centuries.

Under pressure to pay the foreign debts that were run up to finance 
their trade deficits, development attempts, and deepening debt 
dependency, debtor countries were obliged to relinquish fiscal control 
of their economies to bondholders, banks, and creditor-nation 
governments, which pressed them to privatize their basic infrastructure 
monopolies. The effect was to prevent them from using revenue from their 
natural endowments to develop a broad economic base for prosperous 
development.

Just as Britain, France, and Germany aimed to free their economies from 
feudalism’s legacy of the vested interests with rent extraction 
privileges, most of today’s Global Majority countries need to free 
themselves from the rent and debt overhead inherited from European 
colonialism and creditor control.

By the 1950s these countries were being called “less developed” or, even 
more patronizingly, “developing.” But the combination of foreign debt 
and free trade has blocked them from developing along the balanced 
public/private lines that Western Europe and the United States followed.

The tax policy and other legislation of these countries has been shaped 
by U.S. and European pressure to observe international trade and 
investment rules that perpetuate geopolitical domination by Western 
bankers and rent-extracting investors to control their national patrimony.

The euphemism “host economy” is appropriate for these countries, because 
the Western economic penetration of them resembles a biological parasite 
feeding off its host.

Seeking to maintain this relationship, the U.S. and European governments 
are blocking attempts by these countries to follow the path that 
Europe’s industrial nations and the United States took for their own 
economies with their 19^th -century political and fiscal reforms that 
empowered their own takeoff.

Without these countries adopting fiscal and political reforms aimed at 
developing their own sovereignty and prospects for growth on the basis 
of their own national patrimony of land, natural resources and basic 
infrastructure, the world economy will remain bifurcated between Western 
/rentier /nations and their Global Majority hosts and held subject to 
neoliberal orthodoxy.

      The success of China’s model poses a threat to the neoliberal order

When U.S. political leaders single out China as an existential enemy of 
the West, it is not as a military threat but for offering a successful 
economic alternative to today’s U.S.-sponsored neoliberal world order.

That order was supposed to represent the End of History, succeeding 
through its logic of free trade, government deregulation, and 
international investment free of capital controls, while detouring away 
from industrial capitalism’s anti-/rentier/policies.

We can now see the absurdity in this self-satisfying evangelical view 
that had emerged just as Western economies were deindustrializing, as a 
result of the dynamics of their neoliberal finance capitalism.

The vested financial and other /rentier/interests are rejecting not only 
China but the logic of industrial capitalism as described by its own 
19^th -century classical economists.

Western neoliberal observers have closed their eyes to recognizing the 
ways in which China’s “socialism with Chinese characteristics” has 
achieved its success by a logic similar to that of the industrial 
capitalism advocated by classical economists to minimize/rentier/income.

Most late 19^th -century economic writers expected industrial capitalism 
to evolve into socialism of one form or another, as the role of public 
investment and regulation increased. Freeing economies and their 
governments from control by landowners and creditors was the common 
denominator of the social-democratic socialism of John Stuart Mill, the 
libertarian socialism of Henry George focusing on the land tax, and the 
cooperative mutual-aid socialism of Peter Kropotkin, as well as Marxism.

Where China has gone further than earlier socialist mixed-economy 
reforms has been in keeping money and credit creation in the hands of 
government, along with basic infrastructure and natural resources.

	<https://substack.com/redirect/21586f33-4a70-487c-94a3-0ce00ec2a175?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM> 	

Fear that other governments might follow China’s lead has led U.S. and 
other Western finance-capitalist ideologues to view China as a threat by 
providing a model for economic reforms that are precisely the opposite 
of what the 20^th century’s pro-/rentier/, anti-government ideology 
fought against.

The foreign debt overhead owed to U.S. and other Western creditors, and 
enabled by the 1945-2025 international geopolitical rules designed by 
U.S. diplomats at Bretton Woods in 1944, obliges the Global South and 
other countries to recover their economic sovereignty by freeing 
themselves from their foreign (mainly dollarized) banking and financial 
burden.

These countries have the same land-rent problem that Europe’s industrial 
capitalism faced, but their land and resource rents are mainly owned by 
multinational companies and other foreign appropriators of their oil and 
mineral rights, forests, and latifundia plantations, who extract 
resource rents by emptying out the world’s oil and mineral resources and 
cutting down its forests.

      Taxing economic rent is a precondition for economic sovereignty

A precondition for Global South countries to gain economic autonomy is 
to follow the advice of the classical economists and tax the largest 
sources of rental income – land rent, monopoly rent, and financial 
returns – instead of letting them be sent abroad.

Taxing these rents would help stabilize their balance of payments, while 
providing their governments with revenue to finance their infrastructure 
needs and the related social spending needed to subsidize their economic 
modernization.

That is how Britain, France, Germany and the United States established 
their own industrial, agricultural, and financial supremacy. This is not 
a radical socialist policy; it always has been a central element of 
industrial capitalist development.

Recapturing a country’s land and natural-resource rents as its fiscal 
base would enable it to avoid taxing labor and industry. A country would 
not need to formally nationalize its land and natural resources 
outright; it simply needs to tax the economic rent over and above actual 
“earned profits,” to cite the principle of Adam Smith and his 19^th 
-century successors that this rent is the natural tax base.

But neoliberal ideology calls such taxation of rent, and the regulation 
of monopolies or other market phenomena, an intrusive interference into 
the “free market.”

This defense of /rentier/income inverts the classical definition of a 
free market. The classical economists defined a free market as one free 
/from/economic rent, not as one free /for /the extraction of economic 
rent, let alone as freedom for creditor-nation governments to create a 
“rules-based order” to facilitate foreign rent extraction and stifle the 
development of financially and trade-dependent host countries.

      Debt remission is a precondition for economic sovereignty

The fight by countries to free themselves from their foreign debt 
overhead is much harder than Europe’s 19^th -century fight to end the 
privileges of its landed aristocracy (and less successfully, of its 
bankers), because it is international in scope, and is now confronted by 
a creditor-nation alliance to maintain the system of financial 
colonization created two centuries ago, as former colonies sought to 
finance their independence by borrowing from foreign bankers.

Starting in the 1820s, newly independent countries like Haiti, Mexico, 
and other Latin America nations, as well as Greece, Tunisia, Egypt, and 
other former Ottoman colonies, won nominal political freedom from 
colonialist control. But to build up their own industry they had to take 
on foreign debt – on which they almost immediately defaulted, which 
enabled their creditors to establish monetary authorities in charge of 
their fiscal policy.

The governments of these countries were turned into collection agents 
for international bankers by the late 19^th century. Financial 
dependency on bankers and bondholders replaced colonial dependency, 
obliging debtor countries to give fiscal priority to foreign creditors.

World War II enabled many of these countries to accumulate substantial 
foreign monetary reserves as a result of supplying raw materials to the 
belligerents. But the post-war order designed by U.S. diplomats, based 
on free trade and free capital movements, drained these savings, and 
obliged the Global South and other countries to borrow to cover their 
trade deficits.

The resulting foreign debts soon came to exceed the ability of these 
countries to pay – that is, to pay without surrendering to the 
destructive IMF demands for austerity that blocked the investment needed 
to raise their productivity and living standards.

There was no way that they could meet their own development needs to 
invest in basic infrastructure and provide industrial and agricultural 
subsidies, public education, health care, and other basic social 
spending that is characterized by the leading industrial nations. This 
still remains the case.

Their choice today, therefore, is between paying their foreign debts – 
at the cost of blocking their own development – or claiming that these 
debts are odious and insisting that they be written off.

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At issue is whether debtor countries will gain the sovereignty that is 
supposed to characterize an international economy of equals, free of 
foreign post-colonial control over their tax and trade policies, as well 
as their national patrimony.

Their self-determination can only be achieved by joining together in a 
collective front.

Donald Trump’s tariff aggression has catalyzed this process by 
drastically reducing the U.S. market for exports from debtor countries, 
preventing them from obtaining the dollars to pay their bonds and bank 
debts, so these won’t be paid in any event.

The world is now busy de-dollarizing.

The need to create an alternative to the U.S.-centered post-war order 
was expressed in 1955 at the Bandung Conference in Indonesia, and then 
later by the Non-Aligned Movement. But these countries lacked a critical 
mass of self-sufficiency among themselves to act together.

Attempts to create a New International Economic Order in the 1960s faced 
the same problem. Countries were not industrially, agriculturally, or 
financially strong enough to “go it alone.”

Today’s Western debt crisis, de-industrialization, and coercive 
weaponization of foreign trade and financial sanctions under the 
dollarized international financial system, capped by the “America First” 
tariff policy, have created an urgent need for countries to collectively 
seek economic sovereignty, to become independent from U.S. and European 
control of the international economy.

The collective BRICS+, with Russia and China taking the lead, have just 
begun talking about making such an attempt.

	<https://substack.com/redirect/6f5cc832-e99d-4a88-bf9d-78e24d3a5138?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM> 	

The 2024 BRICS summit in Kazan, Russia

      China’s success has made a global alternative attainable

The great catalyst for countries to take control of their national 
development has been China. As indicated above, its industrial socialism 
has largely achieved the classical aim of industrial capitalism of 
minimizing /rentier/overhead, above all by publicly creating money to 
finance tangible growth.

Keeping money and credit creation in government hands, via China’s 
state-owned banks, prevents financial and other /rentier/interests from 
taking over the economy and subjecting it to the financial overhead that 
has characterized Western economies.

China’s successful alternative for allocating credit avoids making 
purely financial gains at the expense of tangible capital formation and 
living standards. That is why it is viewed as an existential threat to 
the current Western banking model.

Western financial systems are overseen by central banks that have been 
made independent from the Treasury and government regulatory 
“interference.” Their role is to provide the commercial banking system’s 
liquidity as it creates interest-bearing debt, mainly for the purpose of 
making wealth financially by debt leveraging (asset-price inflation), 
not for productive capital formation.

	<https://substack.com/redirect/5dfb748d-315e-4327-ae0a-555415280e35?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM> 	

Capital gains – rising prices for housing and other real estate, stocks, 
and bonds – are much larger than GDP growth. They can be made easily and 
quickly by banks creating more credit to bid up prices for buyers of 
these assets.

Instead of the financial system being industrialized, Western industrial 
corporations have become financialized, and that has occurred along 
lines that have deindustrialized the U.S. and European economies.

Financialized wealth can be made without being part of the production 
process. Interest, late charges, other financial fees and capital gains 
are not a “product,” yet are counted as such in today’s GDP statistics.

Carrying charges on the rising debt overhead are /transfer payments/to 
the finance sector, by labor and businesses, out of wages and profits 
earned by actual production. That shrinks the income available for 
spending on the products produced by labor and capital, leaving 
economies debt-ridden and deindustrialized.

      The strategy of creditor-rentier nations to prevent withdrawal
      from their global control

The broadest strategy to block countries from avoiding the 
/rentier/burden has been to wage an ideological campaign from the 
educational system to mass media. The aim is to control the narrative in 
a way that depicts government as an oppressive Leviathan, an inherently 
bureaucratic autocracy.

Western “democracy” is defined not so much politically as economically, 
as a free market whose resources are allocated by a banking and 
financial sector independent of regulatory oversight.

Governments strong enough to limit financial and other /rentier/wealth 
in the public interest are demonized as autocracies or “planned 
economics” — as if shifting credit and resource allocation to the 
financial centers of Wall Street, London, Paris, and Japan does not 
result in an economy planned by the financial sector in its own 
interest, with the aim of creating monetary fortunes. Its aim is not to 
improve the overall economy and living standards.

Global Majority officials and administrators who have studied economics 
at U.S. and European universities have been indoctrinated with a 
value-free (that is, rent-free) pro-/rentier/ideology to frame the way 
they think about how economies work.

This narrative excludes consideration of how debt polarizes economies by 
growing exponentially at compound interest. Also excluded from 
mainstream economic logic is the classical contrast between productive 
and unproductive credit and investment, and the related distinction 
between earned income (wages and profits, the main components of value) 
and unearned income (economic rent).

Beyond this ideological campaign, neoliberal diplomacy uses military 
force, regime change, and control of the main international 
bureaucracies associated with the United Nations, the IMF, and World 
Bank — and a more covert network of non-government organizations (NGOs) 
— to prevent countries from withdrawing from today’s pro-/rentier/fiscal 
rules and pro-creditor laws.

The United States has taken the lead in using force and regime change 
against governments that would tax away or otherwise limit rent extraction.

It should be noted that few early socialists (except anarchists) 
advocated violence in pursuit of their reforms. It has been the vested 
interests, unwilling to accept loss of the privileges that are the basis 
of their fortunes, who have not hesitated to use violence to defend 
their wealth and power against attempts at reform to check their privileges.

To be sovereign, nations must create an alternative that enables them to 
be in charge of their own economic, monetary, and political development. 
But American diplomacy views any attempt to enact the necessary 
political and tax reforms and strong government regulatory authority as 
posing an existential threat to U.S. control over international finance 
and trade.

This raises the question of whether it is possible to achieve reforms 
and a strong public economy without war. It is natural for countries to 
wonder whether they can achieve economic sovereignty without a 
revolution, such as the Soviet Union, China, and other countries that 
fought to end their domination by their foreign-supported landlords and 
creditors.

The only way to protect economic sovereignty against military threats is 
to join an alliance for mutual support, since individual countries can 
be isolated in the way that Cuba, Venezuela, and Iran have been — or 
destroyed, like Libya.

As Benjamin Franklin put matters, “If we don’t hang together, we will 
hang separately.”

American writers characterize the attempt of other countries to join 
together to achieve economic sovereignty as a civilizational war. While 
this is indeed a civilizational contest, it is the United States and its 
allies that are waging aggression, against countries trying to withdraw 
from a system that has provided the United States and Europe with a huge 
inflow of economic rents and debt service from host countries subject to 
U.S.-backed diplomacy.

      How U.S.-centered financial colonialism replaced European colonial
      occupation

After World War II, the era of settler-state colonialism gave way to 
financial colonialism, with the international economy dollarized under 
U.S. leadership.

The Bretton Woods rules established by 1945 enabled multinational 
corporations to keep economic rents for land, natural resources and 
public infrastructure out of domestic fiscal reach. Governments were 
reduced to the role of acting as collection agents for foreign creditors 
and as protectors of foreign investors from democratic attempts to tax 
/rentier/wealth.

The United States was able to weaponize world trade by monopolizing oil 
exports through U.S. and allied oil companies (the Seven Sisters), while 
U.S. and European agricultural protectionism and World Bank “aid” policy 
steered food-deficit countries to focus on tropical plantation crops 
instead of grain to feed themselves.

President Bill Clinton’s 1994 NAFTA free-trade agreement swamped 
Mexico’s market with low-priced U.S. farm exports (highly subsidized by 
strong government support). Mexican grain production plummeted, leaving 
it food-dependent.

To block governments from taxing or even fining foreign investors to 
recover compensation for damages to their countries, today’s 
/rentier/powers have created Investor-State Dispute Settlement (ISDS) 
courts requiring governments to compensate foreign investors for 
increasing taxes or imposing regulations that reduce foreign-owned 
income. (I provide the details of this in Chapter 7 of my 2022 book /The 
Destiny of Civilization 
<https://substack.com/redirect/212f719d-9fec-47c5-bdbf-747c6365236d?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>/.)

This system blocks national sovereignty, including by preventing host 
countries from taxing the economic rent of their land and natural 
resources owned by foreigners. The effect is to make these resources 
part of the investor-nation economy, not their own. (The Saudi oil 
company Aramco, for instance, was not a corporately distinct corporate 
affiliate but a branch of Standard Oil of New York (ESSO). This legal 
nicety meant that its income and expenses were consolidated into the 
parent company’s U.S. balance sheet. That enabled it to receive a tax 
credit for the “depletion allowance” for oil, rendering the company 
effectively free of U.S. income tax, although it was Saudi oil that was 
being depleted.)

Other nations permitted the United States to dictate the post-World War 
II order, with it promising generous aid to support free trade, peace, 
and post-colonial national sovereignty, as spelled out in the United 
Nations Charter. But the United States squandered its wealth on military 
spending abroad and financial wealth addiction at home.

That has left America’s post-industrial power based mainly on its 
ability to harm other countries with chaos if they do not accept the 
U.S. “rules-based order” designed to extract tribute from them.

The U.S. imposes protectionist tariffs and import quotas at will, and 
subsidizes agriculture and key technologies as potential global 
high-tech monopolies, while forbidding other countries from implementing 
such “socialist” or “autocratic” policies to become more competitive. 
The result is a double standard in which the U.S. “rules-based order” 
(its own rules) replaces adherence to international law.

U.S. agricultural price support policy initiated under Franklin D. 
Roosevelt in the 1930s provides a good example of double standards. It 
made farming the most heavily subsidized and protected sector. It became 
the model for the European Economic Community’s Common Agricultural 
Policy (CAP) introduced in 1962.

However, U.S. diplomacy opposes the attempts of other countries, 
especially Global South countries, to impose their own protectionist 
subsidies and import quotas aimed at achieving self-sufficiency in basic 
food production — while U.S. “aid lending” and the World Bank have (as 
indicated above) supported the exportation of tropical plantation crops 
by Global South countries by lending for transportation and port 
development. U.S. policy has consistently opposed family-owned farming 
and land reform throughout Latin America and other Global South 
countries, often with violence.

      Moves toward a multipolar world order

It is not surprising that, inasmuch as Russia has long been the United 
States’ main military adversary, it has taken the lead in protesting 
against the unipolar U.S. order.

Advocating a multipolar alternative to the U.S. neoliberal order in June 
2025, Russian Foreign Minister Sergey Lavrov described the post-colonial 
economic subjugation 
<https://substack.com/redirect/1e56f609-55d6-4f97-b5e2-0e0071e48b7e?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>of 
the countries that achieved political independence from colonialist rule 
in the 19^th and 20^th centuries but which are now facing the next task 
needed to complete their liberation:

    Our African friends are paying more and more attention to the fact
    that their entire economies are still largely based on siphoning off
    natural resources from these countries. In fact, all value added is
    produced and pocketed by the former Western metropoles and other
    European Union and NATO members.

    …

    The West is using illegal unilateral sanctions, which increasingly
    become the harbinger of a military attack, as this has happened in
    Yugoslavia, Iraq and Libya and is now happening in Iran, as well as
    the instruments of unfair competition, initiating tariff wars,
    seizing other countries’ sovereign assets and taking advantage of
    the role of their currencies and payment systems. The West itself
    has actually buried the globalization model, which it developed
    after the Cold War to promote its interests.

Marco Rubio made the same point in the U.S. Senate hearings to confirm 
him as Donald Trump’s Secretary of State, explaining that the “postwar 
global order is not just obsolete; it is now a weapon being used against 
us.”

Violating the rules of foreign trade and investment that the United 
States itself dictated in 1945, and yet another instance of Washington 
resorting to the “rules-based order” of its own rules, President Trump’s 
unilateral tariffs aimed both at shifting the New Cold War’s military 
costs onto other countries, which are expected to buy American arms and 
provide proxy armies, and at reviving the U.S.’s lost industrial power 
by forcing countries to relocate industries to the United States and to 
permit U.S. companies to extract monopoly rents by controlling the 
leading emerging technologies.

The United States aims to impose monopoly rights and related 
/rentier/privileges uniquely favorable to itself on the entire world’s 
trade and investment. Trump’s “America First” diplomacy demands that 
other countries conduct their trade, payments and debt relationships in 
U.S. dollars, instead of their own currencies.

The U.S. “rule of law” is one that permits unilateral U.S. demands to 
impose trade and financial sanctions dictating how and with whom foreign 
countries can trade and invest. They are threatened with economic chaos 
and confiscation of their dollar reserves if they do not boycott trade 
and investment relations with Russia, China, and other countries 
refusing to submit to U.S. control.

The United States’ leverage to obtain these foreign concessions is no 
longer industrial leadership and financial strength, but its ability to 
cause chaos for other countries. Claiming to be the indispensable 
nation, the U.S.’s ability to disrupt trade is ending its former 
international monetary and diplomatic power.

That power originally was based on U.S. holdings of the world’s largest 
monetary gold reserves in 1945, its status as the largest creditor 
nation and industrial economy, and, after 1971, its dollar hegemony, 
arising in large part as a result of its financial market being the 
safest for other nations to hold their official monetary reserves.

The diplomatic inertia created by these former advantages no longer 
reflects the realities of 2025. What U.S. officials do have is the 
ability to disrupt the world’s trade, supply chains, and financial 
arrangements, including the SWIFT system for international payments.

The U.S. and European confiscation of $300 billion of Russia’s monetary 
deposits has darkened America’s reputation for financial safety, while 
its chronic trade and balance-of-payments deficits threaten to disrupt 
the international monetary system and free trade that made it the major 
beneficiary of the 1945-2025 world order.

	<https://substack.com/redirect/67a85c77-cf1f-403b-8aec-f4173d58b3f0?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM> 	

In keeping with the principle of national sovereignty and 
non-interference in other countries’ internal affairs that underlay the 
creation of the United Nations (the basic principle of international law 
grounded in the 1648 Peace of Westphalia), Russia’s Foreign Minister 
Lavrov described (in his speech cited above) the need “to establish 
foreign trade mechanisms [that] the West will be unable to control, such 
as transport corridors, alternative payment systems and supply chains.”

As an example of how the United States had paralyzed the World Trade 
Organization, which it had created on the basis of free trade at a time 
when America was the world’s leading export power, he explained:

    When the Americans realized that the globalized system they had
    created – one built on fair competition, inviolable property rights,
    the presumption of innocence, and similar principles, and which had
    allowed them to dominate for decades – had also begun benefiting
    their rivals, primarily China, they took drastic action.

    As China started outplaying them on their own turf and by their own
    rules, Washington simply blocked the WTO’s Appellate Body. By
    artificially stripping it of a quorum, they rendered this key
    dispute settlement mechanism inactive – and it remains so to this day.

The United States has been able to block foreign opposition to its 
nationalist policies by having veto power in the United Nations, IMF, 
and World Bank. Even without such power, U.S. diplomats have been able 
to block United Nations organizations from acting independently of U.S. 
wishes by refusing to appoint leaders or judges not primarily loyal to 
U.S. foreign policy.

The International Atomic Energy Agency (IAEA), charged with keeping 
nuclear proliferation in check is the most recent notorious case in 
point. Iran published documents showing 
<https://substack.com/redirect/5e5881b9-2ea6-4bed-b8b8-8c80a02d28b1?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>that 
the agency’s leader Rafael Grossi provided U.S. and Israeli intelligence 
with the names of Iranian scientists who were killed, and details of the 
Iranian nuclear refinement sites that were bombed.

The U.S. veto has prevented the UN Security Council from condemning 
Israeli attacks on the Palestinian population. And when the 
International Criminal Court (ICC) brought charges against Israeli Prime 
Minister Benjamin Netanyahu 
<https://substack.com/redirect/a1b96694-137d-41d8-96d8-a33ecbfd55fe?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>for 
committing war crimes and crimes against humanity in a genocide 
<https://substack.com/redirect/ca5d2062-d2ce-44df-b3c0-9c8fee7ce05a?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>against 
the Palestinians, U.S. officials imposed sanctions on the ICC 
<https://substack.com/redirect/d087eaa8-79ce-4110-babf-f23577711a2a?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>and 
demanded the removal of the prosecutor.

The world no longer is to be governed by international law, but by 
unilateral U.S. rules, subject to abrupt change depending on the 
vicissitudes of American economic or military power (or loss thereof).

As Russia’s President Vladimir Putin 
<https://substack.com/redirect/c2aed1ee-7d9e-42ad-8750-1d2b93962d5b?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>described 
this new state of affairs in 2022, “Western countries have been saying 
for centuries that they bring freedom and democracy to other nations,” 
yet the “unipolar world is inherently anti-democratic and unfree; it is 
false and hypocritical through and through.”

The United States’ self-image depicts its long dominant world position 
as reflecting its democracy, free market, and equality of opportunity 
that has enabled its power elite, in their view, to acquire their status 
by being the economy’s most productive members, through their management 
and allocation of savings and credit.

The reality is that the United States has become a /rentier/oligarchy, 
one that is increasingly hereditary. Its members’ fortunes are made 
mainly by acquiring rent-yielding assets (land, natural resources, and 
monopolies) on which they make capital gains, while paying most of their 
rent as interest to their bankers, who end up with much of these rents 
and have become the new oligarchy’s leading managerial class.

      Summary

The real conflict over what kind of economic and political system the 
Global Majority will have is just gaining momentum.

Global South countries and others have been driven so deeply into debt 
that they have been obliged to sell off their public infrastructure to 
pay its carrying charges. Recovering control of their natural resources 
and basic infrastructure requires the fiscal right to impose an 
economic-rent tax on their land, natural resources and monopolies, as 
well as the legal right to recover environmental cleanup costs caused by 
foreign oil and mining firms, and to implement financial cleanup costs 
(/i.e/., write offs and cancellation) of the foreign debt burden imposed 
by creditors who have not taken responsibility to ensure that their 
loans can be paid under existing conditions.

U.S. evangelistic rhetoric describes the imminent political and economic 
fracture of the world economy as a “Clash of Civilizations” between 
democracies (i.e., countries that support U.S. policy) and autocracies 
(i.e., nations acting independently).

It would be more accurate to describe this fracture as a fight by the 
United States and its European and other Western allies 
/against/civilization — assuming civilization entails, as it seems it 
must, the sovereign right of countries to enact their own laws and tax 
systems for the benefit of their own populations within an international 
system that has a common set of basic rules and values.

What Western ideologues call democracy and free markets has turned out 
to be an aggressive /rentier/-financial imperialism. And what they call 
autocracy is a government strong enough to prevent economic polarization 
between a super-rich /rentier/class and an impoverished population at 
large, such as is occurring within the Western oligarchies themselves.

------------------------------------------------------------------------

	<https://substack.com/redirect/36662441-1e83-4cba-ba0e-4c8c282cdd61?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM> 	

*Michael Hudson*is president of the Institute for the Study of Long-Term 
Economic Trends (ISLET), a Wall Street financial analyst, and 
distinguished research professor of economics at the University of 
Missouri, Kansas City. He is the author of many books, including "Super 
Imperialism," "...And Forgive Them Their Debts," and "Killing the Host." 
You can follow his work at Michael-Hudson.com 
<https://substack.com/redirect/6f29e4a9-09cf-4725-8407-30ee526e05e5?j=eyJ1IjoibHZwcGIifQ.9RIwWbE6EVIB7Jy8lfazxZKfps8R18neRGMKwOiqnRM>.

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© 2025 Benjamin Norton
548 Market Street PMB 72296, San Francisco, CA 94104

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