2025.03.27
NIMA ALKHORSHID: Hi, everybody. Today is Thursday, March 27, 2025, and our friends Michael Hudson and Richard Wolff are back with us. Welcome back.
RICHARD WOLFF: Thank you, Nima. Glad to be here.
NIMA ALKHORSHID: Let's get started with the situation in the Middle East. It seems that Donald Trump is preparing for a war to put, at least he's doing everything to put pressure on Iran, and he's preparing for that, to make a new war in the Middle East. In 2019 he mentioned that going into the Middle East is the worst decision ever made. But right now he's the President of the United States, he's talking about a new war in the Middle East. What's your take, Michael, on that? And how is it going to influence Russia, China, and the Third World?
MICHAEL HUDSON: Well, I think Trump is preparing two scenarios: Plan A and Plan B. And the most obvious one that everybody's discussing is to show Iran that he may indeed join Israel in attacking it, and saying how awful this will be. He always begins with the threat to hurt an adversary. And then he offers not to hurt it so badly, if it gives him, and the United States, what he wants. And in this case, I think what he wants in Iran, if he doesn't attack it, is for it to stop supporting Yemen, and Hezbollah, and Hamas in Gaza.
So Trump's second scenario is to obtain this in exchange for removing the sanctions that he put on Iran when he broke the deal that Obama had made with it, and pulled out of the agreement. Just in the last few days, Nima, the National Security Council has come out with its annual review. In the section on Iran, it says that it agrees that Iran is not working on an atom bomb, and hasn't been working on an atom bomb. So none of this rhetoric that Trump and Netanyahu are saying has any basis in reality at all.
So, why are they saying these things? I think that one hint that Trump is planning Option A to attack Iran in the next few months is his increasingly hurried attempt to offer Russia what it's asking for in the negotiations over Ukraine and the transportation deal throughout the Black Sea. I think most immediately, the access to grain exports via the Black Sea is what Russia wants.
Unlike much of the press reports in America, this access is only for grain exports, not for all other exports, and especially not for arms and military exports by Europe into Ukraine.
I think that the U.S. strategists, last time, they nullified this promise by saying, okay, you know, we agree on free trade. And then immediately the U.S. neocons called up the world's insurance companies and said, you know, deny insurance or raise the rates to unsupportably high rates on Black Sea transportation. And they told Europe, don't let any payments be made to Russia for this grain. Make sure that it's cut out of SWIFT.
Well, all of this is connected to Iran, as I'll get into.
All of this now, Trump is saying, well, let's let Russia once again receive payments. Russian banks will be off the sanctioned list and they can deal with SWIFT, in order to get the normal payments. Let's give Russia what it wants. Immediately, I thought, why is he giving it? I know that he wants to solve, to get the Nobel Prize for making peace in Ukraine, but why is he going overboard and giving Russia so easily what it wants?
I think it's because he wants to be able to turn around and say, now that you have everything that you wanted, we're going to attack Iran in a few days. And if you were to somehow take Iran's side and defend it, well then, of course, I couldn't possibly maintain these agreements that I've made with you. And everything that we've offered you, everything that you think that you were going to get through trusting the United States, we can take away, because that's our policy. Any agreement can be pulled back just like we pulled back Obama's agreement with Iran concerning the sanctions before.
So I think, in a way, he is trying to prepare this ground to convince Iran that it's not going to be able to get Russian support because he can separate Russia from Iran – I don't think he can, but that's Trump's fantasy – in the hope that Iran then will say, okay, we're going to withdraw our support for the Houthis, we're not going to support Lebanon and Hezbollah, we're not going to support Gaza, we will do everything that the United States would want us to do if they really did bomb us and take over.
I think that's the fantasy that Trump is working on but it's a fantasy that I think his administration shares. And that really is the setting. The question is what's going to happen when the fantasy comes right up against reality? When Russia says, I'm sorry, Iran is our partner and we don't double-cross our partners, that's what you do. We're different. We have a different strategy.
For Russia, Iran's survival is absolutely the key because beyond Iran is Central Asia and if anything were to lead to a regime change and a restoration of the Shah, or a U.S. proxy government in Iran, then NATO could move right into Central Asia and attack Russia from bases in the south: Uzbekistan, Kazakhstan with its oil, the whole area there. Now, it could also block China's Belt and Road Initiative that is supposed to run through Central Asia.
So, Iran is really the key to China's long-term foreign policy of the Belt and Road Initiative, to Russia's defense against attack from the south, and so defending Iran is an absolute need. That doesn't mean that Iran or Russia would oppose Iran saying, okay, we're not going to provide any more weapons to Yemen and the other countries. But what this would do would be to let Israel just consolidate its control over the Near East, unless Erdogan in Turkey tries to confront the ISIS regime that the Israelis and United States have installed there.
If there is a war and there are hostilities, Europe would be the immediate victim because Iran has always said, if under attack, its first response is going to be to sink a ship in the Strait of Hormuz and block the Suez Canal trade in oil. It dropped hints that in the past, before it had signed the friendship group with Saudi Arabia, it could even block the Saudi oil export ports. One way or another, the price of oil would soar, Europe would suffer, Russia would be the main beneficiary. That's what makes all this so ironic. And it is what makes the U.S. tunnel-vision strategy so self-destructive. If it really wants only to back Israel, it's going to lose the whole Cold War plan that it's outlined. That's my view of the big picture.
NIMA ALKHORSHID: Go ahead, Richard.
RICHARD WOLFF: Yeah, let me just add a few things. I think that Michael has laid out much of what's going on here. I would add that one of the basic platforms of Mr. Trump that enabled him to win was that he would not persist in, what I believe has now been coined as, "the Forever Wars." In other words, he attacked the Democrats for "Forever Wars," such as the one in Ukraine. It would be a bizarre and risky thing to close out one war only then to start another one, not even so far away from the first one, and again involving Russia as an opponent, directly or indirectly. That strikes me as very dangerous politics.
Whatever the importance he assigns to Israel, he's not going to do that for Israel. He would rather see Israel disappear and make his Gaza resort deal with maybe some Palestinians, if he could find them. I don't see it, I really don't see it. There are many reasons for him not to do this, not the least of which is the fact that he is now under increasing difficulty at home. I think this now needs to be factored into the equation. It's only a few months, but it seems as though the November election victory –
NIMA ALKHORSHID: It seems that we've lost the connection with Richard.
MICHAEL HUDSON: You're frozen, Richard. Frozen and silent.
NIMA ALKHORSHID: There's something going on with his connection.
MICHAEL HUDSON: I should say, there's a problem with what Richard and I both say. What we're analyzing is what is reasonable to happen. We're analyzing what happens if the United States, Europe, Russia, and Iran act in their self-interest. But we're dealing with not only actors not acting in their self-interest, I don't know whether they even know what their self-interest is. That's the problem. How can you be reasonable in analyzing the behavior of unreasonable people? That's really the problem.
NIMA ALKHORSHID: Michael, in the new leaks of the Trump administration's officials in which they were talking about if they attack Yemen, what would be the outcome of these attacks? J.D. Vance said that the interest of the Europeans in the Red Sea is much more than those of us. We are not that much dependent on the Red Sea. It's all about the Europeans. Do you think that in their sort of analysis, they're going to bring the Europeans into the conflict, even much more than before, and that would be the main reason to put pressure on them, to bring them into the conflict?
MICHAEL HUDSON: I think they're too unreasonable for pressure to be on them. The question is, who is them? What is called the Europeans are two crazy women who have an almost psychopathic hatred of Russia: Van der Leyen and Kaja Kallas, the Estonian lady. So, if these Europeans are the head of the European Union, they're not the Europeans at all. They're U.S.-appointed NATO people in charge of Europe.
So the European populace may be completely against the war there. What do they want? They want lower energy prices again, they want to heat their homes and do cooking. The industrialists want oil and gas, and they don't want to have to close down their companies.
But the two European neocons of the E.U. don't care about any of this. And as Annalena Baerbock (of the Greens) said: We don't care what the voters say. This is destiny, to fight Russia, to sacrifice everything to fight Russia.
So again, we're not dealing with reasonable self-interest, or even the ability of Europe to make any kind of agreement with Trump right now, especially given all the strains of the tariff, the strains over Europe's desire to throw a monkey wrench into Trump's negotiations with Russia.
Glad you're back, Richard.
RICHARD WOLFF: Yes, I'm very sorry. I do not know what happened. All the computers in the building where I'm sitting went off, and now they have come back. But it is, as usual, one of the great mysteries. You know, in the Middle Ages they worried about the mysteries of the Church. We worry about the mysteries of the Internet. So it is bizarre.
Shall I continue where I left off?
NIMA ALKHORSHID: Go ahead.
RICHARD WOLFF: I wanted just to make the point that the level of chaos and trouble and opposition is building, and quite quickly, by American standards. The latest effort, the tariffs against Canada and Mexico, adding a whole other layer of trouble, and difficulty, and uncertainty, to all the others that have been added on. You know, there are demonstrations around the country. The collapse of Mr. Musk's position, his reputation, the shares, the value of Tesla collapsing around him; suddenly, Americans are talking about the BYD Corporation in China, about which most Americans had never heard a word.
Now, suddenly, as they become a bigger phenomenon in the auto market than Tesla, this has to be dealt with. And suddenly Americans are discovering that there's a 100% tariff against those cars, which is the reason you don't see them, and they're beginning to learn a little bit about tariffs because they don't know anything, you know.
For example, the American love of the pick-up truck. That is a feature of tariffs. It's not that he-men like a truck. They learned to like a truck in the 1960s, when the United States imposed a tariff against pick-up trucks brought in from Europe which were taking the market. Those were blocked. And by the way, that tariff has been in existence the entirety of the last half-century of the United States. We've protected it, and you therefore can do prices of pick-up trucks much higher, relative to their cost, than you can with a sedan car.
And that's why it was important to have a he-man standing next to his pick-up truck to get American men to think there's something sexy about having a pick-up truck. That's not a culture. That's a cultural artifact brought into being because it's profitable, which it was made by means of a tariff. There's nothing new here.
Well, I don't want to have the conversation now, although I think it's very valuable to do.
My point is simply, there's an enormous growing upset about a whole lot of issues. They will be made even worse, in my judgment, by continuing the Forever Wars, by literally starting a new one when you've barely finished, or maybe haven't even finished, the old one. This will allow the Democrats to say the usual nonsense that each party that's out of office says against the one that's in office.
I don't think he's going to do that. I don't think it's worth it. Especially if Michael is right, and that by threatening – as usual – you can work out some in-between that will make it look as though the threat was terribly effective: Mr. Trump can be more peacemaker, which I think right now is more his political objective. Certainly by what he did with the Black Sea deal he seems to have been willing to cut, he wants it. It's very clear around the world, that's certainly the interpretation, that Mr. Trump wants a deal and is willing to give the Russians everything.
And if you pick up today's European papers, you will see the renewed outrage of Starmer and Macron, and the others, who don't want to see what it is they're seeing. And so their even crazier fantasy that they are going to control any of this is already on display. There's a conference in Paris of countries… Mr, Starmer has announced again that they're going to have these military forces that they're going to put into Ukraine.
They are really desperate, looking like it. I don't think this charade is going to last much longer. And if they're dumb enough to actually do any of this, they're going to see in their own countries an opposition that is going to put all of them on notice that their political careers may soon be over.
MICHAEL HUDSON: Well, what you say, Richard, is relevant to the question that Nima asked while you were off the air. He said: What role does Europe play in this triangular U.S.-Iran-Russia deal? And you were right to bring up tariffs because when yesterday Trump said, yes, the 20% tariffs are going to go against autos, the Europeans said, all right, we're going to increase tariffs, especially against Musk's cars, his electric vehicles. They're targeting Musk specifically.
And I think if Europe then opposes, tries to counter, Trump's act by saying, all right, we're going to let in the Chinese cars and trucks, then you're going to have the eve of Trump's decision (Do I attack Iran or not?) be, well, how do I pull Europe in?
The points that you've made of disagreement between Europe and America, especially the Europeans Macron and Starmer saying, we are going to prevent any peace deal with Russia because we're going to have our own troops there, and we're going to put our own missiles there, and we're going to attack Russia to make sure that there cannot be any agreement, until Russia is basically destroyed and Ukraine recovers the areas of Russian speakers so that it can kill them all. This is the craziness that's at work, and I think it makes it almost impossible to get all of these people in an agreement. Trump's going to say, well, what can I do now that Europe is having countervailing duties against America, including American whiskey, and the other things they've talked about.
He's going to up the ante and he's going to try to hurt them, And all of a sudden his retaliation and resentment is going to make it almost impossible for there to be an agreement between Europe and America as it is between Russia and Ukraine. So, the good news for that is it makes it very difficult to imagine any real attack on Ukraine, given the fact that America is not going to be able to get much European support for an attack on Iran, and that Iran will realize this and can say, well, you know, we're really not responsible for the Houthis. They're independent people. There's nothing we can do to stop them. You know, we'll be nicer. That's about it.
Uh-oh…
NIMA ALKHORSHID: We've lost Richard again.
Michael, when you look at the United States, there are people who are arguing that the United States, in terms of the economy, is self-sufficient,and it is not that much dependent on the situation in the Middle East, if something big happens between the United States and Iran, a big war.
Do you think that the United States is not going to be that much influenced by the war? It's going to be just the European Union the war's going to hit?
MICHAEL HUDSON: No, the United States is not self-sufficient, nor is Europe. Europe has hardly anything to offer, and Europe's lack of self-sufficiency is going to spill over to demands for the United States, saying, we went along with you destroying our energy economy and our trade with Russia and our trade with China; but now that you've destroyed our trade with the Near East and our access to oil, we don't have any way of surviving.
This cannot help but lead to a break between Europe and America. And America certainly is dependent on many imports, not only of its industrial goods, but for the raw materials that China has threatened to sanction, and that Russia has already sanctioned, against the United States. And if you take what makes America especially not self-sufficient? Trump has interrupted the supply lines! First of all, to the automotive industry, he says, well, now that General Motors and the auto companies can't get their auto parts from Mexico, let them build factories here.
Nobody told him it takes more than a week to build a factory, and to hire the labor force. It takes a couple of years. So, yes, America can rebuild its self-sufficiency, probably by 2200. It'll take a revolution to be self-sufficient.
So, it's going to have the supply chain interruptions, the trade interruptions, the shipping interruptions from the Near East. The decision by Saudi Arabia and the Arab states, what to do with all of their dollar investments in the United States? Trump has asked Saudi Arabia for $1 trillion worth of a commitment to buy American arms, even though they don't work, even though they've [been] shown to be irrelevant in Ukraine, because big countries don't fight with tanks anymore: they fight with drones. They don't fight with people anymore: they fight with drones and missiles. There's no need for American arms that it makes. [They] are not relevant for the wars of the 21st century (that, you know, probably last only half an hour anyway, given all of the missiles).
So yes, America is not yet self-sufficient, and the interruptions are going to cause huge dislocations that are going to raise prices very sharply and cause the stock market to go down. I'm amazed the stock market didn't go down before. When I turned on the computer, you know, when I got up this morning, and the Wall Street Journal had the Dow Jones Industrial Average Futures, [they] were actually up. And I thought, how can that be, with all of the tariffs? Well, certainly when they opened at 9.30 (New York time), they went down because of the decline and the car company [?], but only marginally, you know, less than one point.
I'm amazed that the stock market seems to really believe that none of these disruptions are going to happen. It's almost saying, well, if we did think that they were going to happen, if we planned for it, then we would be Dr. Doom, and tell people: Don't invest in stocks, they're all going to crash. And that's not what companies that sell stocks, or mutual funds that sell stocks, are very eager…
So there's a kind of pacification of the American public, both by the media and by the Wall Street press to sort of downplay all of these disruptions that are coming up. And if you point out what the disruptions are, again, you say, well, this is benefiting Russia, this is benefiting Iran, you're just trying to stop the war that we need in order to save civilization and promote democracy. So all of this is the fabric that is going to be suddenly torn.
NIMA ALKHORSHID: Richard, we were talking, the question was: Is the United States self-sufficient when it comes to a bigger war in the Middle East and the Trump administration? That's why he thinks that Europeans are going to get hit by the war. You're not going to be that much influenced by the war in the Middle East. What's your take on that?
Because J.D. Vance… the reason that I'm asking this is because of the leaks of this forum, that the Trump administration's officials were talking, and J.D. Vance mentioned the situation in the Red Sea is going to influence Europe. It's not that much influence on us. That's why I'm asking this.
RICHARD WOLFF: Yeah, I'm not interested in the prediction. I'm not good at predictions. I've never found anyone else very good at it either. I think there's a problem with the whole idea of it.
But anyway, what I was struck by, by looking at the transcripts and the very conversations that were leaked (and that Mr. Trump has now branded a hoax), the beautiful thing about it, the thing I found interesting, was the level of hostility to Europe. I mean, wow. People use words like: I loathe Europe.
All right, that's very American. America is a place where, when you have a disagreement with somebody else, and, you know… maybe that's our Puritan heritage or whatever that is. But there's a need to demonize, right? Mr. Putin is the worst thing imaginable. You know? Everybody is the ultimate evil Stalin and Hitler. You know? A little guy like Gaddafi in Libya, you know, or Saddam Hussein, are made into staggeringly evil… The use of the word loathe… Or Mr. Vance's comment: Why are we taking our military to worry about ships? We don't use the Red Sea, the Europeans do. Wow. Talk about the end of NATO. That's the end of NATO.
NATO is now, I mean… I don't know what those people over there are thinking, but this is the worst condition NATO has ever been in. The whole rationale of being the means to contain Russia. Remember George F. Kennan and all of that literature? It's over. The United States is busy cutting deals with the Russians. The Europeans are left out. They built their entire career around this notion of the evil danger of Russia. They have excused everything. They've built a political machine in most countries barely strong enough, with half the people, to hold back the social democratic left, which has the other half of the people. And the whole thing has been built around we… See, the left is not a reliable partner to hold back the Russians. We are.
Okay. It's something. The United States played that card for a long time. They have no other cards. They're in real trouble, so they hold on to this. I mean, if you take a step back, what do we know? We know that at the end of World War II, in which the Germans were finally defeated by the power of the Russians coming from the east, and the power of the United States with Western Europe coming from the west… and that defeated the Germans. And with the defeat, Europe was reorganized, into what? The United States and a corridor called NATO (the European Allies), and on the other side, the Soviet Union with its corridor called the Warsaw Pact, (Eastern Europe). Okay. Over the last thirty years, NATO expanded, and the Warsaw Pact disappeared. All of the countries on the border of Russia were transferred over to the enemy.
So, if anything, Russia is made much more vulnerable and the West is made much, much, much stronger. To resurrect the evil danger of Russia under these circumstances, that's crazy. The West is the one that won that game. They took over the protective cordon that the Warsaw Pact had represented. They have less danger, more territory. Russia is barely recovered from the catastrophe of post-1990 difficulties in Russia. Yes, they have a military. And it's impressive, I don't question it. And yes, they are coming back.
But come on! I mean, the situation should have made the West less worried. That's presumably why they worked so hard to get Poland into NATO and to get Romania and Bulgaria and all the rest… Come on! So you have to ask, what in the world? And now you see the United States with the final blow, saying, Russia's not a danger. We don't want to deal with Russia as a danger. We want to cut a deal!
And there's a small point here I would not overlook. They now confront the United States which is going alone. Europe is in terrible trouble. Every way. I mean, look at the gas problem looming this winter, look at their energy problem, look at their price structure. Britain just downgraded its economic growth estimates for next year, down to 1% or less. And now they're going to be hit by these tariffs.
Here's what they're going to have now to deal with. That part of their population that looks upon all of this as a failure of political leadership, their social democratic left is going to cash in on that. Number one. Number two, they're being frozen out as the United States wants to hold on to as much of what the western capitalist empires can still produce in the face of China and the BRICS. The United States is going to grab it. If you're not helping us economically, said Mr. Trump, we're going to hit you hard. Mr. Trump wants to save for this country. They can't do anything about that.
So there are going to be now voices inside the capitalist sector of these countries, wanting themselves to cut a deal with China. See, here's the irony of it all. Where are they going to go? With whom are they going to make profitable deals? Where will they sell their cars if they can't sell them in the U.S.? Might the rest of the world, might they make a deal? They're going to have to look at that because they don't have many options left.
That's why we're in this period in which a declining empire… Think of Rome, the collapse of Rome. And suddenly everybody in Rome is beginning to pay attention to what they used to call "the savage tribes out there" in the hinterland: the Goths, the Franks, all the… Suddenly they become important to understand. These are people with a history, with a culture, with a religion, with an army. You have to take them seriously. Before, they were undistinguishable savages. Before, Asia was a secondary issue for Europe. Now, it may be the only thing left to save them. And they're going to have to come to terms with their own former colonial subjects who are now in the driver's seat.
These are the kinds of reversals that go with a declining empire, which is the story that keeps returning through the details.
MICHAEL HUDSON: Well, the big question is: Can they come to terms with it? Is it really part of their character? Secretary Lavrov gave an explanation of Russia's view of the West a week ago. (Karl Sanchez has it on his website.) I want to quote what Lavrov said: Over the past five hundred years, when the West was more or less formed in the form in which it has survived to this day, with some changes, all the tragedies of the world originated in Europe, or happened, thanks to European politics: colonization, wars, crusaders, the Crimean War, Napoleon, the First World War, Adolf Hitler. Who demands this continuation of the bank… in the form of the war?
In other words, Russia looks at Europe and the West as basing their views on the form of what you pointed out, the hatred that America has shown towards Europe. Even in terms of juxtaposing the comments that Trump's cabinet recently made disparaging Europe, you juxtaposed how Trump has indeed tried to end America's war with Russia, so that it can fight China,
I think there is a subtext to this. To cut a deal is to be able to threaten to break the deal. That's Trump's modus operandi.
And I suppose that Trump is trying to make this deal with Russia only to say, now that we've given you what you wanted, we can take it all away if you don't obey American foreign policy in the Near East and ally yourself with us, first against Iran, and then against China. So, you have a choice: If you don't want us to break the deal, you've got to break your deal with Iran and China.
I think that is basically the Trump strategy, and I think Lavrov has got the western strategy right. He traces it all the way back to the medieval period when the Roman church sought to conquer southern Italy, Sicily, Spain, the Balkans, and ultimately Constantinople, in its fight to take control of Christianity away from the Roman Orthodox church in Constantinople. They considered themselves the real Romans, not the occupants of Rome who were taking it over.
And from the Russian point of view, this fight over religion is just typical of a whole mobilization of hatred against Russia and the East that's gone on for a whole millennium. So, I'm not sure that Germany, Russia, certainly not the E.U. and Parliament is able to suddenly reverse its policies and become reasonable. You'd have to change the people involved. You'd have to change the political parties involved. People don't really change. You replace them with a whole new group, and I don't see right now in Europe the prospects of another new group emerging. If you're looking at German politics, the only group that I can see with a realistic approach, such as Richard and I take, and most of your guests take, Nima, is the Sahra Wagenknecht group. They didn't even reach the 5% limit to get represented in parliament.
So, Richard is absolutely right as to what is needed and what is reasonable and what is in the self-interest of Europe, but I don't see Europe acting in its self-interest or being reasonable, being Europeans.
NIMA ALKHORSHID: Let me play a clip of Lavrov talking about the way that they're seeing the relationship between Russia and other countries. Here is what they said.
[clip start]
SERGEY LAVROV VIA INTERPRETER: Our comprehensive partnership and strategic interaction with China are very productive. Our strategic relations with India are developing, and the deepening of friendly ties with countries such as the Islamic Republic of Iran, the Democratic People's Republic of Korea, are flourishing.
[clip end]
NIMA ALKHORSHID: Richard, there is no Europe in the way that he was talking about. And what's the strategy on the part of Russia? Do you think they're thinking of getting back to the West, they're getting closer to the West, or they're just giving up on the West, and the way that the Europeans are treating them right now?
RICHARD WOLFF: Well, I think it's a combination. The way that the West has treated them, the whole experience here in the Ukraine situation, up until now. Trump has changed that, but up until then, it was sort of a classic NATO alliance having gotten much stronger, at least in terms of its numbers. You know, it's always that mistake that analysts make: You look at the growth of NATO, you would have been very comfortable. They basically not only defeated the Warsaw Pact, which was their opponent, but they absorbed what was left of the Warsaw Pact. And so they moved everything closer to the Russian [border]. They did everything that Soviet foreign policy and then Russian foreign policy had hoped to prevent. Right up to the border, now, is the West.
That's why they made their decision to say: Stop. But why did they make it? Why didn't they stop Poland or the Czech Republic, or any of the others? Because they were too weak. I mean, to be blunt: they couldn't. They were still in the chaos of the post-1990 adjustment, or whatever you want to call it, the end of the Soviet Union and the emergence of a new system there. But they tried very hard to get stronger. And then the West found itself getting weaker, not so much because of Russia, but because of China, and its own internal contradictions. So there was a different balance of forces. By the time they wanted to incorporate Ukraine, Russia was now stronger, and they were, in fact, weaker.
And this new technology of war that Michael talks about? Very, very important. Nobody can understand what happened in the World Wars without understanding the mistake, for example, that the power of France made when it had the Maginot Line. You remember all of that? That proved to be useless.
The old joke, everybody fights this war with the last war's strategy and technology. Well, we may be seeing a very graphic example of that being replayed. As you can kind of see, drones are a new way of doing these sorts of things, and missiles in their now multiplicity of capabilities, and the ability of the Russians to apparently have one that is ahead (until someone else catches up, of course). And if you're constantly fomenting arms races – which we are are, and they are – well then, you know, it's a crapshoot who wins that race at any given moment, and therefore wins that particular war.
But you have to have a bigger view than that. And again, Europe is in real trouble. Now, Michael is right. It would take big changes, especially the way things look now, for them to get out of the rut that they're in, in which everything is premised on an aggressive Russia, without that being the case. That puts you in a very odd place, if you do that. The United States has been in that place for a long time, and that's a key to many of our problems.
We tell a story here about the evil of communism. This becomes hard when the Soviet Union collapses. Even now, the hostility to China doesn't know how to theorize itself. So you have the people who have no understanding at all: so it's the communist party (because they remember the Cold War, and so you've got to be against communist parties). The Chinese have one of those, so you can focus your anger…
But for most other people, that seems irrelevant. The danger is that China out-produces the United States. So we have this 100% tariff against the BYD Corporation's electric cars. Why? Because they are the best and the cheapest in the world. They defeated the United States in the technology race in the automobile industry, which is the most important reality we have
– until we make the transition to mass transit which, of course, is a much more rational way of dealing with transportation than going from the gas-guzzling car to the electric car. That's stupid, right? But that's where we are. We are still trying to make money off of the private car, for as long as we can, and if that means shifting to electric…
All right. My point: the Europeans need to chart a new direction. If I may suggest it to the leftist parties in Europe, that's your slogan. The old is dead: it's dead anti-communism, dead anti-Russia, dead alliance with the United States… We need a new… they haven't figured that out yet. Luckily, the existing power[s] haven't figured it out either. All right, a new one will come, and then it will go… and here I perhaps disagree with Michael. I think it can go very quickly. I think the left is institutionally stronger in Europe than it is in the United States. In both cases, half the country is open to that – and that's quite similar, Europe and America – but organizationally, the Europeans are way ahead of the Americans.
So I think it could happen, and here's why. In the 1930s and 40s, here in the United States, the left was able to get an extraordinary degree of popular support. The Great Depression here drove the working class to the left, not to the right. We didn't have Hitler, we didn't have Mussolini, or anything like it. We all went to the left. Two socialist and one communist party took the American working class to the left; built the CIO, the labor movement, together with the unions… extraordinary watch. Social security, unemployment compensation, federal jobs, first minimum wage… there's no comparable moment in American history. And it was paid for by taxing corporations and the rich, and borrowing from them. Okay?
And the president, the only one in American history ever to confront an organized demand from below on that scale, the president who then made it happen, brought out the taxes… gets re-elected three times. No president had ever had that before. So we had a real movement to the left.
And then during World War II, which is the only thing got us out of that depression, we were allied with the Soviet Union, which meant that the ruling class here was confronted with the New Deal coalition, the strongest threat from the left it ever faced, that forced it to fund social security, unemployment, and all the rest of it, and then allied with the Soviet Union. No wonder after the war they brought in Joe McCarthy and conducted a massive purge of the left! You can see it.
But here's my point. Overnight the left went from the savior of the country in a depression, from the savior of the fight with fascism afterwards… Overnight, from 1945, by 1947, they had redesigned Russia to be the greatest threat to everything decent and human and Christian and – fill in the blank. That didn't take very long. They needed a change, and they mobilized everything they had: the media, the academics… You know, leftist professors were thrown out of their jobs, media personnel… come on. If you look at the history… I suspect we may be in the early stages of a comparable event in Europe. And not because they're copying the U.S., but because they have no other way to go. If they don't do that, they will become the opposite of what Lavrov correctly said: Instead of being the center of the world, the shaper of the world, they will become a relatively unimportant corner of the world visited, occasionally, by tourists from the rest of the world.
MICHAEL HUDSON: Well, Richard, the implications of what you're saying and what I'm saying, over the long term, is the salvation of Europe and the United States is to be more like China. That's really what we're saying. Because what China is, is what the United States was in the late 19th century: the same protectionist idea, the same public infrastructure spending. That is exactly how Germany industrialized in the late 19th century, with the state theory of money, taking over the monetary system to finance industry, not the Anglo-American approach of letting industry be financialized, but industrializing banking. It's how Britain got rich under the mercantilist period.
What Europe and America have done is erased their own history. It's their own history that was indeed going in the direction – that you and I have described the world seeming to go through in the 20th century – of industrialization and industrial capitalism, leading towards socialism because of its reliance on an increasing role of government.
Well, that's the big fight today. The entire fight from Margaret Thatcher and Tony Blair in London to Donald Trump and Elon Musk today is to get rid of government. This is the mentality that has been drilled into a generation of people that have no memory at all of their own country's history, how they got rich under industrialization. And the horror is to think that the one country of the world that is most successful is doing just what America, Germany and England did to be most successful in times past.
There is a narrative of history that is at stake here, and somehow we're dealing not only with what voters want, but who is going to promote the narrative. And, in a way, you could say that this isn't inherently either right or left. It is reality versus unreality, and it's a historical view of how civilization has developed and where it's going; as opposed to the idea of let's just reinvent the world from scratch today without looking at history but looking at it the way that Trump does, as a transaction. It's a fight of mentality more than anything else, and I don't see the groundwork for a mentality being developed either in Europe or the United States.
That's what Neoliberalism has done. It has wiped out the consciousness of economic history, of social history, in people, so that they're not aware of what you and I have been talking about, as what was most successful in the United States and Europe throughout the 20th century.
RICHARD WOLFF: You know, that helps me understand something that I was having trouble placing. I have been struck by the ease… And remember, Michael and I are professional economists. We've been professors of economics, in my case, all my adult life, in Michael's case, for much of it. So we know the power of the whole neoliberal mentality because that's what the universities teach.
The politician, the business leader, the academic, the media writer, whatever they know of economics – which is usually not all very much, because economic literacy is poor in the United States. But what people do know, they got from school. And in school they learned that markets are a fantastic institution that, in a neutral way, serves everybody to get the "optimum" outcome. They actually use words like "optimum" and all of that. It's the best thing there is, upon which no improvement can be achieved. They think like that. The best government is the least government. You can quote laissez-faire, or you quote Thomas Jefferson. It doesn't matter.
I've been struck, though, that in the Trump administration, in a relatively short time historically, we now see a large part of the country very comfortable having the government intervene everywhere. What is a tariff? A tariff is a governmental act interfering in the free market. You know, blocking migration is an interference in the free choice of individuals, à propos where they're going to live and work. Taking Greenland, or taking back the Canal, or making Canada the 51st… these are massive government interventions in the economy. Announcing, the other day, that any country that buys oil and gas from Venezuela will be an appropriate target for tariffs, that's like a secondary boycott. We have laws against doing stuff like that!
This is remarkable, I think, for people. Look at the change. It is so weird and fast. That there are Democrats who don't know the history, just as Michael just said, there are Democrats who are beginning to line up behind Neoliberalism as a counterweight to the governmental initiative taking… it's role reversal! Republicans used to attack the Roosevelt New Deal Democrats for wanting the government to have a role (you know, John Kenneth Galbraith, and all of that).
So we're seeing a desperate struggle – here's my point – a desperate struggle inside the United States over this new switch. And the irony I enjoy? In the post-war period, we went from Keynes, government intervention, management, to a free-market ideology, and then Reagan and Thatcher, and all of that. But we went very quickly. And the Soviet Union went from friend to enemy. Now we're going quickly the other direction, and Russia goes from enemy to friend. I mean, the malleability suggests – and I like this as a radical – that the ideological commitment to neoclassical economics is very thin. It's been repeated endlessly, it's in the minds of the people, but it is thin, and hasn't settled halfway as deeply as we might have expected it to.
And so maybe – time will tell – the Europeans will show more ability to change direction and gear, although I certainly agree with Michael that the current leadership is so embedded in the old that they will have to go. There's no place for Starmer or Macron or Van der Leyen, or any of that. They're not quite believable, listening to them now, and their future is dim. And the extremity of what they say and do is a sign of how desperate they really are.
I mean, at this point, they are the only ones who want the war in the Ukraine to never stop. They're seriously thinking about bringing their own troops to sit and work side by side with the Ukrainians in a situation in which open war or under-the-cover war will be the norm for an indefinite future. They can talk peace all they want, but they're not making peace, they're doing the opposite. And I don't think many people are fooled.
MICHAEL HUDSON: Well, what I fear, Richard, is that when you talk about the United States looking at Russia as a friend, it's in the sense that the enemy of my enemy is a friend. Russia is a friend only as long as Trump believes that it can turn Russia against China and against Iran. And once it realizes that it can't do that, that Russia and other countries don't change their alliances from day to day, from opportunity to opportunity. But once they look at the long term, Russia is going to remain a friend of China and a friend of Iran, and that means that it will not be the enemy of my enemy, and that kind of a friend, and Russia will simply be added back to the enemy list, as Europe is treating it now. That's my fear.
RICHARD WOLFF: Look, that's another one of the outcomes of the conundrum that we're actually in. That's right.
But what's valuable here in this conversation is the kinds of dimensions, the aspects that we talk about. We're not predictors, right? None of us. We don't know the future. You know, if you want to know the future, go to the carnival and give that lady a few bucks and she'll tell you what your future is. It's an amusement.
What we're trying to do is point out some of the real potentials, good and bad, that are percolating here, right under the surface, that are going to shape what goes on.
Let me make an appeal, though, to you, Nima, and to our audience. I do think that we need constantly to go back and forth, as you're doing, Nima, as you design what we talk about, between the international, but also the class struggles inside each of these units, because each shapes the other of those two, but it's the interaction between them that gives us the understanding.
MICHAEL HUDSON: Well, that's Richard's and my hope, the class struggle within these groups. That's it.
NIMA ALKHORSHID: Thank you so much, Michael and Richard. Great pleasure as always. Take care.
RICHARD WOLFF: Thank you, Nima, and thank you, Michael. Talk to you soon.
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