Michael Hudson: Putin's Pivot to Asia

Yves Smith comments on Michael Hudson: Putin’s Pivot to Asia.

Michael Hudson says that:

The most important way in which they’re coming together is reflected in Mr. Putin’s announcement that Russia is setting up its own bank clearing house system independent of the so-called SWIFT system. When you transfer funds from one bank to another, or when any bank uses U.S. dollars, it has to go through the SWIFT clearing house system in the United States.

Right now the only country that’s not part of this is Iran. To Russia, this has tipped America’s hand. It showed that what U.S. Cold Warriors really want is to break up Russia and China, and to interrupt their financial and banking services to disorient their economies. So Russia, China and Iran — and presumably other Asian countries — are now moving to establish their own currency clearing systems. To be independent of the SWIFT system and the U.S. dollar, Russia and China are denominating their trade and investments in rubles and yuan instead of the dollar. So what you’ve seen in the last few days in Beijing is a rejection of the dollar standard, and a rejection of American foreign policy behind it.

Emphasis Mine

The actions of the Capitalist State are designed to protect their own Capitalists. In the fierce competition between Capitalists, the politcal reality shapes the economic sphere.

The SWIFT system was originally conceived as a neutral entity. However, the interests of US Capitalists have undermined this neutrality by turning it into a political weapon against the official enemies.

It is this politicisation of the SWIFT system that has prompted the emergence of an economic competitor, not purely economic considerations. Here we the example of how politics and economic decisions are intertwined.

This will not change under a Socialist or Communist system. Then, the political decisions will, openly, drive the economic decisions.