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The MoA Week In Review – OT 2025-107
Last week's posts on Moon of Alabama:
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Other issues:
Gaza:
Germany:
Empire:
Britain:
Turkey:
Rules Based Order:
Use as open (not related to the wars in Ukraine and Palestine) thread …
This post is directed at Sun of Alabama who drops links to Bill Mitchell’s blog posts incessantly.
I give theories a fair shake to prove their adherence and their applicability to the real world. I might find flaws or find parts that I disagree with, but it’s rare that I get hit by a sledgehammer of stupidity. So, congratulations, Bill Mitchell, you’ve found yourself in a very exclusive club!
Bill Mitchell has no idea about financial imperialism, petrodollar and the US dollar hegemony at all, which makes his particular version of MMT (I know he coined the term MMT) to be completely detached from reality. Commentators in his blog have mentioned the petrodollar and the dollar hegemony, but I’ve not seen him mention these concepts himself. Bill’s MMT theory is radically different from Michael Hudson’s.
The man has earned his PhD in 1998 and he has been blogging for decades (I saw a post from 2009). It is utterly baffling to me that the concepts of imperialism, unequal exchange etc. has escaped the notice of an economist, especially one who openly lashes out against Marxists misunderstanding him in his blog.
There can only be one explanation for Bill Mitchell’s apparent stupidity: Bill Mitchell is actually an apologist for US imperialism, despite his criticisms of US policies.
Let me present a series of Bill’s blog posts as evidence:
An international currency? Hopefully not! November 3, 2009
MMT and international trade – some further considerations in a degrowth context July 29, 2024
Delinking and degrowth September 5, 2024
Part 1
Bill opposes the development of an international currency like the “bancor”, as he clearly laid out in his 2009 post. The man wants the US dollar to stay as the international reserve currency and reap the exorbitant privileges that comes with it. Bill argued that national sovereignty would be undermined by an international reserve currency subject to being managed by “unelected” officials.
Why should a sovereign national government (and its citizens) allow an international body (which might be unelected – in the case of the IMF) to implement policy that will affect its electoral appeal?
This begs the question: given that foreigners can’t elect US officials and that the US exercises sole discretion in the printing of the US dollar, wouldn’t global trade being dependent on the US dollar as a reserve currency cause the erosion of the sovereignties of non-US nations?
Ironically, Bill gave an example of the US encroaching upon Chinese sovereignty in the same blog post, but Bill can’t see it!
Only countries such as China with enormous stockpiles of foreign reserves can resist these speculative attacks and run a peg against say the US dollar. But remember they have been able to build that stockpile by denying its citizens access to resources and thus keeping them poorer than they would otherwise have to be.
Bill believes that China is intentionally impoverishing its own citizens because China is stupid and wants to build up foreign currency reserves for no good reason!
Part 2
Bill, in talking about MMT and international trade in a post dated July 2024, made the following statements, which I think are extremely crucial to understanding how Bill sees the world:
This is the starting point of the MMT perspective – exports constitute an opportunity cost because the embodied real resources could have been used domestically rather than being sent for the benefit of foreign consumers.
Conversely, imports constitute a net benefit to a nation because they involve foreigners transferring their real resources to the importing nation, thus preventing their own citizens from using them.
Taken together, a trade deficit provides net benefits to the nation, permits higher material living standards, and is said to thereby increase the real terms of trade for the deficit nation.
Nations that run trade surpluses deprive their citizens of a higher material standard of living – either they are being underpaid, under consuming, and/or working longer than they must, which are consequences of reductions in real terms of trade.
Why then would a nation want to export?
The answer is to generate benefits that are otherwise unattainable, given their domestic resource base.
Thus, the export cost can be seen as an investment to allow imports that expand the domestic consumption possibilities.
It is self-evident that if you have something at your disposal and you hand it to another nation then you have incurred a ‘cost’ and if that other nation hands you something that they have declined to use themselves then you have gained a benefit.
A trade deficit means that foreigners have given up more real resources (inputs, final goods) than they have received in return.
In other words, a nation could record permanent trade deficits, without degrading its currency, if the surplus nations desired to continue building their foreign exchange reserves accordingly.
In this July 2024 post, Bill pretends not to know about the effort (the endless wars and murders) that the US made to ensure that the US dollar remains in demand, or, as Bill puts it, to ensure that “the surplus nations desired to continue building their foreign exchange reserves accordingly.” Later, in September 2024, Bill Mitchell suddenly found out about Wallerstein’s world-systems theory and Samir Amin’s delinking theory. Yet, in this September 2024 post, he carefully avoided (except for one lone paragraph) mentioning the role of currency in the exploitation of the Global South by the Global North, which is highly irregular because his entire brand is built around being an MMT proponent and the word “currency” appears with high frequency in all his posts on economy. Imagine, an MMT guy not talking about currency! Let’s not forget that Bill Mitchell has blog posts dating from 2009 and has been a PhD econmist since 1998. This selective blindness or apparent stupidity from him is highly suspicious.
Bill also claims in the July 2024 post that exports are meant to “generate benefits that are otherwise unattainable, given their domestic resource base”. In isolation, there’s nothing wrong with this claim. But, in conjunction with Bill’s rejection of bancor and insistence on maintaining the US dollar as the international reserve currency, the motivation behind Bill’s claim is highly suspect. Basically, Bill is saying that the pieces of US dollar paper that non-US nations get in exchange for sending their material goods to the US are the unattainable benefits that non-US nations should be grateful for.
Bill, whether he realizes it or not, is defending JD Vance’s view of international trade.
Vance’s view of international trade:
The idea of globalization was that rich countries would move further up the value chain, while the poor countries made the simpler things. You would open an iPhone box, and it would say “designed in Cupertino, California”.
Now, we assumed that other nations would always trail us in the value chain, but it turns out that as they got better at the low end of the value chain, they also started catching up on the higher end. We were squeezed from both ends.
Under US dollar hegemony, non-US nations can’t buy petroleum or advanced tech without USD, and Bill prefers it that way. Bill wants these non-US nations to stay dependent to the USD.
Part 3
What left the greatest distaste was Bill bringing up Samir Amin while omitting the extensive criticism Samir Amin has for the role of the US dollar as the international reserve currency. This is an extremely disingenuous representation of what Samir Amin stood for.
In fact, Samir Amin did an entire interview on the 2009-2011 currency war, which you’d think would interest an MMT proponent looking to integrate MMT with international trade like Bill. Samir Amin:
https://links.org.au/samir-amin-global-currency-wars-us-imperialism-and-global-south
The real problem is the imbalance between the power of the US – that is of the US dollar – and the non-power of the other so-called partners (and therefore are really non-partners) in the integrated global monetary and financial system and market as it presently exists.
The real question is that imbalance. That is obvious when you hear the US establishment speaking. They say, and they repeat it with arrogance: the dollar is our money and your problem. That is, the US keeps in its own hands the tools for managing its own currency according to its own needs and targets, good or bad. That is indeed what the US Federal Reserve does, which is its central bank – state bank – ruled by the US Treasury. The US Federal Reserve has the tools in hand for running its monetary policy as it considers it should be, with no regard to anyone else.
Samir Amin’s ideas on delinking from US dollar hegemony isn’t recent. It goes back to at least the 1970s. Here’s a quote from the 1976 essay from Samir Amin titled Unequal Development. Samir Amin:
https://www.sahistory.org.za/sites/default/files/archive-files3/unequal_development_by_samir_amin.pdf
Thus, through the working of the international monetary system, the United States occupied a privileged position: its national currency being accepted as an international reserve, it did not have to worry about its balance of payments – in other words, the deficit in the country’s balance of payments was automatically covered by a credit advanced to the United States by the rest of the world.
This asymmetrical working of the system to the advantage of the North American center was accepted so long as the United States held a position of strength in relation to the other developed capitalist countries. In fact. so long as the United States’s industrial superiority in all fields was expressed in a permanent tendency for that country’s external balance to show a surplus, a “hunger for dollars” was general in the world, and the system could function.
The tendency for the United States’s balance of payments to show a surplus in the period after the Second World War did not express a particularly “fortunate” structural equilibrium but rather a disequilibrium over which American domination had been imposed. The dollar as a universally accepted international reserve currency expressed this domination.
Posted by: All Under Heaven | May 20 2025 2:44 utc | 130
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