June 8, 2026
On May 22, 2026, Kevin Warsh (b. 1970) became chair of the Federal Reserve Board of Governors, replacing Jerome Powell. Donald Trump nominated both Warsh and Powell, and both are Republicans. Trump often attacked Powell for not lowering interest rates, threatened to fire him and threatened him with criminal prosecution ostensibly for improper use of funds to modernize the Federal Reserve building located in Washington, D.C.
Whether Trump’s relationship with Warsh will be any smoother than with Powell, and to what extent Warsh will serve Trump and the Republicans’ partisan interests as opposed to doing what he thinks will be in the best interests of U.S. capitalism, remains to be seen. Trump, who celebrates his 80th birthday June 14, 2026, will likely not run for office again. This November will see midterm elections, when seats in one-third of the Senate and the entire House of Representatives will be at stake.
Republicans fear, with good reason, that they’ll lose control of the House, perhaps by a big margin, and possibly the Senate as well, though this is less likely. If this happens, Trump could face a third impeachment by the House and, depending on circumstances, conviction by the Senate, resulting in his ouster before the end of his second term. I’ll examine this more closely as the November elections approach.
Against this general political, military, and economic conjuncture, Warsh could play a critical role. More on this below. But first, I’ll say a few words on Iran war developments and the diplomatic efforts to end it.
As I write these lines on May 26, along with the diplomatic efforts to end the war, there are renewed U.S. bombing attacks on Iran, and on Iranian boats allegedly laying mines in the Persian Gulf. Trump assured us the attacks were limited and remained within the bounds of the ongoing ceasefire. There are reports of new Israeli bombings in Lebanon, even though the already thoroughly bombed country is supposed to be part of the ceasefire. Republicans and Democrats are expressing concern that Trump is making dangerous concessions to Iran. Other capitalist sources say that poor peace-loving Trump is being bullied or blackmailed by Israel, whose leaders are in possession of damning information about what he allegedly did to some underage girls on the notorious “Epstein Island.”
Beyond these scuffles among top politicians, it’s clear that the powers that be have Israel’s back. If supporting the Zionist entity against the people of West Asia and North Africa is the definition of what a Zionist is, the U.S. undoubtedly has been ruled by Zionists since the mid-1940s. The Zionist Jewish religious fanatics are obsessed with rebuilding King David’s ancient empire from the Nile to the Euphrates, if we are to believe the Bible. Outside the Bible, there’s no evidence such an empire existed. The Zionists dominating the U.S. are not the Jewish religious fanatic type; rather, a different type.
The term “Zionist” can mean a couple of different things. It can refer to Jewish persons who enthusiastically support Israel or to Christians (Christian Zionists) who believe the establishment of Israel will accelerate, or is a precondition for, the return of Jesus Christ. It can also refer to anybody who supports the Zionist entity. Among the last type have been the chief policymakers of U.S. imperialism since 1945 and even before.
This latter group is not motivated by any particular religious views. They can include people who are nominally Christian or Jewish, but fairly tongue-in-cheek about it. Their aims are not to bring back Jesus Christ or the one and only coming of the Jewish Messiah, but to increase the power of the imperialist United States. When it comes to any nation-state and its power, we cannot view this independently of class. What is meant by increasing the power or interests of the United States is what will advance the power or interests of its ruling capitalist class. In the final analysis, this comes down to advancing the profits of the capitalists, especially the big ones.
This is not to deny that some Jewish billionaires have a sentimental attachment to the Zionist entity, the so-called State of Israel, though we shouldn’t take them at their word. These capitalists are not slaves to their sentimental attachment, real or pretended, but rather to their capital and to profit, the real god that all capitalists serve.
Soon after World War II, the U.S. capitalist class decided that supporting the creation of “Israel” in Palestine would serve its interests. Among the reasons was the genuine revulsion at the antisemitism that swept the Western world, especially. This meant that for capitalism’s supporters to continue blabbering about the dangers of “Jewish Communism” or “Jewish Bolshevism” made them sound like Nazis and only discredited them. They were better served by complaining about “Soviet antisemitism.”
Related to that is the fact that the Jewish people were truly grateful to the Soviets for destroying Nazi Germany. If more of the surviving European Jews had immigrated to the United States, this would have strengthened opposition to the “Cold War” against the USSR and the international communist movement within the United States. With the survivors moved instead to Palestine, they ended up fighting Palestinian Arabs for U.S. imperialism, morphing into the racist Israeli’s we know today. Israel fights the native Arabs of Palestine, other Arabs, and other peoples of West Asia and North Africa. In addition, Israel was used to undermine the Soviet Union and the new socialist countries of Eastern Europe. How this was done would take us beyond the subject of this blog, and I don’t have room to explore it in this post.
U.S. imperialists, like the British before them, were determined to prevent the emergence of a potentially powerful nation-state that could unite the Arab world with its abundance of natural resources, especially its oil and natural gas. If the Arab world were organized into a single capitalist state, even if not a socialist one, the huge inflow of money from those resources could be used to rapidly develop a powerful Arab capitalist economy, assuming a government committed to such a goal. Therefore, Britain, prior to 1945, and the United States afterward, were determined to prevent this at any cost.
During World War I, Britain championed the Arabs against the dying Ottoman Empire. They promised a united Arab state once the Ottomans were defeated. Britain reneged and instead established “a homeland of the Jewish people” in Palestine, and the rest of the Arab world was carved up among European imperialist states. (1) Britain began the process of creating the so-called State of Israel through the infamous 1917 Balfour Declaration establishing a “Jewish homeland” in Palestine, and after World War II, the U.S. completed the process. (2) As Israel was created, the Jews, some of whom had lived beside Arabs for centuries or millennia, (3) were squeezed out of the Muslim world and directed to Palestine.
All were used against the Arabs in Palestine, other Arab countries, and beyond. Meanwhile, Anglo-Americans created a different kind of entity in the Arab world, the oil monarchies, including Saudi Arabia (the biggest), Kuwait, the United Arab Emirates, which announced its withdrawal from OPEC, effective May 1, 2026, and others.
These entities are thinly populated, and their territories consist mostly of desert. While very rich families run them, most of the work in these countries is performed by “guest workers” from the Indian subcontinent, particularly Pakistan. Some of the guest workers function as sex slaves for the ruling families. They are expected to eventually return to their home countries. The result is that huge amounts of the non-renewable natural resources are exported. The wealthy families running the oil monarchies have almost unimaginably lavish lifestyles, and the money that they can’t figure out how to spend on their personal lifestyles — the so-called petrodollars — they deposit in U.S. banks. If a pan-Arab central government existed that could resist U.S. aggression, its army would remove these families along with the Zionist entity.
In 1990, the Iraqi government of Saddam Hussein did just that with Kuwait. Kuwait was carved out of Iraq by the British. Not only Saddam, an anti-communist Iraqi nationalist, but also most Iraqi nationalists believe Kuwait should be returned to Iraq. Saddam is a good case study in how not to carry out this progressive historical task. In the aftermath of the Iranian revolution, Saddam, with the encouragement of the United States, attacked Iran with the aim of changing the border between them, intending to transfer certain territories with Arab majorities to Iraq.
If Iran and Iraq had negotiated border adjustments, this would have been one thing, but to do so by force with U.S. encouragement was a disastrous blunder that eventually cost Saddam his neck, first figuratively, then literally. As the late former Secretary of State Henry Kissinger explained, the U.S. encouraged both sides to destroy one another. While peace was declared, from Iraq’s point of view, the war was a total disaster. Iraq now had war debt that threatened its further development. One way to pay it would be to annex the Kuwait oil monarchy and use the proceeds to pay the debt. The U.S. ambassador to Iraq made a statement that seemed to imply that the U.S. would not object, as it would allow Iraq’s U.S. creditors to get their money back. It turned out to be a trap that Saddam fell right into.
The George H.W. Bush (Bush 1) administration immediately launched a massive campaign against so-called “Iraqi aggression,” though the original creation of Kuwait to steal Iraq’s natural resources was the real aggression.
In reality, 1990 was the worst possible time to make such a move. If this had been done in the early 1970s when Saddam was coming to power, it might have succeeded. U.S. imperialism was in the midst of cutting its losses in Vietnam. The activists who had built the great antiwar movement were still young; they had gained a lot of experience, and sentiment against war was still widespread. Most people in the United States feared a “new Vietnam,” and the dollar was extremely shaky, with the dollar price of gold rising as we have often explained. If there was a time for Iraq to end the Kuwait oil monarchy, this was the time to do it. But Saddam’s regime made no moves in that direction.
By 1990, twenty years had passed since the heyday of the anti-Vietnam War movement. The people who had participated in and built it were now middle-aged and, as the expression goes, had put on weight and dispersed. The young people of the 1990s had no comparable experience; to them, the Vietnam War was ancient history, and in the general population, though the war was far from forgotten, the memory was fading. The military draft that had terrorized previous generations had been replaced by a volunteer army. Young people could avoid a war by simply not volunteering for military service. (4)
The dollar had been stabilized for reasons I’ve examined throughout this blog. The most important difference was that in the early 1970s, the Soviet Union under Leonid Brezhnev was at the height of its power. (5) By 1990, while it still existed on paper, in reality, the USSR was falling apart under Mikhail Gorbachev’s leadership. The Gorbachev regime was giving in to almost every imperialist demand and was overthrown in 1991. There was little chance that Gorbachev would come to the aid of Iraq.
Saddam, as the expression goes, had “dug his own grave” by moving away from the USSR while trying to get closer to the United States. Instead of supporting the Iranian revolution, he thought he could use it to make some border adjustments to include certain Arab areas within Iraq’s borders. He treated the “Persians,” Iranians, rather than U.S. imperialism, as Iraq’s main enemy, a huge miscalculation. The war caused Iraq to acquire a huge debt. Saddam moved to seize Kuwait in a desperate bid to get out of the trap that imperialism had laid for him, which he had fallen into.
Under George H.W. Bush (Bush 1), the U.S. used Iraq’s so-called aggression against Kuwait to launch a war against Iraq — known as the first Gulf War — that restored the Kuwait oil monarchy. Later, in 2003, under Bush 1’s son, George W. Bush (Bush 2), the U.S. invaded Iraq and marched into Baghdad, forcibly overthrowing the government. Saddam went underground. He was eventually captured by the occupying U.S. armed forces, who turned him over to their Iraqi puppets, who duly hanged him on December 30, 2006. Having lost his neck politically, Saddam now lost it physically.
From the time of Iraq’s 1958 nationalist revolution, U.S. imperialism worked to undermine it as it does to any country trying to develop itself independently, even on a capitalist basis. In fact, ever since the Russian socialist revolution of 1917, most wars have been between capitalist countries. From imperialism’s viewpoint, Iran’s chief crime is that since 1979, it has been developing its own capitalism. Long before the hot wars of 2025 and 2026, the U.S., under Republican or Democratic administrations alike, beginning with Jimmy Carter, had done everything short of open war to destroy Iran.
Because of the competition raging among the capitalists, each one must aim to make the most profit they can. The profits are then used to create new productive forces based on the latest technology. If a capitalist doesn’t do this, they’ll lag behind the competition in the race to cut the cost price (6) of commodities produced and will cease to be a capitalist. This is not a particular personality trait but an economic law. Capitalists also need to be associated with powerful states.
Now let’s return to the change in leadership at the Federal Reserve. Kevin Warsh’s formal title is chair of the Board of Governors of the Federal Reserve System. (7) The structure of the Federal Reserve is a confusing mixture of private and public. Journalists who are not experts will sometimes describe it as the “Federal Reserve Bank” or simply the “Federal Reserve,” and it is often, not by accident, a target of far-right demagoguery. These extreme right-wingers claim it was created in secret by “international bankers,” often Jewish, to subordinate the U.S. to their nefarious interests that run counter to the interests of the people of the United States. It is often accused of almost single-handedly causing the Great Depression. Supporters of the far right, influenced by the Austrian School of bourgeois economics, often demand that the Federal Reserve be abolished; others demand that it be nationalized. There’s confusion about whether it’s a government agency or some kind of private bank.
In truth, the Federal Reserve is a little of both. It is a government agency, not a private bank; formally, it is a creature of Congress. In practice, it’s more a part of the executive branch and even acts as a fourth branch of the government alongside the executive, the legislative, and the judicial branches. The Federal Reserve Board of Governors has seven members, who, like members of the president’s cabinet, are appointed by the president and confirmed by the Senate. Nobody can serve more than one full term, which can last 14 years, though someone who fills an unexpired partial term may later be appointed to a full one. The officers of the Board, the chair, now Kevin Warsh, and vice chair, now Philip N. Jefferson, are appointed by the president and confirmed by the Senate, like cabinet members, and serve four-year terms. Unlike cabinet members, the president can only fire members of the Board of Governors “for cause.” The chair of the Federal Reserve Board of Governors is considered the “head of the Fed” and is one of the most powerful members of government.
This body is not a bank, though it supervises the twelve district banks of the Federal Reserve System. The most powerful of these district banks is the Federal Reserve Bank of New York, located near Wall Street in lower Manhattan in New York City. There are eleven other Federal Reserve districts with their own Federal Reserve banks. Formerly, there were twelve types of dollar bills circulating in the U.S. and around the empire, each issued by one of the reserve banks. These twelve banks are privately owned, with most of their stock owned by the commercial banks in their districts. Their presidents are not government appointees, but are chosen by their boards of directors. A combination of the Federal Reserve Board of Governors, a government body, and the private entity Federal Reserve Bank of New York coordinates their activities. Unlike other capitalist enterprises, the Federal Reserve System’s chief aim is not to make a profit but to stabilize the capitalist economy as far as possible.
Another crucial body that merges the governmental and private parts of the Federal Reserve System is the Open Market Committee. The FOMC consists of all seven members of the Board of Governors, plus the president of the Federal Reserve Bank of New York, and, on a rotating basis, four presidents of Federal Reserve banks. These presidents serve one-year terms on the FOMC. Five members of the FOMC, the four Federal Reserve bank presidents plus the president of the privately owned Federal Reserve Bank of New York, make up the private side, and the Board of Governors’ seven members make up the governmental side.
What does the Open Market Committee do that makes it so important? To raise money on a day-to-day basis and to finance its operations, the Treasury must borrow money on the open money market, since the federal government runs a deficit, as it has every year since the 1960s, save for a couple of years around the year 2000. The Treasury issues IOUs called Treasury bills, notes, and bonds that supplement tax receipts. Due to continuing tax cuts on the rich, a growing amount of this money is used to service existing debt — pay interest on it, enriching the owners of this debt, both U.S. and foreign capitalists. Unlike in some past periods, the Treasury is not allowed to create dollars directly.
Government securities can be transformed into dollar currency if the Federal Reserve banks purchase them with dollars they create. Under normal circumstances, the Federal Reserve buys only short-term securities, but in a crisis, it can buy long-term government bonds and other assets as well. These include the kinds of assets that private capitalists don’t want, such as mortgage-backed securities, as during the crisis of 2008. As a general rule, it is considered bad for the FOMC to buy long-term bonds because it is too much like printing money when the government doesn’t raise enough taxes.
There are Marxists who, unlike Marx, Engels and others, insist that modern money is not a commodity. They believe that the Federal Reserve can create as many dollars as it wants as long as the government debt is denominated in dollars, until there is “full employment.” Beyond that, issuing more “paper” dollars simply creates inflation.
If money is not a commodity, the problem of generalized overproduction is just the technical problem of having the monetary authority create enough money. If this is not true, it’s a different question altogether, as I have argued throughout this blog. Bourgeois economists assume that capitalist economic crises are the result of bad policies or accidental factors like wars, droughts, and epidemics. Now it’s true that these factors play a certain role in real-world crises, but this analysis covers up the fact that even in the absence of these accidental factors (some, like wars, are not necessarily accidents), economic crises will break out anyway at periodic intervals.
As overproduction develops, the market pushes up interest rates. If the Federal Reserve, or whatever is the leading central bank in the world, resists pushing up interest rates to “keep the boom going,” the demand for gold, the money commodity, is whipped up into a frenzy. When the price of gold in dollars — or whatever the leading currency of the epoch is called — soars, reflecting the depreciation of paper currency against gold, commodity prices rise measured in terms of the depreciating currency.
The prices that rise first are those of primary commodities, followed by wholesale (producer) prices and finally the prices of the commodities of personal consumption that you buy at the grocery store. This, independently of the central bank, leads to higher interest rates that then stop further currency depreciation. We’ve seen this law in action since the U.S. war on Iran broke out. Since March 2026, whenever the price of oil rises on world markets, the dollar price of gold has fallen, but as soon as peace-talk rumors of peace talks begin to spread and the price of oil drops, the dollar price of gold rises. On April 8, 2026, for example, when the United States and Iran agreed to a two-week ceasefire, the price of oil on the world market plunged some 15 percent while the dollar price of gold rose almost 4 percent the same day. The same thing happens whenever the Department of Labor, accurately or not, reports higher-than-expected producer and consumer prices. This drives up interest rates, causing the dollar price of gold to fall. When the Labor Department reports lower-than-expected price increases, interest rates generally fall, and the dollar price of gold usually rises.
The reason is that gold demand is sensitive to changes in interest rates. Higher prices mean higher interest rates and thus lower demand for gold, which translates into lower dollar gold prices. Similarly, lower-than-expected inflation means lower interest rates and higher gold demand, which push up the dollar price of gold.
The Fed generally reacts to lower gold prices by accelerating its creation of dollars. When it creates more currency to force interest rates lower, gold’s dollar price rises, and inflation accelerates. As long as the Fed keeps trying to hold down interest rates by accelerating the rate at which it creates dollars, the rise in the gold-dollar price accelerates alongside inflation. In the end, interest rates rise rather than fall. This is what happened in the 1970s. If the Fed, now under the leadership of Warsh, tries to stave off recession by accelerating the fall in interest rates by having the FOMC create too many new dollars, interest rates would soon rise as they did in the 1970s.
The dollar was weak against gold, and less so against other capitalist currencies, before Trump launched the latest shooting war against Iran on February 28, 2026, with dollar gold prices above $5,000 an ounce. It’s possible that even if a peace agreement is reached that ends the fighting for now, we’ll see a new surge of dollar gold prices, followed by higher dollar commodity prices, followed by higher interest rates. This is what happened when the January 1973 Paris Peace Agreement ended direct U.S. involvement in the Vietnam War.
There’s talk that the Federal Reserve under Warsh’s leadership will end Powell’s policy of lowering the fed funds rate. This would reduce the chance of accelerating inflation, rising interest rates, and ending in severe recession, as happened during the two years following the Paris Peace Agreement, but it would increase the chances that the economy will instead go straight into deep recession and mass unemployment without more inflation. Such a development would have the advantage, for U.S. imperialism, of strengthening the dollar and the dollar system, making it easier to fight a bigger war in the wake of the recession and the stabilization of the dollar. We will soon find out what path the Warsh Fed will follow.
Liberals, progressives, U.S. imperialism, and Zionist crimes
For years after the 1948 Nakba, liberals, progressives and even the Communist Party USA supported the so-called State of Israel. I explained some of the reasons for this last month: In the imperialist West and Eastern Europe, including the Soviet Union, communist parties initially supported the creation of the so-called State of Israel despite the long-term opposition to Zionism by the Communist International, and earlier by the Second International’s ideological leader Karl Kautsky and most Social Democrats.
Up until the 1967 Six-Day War, most U.S. liberals and progressives supported Zionism and Israel. Afterward, radicals of the younger generation began to support Palestine. Support for Israel remained widespread among liberals until the Gaza genocide that began in October 2023, when liberal-progressives, especially among the younger generation, began to shift massively in favor of Palestine. Among liberal-progressives, the analysis of the causes and history of Palestinian genocide remains shallow.
Generally, liberals and progressives contrast a “good” USA with “evil” Israel. They claim that Israel, working through the Israel lobby or blackmail using information about Trump’s alleged relationship with Jeffrey Epstein’s sex slavery operation, controls U.S. policy in Israel’s favor. It is said, which may well be true, that Epstein was an agent of or worked closely with Israeli intelligence. What is ignored is the role of U.S. imperialism. For example, these liberals seem to know nothing about the destruction and genocidal mass murder of some three million during the Korean War or the murder of Vietnamese, Laotians and Cambodians during the Vietnam War. Today, only old people remember the Vietnam War. The more recent wars that the U.S. fought in Iraq and Afghanistan are also dismissed as having been fought on behalf of Israel rather than on behalf of U.S. imperialism.
If you study history, you find that Zionism did not simply emerge out of the European Jewish community but rather is a product of the development of European and then American capitalism, especially as it morphed into modern imperialism. Indeed, Christian Zionism is older than Jewish Zionism. Christian Zionism itself represents a complete change in the Christian religion’s attitude toward Palestine, Jerusalem, and the Jews. There is limited information about the historical circumstances that led to the birth of the Christian religion during the first century CE. It seems to have grown out of the mounting resistance of indigenous Jewish Palestinians, who are largely ancestral to the present-day Palestinian Arabs and were nothing like the Zionist Jewish settlers of today.
As the emerging cult of Jesus Christ spread to the Greek population beyond Palestine, these early Christians hoped that the God of the Temple in Jerusalem would end the power of Rome over them. (8) When a mass uprising broke out in Palestine in 66 CE, the hopes of the first Christians were raised that God would destroy Rome. Instead, Rome destroyed Jerusalem and its Temple in 70 CE. At this point, a faction of the Christian movement decided that God was on Rome’s side all along. Over most of the next 2,000 years, the Christian church claimed that the Jews had failed to carry out God’s commands, which led to their murder of Jesus Christ, the Christian Messiah. For this, God punished them: they would not be returned to Palestine or Jerusalem.
Some Christian churches support this position to this day. Beginning with the Reformation and the growing threat of the Muslim Ottoman Empire to Christian Europe, some European Christians decided it would be a great idea if European Jews returned to Palestine and fought the Muslim Ottomans, marking the beginning of Christian Zionism. It was only at the end of the 19th century that the modern Jewish Zionist movement arose in response to the pogroms of late 19th-century czarist Russia, when the first Zionist colonies of European Jews were established in Palestine. The modern European antisemites, forerunners to the Nazis, arose as Christian Zionists began to merge with Jewish Zionists to get rid of Jews in Europe. Zionism in any form has always been reactionary and became dangerous to the Palestinian people after Britain showed its support for the Zionist movement through the 1917 Balfour Declaration.
Without the support of British and U.S. imperialism, purely Jewish Zionism could not have threatened the Palestinian people. Today, the Zionist entity has a population of some seven million Jews. The idea that seven million Israeli Jews can dictate to the United States and the rest of its world empire, despite the claims of liberals and progressives to the contrary, is absurd. The empire can certainly dictate to its Zionist colony. The U.S. could, if it wanted to, end Israeli crimes against the people of Palestine, Lebanon, and Syria, and beyond the Arab world against Iran.
Treating the Zionist entity as dictating to the U.S. leads to a grotesque idealization of U.S. capitalist imperialism. What is true is that the leaders of the Zionist entity and individuals who participate in its crimes bear full responsibility for their role, including the post-October 2023 genocide in Gaza. The same is true of all the U.S. leaders who have supported Israel’s crimes to the hilt, who could have stopped them at any time. To paint the U.S. as the victim of Zionist Israel rather than its enabler overlooks our special responsibility as Americans to do everything we can to halt the crimes being carried out in our name — just as we must do everything we can to halt the crimes of the U.S. government against the people of Iran and Cuba, to give just two examples.
Trump and conditions for fighting major wars
To fight a war, the imperialist ruling class must do some preparatory work. First, the nation targeted for attack and its leaders must be demonized. Then, just before military actions commence, an incident must be created as justification. The aggressor nation must be portrayed as itself the victim of aggression to create a rally-around-the-flag effect. A classic example is the attack by Nazi Germany on Poland in September 1939. Throughout the summer of 1939, the German media published stories about how Poles were attacking peaceful Germans in Poland. Then, just before the bombs started to fall, the Nazi SS shot some concentration camp prisoners, dressed their bodies in Polish army uniforms, and dumped them at a German radio station on the Polish border.
If you were a German newspaper reader at the time, you would believe that after months of unprovoked attacks by Polish mobs against peaceful German residents of Poland, territories that had been German before 1918, Polish soldiers had attacked a German radio station just inside German territory on the German-Polish border. Poland had attacked Germany! What alternative did the Reich government have but to recognize that there was now a state of war between Germany and Poland? By launching a counterattack to put an end to Polish aggression against individual Germans living on lands stolen from Germany in 1918, Germany would solve the Polish problem once and for all. One thing you have to grant Hitler, if nothing else, is that the dictator knew how to start a war.
Another example: in August 1964, U.S. media claimed North Vietnam’s Navy (consisting of a few PT boats) decided for no apparent reason to attack the peaceful U.S. Navy that happened to be operating off the coast of North Vietnam. What unprovoked aggression! What could the U.S. do but bomb North Vietnam to show the aggressors in Hanoi that such actions against the peaceful United States Navy would not be tolerated! To be sure, the U.S. was not a neighbor of Vietnam, unlike Germany, which bordered Poland; North Vietnam was on the other side of the globe.
In addition, Poland, relative to Germany, was a bigger country than Vietnam — let alone just North Vietnam — was relative to the United States. In 1964, the United States was industrially, financially, and militarily the most powerful nation in existence. And the alleged attack occurred not at a shared border between the two countries; in reality, it was well beyond the power of the Democratic Republic of Vietnam, North Vietnam, to actually attack the United States. In the case of Poland and Germany, it was at least theoretically possible, however unlikely, for some Polish military units to launch a raid on a German radio station located on the border. But Lyndon Johnson knew that he had to make some attempt to convince people that North Vietnam had somehow attacked the United States!
George W. Bush, I think most historians would agree, was not bright relative to Adolf Hitler or Lyndon Johnson. But Bush had a somewhat easier task portraying the United States as the victim of aggression from Afghanistan and Iraq because of the 9/11 attacks on the World Trade Center in lower Manhattan and on the Pentagon itself. I watched the images of the World Trade Center — two towering skyscrapers at the southern tip of Manhattan, in New York City — being consumed by flames and filled with thousands of doomed people as they crumbled, on TV that September morning, and it was indeed a terrifying thing to watch. Bush didn’t need to stage an incident to start a series of wars that he’d been eager to launch (unless you believe in the conspiracy theories claiming that Bush was somehow behind 9/11). Bush had his casus belli ready-made, and he proceeded to use it.
On the pretext that Afghanistan’s Taliban government had granted asylum to Osama bin Laden, the Bush administration claimed that one of the poorest countries in the world, located on the other side of the globe, had attacked not only the World Trade Center in New York City, but also the Pentagon building itself in Arlington, Virginia. The U.S. had no alternative but to invade Afghanistan. In the atmosphere of those days, it largely worked; Bush’s approval rating rose to 90%. From the viewpoint of a war maker, it would be a shame to pass up such an opportunity. True, the war turned out to be not only the U.S.’s longest war but a losing one — but that’s another story.
Bush was eager to invade Afghanistan as well as Iraq, which was then under the leadership of Saddam Hussein, the relatively secular Iraqi ruler. His government didn’t tolerate al-Qaeda, but this didn’t prevent Bush from claiming that Iraq had somehow used it to attack the United States on September 11, 2001. Bush argued that he had no choice but to remove the Iraqi government that participated in the attack on the United States!
In the Iranian war, the Trump administration has had great difficulty coming up with any casus belli at all. The closest it could come up with is that it has to prevent Iran from getting nuclear weapons. It’s perfectly reasonable for the U.S. to have a massive nuclear arsenal despite the fact that, unlike Iran, the U.S. is the only nation to have ever actually used nuclear weapons in war. In addition, Iran has said it is not seeking to make nuclear weapons, and no evidence has been presented that they are, in fact, trying to produce them.
Conditions for war include not only political but also economic and financial measures. The classic example is the role of the Great Depression in setting the stage for World War II. As we explained in numerous earlier posts, on the eve of World War I, commodity prices were high relative to labor values and commodity production prices. During the war and its immediate aftermath, in 1920, commodity prices calculated in terms of the use value of gold were at the highest level ever reached in the history of capitalism, though that didn’t last long. Prices calculated in gold terms crashed in 1920 and 1921, though even at that reduced level, prices were higher than they’d been on the eve of the war.
How do we know whether market prices are high or low compared to the values and prices of production? It’s not by going to the grocery store and deciding whether prices are low compared to the amount of money needed to buy them. As far as I am concerned, prices are too high by that measure. We have to know where prices are relative to values. Prices are equal to values when the quantity of socially necessary labor needed to produce a commodity is equal to the quantity of socially necessary labor needed to produce the quantity of gold represented by its price, measured in gold’s use value, some unit of weight. Price is defined as a quantity of the money commodity, measured in its use value. Whatever form of currency is used to purchase the weekly groceries — paper currency, coins made of base metals, your bank balance transferred electronically by a debit card, or credit money created through a credit card — represents the quantity of gold necessary to purchase commodities.
Commodity market prices do not equal their exact values. If we assume free (not perfect) competition, an economy is in equilibrium when capitals of a given size make equal profits in equal periods of time, including capitals that produce the money commodity. Marx called the set of prices that produce these results production prices — what Smith, Ricardo, Sismondi, and the other classical economists often called the “natural price.” Market prices fluctuate around production prices. Production prices are close but not equal to prices that directly reflect values. Since the early 20th century, various bourgeois and petit-bourgeois economists — for example, Ian Steedman in his 1977 book “Marx after Sraffa” — have emphasized the difference between production prices and prices that are in direct proportion to labor values, arguing that labor value is therefore redundant and meaningless. Most importantly, they point out that profits calculated in prices of production will deviate from profits calculated in terms of direct prices or labor values. Steedman and other economists of this type claim that they have proven mathematically that profit cannot be produced by the unpaid labor performed by the working class.
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Prices measured in terms of the use value of the money commodity are not arbitrary but are ruled by the law of value. The law of value doesn’t mean that market prices at any given time equal production prices, but rather, whenever a commodity’s market price gets too far away from its production price, the economic forces that are set in motion will sooner or later push its market price back toward its production price. For example, if the market price of yogurt rises above its production price, capital invested in producing yogurt will make more than the average profit rate. Capitalists looking for extra profits will move into yogurt production, increasing the amount of yogurt on the market. This increased amount of yogurt makes some of it unsalable at the existing market price, so the price must be reduced if it’s all to be sold.
As prices are cut, the market price falls below the production price, leading to profit rates below the average. Then, capital invested in this industry flows into more profitable branches, and the cycle repeats itself. I chose yogurt, but could have chosen any commodity. In this way, commodities over time are produced in the approximate proportions in which people with money desire them. This is, of course, modified by monopolies and the effects of advertising in creating desires, though there can be no desire for commodities that are not produced. All this doesn’t change the fact that commodities are produced in proportions that allow capitalism to reproduce itself without any central agency’s guidance. Adam Smith famously called it the invisible hand — which is nothing but the law of value in operation.
The same analysis can be used with gold as the commodity in question: it’s produced in the quantity desired by people with sufficient money to purchase it. Gold is produced in approximately the quantities necessary to circulate the commodities made by the industrial capitalists. Gold is produced in the proper quantities, not in the short run — there is no mechanism, in the absence of an overall plan, to achieve this — but only through alternating periods of over- and underproduction. How does this work in the case of the money commodity?
Let’s assume we have an overproduction of gold. What happens? When there is a glut of money, it falls out of circulation and accumulates in hoards. Under modern capitalism, hoards of idle money capital are centralized in the commercial banking system. This causes interest rates to fall. As they fall, demand for gold increases, bringing the money market back into equilibrium as far as supply and demand are concerned. This isn’t enough to bring about the equalization of the profit rate between the industry that produces the money commodity and the other branches of industry. What happens is that lower interest rates stimulate business, raising commodity demand. This leads to a decline in idle capacity in industry and a lower rate of unemployment. As excess capacity declines, at some point, it becomes more difficult for commodity production to keep up with demand at prevailing prices. Sooner or later, prices rise above production prices calculated in terms of the money commodity.
Since the money commodity (which we assume to be gold) has no price, as the price of a commodity must be calculated in terms of the use value of a commodity other than itself, gold has no price of production. But there is a unique exchange ratio between gold and all other commodities, which means that, measured in terms of the money commodity, capitals invested in gold production make equal profits in equal periods of time. Though gold has no price — since to calculate the price of something in terms of itself is a sheer tautology — we can still calculate, in terms of weight, the quantity of gold that an industrial capitalist engaged in gold production must produce to replace the gold advanced in production, plus an additional quantity of gold as profit. This additional amount is profit. The only thing different, then, is that, unlike other branches of commodity production, no separate act of selling has to occur to realize the profit.
As soon as the commodity prices rise above their production prices, the exchange rate between the branch of industry that produces the money commodity and other industries turns against the branch of industry that produces the money commodity. The profit rate earned by capital invested in the gold-producing industry falls below that of other industries, causing a portion of capital invested there to shift toward more profitable industries. This reduces the rate at which the production of gold is increasing (remember we are assuming expanded reproduction), and, as the process continues, at a certain point, it causes gold production to fall.
Here, we should note an important difference between gold and most other commodities. Most commodities are consumed either in the production of other commodities — for example, raw materials — or by the final consumer — for example, yogurt. If the production of most types of commodities is substantially reduced or ceases for some reason, the total quantity of these commodities available for sale soon drops. Maintaining the supply of yogurt currently available (or increasing it as expanded capitalist production continues) means that yogurt has to be continuously produced.
This is not the case with gold. Due to its chemical properties, gold is durable and combines with few other elements, so it resists corrosion and tarnishing. This means that at the time scales that measure the lifetime of the capitalist mode of production (as well as the broader lifetime of commodity-money relations), gold as a material use value is immortal. Gold is not consumed as are most other commodities. True, gold coins do wear out in circulation. But they can be replaced by tokens made of cheap materials, or even by electronic bookkeeping — so long as those tokens, material or electronic, are not issued in quantities exceeding the physical supply of gold they represent in circulation. Gold is not consumed to perform its basic function of acting as the commodity in whose use value the value of all other commodities is measured. Capital itself is measured in terms of a unit of weight of gold that does not involve its consumption. This means that most of the gold that has been produced during the history of production still exists, and so its additional production isn’t necessary to replace existing gold.
More gold must be produced for continued market expansion. It’s not enough to maintain market demand; it must expand. As additional gold is accumulated, the scale of the market expands. This makes possible the realization of an increasing mass of surplus value produced as capitalist expanded reproduction proceeds. The split between the commodity and its value form, the money commodity, causes the process of the accumulation of capital to split into two. On one side, we have the accumulation of real capital: more machines, more factory buildings, more raw and auxiliary materials — constant capital — and ever more employed workers producing an ever greater mass of surplus value. On the other side, we have an ever greater mass of accumulated gold that alone makes possible the realization in the form of money, profit, of the ever greater mass of produced surplus value. A fault that develops in the heart of capitalist production can and does, at periodic intervals, break apart, shaking it to its foundations. Why does the accumulation of real capital and money capital periodically break apart?
As expanded capitalist reproduction proceeds, commodity market prices rise above their production prices; gold production falls further behind the rate required to sustain it. Reproduction involves not only commodity production but also its circulation: The commodity must find a buyer. The unity of commodity production and circulation needed to maintain expanded capitalist reproduction, once a certain level of development has been achieved, must be periodically ripped asunder.
There isn’t an immediate crisis when gold production falls short of that necessary to maintain continued expanded commodity reproduction. What happens is that a portion of the existing amount of idle currency in the banks is drawn into circulation. The period between when a currency unit — one that represents the money commodity in circulation — is spent and when it is spent drops again. Economists say that the velocity of the circulation of the currency increases. This makes possible a rise in the quantity of commodities measured in the units of measure appropriate to their use values and finances their rising prices measured in the use value of the money commodity.
In addition, the acts of purchase and payment of the commodities can be increased through the increased use of credit. As gold becomes scarcer, commodities are sold on credit and paid later. The purchase of commodities is split into two acts: purchase and payment. The monetary system in which the two are united is increasingly being replaced by a credit system in which the act of purchase is split into purchase and payment. As credit becomes increasingly stretched, interest rates climb.
Rising interest rates keep the demand for actual gold in check, but the financial system becomes fragile as increasingly lengthy chains of payment are created. This growing fragility of the financial system is not the cause of overproduction; to think so misunderstands the process. It is overproduction that causes growing financial fragility. Eventually, the system snaps. Credit crises don’t cause overproduction. Commodity overproduction leads to credit-monetary crises, in which the unity between purchase and payment breaks down.
Prices and the law of value of commodities
Under the capitalist mode of production, prices are determined by the value of commodities. A commodity’s value is determined by the quantity of abstract human labor socially necessary to produce it. The unit of measure of abstract labor is some unit of time, hours, seconds, etc., as measured by the clock. By abstract labor, we do not mean labor that produces a particular type of commodity, or labor with any particular type of skill. It is what all types of actual concrete labor have in common; it’s labor in the abstract that forms the social substance of value. This is true whether we are dealing with non-money commodities, the vast majority, or the money commodity. The basic function or use value of the money commodity is to measure the values of all other commodities, non-money commodities, in terms of its own use value. We fail to understand the real nature of the commodity and therefore of capitalist production if we accept the claims that somehow modern money is not itself a commodity. If you follow the financial press, you soon realize that great importance is attached to the dollar price of gold. Why is this?
If modern money were really non-commodity money, gold would be a commodity with relatively little significance. Instead, it’s treated as one of the most significant financial indicators. In analyzing how the law of value rules capitalist production, we should follow Marx, Engels, and not those Marxists who insist that modern money is not a commodity. Keeping this in mind, when we say that a commodity sells at its value, this is a shorthand expression for saying that the commodity is exchanging for a quantity of gold that represents the same quantity of abstract human labor as the commodity whose value is being measured does.
Value, surplus value, profit, and the transformation problem
Now, back to the transformation problem. Since the late 19th century, confusion has revolved around the so-called transformation problem. The problem arises because competition among different capitals tends to equalize profits between the capitals invested in different branches of production. Capitals of equal size in equal periods of time earn equal profits. The reason is that, as a rule, no capitalists will invest in one branch of industry when they could instead invest in another and be “rewarded” with a higher profit rate. Capitals invested in different branches of production will have different ratios between variable capital that alone produces surplus value and constant capital that merely passes its value into the value of commodities that it helps to produce. Assuming that commodities sell at their values, this means that commodities produced with capitals of lower organic compositions realize higher profit rates than those with higher organic capital. Capital moves from branches of industry where profit rates are low to those with higher profits, equalizing the rates between branches.
Another factor involves the turnover rate of capital in different branches of industry. A classic example often used in political economy is the wine industry. Though I am anything but an authority here, there are certain types of wines that are more expensive than ordinary wines. The expensive ones are aged in bottles for years, even decades. If the aged wines were sold at the same prices as ordinary wines, their profit rate, calculated on an annual basis, would be far lower than that of ordinary wines. Remember that equalization of the profit rate means that capitals invested in different branches of industry must earn equal profit rates in equal periods of time. No capitalist, however great a fan of fine wines they may be, would invest capital in a wine-producing method that would yield a 10 percent profit rate over a 20-year period when they could invest in a method that produced the same profit in only one year.
As a result, the value of fine wine measured in terms of the labor necessary to produce it will not exceed the value of ordinary wine. Though the production of fine wine has a much longer production period, let’s say 20 years as opposed to three months, in terms of the quantity of labor necessary to produce it, it won’t have a higher value, but it will have a far higher production price than the wine with only a three-month production period.
Capitalist economists explain that those producing fine wines are collecting interest on their investment. They are deferring consumption for a longer period than those producing the cheap stuff and are therefore entitled to interest because they are tying up their capital for 20 years instead of three months. Like the owner of a bank account, these capitalists must be rewarded for not immediately spending their money.
All this posed a problem for Ricardo, who wanted to construct a mathematically consistent theory of value based on human labor as the sole source of value. He wasn’t successful. He expressed the view that a future economist might be able to produce a fully mathematically consistent theory of labor value. His opponents and successors within bourgeois economics used this failure to move away from labor value, eventually arriving at the modern Austrian and neoclassical schools.
Did Marx develop a mathematically consistent solution to the transformation problem?
In Volume III of “Capital,” Marx gives examples where prices that directly reflect labor values are transformed into prices of production that equalize the rate of profit between branches of production with different organic compositions of capital. The most important result of his demonstration is that the quantity of surplus value is preserved as direct prices are transformed into production prices. The point is that shifting from a direct price system to a price of production system has no effect on the quantity of surplus value. It is here that knowledgeable opponents of Marx’s theory see an opening. They note that Marx did not transform the inputs from direct prices to prices of production. They also note that a price of production system pays for inputs not in terms of direct prices but in terms of production prices. So Marx’s solution, which was not published in his lifetime, was not a mathematically complete solution.
There are mathematical methods that transform prices from direct prices into production prices. We can complete the math. Assuming that all commodities produced enter the reproduction process, the equality between the mass of profit in the direct price system and the price of production system is not affected. A gain for one group of capitalists — those who work with a capital of greater-than-average organic composition, and therefore a below-average rate of profit at values — is balanced out by the loss of those with a lower organic composition and an above-average rate of profit. But here is the rub: Not all commodities produced enter the reproduction system.
Let’s divide industries that produce commodities for personal consumption into two branches. One branch is for consumption by workers and capitalists alike. The other branch produces luxury commodities that are consumed only by capitalists. For example, personal jet planes like the one Trump uses to fly between his homes in South Florida, Washington, D.C., and New York. Luxury commodities do not re-enter the reproduction process. This destroys the equality between the amount of profit made in the direct-price and the production-price systems. Instead of an exact equality (unless we make unlikely assumptions), there is an approximate equality in the amount of profit made when calculated in direct and production prices.
Capitalists purchase consumer necessities that are also purchased by workers, but consumer luxuries are purchased only by capitalists. Put another way, the prices of consumer luxuries do not affect production costs but only the cost of living for the capitalist class. Let’s assume that the average organic composition of capital in the luxury-producing industries is below the social (economy-wide) average. This means that capitalists producing luxuries will sell them at prices of production that are below their direct prices. This breaks the equality between surplus value (calculated in a direct price system) and profit (calculated in a production price system).
Or we can assume the opposite. Assume that, on average, industries producing luxury goods for capitalists have an above-average organic composition of capital. To equalize the rate of profit, the luxury commodities produced are sold at production prices that are above their direct prices. In this case, capitalists as a whole realize higher profits in terms of production prices than they’d realize in a direct price system.
In both cases, it appears that surplus value arises from a cause other than the unpaid labor of the workers. Since the 1960s, a whole slew of economists called “neo-Ricardians” have arisen who say: “Let’s forget about labor value and surplus value based on unpaid labor. All we have to do is figure out prices that equalize profit rates among the branches of production, and the job is done.” Of course, if we do this, Marx’s theory of surplus value, which Engels said made socialism a science, is lost. If science and mathematics point in this direction, we’d have to admit that scientific socialism has broken down.
Anwar Shaikh points out that capitalists gain nothing by selling luxuries above their direct prices because what they gain as sellers, they lose as buyers of those same luxury commodities. Let’s look at this argument more closely. The formula for capital in its most generalized form is M – C – M’. A capitalist advances a sum of money, M (how they got the M is not important here), and ends up with a greater sum of money, M’. Profit is the difference between the two sums of money: M’, the sum the capitalists end up with, and M, the sum the capitalists begin with. But a capitalist does not only act as a capitalist. They also act as consumers of personal consumption goods. Consumers, whether capitalist or worker, use a sum of money, M, and purchase C, the consumer commodity, with the intention of consuming it, not selling it.
Suppose a capitalist acting as a consumer buys a commodity below its value — they’ve made a good deal. Do they make a profit? No, because a profit is made only when a commodity is sold at a profitable price. As a purchaser of commodities with the aim of consuming them, our capitalist, who does not act as a capitalist in this transaction, is neither selling them nor making a profit.
Or imagine the converse. Suppose a capitalist, acting as a consumer, purchases a luxury commodity at a price above its direct price. Our capitalist has suffered a loss. Again, the capitalist advances a sum of money, M, but gets a luxury commodity for personal consumption that has a lower value than the money (gold) that our capitalist used to purchase it. Our capitalist acts here as a person with money, not a capitalist, purchasing a commodity for personal consumption. Only when our person acts as a capitalist and purchases commodities with the aim of making a profit, is our capitalist actually acting as a capitalist.
Nothing changes the fact that when it comes to value flows, the gains the capitalists make as sellers of luxury commodities, they lose as buyers of these same commodities. When a capitalist expends money not as a capitalist but as a purchaser of commodities for their personal consumption, they expend the money as revenue, not as capital. Whether the realized surplus value is expended as capital or as revenue, it comes down to unpaid labor performed by the workers but appropriated by the capitalists — nothing more, nothing less. These gains and losses, when they are spent as revenue rather than capital, do not count as profit. Therefore, we cannot expect an exact equality, only an approximate equality between surplus value and profit. However, this doesn’t change the fact that the class of capitalists can live without working only because they are living off the unpaid labor of the working class.
NOTES
((1) In 1916, Britain and France signed a secret treaty known as the Sykes-Picot Agreement, dividing up West Asia among themselves and their ally, Czarist Russia. This shows that Britain had no intention of allowing the Arabs to unite in a single nation-state. The treaty text was published by the Soviet foreign commissar Leon Trotsky after the Russian Revolution. Britain had no intention of allowing a united Arab state to emerge after World War I. (back)
(2) The first Jewish Zionist colonies in Palestine were established as early as the 1880s. At this point, the creation of Israel was far from inevitable. To transform these few colonies into the modern Zionist entity, it was necessary to get a major imperialist power behind the colonization project. The leader of what was called political Zionism, Theodor Herzl, approached a number of imperialist countries, even the Sultan of the Ottoman Empire, trying to convince them to support the proposed colonization of Palestine. None were willing to fully commit to this project until, years after Herzl’s death, Britain issued the 1917 Balfour Declaration.
Even then, the creation of Israel was not inevitable. The tragic defeat of the German working class and the German Communist Party, and the victory of German fascism with its rabid antisemitism, moved the process along. The victory of German fascism was a victory for Zionism. At first, the Nazis used Zionists to encourage German Jews to move to Palestine. Once World War II began, this became impossible because Palestine was controlled by Germany’s enemy, Britain. The Nazis moved rapidly to the physical extermination of all European Jews, in what became the Holocaust. The triumph of political reaction in the form of the Holocaust and the resulting political disorientation, combined with the rise of the U.S. world empire, finally made it possible for Zionism, backed now by U.S. imperialism, to complete the creation of the Zionist entity. This was done with the 1948 Nakba and the proclamation of “Israel’s independence.” (back)
(3) There were two types of Jewish communities in West Asia. One was descended from Spanish Jews who were kicked out in 1492 as feudal Spain began its transition to capitalism, and Columbus “discovered” the Americas as an unexpected byproduct of his search for gold. These are the so-called Sephardic Jews, meaning “Spanish Jews.” From the end of the 15th century until the early 20th century, they lived beside Muslim Arabs peacefully. The situation became impossible as Israel was created when most were forced to move to Palestine and were transformed into Israelis. The other type of Jewish community is lumped together in the catch-all phrase Mizrahi Jews, who have lived mostly in the lands east of Palestine for thousands of years and whose ancestors never lived in Europe. Since the Muslim-Arab conquest, they have mostly spoken the Arabic language.
The core of Mizrahi Jews is the Iraqi Jewish community. Iraq in the ancient world was known as Babylonia after its most famous city in antiquity, Babylon. The Jewish community dates back at least 2,500 years. They lived side by side with other people of the area, even before the other people considered themselves Arabs. This is the Jewish community that largely created the Talmud, the most important book in the Orthodox Jewish religion after the Hebrew Bible, the Christian Old Testament itself.
This community had been speaking the Arabic language as long as other Iraqis have been speaking it. The creation of the Zionist entity by British and U.S. imperialism forced them to move to Zionist-occupied Palestine. There, they forgot Arabic in favor of the “neo-Hebrew” spoken in the Zionist entity. They turned into Israelis, in the interests of serving the U.S. world empire, at constant war with the Arab neighbors they had previously lived beside for thousands of years. (back)
(4) It’s not so simple for people from working-class families as opposed to middle-class families. Faced with limited employment opportunities provided by declining U.S. capitalism, many young workers volunteer for the military in the hope of getting experience and gaining skills that will be attractive to potential employers seeking to purchase their labor power. The danger is that when war comes, they’ll be forced to fight and possibly come home in a body bag. (back)
(5) The core of the Soviet political system was the Communist Party of the Soviet Union, which in 1972 experienced a process of accelerated political degeneration in which many careerists and out-and-out anti-communists “working from within” had entered the party. Under this pressure, the Brezhnev leadership adopted an economic plan that prematurely featured more rapid development of consumer goods over capital goods, which led to a radical reduction in the rate of economic growth, though it did raise living standards in the short run.
Corruption and the “second economy” of illegal private enterprise and personal enrichment further undermined the Soviet economy. Given the increasingly unfavorable political situation, the Brezhnev leadership was powerless to reverse these disastrous processes. The core of the Soviet Union’s mighty industrial machine, built up through its planned economy, was second in that period only to that of the United States, and even held first place in the world in some basic branches of production. It was still intact. This, combined with the Soviet Union’s powerful nuclear deterrent, meant that the United States had to think twice before launching any war near the USSR’s borders. By 1990, this was no longer the case. (back)
(6) The cost price is what it costs the capitalist to produce a commodity, not what it costs society to produce a commodity. (back)
(7) Another fact I should mention about Kevin Warsh is that, unlike his predecessor Jerome Powell, he is Jewish. Normally, I don’t think it’s worth mentioning the religious background of capitalist officials. For all I care, they can be Christian, Jewish, Hindu, or of any other religious background. What counts is that, regardless, they represent the capitalist class. But sometimes a religious background can have political consequences.
As I have explained throughout this blog, the heads of the central banks, particularly the head of the most powerful central banking system, the Federal Reserve System, serve as scapegoats when things go wrong, such as a major downturn in the industrial cycle. Even if we assume, let’s hope not prematurely, that large-scale military action is over for now as far as the Iranian war is concerned, there is plenty that can go wrong in the world capitalist economy.
As far back as the Middle Ages, Jews, because of their literal millennia of experience in the business world, have been appointed to high financial posts in Christian as well as Muslim countries. So it’s not that surprising that Trump nominated Kevin Warsh, a Jewish lawyer, to head the central banking system. Thanks in no small part to the Zionist “leadership” of the Jewish community, U.S. Jews are blamed by many for the genocide of Arab Palestinians in Gaza. I warned about this as early as my post written immediately after October 7, 2023. Fortunately, the participation of many young and not-so-young Jews in the anti-genocide movement alleviated these dangers somewhat.
This is not enough in light of the continued stance of the official Zionist leadership and many other Jews, either through outright support or silence on the Gaza genocide. This is giving an opening to antisemites that they haven’t had since 1945.
The Jeffrey Epstein scandal has made things worse. Epstein, by providing sex-slave services to the very rich, such as the current president Trump as well as former president Bill Clinton, the so-called Epstein class, played the traditional Jewish middleman role that has marked thousands of years of Jewish history. This, of course, sets up Jews to again become the scapegoats for the crimes of the ruling class.
If a deep recession, or something worse, occurs over the next few years in the economy, it will be all too easy to blame Jews for causing it. This is true, not only due to Israel and the Zionist lobby that allegedly controls the U.S. government for having caused the Iranian war and the subsequent oil shock, but also due to actions by the Federal Reserve, “controlled” by Jews. The superficial “analysis” of most of the liberal-progressive community of both politics and economics that claims the Zionist lobby is alone responsible, rather than it being merely an agent of U.S. imperialism, for U.S. crimes against the people of the Middle East, with the honorable exceptions of Ben Norton and Brian Berletic and a few others, doesn’t help here. (back)
(8) The Temple in Jerusalem was the place where the God of the Jews and later the God of the Christians and Muslims is believed to have, in some sense, physically resided while on earth. Unlike the landowning ruling classes of the era, Jews were often forbidden to own land, so, as the chief traders of the Roman world, they held the bulk of their wealth in precious metals – money. Like other ancient temples, the Jewish Temple was the repository of much of this wealth.
In the Roman world, Jews were poor in land but rich in money, though the bulk of it was in the hands of only the richest Jews. To the extent that money was already the real god of the ancient world (if not yet to the extent it became the god of the capitalist world that was to come), god really did reside in the Jerusalem Temple. This was because the Jewish communities scattered throughout the Roman Empire and the Parthian (Persian) Empire to the east were expected to pay tithes to the Temple priesthood, who stored these monies in the Temple after they took their generous share as compensation for their service to God. This made the Temple’s destruction almost inevitable, as the frequently hard-pressed-for-cash Roman emperors could not resist the temptation to seize the monetary hoard as booty. (back)