#141 The Political-Economy of US Decline - Alan Freeman

Speaker 1: As far as I'm concerned, as long as that same respect and recognition is not shown toward every one of our people in this country, it doesn't exist for me. And during the few moments that we have left, we want to have just an off-the-cuff chat. between you and me, us. We want to talk right down to earth in a language that everybody here can easily understand.

Mamadou: Welcome back to another episode of The Malcolm Effect and once again I am bringing you some great guests, some of, in my opinion, the best voices I could find on these topics. So welcome to The Malcolm Effect, Professor Alan Freeman. Thank you, how are you?

Alan Freeman: I'm very well Mamadou but I have to say as I always do, I am not a professor and I have never been a professor. Oh, so I don't know whether that elevates me in the minds of your listeners or whether it lowers me, but whatever is the truth.

Mamadou: Okay. Thank you so much for, okay. I don't think it matters because I still think you're one of the best voices I could speak to. So thank you. Brilliant. So I really want to talk about this understanding and we often hear the US is in decline. We often hear, I mean, I know there's some talk about did the US ever actually achieve hegemony, but But as thinkers who center imperialism and anti-imperialism in our analysis, I think it's important that to begin to unpack what people mean or what perhaps you mean when we think of the US decline. So just as an opening question, when people talk about American economic decline, North American economic decline, what did it actually mean in political economy terms?

Alan Freeman: Well, I would start by asking the opposite of that question, and then you see where the answer is, which is, was America ever really great? Right. Because if it was never great, then it didn't decline. It just did what it does, if you see what I mean.

Mamadou: Mm-hmm.

Alan Freeman: Now, what I think is involved here is undoubtedly America, during the last century, became the economically dominant imperialist power. That is, it essentially came to tell Europe and Japan what they must do, and they had to fall into line. That's what I mean by dominant, okay?

Speaker 1: Mm-hmm.

Alan Freeman: It never defeated the USSR. So for half of that century, I would say that there was a basically dual world structure. Eric Hobsbawm's written about this, you know, the antagonism of the USSR and what people call the collective West led by the United States of America. And then with the rise of China, I would say that in the 21st century, That took the new political form of what is essentially, some people call it multipolarity, some people call it pluripolarity. But what I think it's useful to focus on is the emerging very specific alliance that you see with the Shanghai Accords, with the China and Russia coming close together, with Iran becoming clearly part of that common equation. and with what's happening in Latin America, and also the resistance to the French imperialism in the Sahel, all those things are kind of recreating a kind of bipolarity. Now, I don't want to go too far with that, because we'll probably get a chance to discuss what multipolarity is and what pluripolarity is. But the point I'm making is that we're seeing a kind of funny return to a situation where there are two sides, okay? In fact, let me just throw something in here so that we can pencil for later. Keir Starmer recently made a very interesting speech about Iran and Ukraine. And he said, I quote him, I'm pretty sure, I mean, we can check, but I'm doing this from memory. We are now in a war on two fronts. Well, pick that apart. First of all, even saying we're in a war is admitting something since he's never declared war and he needs the approval of the British Parliament. Ever since Cromwell, you need the approval of the British Parliament to go to war. But secondly, he's actually saying it's not two wars, it's one war with two fronts. So bear that in mind in what follows. Now, OK, coming back to the United States, what the United States was able to do was become essentially the war industry machine of the rest of the West during World War I and World War II. So its rise to so-called greatness was actually a rise to becoming the supplier, for a long while, the unchallenged, industrially superior supplier of all the industrial needs of Japan and of Europe, Australia to some extent. And it was doing this in the role of being a dominant power. So it not only supplied them all, but it's set up a political structure in which it used that economic leverage to exercise political control. So what's been happening is what one means by decline is a kind of falling from grace, a kind of falling from that position of dominance. So I'm going to stop there because I've sort of set the parameters, but I haven't answered your question about decline. I'm saying that you need to ask, what's it declining from?

Mamadou: Exactly. Thank you. So I guess for those of us who are interested in analysis then, and I perhaps, okay, no, I'll come back to the analysis question because I would say, so when we talk about this thing of, I guess, decline or full form grace, right? How do we periodize the US economy? When would we like say, is it 1970s Christ, profit crisis, etc. ? Is it the de-industrialization? From a Marxist perspective, what indicators are we looking at? Are we looking at profit, profit rates, productivity, industrial capacity? I guess it's trying to hone in a little bit and say, okay, when we're trying to make an assessment of what is called decline, what are we looking at?

Alan Freeman: That is very interesting. And I'm going to I will go back to the earlier period because, again, the question what happened in the First World War, what happened in the Second World War is the key to all this. Now, I'm going to look at the post Second World War period first. So I've recently produced a chart. Which was just a kind of refinement of many charts I've produced. And your readers can find this information, by the way, in a publication called A Japanese Political Economy. And they have had several issues discussing what they call secular stagnation, which is a big preoccupation in Japan, because it was at one stage a rising challenger to the US. And since God knows when, you know, 30 years ago, It went into decline. So they're very interested in that. And there was a whole issue on it in which I prepared a lot of material on the US decline called the 60 year decline of the West. So if anybody wants to look it up, they will see a lot of charts and a lot of discussion of that. Now, the chart I've recently produced is something very important. Most people, when they look at growth or non-growth, the indicator they look at is called gross domestic product. In fact, what they look at is what's called real gross domestic product indicator. domestic product, which is an attempt to measure the volume, the quantity of stuff that the economy produces. Now, there's a very important caveat here because you get a different picture if you measure the money and if you measure the stuff. But I'll come back to that because underlying it, if you want to know what is the industrial capacity of the US, you use real GDP. Except what I've used is real net domestic product, an NDP. And the difference is you deduct the depreciation of your machinery from growth. And the reason that's important is first, obviously, if you are paying for the decline of your machinery, then you're not growing as fast. And in fact, there are many periods when Over the last 20 years or so, the United States actually had net negative net growth, which means it's actually declining. It's actually shrinking as opposed to not growing very fast. Now, when you look at that graph, it straightens out a whole series of illusion. First of all, you find that the first thing you find is that when the economy became great was during the war. The war economy, the Second World War economy, this is the untold story, was the occasion when the US economy really took off and it reached extraordinarily high growth rates. Then in the Civil War, the Korean Civil War, and in the rise of China, into which the US threw a lot of resources to try and stop it, there was a, there was a collapse. I mean, to some extent that was demobilization collapse, but also the, the USA overreached itself. So it, it recovered from that by giving up basically, which is a good way. If it would, if it was to stop trying to invade other countries now, it would immediately recover. Okay. But it, it, it recovered from it and it grew until 1974 from 1970, you know, uphill all the way from 1974 onwards. It's downhill all the way. And there's an illusion or a myth that that graph dispels it. You don't see it. It also doesn't. The myth doesn't hold up with the gross domestic product either. But if you look at net domestic product, it's particularly clear there was no neoliberal recovery. And a lot of people on the left have argued that after 1980 or 90, there was some kind of recurrence or recovery of US economic dominance, which was due to the new neoliberal model. You find this in the people who talk about a structure, the SSA, structures of social accumulation, they tend to say that. And Duminil and Levy, they tend to say that. They wrote a book called Capitalism Triumphant. in which they said there's been this huge recovery in the 1990s. It was very unfortunately published four years before the great crash of 2008. If you look at the long-term figures, you see there was no neoliberal recovery. The industrial capacity of the US, the productive capacity of the US, did not recover after 1970. It kept on going down. So if you put all those facts together, demobilization, no, Second World War, apogee, greatest height of expansion, demobilization, Civil War collapsed 1951-53, growth unchallenged, unchecked until 1974, and then very long run declines. Now, myself, what do I think that decline is caused by? There are two, three factors involved. I wrote a long time ago an article about this in a wonderful volume by Chaim Breshith and Yira Yuval Davis on the Gulf War. I repeated that in, of all things, 1990 in an article in Capital and Class. The US economy rests on what I call a tripod. It has three sources of strength. One is the US maintaining its own industrial strength. The second, it's financial dominance through the dollar economy. And the third is it's super exploitation of the labor of the global south. So those are the three legs of the tripod. Now, you kick one leg of a tripod over. and the tripod starts to fall. The leg that went first was America's own industrial productivity. And that has to be emphasized. It has to be emphasized because the whole mythology of Trumpism, which much of the left buys into by the back door, is we was robbed, we was stolen, We were doing fine and China took it away from us. We were doing fine and the terrorists took it away from us. We were doing fine and the finances went wrong. No, the industrial productivity of the US economy itself went down from 1974 onwards. In 1974, there was, by the way, a huge slump, the first big post-war slump. And essentially that was caused by the failure of Keynesian demand management. And the failure of Keynesian demand management was caused because it would not interfere with investment. It would not interfere. So essentially what happened is U.S. enterprises, U.S. capital stopped investing in the U.S. economy. Nobody made them do it. They did it of their own accord. Why? Because they got less profits there. This is what capitalism is. Capitalism is the pursuit of highest possible profit. And the highest possible profit rate, more and more, was not to be found in the US domestic productive economy. It was to be found internationally. in the super exploitation of the third world. So there was massive continued attempts to use US capital to get money abroad. And there was massive continued attempt to use the financial domination of the US To maintain or to get the money went into finance instead of production. So the overall factor driving US decline was the well, it was driven the lack of investment, which I personally and many others think is driven by the falling rate of profit, which is an empirical thing. It's an empirical thing. It's not. you know, these interminable debates that Marxists have about whether Marx was right or Marx was wrong. I happen to think Marx was right. But if you look at the facts, it's what happened. The profit rate went down and people stopped investing. Very, very rational behavior. I'm just going to finish on one fact that calls a little graph I produced, which I love, which highlights this. If you look at the contribution to world growth of the USA compared with other countries in 1974, I can't remember the exact amount, but it was about like 50% of world growth was the USA. If you then fast forward to 2020 or 10, anything in this millennium, right, the contribution has halved or dropped to one third. If the United States had simply carried on producing at the rate of 1974, there would have been hardly any change in its share of world growth. That's a fact to take up. It's not the rise of China. It's not the response of the global south. All these did is it choked off the other avenues. I hope I haven't lost you.

Mamadou: No, no, absolutely. No, no, I can hear you. Thank you.

Alan Freeman: Yeah, I can still hear you. Yeah, it was entirely self-inflicted. And that's a very important fact to get across, both for the US left and for the US right, the MAGA right, you know, which is a big process of chaos. It's very important for them to understand. It's very important for China because there's this whole idea that was put forward at the I think it was a theory of the Thucydides trap, that the conflict between China and America is a result of China growing and becoming a threat. It's not. It's caused by America shrinking and America did it to itself.

Mamadou: Thank you so much for that brilliant answer. There's so much there. We always hear about the 1960s and 1970s and the neoliberal moment, which you have touched upon. But I think it would be worth just perhaps digging a bit deeper. So two questions I have, which are tied together. How did the crisis of profitability in the late 1960s, 70s reshape US capitalism? And was neoliberalism a solution to this crisis or displacement of it?

Alan Freeman: Well, I would say that neoliberalism was one of two solutions. which were considered seriously by the West. One solution, which was the report of the Brandt Commission, which is the place where the term Global South first comes from, actually comes from the Brandt Commission report, in which they said what you've got to do, faced with this crisis, is you've got to massively invest. You've got to completely change your relations with the Global South, such that you develop the productive capacity of the Global South. This is the opposite of what the USA was doing. The USA invests, but invests in cheap labor, invests in anything but industrialization. That's the investment strategy of the US and has been since Theodore Roosevelt. Right. You know, Theodore Roosevelt created the Banana Republics. And I always like to say, when everybody says the word Banana Republic, remember who eats the bananas, right? The Brandt Commission said, stop doing that. Develop the industrial capacity of the global south. Go along with the development economics, the anti-dependency economists of the 1960s. Agree with them. Go ahead and do with that. Massively increase money to develop your own economy, but above all, develop a relation with Russia. Explore the complementarities between the Russian economy and the German economy. There's no accident. that this came out of Germany, because what Germany said is, this was, Willy Brandt was a socialist who advocated what was called Ostpolitik, East politics, reconciliation with Russia, an exploration of the complementarity of the, you know, the whole of the East Asian continent and German capital. That was crushed by the United States, and it was crushed, in my opinion, for two reasons. First, I don't think the United States could ever tolerate another imperialist power rising to a sufficient degree of strength that it could become an alternative pole. And if Germany and Russia had reestablished, you know, sane commercial relations, sane industrial relations, that would have happened. The combination of Germany and Russia would have been, you know, the end of imperialism as we know it. So they couldn't politically allow it. And they began this whole process of eastward expansion of NATO and so on. The second was the issue of the U.S. dollar. Now, the problem for the US dollar was that with the decline of the with the collapse, as there was of US production, there was a serious threat because it was combined with inflation. That's the crucial thing, which is a serious threat to the viability of the dollar, which depends on people using it as a reserve currency. And you've got to, I don't know if your readers may remember, or they may, there was the debt crisis of the 1970s. The US financiers had lent huge amounts of money to Latin America and other countries. To maintain the value of that investment, there was a thing called the Volcker Shock, the massive increase in interest rates. Now, the effect of the massive interest rate expansion is often talked about as if it was an attack on the US working class. Well, it was, of course, because it massively increased unemployment. And that's the first, the classic neoliberal solution. If you want the market to take care of overheating in the economy, as it's called, you choke off investment by choking down inflation. interest rates that gives rise to unemployment unemployment gives rise to downward pressure on wages so essentially you attack the problem of declining rate of profit by lowering wages so it was a big attack on wages but it was also a huge attack on the global south it ruled out any possibility of industrial development of the Global South, because they were suddenly involved in paying off huge amounts of debt that they had incurred. So neoliberalism was the double-edged policy, attack the Global South, attack the US workers. And it was an alternative to the Brandt solution, and it's produced the world that we now see. It maintained bipolarity. There was no tripolarity. There's no... They then... Later, it's another story, but they choked off Japan... in the 1987 financial, which Peter Gowan wrote about financial attack on Korea and Japan.

Mamadou: Really basically- Is that the Plaza Accords?

Alan Freeman: Yeah, that's right. Yeah, the plaza. Of course, they forced Japan and Korea to pay for America's debt. Because, of course, the form this crisis took is the U.S. became more and more indebted. I forgot to mention that. But in the period up to 1974, basically, the U.S. was was was other countries were in debt to the U.S. It had a trade surplus. After 1974, it went into trade deficit. And you have to compensate that by using financial strength, by using the dollar, so-called invisible exports, which is another word for piracy. So the piracy money was the way of compensating for the industrial decline. Now, that took place in two phases. First, shut off Germany. And secondly, choke Japan and South Korea in the Plaza Accords thing. So I think I've answered your question.

Mamadou: Yes, you have. Thank you. Thank you very much. Thank you very much. Yeah. Okay. So I guess the question I have is how should we understand the financialization of the U.S. economy? Is it a symptom of decline falling from grace or is it a new phase of accumulation?

Alan Freeman: I think it's neither of those. I think it's a symptom of decline. I think it's not a phase of accumulation. I mean, this is where I differ. I know that's not what you meant, but this is where I differ from the social structure of accumulation people. And this is where I differ from the people who first advanced the financialization thesis. You know, it's... The name Ben Fine comes to one's lips, but there was a collective established. And it's the collective that originally established the International Institution for the Promotion of Political Economy. And they did an enormous amount of very good empirical work showing how what was happening is that industrial companies were being hollowed out. They were putting all their money into finance instead of reinvesting. in production. And also the banking, the structure of banking was changing so that banks, instead of carrying out the normal function of plain vanilla lending, which is you borrow from people who've got money and you lend it to people who need it, including industrialists who need it, that was replaced essentially by speculative process in which what you do is you buy financial assets And it's very important to understand what the buying of financial assets means when it is a substitute for industrial production. It means you're no longer buying the dividends that you would get from the shares and the bonds. You're no longer buying receipts. You're buying into glamour. You're buying into things that you think will rise in price indefinitely. You're creating a financial bubble. So rather than financialization, I would call it the bubbleization. And the person who's written about this a lot, and she can say more than me and correct even anything that I'm saying that's not true, is Radhika Desai. She's done an enormous amount of work on this. And I would defer to her on all this. But I think what we share in common and, you know, we agree on it. Well, we don't disagree on anything on that front. What we agree on is that monetization is a product of the falling rate of profit. OK, I wrote an article with Victoria Chick, who is sadly no longer with us, a wonderful post-Keynesian writer. I'm not sure where it appeared, but it was it was on green economics, actually, interestingly enough. I'm trying to remember the title so your readers can look it up and maybe it'll come to me. But it was an article connecting the stagnation of the economy and the prospects for a green revival. And in it, we realized that both Keynes and Marx had a theory of the falling rate of profit. It's very interesting. Keynes was very clear. They said that at a certain point, there will be a saturation of capital. because of the marginal efficiency schedule of capital, capitalists will no longer invest, and you'll move towards a stationary state. Now, another way of putting that, and Marx puts it this way, is if you have a declining industrial rate of profit, how does that affect industrial investment? Why should capitalists stop investing just because the profit rate is falling? They're still making a profit. And I've had this objection from many Marxists, and it puzzled me. And I ended up writing two works. One was called A Correction to the Rate of Profit, in which I added the financial capital, total capital. And the other one is called the whole of the storm, the whole of the storm. So your readers can Google that if they want to find it. It's in public domain. And the whole of the storm said, if you want to know what's behind a crisis, don't just look at the lightning flashes. Look at the buildup of the electricity and listen to the thunder. Because the reason that capital is not investing is it has somewhere else to go. And that somewhere else is money. Now, in Marx and Keynes, they both recognized the crisis happens because capitalists don't immediately sell what they produce. They therefore accumulate either excess goods or they accumulate money. They actually, you know, they sell their goods for money and then they don't buy anything. In the modern period, it's not just money. Money takes the form of financial assets. So they move their money out of industrial production and they put it into financial assets. And I can actually tell a little story about this because I used to work for The Economist. Now, please salivate or whatever, you know, scorn me. I was not working on the editorial side. I was I was a computer geek and I was working on producing their accounts. Right. And so one of the things I had was a close relation with the people in the Treasury Department of The Economist. Now, the interesting thing about journal production is you sell it before you produce it, right? You sell a subscription to a journal, people give you a lot of money, and you undertake over the next year to supply them with what they've paid for. That's what a subscription is. It's a quite unusual form of financing. You get it in housing. to some extent, you know, all forms of construction where people want a down payment. But the whole of the money comes in. So you're sitting on all this money. Now, what they used to do was they're sitting on all this money. So they've obviously got to put it to some use. So they would put it on the overnight market, you know, just make a little bit of cash. Then they gradually began to realize that instead of putting it in the overnight market, they could put it in, don't quote me on this because I don't know where they put it, but they could put it in longer term markets. So you could put it in derivatives or offshore securities or whatever else is the fancy of the age. I mean, they were very prudent people. Economists usually are, but they realized there were safe options where you just don't use the money anymore. to sit in a bank and wait to finance your production. You put it somewhere where you can bring it out in three months' time and bring out another issue. I mean, sort of gross simplification, but that's what they did. So they were beginning to become a quasi-financial organisation. Now, in their case, that was not completed. But in the case of Exxon, that's exactly what happened. All the money they got from selling their stuff, instead of reinvesting it in production, they invested it in the financial market, and they became a financial institution. They were what was called hollowed out. They became a financial institution. So coming back to the Marx analysis, when the industrial rate of profit falls, the range of opportunities for industrial investment slowly shrinks and financial investment becomes comparatively more and more profitable. So money shifts from production into financial speculation. And as Michael Hudson has pointed out, that really is speculation. They're not investing in getting the returns from the productive companies, which then pour back in. They're just investing in this thing is going to keep on going up forever and we can make tons and tons out of it. And this is where Epsteinism comes from, because you can make money very quickly on these fast growing speculative markets. And you start to think you're gods. You start to think you're super people until the crash, until 2008. And I think, you know, sort of moving on to the superstructure, the reason the Epstein crisis has come out now is we're in another 2008, so sort of slow running, melt the train wreck. But basically, this thing is not paying for itself anymore. The finances are collapsing. That's what happened in 2008 when the financial bubble burst. So financialization just creates asset bubbles in the place of real industrial strength.

Mamadou: Thank you. Okay, so this is a question people often ask. And I think you kind of touched on it. But so given the state of the US economy now, can the US reverse its relative decline through industrial policy? Or is it too late?

Alan Freeman: It's never too late. It's never too late. They have to do one thing, which is they have to let China do it for them. It's as simple as that, right? I just want to take one example that proves this. Railways in the United States. The United States is crying out for high-speed rail. Nothing would regenerate the US economy faster than a massive investment in high-speed rail. Who's going to do that? Who has the technology? You have to get the Chinese to come in and build your railways for you. And it would absolutely transform the US economy. Imagine if you could get from Washington to Washington to Washington. Right. in 10 hours, which is absolutely possible. Now, you can do it now by airplane and so on, but it's not the same, especially if you've got stops on the way. Travel is what expands the economy. Second thing is housing. There's a huge housing crisis in the US because of the whole speculative structure that you don't build houses in the US in order for tenants to live in them. You build them in order to have something that's going to rise in value. uh same same problem in britain by the way you know in fact they even started destroying houses during 2008 which is just barbaric uh absolutely barbaric i mean nothing like it has been done since the irish famine you know you destroy things that people need because they don't make any money well if you're going to massively build houses those has to be socially affordable which means it has to be state and municipal power it has to be state-funded. Again, the Chinese would be massively involved, although I'm sure you could grow very rapidly a powerful domestic building sector which could build affordable people's housing. You would then have to do two things. You'd have to bring China in and you would have to use the state. The great period of expansion of the USA, I keep coming back to this, was the Second World War. Well, there's a hidden chapter in the Second World War. U.S. government spending increased to 60 percent of gross domestic product in money terms and 80 percent of investment, 80 percent of investment in the USA during the war for four years. was by the government. And the very interesting thing was that they had sort of capitalist planning. They got together all the big military oligarchs and said, we're going to plan the economy because we're having a war. And by the way, we'll plan it in such a way that when we finished, you'll be able to make massive profits by selling the results of your industrialization to the Europeans. And don't worry about socialism. We'll squash that all with McCarthyism once we're done, which they did. So for a while, the capitalists suspended, you know, lack of faith in the government. And it solved the demand problem because there was unlimited demand from the military. The military just said, whatever you can sell us, we will have. We want more, more, more, more, more. And there was a huge expansion. Well, you have to replace that by a peacetime source of demand. And the peacetime source of demand has to be the government. Now, Green New Deal is a big part of this. But the problem is if you just take one thing on its own, like green, and that's not enough. It's not a big enough lever to move the US economy upwards. The New Deal itself didn't solve the depression. It was the war that solved the depression. And by the way, I think Franklin Delano Roosevelt and his advisors were perfectly aware of this. Yeah. We can discuss Pearl Harbor another time, but it wasn't just so, you know, oh, my God, we never knew this was going to happen, as is normally said. So you have to do all those things. You have to have Green New Deal. You have to have massive Chinese investment in high tech as well as high because the US has a lot of illusions about how good its high tech is. And in railways. And you have to have you build a massive domestic construction of housing that all that plus big expansion of demand of the reduction, elimination of poverty like like China has done, you know, crazy. massively increase the purchasing power of the very poor. All those things have to be done. You can only do that if it's led by the state. So it's a political transformation because you'd have to do a completely new reset with China and you'd have to let go of all your shibboleths that the state is inefficient. You can't let the shibboleth loose on your economy. So it's not a question of too late. It's a question of waking up.

Mamadou: Thank you so much. And in closing, I want to talk about the political stakes of what we've discussed today. So first is, what does this mean for the global South? Does it open up space for alternative world-making or simply deepen instability? And what should anti-imperialists or Marxists be paying attention to right now?

Alan Freeman: Well, I think the answer to that is it does depend in which country the anti-imperialists are. I always go back to the Communist Manifesto on this and the 19, I think it was 19 points, maybe 21 points of conditions for joining the Third International. And they clearly said the tasks of the communists in the imperial countries and in the rest of the world are different. In the imperialist countries, the task is simply to stop your country going to war. Simple as that. Stop war. Peace. That's the demand. Because actually, if the threat of war were removed from the dagger pointing over the heads of state of most southern countries, even ones where the capitalists have quite strong influence, you know, or even are corrupt. If you were to do that, the pressure to just capitulate to the US economically would be taken off. And either either those leaders, capitalist leadership would wake up or they would be replaced. Right. So stop war in the global south. The country simply depends on the country that you're in. And I generally don't make a habit of telling people in the global south what to do because it's not my place to do so, especially since if I. mouth the criticisms that you find on the fake left. All you do is repeat the excuses that will be used to make war. But I think it would be very interesting to have a dialogue which is led by people from the global south. on what they think their country should be doing, in which they say what assistance can be given by anti-imperialists in the global north. But obviously, the answer is you have to throw off the yoke of the imperialists. You have to go for national sovereignty, and that includes industrial sovereignty. You have to go for industrial development. You have to have south-south collaboration. You have to know which side you're on in a war. I mean, you know, Saudi Arabia, wake up. you're fighting on the wrong side, right? And I could repeat that for many others. So all that is obvious stuff. But basically, I would prefer that I was listening rather than speaking on that question.

Mamadou: Thank you. And I guess finally, unfortunately, even those on the left have been taken, some on the left at least, have been taken by this idea that, oh, but China's rise is just going to mean inter-imperialist rivalry. between China and the US. How do you understand China's rise? And why do we say, those of us who are principled anti-imperialists, that China is not an imperialist power?

Alan Freeman: This is a big question, but I go back to the writings of the Indian economist M. N. Roy, and I advise your readers to go and look up, because he wrote the Theses on the Eastern Question, which was adopted, I think it was by the Fourth Congress of the Communist International, maybe it was the Third Congress. Maybe I'm even so bad on my memory it was the Congress of the Toilers of the East. But it's basically an official document of the communist movement. And what people forget is they get into elaborate discussions between Lenin and Luxembourg and Bukharin. And, you know, was it export of untold goods or was it, you know, investment abroad? And they use that as a criterion. But M.N. Roy distilled all that discussion. And he's writing in 23, 24 or so. you know, 10 years after that initial debate, which is a lifetime during the war. And he summarized the argument in a way which I think is much superior. It doesn't negate anything before. He says what imperialism is, is it's the massive exploitation of foreign labor, because the rate of profit that you can know, sorry, the rate of exploitation you can get by exploiting foreign labor is and this is a whole field of work which I haven't mentioned that I've been engaged in, but you can basically get 20 to 40 times more profit out of exploiting foreign workers than exploiting your own. You can work this out by comparing the GDP in money terms of, say, India and the USA. One is about 40 times the other. That basically means the labour of India's workers. 40 labourers in India exchange for one labour in the USA. So it's massive super exploitation. Now, MN Roy was talking about the contest between Britain and America, and he said this is a contest, a growing contest, over who has the right to exploit the workers of which country. So competition between capitals is elevated to its highest level, which is competition between nations. And the ultimate form of that is war. That's a very simple, straightforward question. So you have to ask the question, does the profit that is made by Chinese capitalists or the money that is made by the Chinese state or the earnings that are made by the Chinese people, Does that come from the exploitation of foreign workers? And the answer is overwhelmingly no. There's a caution. Of course, Chinese capitalists invest in Africa, for example. And if a Chinese capitalist company makes money from its investments in Africa and returns it to China, as opposed to reinvesting it in Africa... It is making that money to a certain extent out of the labor of African workers. But the question is the question that Hobson asked, which is who dominates? Is the is the domination of the domination? The British structure is dominated by people who invest abroad. It's dominated by people who exploit foreign labor. So is the U.S. economy is dominated by its financial military sector economy. by its foreign investment sector, they run the politics of the USA. That's why going to war is always the USA's first choice. If that was the case in China, why isn't going to war China's first choice? Who is China facing wars with? Is building up defence capacity? In fact, I often make the distinction that whereas China and Russia have defence industries, America has a war industry, and they recently obligingly changed the name of the Secretary of Defense to be the Secretary of War, as he used to be during Theodore Roosevelt era. War is their business. War is not China's business, and nor is the exploitation of foreign labor. The overwhelming source of the growth of the Chinese economy is is investment. It's technology. What they've done is they've broken the Washington Consensus rules. They have actually got control of technology, not of other people's technology, but of the right to develop that technology themselves. They did that by writing into the joint management contracts that there would be technology transfer. But once they've got it, they are now the major producer of high tech. The rate of scholarization, the rate of research, the rate of R&D in China, there is second to none in the world. And the left are just recounting Trumpism. It's just a version of we were robbed. And the reason they do that is they have the illusion of the Western superiority, which is shared by the whole colonial mentality. They think that our countries, the imperialist countries, are wealthy because they're better, because they're superior. They're not. They are wealthier because they are superior bandits. They are superior robbers. This exploitation of foreign labour is robbery, pure and simple. And they've spent since colonial times, 500 years, history of capitalism, growing out of the profits that were produced from the sweat of the labour of three quarters of the world. And that's why they're wealthy, not because they're better, not because they're superior. So, first of all, rationally, this section of the left is just wrong. But second, it's just echoing the complete what I call Colombian mentality that our wealth is a product of our superiority. It's not. It's a product of our robbery.

Mamadou: Thank you so much. I think we'll close there. There's so much more that we could say, and I'm putting it on record that I would love to have you back on the show again sometime. But thank you so much for this discussion. This was truly insightful. I encourage all the listeners to please engage with Alan Freeman's work, which can be found online, and I will definitely be having him on again soon.

Alan Freeman: Until next time, everyone. I now have a sub stack, but I haven't used it yet. But join my sub stack and I'll start posting this stuff because I want to get it out there. Most of it is only known to a small circle of people. So now that people are interested, I want to start getting it out there.

Mamadou: You heard it here. I don't know if it's first, but you heard it here anyway. Get on to it.

Alan Freeman: Thank you so much. Thank you so much for this opportunity to talk. It's wonderful.

Mamadou: Thank you so much. Until next time, everyone. Take care.