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Last week I published a long article exploring the history of Sen. Joseph McCarthy of Wisconsin, whose anti-Communist crusade dominated our politics of the early 1950s. His activities gave rise to “McCarthyism” as a term of abuse and despite the passage of three generations, that expression still seems so widely used today that it has its own 14,000 word Wikipedia article.

In February 1950 McCarthy received huge media attention when he began giving public speeches denouncing the alleged dangers our country faced from the subversive activities of Communists and Soviet agents. Based upon my mainstream history textbooks and the media coverage I’d absorbed, I’d always regarded those claims as wildly exaggerated, so I’d been greatly surprised to gradually discover that the domestic threat of Soviet Communist agents had once been at least as severe as McCarthy alleged.

However, although I became convinced that the menace of Communist infiltration had been very real, I still regarded the senator’s own behavior as erratic, with McCarthy prone to making wild accusations. As I wrote a dozen years ago:

In mid-March, the Wall Street Journal carried a long discussion of the origins of the Bretton Woods system, the international financial framework that governed the Western world for decades after World War II. A photo showed the two individuals who negotiated that agreement. Britain was represented by John Maynard Keynes, a towering economic figure of that era. America’s representative was Harry Dexter White, assistant secretary of the Treasury and long a central architect of American economic policy, given that his nominal superior, Secretary Henry Morgenthau Jr., was a gentleman farmer with no background in finance. White was also a Communist agent.

Such a situation was hardly unique in American government during the 1930s and 1940s. For example, when a dying Franklin Roosevelt negotiated the outlines of postwar Europe with Joseph Stalin at the 1945 Yalta summit, one of his important advisors was Alger Hiss, a State Department official whose primary loyalty was to the Soviet side. Over the last 20 years, John Earl Haynes, Harvey Klehr, and other scholars have conclusively established that many dozens or even hundreds of Soviet agents once honeycombed the key policy staffs and nuclear research facilities of our federal government, constituting a total presence perhaps approaching the scale suggested by Sen. Joseph McCarthy, whose often unsubstantiated charges tended to damage the credibility of his position.

Some years later I’d read Blacklisted by History, a ringing 2007 defense of McCarthy and his activities by M. Stanton Evans, and last month I did the same with most of the other major books in the pro-McCarthy camp. These included Arthur Herman’s widely praised 1999 biography Joseph McCarthy, Ann Coulter’s 2003 bestseller Treason, the famous 1954 work McCarthy and His Enemies by William F. Buckley Jr. and L. Brent Bozell, and Buckley’s much later 1999 novel The Redhunter, a lightly fictionalized account of the Wisconsin senator’s career. To provide some balance, I also reread Richard Rovere’s short but highly influential 1959 work Senator Joe McCarthy, providing an account quite hostile to the senator.

With the exception of the Rovere book, all these other works had been written by McCarthy’s strongest defenders, but based upon the factual information they provided, my verdict of a dozen years ago was fully confirmed. McCarthy was right that America had faced a great threat from Soviet Communist subversion, but he was frequently wrong about almost everything else.

McCarthy often made wild, unsubstantiated accusations, and he was just as dishonest and careless with facts as his mainstream media critics had always claimed. So although he was hugely successful for several years, he ultimately did enormous damage to his own cause. Moreover, he was very much of a latecomer to the Communism issue and quite possibly merely an opportunist. So he became a public figure who permanently tainted the important work already done by his far more scrupulous and competent political allies.

The widely televised Army-McCarthy Hearings of 1954 destroyed his credibility, and a few months later he was censured by an overwhelming vote of his fellow senators. After his political eclipse, he gradually drank himself to death over the next couple of years.

By the late 1950s, the self-destructive nature of McCarthy’s efforts were so widely recognized that they had become a theme of popular fiction. For example, Richard Condon published his Cold War thriller The Manchurian Candidate in 1959 and it was soon made into a famous movie of the same title. This work portrayed the extremely nefarious plots of Communist agents to seize control of our country, but ironically enough, the McCarthy-like political character was eventually revealed to be a Communist dupe, manipulated by our foreign enemies into destroying our society and its freedoms while capturing our government for the Communist conspirators who secretly controlled him.

• American Pravda: McCarthyism, Part I – The Man
  Ron Unz • The Unz Review • April 28, 2025 • 12,700 Words

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Towards the beginning of my long article I described how the 1990s declassification of the Venona Decrypts fully confirmed the enormous influence that agents of Soviet Communism had gained over our federal government during the 1930s and 1940s. By the late 1940s, the discovery of so many very high-ranking Soviet operatives such as Alger Hiss and Harry Dexter White easily explained the huge attention that McCarthy attracted when he launched his anti-Communist crusade with a public speech in February 1950, and the arrest of Julius and Ethel Rosenberg later that same year for nuclear weapons espionage seemed to further boost the credibility of his claims. So although McCarthy’s accusations were often bombastic and unsubstantiated, they resonated deeply with a fearful public grown suspicious that our elected officials were concealing the true extent of ongoing Communist subversion.

The documented existence of all those important Soviet agents was obviously the proximal factor behind the widespread popular support that McCarthy’s political crusade quickly attracted. But I think that there were also much deeper political roots to McCarthyism, roots that have almost always been ignored in our histories of that era, whether these were written by the senator’s many mainstream critics or by his small handful of committed defenders. This strange silence seems due to the controversial nature of that prior history, but an important clue to that hidden backstory may be found in an influential book from that era.

Donald Trump and the Shadow of McCarthyism

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Last month the Trump Administration launched an unprecedented assault against academic and intellectual freedom in America, targeting many of our most elite institutions of higher education.

As an example of this, enormous pressure was exerted against Columbia University in New York City by withdrawing $400 million in annual federal funding and demanding its full cooperation with the arrest of foreign students who had been critical of Israel’s massacre of Gazan civilians. Trump officials also required that Columbia’s prestigious Middle Eastern Studies program and other research centers be placed under “academic receivership,” ensuring their tight ideological control by pro-Israel overseers.

Faced with the dire threat of such a massive loss of funds, Acting President Katrina Armstrong acceded to those demands, but then resigned, much like her predecessor had done seven months earlier.

For similar reasons, the top leadership of Harvard University’s Middle Eastern Studies Center was forced to resign, seemingly destroying the academic independence of that prestigious institution eighty years after it had first been established. But apparently that preliminary academic concession was deemed insufficient, and Trump officials soon froze more than $2 billion in such federal funding to America’s most prestigious university. When Harvard resisted further demands, Trump illegally threatened to revoke Harvard’s non-profit status, ban all foreign students, and essentially attempt to destroy it.

Our government declared that all these attacks upon America’s top academic institutions were part of its sweeping ideological campaign to root out campus antisemitism, with that term now extended to include “anti-Zionism,” namely sharp criticism of the State of Israel and its policies.

The successful Hamas raid of October 7, 2023 had been followed by relentless Israeli attacks against the helpless civilians of Gaza, and these had prompted a huge wave of pro-Palestinian campus protests during 2024, outraging the Israeli government and its pro-Israel American supporters. The latter included many Jewish billionaire donors who exerted their enormous influence to successfully demand unprecedented crackdowns that involved the arrest of some 2,300 students and soon stamped out those demonstrations.

Despite that major success, the Zionist donors regarded their victory over the protesters as incomplete. With the pro-Israel Biden Administration now replaced by the even more strongly pro-Israel Trump Administration, they demanded that this campaign be extended to rooting out the ideological forces that they deemed responsible.

Under their influence, Trump and his top aides declared their intent to arrest and deport any foreign students who had participated in those campus protests or otherwise expressed their sharp criticism of Israel, and this soon resulted in a series of shocking incidents.

For many decades, legal permanent residents of the U.S. were assumed to possess all the same rights and privileges as American citizens, certainly including the Constitutional protections of our Bill of Rights. Their Green Cards could only be revoked for very serious crimes such as rape or murder, and cancelling student visas for ideological reasons was almost as rare.

But under Trump this completely changed. Secretary of State Marco Rubio declared that a central foreign policy goal of the American government was combatting antisemitism everywhere across the world and anti-Zionism fell into that same category. Therefore those foreign students who strongly criticized Israel should be removed from American soil, and he cancelled the visas or Green Cards of some 300 of them, ordering their immediate deportation, with the total eventually rising to 1,500.

Some of the resulting scenes were quite shocking. A young Turkish doctoral candidate attending Tufts University on a Fulbright Scholarship was snatched off the streets of her Boston-area town by six masked federal agents, hustled into an unmarked car, and transferred to a holding cell in Louisiana in preparation for her deportation. Other raids on Columbia student housing by teams of federal agents picked up a Palestinian Green Card holder with an American citizen wife eight months pregnant. A South Korean undergraduate who had lived in the U.S. since the age of seven went into hiding to avoid a similar fate, while a student from India quickly fled to Canada to avoid arrest.

None of these university students had committed any crimes, but they were seized by federal agents in campus raids or grabbed from the streets of their cities merely for having expressed public criticism of the foreign government of Israel. Nothing as bizarre as this had ever previously happened in America.

For example, the Tufts student was abducted for having co-authored an op-ed in her campus newspaper a year earlier supporting the implementation of policies passed by an overwhelming vote of her own university’s Community Senate. The text of the piece that prompted her arrest was so anodyne and dull that I found it difficult to read without nodding off.

Repressive police states that arrest students for criticizing the government have hardly been uncommon throughout history. But I’d never previously heard of one that only implemented such measures for criticizing a foreign government. This demonstrated the true lines of sovereignty and political control governing today’s American society.

The declared aim of the Trump Administration and its ideological allies has been to completely root out and eliminate anti-Zionism across American universities. However, I think the likely outcome of this harsh ideological crackdown may be to destroy intellectual freedom at those institutions, thereby also destroying much of their global influence. Several weeks ago, I discussed these strange and alarming developments in an article.

• The Zionist Destruction of American Higher Education
  Ron Unz • The Unz Review • March 31, 2025 • 7,300 Words

The Forgotten Menace of Soviet Communist Subversion

As might be expected, these dramatic Trump Administration attacks against free speech and academic freedom provoked a huge wave of sharp criticism, both across the mainstream media and among private individuals, and the word most often used to condemn such policies was “McCarthyism.” Throughout the month of March, I saw that term regularly expressed in angry YouTube interviews, published opinion pieces, and even in some of my personal email exchanges.

Yet although my own very critical article ran well over 7,000 words, it included no mention of either Sen. Joseph McCarthy nor his anti-Communist political crusade of the early 1950s. Trump’s actions seemed orders-of-magnitude more serious and unjustified than anything ever proposed by McCarthy, so I regarded any such comparisons as absurd and ridiculous.

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Back when I was a young child my grandfather enjoyed watching professional wrestling on his old black-and-white television, so I occasionally did the same.

In those distant days, television wrestling possessed almost no money nor prestige and was barely even considered a real sport, probably tied with roller derby as occupying the bottommost-tier of audience viewership. Wrestling matches were only carried on one of the lowest-rated local television stations, unaffiliated with any network, whose managers desperately sought out anything they could find to fill their available broadcast hours.

The notion that wrestling might someday become a multi-billion-dollar national business enterprise would have seemed totally outlandish and ridiculous. Although a 1975 Hollywood science fiction film called Rollerball envisioned a future America in which a lethal version of roller derby had become the #1 sport, no one ever suggested anything similar for wrestling.

Although I’ve never watched a single wrestling match since the black-and-white shows of my childhood and those memories have faded, I think that they may have often featured tag-team contests, in which pairs of wrestlers faced off against each other.

If so, then our national headlines are now proclaiming a heavyweight wrestling match to determine the future of American higher education and perhaps our entire society as well. President Donald Trump is facing off against Harvard University in the greatest political bout of this young century, with each of those primary contenders backed by their chosen seconds.

Trump is a noted author, with more than twenty published volumes to his name, many of them high-profile bestsellers on business strategy, politics, and negotiation. But I’m not entirely convinced that he’s ever actually read a single book cover-to-cover in his entire life, even including any of his own, and if he did, I suspect that the last one may have been decades ago, perhaps filled with many colorful pictures.

Meanwhile, his main opponent in that match is America’s oldest university, now approaching its 390th year of existence, long ranked as the world’s wealthiest and most prestigious institution of higher education.

Trump’s loyal team-mate is his Secretary of Education Linda McMahon, the billionaire wrestling-lady, while Harvard is backed by Columbia University, still smarting from the brutal beat-down it recently received at the hands of the Trump-McMahon team before Harvard had entered the lists.

Although wealthy and very prestigious, Columbia still probably ranks a bit below the longstanding Harvard-Yale-Princeton triumvirate. Therefore the threatened loss of $400 million in annual federal funding a few weeks ago brought the university to its knees, forcing its administration to surrender on all the main points demanded.

Teams of federal agents were allowed to raid student housing and drag off any non-citizens suspected of criticizing Israel, the administration agreed to create a special unit of 30 campus security officers tasked with suppressing any public displays of anti-Zionism, and its prestigious Middle Eastern Studies program was placed in “academic receivership,” presumably intended to ensure that it became entirely pro-Israel in its teachings.

All these concessions were made by Acting President Katrina Armstrong, who afterwards resigned due to that horrific pressure she had endured, becoming the second president of Columbia to do so in just the last eight months.

So based upon this painful recent history, we are clearly seeing the sort of grudge match that has become wildly popular in pro-wrestling, with Columbia eager for its share of revenge now that it has mighty Harvard on its side.

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In pro-wrestling as in other spectator sports, the onlookers can side with one of the champions or the other, or else merely enjoy the battle without taking sides.

Given Trump’s ignorance and the stupidity of his policies, most recently demonstrated by his Looney Tunes tariff proposals, I certainly couldn’t see myself cheering for him. But instead of remaining neutral, I’ve found myself entirely in Harvard’s corner.

My position might seem a bit strange given the harsh criticism that I’ve leveled at my alma mater over the years, even on some of the very matters that the Trump Administration is fiercely attacking.

For example, as far back as late 2012, I’d published a short piece arguing that Harvard had gradually transformed itself from a great academic center of learning into an enormous hedge fund with some sort of small school or something attached off to one side.

• Paying Tuition to a Giant Hedge Fund
  Ron Unz • The American Conservative • December 4, 2012 • 1,300 Words

As I noted in a follow-up column a few days later, my criticism had deeply resonated in liberal journalistic circles, and during the years since then denouncing our elite universities as disguised hedge-funds has become widespread:

Late Friday afternoon, the piece was prominently featured on the Business Insider and CNBC websites, and soon redistributed on twitter by a large throng of individuals, some of them prominent journalists. MSNBC‘s Chris Hayes tweeted “very jealous I did not write this article” to his 175,000 followers, Pulitzer Prize winner Bart Gellman described it as “eye opening,” and New York Times economic policy reporter Annie Lowrey used the phrase “Harvard as a giant hedge fund plus a wee research university.”

Moreover, that particular piece had actually been published as a side-bar to my extremely long analysis of the admissions practices at Harvard and our other most elite universities, which together served as a direct funnel to the commanding heights of American academics, law, business, media, and finance. My statistics demonstrated that their admissions process had become hopelessly corrupt, and I summarized these conclusions.

In recent decades, elite college admissions policy has frequently become an ideological battlefield between liberals and conservatives, but I would argue that both these warring camps have been missing the actual reality of the situation.

Conservatives have denounced “affirmative action” policies which emphasize race over academic merit, and thereby lead to the enrollment of lesser qualified blacks and Hispanics over their more qualified white and Asian competitors; they argue that our elite institutions should be color-blind and race-neutral. Meanwhile, liberals have countered that the student body of these institutions should “look like America,” at least approximately, and that ethnic and racial diversity intrinsically provide important educational benefits, at least if all admitted students are reasonably qualified and able to do the work.

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In an amusing display of British pride and solipsism, the venerable Times of London once ran the headline “Fog in Channel – Continent Cut Off.”

Overly arrogant individuals sometimes find it difficult to recognize that they are not the center of the universe, and that instead they might actually be considerably less large and powerful than those they intend to overawe, cut off, or isolate.

This sort of notion was also famously expressed in a Bugs Bunny and Road Runner cartoon I remember seeing during my childhood. One of the Looney Tunes characters—I forget which one—was perched on the branch of a tree and idiotically decided to destroy his adversary by sawing it off. Since cartoons may easily defy physical laws, his ridiculous plan actually succeeded and that branch remained suspended in mid-air while the rest of the tree suddenly plummeted to the ground. But real life is considerably different than what was portrayed by Warner Brothers cartoonists.

Some may disagree. I’ve sometimes wondered whether the surprising trade policies that President Donald Trump announced over the last couple of weeks might have been inspired by those Bugs Bunny cartoons of the 1950s. Perhaps he assumed that they accurately portrayed real life events and decided to apply that same strategy to America’s international trade problems.

Certainly the sudden, unilateral application of new tariffs against every other country in the world—ranging from a stiff minimum of 10% against the entire human race to a China rate that ultimately reached an absurd 145%—seemed more like something out of a cartoon than normal economic policy planning.

The initial tariff rates shown in the chart that Trump held up at his April 2nd announcement produced a jaw-dropping reaction by nearly all economic observers. I suspect that many of them may have wondered if he’d somehow gotten his dates confused and the whole exercise had actually been intended as an April Fools’ joke.

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I was recently interviewed by a right-wing British podcaster named Mark Collett, and he suggested that Trump’s erratic and mercurial political decisions reminded him of the Roman Emperor Caligula, leading me to concur with his historical analogy.

Caligula is probably best known for announcing that he would appoint his horse Incitatus to the consulship, the highest political office of the Roman government, and also for declaring himself to be a living god. But I think that if Trump had given his favorite dog or cat a Cabinet post and even Tweeted out a few fanciful claims regarding his own divinity, the negative impact upon America’s position in the world might have been considerably less damaging than what was caused by his outrageously bizarre tariff proposal.

Tariffs are just a type of tax levied on imports, and America annually imports well over $3 trillion dollars worth of foreign goods, so tariff taxes obviously have a huge economic impact. But Trump suddenly raised those taxes by more than a factor of ten, taking them from around 2.5% to 29%, rates far, far beyond those of the notorious 1930 Smoot-Hawley Tariff and reaching the levels of more than 100 years ago. This certainly amounted to one of the largest tax increases in all of human history.

According to our Constitution, tariffs and other tax changes must be enacted by Congressional legislation. But Trump ignored those requirements, instead claiming that he had the power to unilaterally set tariff tax rates under the emergency provisions of a 1977 law that no one had ever previously believed could be used for that purpose.

Across our 235 year national history, all our past changes in tariff, trade, or tax policy—including Smoot-Hawley, NAFTA, the WTO, and Trump 45’s own USMCA—had always been the result of months or years of political negotiations, and then ultimately approved or rejected by Congress. But now these multi-trillion-dollar decisions were being made at the personal whim of someone who had seemingly proclaimed himself a reigning, empowered American autocrat.

As might be expected, Trump’s huge tax increase on $3 trillion of imports quickly led to a very sharp drop in stock prices, but Trump declared that he was unbending and would never waver. China had prepared for exactly such an economic attack, and when it soon retaliated with similar tariffs on American products, Trump counter-retaliated, with several days of those tit-for-tat exchanges eventually raising tariff rates against China to an astonishing 145%, essentially banning almost all Chinese goods. Many other countries and the EU also threatened similar retaliatory tariffs, but since their tax rates were governed by law rather than autocratic whim, their responses were necessarily much slower.

However, just a week after he announced those gigantic tariffs against the entire world and repeatedly promised to maintain or even further raise them, Trump suddenly changed his mind. Although he kept the Chinese rates at those ridiculous levels, he declared that tariffs on all other countries would suddenly be reduced to a very high but rational 10% rate for the next 90 days while he decided what to do.

Thus, during the course of a single week, Trump had raised American tariffs by more than a factor of ten, then dropped them by a factor of two, representing exactly the sort of tax policy we might expect to see in a Bugs Bunny cartoon.

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Trump’s totally unexpected reversal naturally produced a huge rebound in stock prices, which recovered much of the ground that they had previously lost, and Trump boasted about all the money that his friends had made from that unprecedented market rebound. This led to some dark suspicions that our unfortunate country had just witnessed one of the most outrageously blatant examples of insider trading in all of human history.

Across thousands of years, the world has seen many important countries ruled by absolute monarchs or all-powerful dictators, with some of these leaders even considered deranged. But I can’t recall any past example in which a major nation’s tax, tariff, or tribute policies have undergone such rapid and sudden changes, moving up and down by huge amounts apparently based upon personal whim. Certainly Caligula never did anything so peculiar, nor Louis XIV nor Genghis Khan nor anyone else who comes to mind. Lopping off the heads of a few random government officials was one thing, but drastic changes in national financial policies were generally taken much more seriously. I don’t think that Tamerlane ever suddenly raised the tribute he demanded from his terrified subjects by a factor of ten, then a few days later lowered it back down by a factor of two.

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Nika Dubrovsky: Hi everyone. It’s a real honor to welcome you on behalf of the David Graeber Institute. We’re especially grateful to our speakers — many of whose work aligned closely with David’s thinking and values — for joining us to reflect on how radically our world is changing.

It’s in this spirit that we hope to better understand the transformations unfolding around us.

Today’s conversation marks the beginning of a new series of public discussions hosted by the David Graeber Institute.
With that, I’m happy to hand over to Ann Pettifor, who will be moderating today’s session.

Ann Pettifor: Thank you very much, Nika. And can I say how wonderful it is for Michael and Yanis and myself to be gathering here in the name of our very dear friend David Graeber, whom we loved very much and were so sad at his loss. And thank you to Nika in particular for establishing the Institute and for facilitating these exchanges and reminding us all of how important David was to the current public debate. So I’m feeling quite emotional even thinking about him.

So anyway, great. So I want to just begin. Everyone here knows Michael Hudson, I’m assuming, and Yanis Varoufakis.

They will speak about their work. And what we have in common, I think, is A, David Graeber, but B, an understanding of the international financial system and its impact on Europe, on the United States and on the South. And that’s what is going to be the major theme of this today.

And I hope to begin with Michael Hudson’s latest paper, which is superb. And Michael, you give us the title because it’s escaped me for the minute. But it really is a wonderful paper, which I think Nika will be distributing more widely.

So, Michael, you begin our conversation by talking to us about what is actually going on, really. What is the real motives of the Trump administration? And why are we where we are right now?

Michael Hudson: Well, there are two things that are key in this. I think that a few years ago, Trump was talking to some economists, and he said, isn’t there some way that America can get rid of the income tax? We want to get rid of taxes, at least on my constituency, the donor class, the 1%.

And the economists told him, well, you know, America didn’t really have an income tax until 1913. And Trump said, well, how did we get by from the revolution until World War I? And the economists said, well, we had tariff revenues. That was almost the entire source of the American government and the Treasury, along with the sale of land that had been grabbed from the Indians.

And so Trump said tariffs. That’s wonderful. Trump loves tariffs because they fall mainly on the consumers, not his class.

They don’t fall on the class that he wants to untax. So he somehow thought, how do we justify a tariff policy? And if only we can go back to that golden age, of course, we have to shrink government, at least the government social spending. And how do we justify a tariff policy? Well, I think that we’re now talking about him imposing tariffs to threaten other countries with destabilizing their economy.

And that’s the only thing that America has to offer now. It can’t offer industrialization because it’s deindustrialized. It can’t really offer much financialization because it’s weaponized the dollar.

Trump wants to weaponize foreign trade as well. And he’ll tell foreign countries, well, of course, we can roll back the tariffs and let’s sit down and negotiate. What can you give back to the United States? And it’s almost as if he’s read Yanis’s articles on the role of information technology is dominating the new economic shape of the world and that of empire builders.

They want to gain dominance in information technology and various platforms and in ship making technology with a view to making other countries dependent on paying monopoly rents to U.S. companies, especially those in Silicon Valley, which are Trump’s large campaign contributors. So it’s as if information technology monopoly rents are going to be the new buttress of the American balance of payments. If other countries can be blocked from creating their own independent technology.

Well, U.S. diplomats can impose sanctions on this. They can try to prevent China from developing IT. They can try to lock Europe and other countries into this.

And the magnitude of this issue today is as large as that of the 19th century fight against landlords. And it was the fight against landlords that inspired classical economists from Adam Smith to John Stuart Mill to Marx and the socialists to define economic rent. And they said, if we’re going to free our economies from the legacy of feudalism, a hereditary aristocratic landlord class, then we’ve got to take away their economic rents, mainly by either taxing rents away or by just socializing the land and making it a public utility.

So they developed the whole concept of economic rent as the excess of market price over intrinsic cost value. Well, they didn’t succeed in getting rid of the landlord class, but they did define rents in a way that can be applied to monopoly rents. Again, excessive price over income and that the fight against the kind of monopoly rents that Yanis has described as the ideal of the platforms of information technology and all of its associated dynamics are a parallel to the fight today to the 19th century fight against landlords.

To free economies from economic rent. And in this case, from economic rent that’s been sponsored and controlled by the United States as a means of replacing the form of dominance that it had over the rest of the world since 1945.

Ann Pettifor: Fantastic. That does lead us into Yanis’ book and Yanis’ work on technology. Yanis, what would you say to Michael’s analysis of what’s happening right now?

Yanis Varoufakis: Well, of course, I agree. How can I not? Ever since he wrote the great book, Super Imperialism, and now he’s even alluding to my work on techno-feudalism.

Look, it’s not technology. It’s got nothing to do with technology. I mean, technology is everything.

Since the Iron Age, we’ve had technology. And it’s not information technology either. Because look, compare and contrast, for instance, OpenAI, which is, you know, heavy duty information technology, right? But in the end, it was so easy to append it.

DeepSeek came out and offered a cheap version of it and essentially damaged that business model spectacularly. So what I think Michael Hudson is very poignantly bringing into the conversation about the global order of things is what I call cloud capital. So you can have an industrial robot, which is very technologically advanced, uses information technology and algorithms and so on to assemble Teslas, right? You can have OpenAI, which produces a standard service in a standard capitalist model.

But what lives in here? What lives in here? In Google? In Facebook? In Meta? In X? In all these platforms, this is not just information technology. We get it wrong. It’s a new form of capital.

Because every form of capital we’ve had up until now, since we created the first tool to the old singing, old dancing industrial robots that assemble Teslas, they’ve been produced means of production. That’s what capital was. With this, we had a mutation of capital.

For the first time, we have automated systems that are not produced means of production, but are purely produced means of behavioral modification. So unlike the machines that Henry Ford employed to produce other machines, Model Ts, and create a monopoly capitalist system whereby he’ll use the monopoly profits in order to buy newspapers to influence people and governments and to rip up all the streetcars, trams, in order to replace them with his own cars. Unlike that, you know, Jeff Bezos doesn’t sell anything.