NIMA ALKHORSHID: Hi everybody. Today is Thursday, September 4, 2025, and our friends Richard Wolf and Michael Hudson are back with us. Welcome back, Richard and Michael.
RICHARD WOLFF: Glad to be here.
NIMA ALKHORSHID: We had a summit in China, SCO [Shanghai Cooperation Organization] summit, which was huge: India, Russia, China, coming together. And we had regional powers, we had Iran and other Central Asian powers there, talking to these superpowers.
On the other hand, we had Armenia and Azerbaijan being part of that, considering the new conflicts in that region. Curious how Donald Trump reacted, and he's talking about the United States:
DONALD TRUMP (CLIP): […] the United States, everything in the world would die. It's true. It's so powerful. It's so big. And I made it really big in the first four years. Then it started to degenerate with what this Biden administration did. But we built it up to a level that I never thought we could be at this quickly. We're the hottest, we're the best, and we're the best financially. The money coming in is so big because of tariffs and other things, but because of tariffs. Tariff gets us even those other things, plus it gets us great negotiators. I settled seven wars, and numerous of those wars were because of trade […]
NIMA ALKHORSHID: By the way, tariffs were the main reason that India was somehow pushed toward Russia and China in the summit: after years, India went to the summit, the SCO summit. Go ahead, Michael, your take.
MICHAEL HUDSON: Well, the interesting thing is that there's been hardly any coverage in the American press, and even the European press, about what the summit really was all about. The New York Times coverage is probably the worst. It made it seem as if the whole Shanghai Cooperation Organization and the meetings in Tianjin and Beijing were simply to discuss confrontation against the West. And to read the coverage here, and in the Financial Times and others, you'd think that the meetings all were, how do we organize ourselves to threaten the West?
That's all the coverage is about: the military parade, which is depicted as an imminent threat to the West. What's left out is the fact that all of this focus on the military parade was to remind the world of the 80th anniversary of the end of World War II in Asia; it was to frame the whole discussions, that the aim — originally — of the post-war economic order that the American strategists designed was to end fascism and introduce a fair world order based on the United Nations principles.
Again and again, both President Xi, President Putin, and others kept referring to the United Nations principles of equal treatment, no interference in other countries. It was about how to reestablish this order. And, of course, they recognize that this order cannot any longer include the West. Putin's speech, especially, was how the United States and Europe have led the West away from the United Nations principles, away from the open international economy — away from the most favored nations treatment — where you treat other nations equal and you acknowledge the security demands of everyone.
So you had the NATO head, Mark Rutte, complaining that Putin was getting too much attention, meaning we shouldn't discuss, even, what they're really talking about in China. It meant not to discuss how much of a landmark we've seen in the last few days in introducing a new economic order. And President Putin, when told about this, explained that [in] the press conference — he gave one — the confrontation was not at all the focus. The talks were about how to spell out the details of consolidating relations among the Asian countries, the BRICS countries, and the global south countries themselves. There was no mention in the speeches that were given and the press conferences, really, about the West.
It was about themselves and, specifically, how are Asia and the global south countries to go their own way, with minimum contact and exposure to the West? They're not trying to attack the West. They're trying to isolate themselves and break free of the Western economic model of Margaret Thatcherism, financialization, and neoliberalism that's led the West to deindustrialize. How can the members of the SCO, BRICS, and their allies in the global south, how can they create a socialist market economy, basically, along similar lines to China, that actually raises living standards and increases productivity, instead of deindustrializing?
So, no war is really threatened, except by NATO. But there's not going to be peaceful relations either. The idea is how to become independent of relations with the West. And this is what's not being discussed here. And this split is best epitomized by the Power of Siberia 2 pipeline. That was the most important discussion that came out. And this was gas that originally was planned to go to Europe via the North [Nord] Stream 1 pipeline. Well, that's all ended. Siberian gas is going to go via Mongolia to China. And just as Russian gas powered European industry in the past, it's now going to do the same for China, Mongolia, and other countries that are plugged into their mutual pipelines.
Well, what that means is that Europe is going to be left to depend on U.S. liquefied natural gas exports, much higher prices, and declining North Sea supplies from Norway. And this enormous amount of gas in Siberia is going to drive Chinese growth.
Well, you could see the fury that this has caused in Europe. Yesterday afternoon, the German Chancellor Friedrich Merz called Putin "perhaps the most serious war criminal of our time." What he said: The European Union is rapidly transforming from an economic union into a military political bloc — with almost, he gave almost constant aggressive decisions and statements. And that's how President Putin described what Merz said, that the Western reports are simply belligerent. And Putin said: We do not assume that any new dominant states should appear. Everyone's going to be on an equal footing. In other words, no new dominant state means we're not going to let the United States and its satellites in Europe run the world anymore, certainly not run us.
But there's a recognition that, yes, the United States can run Europe, and probably Japan and Korea for the time being, but all these meetings were: how do we not get involved in that? And you quoted President Trump before. On social media, he wrote, "President Xi, please give my warmest regards to Vladimir Putin and Kim Jong-un as you conspire against the United States of America." That was the message, the reporting, of all of this, has happened. And I don't want to go on too long, but I just want to point out that the contrast between the successful consolidation of the Shanghai Cooperation Organization and the BRICS trade and investment stands; it's a different economic system from the U.S. destabilization, the U.S. economy that's destabilizing. And that makes it very difficult for … the upshot of the meetings for, I guess, what we can discuss is, if the world's dividing into these two different systems, how is this going to affect countries that have tried to have a foot in both systems, like Turkey?
Well, originally, people thought that India was going to be the weak part of BRICS, and that India was trying to have one foot in the U.S. economy, and the other foot as much as it could with BRICS, but really representing U.S. neoliberal interests within BRICS. Trump's tariffs changed all of that. Fortuitously, just a week before the meeting, Trump gave India no choice at all but to choose its future with BRICS, and to make up with China and say: This borderland up in the Himalayas, where there's no real defined border, that's not important at all. What is important is our whole long-term development. For India, the oil and gas trade that we have with Russia, refining Russian oil, and getting it is much more important to our economy, which runs on energy and electricity that is produced by oil. That's much more important than our exports, mainly of manual labor products, to the United States.
Well, Putin [Trump] kept saying, India needs the U.S. market. It's going to fall apart without the U.S. market. And, I think, President Modi made it very clear that that's not the case at all. So you have these two opposing dynamics at work: On the one hand, the BRICS and the global majority are trying to isolate themselves from the U.S.-NATO, not to attack it, not to be rivals. No rivalry involved, because they're doing completely different things. Europe is militarizing its economy and deindustrializing the non-industrial sector. Asia does have to have a military overhead, but it's trying to continue the spread, the Chinese successful industrial model, to all of the other countries of BRICS, and to arrange these treaties that they're working on, accordingly, to consolidate their mutual relationships. And that's what is so upsetting to the West: the thought that other countries are not dependent on the U.S. market, not dependent on Europe, but can actually go their own way. And it's a different system, and it's succeeding; while the U.S. economy is shrinking, and the European economy is shrinking, and they are disintegrating.
NIMA ALKHORSHID: Go ahead, Richard.
RICHARD WOLFF: Yes, I'd like to add to what Michael has said with a little bit of history, and then a little bit of focus on the BRICS.
At the end of World War II, George Kennan and others argued that, in the wake of the defeat of fascism, the next stage would have to be for the consolidation of the American empire — he did not use that language but, in effect — would be to isolate, or in his words, "contain" the Soviet Union, which then, in his brain, included Eastern Europe.
Okay. Why do I bring this up? Because history has brought us to a kind of 180 degrees. If I had to summarize what I got out of this summit in China over the last weekend, it would be that it represents a program of the "containment" of the West and, above all, the United States — again, not in those words, because they go out of their way, it seems to me, not to use the language, because language matters. They don't define themselves as caught up in a great military confrontation. They don't describe themselves as the object of a great conspiracy. They don't do that.
You might enjoy, as I did, what Mr. Putin said, when he was shown the clip you just showed us, Nima, about, you know, ‘my greetings as you conspire against the United States.' When asked what he thought of that, Mr. Putin had a big grin, and said how he appreciated Donald Trump's sense of humor. What a remarkable way to diffuse, by humor, by ridicule, the whole intensity of it all. The hot house language now becomes a joke. It tells you a lot about what's going on here. Number one.
Number two: The BRICS now is in a very comfortable position, and that's what this summit showed to me. For five years, from 2020 to right now, the gap between the size and economic wealth of the BRICS relative to that of the United States, or the G7, has gotten wider, and wider, and wider. This is stunningly important. They caught up in the year 2020, and they are now leaving us in their rear-view mirror as they move forward.
That's why Michael's point is so important. Their major function now is to consolidate, to organize, to integrate what they already have, which I want to remind you: The BRICS together is more than half the population of this planet, and the G7 is barely 10% of this planet, and those numbers are very, very hard to overcome. And if you add the five years in which one of them grows markedly faster than the other one, I want to remind you: Germany is in recession; Britain is barely holding on; the United States feels better than all of them because it has 2.5%, China has 5 [%], and India has 7%. There is no contest here. Time has been on their side and only becomes more so as I speak. And that's what they were dealing with. They know that. The United States people know it too. Everybody knows it.
But that means they don't need, and they don't want, military confrontation. And they don't want it because they don't need it. Whereas the West wants it because it needs it. You have to keep that in mind, or else you'll misunderstand the dynamic that's going on here. And, I think, at the bottom here is a very, very dangerous situation. And let me end my comments with that.
The United States maintains 700 (roughly) military bases around the world. Russia and China have nothing like that. China lists one, and I don't know what the Russians list, but it's trivial. Okay. What does that mean? Well, let me give you a second example. Over the time of the meetings in Beijing, the one dramatic thing that the United States did, and made sure that the President announced, was an extraordinary act: A boat, a little boat, with a few outboard motors, was moving in waters 1,000 miles away from the United States. It was clear from the pictures that we've now been shown that this boat had no missiles on it. It couldn't have sustained them. It was too small. It was moving in the water between Venezuela and Trinidad, which is a short distance. Those countries are separated by ten or twelve miles of water.
And the United States took the extraordinary step — since you can't know what's on such a boat without pretty close inspection, it did not stop the boat. It did not arrest the people in the boat. It blew up the boat with either a drone or a missile, killing, according to the U.S. government, eleven people who were in or on that boat. That is, the United States — and this was announced by the President in his press conference …
It was announced without arrest, without a trial, without a jury, without a judgment, and these people were summarily executed.
What are you doing?
By the way, these are international waters where global international law forbids this. The United States is not at war with Venezuela. Or if they are, no one has declared it: not the Venezuelans, not the Americans. Congress hasn't voted for it, and the President hasn't said it. He announced that "we" — whoever the royal "we" was — took out a drug boat, as if he knows a thousand miles away what was in that boat, and where the people in the boat were going, with what was in the boat. Since it's a thousand miles away, since there are many countries between that place and the United States, that boat could have been going to any of them, with God knows what in it.
What are you doing? That is so outrageous an act, and will be seen around the world in that way, that you have to ask: What would possess you to do it, and what would possess you to have your president tell the world you're doing it? And the only answer I can come up with is that it is very important — in the short run — to take the headlines away from the [Jeffrey] Epstein case, which threatens Mr. Trump. And in the long run, it's an underscoring: that military action is what we are reduced to.
And now, finally, in Afghanistan, the United States began, if I understand it correctly, to use drones; and very famously, over a number of years, listened to whatever its sources of information were, and used the drones to assassinate groups of people who often turned out to be a funeral, a wedding, a family gathering.
Okay, if you keep doing that — and that's the equivalent of what was done with that boat — you are teaching the people of whoever you do that to be deeply angry, bitter, and fearful because to them, this is wildly irrational military destruction. If you want to know, honestly, why the war in Afghanistan — which pitted the United States against the Taliban — was lost by the United States — because what runs Afghanistan today, friends, is the Taliban — they won, we lost — and one of the reasons was what we did there. And we seem not to have learned the lesson.
All of Latin America can now sit, and wonder: Can you send a boat with anything, anywhere — in the Caribbean Sea, for example — or are you risking the displeasure of the United States, which is willing to be jury, judge, prosecutor, and executioner, all at once, instantaneously, when there is obviously no imminent threat to any American anywhere?
We're watching something which, in itself, is small, but put into its context, is not small. It is a dangerous sign of a reliance on military action because nothing else any longer works to deal with your problem. India is lost to us. The president, who suggests that he is a great leader because of his tariffs — just as we watch the BRICS organize itself to enable dozens of countries to reduce or eliminate the damage they feel the tariffs have done to them — fifty billion or a hundred billion raised by the tariffs is a childishly inadequate offset to the damage done by what India has done and, finally, what every country on earth is now doing, every business involved in international trade is now doing: they are reassessing.
And by the way, that includes American companies, both those located with plants abroad and those here in the United States. Practical profit-maximizing strategy requires you to adjust to a dramatically changing world economy. The rest of the world has not, in most cases, imposed tariffs on the United States, but they could. And if evolution develops in certain directions, they will. And where you locate your business, whom you trade with, whom you buy from, whom you sell to, everyone is recalculating. And in that recalculation, the relative importance of the West is shrinking, and the relative importance of the people who met in Beijing is growing. And the only people who will ignore that are those who are self-destructive, rather than profit-maximizing — as they claim to be. So we are watching a changing world economy, and we're watching a meeting in Beijing that will be looked back on as a very important milestone. Mr. Trump has accelerated these changes. That's all.
MICHAEL HUDSON: I want to pick up the point that you were making about the attack on Venezuela, the boat. President Trump provided the framework for why he did it. What he said was, explicitly: This is only the first attack on Venezuela. It's the opening shot. And there's been a discussion, as you know, for the last few weeks, about the U.S. plans to invade Venezuela because indeed it does have a threat to the United States. And you have to understand what that threat is.
The threat is that Venezuela has oil that is no longer directly controlled by the United States. Control of the world's oil supply, at least control of the oil supply to the Western satellite countries, is a key to American diplomatic control of their economies, because it's this control by the eight [seven] sisters — the big American, British, and Dutch oil companies together — that enables the United States to impose sanctions to say: If your country does not do what we want, for instance, if your country does not break off your trade and investment relations with Russia, we're going to cut off your oil.
So I think you have to put the Venezuela attack in the same context as the American destruction of Nord Stream. The United States has already said Trump has put a $50 million bounty on (whoever can kill) Venezuela's President Maduro. This is not exactly the U.N. Charter's rule about not interfering with the internal affairs of other countries. The United States has already grabbed Venezuela's assets; its gold assets that were held in the Bank of England have been grabbed. The United States has grabbed Venezuela's holdings of distribution and gas station networks in the United States. The United States wants Venezuelan oil because it's an enormous amount of oil. And the United States has aimed at controlling this oil for the last century.
That's why its refineries are not in Venezuela, but in Trinidad, because that's separate from Venezuela. The United States has always wanted the ability to put pressure on Venezuela by saying, well, you may have the oil, but who's going to refine it? Well, here you're twelve miles away on Trinidad. Well, that's very separate, and we can control Trinidad and just have our control over you.
Think of the imminent attack on Venezuela in the same frame of reference that Trump has said: We must invade Greenland for our own national security. And Greenland has raw materials that the United States wants. It has [a] favorable situation geopolitically in the north to control a large part of the sea trade and the whole Arctic arena. This is what it's all about.
The United States wants to actually invade Venezuela and it, apparently, has been preparing marine forces for an invasion. We don't know how many. There are various rumors and reports around, but enough reports to say that the plans are all there. And when Trump says this is only the first step, it's not about the boat. It's not about drug dealing. If you don't like another country, if you don't like socialism, what's the American translation of socialism? Drug dealing, terrorism. They're accused of that.
Again, the one thing that the United States cannot talk about, as it's forced to, is neocolonial imperialism. Conquer Venezuela. Conquer Greenland. Just as England, and France, and Germany conquered part of Africa. All of a sudden, we're put back in history 150 years to this.
Well, what they cannot talk about — to get back to the SCO and BRICS meetings — is that what the BRICS are doing, what China has done, in creating a mixed economy — well, let's call it a socialized market economy. This was the original dynamic of industrial capitalism, seeking to rationalize production, minimize waste, and minimize unnecessary costs imposed by rent-extracting classes: the landlords, the monopolists, the banks that did not play a productive role in financing industry.
The problem is that America and Europe no longer follow this original 19th-century logic of industrial capitalism. They're willing to blow up the world if they can't control it and dominate other countries. That's what's an issue in this Venezuela boat attack that was shown, again and again, on network television, the blowing up of the boat. So, maybe the title of this show should be: "Late Stage Barbarism." That term has been used throughout much of the internet, including guests on your show, Nima, such as Alastair Crooke and others. It's late stage barbarism and the willingness to attack other countries that the United States and NATO cannot control.
That is a setting for what Asia, the BRICS, and the other countries are following to say, let's look at where the U.S. economy and the European economies went wrong. How do we avoid it (among themselves)? How do we create trade among ourselves, and investment among ourselves, and monetary relations about ourselves, which are not going to lead to the kind of financialization that has destroyed the Western economies, as they've taken a long detour away from industrial capitalism, towards finance capitalism and financial polarization and polarizing the economies between creditors and debtors, and imposing a whole overhead of debt service, of land rent, of increasing monopolies? That's the Western model. And what the BRICS are discussing is: How do we avoid all this?
And they're reinventing the wheel that Britain and Germany and France, and the United States developed in their industrial take-offs in the early 19th century.
Well, that's what can't be discussed. So instead of spelling it out — by saying, well, we're no longer in industrial capitalist countries, we're deindustrializing, and so the only way that we can control other countries is to grab them by military force, whether it's Venezuelan oil, or Greenland, or Ukraine's rare earths — well, they just called them, well, they're drug dealers, they're belligerent, they're evil. And this demonization of other countries — as if countries that you can't control are drug dealers, are ethnically inferior, if they're Slavic and you're Ukrainian, or if they're Hispanic and you're an American government, a Republican — all of this demonization is to avoid talking about what this world's split, which we're seeing taking shape in the last week, is really all about.
RICHARD WOLFF: I wanted to add because there's an ongoing debate, which begins by recognizing — correctly in my view — that there are also huge differences among the members of the BRICS.
That is correct. These are very different countries — different histories, different economic systems, different cultures. It is a very complicated, heterogeneous mass. Number one. It is right now being thrown together by a common enemy. And what is not recognized here in the United States is that the United States is that enemy. That's why you have this apparently perverse result that the United States wants to do everything to dismiss and to deny the BRICS, and then is confronted by the fact that it is the single most important bringer-together of this heterogeneous [mass].
It's important also to recognize that, as the world is changing, the way we think about the world economy has to also change now. The 20th century set up the issue, as if it were a great historical struggle between the capitalist system and the socialist system: U.S., U.S.S.R., etc. Those issues raised by capitalism versus socialism, those are still on the table. Those have not been resolved, not in the West, not in the East either. They will play their role. Right now, they are secondary because the key issue motivating world actors and affairs is this break between the dominance of the West and the rise of the East; the decline of the G7 and the rise of the BRICS.
And it is perfectly appropriate for us to think about that dynamic, not because it displaces or somehow renders no longer relevant the capitalism–socialism struggle. That struggle is there. It's right below the surface, and it will come to the surface. It does already now, but it will continue, in one country or another, in one region or another, in one group of striking workers at a factory in — fill in any blank of — any country now in the BRICS. They haven't overcome those contradictions. Some of their enthusiasts may say so, but that's naïve.
You know, the people who made the transition from feudalism to capitalism, for example, in France: Robespierre, Danton, all of them, they loved to talk about liberty, equality, fraternity, and the struggle of people. They believed if you bring in capitalism, you will get liberty, equality, fraternity, and — add the American Revolution contribution — democracy.
Well, the 19th century taught people that you got the capitalism, you did. You buried feudalism, you did. But did you get liberty, equality, fraternity, and democracy? Not at all. And who made that point more powerfully in the 19th century than everybody else? Karl Marx. That's his contribution. He loved liberty, equality, fraternity, democracy, the French and American revolutions. He said so, over and over again. But he said capitalism is its own obstacle to getting that done. And that was his other great contribution: It's not external, it's internal.
Well, we have every right to say — and I would argue — that the BRICS is an immensely important break in Western capitalism, challenging all the people who led it, or as Michael says, challenging the whole logic and ideology of capitalism in the 19th century and the 20th. So it's beyond words important, but it doesn't remove, or erase, or leave behind those other issues. It just teaches us that while we may have thought the issue in the 20th century was capitalism versus socialism, a lot of other things were going on; and those have now come to the fore, pushed away, pushed into second place, those other issues; they're not resolved. They will show us in the future that those issues remain on the table. And they will be doing that in China and everywhere else as well.
MICHAEL HUDSON: Well, Richard, you're quite right in emphasizing what the BRICS was. The BRICS has a variety of political systems and there [are] very heavy neoliberal forces within the BRICS. How do they deal with that?
Well, I think the key to these meetings is, although nominally they're geopolitical meetings that we've been seeing in China, the whole meetings were built around this military anniversary of the ending of World War II. It was placed in a military perspective in order to highlight just how important today's fight is in shaping the next eighty years.
Because just like the promise of industrial capitalism — to bring about more equality and raise living standards — ended up taking the detour into monopoly capitalism and finance capitalism, the United Nations agreements and the whole economic order that was devised in 1944 and 1945, that created the UN, and the IMF, and the World Bank has not lived up to its promise at all.
And I think President Xi's speech proclaimed at this meeting that the aim was "a global government initiative." He's talking about: How do we make global governments that can be agreed upon in the face of these neoliberal strengths in some countries, in the face of the surviving post-industrial rent-seeking interests, in many of the BRICS countries, and many of the global south countries — how do we deal with it? All that they could deal with, that they set out to do was: Let's make a set of foundational assumptions for international trade — non-interference, was one of them; equality among different countries; not threatening each other's national security.
Equal economic sovereignty among nations was really what it was all about. Well, how can you have economic sovereignty for the global south countries, for instance, when they have the modern equivalent of what Britain and Europe had: the survival of feudalism, the survival of landlord class, land rent, survival of monopolists? Well, what the global south countries have as their legacy, that's just as serious as feudalism, is the legacy of foreign ownership of their raw material resources.
What Europe — England, Germany, France — what they sought in Africa was not to replicate themselves, not to spread the industrial capitalism that marked the industrial take-off of Europe, but they sought rent-seeking. They sought to create their own rentier economy, very much as much of a straitjacket as feudalism was. They wanted control, they wanted resource rents for oil, for mining, for monopolies in transportation — such as the European investment in canals and railroads — and other basic infrastructure. From the very beginning, European, and then American, investment in the global south took a completely different form than investment in continental Europe and the United States itself. It was all rent-seeking.
Well, this is the legacy that the BRICS countries have to deal with because this legacy has created client oligarchies in many of the southern countries. Well, this was a problem that they were worrying about, until last week, about India. Where does India's sort of mixed economy and mixed geopolitical identity lie? Well, they were able to solve that. They're going to have to solve this problem, which you point out, of different economic systems throughout the BRICS and global south countries.
The only way that they can make a beginning in this is to say: What we can agree upon is dedollarization using each other's currencies, not the dollar. China is going to create, be the major investor in, an international bank, and create trade relations. That has to be the beginning. How they deal with each other.
Before they can deal — now, how do we deal with your domestic economies — so that other countries can follow the same path that China has done in keeping the financial sector as a public utility, to create money and credit for purposes of capital investment and productive lending, instead of predatory corporate takeovers and financial leveraging, and debt pyramiding that you have in the United States? This is what they're trying to do. I think the focus is on international geopolitical relations before they can then go into the domestic relations.
As they work out this geopolitical discussion of, well, how are we going to arrange for the means of payment? What is a productive loan? The structuring of foreign trade and investment has its own momentum in transforming these internal economies to free themselves from the Western neoliberal, rent-seeking, financialized predatory economy that you have here.
NIMA ALKHORSHID: Richard, just to add something to what Michael said: Over the last three years, the United States dollar has lost about 107% of its value related to gold. This is, I think, the main point that Russia and China, and other countries, are trying to build on their economy. The main goal is to build on the value of gold. Go ahead, Richard. Do you want to add?
RICHARD WOLFF: Yeah, I also personally am running out of time, but I just want to add one little point. I think we're going to see what Michael has just alluded to. We're going to see — and the whole world will see — how exactly China and the BRICS are going to handle the economic issues that the whole world confronts differently. They're going to see it, step by step, whether it's in the attention paid to the climate — how much of your economic development is going to be shaped by taking the climate issues seriously, versus not doing that? It's already evident. How much of your work is going to be in making sure that the inequality of wealth and income stops increasing and starts tangentially, you know, decreasing, taking deliberate steps? And there'll be some evidence.
And the last one that I think is the one that may do the trick is how you're going to integrate artificial intelligence. In the West, it is a threat to employment. And the reason for that is that capitalists use AI — if they use it at all, if they install it — because they can fire workers and replace them with AI. If you have a hundred workers doing a task and AI enables them all to do a bit more, you can fire fifty of them, and they can get as much done as the remaining, as they used to take a hundred for. Okay? And you'll see that. And that's why there's the alarmism and the anxiety about employment.
But of course, there's an option. If the AI makes you doubly productive, as in my example, the alternative is that everybody keeps their job but works four hours a day, not eight. Then you get the same output, all the same numbers, the same profit. It's all the same, but the AI has been used to enhance the leisure of the majority, the working class.
Okay, those are the two poles. Fire half the workers, or keep them all and give them a half-time job, paying them the same, because all the numbers work out. The profits are the same, outputs the same, revenues the same, and wages the same. Half the work, same wages. Workers would love it.
Well, those are the two poles. You can do anything in between. That's going to be a decision that more and more countries are likely going to make. And it's going to separate those who are, in general, serious about the old socialist objectives, and those who are not. And that's going to become an issue of contention inside every economy.
That's what I mean by saying we haven't left the world of capitalism versus socialism. We're actually closer to making that a real struggle — on the ground, every day —than we were. We just didn't understand it. We thought the struggle was X. It's actually Y. That's how I think we should think about the significance of the whole BRICS movement.
However, I am sorry. I have another thing. I wish you all well, and I will be ready to go next Thursday without a limit.
NIMA ALKHORSHID: Yeah, thank you, Richard. See you soon. Michael?
MICHAEL HUDSON: Well, I think that Richard has put his finger on the point that, yes, it's a clash; but not so much between socialism and capitalism, because what does capitalism mean? It's really between socialism and finance capitalism because, back in the late 19th century, all of the writers in capitalist economies believed that the trajectory of industrial capitalism was going to be toward a mixed economy, and they all used the word socialism. It meant something different, as we've talked about, to different people. There were many kinds of socialism: anarchist socialism, libertarian socialism, mutual aid socialism, Christian socialism, John Stuart Mill socialism … tax the landlords, basically, that's the common denominator of classical economics.
And socialism was expected as part of the dynamic of industrial capitalism itself. That all ended after World War I. And you could look at the SCO and BRICS and global south countries; you can look at what's happened, in the last week, as setting the stage for a resumption of this whole idea of a market economy — a state capitalist economy, a mixed economy, as you have in China, and as Lenin described in his New Economic Policy of 1921 — you're always going to need a kind of mixed economy.
And you're also going to need a tax system, tax uniformity among the countries that are doing trade and investment so that the tax system is based on taxing economic rent — that is, unearned income: land rent, monopoly rent, natural resource rent, and financial speculation — by keeping … And there's always going to be some sort of rent because localities have a better location. There's always going to be a natural monopoly in the form of basic public infrastructure: transportation, communications, healthcare, and education. These potential rent-extracting sectors are going to be kept in the public domain, kept by finance. And as long as finance is used along with the fiscal system to shape how economies operate, that is going to be what the discussions and arguments and theory of economic development, for the next few generations, is going to be all about.
Well, that's exactly what is not being discussed in the West. But it is being discussed in China, and among the countries that were just meeting in Beijing. So, I think we can look at this as setting the stage, on the one hand, the positive lines that Asia is taking, and drawing in as many of the global south countries as want to join, even if it means moving away from their vested client oligarchies and their own rentier interests that the West has put in power for all of this. And this is, of course, what the whole American fight against Venezuela is, that tried to have a socialist revolution with America saying: We're going to make socialism so expensive for you in its military overhead, in its sabotage of your economies, that we can then say socialism's a failure because we are able to destroy socialist economies.
Well, the BRICS countries, the Shanghai Cooperation Organization, have said: You are not going to be able to do to our economies what you have just been doing to Venezuela, and what you're threatening to do to Greenland. We are going to isolate ourselves from you. We're not going to fight with you. We will defend ourselves if you attack us, as you're attacking Russia in Ukraine. If you're attacking us because of the path we're taking, then, of course, there's going to be a fight. We don't want to fight. We just want nothing to do with you. You're a different system. You're late-stage barbarism. And we're going our own way. I think that is what is shaping the next generation globally.
NIMA ALKHORSHID: Thank you so much, Michael, for being with us today.
MICHAEL HUDSON: Thank you for having me, Nima. This was the right discussion to have at this time.
Transcription and Diarization: hudsearch
Editing: Kimberly Mims
Review: ced
Photo by Farid Karimi on Unsplash