From Caracas to Minneapolis

One thought on “From Caracas to Minneapolis”

“U.S. industry, not least because of its relatively high wage levels, was rapidly emerging as the country with the highest labor productivity…as U.S. industry has become ever less competitive against China and other Asian countries, its economic position is increasingly looking like that of late 19th-century Britain and, to some extent, France” This seems mildly contradictory in the sense that American wages are still quite high in a global sense, even when compared against other rich countries. I do have to reiterate to foreign friends that US dollars do not have the buying power they might think they do within US borders, when I tell them what it costs to rent an apartment in even a “low-cost” state, they often seem to be genuinely shocked. I could make a similar argument using other factors, that its at least somewhat likely, the standard of living in America in the latter half of the 19th century was not as good as Britain’s; though many present economic historians would say so. Though its important to note that its not so much whether US wages provide a high standard of living for US workers but that wages are high by global standards. I take it you are aware of Robert C. Allen’s thesis that high wages and cheap energy (from coal) were the two biggest determining factors for Allen for why the Industrial Revolution happened first in Britain and not elsewhere? The US has high wages in global gold-value terms compared to what workers earn elsewhere. So, comparing the silver wages of workers in Britain and India, I believe Allen found they were seven times that of India in the 17th to early 19th centuries. In terms of what it could actually buy, Allen found that it could buy four fairly barebones subsistence consumer baskets in Britain as opposed to one in India. Which is still not a riotous standard of living when you consider how little a human being can live on in theory. Allen’s thesis that high money wages made industrial machines more profitable to run in Britain than elsewhere comes with a side-thesis that got less attention. Mainly, that high urban wages made leaving the land (where future workers weren’t actually just enclosed) a positive economic gain and essentially allowed them to reproduce themselves– then at a growing rate and not just a stable one. So high international wages in America might provide a similar incentive to use more machines in America but apparently without corresponding gains in employment, meaningful productivity edge, and in some cases absolute decline.

Could it be the fact that sufficient wages to reproduce the historically-determined standard of living of the American working class within American borders are not paid? Anyone whose been consigned to the lower third/half of the earning bands in the US labor market knows its a hardscrabble existence. There are places where it’s worse, sure, but I’m wondering if this is a factor in US industrial decline rather than say high wages in international exchange value (most succinctly expressed in gold). Since the working class must buy everything in the market it actually must earn more than the peasantry did to maintain itself long-term, one example that Perelman gave, was that Scottish highland peasants could make shoes that fit their needs with five hours of labor. The cost of a pair of shoes for a Scottish worker in the 18th century? One week of labor. Now maybe the shoes were better than the peasant equivalent but the fact it took so long is a large burden in terms of cost. Robert C Allen argued that peasants in France could only do about four hours of hard labor on their caloric intake, so for a worker to perform 12 hours of hard labor, they had to eat much more, including meat, which is expensive. Just something that crossed my mind, you’ve given very satisfactory answers on this question in the past, but it seems odd that what might have been a benefit in the past (high wages on the international scale) might no longer be. That might just be dialectics but the relative lack of counter-tendency on this point is mildly puzzling.

“What stage are we exiting?” I thought you were going to propose a new third stage of imperialism, e.g. 1. classic imperialism as Lenin described it 2. US World Empire, somewhat akin to a far more brutal version of Kautsky’s Super-Imperialism, which inspired the Hudson book of the same name, which focuses on US state-centered finance, open and veiled protectionism, and dollar-imperialism, the end of the gold standard and the shakedown of US allies like Germany and Japan of their gold holdings, the changeover to the petro dollar-standard etc. 3.???

Things are still in motion and taking shape so I don’t expect you to have a fully furnished answer. Definitely, it appears like capitalism is entering its second-childhood and its senility is manifesting as the revival of open, brutal 17th century colonialism. I definitely think you’re on the money and the Venezuela action is about preserving the petro-dollar and possibly holding down inflation in fiat terms. Now, whether Venezuela is all that useful to US imperialism is another question, its true Venezuela has the world’s largest proven reserves but its not the 1940s when Venezuela was the number one oil exporter and probably made up half of global net exports. The oil in Venezuela is very heavy and hard to refine profitably, a situation not helped by US sanctions which has helped place its oil industry into serious disrepair and decline. US oil executives, at least outwardly, are signaling to Trump they have little interest in Venezuelan oil but behind closed doors and with pressure from the admin and changes in policy/leadership there that could change.

I heard an interesting theory that Venezuela is meant to muck things up for China. Although it’s little remembered, the 70s oil shock, was more damaging to Western Europe and Japan than it was for the US (and even the USSR) because they were major oil producers. Obviously, the average American suffered but America’s substantial production made it somewhat more insulated and oil companies made a killing with old fields and previously unappetizing proven fields suddenly becoming profitable again. Japan had to abandon its heavy industry-focused development strategy which it was investing 25% of GDP into and in the 80s settled into real estate speculation and finance leading to its own super-bubble which popped in the early 90s — something its only now recovered from in nominal terms. With chaos and possible intervention in Iran, China could find itself suffering the pain of high oil prices or shortage fairly quickly, though having Russia on its border, helps in that regard.

Its been argued by journalist Pepe Escobar that US strategy is actually to cause chaos since its harmed less by it than rivals and since its a low cost means of attacking states signaled as enemies.

There is one possible alternative to the Petro-dollar though I’m not sure if it can fully replace it. You might call it the crypto-dollar standard, Michael Hudson has argued that this is what’s behind the mad dash of US financial institutions and even the US state itself into crypto with the US government requiring stable coins to purchase treasuries in what appears to be a desperate attempt to offset lackluster treasuries sales. Does this negate your analysis that crypto coins like bitcoins are a collectible rather than say fiat currency? Possibly but not necessarily and there’s a way in which this can work as a hypothetical replacement for the petrodollar. The big thing that Hudson suggested was that crypto was being pushed as a way to bring criminal dollars from outside the United States onshore into American borders and recycled through the financial system. I remember the hosts of the Fourth Reich Archaeology podcast suggested that Trump would win the 2024 election because he was positioned to be the “prince of crime” and that the US ruling class is going into a criminal mode. With how openly criminal the Trump admin is acting it feels like there may be something to that. Is the fate of the world if the Petro-dollar fails to be eaten alive by global mafias and criminals who have their criminal earnings ferried into the United States via crypto? I hesitate to propose that since it seems oddly akin to Dühring’s theory of force or suggestions by vulgar economists of Marx’s time who saw trade as basically one party getting over on the other and failing to explain how that could make a whole society richer on net. Yet, it’s not implausible as a kind of global social cannibalism fostered for the purpose of preventing the decline of US imperialism for as long as possible. How else it might work is not something I know, the fed has been legally prevented from issuing a digital coin of its own and the use-case for most legitimate business transactions isn’t amazing, other than perhaps avoiding some forex issues/wiring fees or delays.

“Navellier forecasts that U.S. GDP — the total value of commodities sold in the economy, adjusted for inflation — will grow by more than 5 percent in 2026. Such a rate of growth would be unusually high for the modern US capitalist economy. If his forecast were to materialize, unemployment — currently estimated at 4.4 percent by the Labor Department — would decline.” Some claim that the reports of 4% quarterly GDP growth later this year is driven entirely by AI. Which makes sense there would be few jobs from it given that other than the construction labor, the trillions invested in data-centers does not produce many full-time jobs on site. Since AI appears to be destroying jobs on net rather than producing them it makes sense we haven’t seen much job growth yet. But I’m not convinced we can have a jobless boom of 5% GDP growth this year driven entirely by the AI bubble. NVIDIA is already at 16% of GDP, there are limits to how much that can grow credibly. So I would agree with your statement if it does turn out to be true. As an interesting tie-in, there is a theory that one of the main reasons behind the push for the Greenland acquisition now is that they want it to build data-centers on. Greenland is sparsely inhabited with surprising potential in terms of geothermal activity and plentiful ice and sea water around it that can be utilized for cooling purposes. It’s not as outlandish as it seems on the surface as the data centers have run into local and popular disapproval in the US itself. You could build trillions of dollars worth of data centers in Greenland provided you can import the labor, materials, and erect the minimal infrastructure to do it. Peter Thiel has expressed interest in creating a self-governing tech city there prior to this latest debacle. If you know about the Thiel network, then you know it’s the beating heart of the American right-wing right now, as it weds big tech capital to right wing politics. The number of not just conservative, but hard right fascist influencers on the Thiel network payroll directly or indirectly is stunning. Vice President JD Vance, Elon Musk and Palantir’s CEO and co-founder are plugged into this network.

US geostrategic interest explains the Greenland thing better, as the arctic is basically a Russian lake. Russia has five nuclear polar icebreakers and the US has zero. Russia maintains a fleet of icebreakers and the US has just three polar icebreakers. Russia has the majority of land mass in the arctic circle, and they have a network of bases and ships there going back to Soviet times, the restoration of capitalism was a setback to their arctic development, which was at a high pitch in the 80s, but its in full-swing again. Not only does Russia maintain more military personnel there than most European states have in their armies but they have a network of ports set up throughout the arctic that is in the process of expanding. This isn’t something that’s coming at some point decades in the future with global warming, it’s actually here. China has been taking non-arctic rated ships and unloading cargo for at least 9 months of the year to help Russia break the sanctions regime. The northwest passage remains elusive but a possibility if the US made the investment to open it + climate change. As it stands, Russia has famously been a country without a warm water port with the exception of its Black Sea ports, Kaliningrad, and the geographical oddity of arctic Murmansk. One thing Russia does have is at least four portable sea-based nuclear reactors that can provide year-round de-icing of ports. With the impact of climate change plus their smart infrastructure investments, Russia is rapidly becoming a maritime power. Not necessarily in the sense that the USSR was in having a blue-water navy capable of challenging the United States but in that its increasingly possible for it to draw its lifeblood from the sea. This appears to run counter to the philosophies of right-wing Russian intellectual Alexander Dugin who locates the split between Russia and the Anglosphere in maritime vs land based civilization. Contrary to popular belief among American liberals, I don’t think Dugin has much purchase on Putin’s thinking or strategic priorities.

But speaking of great happenings in the far north, apparently there is embryonic planning for a general strike in Minnesota: https://www.wsws.org/en/articles/2026/01/17/xcxi-j17.html

January 23d is the suggested date.

ProleEcon says:

January 20, 2026 at 12:53 am

“U.S. industry, not least because of its relatively high wage levels, was rapidly emerging as the country with the highest labor productivity…as U.S. industry has become ever less competitive against China and other Asian countries, its economic position is increasingly looking like that of late 19th-century Britain and, to some extent, France” This seems mildly contradictory in the sense that American wages are still quite high in a global sense, even when compared against other rich countries. I do have to reiterate to foreign friends that US dollars do not have the buying power they might think they do within US borders, when I tell them what it costs to rent an apartment in even a “low-cost” state, they often seem to be genuinely shocked. I could make a similar argument using other factors, that its at least somewhat likely, the standard of living in America in the latter half of the 19th century was not as good as Britain’s; though many present economic historians would say so. Though its important to note that its not so much whether US wages provide a high standard of living for US workers but that wages are high by global standards. I take it you are aware of Robert C. Allen’s thesis that high wages and cheap energy (from coal) were the two biggest determining factors for Allen for why the Industrial Revolution happened first in Britain and not elsewhere? The US has high wages in global gold-value terms compared to what workers earn elsewhere. So, comparing the silver wages of workers in Britain and India, I believe Allen found they were seven times that of India in the 17th to early 19th centuries. In terms of what it could actually buy, Allen found that it could buy four fairly barebones subsistence consumer baskets in Britain as opposed to one in India. Which is still not a riotous standard of living when you consider how little a human being can live on in theory. Allen’s thesis that high money wages made industrial machines more profitable to run in Britain than elsewhere comes with a side-thesis that got less attention. Mainly, that high urban wages made leaving the land (where future workers weren’t actually just enclosed) a positive economic gain and essentially allowed them to reproduce themselves– then at a growing rate and not just a stable one. So high international wages in America might provide a similar incentive to use more machines in America but apparently without corresponding gains in employment, meaningful productivity edge, and in some cases absolute decline.

Could it be the fact that sufficient wages to reproduce the historically-determined standard of living of the American working class within American borders are not paid? Anyone whose been consigned to the lower third/half of the earning bands in the US labor market knows its a hardscrabble existence. There are places where it’s worse, sure, but I’m wondering if this is a factor in US industrial decline rather than say high wages in international exchange value (most succinctly expressed in gold). Since the working class must buy everything in the market it actually must earn more than the peasantry did to maintain itself long-term, one example that Perelman gave, was that Scottish highland peasants could make shoes that fit their needs with five hours of labor. The cost of a pair of shoes for a Scottish worker in the 18th century? One week of labor. Now maybe the shoes were better than the peasant equivalent but the fact it took so long is a large burden in terms of cost. Robert C Allen argued that peasants in France could only do about four hours of hard labor on their caloric intake, so for a worker to perform 12 hours of hard labor, they had to eat much more, including meat, which is expensive. Just something that crossed my mind, you’ve given very satisfactory answers on this question in the past, but it seems odd that what might have been a benefit in the past (high wages on the international scale) might no longer be. That might just be dialectics but the relative lack of counter-tendency on this point is mildly puzzling.

“What stage are we exiting?” I thought you were going to propose a new third stage of imperialism, e.g. 1. classic imperialism as Lenin described it 2. US World Empire, somewhat akin to a far more brutal version of Kautsky’s Super-Imperialism, which inspired the Hudson book of the same name, which focuses on US state-centered finance, open and veiled protectionism, and dollar-imperialism, the end of the gold standard and the shakedown of US allies like Germany and Japan of their gold holdings, the changeover to the petro dollar-standard etc. 3.???

Things are still in motion and taking shape so I don’t expect you to have a fully furnished answer. Definitely, it appears like capitalism is entering its second-childhood and its senility is manifesting as the revival of open, brutal 17th century colonialism. I definitely think you’re on the money and the Venezuela action is about preserving the petro-dollar and possibly holding down inflation in fiat terms. Now, whether Venezuela is all that useful to US imperialism is another question, its true Venezuela has the world’s largest proven reserves but its not the 1940s when Venezuela was the number one oil exporter and probably made up half of global net exports. The oil in Venezuela is very heavy and hard to refine profitably, a situation not helped by US sanctions which has helped place its oil industry into serious disrepair and decline. US oil executives, at least outwardly, are signaling to Trump they have little interest in Venezuelan oil but behind closed doors and with pressure from the admin and changes in policy/leadership there that could change.

I heard an interesting theory that Venezuela is meant to muck things up for China. Although it’s little remembered, the 70s oil shock, was more damaging to Western Europe and Japan than it was for the US (and even the USSR) because they were major oil producers. Obviously, the average American suffered but America’s substantial production made it somewhat more insulated and oil companies made a killing with old fields and previously unappetizing proven fields suddenly becoming profitable again. Japan had to abandon its heavy industry-focused development strategy which it was investing 25% of GDP into and in the 80s settled into real estate speculation and finance leading to its own super-bubble which popped in the early 90s — something its only now recovered from in nominal terms. With chaos and possible intervention in Iran, China could find itself suffering the pain of high oil prices or shortage fairly quickly, though having Russia on its border, helps in that regard.

Its been argued by journalist Pepe Escobar that US strategy is actually to cause chaos since its harmed less by it than rivals and since its a low cost means of attacking states signaled as enemies.

There is one possible alternative to the Petro-dollar though I’m not sure if it can fully replace it. You might call it the crypto-dollar standard, Michael Hudson has argued that this is what’s behind the mad dash of US financial institutions and even the US state itself into crypto with the US government requiring stable coins to purchase treasuries in what appears to be a desperate attempt to offset lackluster treasuries sales. Does this negate your analysis that crypto coins like bitcoins are a collectible rather than say fiat currency? Possibly but not necessarily and there’s a way in which this can work as a hypothetical replacement for the petrodollar. The big thing that Hudson suggested was that crypto was being pushed as a way to bring criminal dollars from outside the United States onshore into American borders and recycled through the financial system. I remember the hosts of the Fourth Reich Archaeology podcast suggested that Trump would win the 2024 election because he was positioned to be the “prince of crime” and that the US ruling class is going into a criminal mode. With how openly criminal the Trump admin is acting it feels like there may be something to that. Is the fate of the world if the Petro-dollar fails to be eaten alive by global mafias and criminals who have their criminal earnings ferried into the United States via crypto? I hesitate to propose that since it seems oddly akin to Dühring’s theory of force or suggestions by vulgar economists of Marx’s time who saw trade as basically one party getting over on the other and failing to explain how that could make a whole society richer on net. Yet, it’s not implausible as a kind of global social cannibalism fostered for the purpose of preventing the decline of US imperialism for as long as possible. How else it might work is not something I know, the fed has been legally prevented from issuing a digital coin of its own and the use-case for most legitimate business transactions isn’t amazing, other than perhaps avoiding some forex issues/wiring fees or delays.

“Navellier forecasts that U.S. GDP — the total value of commodities sold in the economy, adjusted for inflation — will grow by more than 5 percent in 2026. Such a rate of growth would be unusually high for the modern US capitalist economy. If his forecast were to materialize, unemployment — currently estimated at 4.4 percent by the Labor Department — would decline.” Some claim that the reports of 4% quarterly GDP growth later this year is driven entirely by AI. Which makes sense there would be few jobs from it given that other than the construction labor, the trillions invested in data-centers does not produce many full-time jobs on site. Since AI appears to be destroying jobs on net rather than producing them it makes sense we haven’t seen much job growth yet. But I’m not convinced we can have a jobless boom of 5% GDP growth this year driven entirely by the AI bubble. NVIDIA is already at 16% of GDP, there are limits to how much that can grow credibly. So I would agree with your statement if it does turn out to be true. As an interesting tie-in, there is a theory that one of the main reasons behind the push for the Greenland acquisition now is that they want it to build data-centers on. Greenland is sparsely inhabited with surprising potential in terms of geothermal activity and plentiful ice and sea water around it that can be utilized for cooling purposes. It’s not as outlandish as it seems on the surface as the data centers have run into local and popular disapproval in the US itself. You could build trillions of dollars worth of data centers in Greenland provided you can import the labor, materials, and erect the minimal infrastructure to do it. Peter Thiel has expressed interest in creating a self-governing tech city there prior to this latest debacle. If you know about the Thiel network, then you know it’s the beating heart of the American right-wing right now, as it weds big tech capital to right wing politics. The number of not just conservative, but hard right fascist influencers on the Thiel network payroll directly or indirectly is stunning. Vice President JD Vance, Elon Musk and Palantir’s CEO and co-founder are plugged into this network.

US geostrategic interest explains the Greenland thing better, as the arctic is basically a Russian lake. Russia has five nuclear polar icebreakers and the US has zero. Russia maintains a fleet of icebreakers and the US has just three polar icebreakers. Russia has the majority of land mass in the arctic circle, and they have a network of bases and ships there going back to Soviet times, the restoration of capitalism was a setback to their arctic development, which was at a high pitch in the 80s, but its in full-swing again. Not only does Russia maintain more military personnel there than most European states have in their armies but they have a network of ports set up throughout the arctic that is in the process of expanding. This isn’t something that’s coming at some point decades in the future with global warming, it’s actually here. China has been taking non-arctic rated ships and unloading cargo for at least 9 months of the year to help Russia break the sanctions regime. The northwest passage remains elusive but a possibility if the US made the investment to open it + climate change. As it stands, Russia has famously been a country without a warm water port with the exception of its Black Sea ports, Kaliningrad, and the geographical oddity of arctic Murmansk. One thing Russia does have is at least four portable sea-based nuclear reactors that can provide year-round de-icing of ports. With the impact of climate change plus their smart infrastructure investments, Russia is rapidly becoming a maritime power. Not necessarily in the sense that the USSR was in having a blue-water navy capable of challenging the United States but in that its increasingly possible for it to draw its lifeblood from the sea. This appears to run counter to the philosophies of right-wing Russian intellectual Alexander Dugin who locates the split between Russia and the Anglosphere in maritime vs land based civilization. Contrary to popular belief among American liberals, I don’t think Dugin has much purchase on Putin’s thinking or strategic priorities.

But speaking of great happenings in the far north, apparently there is embryonic planning for a general strike in Minnesota: https://www.wsws.org/en/articles/2026/01/17/xcxi-j17.html

January 23d is the suggested date.

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