Ask Prof Wolff: Global South - Breaking the Cycle of Foreign Debt

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A Patron of Democracy at Work asks: "My question is regarding global south countries that are (1) highly indebted to foreign institutions like the IMF, and World, other countries and are stuck in a debt trap, and (2) are highly dependent on remittances from expat workers, as well as exports to meet their balance of payments problems. Just to meet their debt servicing commitments they end up having to borrow more. How can these countries escape their balance of payments problem? Does either increasing local taxation of working classes or the local elite help? If not, then what would?"

This is Professor Richard Wolff's video response.

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“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”

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Follow Wolff ONLINE:

[cheri]

Rise and shine with Professor Wolff's accurate intelligence.

[amp]

My favourite channel for not using ads, amongst other reasons. Makes it the most credible to me! 👏💡

[clarestucki]

"They usa a part of the loan to be politically successful." That's Wolffspeak for 'They steal most of the loan money'!!

[robertmesic]

I believe it's Richard Wolff's wig that is singlehandedly keeping the world's economic system from exploding.

[michael]

The book Economic Hitman explained this topic well. US corporations along with their people in the State Department, CIA, and the military have a plethora of tactics and weapons to go after the resources of third world countries. In many instances the poor labour of subject countries would have to fig out their treasures in dangerous mines to make a couple of dollars a day. I can’t live otherwise and they can’t think because they are intentionally deprived from education. All the rich local leaders take bribes. There are thousands of foreign students in the US colleges from third world countries who have not passed grades or exams necessary for enrolment. Someone sent them there as part of the deals.

[jonpierson]

Thanks for your thoughts and history lessons

[mkl_]

Also Cuba. I’m very interested in the Cuban experiment, and Venezuela too. What’s the real story with those two countries, the two that dared to stand up for themselves and were pushed out of the American sphere of domination. They suffer even today from the petty US embargo, as we all well know.

[niteriderband]

Its time for Nationalization of all Banking systems. Greedy private entities cannot be trusted which was proven historically time and time again.

[GhostOnTheHalfShell]

Interestingly DW reported Zimbabwe’s agricultural sector has emerged this year with a wheat surplus, but the financing was reported as a joint venture but with who not made clear. At the same time, they have $22 b in debt now to China; the latter is not exactly doing anything different to other countries than the West and that’s not surprising but it is unfortunate

[kirchen]

Argentina is a good example of this. From the dictatorships (backed by the US and the local oligarchy) most governments borrowed debt (not because they wanted to invest, but because they cut taxes from the wealthiest) and were trap paying off the loans they took... Kirchner paid that debt, and still, was insanely attacked by the media (obviously controlled by the oligarchy and the US) pushing people to vote a right wing government that entered that vicious circle of debt once more... which is doom to repeat again and again.

[GhostOnTheHalfShell]

Debt on their economies causes inflationary and recessionary effects at the same time. debt here seems a lot like stagflation.

[Mnogojazyk]

I amn’t entirely satisfied with Dr. Wolff’s response. Can we get an example of country besides the PRC that solved its foreign debt cycle?

[bobcornwell]

Now, China is playing the foreign dept game.

In my view, this is a power game. The strong exploiting the weak. Yes, capitalism provides institutional structure to make doing this easier and to make doing it seem more legitimate.

But I have witnessed such exploitation done in the name of revolution too.

[fonzie]

Kiitoksia taas professori ja terveiset Suomesta

[littlestone]

This is one of the best Marxist academics in the English speaking world!

[Madaboutmada]

Can you dive deeper and reflect on the foreign resource exploitation that runs tandem with the loans? Vijay Prashad summed it up nicely in COP26 last year.

[username]

A country going into massive debt because it borrows but doesn’t have the nerve to tax or take money from those that have enough to give? Why does that sound like the USA. 🤔

[brad]

If capitalism in America is declining what socioeconomic system might replace it?

[robertfelts]

1st world, 2nd world, 3rd world. NATO and NATO allies are 1st world. The others are 2nd world. 3rd world are the ones not involved in a side, like Switzerland or a developing poor nation. 3rd world means not aligned in the big game

[DownMichael]

Richard, isn't China using debt as a leverage the same way as the World Bank of the developed nations have been?