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Michael Hudson, Radhika Desai and Danny Haiphong: The Economics of the Ukraine Proxy War

Economic Warfare

Image by Truthout.org via Flickr

by Michael Hudson
Writer, Dandelion Salad
February 13, 2023

The Left Lens with Danny Haiphong on Feb 2, 2023

Economists Michael Hudson and Radhika Desai join Danny Haiphong to break down the economics of the Ukraine proxy war between NATO and Russia as the one-year anniversary of the military operation approaches.

Michael Hudson’s latest books
Radhika Desai’s latest book

Transcript

Excerpt:

Michael Hudson: Well the whole purpose of the war is economic, but it’s not economic just about Ukraine and the winners and losers of the United States and Europe.

President Biden has said this is a ten- or a twenty-year war, and it’s [a war] for what kind of economy [the world is] going to have.

Is it going to be a finance-based neoliberal rentier economy centered in the United States, with the United States controlling all of the monopoly rents: for oil, for raw materials, for technology, for computer information, for pharmaceuticals?

[Or, on the other hand,] will other countries have a chance to be independent?

Ukraine is just sort of the first joust in this long long war and [the war is] over the economy.

Everything that’s happening right now is just sort of a squiggle over the really big picture, which is how the world is going to be structured economically.

[…]

The one economic effect of the war in Ukraine is to completely disarm Europe. Europe has no more tanks, no more rifles, no more ammunition. It’s a huge market now for American arms, if the United States can continue to keep the current European political leaders in power. The United States has solidified its hold on Europe, and it had hoped that the sanctions would put such an economic squeeze on debtor countries — on Latin America, Africa, and South Asia — that they would be forced into higher reliance on the dollar.

Radhika Desai: If you were to just say one word about the sanctions which are imposed by the West, I would say that the word that simply describes what has happened as a result of sanctions is: Boomerang. The sanctions were advertised as [a way to] lay waste to [the] Russian economy, [and make its economy a] basket case, [and] the big nuclear option of freezing Russia’s reserves [were] going to bring Russia to its knees. None of this has happened. I think this is really interesting to sit back and observe why that is so.

If you look back at the history of sanctions — which goes back to the early days of the First World War, what you find is that, basically, the application of sanctions was an attempt to bring to Europe — and essentially an attempt to use everywhere else — measures that had been used by imperial countries against their colonies to bring them to submission.

But the fact of the matter is that we have come a long way from that world, and even the relatively weaker economies of the world are not so easily damaged without inflicting damage on yourself.

Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of A Philosophy for a Fair Society (2022), The Destiny of Civilization (2022), …and forgive them their debts (2018), J is for Junk Economics (2017), Killing the Host (2015), The Bubble and Beyond (2012), Super Imperialism: The Economic Strategy of American Empire (1968 & 2003 & 3rd Edition 2021), Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy (1992 & 2009) and The Myth of Aid (1971), amongst many others. He can be reached via his website Michael Hudson, mh@michael-hudson.com. Originally published Feb. 7, 2023.

From the archives:

10 Ways the War in Ukraine Threatens Our Environment

Michael Hudson and Radhika Desai: Since Money is Political

Seymour Hersh: How America Took Out the Nord Stream Pipeline + Transcript

Roger Waters Calls for Peace in Ukraine at UN Security Council

Michael Hudson and Radhika Desai: What Causes Inflation?

Finian Cunningham and Pepe Escobar: Ukraine War is Desperate Bid by US to Preserve Hegemony and Prevent Multipolar World

Michael Hudson and Radhika Desai: Multipolarity and the Decline of US Hegemony

Michael Hudson: The World Bank Has Always Been An Arm Of The U.S Military

Richard Wolff: The Economics of the War and the Crisis Ahead