Super Imperialism: The Origin and Fundamentals of U.S. World Dominance

by Michael Hudson

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.

Genres: Economics, Politics, History, Nonfiction, Finance, The United States Of America, American

448 pages, Paperback

First published January 1, 1972

About the author

Michael Hudson 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. He is a contributor to The Hudson Report, a weekly economic and financial news podcast produced by Left Out.

Reviews

[The Conspiracy is Capitalism · Rating 5 out of 5]

The most important geopolitical economy treatise of the 20th century?

Preamble
--The 1st edition, published in 1972 (immediately after the 1971 Nixon Shock) is the classic study on dollar imperialism, predicting the incoming US debtor empire. The 2nd edition is a 2003 re-issue prompted by the 2003 War on Iraq. With growing interest in de-dollarization (ex. China, multipolarity), a 3rd edition is expected for 2021.
--The labyrinthian contents of Finance (“The devil wins at the point where the public comes to believe that he doesn’t exist”) demands the most talented writing/editing to make accessible to the public; sadly, every Hudson book (the most comprehensive of Hudson’s range being The Bubble and Beyond) reads like a compilation of articles, resulting in grueling repetition and public obscurity.
…Other formats to try first:
-interview: https://youtu.be/paUgY6SGlgY
-lecture: https://youtu.be/h45Bovld7Vk
--This books focuses on the better-hidden economic terrorism of imperialism rather than the politics of military terrorism (although military spending plays a crucial role). Why use tanks when you can use banks? Of course, we need to pair this with the politics of democracy-bombs:
-Washington Bullets: A History of the CIA, Coups, and Assassinations
-The Management of Savagery: How America's National Security State Fueled the Rise of Al Qaeda, ISIS, and Donald Trump
-The Jakarta Method: Washington's Anticommunist Crusade and the Mass Murder Program that Shaped Our World
-Killing Hope: U.S. Military and C.I.A. Interventions Since World War II

Highlights:
1) WWI to WWII: US as absentee creditor:
--“Absentee creditor” is not termed by Hudson, but I think it summarizes US’s pivotal role in setting the conditions for WWII. US entered WWI as an associate (worried about Allies not paying war debts) rather than a full ally, diverting from the historical pattern of allies subsiding war costs for loyalty (ex. Louis XVI subsidizing US’s war of independence).
--FDR followed in the nationalist/isolationist tradition that saw US industrialists reject British free trade imperialism to (1) pursue protectionist industrialization and (2) develop domestic market self-reliance (intro: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, details: America's Protectionist Takeoff 1815-1914). (We should add US benefits from settler colonialism).
…This differed from European imperialist rivalries seeking foreign markets to reduce wages + domestic class oppression with insufficient home market demand, culminating in WWI. (This part at least falls in line with both Lenin's famous 1916 Imperialism: The Highest Stage of Capitalism and W.E.B. Du Bois' 1915 essay "The African Roots of War" on how imperialist “Scramble for Africa” led to WWI).
--The results: after the ravages of WWI, US was left as the world’s creditor but did not want to take over Britain’s former world workshop + banker roles and embed the US into world finance/trade.
…FDR focused on national government planning and neglected foreign relations, providing pro-debtor domestic policies (New Deal era) while insisting on the most vulgar pro-creditor position abroad: after providing credit for the destruction of mainland Europe, US insisted on full repayment of inter-Ally war debts rather than subsidizing unpayable debts while keeping (indeed raising) US tariffs! So, the Allies had war-torn production and were further prevented from exporting to US to pay off debts!
…It’s easy for us to laugh at British elites clinging onto their colonial creditor “sanctity of debt” private property ideology (instead of debtor’s ability to pay) despite their now-reversed position with US and also being told scornfully to sell off their colonial assets. However, we should consider different layers of analysis (i.e. geopolitical) to avoid adventurism. US pressure was top-down (elitist, instead of empowering colonies; British elites would push costs to lower classes) and myopic (unpayable debts and the resulting WWII was a disaster esp. for the masses).
--US also took no responsibility for how unpayable inter-Ally war debts resulted in unpayable German reparations! US private creditors would loan to Germany to pay for reparations to the Allies who would then pay inter-Ally war debts to the US government. US private credit dried up as it was diverted to US domestic stock bubble which burst in 1929 Crash/subsequent Great Depression.
--FDR’s nationalist de-linking of dollar from gold to devalue dollar (help US exports during Depression) led to a trade war downward spiral (competitive devaluations + tariff wars) which internalized the Depression in nations, leading to WWII. As someone who thought highly of FDR’s domestic policies (relative to US presidents!), it is startling to learn pro-austerity predecessor Herbert Hoover and his class of private creditors actually wanted foreign debt relief for the selfish reason that both private creditors and the US government could not both be repaid. It also seems FDR’s scorn for international private bankers at the time was built on crude geopolitical economy.

2) post-WWII: US as surplus empire:
--US government emerged from WWII ready to shed its absentee role and embed itself in a world system dictated by itself (Bretton Woods/IMF/World Bank), to create a surplus empire. Compared to the crude nationalism of WWI/WWII, this recognition of world finance to benefit US exporters (maintain full employment to quell the Left by recycling US surplus goods abroad) and US investors (buy up foreign assets) has a certain amount of “enlightenment”.
--Bretton Woods was premised on the US creditor/surplus position tied to gold (which the US needed to revive the value of after accumulating a dominant share), thus long-term asymmetrical failings. Same goes for IMF/World Bank (US veto power).
--It is curious reading Keynes (a deity in political economy) represent the British empire in negotiations with US and get crushed. Hudson focuses on Britain’s Sterling area being the main immediate threat to the US (instead of Soviet Russia), and how the US superseded this to prevent Britain reviving its export industries within this area to pay for its war debts to India/Egypt/Argentina etc. For a critical Global South perspective on Keynes (as well as fall of British empire setting up Great Depression):
-fascinating comparison: Capital and Imperialism: Theory, History, and the Present
-The Agrarian Question in the Neoliberal Era: Primitive Accumulation and the Peasantry

3) 1971 Nixon Shock: US as debtor empire:
--The post-WWII asymmetrical (i.e. US remain surplus) free trade paradigm quickly eroded with the Cold War attempt to isolate communism. Cold War military genocides in Korea and Vietnam required such high military spending abroad that US balance-of-payments shifted from surplus to deficit. Bretton Woods dollar-gold convertibility became a burden by the mid-1960s as countries (ex. France) exchanged their dollar earnings for US’s gold. US dismantled Bretton Woods and delinked this convertibility (official in 1971 Nixon Shock), pivoting to become the (first) debtor empire.
--To avoid the typical debtor balance-of-payments adjustments (raise interest rates + austerity), US government needed to entrench the dollar into the world monetary system by strong-arming the world against alternative regional currencies. US used the fear of global monetary collapse, playing this sabotage tactic (think Nixon’s “Madman theory” vs. Communist bloc) as trade played a relatively bigger role for other countries. Divide-and-conquer was of course also used, with Britain preventing a united Europe.
--The mechanism: US dollars floods into foreign central banks (i.e. surplus exporters in West Europe/East Asia), who are forced to recycle it back to US government in exchange for US Treasury IOUs. Surplus dollars are a competitive devaluation burden to foreign exporters; there is not much else foreign central banks can do since they are prevented from exchanging for US gold or buyout key US industries, while speculating on US stock market/real estate is risky for central banks. John Connally Jr., Richard Nixon's Treasury secretary, proclaimed in 1971 to G10: the dollar is “our currency, but your problem”.
…Thus, the biggest “free lunch” imperialism in history: US dollars and low-interest US Treasuries conjured by the US government pays for military encirclement of the world (to prevent attempts to get off dollar; rising federal budget deficit) and foreign productive goods (rising trade deficit)/industry buyouts.
--Asymmetrical trade is more accessibly explained in Varoufakis’ And the Weak Suffer What They Must? Europe's Crisis and America's Economic Future

4) World Bank/IMF: starve the Global South:
--In a book with “imperialism” in its title, we finally get to the Global South at the half-way point. Hudson contends that WWII provided isolation for colonies to pursue agricultural and industrial self-sufficiency (I wish he elaborated on this; time to consult the Patnaiks again), and this was reversed by the 1960s from US switching from European reconstruction to Global South “development” to create the minerals-for-food flow (US unconstrained industry/military demand for minerals + US unconstrained agricultural surplus exports).
--US industrial agriculture is buttressed by massive protectionism, so asymmetrical “free trade” with Global South wipes away rural agriculture. Global South needs social transformation (esp. land reform + tax reform) to dismantle colonial institutions and build self-sufficiency (social services + infrastructure to build production upon), whereas US liberal technocratic “development” purposefully prevents this to protect bribed South oligarchs and foreign investments.
--Rural agriculture wiped out + sudden urbanization + raw materials exports (priced in devaluing dollars, which accelerated from 1973 grain/oil shocks + 1979 Carter/Volcker shocks) caused food shortages/dependency + price/cost of living inflation + loss of gold reserves + debt trap.
--Global South’s collective efforts against this (esp. New International Economic Order, NIEO) were stifled (for details, see Vijay Prashad’s The Darker Nations: A People's History of the Third World and The Poorer Nations: A Possible History of the Global South). Hudson connects US aid liberalism (in particular Malthusian population control, see Too Many People?: Population, Immigration, and the Environmental Crisis) with mercantilism’s framing of population as a military input:
“It thus was historically logical that Secretary of Defense Robert McNamara should become president of the World Bank upon leaving his position as architect of America’s war in Southeast Asia.”
…I’ve noted elsewhere Hudson’s discombobulating flip between praising domestic liberal reforms (Classical political economy freeing the market from economic rent) vs. condemning liberal imperialism (free trade).
--For a more accessible overview of liberal imperialism, see The Divide: A Brief Guide to Global Inequality and its Solutions.

5) Theories of Imperialism:
--Hudson’s key thesis is to distinguish:
a) Colonialism: government intervention follows private investments (esp. raw materials), as established by Hobson/Lenin/Luxemburg etc.
b) “Monetary imperialism”: US government interventions (WWI inter-governmental debt, pressuring foreign central banks to recycle dollar, IMF/WB) as the driver, more than private investments.
…This is a messy topic as private capital vs. state intervention are so intertwined and fluctuate due to circumstance.
--Other messes: Hudson frequently contrasts productive industrialization vs. parasitism (his usual focus is on economic rent-seeking; in this book, it is military/bureaucratic superstructure). I’d be curious to see Hudson incorporate what often precedes capitalist productive industrialization: dispossession of the Commons (“Enclosures”, Marxist critique of “primitive accumulation”) to first construct labor/land/commodity markets. See Less is More: How Degrowth Will Save the World
--“Super” imperialism refers to US’s sole debtor empire position, a system more flexible than European colonialism:
a) Western Europe/East Asian surplus competitors: pro-debtor subsidize US demand + military encirclement
b) Middle East oil surplus: same
c) Global South debtors: pro-creditor austerity + free trade exports while US agriculture is protected
--More synthesis of Hudson’s Global North Finance Capitalism perspectives is needed with Global South perspectives (see earlier). It is curious to see how Hudson shares many geopolitical conclusions with Prashad: https://youtu.be/p7ERe-_YpKs
--What to make of the gold standard?
a) Keynes: gold is a “barbarous relic” where limited quantity constrains domestic credit creation, thus deflationary on market/employment leading to foreclosures to creditors.
b) Hudson: domestic currencies can be freed of gold’s constraints (ex. Modern Monetary Theory). International currency is used to finance imbalances in international payments, not domestic production. Extreme balance-of-payments deficits have historically been from financing wars, thus gold can be a useful constraint.

[Chris Dietzel · Rating 4 out of 5]

Two important notes about when this book was originally published:

1) The U.S. government pressured the publisher to keep it from being published in other countries.
2) The Department of Commerce stopped making available to the public the types of data Hudson used to compile his assessment.

That automatically tells you this book reveals important truths about what the U.S. is doing in the rest of the world. A short summary: After WWI, every other traditional imperial power was bankrupt and would never be able to repay its debts. After WWII, the U.S. began using its power as the world's largest creditor to create a world economic policy that would keep all of these other countries (and developing countries) tied to the U.S. dollar even though that created a parasitic relationship. By the time the Vietnam War was ramping up, the U.S. was bankrupt and had become the world's largest debtor. By this point, every other country's debt-filled economy was tied to the economy of a country that could also never get out of its own debt. Instead of trying to be fiscally responsible, the U.S. embraced debt as a way of trapping the rest of the world against leaving a dollar system that is effectively worthless. With this debt being insurmountable, the entire system is built on a fictitious set of rules that have been turned upside down. "Austerity" is pointless and just transfers wealth from the poor to the rich. Politicians talking about budget cuts are either offering lip service or else pushing policies that will transfer wealth from the poor to the rich.

The facts that Hudson provides are worth 5 stars. This is a truly eye-opening book and since reading it I've added some of his other books to my to-read list and watched interviews with him online. On the other hand, reading this is a slog because of how dry it is. It's like reading a college textbook. Ultimately, though, it's worth it.

[John Davie · Rating 4 out of 5]

I can never stop cracking up laughing when I hear talk of a US backed "rules based international order."

[Reid tries to read · Rating 5 out of 5]

Great book. Reading The Global Minotaur: America, the True Origins of the Financial Crisis and the Future of the World Economy helped me understand it a lot better. Michael Hudson claimed in an interview that when this book was first released its biggest buyer was the CIA because they wanted to use it to train their agents on what the actual nuts and bolts of U.S. global dominance were


How the US lead to WW2

During WW1 the United States made massive loans to Europe and became the world’s major creditor. The United States viewed its loans not as giving money to allies, but as simple business associates who needed to repay their loans in full plus interest. WW1 had devastated Europe and these countries simply had no ability to possibly repay the loans, especially due to the fact that the U.S. refused to open itself as a market and reduce tariffs. Britain bore the brunt of repayment, and a pyramid scheme formed where Britain and France leaned hard on Germany to repay loans to them so that they could turn around and pay that money back to the U.S. As long as U.S. private investment flowed into Germany this house of cards did not topple: “During 1924–31, U.S. private investors lent $1.2 billion to German municipalities and industries, and other countries lent an additional $1.1 billion. The Reichsbank used these dollars to pay reparations to the Allied Powers. Some went directly to Britain, others to France to be used by France to pay Britain on its wartime loans. Britain and the other European Allies then paid the funds to the U.S. Government to service their war debt” (79) When investors increased domestic investment and decreased investment abroad due to a stock market boom, however, this arrangement came crashing down and sent the global economy into crisis.


Lend-lease and the end of Britain's empire

Before entering into the second World War the United States provided funding and military equipment to the Allies through Lend-Lease, which started in December 1940. “Any country would qualify for Lend-Lease aid ‘whose defense the President deems vital to the defense of the United States.’ “ (134). The United States learned from its previous mistakes and would use Lend-Lease to conquer its allies in a more enlightened manner. Britain would again bear the brunt of repayments, but the United States would offer the British empire a concession: open up your colonial markets to U.S. competition, giving America access to their vast raw materials in the process and essentially disintegrate the British empire, which Britain acquiesced to. “British exports to Latin America fell from 40 per cent of that region’s imports in 1938 to only 8 per cent in 1948. Similar declines occurred in Britain’s trade with other countries. Throughout the Near East it had to yield some of its exclusive oil rights. America’s strategy was threefold. First, Britain would bear the cost of paying Sterling Area countries for the material support they had given during the war. Second, these funds would be made generally available to buy U.S. exports. And third, Britain’s currency, the pound sterling, would remain overvalued rather than set at the level to which it was allowed to decline only in 1949. This strategy succeeded only as a result of British war-weariness and the special love of its political leaders for the United States, even at the cost of sacrificing Britain’s own world position. In exchange, the United States provided loans, not gifts or a clean slate. In retrospect, one can see that the loans did not serve to put Britain back on its feet. Rather, they subsidized Britain in a condition where its economic viability – that is, its ability to compete with the United States – was not restored.” (283)


Post-ww2 plan

After WW2 U.S. foreign policy’s ultimate goal was to prevent economic independence and self-reliance of other states. In order to maintain full domestic employment, which U.S. strategists believed to be essential, the U.S. would need to be a major exporter. Therefore, foreign markets would have to replace the War Department as a source of demand for U.S. industry and agriculture, and to pay for this the world essentially needed to be showered in U.S. dollars. Through government loans, private investment, and government aid the United States would essentially provide the world with dollars and dictate the terms with which these dollars were provided. The United States had stripped most of the world of its gold (the U.S. treasury had 3/4s of the world’s gold post-war), then pegged the dollar itself to gold, in essence returning the world to the gold standard. It was in America’s best interest to return some of the gold in the form of dollars to Europe so that Europe could become a sufficient market for America. What private investment abroad failed to return the United States government would do under the guise of cold war military spending. A major obstacle to this was the drive of other governments to promote their own self-sufficiency through tariffs and other nationalistic economic policies, which was circumvented when Britain led all of Europe in a march into America’s orbit. The other major issue was that the U.S. Congress did not want to give impoverished postwar nations outright “gifts” due to their tendency to put domestic, short-term spending programs ahead of foreign policy. This issue would be overcome by providing “ Congress with an anti-Communist national security hook on which to drape postwar foreign spending programs. Dollars were provided not simply to bribe foreign governments into enacting Open Door policies, but to help them fight Communism which might threaten the United States if not nipped in the bud” (27). Therefore, “U.S. diplomats would provide foreign assistance to induce other countries to adhere to free trade, stable currency parities, general dependence on American food and industrial exports, and to open their investment markets to private capital. Neither protective tariffs, nor quotas, nor financial barriers such as competitive devaluation, multiple exchange rates, bilateral clearing agreements or blocked currency practices could be permitted beyond a brief transition period…Europe and Asia specifically would have to relinquish their traditional ideas of economic self-sufficiency and foreclose a return to such policies by joining appropriate international organizations. Two sets of institutions were needed to implement these designs: one to ward off possible reversion to Europe’s and America’s nationalistic trade and financial practices of the 1930s, the other to provide foreign countries with loans and other economic incentives sufficient to make tariff reductions positively attractive to them. American industry and agriculture would provide the physical resources for postwar European reconstruction and growth, the U.S. Government the funding.” (156). Another part of the strategy would be to have Europe add newly minted gold to its reserves by obtaining from South America. Latin American gold would be, through unequal trade balances, delivered to Europe, who would use this gold to buy U.S. industrial and agricultural goods. In essence, Latin American gold would become a virtual U.S. possession.


Why did nations agree to this plan?

“As General Ayres of the American Bankers Association testified, ‘I fully expected that the people of the other nations would agree with whatever we agreed to, because they knew that this was going to deal with money, and we have the money and they need the money.’ “ (168)

Britain first agreed to the U.S. proposals, followed by continental Europe (because they relied on Britain) and eventually much of the underdeveloped world (since they relied on Europe). Withdrawal from any of the international economic organizations which had been set up (the IMF, World Bank, or GATT) would, in essence, be a withdrawal from all three and therefore a withdrawal from the new economic world order. The price for seeking autonomy would be exile and excommunication. U.S. military spending in Europe would further hamper any attempt to reconstruct the Continent along any tye of line which would limit the expansion of U.S. trade or investment, whether that be socialist or even merely nationalistic line. “As Europe began to recover, it was able to finance an increasing share of the NATO policing efforts believed necessary to thwart a potential military threat from the Soviet Bloc. Political and military ends thus were achieved through economic means.” (170).


Why the communists were isolated

The United States had originally intended to include the USSR in this system. Both nations could benefit, as the USSR needed heavy industry equipment (both to rebuild from the war and to provide its populace with sought after consumer goods) and filling these orders would both be beneficial for U.S. exports and integrate the Soviet Union into this new multilateral system of world trade. Russia was also not viewed as any type of industrial, agricultural, or foreign investment rival. Finally, although the USSR was a state-controlled economy it was not seen as a very expansionist one that would threaten U.S. export/investment plans. However, the USSR had some major reservations about how U.S. domination of the postwar world order and the laissez-faire marketplace might threaten Russian autonomy and security. “Russia thus had the same fears as had most of the less developed areas, that a dismantling of world economic barriers would enable the most developed nations, in particular the United States, to impair their political- economic autonomy, i.e., to dictate the directions and rates of growth of, in this instance, the Soviet Union.” (184). The United States ideological fight up to this point had been against “Nazi economics” which it easily evolved into a fight against state-controlled economics in general, with the communist bloc being seen as the worst offender. The U.S. then forced the world to choose between the United States and the Soviet Union as a trading/investment partner, with most choosing the United States due to it being far richer, far more powerful, and having more capabilities in handing aid to them. The USSR and its allies would be excluded from the new global economic system, and a deep network of military treaties, bases, and covert systems were set up in order to assure this new economic structure would not be threatened by Russia militarily. “U.S. policy must be adjudged to have been shortsighted and fraught with internal contradictions from the beginning. Vietnam finally made it clear that the costs of pursuing a global policy of isolating the Soviet Bloc was self-defeating. By economically isolating Russia, American planners brought about precisely the drive for Soviet self-sufficiency it had hoped to thwart. And within its own Dollar Area, the balance-of-payments costs of Cold War policies became so large as to negate the once unquestioned U.S. hegemony. Russia’s movement toward becoming an independent national economy was accelerated, not retarded” (188).


Institutions of American Hegemony: The World Bank

“Foreign populations are to supply raw materials and exchange them for U.S. food exports, not grow their own food and consume their fuels and minerals themselves or work them into manufactured goods to compete with U.S. producers.” (p. 226)

Britain tried to have the world bank located within London but to no avail. While the United Nations were to be located in New York City, the World Bank and the IMF were placed in Washington under close supervision from the U.S. government. After 1952 the Bank’s mission switched from reconstruction loans to Europe to infrastructure loans for the less developed countries. Its function would be to serve as a tool of the U.S’. most immediate interests. World Bank lending activities were designed to finance large scale exports from the United States (and eventually Japan and Germany) while not financing the development of those same sectors in developing countries (especially agriculture in fear of it displacing U.S. exports). The third world would be given loans designed to make them exporters of non-food raw materials needed by North America and Europe at “satisfactory” prices. They would open their home markets and exchange in terms that favored the already developed first-world while their agricultural self-sufficiency was destroyed. Because they all exported raw materials there was a glut on the market which drove their prices down. Anybody who didn’t agree to this deal, like Cuba, would be excommunicated from the Western economies. The best course of action for these countries would be to leave the World Bank, IMF, and GATT while forming their own set of development institutions run by themselves

Institutions of American hegemony: Foreign Aid

“The U.S. approach to foreign aid was appraised in terms of realpolitik as early as 1957, in the Senate’s report on the concept, objectives, and evaluation of foreign assistance: Technical assistance is not something to be done, as a Government enterprise, for its own sake or for the sake of others. The United States Government is not a charitable institution…the cost of any foreign activity of the United States becomes significant only when it is related to the benefits which the United States receives from that activity.” (229-230)

Essentially any loan to a foreign country is recorded as “aid”. military aid (AKA “security assistance”) takes up around 25-33% of all aid today. Military aid is designed to minimize risk by supporting already existing governments, social systems, and political structures. Economic aid too is designed to minimize discontent in countries in order to prevent uprisings which could potentially lead to these countries leaving the U.S’. economic orbit. This saves the United States from having to send its own military into these countries. From a POV of economic growth, the U.S. is fine giving aid to spur economic growth, granted that this growth provides increased demand for U.S. exports. In its early postwar phase from 1945-1952 U.S. aid was designed to help alleviate the World’s dollar shortage.

Institutions of American Hegemony: The GATT

The U.S’. view on trade after the war was that absolute free trade was unappealing because it would involve losses for some in the American farming, auto, and steel industries. When the U.S. created the General Agreement on Trade and Tariffs (GATT) its hypocrisy was self-evident; The U.S. never actually became a member of GATT even though GATT was the United States’ own creation. Its participation was by presidential order only, and therefore congress could and often did step in to overrule GATT orders and exempt the U.S. from certain trade policies. “From the outset, therefore, the U.S. position on liberalizing world trade has involved a double standard. America has insisted that other countries adhere to fixed principles of free trade, modified only by international agreements on tariffs and import quotas, while it alone is permitted to abrogate those principles and agreements unilaterally, whenever Congress shall so determine.” (262-263).


Institutions of American Hegemony: The IMF

After WW2 at the Bretton Woods conference the decision was made to peg all currencies to the dollar, and the dollar would be pegged to gold. The United States at the time held the majority of the world’s gold, so essentially all currencies were back on the gold standard. To promote stability, devaluations of currencies were greatly hampered so that countries could not end up stuck holding worthless money like Germany did in the 1930s. Currencies were also prevented from devaluing so that foreign exporters could not compete with the United States for markets by devaluing their currency and thus lowering their inputs and therefore their costs of production. With gold being virtually the same as a dollar, the United States could essentially print money to finance anything and claim that it was really giving out gold. As long as nobody saw the need to exchange all their dollars for gold then this system would work to stabilize the capitalist world. The IMF was essentially designed as a way to guarantee cooperation and stability when it came to exchanging currencies. America would dominate the IMF by having de fact veto power. “By international law the U.S. dollar and gold were made virtual identities. What then did the world have to fear from U.S. deficits on international account? The build-up of dollar assets abroad, declared by the IMF to be the equivalent of gold, allowed the United States to finance its deficits with the printing press. And, because of the IMF, the world’s central banks were led to accept this dollar paper. That is what the IMF was for, and that is all it has accomplished.” (297)

[sologdin · Rating 4 out of 5]

Yeah, this is pretty much fundamental to the 20th century. No excuses, lazies!

[David · Rating 3 out of 5]

If the map approximates the terrain too closely, you're gonna need a second map to parse the first one. I have a similar experience with Super Imperialism: very revealing, but boy do its contents overflow. Hudson's empiricism leaves the reader with few handrails, other than the motif that the US can and will try to turn any economic relation to its advantage, and that due to its vast internal market it has the preponderant mass to make that advantage hurt more than other nations could.

Gonna see if I can't summarize it in a few lines here.

1910-1920: US agriculture is so productive it has a surplus. War in Europe gives rise to vast American exports, military as well as civilian, financed through US government loans. This was a government decision, not the spontaneous dynamics of finance capital. US tariff walls render selling to US to raise cash impossible, hence debtor countries press each other for maximum repayment, with Germany as the ultimate victim.

1920-1930: Germany (and Poland, Romania, the Baltic countries) are bled dry by the US debt; the only way to generate liquidity is borrowing yet more from US private capital. The exigencies of the financial feedback loop render productive investment an unbearable cost for Europe. The US stock market overheats and byzantine private debt constructions, in which European capital too is enmeshed, bloom. Between 1927 and 1929 stock markets around the globe buckle under the millstone of debt and eventually the US stock market itself collapses, the most severe crisis (due to its prior overdevelopment).

1930-1940: 1-year debt repayment moratorium by the Hoover admin. This makes possible a British devaluation of the Pound (which otherwise would have made the terms of debt repayment worse), boosting British exports to the detriment of its neighbours. Currency devaluations and protectionist tariffs follow around Europe. FDR takes a hard line against debt forgiveness, "spurning world leadership"; only 4% of US national income is trade-related and hence the US is much less reliant on foreign goodwill.

Tbc

[Kyle · Rating 3 out of 5]

Read the second edition. Hudson's understanding of what happened to the world monetary system in 1968-1973, written by him as it was occurring, is fundamental for anyone wanting to understand how the US empire rules the world as a debtor, what happened to the gold standard, and how reserve currency status ensures empire. One of those classics that has been so cited and incorporated into the theories of others that its probably not necessary to read the whole book, many other people have tried to explain it. However, if you're interested in the original master account of how US empire functions but just want the most pertinent details, you could probably just read the introduction, chapters 11-15, and the epilogue. The rest of the book is a fairly interesting historical account of how allied debts from World War One and Two were used by America to create the new economic system in its favour, how they broke up the British empire and took over its markets, and the initial stages of the Bretton Woods institutions.

[Jamey · Rating 5 out of 5]

Remarkably eye-opening systemic analysis of just how dollar hegemony started and why it is ending.

[Gerad Ryan · Rating 5 out of 5]

Amazing history of high finance during the 20th century, especially with regards to World War I, the Interwar period, reparations, World War II, Bretton Woods, establishment of dollar as world-reserve currency, etc. Will completely change how you look at the history of the 20th century and World War II in particular

[Eric Dowdle · Rating 4 out of 5]

Dey reading, but tons of interesting info that completely changed how I think about international relations, finance, macroeconomics, and food policy

[Martin Henson · Rating 5 out of 5]

Michael Hudson is a machine: he has written so many books and they are astonishingly well researched and the detail is almost breathtaking in its completeness and depth. This is the third edition of Super Imperialism, which ends with a 13-page epilogue written in 2021 and which argues that the long (American) 20th Century is coming to an end, as the US - having deindustrialised and most recently acted (for reasons that it would argue are nothing to do with its economy) belligerently with respect to its creditors (let alone those in dollar debt) - adopts policies that only encourage the de-dollarisation approaches now developing in the BRICS. To be sure, there are undoubtedly private sector pressures in e.g. China that are quite happy with dollar hegemony - but it is also clear that the Belt-and-Road initiative, together with new institutions (like the Shanghai Cooperation Organisation) and treaties (like the Regional Comprehensive Economic Partnership) are slowly creating an entirely new and comprehensive replacement to the Bretton Woods institutions like the IMF and World Bank. The next few years will be very interesting.

[Forrest · Rating 5 out of 5]

Extremely detailed, day by day, who said what when, account of the decisions made that led to US hegemony and why other countries were forced to let it happen. Probably too detailed for me and for most, you could probably find a summary somewhere to get the gist, but the detail really makes it sink in that the US is extremely hypocritical, selfish, and genocidal.

[Thomas Ray · Rating 5 out of 5]

Super Imperialism: The Origin and Fundamentals of U.S. World Dominance, Michael Hudson (1939- ), 2d ed 2003 (1st ed 1972), 425 pages, ISBN 9780745319896, Dewey 337.73 https://pin.linkcat.info/app/work/721719


This is an amazing book, detailing how the world financial system is a house-of-U.S.-IOUs, increasingly worthless.


The U.S. has covered its increasing dollar liabilities to other countries by requiring those nations to invest those dollars in Treasury bills. This ability of the U.S. to create international monetary reserves by printing dollars, has forced others to finance U.S. wars. pp. 292, 308, 335-340, 363.

In the 1960s, as the U.S. deficit-spent on the Vietnam War, other countries became awash in dollars. Their other choices were to appreciate the value of their currencies (lowering their exports), or let prices inflate. U.S. strategists knew that Europe and Japan didn't want appreciation or inflation. The world would prop up the value of the dollar. The U.S. could run deficits without end. And so it's been ever since. pp. 297, 337, 350.

Foreign dollar holdings exceeded the U.S. gold stock by 1964. p. 296.

"The dollar is overvalued." --Paul Samuelson, 1971. p. 337.

The Democratic Party could not in election-year 1968 admit to losing the war, so the war and its financial hemorrhage had to continue. U.S. gold reserves were dwindling. pp. 309ff.


Financial imperialism, militarily enforced.

The U.S. in 1968 threatened to withdraw its troops from West Germany unless Germany renounced its right to convert its surplus dollars into American gold. p. 339.

Japan regained control of Okinawa in 1971 only by agreeing to curb textile exports to the U.S., losing 300,000 Japanese jobs. p. 344.

The bankrupt United States demands that all other nations transfer its bankruptcy to themselves, stultifying their industries and paying tribute to the beggar. p. 264.

As dollar debts have replaced gold as the backing for central bank reserves, hence for the world's credit supply, the entire system would be threatened if questions into its unfairness were reopened. p. 377.

The U.S. debtor dominance is surreal. Economies in deficit normally lose their world power, their autonomy, their ownership of their resources, and their central bank's financial power. pp. 377-378.

The world fears that the U.S. will plunge it into crisis if it doesn't get its way. p. 378.

The U.S. foreign trade and payments deficit was $300 billion by 2000. If deficits of this magnitude no longer inspire crises such as those of spring 1973, it's because the central banks of Europe, Japan, OPEC and other dollar accumulators have so thoroughly acquiesced in U.S monetary imperialism. p. 385.

The U.S. floods the world with dollars, taking foreign resources, companies, goods and services for nothing but Treasury IOUs of questionable and shrinking value. pp. 322, 386.

The U.S. makes all other countries lenders to itself. p. 386. To change this system in a way adverse to the U.S. would bring down America's creditors. p. 386.
The U.S. demands food dependency on U.S. agricultural exports on the part of Asia, the former Soviet Union and Third World countries. pp. 386-387. Military dependency is also demanded, feeding the U.S. electronics industry. p. 387.

The U.S. absorbs the resources of dollar bloc countries. They can't stop it without collapsing the world economy. p. 387.

The World Bank insisted that Russia and other countries privatize their public domain under kleptocratic conditions favoring U.S. investors. p. 381.

Finance capital mediates political power internationally, to acquire monopolistic control--and monopoly profits--from natural resources, raw materials, and the power of labor, tending toward autarky by controlling all regions, the entire world's raw materials. --Gerhart von Schulze-Gavenitz, 1925. p. 55.

U.S. FEDERAL DEBT

U.S. federal debt per U.S. resident was $101,000 as of quarter 4, 2023. Up from $2,000 in 1972 and $20,000 in 2002. https://www.wolframalpha.com/input?i=... U.S. financial hegemony is crumbling under this burden. p. 174. Cold-War costs retarded the U.S. economy. p. 175.

U.S. POSTBELLUM

It was largely to promote trade protectionism that Republicans created state land-grant colleges after the Civil war. p. 2. U.S. religious colleges had been trumpeting British free-trade doctrines. p. 2.

WORLD WAR I

For Europe, WWI was a grab for colonies. p. 80.

The U.S. entered WWI only so that U.S. bankers and exporters would be able to collect the money they had loaned to Britain. pp. 2-3. [A rich man's war and a poor man's fight. --Craig Johnson. https://m.youtube.com/watch?v=HLgpCcN... ]

The U.S. wished to see Europe's empires dissolved, their governments stripped of wealth, which tended to be used for military purposes with which few Americans sympathized. The U.S. got enough of that wish that it was unable to collect its war loans. pp. 3-6, 76.

WWI AFTERMATH

The world's center of gravity shifted from Europe [where it had been since the late 1400s (/not/ since the 490 BCE Battle of Marathon, as Schulze-Gavenitz claims)] to America. p. 55. [See the excellent Penguin Atlas of Medieval History for the centuries of Asian preeminence. https://www.goodreads.com/review/show... ]

After WWI, the U.S. Government scrapped thousands of automobiles and motor trucks so as not to bring the automobile industry into ruin. p. 45.

U.S. insistence on debt repayment beyond its allies' ability to pay, wrecked the price stability necessary to international trade and investment. At the same time, the U.S. increased tariffs to protect its industries--making it impossible for its allies to earn money to repay war loans. pp. 48, 51, 65.

No nation was lending money. p. 49.

The U.S. State Department objected to a loan to Brazil's coffee cartel, as the proceeds would be used to support world coffee prices at the expense of U.S. consumers. p. 50.

BREAKDOWN, 1921-1933 pp. 58-79.

Germany suffered hyperinflation, 1921-1922. p. 58. The German middle class was wiped out, sowing the seeds for fascism. p. 59.

Prices collapsed in the U.S., as Europe couldn't buy U.S. goods. p. 65.

Unpayable intergovernmental debt led to the Great Depression. p. 67. The WWI victors' efforts to pauperize Germany worked to pauperize everybody. p. 68.

Germany in the 1930s prepared for war to seize the materials it could not buy under existing world conditions. p. 6.

BRETTON WOODS, 1944-1945. pp. 137-161

The U.S. needed Europe to borrow money to buy U.S. goods. So the U.S. created the International Monetary Fund and World Bank, under U.S. control. pp. 137-138. Loans--always loans, never grants--would be for buying U.S. exports: U.S. Government funding of the IMF and World Bank are export subsidies for U.S. firms--which foreigners must repay. pp. 144, 147.

The U.S. needed to maintain full employment after WWII, to avoid a postwar depression and attendant leftshift in U.S. politics. p. 140. Other countries must be kept dependent on imports from the U.S. p. 141. This would keep foreign people poor, unemployed, and politically left-leaning [requiring violent repression]. Better them than us. p. 141. By 1950, the U.S. achieved its export targets. p. 144.

Countries also borrow from the IMF and World Bank to make payments on debts they owe to the U.S. p. 149.

The U.S. military stamps out threats from "so-called wars of national liberation." Or lets the U.K. do it. p. 149.

GOLD

In 1949, U.S. gold holdings reached an all-time high of $24.8 billion (at $35/troy ounce: 22,000 metric tons https://www.wolframalpha.com/input?i=... or 1,140 cubic meters https://www.wolframalpha.com/input?i=... ). This accumulation, at the rest of the world's expense, threatened to reduce Europe's purchases of U.S. exports, and threatened inflation in the U.S. pp. 158, 275. (Gold is $2336/troy ounce as of 2024.04.28. https://www.wolframalpha.com/input?i=... The 1949 hoard would now be worth $1.655 trillion. https://www.wolframalpha.com/input?i=.... )

ISOLATING THE COMMUNIST BLOC pp. 162-175

U.S. planners demanded, as a condition of membership in the International Monetary Fund, World Bank, and General Agreement on Tariffs and Trade, that each country submit to U.S. control of the country's directions and rates of growth--knowing that the USSR would refuse. (The rest of the world acquiesced in exchange for loans.) Thus the U.S. erected the Iron Curtain. (Winston Churchill coined the phrase "Iron Curtain" in March, 1946, in a speech at Fulton, Missouri.) p. 171.

[By cutting world trade off from the USSR, the U.S. ensured that the socialist experiment there would fail. The U.S. has achieved the same result against /every/ smaller nation by direct military and CIA intervention. See /Killing Hope/, William Blum, 2014: https://www.goodreads.com/review/show... ]

INTERNATIONAL MONETARY FUND AND WORLD BANK

The IMF and World Bank--against the wishes of Europe and Asia, but with obedient approval by Latin America--were and are located in Washington, DC, and overseen by the U.S. Government's National Advisory Committee on International Monetary and Financial Operations of the World Bank (NAC). p. 181. Wall Street bankers were chosen to run the Bank. p. 184.

NONDEVELOPMENT

Loans were made for purchase of equipment and engineering services from U.S. firms--/not/ to improve agriculture in the borrowing country (which might displace U.S. exports). p. 185. Loans for industrialization were made, so that labor and resources would be bled from borrowing-country agriculture, which then would depend on U.S. agricultural exports. p. 186. Borrowers' gold reserves were drained. The developed-country/poor-country divide has widened since WWII. p. 187. World Bank loans have fostered food deficits, unemployment, inflation, and economic instability in borrowing countries. p. 188.

TECHNOLOGY

Technology is not merely technical but social. Food-deficit Chile exports nitrates, while its own lands are under-fertilized. p. 193

U.S. PROFIT

The U.S. received $2.10 from World Bank operations for every dollar it invested from Bank inception through 1969. p. 197.

WORLD BANK PRINCIPLES, 1969, pp. 201-208.

1. Free trade. Food-deficit countries must open their markets to U.S.-Government-subsidized agricultural commodities. Prevents these countries from developing agriculture. p. 201.

2. "Aid"-recipient countries must permit foreign investors to own the main growth sectors of the economy. Profit and interest will flow out of the country. p. 202.

3. Aid is a political tool to keep in power regressive regimes. p. 202.

4. Increase "aid." Meaning loans at interest, military assistance, U.S. export promotion and administrative overhead. p. 203.

5. Impose austerity, causing deflation and recession p. 203.

6. "Aid" only for purchase of U.S. goods and services. p. 204.

7. Ignore the "aid"-created problems of agricultural decline and exodus of rural population to urban slums. pp. 205, 207-208.

8. Abolish welfare. p. 205.

9. Keep wages and taxes low, rents high, profits high, opportunities absent. p. 205.

10. Loans are to develop export sectors of the economy, such as minerals extraction, not to help locals. p. 206. Loans contribute to overproduction for export, keeping prices low. 207.


EFFECTS OF "AID"

"Aid," as practiced by the U.S., has these effects on the target countries: pp. 208-247.

Reduced agricultural output. Flight of rural people to urban slums. Reliance on U.S. agricultural exports. Declining agricultural infrastructure.

Increasing debt. Increasing share of national income to pay interest on the debt to the U.S. Enforced austerity. Rearrange the economy to extract minerals and commodities for export. Declining ability to provide for local people.

Entrench the power of the local landed elite and the local military that keeps elite boots on the peoples' necks.

Keep people poor in the global south.


GATT
The U.S. insists that other countries adhere to treaties, which the U.S. abrogates. pp. 251-252, 257-259, 333.

The U.S. erects barriers against other countries importing into the U.S., without fear of retaliation because, where else will Europe buy her soybeans but from the U.S.? pp. 330-331.

U.S. efforts in 1971-1972 to normalize relations with China and the USSR were largely for the purpose of finding new markets for U.S. farm products. p. 261.

NO MORE GOLD

As of 1971, the U.S. decreed that its obligations are no longer redeemable in gold. You can use your dollars to buy U.S. products, or buy U.S. debt. This created demand for U.S. exports. pp. 262-263, 299, 340.


U.S. MILITARY-INDUSTRIAL COMPLEX

Post-WWII, the U.S. had to give or loan money to other countries so they could buy U.S. goods. But Congress balked, wanting that money spent in the home district. Congress toed, and toes, the line when the foreign aid was, and is, in anticommunist military form. pp. 12-14.

The wars in Korea, then Vietnam, turned the U.S. from the greatest creditor ever to the greatest debtor ever. pp. 14-29, 312.

The spigot could not, and cannot, be shut off: the military-industrial complex has been created: it was and is the bulletproof vested interest, the tail that has wagged the U.S. dog ever since. Moreover, to now say, "no more globocop, it's no longer profitable," would be to admit that Uncle Sam had sent his nephews and nieces to kill and die for crass commercial interests. pp. 14, 16, 27-28.

Nearly half of U.S. agricultural income is government subsidy. p. 25.

THE UPSHOT

U.S. officials created the global finance and trade structures, to serve the concentration of private wealth.


See also the sequel, Global Fracture, Michael Hudson, 2005. https://search.library.wisc.edu/catal...


Michael Hudson's autobiography:
https://www.patreon.com/posts/bonus-m... In which we learn:

The average dollar invested abroad by oil companies was recaptured by the US economy within 18 months. The payback period was that fast.

All of America’s oil imports are from American oil companies, so if you pay a hundred dollars for oil, maybe thirty dollars of that is profit, thirty dollars is compensation to American management, thirty dollars is the use of American exports to physical equipment, oil drilling equipment and others to produce the oil.

Standard Oil sold its oil at a very low price from the Near East to Liberia or Panama or Lagos, or wherever they have a flag of convenience and no income tax. Then they would sell it at a very high price to its refineries in Europe and America, at such a high price that these “downstream” affiliates don’t make any income. So there’s no tax to pay. For all US oil investment in Europe, there’s no tax to pay because the oil companies’ accountants price it so high, and pay so little per barrel to third world countries such as Saudi Arabia, that they get only a royalty. Standard Oil and other U.S. oil companies – and also mining companies – don’t earn an income there, because they sell it so low, all the profits are reported to be taken in Liberia or Panama.

"The real world is driven by what academic economists belittle as 'distortions,' headed by government spending and private investment." p. 368.

**************


See also this interview, 2022.01, "What Is Causing So Much Inflation?:" https://www.nakedcapitalism.com/2022/...


************

1840s. Democrats (slave states) wanted low tariffs, to sell raw cotton and grain, and buy British manufactured goods. Republicans (northerners) wanted to build domestic manufacturing behind high tariff walls. p. 2.

Postbellum. Republicans created land-grant colleges and business schools, largely to promote trade protectionism, in opposition to the British free-trade dogma the U.S. religious colleges were trumpeting. p. 2.

1917. The U.S. eschewed the colony-grab that impelled Europe to WWI. The U.S. entered the war only so as to enable its bankers and businesses to collect on their loans to the European allies. p. 2. [A fact not advertised to U.S. soldiers!]

Interwar years. The U.S. did not extend credit to Europe, and it kept tariffs high, preventing Europe from earning money by exporting to the U.S. So, the U.S. could not collect the debt Europe owed. pp. 3-5.

Germany prepared for WWII to seize materials it could not buy under existing world conditions. p. 6.

1939 Michael Hudson born.

1950s World Bank begins promoting foreign trade dependency on U.S. agricultural exports. p. xi.

1960s-1970s U.S. foreign aid generates a transfer of dollars from foreign countries /to/ the U.S. p. xiii.

1971 The U.S. decreed that dollars are no longer redeemable in gold. This exempts the U.S. from austerity, frees the U.S. to pursue domestic expansion and foreign diplomacy. p. xii. It lets the U.S. subsidize agricultural commodities, driving foreign farm products out of world markets, and impose illegal steel tariffs, curtailing European and Asian production. p. x.

1971.08 London gold window closed. p. xi.

1971 The U.S. $10 billion balance-of-payments deficit led to a 10% devaluation of the dollar, causing a global crisis. p. ix.

1971 The Institute for Policy Studies obtained the Pentagon Papers, and invited Michael Hudson to review them. It was the Vietnam War that pushed U.S. balance of payments into deficit. France converted its surplus dollars to gold. p. xii.

1971-1972 "Chicken War" between U.S. and Europe, and grain embargo that quadrupled wheat prices outside the U.S. p. x.

1972.09 First edition of this book published.

1972 Michael Hudson became the Hudson Institute's economist. p. xiv.

1973 Oil War: OPEC retaliated against U.S. grain embargo with matching oil-price increases. p. x

1991 USSR breaks up. U.S. sponsors Russian kleptocrats. p. xi.

1990s European Commission prevents member governments from taking a monetary stance independent of the U.S. p. xvii.

1990s East Asia finances U.S. federal budget deficit by buying U.S. Government bonds with its surplus dollars. p. xii.

1997-1998 Asian-Russian crisis, instigated by World Bank and IMF. p. xi.

2001 Oct. The sinking value of the dollar led to a U.S. stock market plunge. Norway lost enough in the U.S. stock market to have to cut its government expenses. p. ix.

continued in comments

[Klejton · Rating 4 out of 5]

Hudson writes the way he speaks. He doesn’t know when to put the emphasis on an important point and carries on with the same monotone tonality throughout the book. He doesn’t know how to translate the economic importance of an event into the political. He just points at it as though it is self evident but forgets to connect the dots. So you have to do a lot of this yourself, meaning you will have to take a lot of notes while reading.


Additionally, it really bothers me when Hudson mentions statistics but provides no source for them. His “The bubble and beyond” was the worst in this sense but it is definitely present here as well.
He also has a habit of going into excruciating detail over the most un-interesting side points but then cutting it very short whenever he makes a very interesting connection, for example how America’s unforgiving attitude towards collecting the war loans from the allies might have been a major contributor to the rise of Nazism (their professed hatred of finance, bankers might have been interesting to follow up)

Only start this book if you have a lot of time and patience (I love being unemployed).

An essential read otherwise, showing the rise of America into being the central gravitational force in the fabric of international finance.

[noblethumos · Rating 5 out of 5]

"Super Imperialism: The Economic Strategy of American Empire" is a book written by economist Michael Hudson, first published in 1972. The book explores the role of the United States in the global economy, arguing that the US has developed a form of "super imperialism" that enables it to control the world's economic system to its advantage.

Hudson argues that the US has used its economic and military power to dominate the global financial system, which has allowed it to maintain its position as the world's dominant economic power. He contends that the US has pursued a strategy of financial imperialism, in which it exports its own economic problems to other countries, while maintaining control over the global financial system.

According to Hudson, the US has used its control over international financial institutions, such as the World Bank and the International Monetary Fund, to enforce policies that benefit American interests at the expense of other countries. He argues that these policies have led to the underdevelopment of many countries, while benefiting American corporations and financial institutions.

Hudson also examines the role of oil and other natural resources in the global economy, arguing that the US has pursued a strategy of resource imperialism to secure access to these resources and maintain its economic dominance.

Overall, "Super Imperialism" is a significant work of economic analysis that challenges the dominant assumptions of the global economic system. Hudson's insights into the role of the US in the global economy have had a lasting impact on the fields of economics and political science.

GPT

[Peter Steininger · Rating 4 out of 5]

One of those books that makes you feel like you were an idiot before you read it.

[Cinnamon · Rating 5 out of 5]

Note: The final chapter of this updated edition published Sept 30, 2021 succinctly describes the impending conflict with Russia & China

[Tilden Katz · Rating 4 out of 5]

One of a few really good works on the way the modern world operates

[Kaiserberg]

Hudson gives an innovative account of the origins and change of America's leading position as the world's political and economic hegemon, finding its origins mostly on the US's intrasigence in the repayment of its First World War loans (Hudson has written extensively on the history of debt forgiveness) and its consolidation of its position by being a world-debtor - a historically unprecedented position.
However, Hudson tends to repeat himself often: There are chapters where he virtually elaborates the same point every two sentences, making the reading monotone and uncreative. Most of his claims are correctly cited, though there are several which are not; providing additional citations would have made his assertions more convincing.
Throughout the book, Hudson explains in great length and detail the series of events culminating in world-historical moments (i.e 1946 British Loan, US rupture of the dollar with gold, etc), however for certain important "why" questions (i.e, why, aside of minimal protest did European and Asian countries agree to appreciate their currencies vis-a-vis the dollar?, why did they keep on buying US Treasury IOUs?, etc) the author only gives vague and poorly backed explanations (US diplomatic armtwisting, fear of economic collapse, blind adherence to the repayment of debts...). The only exception being in the last chapters, where he mentions countries buying Treasury securities to make their exports more competitive (i.e China buys US Treasuries, China increases demand for dollars, thereby increasing its value and making its exports to the United States cheaper, while American imports to China become more expensive).

Overall, though lacking in many respects (much is also centered from the period 1921-70s, given the book's original publishing date, recent developments in "Superimperialism" only occupy the last few chapters) it is an important book to understand the origins of the current world-economic system and the US' hegemonic role in it.

[Ben Conley · Rating 5 out of 5]

I consider myself more or less a layman on economics despite having read some pop economics books in the past. This book was a difficult read, and much of it I did not understand at all. Some of this has to do with Hudson’s use of economic jargon, which I don’t fault him for, only assume that I am not the target audience for this book. The subject is also quite complex, and it seems that Hudson’s goal with the book is to be comprehensive- so jargon there must be.

That being said, I did get a lot from the book and thinking through the things that I didn’t understand. I recall that the introduction spells the whole thing out and so I will go back and read it again having consumed the whole book. Maybe it will make more sense.

There is one particular personal burning question that Hudson provides the answer to: Despite so much US aid, why are the myriad aid nations still poor? Liberals like Sachs say “we simply don’t give them the right things” and “their leaders are corrupt” (with thinly veiled arrogance, contempt, and racism) and Conservatives say “they are too backward or stupid to help themselves” (with more-or-less explicit racism). Hudson gives a thorough materialist explanation, and it shouldn’t surprise us: US “aid” isn’t actually aid in many cases (being instead predatory loans, i.e. poverty traps) and/or the intent of the US is actually to help themselves by creating a customer for US exports, which institutionalizes economic reliance on the US and reinforces feudalistic land ownership (e.g. latifundias)- many times enforced by US-backed dictators.

[Charlie Huenemann · Rating 4 out of 5]

In brief, the US used its advantage after WW2 to establish the dollar as the world currency. It then flooded the world economy with dollars, encouraging other nations to take loans and invest in US treasury notes and bonds. Then, as the US deficit grew through wars in Korea and Vietnam and Congress acting like Congress, the US economy basically became "too big to fail", and all other powerful nations had to base their own well-being on the financial prosperity of the US and the strength of the dollar. Less powerful nations fell under US power through USAID loans and have been used basically as surrogate colonies. Note the current efforts by Brazil, Russia, India, China, South Africa, and now dozens of others to create an alternative world currency to rival the dollar.

Hudson is an experienced economist who knows a lot, and he presumes his readers know enough macro economics to follow his explanations and arguments. So it's not an easy read, but it is a rewarding one: the book illuminates the most important economic moves of the 20th century.

[Luuc Van · Rating 5 out of 5]

One thing that I still struggle to understand is why the world has allowed this obviously unfair system to continue for so long. Only today, over 50 years after the end of gold, is an alternative being developed by BRICS countries. Why was this not tried sooner?

[Zach Saylor · Rating 5 out of 5]

This guy gets it… this guy really gets it.

[Alexander · Rating 5 out of 5]

One of the best books I've ever read

[Bob · Rating 5 out of 5]

Without giving too much away or getting into all the minutia , This book is the history about how the United States of America went for a creditor nation lending money during World War I and World War II to becoming a debtor nation beginning with the Korean War causing the rest of the worlds countries to finance the United States’ Wars at their expense as well as 90% of the American population’s expense .
This book also goes into detail and explains what the Brettonwoods conference was all about in 1945 and prior to that, the reasons why the United States entered World War I so late and why the Congress did not want to join the league of Nations after WW1.
The IMF & The World Bank were organized at the Bretton Woods Conference .
The main reason behind Bretton Woods was to come up with a better plan for Europe to repay the United States because after World War I Europe could not repay its debts to the United States. In fact Germany the enemy was released from all its debts while the United States held Britain to repay all of its debts. That’s the second reason for Brettonwoods was to strip Britain of her empire making United States the new leader of the world.
Digressing the United States Congress did not want to join the League of Nations to protect the sovereignty of the United States.
In other words they were fine with the United States telling other countries what to do but they didn’t want other countries telling the United States what to do.
The big takeaway I got from this from the point Professor Hudson was making, was that if the United States had taken the lead after World War I instead of waiting till after World War II there wouldn’t have been a World War II or a depression.
During WW1, The United States declared itself a partner to its European allies instead of an ally in a war as in a business partner. However when it came time For Europe to pay back the debts it owed, The United States became protectionist disallowing European countries to export goods and commodities to the United States to help pay the debt which would compete with domestic producers, in other words causing Americans to lose their jobs. As it was, Americans were losing their jobs during World War I anyway due to the slow down in production because the European nations could not buy any more stuff, So the United States entered the war as a way of boosting production and saving jobs.
The book also explains in detail about when the United States went off the gold standard in 1971 and what happened afterwards., for example the wage and price freezes in the United States, and the worst inflation a long time. Also how The printing press replaced the Gold Standard, instantly created new credit, by flooding the Rest of the world with American dollars which made the value of our money go down but cost foreign currencies to rise in value making our exports more attractive and competitive.


The book also goes into detail about how the IMF & The World Bank changed tactics after 1991, when they began to dictate foreign countries how to run their governments. Instead of private investors being the main engine , other countries' central banks became depositories of American dollars. He explained how the new policies create a dependency on the United States instead of helping these countries to sustain themselves and become independent of the United States ; in other words government subsidies encourage dependency .
Hudson also explains the euphemism of “Foreign Aid “ & its corollary, “Loan-Aid”.
Hudson Also describes The Euro as a surrogate for American dollars not backed up by anything except American dollars

The United States of America became a nation in debt beginning with the Korean War , 10 years before Eisenhower’s famous warning about the military industrial complex in his farewell address. Yes the debt is caused and was caused by military spending and not by importing more than exporting.

My advice is to take notes as you read Professor Hudson’s books if you are reading a hardcover book. This book I checked out the library the person who had it before me wrote notes in pencil in the book, not advised. Otherwise if you’re reading a Kindle edition is the highlight function often.
Prior to this I read his book , Killing The Host”, and it took me a long time to finish since he goes into a lot of economic jargon and minutia, I put the book down for a while and then pick it up again.
It’s also very instructive to watch his Interviews and discussions on YouTube. I’ve found when you watch somebody talk and discuss the issues and then read their words in a book it becomes easier to understand.

[Patrick Gendron · Rating 5 out of 5]

This book by Michael Hudson is a phenomenal deep dive into how the United States has used Monetary Imperialism to control the world’s economic system and fund endless wars and domestic budget deficits.

Hudson goes through excruciating detail when describing the Machiavellian ways in which the United States first used its post-WWI creditor position to implement austerity measures on other countries while subsidizing its own industries and then later, during the post-WWII era, to pump loads of dollars into the global economy to finance US consumption and military spending and use its extreme debtor position to force central banks around the world to buy US Treasury bonds with their excess economic gains instead of converting them to gold or appropriating US assets.

This has created the unique situation where other countries’ monetary assets are now America’s monetary debt. This foreign official saving finances the US domestic budget deficit in the process of funding the US international deficit.

Hudson explains how America’s military and balance-of-payments deficit has become the foundation for world central bank reserves and today’s world monetary system. America has successfully forced other countries to pay for its wars regardless of their choice in the matter.

This is something never before accomplished by any nation in history and is probably the largest contributor to global suffering and poverty.

The US deficit has siphoned off other countries’ surpluses and exploited them financially. It has created pressure for a new economic order that would make a multipolar world possible without US domination.

Countries like Russia and China are already leading the way towards creating economies that value public investment in infrastructure to provide basic services at subsidized prices to lower the cost of living and doing business, while spending on social welfare to raise the educational, health and productivity levels of their populations.

This is the opposite of what the US and it’s global financial institutions, the IMF and World Bank, have done. They have been exerting financial leverage to force debtor counties to pay foreign banks and bond holders by selling off their public infrastructure to private foreign capital. This has created increased costs for transportation, communications and other basic utilities, which does not help debtor economies recover.

The real question now is: what direction will the global economy take going forward? The US and Western approach that polarizes income and wealth or the more Socialistic approach that promotes broad-based prosperity, but would require nations to act more independently and resist US demands to privatize and financialize infrastructure into debt-financed rent-seeking monopolies?

Hudson admits that a multipolar world will require a new financial system that replaces dollars with gold and other global currencies. The US will try to prevent such de-dollarization and the creation of an alternative international financial system not dependent on dollar credit and neoliberal financial philosophy. But America’s increasingly belligerent threats of sanctions and regime-change attempts have only made this shift more likely and timely.

Hudson reminds us that more and more counties are refusing to open their economies to US banks or foreign investment. This looming global fracture is becoming a fight over the most basic economic principles. Will it continue to be a privatized neoliberal economy organized by the central planning of Wall St or will sovereign national governments maintain their policy independence and take their economic and social future into their own hands?

Michael Hudson advocates for a multipolar world that allows countries to focus on peace and prosperity. He is a great writer and an amazing historian and this book illuminates topics that are rarely discussed in academia let alone in the homes of the working class of the world who have been suffering under US imperialism.

I recommend this book for anyone who is interested in gaining the knowledge necessary to understand not only how we got to this point of end-stage capitalism, but more importantly, how to imagine something better that will bring us closer to a world that works for all of us and meets our human needs.

[Jon · Rating 5 out of 5]

Early on Hudson shares the source of the book's title. It comes from an essay written in 1925 by German economist Gerhart von Schulze-Gavernitz, who was responding to a statement made by US Senator Henrik Shipstead at the time, remarking on the position of the US in the post-WWI world: "We are in the situation of banker to the whole world, and control it by the economic power in our hands. Never has a people had such power, to use for good or for evil. The way we use it will shape history." The title of this essay was Amerika's Uberimperialismus or, "America's Super Imperialism." And for this quite storied volume of 20th Century economic history, that is a pretty good jumping off point.

The central event of the text is Nixon's dismantling of the Gold Standard in 1971, which Hudson was employed to analyze as an economist for Chase Manhattan Bank. But in order to put the transition off the Gold Standard in its proper context, Hudson starts with World War I, and America's unique position as the only major Western power whose economy hadn't been laid to waste in the war's aftermath. Because it is here, when the US found itself in this historically unique circumstance, that it learned to press its advantage relentlessly, single-mindedly, pushing in any direction that would maintain its absolute dominance. Hudson walks us through the legislation, Congressional testimony, statements made by the economists and legislators shaping policy, papers written by the Council of Foreign Relations, and many other such points of record, showing there is no disguising the fact that for a century the US focused narrowly on base nationalism and self-interest, going to the most extreme lengths to not only guarantee a growing US economy, but also bringing its position to bear on sabotaging any other economy that might try to gain independence from that of the US, or even simply to get from under US dominance.

This sordid history leads up to the 1971 dropping of the Gold Standard because it illustrates that doing so was not for any economic necessity, it was entirely political. It cemented US economic dominance using exactly the opposite strategy it had used from WWI until the late 60's, as a debtor instead of a creditor. It was an audacious tack, but it worked up until about the last decade. Now things aren't looking so bright, so to speak, as Hudson explains, in this updated 2021 Third Edition. With the US finally losing its threads of dominance over the world's economies and the world transforms into multipolarity, we will be lucky if we can avoid another World War, simply stated.

[Gage Hoefer · Rating 5 out of 5]

I've been looking for a Marxist approach to explaining/interpreting monetary theory and how it intersects with American foreign policy for a long time- and Hudson turns out to be exactly what I was looking for. Excellent writing- it covers a wide range of economic theory in practice, showing how the U.S. state attained its position as global hegemon post WWII through brutal financial practices, forcing the debt we incur from military expansion onto the world at large.

[Paul Thompson · Rating 5 out of 5]

I really felt like Howard Beale listening to the corporate cosmology speech of Arthur Jensen, except in this case, nations DO exist, and their central banks are sending their excess dollars back to the United States in exchange for US Treasury IOUs.

If you're wondering how it's possible for the United States to consistently run huge domestic budget and balance-of-payments deficits - while continually insisting via the IMF and World Bank that other countries do the opposite by implementing domestic financial austerity - it is because of this global dominion of dollars that the U.S. has imposed since 1945.

Reading a treatise like this one really opens your eyes to the fact that all the squabbling about domestic spending in the United States is just a sideshow. As long as the U.S. dollar is the world's key currency, and as long as foreign central banks continue recycling these dollars into U.S. Treasury securities, we can spend as much money as we want!

We live the safe protective cocoon of the imperial core, and we love it, folks!

[Brian · Rating 3 out of 5]

A very detailed examination of how the US government has used its position after WWII to enhance its power by creating economic dependence through various means, such as the IMF, World Bank, food aid, and in effect, using its trade deficits as a way to get other countries to finance our wars. The real fascinating tidbit was the realization that by going off the gold standard the US could farther strengthen its power, opposed to the common belief at the time it would weaken us. A very insightful observation at the time especially as the role of international finance was not so well understood.

The book dives into a deep look of government debts since since WWI and their political impact and is jam packed with information from all over the place. Sometimes it almost feels chaotic as Hudson will throw bits of information at you. The book is also quite dense, technical, and laborious. It's really quite a chore and I assume this was not intended for a mass audience but it would've been nice to have to a more "to the point" version.