The Violent Demise of Monetary Supremacy w/Radhika Desai

Adnan Husain: Bismillah ar-Rahman ar-Rahim. Salaam, hello, peace to you all, and welcome to another collaborative episode with Resistance is Fertile podcast's co-host, Benji Schoendorf, anti-imperialist psychologist and wonderful comrade and friend. It's great to see you, Benji.

Benji Schoendorf: Good to see you also, Anna. And I'm so happy to have this third conversation now with Radhika, who I feel also very friendly towards.

Adnan Husain: Absolutely. I mean, we're so delighted that you could join us again, Radhika, just to remind listeners, of course, you are a geopolitical economist, author of many books, including Geopolitical Economy. I think the subtitle was After U.S. Hegemony, Globalization and Empire. More recently, Capitalism, Coronavirus and War, a Geopolitical Economy. And we've had a couple of conversations over the course of this last year that have been really illuminating and helpful in thinking about changes that are taking place in the world, in the global economy. We talked about tariffs, the Trump tariffs months ago. Now it seems like ancient history because that whole project seems in ruins. But we did speak with you more recently about the Ramadan war, Iran. And we had so many other questions and other topics that, you know, we wanted to come back and discuss some of those, but also some of the latest developments. And so firstly, welcome back again. It's great to see you.

Radhika Desai: Always great to talk to both of you, Adnan and Benji. It's a great pleasure.

Adnan Husain: Well, so I wondered if one of the first places to start is I heard a conversation you had on your own, which I should have mentioned, of course, that you also have your own YouTube channel, Geopolitical Economy Report. And, you know, we will, of course, link to that in all of the descriptions and so on. But I heard a conversation that you had, as you are wont to do with Michael Hudson. You have the collaboration that you do now. and they're always so illuminating. But also for the uninitiated like myself on all matters finance can sometimes be a little fast to absorb the concepts and exactly what the consequences are. And so one thing you were discussing and something I noticed too was the UAE had made a petition to the U.S. Treasury for some kind of financial assistance in the form of a kind of currency swap um and um you know what the implications of that are and how we see that perhaps as a feature of the wider situation facing these gulf countries and gulf economies um during this period of the closure or at least control over the Strait of Hormuz and the U.S. blockade causing all kinds of effects. So I'm wondering if you could tell us a little bit more of what you thought was important about that story and what it might portend and perhaps along the way you might explain to people like me what really these swaps are all about.

Radhika Desai: Yeah. So basically, you know, the way in which I mean, as part of the administration or running of the dollar system, there has been a general kind of how can you say there is a structure. that supports the dollar system in the following way, that they get buying from all particularly allied countries like the Gulf countries, European countries, etc., that they will use dollars for various things. And then should there be, you know, they commit themselves to using dollars and then suddenly find themselves short of dollars. then they can deposit x amount of their own currency with the federal reserve in return for which the federal reserve will give them dollars so that they will not be they will no longer be short and they can they can have temporary liquidity and then that that's uh you know the problem is solved The difficulty that we see and so, you know, the fact that it was the UAE asked for this was itself part of the larger problem in which the UAE and countries more generally, US allied countries, countries with military bases in the region, they find themselves in the middle of a new problem where they have suffered considerable destruction. And they have to, you know, engage in the work of repairing it and all of that, which means that they will be needing money. They will be needing dollars, et cetera. So the Federal Reserve rather. And so there are two interesting things about this. Number one, as you know. The Trump administration has been waging a sort of war with the Federal Reserve, you know, accusing Jerome Powell of corruption, you know, in the spending of the money for the refurbishment of the Federal Reserve building and generally attacking, you know, calling him things like moron and whatever, because, you know, according to Trump, he will not reduce interest rates enough, which is actually not true. Interest rates are have been kept fairly low uh but anyway uh so there are all these uh uh points so what's interesting about this swap line is that this swap line has been issued by the treasury not by the Federal Reserve. So Scott Besant, not Jerome Powell, is the presiding official. The previous instance in which the Treasury was used to provide a swap line was when they provided a swap line last year to Argentina in order to help Javier Millet win the election. So that's the first. But perhaps that is less important than the second fact, which is that Normally speaking, funds move from the UAE to the United States. And now that the UAE and possibly other countries in the Persian Gulf may not be actually sending money to the US, but rather asking for money from the US, this could have very serious destabilizing consequences for the dollar system. The reason is that, you know, The working of the dollar system has been heavily mystified by a whole range of scholars who are interested always in talking it up. So, you know, they always want to act like, oh, this is perfectly fine. There's no problem with it and blah, blah and so on. And of course, at the end of the day, if we're forced to admit all the problems with it and there are many problems with it, then they'll say, oh, well, but the dollar will still survive as the world's currency because there is no alternative. But anyway, these are the sort of people who have mystified the workings of the dollar system, particularly after 1971, when the link with gold was broken. Before that, there were problems, but there were different kinds of problems. So basically, after 1971, The dollar has, you know, has remained the world's currency for a very interesting reason. So the U.S. provides the world with liquidity by essentially running deficits. So, you know, they essentially they they print money and then they hand out this printed money to people saying, here is the payment for for what you've given us. But, you know, so so that's what they do. Too much of this activity, you know, the bigger your deficits would normally put downward pressure on the dollar and the United States couldn't get away with it. But the way in which the United States has historically since 1971 counteracted this tendency particularly beginning in the 1990s, is essentially to deregulate finance and to essentially open a casino and say, everybody, come one, come all, come and gamble in my casino, bring your dollars and come in here. And so they can then participate. The wealthy of the world can participate. So they are mostly from the rich countries, Western Europe, Japan and the Gulf countries. And they the private money of these countries can enter into this system and participate in the general looting of the whole world. And so this is the system. And so the inflow of funds into the dollar system is a very critical element. Now, if countries like the UAE and other Gulf countries and also, of course, Europe, which is no, there is no shortage of problems in Europe as well. If this money ceases to flow in, then the dollar's days are definitely numbered. So that's the whole story behind the swap lines.

Benji Schoendorf: So do you think this time the money is in danger of stopping to flow into the U.S.? Because that's generally what happens when there is a war, you know, all the money goes to shelter in the U.S. and that's how they can finance it. What's happening this time?

Radhika Desai: Yeah, so that's a very good point. So generally speaking, whenever there's a crisis, the dollar is supposedly the haven currency. So all the money flocks to the dollar and the dollar generally rises. And what I'm reading in the Financial Times and other such places is that this time around, the haven effect has been very muted. So the dollar has gone up a little, but not as much as you'd think it would have gone up. So this is already signs of trouble. There are many other signs of trouble. I mean, you know, the Treasury market is not very well. It has been supported by the Federal Reserve for a long time. So people are not rushing to buy American treasuries. What else? I mean, yeah, there are many such problems.

Adnan Husain: Well, I have a quick question about the fact that the money has not been rushing into the United States. I had also read somewhere that that wasn't the case. But again, the Financial Times type economist type class of economic journalists who cover these sorts of topics always affirm and assert the idea that, well, you know, this is a problem because there's no alternative and there's no other place anybody would trust to park their money. And I wondered if you thought that was true. correct if and if so why and you know my question would be why wouldn't someone obviously look at an economy like uh china's and say well this is a stable growing economy but isn't it the fact that it's not necessarily so easy just for capital to come in that's the whole point that's why china is different and is remaking the structure of the world economy slowly but surely i'm just wondering What you think about that claim? Well, there's no other alternative for capital to go for that purpose.

Radhika Desai: Right. So to answer that question, let me just preface it by saying that the way in which the use of the dollar is internationalized, that is essentially through this extremely speculative and predatory type of financial system. This has had many bad effects for the United States. So this has been, you know, no sooner was such a system instituted, then the United States basically started deindustrializing. So historically, you know, other currencies, whether it is the euro or the yen, they have not resorted to the same type of internationalization. I mean, that may be changing now, but they have tended not to do that. And so that's partly why, you know, these people are able to get away with saying that there is no alternative. In China's case, on top of everything else, China also has capital controls. I mean, they're not they're not very controlling, but nevertheless, capital controls exist. And so people say that, you know, the Chinese will not permit their currency to be internationalized in the same way. And they are right for the simple reason that if China were to internationalize the use of the renminbi in the same way as the dollar, China would suffer the same fate economically as the United States. OK, so that's the key point. Now, having said that, I think China has internationalized the use of the renminbi to some extent. And remember also that China's position is very different, at least for now. China has major surpluses. which is a very different position to be in, so that China can provide liquidity to the world with her surpluses. The question is whether she wants to use her surpluses in this fashion. So my point is that ultimately the argument that the dollar will continue because there is no alternative does not wash because the alternative is never going to take the form of another country's currency. And it shouldn't take the form of another country's currency performing the same role as the dollar. Decades ago at Bretton Woods, John Maynard Keynes had gone there with a set of proposals to create what we may call a super sovereign currency or something.

Benji Schoendorf: Bancor, exactly.

Radhika Desai: It was going to be run by an institution that would be created called the International Clearing Union. And Keynes had many other, you know, there is a lot of genius to these proposals. They were ultimately rejected, not because there was anything wrong with them per se, but because the United States did not wish to have the United States wish to force the dollar on the world. And so that is why they were rejected. But basically, to my mind, some kind of currency like that. would be the better solution. In the short run, countries with export surpluses like Germany, like Japan, like China, they may be able to provide in a stable fashion rather than in the volatile and unstable fashion that the dollar does. They may be able to provide some liquidity, but then the question is, is that the best use of their funds? You know, China may have a lot of reserves, but quite frankly, should China be sitting on all these reserves? Shouldn't China just be investing them? You know, reserve accumulation has a cost. which is that you are not investing these reserves in economic activity. China's economy is doing very well. The other question will be, what are the liquidity needs of the world? Will the reserves of these countries be enough? So, and the other wonderful thing about, let me just say one thing, because recently I see the World Bank and the IMF at their meetings last month, they made a big point of noting that the world economy suffers from a lot of imbalances. This has been true. I mean, these imbalances, by the way, are more or less completely the result of the fact that the that the dollar system functions in the way it does by United States running deficits so that the whole system is premised on imbalances. But Keynes' system would have actually minimized imbalances and it would have created the situation in which the rich countries would, if they are running export surpluses, there would be some pressure on them to increase productive capacity in other countries which are running deficits. so that they will no longer run deficits. And trade can expand, but it can expand in a more or less balanced fashion. And if trade is balanced, quite frankly, you don't need much currency. You see, you only need currency when trade is imbalanced. If Adnan's country exports $100 worth of goods to Benji's country, and Benji's country exports $100 worth of goods to Adnan's country, there is no need for money. You cancel it all out. That's what a clearing union did. That's called clearing. And you can do it in a multilateral fashion rather than a bilateral fashion as well. But the point is that that was the whole genius so that there would be as little controversy as possible. Every country could focus on its productive interests. apparatus and on productive investment. There would be capital controls and every country would be free to manage its financial sector in a way that trained it to investment in production rather than an investment in speculation and investment in predatory lending.

Benji Schoendorf: So that's fascinating and such a great idea. And as I was listening to you, I was thinking, oh, but such a system wouldn't be very hospitable to speculation, right? And the U.S. economy is, if anything in my, you know, an inexpert view, maybe just nothing but a casino, a speculation bubble, like I just read some figures today that show that the AI bubble, which is just based on nonsense, getting to general intelligence, whatever, in the next two months, accounts for like 45% of, I don't know what number, it's probably not GDP, but of the stock market or something like... The rise in the stock market, yes. Yeah, the rise in the stock market. Thank you for... And how can this continue, right? And I'm trying to understand because I don't see how it can continue. And if I was on the other side of it, if I was the biggest economy, if I was China, to be very clear... I would want to manage that danger also. I, you know, I would be kind of worried if that bubble kind of popped in, in this way, you know, there's this old thing that if you're a hundred money to the bank, it's your problem. But if you treat 10 billion, it's their problem. And there is this thing going on like this bubble is so big. That maybe it's become the problem of even the people who haven't haven't deconstructed their economy to turn it into nothing but this giant self-inflating bubble, which makes me think of the self-licking ice cream cone somehow. So I don't know how you disentangle that idea.

Radhika Desai: Well, I think that, you know, this is part of the degeneration of American capitalism, that it has not it has turned away from a production generally, you know, so that they are incapable of innovating. Last year, you know, when Deep Seek, you know, the big shock of Deep Seek, I wrote a paper called How Deep Seek Has Exposed Silicon Valley's Sci-Fin-Fi Model. So we've heard of sci-fi, right? So science fiction. But this is not just science fiction, but it's also financial fiction. So the two are merged. And this is the second time, like we've seen this movie before. This is the second time they're doing this because the last time they did this was in the dot-com bubble.

Benji Schoendorf: It was much smaller, no?

Radhika Desai: It was much smaller. And this time they're doing it with this AI bubble. And they are doing it at a time when every other asset market in the United States is also in bubble territory. That's why people talk about the so-called everything bubble. So anyway, the point I'm trying to make is that, yes, you are absolutely right. And they are saying, you know, and one of the points I make in this article is that In the United States, the whole investment, and they're investing huge, they're basically asking people to invest billions and billions of dollars in a pie in the sky scheme where the idea is, as you say, that they're going to come up with something called artificial general intelligence. I'm trying to remember who it was. I think it was the guy who, Larry Ellison, in an interview, in one of these fancy gatherings, interview with Tony Blair, said, oh, we are going to create artificial superintelligence, whatever that means. But basically, this is totally pie in the sky. Artificial intelligence is useful. I think the Chinese are using it in many interesting ways. But what we are calling artificial intelligence is nothing more than super enhanced computing power. OK. And when you have super enhanced computing power, you can do a lot of things. But the Chinese are also doing it. They are enhancing computing power without the same level of energy consumption and the same level of investment at a fraction of the price, at the fraction of the cost in energy terms. And I think that that would be the way to go. But in the US, of course, they are building these data farms in search or in pursuit of this holy grail of artificial general intelligence. It is not possible. for a machine to replicate human intelligence. That's just the long and short of it. I mean, you may think that I think too much of human beings, but human intelligence is exceedingly complex. It cannot be reduced to what a computer does, which is the methodical, how can you say, it goes through every possible combination and choice, right? Sure, it's very helpful when it does that, but it's not the same as human intelligence.

Adnan Husain: But it's interesting that even if it cannot achieve these dreams or fantasies, as you're saying, sci-fin fiction, the dangerous part of it is the fin. You know, the fact that nonetheless, there's so much investment in it. And even after Deep Seek. Right. Even after deep seek exposed the huge bubble, it was like I know it was like a few days after Trump had arrayed a group of, you know, tech billionaires and talking about the investments they were making in the trillions.

Benji Schoendorf: True. 300 billion or something.

Adnan Husain: Yeah, it's an incredible amount of money that was being handed over to these tech overlords when, you know, a few days later, DeepSea at a cost of 5 million was capable of replicating, maybe even exceeding the performance of, you know, tasks and speed and all that. So it just seems like it's not for, this has to be understood, it seems to me, is that The actual reality and evidence against it doesn't seem to make a difference in the investment patterns and the plunder from public investment into this huge bubble because it isn't actually designed to achieve growth. It's, again, just a financial fiction that they're living in. And it reminds me also that later that spring, every university, I'm sure it's the same at yours, is talking about what are we going to do to be on top of AI? And we have to invest in curriculum and research and technology. you know, all of these things. And anybody who raises any objections is immediately cast as a Luddite. It's here to stay. And, you know, it's not that people aren't saying that it's a tool that people may use, but the way it's being talked about is very messianic. It is like the Holy Grail. It's a religion rather than a reality. And, you know, You know, it just seems like there's something that needs to be explained about a persistent investment against all evidence to the contrary that I think suggests that the economy is performing, you know, purely for the plunder of this kind of elite class that recognizes the empire is going down and they're going to get what they can right now.

Radhika Desai: True. I mean, look, basically, when you a lot of the discourse, not just about AI, but across the board about the capitalist economy is now taking the following form. They will admit the wiser ones, the ones who are willing to take the risk, they will admit every possible problem with it. Yeah. But then they say, oh, well, there's nothing we can do about it, because if you were to do something about it, you would have to change the system from capitalism into something else. So they say there's nothing we can do about it. We just have to learn to live with it. There is no alternative. And so, for example, in the case of this bubble, the AI bubble, there actually have been a lot of stories in the press, in the financial press, basically saying, yes, it's a bubble. But then they say, well, we need a bubble in order to create the investment, right? Now, what kind of a system is it that you need a bubble to create an investment? You know, I mean, this is complete madness, but there has been this kind of notion that in capitalism, the way innovation proceeds is there is usually a financial bubble, and that attracts people to make a lot of investments. A lot of those investments go bad. They will not fetch the returns that were expected. But at the end of the day, when all is said and done, after there has been a crash, and after loads of people have lost jobs, their jobs, their livelihoods, their homes, who knows what else, then at least we'll be left with some minimum level of useful investment that we got. Now, if this is the way that you are investing, if your system cannot invest except in this form, there's something deeply wrong with your system, but they will never... admitted they will in fact try to say you know it's a bit like you know that old dr strange love the subtitle of dr strange how to stop worrying and learn to love the bomb so this discourse is all about how to stop worrying and learn to love bubbles so um you know last time we talked about uh the war on iran

Benji Schoendorf: And there has been some discourse in some parts on the left that there is this cunning, evil master plan behind it all, which has to do with reducing the oil supply by 25% and re-establishing an iron-tight grip on by the US on the remaining 75% as a way to throttle China. I personally don't buy it, but I'd love to have your expert opinion on it. And I think it probably has something to do with in your I think was the latest conversation, Michael Hudson. And Michael Hudson said, so this World War III started in Ukraine and something. And he said, I don't like this talk of World War III. To me, it's one big imperialist war and it started. And that was luminous. Yeah, to me also, it's all the same. And they're never finished because they're trying to, you know, square the circle of capitalism that is on its last leg and it's always finding this new scheme. And so the new, what is your view about the new cunning scheme and what is the end game of that century-long imperialist war on the world?

Radhika Desai: So, you know, there are so many. First of all, let me say that I may come to the World War point if there's time, but I'm going to do an explainer on that because so many people are using the expression World War and I want to push against it. This is not a world war and we have to understand that it's not a world war. Otherwise, we will be missing something very important about what happened during the world wars. and what's happening now. But that's a different point. Let me come to this point about the cunning plan. So, you know, from the beginning of the Trump administration and by the way, this analysis of mine has been consistent going back to the first time that Trump won so that I published an article in Counterpunch in the early like in January, February or so of 2017 after Trump took office. in which I laid down the bare bones of my analysis and it has been proved very durable. Let's say it has lasted this long. OK, so from the beginning, you know, people have been Trump has been acting in a completely crazy way with his, you know, lambasting Zelensky in the White House, announcing tariffs, talking about Greenland and amassing armada and whatever. I mean, he's more and more out of control. But there's a huge industry of people who are trying to see a method in his madness that, you know, like who is I forget the name of the character, but there is this character in Blackadder who always has a cunning plan. I have a cunning plan. So anyway,

Benji Schoendorf: Sorry, it's Baldrick, isn't it?

Radhika Desai: I have a cunning plan. Baldrick, he always has a cunning plan. So, OK, so I mean, first of all, I don't think Trump has a cunning plan, so I wouldn't even call him Baldrick, although Baldrick's cunning plans always go awry. Anyway, so the point is that people have been looking for the method in the madness and they see Trump's imperialism as kind of this recharged imperialism that's showing the whole world just how powerful America is. I think none of these things are true. Trump has no plan. Trump was elected because he figured out that in order to be elected, you have to admit to the American people that there are lots of problems in the economy and you have to promise to fix them, which is what he's done. But that doesn't mean that he had ever any intention of actually carrying out his election promises. Once elected, he is doing what every American president in modern times has done, which is to serve the American corporate capitalist class. And in this case, in Trump's case, the service to the American corporate capitalist class means service to a version of this class to which it has been reduced today, which is like, what it does is so contrary to the well-being of an ordinary American person, working person, that you can't believe it. Like, you know, when the U.S. was still a manufacturing power, serving the working class also did have synergies with serving the people. But this is less and less so. You've got an unproductive, financialized capitalist class which wants more and more and more, takes, takes, takes, takes everything and leaves everybody with nothing. Yeah. And does not even generate industry, does not generate jobs. So basically, you know, you are living in a time where what you have to promise people to win elections and what you have to do if you are a good capitalist government, when you are in power is diverging. You know, there used to be a time when you could ride both those horses together. But now you can't. So Trump has jumped onto the horse of serving the capitalist class. He has abandoned the people. The people know this. They are supporting him less and less. Trump knows that they are supporting him less and less. That's the one thing he does understand. There are very few things he understands, but he understands that the poll figures are not looking good. So beginning with late last year, exactly about a month before, a year before the midterm elections were to take place, he has started... you know, all these mad schemes. So he, first of all, amassed this armada, as he called it, in the Caribbean. Then he... And of course, nothing came of it. And at the end of the day, they had to settle for this stunt. You know, of course, they barbarically bombed various Venezuelan cities, including Caracas. But then they had to essentially satisfy themselves by just kidnapping poor President Maduro and First Lady Celia Flores. This is ridiculous. But anyway, this is what they tried to paint as a great military feat. I mean, this is completely ridiculous. And of course, that did nothing for his approval ratings. So then we got all these shenanigans, you know, more attempts to try to solve the Russian conflict and, you know, all this strange stuff about Greenland. And then you got all the lecturing of Europeans, whether at Munich or at Davos or whatever. And then you none of this works. You finally got the Iran war. In my view, as to why we got the Iran war is, you know, American presidents have been salivating about invading Iran for decades, ever since the Iranian revolution took place and the Americans were humiliated in the hostage crisis and all that. So, they of course wanted to do that, particularly in this century. You know, George Bush Jr. started talking about the so-called axis of evil, you know, and so on, that included Iran. So, They they have been doing that. Trump, however, actually did it not because the American military is so great and it is now become capable of tackling Iran. None of this. In fact, the American military is worse than it used to be. It is definitely not capable of tackling Iran. But he fell for Netanyahu's. beguiling proposition that look you know Donald you know we will attack them on Friday and you know what by Monday it'll all be over there will have been regime change in Iran and the people will rise up and do our job for us and we will then declare victory and so on. Trump fell for this because he was so desperate and now he's in the middle of a war he doesn't know how to get out of So there is no cunning plan. This is, insofar as there is any rationale of it, it is this. As for controlling the world's oil reserves, et cetera, et cetera, I mean, this is, you know, retrospectively, you know, people are trying to attribute this to Trump, but I don't think Trump, you know, this implies that Trump can think strategically. Give me a single piece of evidence that tells you that Trump can think strategically. A man who thinks that tariffs are the way out, you know, You know, look, don't get me wrong. Tariffs have been used in economic history to today to very great effect, to very good effect. But only when they are combined with an industrial policy. Just slapping tariffs as a way of bullying countries and their governments and so on is not going to get you nowhere. And all Trump got. for all his ridiculous tariffs was to be ridiculed himself. And somebody, some smart Alec journalist invented this term, Trump always chickens out because that's what he did. And so, and of course, now he's gone to China and practically everybody in the mainstream press is pointing out that Trump has gone there. with the weaker hands. He doesn't have the guards to use his own language. So to me, there is no such grand plan. And by the way, there are also this, maybe I've gone on a bit long, but let me just say two quick things. Number one, the oil story sounds persuasive on a superficial level because the previous country to be attacked was Venezuela. But the idea that somehow there is a Venezuela model of Trump's imperialism, that Desi Rodriguez is Trump's viceroy in Caracas. This is ridiculous. You know, this is not true. Desi Rodriguez is under a lot of pressure. But even under that pressure, she's trying to do everything that she can to preserve the gains of the Bolivarian process. So that's that's one thing. Secondly, people are talking about petrodollars, you know. This is a very silly term. Yes, there was a time when, back in the 1970s, the denomination of the oil trade in dollars and the deposit of the surpluses of the oil-rich countries, the OPEC countries in Western financial institutions, did play a role in buoying up the dollar to some extent. But remember that in this era, when all of these things happened, in the 1970s was when the dollar sank so low that at one point gold was $800. And that in real terms, that level was crossed only very recently. So now we have the dollar, which in real terms, in inflation adjusted terms, is even less valuable than it was back then. So the trade of oil in dollars has long ceased being a major support. of the dollar system. So, yeah. And rather than that, the mechanisms I suggested, which is that they have opened this casino, they are essentially supporting the dollar on a bed of the hot air of finance. That is what's supporting the dollar system.

Adnan Husain: Yeah, well, you brought up the next point that I was hoping we would discuss, which was that I think Trump felt that perhaps he had invented some new kind of form of imperialist scheming and achievements by the Venezuela and assumed that, you know, Iran would be similarly in these, you know, kind of bizarre terms, successful, even though it wasn't Venezuela, wasn't a success, as you're pointing out. Iran, even less so in ways that are actually even clear to Trump that it's not, whereas the Venezuela may not have been very clear to him that it wasn't the success that he expected. But that originally the. resistance of Iran, its unwillingness to fall to spectacular violence in the American way of war, convinced Trump that he actually had to postpone his original trip to China, right? So hoping to gain some achievements and some leverage and believing that somehow obstructing Iran's production of oil in the global oil market by capturing it or sequestering it or something would be a long-term advantage against China and China's economy, and that then he could go to China with some leverage. Now that he's in the position that he's in, I'm wondering what you think, you know, what are their goals, actually? You know, with China, there's been some discussion. And again, it's from these like Economist and Financial Times sort of ideologues who grasp some part of the issue, but then always fail to give you the proper analysis. is that China has a great stake in trying to end, you know, the war and that this is something that Trump might be able to use to push them into putting leverage and that if China wants to be a responsible power, this is now how they're in other words, if they if it will be like a pillar in the capitalist world economy, it will Put the brakes on Iran's resistance and, you know, encourage it to make a deal to preserve this global order. So that's one kind of way in which people are trying to analyze what the purpose of this visit might be now. And I'm just wondering what you think both of that, but also broadly speaking. What is the Trump administration's goals, what they want to try and get, and how will China respond, do you think?

Radhika Desai: Yeah, I mean, I personally, again, you know, don't feel that Trump has, you know, Trump has very, that Trump wanted to go to Beijing, having acquired control over a very substantial part of the world's oil supply, because that would hurt China. I don't think that explanation also I particularly buy. I think Trump has always had very contradictory relation with China. Remember what happened in his first term? He, you know, bellowed a lot about what China was doing. And then he said, I was going to he's going to do a deal with China and blah, blah and so on. So, you know, that was how he because at the end of the day, a lot of the people whom he represents, remember, he has gone there with an entire retinue of corporate CEOs. They all rely on the relationship with China. In fact, between Trump Mark one and Trump Mark two, we've also had China's attractiveness to these corporate CEOs has only grown because now they can not just think about, you know, locating their factories in China so that they Locating factories in China so that they can take advantage of China's cheap labor. Now, they want capital and technology from China. So, all the tables have been turned and all these people have gone there hoping to, you could almost say, cap in hand to get something from China. To me, that was what Trump did, however, probably hope is that, you know, the the the March trip was agreed a long time ago. And he thought that, well, you know, I'm going to have this little adventure in Iran and it will all be over in a weekend. And then I will go having demonstrated some big victory, et cetera. And so I will go there, you know, looking good. in the event, Trump, of course, is going there looking very bad. Trump looks like the incompetent that he is, irresponsible, incompetent person that he is, venal even, all of these things. I mean, he's an awful person. But, and so that's one set of things. The other is that, yes, it's true that people have been saying that, sorry, did you have a

Adnan Husain: Oh, just that it looks like he's going there now and he actually needs China's help to clean up the mess he's created.

Radhika Desai: Yes, exactly. So it's not like, OK, so first of all, so Trump would like China to help him in resolving this and resolving it in a way where he doesn't look like he has been totally humiliated, as Friedrich Merz said he had has been and that he has been totally defeated. I don't think he's going to get that. Now, what these sources are also saying is that China has an interest in de-escalation in the Gulf. And it's true, China's economy relies on Gulf oil. But I would mitigate that in a couple of ways. Number one, China can import a lot of oil without having to go through the Persian Gulf. So that's the first thing. Secondly, I would say that China has supported Iran's to the hilt diplomatically. It has even said that there should be absolutely no restriction on Iran's right under international law to enrich uranium for its needs. So China has stood by all of these things. So it's not like it's going to give that away. China does not... China is not Trump. It doesn't change its foreign policy goals and statements from one day to the next. So I would say that, and of course, China regards what is happening in Iran as a travesty of international law. So I think that China and... I think the best thing that could happen is that he will get either some deal from China. You know, Chinese have agreed to buy 500 Boeings and maybe one or two other such sweeteners. He will get some sort of deal through which he can come home looking victorious vis-a-vis China. And then he can hope that everybody will forget about the Iran war. Just as we've stopped talking about Venezuela, we'll stop talking about Iran. And so I think that's the best that can be expected. I don't think Iran is going to throw, sorry, no, I don't think China is going to throw Iran under the bus. It will remain consistent in all the ways that it has. Iran has not gone so far as to go and militarily defend Iran, although it has aided Iran's military from what I understand. But it has not gone to fight because if it were to do so, if either Russia or China were to do so, and these are the two main allies, we might actually be looking at something like the World War, although I would still not call it a World War, but certainly a very big war, potentially nuclear war. Who wants that? Nobody wants that. And I think that that's the main reason for the restraint that many people on the left have been complaining about, that why isn't Iran doing more, et cetera? Sorry, why isn't China doing more for Iran? Or for that matter earlier, the same thing was said about Gaza. But if Russia and China were to enter into a war with the United States, Israel, Europe, et cetera, over Gaza, it would be a very big war and it would easily be nuclear.

Benji Schoendorf: Yeah, so... I think whatever happens, we are in for very difficult economic times on a world scale. And probably my guess would be that the poorest countries who are the most dependent on US imperialism will actually suffer the most, because countries that have been heavily sanctioned or whatever have developed food sufficiency, self-sufficiency, and self-sufficiency in many domains. And what do you see on the horizon? Because will that weakening of those countries most dependent on the empire strengthen the empire? Or will it serve to further weaken it and maybe make more countries break away in clear ways. How do you see, it's a bit murky to me, but what I see coming is an economic shock, the likes of which we've not seen in a century maybe. How do you see that yourself?

Radhika Desai: I agree. And I think, you know, I forget the name of the guy, but the head of the International Energy Authority has said that this is going to be even bigger than the 1970s shock. I think that it will be huge. It will affect agriculture and food production, because one thing people don't realize is that compared to the 1970s, when this process was only getting going, the success of green revolution technologies has made agriculture around the world. heavily dependent on the use of fertilizers and the use of energy. And both of these things are being restricted now. And by the way, I should say that this is happening on top of an underlying agrarian crisis, which was already unfolding in a slower fashion. uh through it due to at least two major reasons one is the extent to which big corporations have started controlling not directly farming so much as the larger agricultural sector providing inputs and outputs and so on so this this has been like the farmers the ordinary farmer has been squeezed and i particularly am very you know india is still a very very important part of the world it's the most populous country in the world uh it's um A very large proportion of its population is agrarian and so on. And these people are going to suffer as a result. So if you are not going to get fertilizers and so on and so forth, then all these people will obviously suffer low harvest and so on. So this shock is coming on top of already straightened circumstances. And yes, you will remember that there were two things that were reported in the press before COVID about India and agriculture. Number one, that there was a spate of farmer suicides taking place. uh and uh this is because farmers are getting squeezed they are indebted they cannot pay and the squeeze on them is thanks to the corporatization of the larger agricultural sector And the, you know, the complete abandon with which the Modi government in particular has allowed Western agribusiness into India and allowing it to squeeze Indian farmers. And secondly, you'll have heard that the farmers put up a heroic resistance in the farmers movement to these new agricultural bills that were going to pass. was a sign of the already existing tensions that that are being experienced in to some degree practically everywhere and that would include the united states because the farmer there is also suffering uh it's not like you know because corporatization of agriculture will affect all farmers So we will see, you know, people are saying that the farmers, you know, they will be sowing about now. But if they know that the fertilizers are not on their way to them, they may decide to sow less or not sow, etc. So we are going to face a huge crisis and it will add to the chaos and confusion of the world. We already have a lot of chaos and confusion in the world. There will be this will be added to it. And finally, I will say that this will not strengthen imperialism. Imperialism is now on the downslide because Western capitalism, capitalism in general, in the advanced capitalist countries, it's on its decline. It is incapable of delivering even the most minimal goods. for ordinary people of these countries. And particularly this production shock that is going to hurt agriculture and all sorts of manufacturing, because energy is used everywhere, will lead to inflation. will lead to huge price rises. And already, I don't know whether you saw, but I think it was just today that it was reported that American wholesale prices, this is just one country, of course, this will be true of many countries, but American wholesale prices have already registered a huge jump. And once wholesale prices register a jump, then retail prices, it will be registered in retail prices within a couple of months. So we are in for a...

Adnan Husain: and and by the way be true even if the war stops tomorrow war only right the downstream effects will continue certainly and um you know that's going to be very interesting to see going forward because we know major economic deprivation inflation these are drivers of social and political revolutions and if we've been told that We can't do anything because you'd have to change the whole system. Maybe more and more people in both the global north and the global south will feel that they have an investment in a change in the whole system because if you can't do anything, then we might have to do everything. you know, in order to actually solve these problems. So we will look forward to further observation of what's happening and hopefully mobilizing and organizing with the kind of analysis you're providing us about what's really happening. So I want to thank you so much, Radhika, for this wonderful, insightful conversation. And hopefully we'll have another one soon as we watch the continuing effects of

Benji Schoendorf: I wonder if I may be so bold as to ask maybe for another couple of minutes, because I always like to finish whatever content I produce on the internet by some perspective that people can look to something they can see as a light in what is a very dark time. So what is the good news in that? In my view, I see the coming demise of 500 years, you see that as 200 years and brother Adnan, since the Crusades, you know, Western plague on Donald.

Adnan Husain: No, the Crusades were defeated though. That's the good thing. They did defeat them.

Benji Schoendorf: But, and that to me is a very important horizon. And the other one is really when those material conditions get very squeezed and people are going to move in ways that cannot be predicted. So in this new era, situation there are also new opportunities. Do you also see that yourself Radhika?

Radhika Desai: Well I think that, let me just take the instance of these recent local elections that took place in the UK. You will have heard that both the major parties did extremely badly so I think people are wising up to the fact that they have been sold moonshine by their political masters This is happening across Europe. I mean, I believe Friedrich Merz is among the most unpopular leaders. So is Keir Starmer. Macron, nobody believes him. You know, I mean, you name it. All of these people are suffering from huge legitimacy deficits. Secondly, the Reform Party, the Trumpists, whatever, is not doing so well. Trump himself is not doing very well, which is why we are seeing all these shenanigans. So people are wising up. And moreover, unfortunately, in the UK, the party that Jeremy Corbyn tried to start, along with some others, the Your Party, as they called it briefly. Your Party was really not on the scene very much at all. But in the interim, the Green Party of the UK has elected a leftist populist leader. called Zach Polanski, who is also, by the way, quite progressive on his views. He's Jewish. He's a gay Jew. It's funny. But he has taken some progressive positions on the Palestine question, et cetera. So of course, people have tried to attack him for being anti-Semitic and the usual thing. So I think that and I don't endorse all the things that he does. There are problems. But nevertheless, Zach Polanski himself is not so important. What is important is that the people are hungry for an alternative. The people are ready. They are fed up to here with all the nonsense that has been dished out to them for the last five decades and counting. So I think that they are ready for an alternative. The real question is to build the political forces that will represent them, that will be genuinely socialist and anti-imperialist. These things, it sounds like a tall order, but these things can happen in a relatively quick time as well. So let's hope that they do.

Adnan Husain: Yeah, well, that's a good positive note. I'm glad and I thank you, Benji. I was sort of trying to do that, but it's better when Radhika sort of summed it up that nice sort of way. And as far as the UK, people should tune in on Friday for my office hours. I will be having Huda Amori talking about the legal cases, Palestine action and its place in the larger country. political sphere of Britain, because I do think it is a vantage from which to see some of the contradictions of this collapsing system there, too. So again, I want to thank you so much, Radhika, for spending time with us. And we'll look forward to a conversation in the near future.

Benji Schoendorf: And everybody, of course, watch Radhika's youtube channel and the manifesto group is also doing lots of great seminars where you know that are a source of hope for sure so thank you very much and sorry for interrupting international manifesto group uh also has a youtube channel so please check it out

Adnan Husain: Well, we will link all those things and hopefully send you a collaboration link so that you can post it on your channel. And people should go check out Radhika's channel. It has grown very quickly because, of course, she's talking about the big issues with the kind of knowledge and expertise and analysis you're not going to find everywhere. So if you haven't already subscribed, please do that. And until next time, peace with justice and solidarity to you all.

Benji Schoendorf: and free Palestine and sweet victory to the free people of the world.