Michael Hudson: Iran, Oil, and Global Depression

We won’t get out of the demise of the Anglo-American empire without a major depression. It was coming anyway, but the Iran war is the last straw. The Iran war is not the whole reason for the attempt to destroy Iran. The larger strategic vision is the imperialist effort to control the world economy by controlling the world energy supply using a series of “chokepoints” such as the Strait of Hormuz. Hudson says that oil companies are driving this policy more than Zionists. As the price of oil rises from the interruption of energy supply chains, the oil companies make out like bandits as the world sinks into depression from unaffordable energy and unaffordable debt.

Hudson believes that the future lies in the formation of institutions that foster peace and productivity instead of war and greed. The main international economic problem is the imbalance between creditor countries and debtor countries. Debtor countries are unable to develop because they cannot both pay their debts and pay for their own development. What is needed is a means to write down or cancel unpayable debts that are preventing economic development. Hudson thinks that the solution proposed by John Maynard Keynes in 1944 as the new post-war economic order was being debated at Bretton Woods. Unfortunately, the US was able to prevail. The IMF and World Bank became a continuation of financial imperialism, not real development banks. Hudson is suggesting that the new BRICS bank could use the Keynes solution to promote balanced economic development for debtor countries. He is also saying that these countries will have to develop a new international political institution to resolve conflicts and promote peace like the United Nations was supposed to be. It would preserve the basics of the UN charter, which is equal national sovereignty for every country, large and small, but would not include the veto power that gives the US control over the UN. It would promote a socialist, not an imperialist world order. That is the hopeful future, but first we must survive a severe depression.