Guerrilla History - Dedollarization & the Petrodollar w/ Richard Wolff

Episode Date: May 5, 2023

In this fun episode, we talk with Professor Richard Wolff about the process of dedollarization, its impact on the Petrodollar, and how these play into geopolitics more broadly including the ability of the US to sanction whomever they wish - processes that we need to continue keeping an eye on.  A really interesting conversation, we're looking forward to continuing it very soon!! Richard Wolff is a Professor Emeritus of Economics at UMass-Amherst and a Visiting Professor at The New School.  He is also the host of Economic Update and the founder of Democracy At Work.  You can follow him on Twitter @profwolff. Help support the show by signing up to our patreon, where you also will get bonus content: https://www.patreon.com/guerrillahistory 

You don't remember den, Ben, boo? No. The same thing happened in Algeria, in Africa. They didn't have anything but a rank. The French had all these highly mechanized instruments of warfare. But they put some guerrilla action on. Hello, and welcome to guerrilla history. a podcast that acts as a reconnaissance report of global proletarian history and aims to use

the lessons of history to analyze the present. I'm one of your co-hosts, Henry Huckimacki, joined as usual by my two co-hosts, Professor Adnan Hussein, historian and director of the School of Religion at Queen's University in Ontario, Canada. Hello, Adnan. How are you doing today? Hi, Henry. I'm well. It's a pleasure to be with you. Yeah, always nice to have you here. And also joined as usual by Brett O'Shea, host of Revolutionary Left Radio and co-host of the Red Menace podcast. Hello, Brett. How are you doing today? I'm doing well. Great. We have a great returning guest again, one of our old friends who's coming back, and hopefully we'll have him a couple times again in the relatively near future. We have Professor Richard Wolfe, who of course,

as the listeners are probably aware, is a professor emeritus of economics at UMass Amherst and visiting professor at the new school, host of economic update and author of many, many books, including his latest, the sickness is the system when capitalism fails to save us from pandemics or itself. A brief reminder to listeners that you can follow us on Twitter at Gorilla underscore pod. That's G-U-E-R-R-I-L-L-A underscore pod. You can help support the show and get bonus content from each of the three of us hosts by going to patreon.com forward slash guerrilla history, G-U-E-R-R-I-L-A history, and now our guest. Hello, Professor.

How are you doing today? Very well, Henry, and thank you very much for the invitation. Of course, it's always a pleasure to talk to you. And like I was saying, before we hit record, when we were talking to each other, Brett Adnan and myself, we were saying we have to have Professor Wolfe on the show again sometime soon. And we were putting together a list of topics that we would want to talk about. And the list expanded to well over a dozen. Today's topic is going to be one that Brett suggested, and so I'm going to turn the mic over to Brett right now to get us into the conversation.

So, Brett, without any further ado. Yeah, absolutely. It's a wonderful honor and pleasure to have you on, Dr. Wolf, as always. Let's go ahead and dive right into it. Today, I thought we should cover the issues surrounding the petro dollar and de-dollarization. These things are part of a bigger shift that's seemingly happening in the world, the end of the neoliberal period. the rise of multipolarity, etc. And a lot of this is not only the empirical, imperial hegemony of the U.S. It's military power and might, but it's economic reach as well. And that's what we were going to focus on today. Now, we do like to start with just introducing these concepts, because we

can't assume, as you were talking before we started recording, that everybody is up to snuff on what exactly this stuff is. So I guess the opening question is, can you just let us know what the petro dollar is, what that actually means and what this de-dollarization process means as well? Yeah, the term petro dollar basically signals that there's some kind of special relationship between the currency of a particular country, the United States dollar, and the global market in petroleum, oil. For a long time in the 20th century, most of the 20th century, most of the 20th century, oil became the number one source of energy in the world. And the oil was pulled out of the ground in a few countries.

It was not generally distributed in the world. It was located millions of years ago as oil emerged out of the decomposition of vegetable and matter and animal matter. And what tended to happen was enormous wealth would accrue to those parts of the world that happened to be sitting on the surface below which the oil turned out to be in the huge quantities. Places like Saudi Arabia, Iran, Venezuela, Nigeria, Russia, Norway for a while, and so on, became very rich economic units because they sat on this resource. Over the same 20th century, the British Empire receded.

It had been dying slowly in the 19th century, but it really finished out by the beginning of the 20th. So alongside the emergence of oil as the basic energy source, there was a lot. the emergence of the United States as a hegemonic power. Particularly in the aftermath of World War II, every other conceivable competitor to the United States was destroyed. Britain, France, Germany, Russia, China, Japan, wiped out by that war. And other than Pearl Harbor, no war occurred on the United States, no bombing, no, none of that. And when the war is over, the United States sits in an absolutely unique position and becomes the dominant political economic force. And as happened in the past, a deal was struck, a deal between the major oil and the major economic power, petroleum and the dollar, or shortened, the petro dollar.

It worked like this. Saudi Arabia leading the way basically could dictate that the world market in oil would be handled through transactions, buying and selling oil, in which the dollar was the only acceptable currency. You want to buy oil, which most countries have to do. You're going to have to get dollars, keep dollars, use them to pay. for the oil. So, Saudi Arabia, Iran, others bring in Iraq, you know, all of those places everybody kind of knows, bring in a huge amount of dollars in payment for the oil that they ship around the world. The second part of the deal was that those countries, led again by Saudi Arabia,

would lend those dollars to the United States government by buying its debt, buying its treasury securities. So you had a very nice arrangement in which the dollar is used all over the world. And remember, if the rest of the world accumulates dollars, they did it not only to buy oil, but also as a reserve for their currencies. They had to have either gold or dollars or a combination. Otherwise, nobody would use a Spanish currency or an Italian lira or fill in the blank because you didn't know what that was worth.

You had to have a guarantee that you could take that currency, go to the central bank of that country, and get your own currency or a dollar or gold as the reserve. And so banks accumulated dollars, merchant. accumulated dollars, and that, many people don't understand. How do they get the dollars? They have to ship to the United States something really produced by human beings that uses resources, you know, French wine, or Japanese automobile, or Chinese software program, or fill in the blank, then send these real wealth goods to us, and we send them cheap

little green pieces of paper called the dollar that cost absolutely nothing. So what you're getting there is the fruits of labor in exchange for nothing. And better, they then take that nothing because holding green dollars, it earns you nothing if you're a foreign central bank. So what they do is they lend those dollars to the United States to get treasury debt, to get obligations of the government to pay them back. It's a loan. and that earns them interest. And so this is a wonderful arrangement. The United States can borrow itself into oblivion

because there's always a ready flood of dollars looking to be lent. So they don't have to tax their own people. They can borrow the money instead. This year, for example, we are adding not only billions, but hundreds of billions or even trillions of dollars in debt. This is all the petro dollar system that merely was very successful for most of the 20th century, but is now in trouble. The second part of that question, just this de-dollarization process, what are the threats there if the world decides to start using other currencies and how legitimate of a threat is it at the current time? Sorry.

Okay. Well, the threat is definitely legitimate. I mean, just to give you an idea. In the year 2005, among reserves held in central banks around the world, the U.S. dollar comprised 67% of reserves. Today, 20 years later, it's less than 45% of the world reserves. Wow, that's in historical terms an extraordinary decline. But you have seen the headlines in recent months. Saudi Arabia is no longer requiring buying and selling of oil and dollars. Just signed a deal with China where the yuan will be the currency that is used.

Basically, other countries want in to the subsidy that having the dollar be dominant gave to the United States. They're jealous, if you like. Why should the United States get all the benefit? You know, there is already another currency beside the dollar that is held as a reserve and that is used internationally, and that's the euro. It's not as important as the dollar, but it's there. What you're seeing is the natural result. I mean, the unique position of the United States at the end of World War II was not sustainable.

You don't, history isn't about one country is dominant and powerful and all the others say, oh, that's it. We give up. It's not the way the world works, not the way capitalism works. The very capitalism, the United States, exported to those places is what is coming back to bite American capitalism in the rear end. They want their share of the world market. They want their share of global resources. They want, they want, they want. They want everything the United States wanted. And they're now in a position to make good on their demand. The real, if I could jump slightly,

this is so important that you all understand, and I thought of pleading here, there is, we living through a moment of very basic decision. Is the American Empire declining? Answer, I think almost everybody, except the leaders in Washington, they know that that's true.

All right, as you decline, are you going to try desperately to hold on? Are you going to play the only card you have, which is war and even nuclear war? Or are you going to try to work out some new world order in which you will have to give up significant economic, political, and military advantages? is that you thought would last forever, even though somewhere you know nothing does. And let me give you a historical, because your program is historical. When the fledgling American capitalism took the enormous risk of going to war against its colonial master, King George III of Britain, fighting a bitter, violent, that was half-war, Britain, America, and half-war civil war inside the United States

between those who wanted independence and those who didn't, and that was a big part of it. The British thought they could control and limit this new capitalist center. They were wrong. They lost the independence war. A few years later, 1812, they tried again, and they were beaten again. After that, the British realized we can't do this militarily. And they worked out a live and let

live arrangement that allowed there to be basically an alliance between Britain and the United States for the next 100, under 50 years. So the question for the United States to be crude and simple, but it's the basic story.

Are you going to work out a deal like that with China? Or are you going to go to war with a country that has nuclear weapons and knows how to deliver them. That, I don't mean to scare people, but that's actually the decision. The people playing in the South China Sea with provoking around Taiwan, they want to solve this problem one way. And there are people in Washington, I can assure you, that do not want to solve it that way, because they're afraid. The recently released Wicke League Pentagon documents that a 21-year-old

right-wing young man released, if you read those documents, they're full of discussions by leading figures in the American military who reasoned as follows. We're losing the war in Iran, in Ukraine. We lost in Iraq. We lost in Afghanistan. We lost in Vietnam. There's a message here, my fellow officers. We've got to pay attention. In their way, they are acknowledging inside, of course, privately that we are in a very difficult position here. Our economy is weaker than I have ever seen it in my lifetime here in the United States. Our political power is being mocked around the world. The inability to get the UN to do anything,

the inability of many countries in the world to line up with United States and Western Europe is remarkable. The power of bricks, the dozen countries that have applied to join the bricks, These are mammoth shifts here, and they're happening in very condensed time. So for me, this whole de-dollarization is best understood as part of the adjustment that has to be made. There is no way to stop China, India, Brazil, Russia, South Africa, and all the others that are allied with them. They're claiming their place in a world. The United States place is going to shrink.

And the United States can either try to work that out or it can try to prevent it. That's the debate that's going on. And everything is confused because all the old lines of political division don't work. Half of bricks is left of center. The other half is not. You know, American politics, the two parties are absolutely pro-capitalist, but on almost everything else, they quite sharply disagree now. There are two wings of a pro-capitalist party, we have no anti-capitalist party of any size

of power. True enough. A mass population that's anti-capitalist, but no political form of expression. and that has its own particular problems. The dollarization is exaggerating and intensifying and antagonizing. It just makes everything else worse. But it's also visible, and therefore it is teaching Americans as they slowly learn about it. And it is not easy to learn about it.

Every time a statistic is released about the decline of the dollar, there's a flurry of stories in the financial. press and in the popular press here telling us, oh, it's not important, it's temporary, it's just a lot of noise to defuse any clarity. Meanwhile, the numbers, for those of us who look at them, are unmistakable.

There's absolutely no debate. The dollar is not what it was, nowhere near what it was, and there's absolutely no sign that that's going to be reversed anytime soon. None, before you hop in with your question. I just have a statistic I'm going to throw out there, and then you can ask your question. So, as the professor said, the percentage of dollars being held in foreign central

banks has been dropping dramatically. There was a paper that came out from the IMF titled The Stealth Erosion of Dollar Dominance, which came out last year, 2022, for those who are listening in the future, that showed that the share of Central Bank foreign exchange reserves that were held in dollars dropped from 71% in 1999 to well under 60%, about 57, 58% in 2021, which is when that report was most recent for. And if we look at the IMF's latest numbers, they're showing that it's already under 58% and that if you look at the percentage, the estimates for percentage of foreign exchange that's going to be carried out with at least one side of the exchange being in dollars, they're

expecting it within the next two or three years to drop to between 40 to 45 percent. Some analyses are expecting it to drop to 40 to 45 percent in the next couple of years because of this increase in bilateral national currency trade that the professor was just talking about. So Adnan, I'm sorry to button. Go ahead with that. That's helpful. I want to pick up on a couple of those two themes. One is institutional arrangements and the other is U.S. monetary policy and how that is accelerating a dollar de-dollarization. And so one component you've been talking, Dr. Wolf, about Bricks and some other, you know, institutional formations.

I noticed that there's talk, Malaysia's leaders recently been talking about an Asian monetary fund. Bricks is also talking about a new development bank. And so, you know, and about investment. in the global south under new conditions and new terms, moving away from the institutions of the IMF and its dictates. So a lot of the discussion about, you know, why, oh, de-dollarization isn't really going to happen and possible is often, you know, justified on the basis that these institutions are so important and you can't have, you know, willy-nilly all these new, you know, arrangements, but it seems that these arrangements are developing. So I'm wondering to comment

firstly about what things like this Asian Development Bank or Asian Monetary Fund or the new development bank may change in the world. And then the second component that I was interested in asking you about is that if you could help us understand and explain how the U.S. Federal Reserve's policy in dealing with inflation has been to raise interest rates, higher and higher, and how and why that is precipitating the cost of dollars being too high and is, you know, even pushing, you know, countries to seek alternatives because they can't necessarily, you know, purchase dollars if interest rates go up. In the interest of time, on the first question, I would argue that what has really accelerated

the de-dollarization in recent years, and especially over the last two years, has been the decision of the United States to do what really can't be called something other than weaponizing its dollar position. You know, that's what it's doing. I mean, give you an example. The IMF recently changed its rules to enable it. it to give an enormous loan to Ukraine. The chances of it getting paid back by that country being literally blown apart these days

is slim to none. And everybody knows that, who has any knowledge of this situation, but it was a demonstration if you needed it that the United States will use its financial power, which is partly about the dollar, to make these institutions, whether it's the world, Bank or the IMF and so on, in a way that consistent with its own objectives. And I think the sanctions that the United States imposes, not only on a particular country, but on people in friendly countries who trade with that sanctioned country, I mean, you are trying to punish a huge part of the world, and you really can't be surprised if they

look for ways to evade such punishment and stopping use of the dollar and replacing it with a currency you are less fearful of being punished by becomes this a matter of doing good business and it is therefore driving a lot of people away from the dollar. I don't see the decisions to throw these enormous sanctions at Russia around the war as having been made. by people who understood what the side effects, what the collateral damage, if you like, that they were risking. And I think they've been surprised by the reaction, which has been to speed up de-dollarization, to speed up these other currency arrangements, to get out from under the pressure that the dollar

and use of the dollar puts you under because the United States. And that leads me to the second question, because really the same. issue. Because the dollar was so important and because what we used to call less developed or third world or whatever you want to call Asia, Africa, Global South, whatever phrase you prefer, they have such trouble building their economies, paying back their loans upon which they often default or have to have a fix. So more and more in recent years, the loans to those countries, they still flow, but they flow in dollars. Oh, ho.

That means they have to be repaid in dollars. Okay? And the way this normally works is when you repay, but you don't have the money really to repay, you go through a strategic moment. You give back the dollars you owe, and you immediately get another loan. Yeah, but, and that works.

Except when the Federal Reserve, an American agency, over which these countries have absolutely no control, decides for its own reasons in terms of its own domestic policy to jack up interest rates. Then a poor African country can roll over its own loan, but it'll have to pay an immensely higher interest on it, which it can't do. And there again, it's put into an impossible situation. It defaults or threatens to. And why? because the American Federal Reserve raised interest rates and why are they vulnerable to what happens?

Because the debts are in dollars. Once again, they might be better off if a debt was in yuan or some other currency which might not impose on them that kind of dependency. And the very least, you didn't want to not put all your eggs in one basket, borrow from them and from the United States

to try to, and all of them. And all of this, given the formerly dominant position of the United States, is experienced as a decline of America's reach and power, which it is. But you're not going to stop that by threatening more sanctions. It actually makes it worse. It gives every country an incentive not to be vulnerable in this way. And the United States looking more and more like it's flailing around trying to hold on. and undercutting itself by the very impossibility of its situation, and yet the denial prevents them from seeing it.

You're watching a real disintegration of the United States as an economic powerhouse, and that frightens everybody as it should, but it also frightens the United States people. That's what's going on. Well, Professor, there's so much more that we would want to say, I have a million questions on this topic alone. So I know that you have to go now. Perhaps we'll be able to bring you on again in the near future to do a part two of this conversation. I would really like to focus on the aspect of sanctions and the impact of de-dollarization on how sanctions are working more, in part because I'm in a sanctioned country.

So this is a topic that I like to hit on, but also because, of course, we've, as the listeners know, have had an entire series on sanctions as war over. the course of the last, what, guys, five months at this point, six months. It's been going on for a while. So we have a lot of episodes specifically about sanctions, and that's one thread that I'd really like to continue hitting on. But until that future conversation, Professor Wolfe, how can the listeners find you and your work? The easiest way to access everything we do is to go to the website that we maintain. It's called Democracy at Work, one word, Democracy at Work.Info, I-N-F-O.

That will get you everything. You can also go to the website where I put all my work, and that is simple, R-D-Wolf, W-O-L-2-F, R-D-Wolf.com, and you'll get a lot of it there as well. All right. Thank you very much, Professor. I hope that we can talk with you again very, very soon. I'll be in touch about that. Don't worry. very good i look forward to it and i'm eager to continue the conversation goodbye brent and nod on as well take care right thank you professor and listeners we will continue the conversation in the wrap up right now so guys what did you think of the the conversation like i said i guess

i'll start um i really didn't even get to start asking questions about sanctions because as you know with professor wolf you ask him a question and you get um almost at like a barrage of information for the next several minutes. So, of course, with the number of questions that we came with, there was no way we were going to get through all of them. But that just gives us room for exploration in the future. But I do think that this aspect of sanctions is one that we do need to hit quite a bit more, because as we've seen, through our Sanctions' War series and listeners, if you haven't

been listening to it, go back and listen to all of those episodes. we can see that sanctions have been absolutely devastating to populaces around the world in basically any country that the United States decides is the enemy of the day. And that is the goal of sanctions. The goal of sanctions is ultimately not to achieve some geopolitical aims. It is to punish these countries to cause suffering. And, you know, maybe as a side effect, they would have the people rise up and overthrow their government, the government that the United States didn't like, you know, how's that democracy

for you? The United States doesn't like your government, therefore you should overthrow your own government. But that's, you know, the side effect. The intended goal is for the people of these countries to suffer. And the reliance of the dollar and the importance of the United States within the decision-making structures. Let's think of the SWIFT system, for example. The SWIFT system was the system, but the vast, vast majority of international transactions were carried out in. And so when the United States decides that you're going to be cut off from the SWIFT system, and yes, the United States would claim that they are not the sole arbiters of the SWIFT system, but if you look at the governance of the SWIFT system, the United States governs the SWIFT system. And when you have these countries holding their debt denominated in U.S. dollars, when their reserve currencies held within their central banks are largely U.S. dollars, the ability for sanctions to really wreak havoc on the people within these countries is immense. when you're cut off from the rest of the world without a way of financing your deaths,

the ability of one single country to be able to exact the most severe consequences imaginable on your country, as we've seen in the cases of Syria, Iraq, Yemen, and we will continue to see in upcoming episodes of this series on North Korea, on Russia. have on Zimbabwe, we have many, many case studies that we have talked about and that we will talk about. If it wasn't for the reliance on the U.S. dollar, are sanctions still possible to be carried out? Yes. Are the willy-nilly crippling unilateral sanctions that the United States has the sole ability to be able to institute, implement, and decide what the justification for them is and when they should be revoked, you don't have that same power without having the absolute international reliance on the dollar. So being able to carry on this conversation next time

with the professor about de-dollarization of the international system and how that de-dollarization at least presents some opportunities for these countries that find themselves in the United States' black book for one reason or another, it provides some wiggle room. And we're starting to see that now in the case of Russia. As the listeners, I'm sure know by this point, I'm based in Russia. The sanctions regimes that that has been put on Russia is about as severe is on any country in human history in terms of the number and the level of the sanctions packages that have been put on. But the impact hasn't been as much because de-dollarization has begun. These bilateral trade and national currencies, Russia, China have recently.

agreed on bilateral trade and national currencies. Russia has bilateral trade agreements with numerous countries throughout South Asia as well as in Africa, in national currencies. This, as well as finding alternative mechanisms to things like the SWIPP system, means that even when the United States decides that country X is the country that we're going to sanction today, the crippling impact is it that is not going to be quite as severely felt, and therefore sanctions are not going to be quite as coercive of a measure as they had been up until the present, basically. So that's my long rant out of the way. I don't know if anybody wants to pick up on that. Yeah, I could say a couple things. I'm kind of zooming out a little bit from the

interview as a whole that we, the time we did get with Professor Wolf. I thought it was very interesting how, for example, he ties the Fed boosting interest rates to try to grapple with domestic inflation leading to the, you know, another sort of fire law on the fire of de-dollarization abroad. He's talking about how, you know, African countries have loans and then the interest rate goes up and those loans become unpayable, et cetera, giving more and more and more urgency to more and more people to get off of the dollar in whatever ways they can. So that's interesting how domestic policy is also exacerbating, you know, from the U.S.'s point of view, this problem abroad. But the interesting thing that I really want to

think about and that Professor Wolf was gesturing towards is that this process of de-dollarization, however it takes place, whatever the speed of it is, there's arguments on all sides, of course, this is an ongoing developing thing, but that it is a deeper signification of an empire in decline. And the last empire, the empire that the United States replaced, was the British Empire, and we get some insight as to how a dying empire can sort of adapt to that. Now, I think the U.S. is, and especially looking at our leaders, they're so detached from reality. They live in a fantasy world. They live in these silos, these echo chambers, this cushy little, you know, eastern seaboard, high class, gated neighborhood world where their power and

their career is of paramount interest. And they don't have the capacity on the individual level or the collective level to grapple with these problems, much less to solve them in any decent way. So, you know, what happens when the U.S. Empire continues to go down and decline, de-dollarization being only one aspect of that broader process? I don't know, but, you know, I would put my money on the side of the U.S. lashing out. That this is, they're not going to, you know, exit stage left calmly. They're not going to integrate themselves maturely into a world with many powers or multiple poles of power. They're going to try to stop this process by brute force if they can.

Now, what would be a rational choice for the U.S. to make if they could grapple with this reality and actually deal with it, which it can't because government is completely corrupted and ineffective? But you look at a China, you say instead of saber-rattling, instead of heightening the rhetoric, instead of sending Pelosi over to Taiwan, instead of like, you know, fighting the proxy war in Ukraine,

just so getting ready to fight the proxy war that's coming in Taiwan, You could step back and say, the U.S. Empire, it was a hot moment of unipolarity. That's seemingly coming to an end. We're going to do this gracefully. China, let's cooperate. You know, we can have a competitive rivalry that makes us both better in some regards.

But there's no reason why we cannot cooperate while the U.S. can take a step back and say, China, you know, that's your neighborhood. We're not going to go to war or start nuclear World War III over a little island, you know. you know, let's cooperate where we can, etc. That would be one way of doing this in a mature way. Also, hey, there's lots of problems at home. Maybe we don't need the empire. The people on the left in our citizenry and the people on the political right now

have finally cut up with the reality that the empire is bad. We don't want it. And we suffer a lot of losses and deprivations here at home in order to fund and perpetuate this insane, violent, evil empire abroad. So, you know, little nice liberals want stuff like healthcare, maybe conservatives want more robust infrastructure or maybe both sides want jobs guarantees or just a, you know, blossoming of public transportation or whatever. All of these things that we want to solve here at home are not going to be solved as long as the U.S. Empire desperately tries to pour all of its resources and funding into being this global empire that dictates to everybody else economically and militarily what they can and can. can't do. So just rhetorically tying the death of the empire to the things we need at home to solve our actual issues, I think is a good way if you're going out trying to convince people

against the U.S. Empire, whatever. But I think the sole thing I'm getting at here is, you know, these are open questions. The empire is in objective decline. We're not exactly sure how fast this decline is going to happen. It's likely to be protracted over several years or decades. How will the U.S. respond. And that is going to determine the quality of life of people and families that live here as well as the quality of life of people that live abroad. One quick thing before I let you in on done with your thoughts. Just very quick. Brett, you mentioned that some different groups of people want less U.S. spending on things like wars for different reasons. You know, liberal audiences may want that for some reasons. Conservative audiences may want that for another reason. But

we have to be careful that we understand that the goal needs to be that we try to end the U.S. Empire in this regard. It's not just we need to scale back the amount of spending because if you're only worried about the spending, you're not worried about the U.S.'s role within the international system and the imperial ambitions of the United States. the, well, the actuality of the U.S. Empire. I had recently seen, and of course this is online from our quote-unquote Pat Sox, that they were complaining that there was a delegation of some left-wing activists

who were making a delegation to Cuba right now. And they were saying, why are you going to Cuba? You should be carrying, if you're a real socialist, you should be carrying about the working class of the United States. Okay. I mean, of course, we do care about the working class of the United States, but where is international solidarity here sending this delegation, which is not a delegation of the United States government, mind you.

This is like an activist educational delegation, going to Cuba, which has been a target of U.S. Empire for 70 years now, my math is off, 60 years. 60 years now, them going there on a solidarity delegation is not the same thing as the U.S. say, you know, cutting back the amount of money that's going to Afghanistan in the means of bombs to Afghanistan or, you know, various NGOs that the United States funnels money to in order to, we've talked about the NGOification of imperialism, I think, in two different episodes. So I'm not going to get into that right now. But listeners, if you are interested in that. We talked about that with Amanda Yee and also, I think one of the episodes that

we did with Vijay Prashad, I don't remember the other one, but it's definitely been like two episodes that we've talked about the NGOification of imperialism. So it's not like sending this delegation to Cuba. The U.S. government is not sending this delegation. It's not like this delegation going to Cuba is maintaining the U.S. empire and using taxpayer money that could have went to the working class of the United States. No, this is not something. that's worth criticizing, like show international solidarity, try to break the U.S. empire, and also advocate for the working class of the United States. These are not mutually exclusive things. You can walk and chew bubble gum at the same time, despite what some of these purely online fools

will have you believe. Adnan. Well, yeah, I think, I mean, the point Brett made about following on Dr. Wolf's point that the key question is, well, how is the U.S. going to respond to these clearly evident changes in the global economic and geopolitical situation? Is it going to try and hang on to its empire by doubling down on sanctions regimes, militarism, and war? Or, you know, is there going to be some understanding that it has to learn to live in a different kind of world where things are going to be more contested in the negotiated. And I guess to follow up on what you were just saying, Henry, I think, you know, a real important point here is, you know, many people have suggested that it's not so easy for multipolarity to remake the world. And also, there aren't really a lot of guarantees that the kind of withdrawal of the U.S. well, not withdrawal, but like the U.S. losing its predominant

position, you know, doesn't necessarily itself also make the struggle for an equitable and just world inevitable. It just means that, you know, one of the key impediments of the hegemony of one, you know, in a unipolar world of the U.S. imperial and economic hegemony over the world loosens its grip and there's the opportunity and the chance to build something better. But But this era is also going to mean that there's going to be a lot of kind of confusing, you know, conflict. It's not going to follow any ideological regime necessarily as regional alignments emerge. You know, as Professor Wolfe himself mentioned, you know, Bricks is not an ideologically aligned grouping. They're, you know, grouped together because they have been shut out of the U.S. and European-led.

you know, a neoliberal order, and they're trying to renegotiate that position, and they recognize and realize that perhaps they need to cooperate with one another. It's a little bit like what happened in the 1950s and 60s with the end of colonialism, decolonization, ended up leading to new national, you know, nation states in a post-colonial world who found themselves constrained by U.S. dollar diplomacy, because that's what was happening. They were being imposed upon them, the outcomes of the Bretton Woods system with the World Bank, IMF, and the dollar as the global reserve currency, or they had to kind of join the orbit of the Soviet system. And, you know, you had a kind of ideological, you know, diversity

in this group of the global south that wanted a non-aligned kind of movement. I think we're very much in a similar era where we will see these regional affiliations, different countries want to have options for whom they're going to trade. The reason why they're being pushed into some kind of apparent economic and maybe even geostrategic alliance with one another really has to do with the insistence of the United States on imposing uniformity, just like it is with the sanctions regime, saying you are either with us or against us. You either, it's adhere to the rules-based order or, you know, you're an authoritarian and we oppose you, right? So the U.S. is, in some sense, the U.S. and Europe is polarizing, you know, the situation with

its attempts to maintain this hegemony. But a couple of points on different components of this that I just wanted to bring up. Brett, when you mentioned that, you know, some of these ideologues are really in fantasy land, thinking that they can reimpose, you know, U.S. supremacy on the world. But there's a lot of evidence starting to break out that they recognize, you know, the grip is being lost. The question is how are they going to respond to that? I mean, Marco Rubio is representing this kind of political and ideological orientation recently in March 30th, said, you know, on Fox News, we won't have to talk sanctions in five years because there will be so many countries transacting in currencies other

of the dollar, that we won't have the ability to sanction them. So, of course, for him, this is a dire kind of situation, but it's a recognition that, you know, this de-dollarization means that the effectiveness of sanctions is going to wane as people seek alternatives. And, you know, you know, Janet Yellen, Secretary of the Treasury also very recently indicated in an interview with Farid Zakaria on CNN that the sanctions, use of the sanctions, has put the weaponization of the dollar has produced a reaction, as Buried Zakaria said. He asked her, he led this segment by saying the way the United States has used sanctions often in this case against Russia, the case of the Iran nuclear deal, is to use the power of the dollar as the reserve currency of the world. But that weaponization of the dollar has produced a reaction.

This week, President Lula in Brazil said, why are we all being forced to use the dollar? Emmanuel Macron made reference to the dollar in that same way. The European Commission has talked about after Trump pulled out of the Iran nuclear deal, talked about creating an alternative to SWIFT to the American-dominated payment system. Is there a danger that we will look back at all these measures and say this was the moment that the dollar's hegemony and its status as a reserve currency began to falter? Now, you cannot have a more establishment kind of connection. figure than Farid Zakaria when it comes to the global economic sort of things.

And here he is laying out a lot of the things he sounds like, you know, Professor Wolff, kind of recognizing what's happening. And the point that Henry just made about alternatives to sweat. So the weaponization of these institutions and of dollar supremacy is, and through sanctions regimes, is pushing countries to look and seek alternatives. And so Secretary Yellen kind of, you know, admits this. She says there is a risk when we use financial sanctions that are linked to the role of the dollar, that over time it could undermine the hegemony of the dollar, as you said.

But this is an extremely important tool we try to use judiciously, and in circumstances, especially when we have the support of our allies. And she goes on, you know, that it's very effective and we work with our coalition partners, which is, you know, of course, totally bogus. The U.S. takes the lead and they end up following along with us. But she admits, of course, it does create a desire on the part of China, of Russia, of Iran, to find an alternative, you know, and while she tries to recover the situation saying that there are good reasons for the dollar being a reserve currency because we have deep assets, it's liquid, dollars are, you know, already widely used. And so there's a bias towards staying with a safe system that you already know you can count on. You know, it's stable, et cetera. But, you know, really the case for the dollar is, undermined and we see the flight from the dollar taking place. Kenya is looking to use the shilling for purchasing, you know, oil. You know, the fact that Saudi Arabia is agreeing.

Okay, so we're not even talking about the yuan renminbi that they're willing to sell in, which you could say, well, the biggest purchaser of Gulf oil is China. So, of course, maybe they might have to for the sake of if China demands that, and that's a huge part of their market, they're going to, you know, go ahead. Kenya, okay, you know, being able to buy in the shilling suggests that Saudi Arabia is willing to do business now, really in any currency, you know, where they have a significant, you know, market. That suggests that the dollar's hegemony, especially since it was anchored, and this is something we didn't get a chance to talk about in the history with Professor Wolve, that the reason why we talk about the petrol dollar

is because the U.S. specifically negotiated when it went off the gold standard. in the early 70s under Nixon, it anchored it via, you know, the price of oil by getting Saudi Arabia and therefore Obeck to agree to only use the dollar. Well, that obviously, that was just a political agreement. I mean, that wasn't based on anything. It wasn't based on the fact that like the gold standard that the U.S. had a lot of gold in Fort Knox, you know, it's a political agreement, you know, and that political agreement seems clearly now to be somewhat obsolete. That spells, you know, future, you know, real trouble for dollar hegemony. So the question, yeah, really is. Are we going to recognize these developments and say that in the, in a world where

U.S. hegemony has been weakened, there are opportunities that we have to support, recognize, and work towards to create a more global adjust order? Or do we try and kind of, you know, are we going to allow like those interests in the United States that have the most to gain by trying to maintain U.S. hegemony, the arms manufacturer, the military industrial complex, the financial institutions that are wedded to, you know, the U.S. dollar system. But also like in the global south and around the world, what is going to be the shape of this multipolarity? You know, is the new development bank of Bricks going to be a benefit to, for global justice? Or is it just going to replace, you know, maybe slightly better than the IMF? But, you know, is it going to lead to, you know,

the socialist, international socialist future that really, you know, we all need? Yeah, I'm incredibly insightful stuff, odd not. And I also listened to that, uh, was a car, I interview with Janet Yellen. It's interesting. I keep actually an eye on that stuff as well because I'd like to see like where Farid goes and who he interviews and what they say about the stuff. It's interesting to get insight there. I would say you're absolutely right. And we want to stress this that mere multipolarity, mere de-dollarization, these are not intrinsically good or inherently socialist necessarily. They can take many, many, many different forms. But one thing that does do that we're always

stressing is that it opens up possibilities. A possibilities abroad, possibilities domestically, and it's really our job to try to organize and be able to take advantage of whatever opportunities we possibly can can in the wake of these new openings. Because I think it's right now we're living through a shift. It's not an inherently good or bad shift on its own right, but it does open up lots of possibilities and we should keep that in mind. It is good in the sense that the U.S. will seemingly, if things play out,

as they seem to be playing out, have less and less of a capacity to unilaterally imposed its interests and its policies on the entire world without any pushback. So there's something inherently good about that because I don't think any one country, even if it's a different one, should have that right or that ability. So insofar as that's weakening,

I think that is a good thing, but that's an important point. The other thing I wanted to say is that, you know, even if elites, the Marco Rubios, the Fareed Zakaria's, even Pentagon officials in their internal chatter, even if they understand the basic shape of this thing, they understand where things are going. What I'm very skeptical of is it's hard to imagine what the policy mechanisms are.

Like, you know, let's say that there's a general agreement among certain more forward-thinking members of the ruling class elite in this country. This is happening. You know, what is the agreement? What do we do next? Let's say we can even get around the military industrial complex and the arms manufacturing.

and their status quo interests, maintaining the status quo, if we could get around that, what is the policy project and how do you get both parties to sign on to like, here's how we're going to deal with the decline of the empire? It's very, very hard. So there's the elites acknowledging something's happening and that, and then there's the, what are the actual mechanisms of the United States, the United States state apparatus to do anything meaningful about it in a, you know, through Congress, through policy, whatever that may be. So that's going to be interesting to see how that plays out because I do agree with you that there are certainly elements in the elite, either in media or in the political parties

or in the deep state itself who are recognizing this stuff. But how does that ultimately cash out is going to be very interesting to watch? The last thing I'll say, and this is my concluding statement, is just a question I would have if we can get Wolf back on the show. Because my question that I don't really understand, I don't have the answer to, is what would happen if the U.S. dollar suddenly ceases to be the world's reserve currency, if this happens tectonically in a very short period of time, or maybe over a longer period of time, but there's no real policy that is doing anything to deal with it. What does that mean for the United States

government? What does it mean for United States citizens in our domestic economy? And then what does it do to the trillions of dollars of debt that we have, which we've been able to accrue in part because of this dollar hegemony that the U that the U.S. has been able to maintain, right? The ability to inflate that debt to such huge degrees is in part, you know, tied to that. So if that falls away, you know, what happens on that front? I'm, you know, concerned about the domestic economic front because everybody I love and know lives here. And it matters to me what happens to my family and friends and my community.

So those are questions I have for next time, I think. Yeah. And I, there's a lot of questions that we could have for next time. time. There's a lot more that I want to say, but knowing that I'm already working on getting the professor to come back, I'll save those four next time. It's just, just to remind the listeners about that last point that Brett made before we wrap up. I'm sure all of the listeners are aware of this, but it's worth keeping in mind nonetheless, is that the United States is a free-floating fiat currency. Its value is not tied to any tangible asset. Its value is tied to

the fact that it is the global reserve currency. And so when Brett is saying it's interesting to think about what would happen to the dollar, what would happen to the U.S. government, what would happen to the U.S. economy, and what would happen to American citizens, people living in the United States at least because I don't have any U.S. dollars, but, you know, it's very interesting to think what would happen because the U.S. dollar for decades has been relatively stable, simply because it is the global reserve currency and many foreign countries hold their debt

in U.S. dollar denominated debt. And so as that begins to change, remember that there is nothing tangible backing the U.S. dollar and unless that changes, it is therefore possible that the valuation of the dollar could fluctuate pretty substantially as the U.S. dollar's position as the reserve currency continues to,

if it continues, which it looks like it will, continue to fall in its position as the global reserve currency as we go through this process of de-dollarization. So certainly something to keep an eye on, for those of you listeners who are based in the U.S. or have loved ones in the U.S., because as we see de-dollarization, as Brett said, we could see a continuing rise of multipolarity, which isn't inherently socialistic. I think that that bears repeating because many people do think multipolarity, well, all of a sudden we're going to have the possibility of socialism. Well, like, maybe the possibility is there, but there's nothing inherent about it.

But if that comes to pass, what is backing the U.S. dollar and what is keeping the U.S. dollar stable? So that's something to keep thinking about. You can think about that listeners as we leave you until the next time when we talk to Professor Wolfe, when inevitably we'll ask that question. directly to somebody who's far more knowledgeable about economics than any of the three of us. So on that note then, Adnan, how can the listeners find you and your other podcast? Well, you can find me on Twitter at Adnan-A-Husain, H-U-S-A-I-N. You can check out my website, www.ad-A-H-N-Husain.org for future courses and resources and listen to the M-A-H-L-I-S on all the platforms.

platforms about the Middle East, Islamic world, Muslim diasporic culture, and experience, the M-A-J-L-I-F. Yeah, absolutely recommend the listeners to do that. Brett, how can the listeners find you and your two other excellent podcasts? Yeah, you can find those at Revolutionary LeftRadio.com, and you can also join the Patreon, patreon.com forward slash RevLeft Radio, because recently we've upped the amount of bonus Patreon monthly content from one episode a month to three episodes a month. And we're really having fun over there. It's a time where I get to sit back and kind of wrestle with some, you know, issues in the news, some timely topics.

The ephemeral nature of the 24-hour news cycle is such that I plan my episodes a month out. And sometimes I just can't get to things that pop up and go away quickly. So on the Patreon, I'm doing a lot more of that. And it's pretty fun. So if you want to support that show, you can do that. And you can always, of course, support a guerrilla history's Patreon and get bonus content as well. Yeah, absolutely. We are throwing up early access content on our Patreon.

we're throwing up some exclusive content, which eventually gets unlocked because we do want to make sure that everybody has access to the information that we're sharing. But like we're talking years down the road for some of the things that are getting released at this point from the Patreon. And yeah, we always have good ideas for things that we can start doing. Like I'm planning on serializing the Losorto book and audiobook form. And I'll put that up in serialized format on our Patreon.

So as we get closer to the release, state for the book that Salvatore, Engel de Morrow, and myself co-translated and edited Domenical Lacerdo's Stalin history and critique of a black legend, people that are on our Patreon will be able to start getting serialized audiobook format of that. That's my plan, at least. So we'll see how that comes to pass. As for me, listeners, you can find me on Twitter at Huck-1995, H-U-C-1-9-95. You can follow Gorilla History on Twitter at Gorilla underscore Pod, G-U-E-R-R-I-L-L-A, pod and you can support us on Patreon and get access to all of that bonus stuff that we've just been talking about by going to patreon.com forward slash guerrilla history again

gorilla being spelled G-U-E-R-R-I-L-A history and until next time listeners, solidarity. Thank you. Thank you.