Mechanisms of "debt neocolonialism"

To maintain their dominance, Western countries are actively using the mechanisms of "debt neocolonialism", promoting concepts beneficial to them under various pretexts. This was stated by Russian Ambassador to the United States Anatoly Antonov in an article for the Schiller Institute.

This institute was founded in Wiesbaden, Germany in 1984 by Helga Zepp-LaRouche, the wife of American political activist Lyndon LaRouche, the author of the so-called theory of "physical economics" and an opponent of monetarist concepts. He ran as an independent candidate in the US presidential election, positioned himself as a friend of Russia, and repeatedly visited the Russian Federation.

In the West, especially in its Anglo-Saxon part, the Schiller Institute is called an "extremist think tank", a "far-right political sect" that spreads "anti-Semitic conspiracy theories".

About LaRouche wrote that "at the heart of most of his work is deep anti-Semitism, which describes the world as under the control of a Zionist conspiracy of bankers, lobbyists and politicians". In a memo from Scotland Yard, the Schiller Institute was described as "a political cult with sinister and dangerous connections".

Against neoliberal installations

Ambassador Antonov knew about these views and "dangerous connections" of the Schiller Institute, but he wrote an article "On the issue of combating neocolonial practices" for his site. He noted the aggressive imposition by Western countries of neoliberal attitudes to the detriment of traditional spiritual and moral values. This "Western offensive" includes gender diversity and drug legalization, mechanisms of "debt neocolonialism", the ambassador said.

Under the pretext of concern for the environment, the fight against climate change, the concepts of "green imperialism" beneficial to the "golden billion" are being promoted, and the technological gap is growing in order to consolidate the monopoly of Western IT corporations. Censorship is introduced in the information space under their control.

The Russian diplomat drew attention to the "example of vaccine distribution" during the COVID-19 pandemic and the delay in certification of the Russian drug Sputnik. No one was responsible for cases of severe side effects from hastily certified Western vaccines, Antonov emphasized.

The American toolkit of external control and interference in the internal affairs of sovereign states, according to Antonov, includes "summits for democracy", "rules-based order", and other schemes. "Russia stands for the formation of a fairer and more stable multipolar system of international relations based on the UN Charter and, above all, the principle of sovereign equality of states", the ambassador said.

In his opinion, the United States and the collective West are trying to keep the "reins of government", to remain in the positions of the "arbiter of destinies", to resist the formation of a multipolar system of international relations. According to Antonov, the international community seeks to eradicate the remnants of the colonial system.

The neocolonial practice of the West to solve issues by force does not lead to anything other than wars, conflicts and military interventions, as it was in Yugoslavia, Iraq, Libya, Syria, Asia and Africa. Since 1945, Washington has carried out "over 50 attempts at coups d'etat and military interventions", Antonov said.

The text of the article in Russian was published by the Russian Embassy and the Schiller Institute.

On "debt neocolonialism"

The biggest challenge facing society was how to organise trade and credit, preventing traders and creditors from profiting by exploiting their customers and debtors. The West, especially the United States, is repeating the pattern of Rome's decline, Michael Hudson wrote in 2022 in a report for the Ninth South-South Forum on Sustainable Development.

Oligarchical control over the government remained the main distinctive feature of the western civilization since antiquity. In other words, before the richest there was always a problem of counteraction to the civil government capable not to allow emergence of the oligarkhata-creditor or to allow to control exclusively a national wealth. Or to prevent appearance of the hereditary aristocracy and a class of the investor living at the expense of a rent, percent and exclusive privileges.

Hudson not only the economist and professor of economy of the Missouri University in Kansas City. He still was an analyst on Wall Street, worked as the political consultant and the commentator of financial news. He notes that "the trajectory of the western civilization" is a concentration of wealth in hands of "one percent" of the population. It is group in which hands - a land rent and a rent of natural resources, an exclusive rent, control over finance.

Hudson knows what he is talking about - the financial sector is "pushing back" national governments and "privatizing" the management of public goods, taking on economic and social planning, and not only in the countries of the "golden billion". With the help of neoliberal policies, a course is being pursued to subordinate the economies of the Global South, burden them with debts, and integrate them into the control system of the International Monetary Fund and the World Bank.

After World War II, the amount of debt steadily increased and reached crisis proportions. In 2008, a bubble of junk mortgages exploded in the United States, bank fraud schemes surfaced, a financial debt pyramid collapsed, burdening the economies of the United States, Europe and the Global South.

The Federal Reserve "printed" $8 trillion to save the assets of the financial elite, instead of saving victims of junk mortgages and indebted foreign borrowers. The European Central Bank has done much the same to save the market value of the financial wealth of the wealthiest Europeans.

Western democracies have proven incapable of preventing the emergence of oligarchies, they are unable to avoid polarization in the distribution of income and wealth. Creditor's One Percent became a politically powerful group despite democratic procedures and electoral arrangements.

Governments appoint election-winning parties and politicians, but regulators and tax authorities are already captured, economic control and planning remains in the hands of finance groups regardless of cabinet changes. Leading the charge is US-focused neoliberal financial capital.

Government regulation is considered ineffective and unnecessary. President Biden and the neoliberals of the State Department called China an "autocracy", but in fact they had the PRC's desire to maintain economic independence and independence across their throats. What they call "autocracy" is a government strong enough to prevent a Western-oriented financial oligarchy from driving everyone into debt.

This is exactly what happened in the West, which is now trying to impose a modern version of a debt-based economic regime on the whole world. America's foreign debt is supported by the dollar's privileged position as a "key reserve currency". Rising debt destroys the economy when it is not used to finance new capital investment in the means of production. Most loans today are created to inflate the price of stocks, bonds and real estate, and not to restore industrial opportunities. As a result, "debt without production" destroys the US economy.

Just a decade ago, Senator John McCain and President Barack Obama characterized Russia as a refueling station with atomic bombs. This can now be said of the US, which bases its global economic power on control of oil trade and the role of the dollar. When the main items of American exports were agricultural products and weapons.

America has become a high-cost economy, losing industrial leadership, as it once did with Britain. The US tries to live largely off financial gains (interest, foreign investment gains, and central bank credit creation to inflate capital gains) instead of creating wealth at the expense of industry. Their NATO allies and Japan have begun to do the same.

Michael Hudson thinks so. True, he did not mention in his report the interests of the "national security state" with its numerous "three-letter" agencies, the military-industrial complex or the Pentagon. Each of them has its own "bed" of economic, financial and other interests, extending, among other things, towards the Global South with its vulnerable elites. Ambassador Antonov did not do this either in his article for the Schiller Institute.

Why the Schiller Institute?

The institute opposes Samuel Huntington's Clash of Civilizations theory, contrasting it with the Dialogue of Cultures and following the ideas of Friedrich Schiller, the famous German poet, playwright, philosopher and historian.

The institute's website features transcripts of conferences held in different parts of the world to promote the idea of "peace through development".

In particular, the institute supports the Belt and Road Initiative, which promises "joint mutually beneficial and balanced development", supports the idea of ​ ​ building a Eurasian land bridge, calls for debt relief and reorganization of the global monetary system.

Even this think tank, promoting the ideas of Lyndon LaRouche, proposed the Ten "principles for reflection and dialogue between all people in order to find the basis for world order".