Episode 303 – Real Resources, Real Power with Fadhel Kaboub

Steve Grumbine

00:00:44.125 – 00:02:26.725

All right, folks, this is Steve with Macro N Cheese.

It’s been a hot minute since I’ve talked to my MMT friends. Especially the next guest, who has been a frequent guest for years, but he has been very, very busy in Africa. And that is my good friend, Fadhel Kaboub.

Fadhel Kaboub is an associate professor of economics at Denison University who is on leave and the president of the Global Institute for Sustainable Prosperity. He’s the author of Global South Perspectives on Substack. Definitely, check it out.

He’s also a member of the Independent Expert Group on Just Transition and Development. An expert group member with the Global Solidarity Levies Task Force. And a member of the Earth4All 21st century Transformational Economics Commission. A Steering Committee member with the Fossil Fuel Non-Proliferation Treaty Initiative. A member of the African Forum on Climate Change Energy and Development. And a member of the Independent Expert Group on Just Transition Finance.

He also serves as a senior advisor with Power Shift Africa and has recently served as an Under Secretary General for Financing for Development at the Organization of Southern Cooperation in Addis Ababa, Ethiopia.

Dr. Kaboub is an expert on designing public policies to enhance monetary and economic sovereignty in the Global South, build resilience and promote equitable and sustainable prosperity. With that, I’d like to bring on my guest, Fadhel Kaboub. Welcome, sir. Thank you so much for joining me today.

Fadhel Kaboub

00:02:27.145 – 00:02:30.285

Thank you for having me back on the show. Always a pleasure being here.

Steve Grumbine

00:02:30.825 – 00:03:58.535

Absolutely. I want to just focus our talk today on a couple key areas.

Obviously, there is just nothing more pressing right now than the genocide in Gaza, which we’ll get to later in the conversation. But to start with, I’m looking at alternatives.

I’m looking at ways of mitigating and clipping the power of the United States in terms of how it has operated as a bad actor on the global stage. And we see the BRICS rising. And there’s a lot of talk about, you know, oh, it’s going to displace the U.S.

And then we have other people that are saying, hey, not so fast. This isn’t some big slam dunk. It’s way early. Don’t count your chickens before they hatch, et cetera.

But what I do know is this: Right here, right now, the United States uses its hegemony to sanction countries that don’t go along with its global capitalist empire. They don’t go along with its neoliberal approach to nation building.

It uses the long arm of the IMF to destabilize countries and to put them into debt peonage. It does an awful lot of things.

And I think that the rest of the world is looking for ways out of that arrangement so that they’re not treated as captives of the United States. So with that in mind, I know recently there was a BRICS summit.

Help us talk about what is real and what is not real about the rise of the BRICS.

Fadhel Kaboub

00:03:59.475 – 00:08:05.559

Well, first we should set the scene a little bit more in terms of the power and influence of the United States.

There’s also this thing called Europe, Western Europe in particular, that is not an empire in today’s world, but it’s still very influential globally and, of course, sides on the side of the US, in particular.

And when I say Europe, you should also include Australia and the rest of the OECD [Organization for Economic Co-operation and Development] countries, especially Australia, Japan and so on. So there is that global economic and geopolitical hierarchy that’s dominated by the US and its allies, its strategic allies.

Then you have the Global South, Africa in particular, that’s been at the bottom of the hierarchy since colonial times and the architecture that was designed by the U.S. and Western Europe after World War II. After “quote unquote” the African continent started to gain independence is a hierarchy that was designed to build this architecture that’s designed to lock the African continent and the rest of the Global South at the bottom of the hierarchy and assigned a particular role, economic role, to Africa since colonial times, and made sure that that role was enforced.

Number one, we’re supposed to be the place for cheap raw materials for the industrialized world. We still play that role today.

Number two, we’re supposed to be the consumers of industrial output and technologies from the industrialized world. We still play that role today.

And number three, and most importantly, we’re supposed to be locked at the bottom of the global economic value chain in the sense that all obsolete technologies, assembly line manufacturing, is outsourced to us under the label of development cooperation and job creation. But it’s really designed to lock us at the bottom of the global value chain. And we still play that role today.

So that global economic architecture and the role that was designed for us – we have to remember that role was designed for us before there was a thing called the United Nations; before there was a thing called the World Bank and the IMF and the World Trade Organization [WTO]. So all of that colonial role that was imposed on us was then locked into the design of the World bank, the IMF. The United Nations, itself, we have to remember, was designed by the five dominant superpowers that emerged out of World War II and then invited the rest of the world to join under terms and conditions that were already pre-negotiated by the superpowers.

And then all the other offsprings of the UN and the multilateral system that were born after that period were born in conditions of post-colonial, dominant, hegemonic role of the United States and Western Europe.

So that’s what we call the multilateral system today, that is supposed to function and govern the international community, is the legacy of those colonial designs based on a particular geopolitical hierarchy that was not supposed to be disrupted. So that’s the world we live in today.

And then of course, over the years, over the decades, we see that the system is so hypocritically dysfunctional. Especially when we see conflicts and genocides that are emerging like the ongoing genocide in Gaza. That wouldn’t happen, wouldn’t continue for more than a year now if a country like the United States, which is the dominant country in this multilateral system or called unilateral system, almost. If the US wanted it this afternoon . . . in the next 10 minutes . . . it could stop. But of course the US doesn’t, and we know this for a fact. And Western Europe doesn’t.

Despite all the hypocritical statements we hear from politicians left and right and the media machines that spin their stories and all of that. So that is a dysfunctional system that the global majority doesn’t want to live under this global governance system.

When I say the global majority, that’s the Global South. The global south is 88% of the world population.

Steve Grumbine

00:08:05.687 – 00:08:06.255

Wow.

Fadhel Kaboub

00:08:06.375 – 00:08:08.119

We are the global majority.

Steve Grumbine

00:08:08.247 – 00:08:09.023

Indeed.

Fadhel Kaboub

00:08:09.039 – 00:13:55.915

So there’s a small minority – I’m not talking about the populations of the Global North only, but we’re talking about the elites.

We’re talking about the very small number of people in the US and Australia and Western Europe who are not even representing their own people. Who are abusing their own people in terms of inequality and injustice, and all of that. That’s the small minority of elites who were just driving so much destruction on this planet.

Destruction of the planet, destruction of human life in places like Sudan; in places like Palestine and the DRC, and beyond. So the thirst that you see around the planet for a new multilateral governance system to be born that is just and stable and equitable is everywhere.

And BRICS is one political manifestation of this desire to form an alternative. Now that is a desire, it’s an aspiration.

It doesn’t mean it’s there yet, it doesn’t mean it’s delivering yet, and it doesn’t mean that it will successfully deliver what the global majority actually wants. Because this is a political project, a geopolitical project.

So the philosophy behind the design of BRICS is not necessarily the philosophy that will deliver justice and a truly well functioning multilateral system. And the reason I say this is because the economic vision that BRICS has been pursuing and continues to pursue is a mercantilist economic vision.

You don’t see anything in the design of BRICS that tells me that we’re going to undo the colonial hierarchy and the colonial role that was imposed on the Global South.

And then the design of BRICS and the individual nation that led the creation of BRICS tells me that they want to beat the system at its own game by beating them in exports. Export-oriented growth. It’s definitely a growth-oriented economic bloc.

It’s not a sustainability economic block, at least not yet under the current design.

And despite the fact that it’s inviting key players in the Global South to join, it’s not really laying out a vision and concrete steps to structurally transform and decolonize.

It might be going in the direction of creating similar hierarchies within the block itself, with a few superpowers within the bloc dominating economically and geopolitically, and then leveraging the desire of the rest to escape the old geopolitical system under slightly better conditions under a BRICS system. So the aspirations are there. For example, the aspiration to de-dollarize.

Well, that sounds great, but do you actually know how to de-dollarize a system? You’ve heard me say before, you can’t de-dollarize a system that hasn’t been structurally and economically decolonized yet.

What does de-dollarization mean? Is it something you announce by decree? You say, from now on we will not use the dollar. And then how do you actually do it?

How do you build a functioning economy away from the existing dollarized structures? Do you have a payment system? Well, everybody’s thinking about the new payment system. But a payment system doesn’t work in a vacuum.

A payment system is designed to serve trade of actual production of goods and services that will be delivered logistically, physically, which requires insurance, which require energy systems which require all of these systems are not under your sovereign control. They’re still under a dollarized hegemonic system controlled by the US and Western Europe.

So you have to structurally de-dollarize the entire system, not just the currency that you use for payment purposes. And I use the example sometimes. If Kenya and Uganda, two neighboring countries, want to de-dollarize their trade, what are they going to do?

Kenya will export coffee to Uganda and Uganda will export more coffee back to Kenya because their economies have been dominated by the colonial rule that was imposed on them to be major producers of coffee and tea and cut flowers and things like that. But you can’t have functioning economies that are de-dollarized that just produce coffee and tea and flowers for Valentines.

Well, where’s the rest of the energy system, the food system? Where are they going to get the actual building blocks of development and prosperity? Oh, you’re going to have to import them with dollars.

So how do you actually de-dollarize the two economies? You have to build the building blocks of development and prosperity, starting with the food system.

That’s why we talk about food sovereignty. Starting with an energy system. That’s why we talk about energy sovereignty, at least at the regional level, not necessarily country by country in some cases.

And then an industrial base that actually allows you to manufacture and deploy the building blocks of development for the entire block that you want to de-dollarize. And that’s the process of de-dollarization.

It’s not enough to have courageous and audacious presidents making declarations and big summits and saying we’re going to desolate our trade. That’s an aspiration. But the practicalities is totally different.

So that’s kind of the beginning of the conversation for me is this is the landscape that we’re talking about. Lots of aspirations by the global majority to move into a better system.

A lot of these aspirations are misguided on technical grounds and sometimes infused by new hierarchies that they want to establish within the new block.

And that means there’s a space for public discourse about how do we design a truly multipolar world of peace and prosperity and justice and sustainability.

Steve Grumbine

00:13:57.135 – 00:14:19.995

So what is the US’s intent on trying to destabilize places like China and Russia and the rest of the Global South? Is it just to keep them off their game so they cannot achieve that sovereignty? What is the purpose of it?

It seems like this is 100% the US’s game to maintain that kind of colonial system.

Fadhel Kaboub

00:14:20.535 – 00:26:26.845

Sure.

So for a long time, since the end of the Cold War, the US basically enjoyed a superior position in the hierarchy, a unipolar world, not a multipolar or bipolar world.

And as that was happening, the US internally started to de-industrialize by outsourcing a lot of the manufacturing to countries that were very happy to do the work with almost no environmental impact standards or labor standards, basically at the lowest cost, race to the bottom, thing. And part of those countries were actually China. China, India and the rest of the Global South. And that was an ideal scenario for the US elites.

The 1% is to extract the most out of the production process at the lowest cost possible across the Global South. And then whatever is produced, you ship it back as efficiently and cheaply as possible to the biggest markets, which is the US and Western consumers.

And then extract the most out of those profits for your shareholders, and you drive the financialization, and you keep going. And that’s what drove inequality in the US and Western Europe.

And politicians were very happy to create all the incentive structures for them to do it at home and for them to do it globally with the establishment of the WTO and the rules of investment in trade that were favorable to the 1%. So that was the system that they thought would function forever.

Except countries like China, in particular, India to some extent, but not completely – but especially China, which is now the rising economic superpower and potentially geopolitical superpower – China had a long-term vision and long term strategy to escape the bottom of the hierarchy.

So yes, China started with assembly line manufacturing with low-cost labor and no environmental standards. But over time it did have a strategy to truly industrialize, to move from low value-added manufacturing to high value added manufacturing.

China had the advantage of having a large internal market which allows you to have economies of scale.

So as it started at the bottom of the industrial hierarchy, it had a long-term vision to actually move up the ladder gradually – slowly but surely – and move into high-value-added manufacturing and invest in research and development, engineering skills, technical capabilities. China for the last 30-plus years has produced 1.5 million engineers per year.

At least 200,000 of those engineers every year are MIT-level, top-tier engineering skills.

Yes, China did lose some of its engineers to brain drain. But a lot of that reversed back and a lot of the engineering skills are reverse brain drain. Coming back from Western Europe and the United States is coming back to actually build and enhance China’s industrial capacity.

In addition to that, because of the industries that dominate the world today and will continue to dominate for the next several decades, those industries rely on what the US calls critical minerals for all the high-tech equipment – military equipment, renewable energy infrastructure – all of which requires critical minerals. As the US and the European Union were asleep basically over the last 30 years, China managed to do two things.

One is to dominate in terms of access to mining sites in Africa and Latin America and the rest of the Global South. Mining sites where you actually get those critical minerals.

And number two, and most importantly, they managed to master and perfect the technology of refining critical minerals to the level of purification needed to become key inputs into the high-tech industry. To the point where today the US and Western Europe are actually dependent on China’s refining capacity.

Between 60 and 80% of critical minerals refining capacity is done by China today.

But the US now is waking up again to this reality that China is actually catching up in terms of economic capabilities, high tech capabilities, and might be able to exceed the US dominance in the global economy.

And once we have industrial superpower capacity, then you have military superpower capacity, which translates into geopolitical influence and dominance. So that’s the path that the US sees China moving toward.

So the US woke up because of the COVID supply chain disruptions that made it very clear that we’re so dependent in terms of high-tech capabilities on China. And number two, because of the Ukraine conflict.

So both of these things drove this desire to re-industrialize the United States and re-industrialize Western Europe. So that’s the reversing the outsourcing of manufacturing; especially in some key industries, high tech industries.

And that meant the US needed to catch up on having actual access to critical minerals at the source, not just in terms of mining, but also in terms of refining.

Now the US will probably, with a serious commitment to this, will need at least 10 years to start to catch up in terms of building the capacity to human capabilities and logistical capabilities to actually take a decent market share of the critical mineral space.

Europe will probably need more time and more investment and resources in Europe. Because of the Maastricht Treaty restrictions and the budget restrictions, austerity restrictions, they may not actually be able to catch up. That’s a reality that Europe has to deal with. But the reality of today is that China still dominates.

So the US is using slightly different tactics to carve out some of that space away from China by hijacking the development narrative that we actually use in the Global South. We have this concept of the right to development and saying yes.

So you go to a country like Zambia, countries that have critical minerals across the Global south and you say, look, why are you selling your critical minerals in raw form to China?

You need to invest in your own industrial policies – green industrialization, development, value addition-  because you have the right to development and we are here to help to bring financing and investments and we’ll help you add value. Billions of dollars worth of value-addition in the African continent. And that sounds wonderful. So what are we going to do?

We’re going to take these critical minerals, refine them, process them, and build factories in Africa to produce car batteries for EVs. But those EVs are not to be exported to China and its partners.

These are to be exported to the US market so we can have cheaper car batteries for cheaper EVs to compete with the Chinese EVs that are dominating today. And the same thing, those are batteries to go into European manufacturing to compete with Chinese EVs and so on.

So I’m looking at this and I’m saying, wait a minute, this is not Zambia’s industrial policies.

This is Zambia manufacturing component for the US IRA or manufacturing component for Europe’s industrial policy for Europe’s trade competition strategy against China.

This is not our industrial policy because you know what, if we manufacture car batteries in Africa, we don’t even have electricity for those car batteries.

Our industrial priority is to manufacture solar panels, wind turbines to produce electricity for the 600 million people today on this continent who have no access to electricity. But car batteries? This may be in 10, 15 years after we build the infrastructure to build the electricity generation capability.

But why should we prioritize your industrial policy?

And it’s very clear that this is actually not just an industrial strategy for the US this is a very important geopolitical step in pushing back against Chinese dominance and influence. And now those critical minerals are going, and those batteries are not going to China. They’re going directly to the US and Europe.

So you see this power struggle happening.

And of course you have now trade restrictions in Europe and the US against Chinese batteries, Chinese EVs, because they’re actually outcompeting US and European capabilities.

Because both the US and Europe have completely neglected research and development and investment and productive capacity in the renewable energy infrastructure, including clean transportation infrastructure. And now the only way to catch up is to aggressively defend and protect U.S.

and European markets from cheaper and more efficient and effective made in China technologies.

And I’ll close by saying one important piece of information here, which is yes, as the US and Europe are waking up to this reality and trying to catch up as quickly as possible, China is actually today the largest investor in the world in terms of research and development and alternative technologies. Alternatives to what? Alternatives that will not Use the critical minerals that we think are so important today.

So by the time the US and Europe built all the productive capacity and skills to catch up in terms of competition with Chinese EVs and Chinese batteries, China will be taking off with a brand new technology that doesn’t – that all of that stuff that Europe and the US is building up today will become obsolete, right?

So that’s also part of the reality that we’re looking at dying empires in terms of the big mistakes that the US has made by prioritizing the greed of the elite of the 1%, throwing their own people under the bus and outsourcing jobs and technologies, and divesting from education, from health, from infrastructure, from research and development, all of that is coming back to bite the United States and Europe. And now the only thing that these two economic blocs can do is number one, make sure that the Global south stays at the bottom as a place to extract.

Number two, make sure that the Global south is used as a stepping stone for their own industrial policy – make cheaper batteries for us.

And number three, use the existing multilateral system, the rules of trade and investment and finance to try to cause as much damage to the Chinese industrial machine as possible, to slow down their progress in terms of catching up in the high tech sector and to cause as much disruption to their heavyweight export machine.

That is not just the cheaper low-value added manufacturing anymore, but exporting the highest value-added high-tech products into European markets with Europe and the United States producers not even being able to compete with Chinese EVs and high-tech products today.

So their only way to defend themselves is basically by banning those technologies from entering Western markets in Europe and the United States and by banning the high-tech manufacturers in the Western world from sharing or selling the technology to China. Here I’m talking about the manufacturers that actually produce the machines that produce microchips.

And there’s only two companies in the world that produce the high-tech equipment that I’m talking about. One is based in the Netherlands I believe, and they’re banned now. The one below it and the next one below it, with the US banned last year, I believe, or two years ago.

Now they’re banned from selling latest technology to China, but of course China’s reverse engineering the hell out of everything and they will eventually catch up.

Steve Grumbine

00:26:27.305 – 00:27:21.857

It sounds to me like we’re not dealing in a cooperative society. We’re still very much dealing in a capitalist race to the bottom, if you will.

Even now, because we’re not talking about mass transit, we’re talking about cars. We’re talking about individuals. We’re talking about pulling up earth, destroying the earth, pulling more pollution out. At no point does it – I mean these EVs [Electric vehicles] feel more like a luxury item than an actual answer to climate crisis. So the EVs feel like much more of a race to the bottom. Like we’re dealing in a capitalist free for all.

We’re not dealing with a sustainable environmental solution. This is more green capitalism. Yeah. Both on the BRICS side, the Chinese side, and the US side.

And these are more battles of capitalist conquest as opposed to survival. Your thoughts?

Fadhel Kaboub

00:27:22.041 – 00:32:04.275

Oh, absolutely. It’s actually worse than that.

So if you take the three major economic blocks today – the European Union, the US, and China – and look at their major economic and industrial plans: the European Green Deal, the US IRA, which is a US green industrial policy, and China’s Belt and Road Initiative, BRI, all three of them are going with the assumption that there will be plenty of critical minerals for them to extract from the Global South to feed into their industrial plants. Why? Because all three have an obsession with growth. They call Green Growth. Right? Growth, consumerism, planned obsolescence, energy waste.

But they want to decarbonize, right? Especially Europe and the US.

So if that is true of all three plans move forward for the next several decades, then the actual volume of critical minerals that we have on the planet will not be sufficient to fulfill all of their three major industrial policies and leave anything for the Global South to actually develop. So the plan is the South stays at the bottom with nothing for development, for prosperity, for sustainable development goals, for all of that stuff.

And the rest of the world will move forward with their own plans. So that’s why I always say there is no such thing as a new multipolar world with Africa and the Global South staying at the bottom of the hierarchy.

That means that we’re still planning on having the same colonial hierarchy and everybody’s going to continue with their growth-obsessed visions.

So that’s why I always say a new multipolar world can only be born with Africa and the rest of the Global South being repositioned away from the bottom of the hierarchy and at the center of a new balanced international economic order. So the question is, how are we going to do that? What are the conditions under which the Global South can actually be repositioned? And I’m not naive.

I don’t think that somehow China will come and say, oh, we need to reposition Africa and the Global south at the center of a new multiple world. Or Europe somehow will wake up and realize, oh, we can’t really live off of the fumes of old colonial powers.

We need to take Africa and reposition it where it belongs. Or the United States saying, oh, this is really unfair.

We need to bring Africa and the rest of the Global South the center of a new industrial and economic order. I’m not naive. It’s not going to happen.

So we as people of the Global South have to create the political leverage to forcefully reposition ourselves and force everybody else to rethink their plans.

In other words, if we have a true green industrial policy in Africa and the Global South, where we say – we’re actually going to use our critical minerals, we’re going to use the complementarity of resources and capabilities that we have, we’re going to use the youngest labor force on the planet that we have, to manufacture and deploy NAT car batteries for the Global north to manufacture and deploy the building blocks of development and prosperity.

Starting with renewable energy infrastructure, clean cooking infrastructure, clean transportation infrastructure and everything else we need to actually have real development of prosperity.

So all of that requires, number one, political commitment from a block of Global South countries to say, oh, we’re all in this together and we’re going to industrialize as a bloc.

But, also, it requires access to manufacturing technology, which is the one thing that the US and Western Europe in particular have always refused to share. Right?

And this is where intellectual property rights, the rules of trade and investment architecture, the WTO, make it essentially impossible for you to replicate or borrow or use existing technology unless you pay for it with blood, tears and money, essentially. So access to that manufacturing technology has always been denied.

I’ll give you one example as to why this is so antithetical to all the efforts we claim we’re trying to do on the climate front.

According to IRENA, the International Renewable Energy Agency, their last report on Africa technical report basically said that by 2040 – which is the day after tomorrow on the clock – by 2040, Africa can produce 1000 times its anticipated needs in terms of energy, 1000 times and completely replace all of the fossil fuel exports from the continent. That is technically possible by 2040.

Steve Grumbine

00:32:04.355 – 00:32:04.851

Wow.

Fadhel Kaboub

00:32:04.963 – 00:36:02.147

And because we have the biggest renewable energy potential – even better than that, as I said earlier – we have all the critical minerals we need, we have the youngest labor force population, but don’t have the manufacturing capability. Technology that is available, that is being withheld by major industrial superpowers saying, you’re not allowed to unleash that big energy potential.

And I’ll tell you why they don’t want to unleash that potential.

Because if you think of the power of OPEC countries, the oil producing countries today, their economic weight and the energy system globally, their geopolitical weight globally, take that and multiply it by 1000. That’s the potential that Africa, alone, has. And that is disruptive.

That is disruptive in the sense that nobody can then tell African countries what to do, how to vote, how to use their resources, how to govern themselves.

So that means you unleash the potential for an entire continent to be moving up the hierarchy economically, geopolitically; which means it disrupts the existing colonial hierarchy that we talked about earlier.

So that is actually not being perceived as an opportunity for sustainable prosperity, for fighting climate change, for producing the cheapest, most abundant renewable energy, not just for Africa, but for the rest of the world. They don’t care about that. They see it as a risk to be managed, as a threat to be mitigated.

And that’s why the African continent today attracts less than 2% in financing that goes towards renewables, globally. And again, we’re being denied access to the manufacturing technology to unleash this potential.

So the geopolitical leverage that we need to create is – first get a political commitment of a bloc of countries that says we will industrialize as a joint bloc, not as individual countries – because individual countries cannot industrialize in Africa. Because you don’t have the economies of scale, you don’t have all the resources. But as a block, you have the economies of scale, you have all the resources you need, and you have the collective bargaining power.

Imagine that block going to a country like China, which has the entire value chain that we actually want to replicate, say the value chain of manufacturing solar panels. And saying to China, which is one of the dominant superpowers in the world today.

Say, look, we give you the bargain of the century in if you share technology, transfer technology to replicate the entire value chain of same manufacturing solar panels on terms that we determine based on labor rights, human rights, environmental rights, distribution of ownership, and so on within the block. That’s the homework we do. If you do that, here’s what we give you in this bargain of the century.

Number one, in 10 to 15 years, you double your industrial footprint globally. In 10 to 15 years, you double your geopolitical weight globally, and you secure access to these precious minerals that everybody’s panicking about.

In addition to that, thanks to the US and European trade restrictions on Chinese EVs, we tell China, look, we the Global South, the global majority, we have the biggest consumer market on the planet. Bigger than the US and all the OECD countries combined. Except we do have a small problem.

We don’t have the purchasing power to buy your EVs, but if we truly industrialize, we’ll have the biggest consumer market for you. So I guarantee you China will accept the bargain. We’ll transfer technology and this will be a de-dollarization industrial policy.

This is a zero dollar industrial policy because every country pays for its labor in the national currency, pays for its resources and national currencies. The part where you normally need dollars to import the manufacturing capability, China will bring it in kind as part of the joint venture deal.

So no dollars needed for this. This is how you actually de-dollarize your economy.

 

Narrator

00:36:02.171 – 00:36:22.065

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Fadhel Kaboub

00:36:24.965 – 00:39:17.185

So once you trigger the process of this actual industrial policy, you immediately have the second bargaining chip or the geopolitical leverage to change the terms of engagement with the US, with Europe, with the rest of the Global North countries. And now we can go to a country like Germany or France and say, look, we give you the same bargain that we give to China.

We want joint venture partnerships with you on our terms, if you transfer high-speed rail technology to be manufactured and deployed on our terms here in the Global South, we want wind turbine technology. If you want pharmaceuticals technology from the US . . . and so on.

And at that point, those Global North countries cannot say no. Because as soon as they say no, they know that we can go immediately to China and say, oh, we would like to use your wind turbine technology.

Let’s do another joint venture. We want to use high speed rail technology, which is available in China, too.

So the idea of this geopolitical bargain is not to position China at the top of the hierarchy, but rather to reposition Africa, in the Global South, at the center of a new international economic order where we become the arbiters of this new geopolitical and international trade and investment and finance architecture. And that is the multipolar world we actually want.

And that’s why I said in the beginning, no multipolar world can be born without Africa and the Global South at the center of it.

Because any other option will be one of the three major blocs, Europe, US and China being at the top of the hierarchy and assuming that they can continue to extract and abuse the Global South at the bottom of the hierarchy. So that’s why I said, nobody’s going to do this for us. Not China, not Europe, not the U.S.

It has to be the Global South seizing this small window of opportunity of this geopolitical repositioning and struggle that is happening between the major superpowers and saying, hey, we have everything that you depend on and we want our rightful place in this new multipolar system with development and prosperity. And that’s a process of decolonization, that’s a process of decarbonization, and that’s a process of de-dollarization.

And as we do this and we start, actually, using our critical minerals, then the signal is very clearly sent to the rest of the Global North – China, Europe and the US – and saying, look, there isn’t actually enough critical minerals for you guys to continue with your obsession with growth and consumerism. So now you need to invest in a circular economy. You need to rethink your obsession with energy waste and energy use.

And now you need to think about a degrowth model for Europe. For the US. For China’s Belt and Road initiative.

Steve Grumbine

00:39:19.485 – 00:40:54.065

Very well said. I want to piggyback on something you said a little bit ago and come back to this.

You had said, basically, that the US had put itself in a big hole by relying on imports as a means of survival. And the pandemic reflected how moronic that approach has been.

And yet within the MMT community, it’s repeated often that imports are a benefit, exports are a cost.

And I understand that, on the ledger, that I’m sending real goods and services out of the country. Like for example, in Africa, where they don’t have the ability to produce electricity, but yet they’re sending out green energy stuff to the Global north to meet their objectives. It just seems kind of humorous, in the grand scheme of it all, that we have these nonstop unequal exchanges that are occurring around the world.

And what it comes down to is the US neglected its manufacturing base. It neglected its research and development investments. It neglected actual real deficits that we face as a society, and instead put all the money into the war machine in terms of policing its import business around the world to make sure all the Global South created what it wanted so it didn’t have to do it domestically. Can you talk to me a little bit about this unequal exchange and this concept of imports are a benefit, exports are a cost?

Because what it sounds like to me is a slogan without a reality. Can you help me understand that better?

Fadhel Kaboub

00:40:54.685 – 00:43:32.685

Yeah, I mean, the generalization is misleading because if you’re dependent for your own survival in terms of actual food production on imports, then it’s very misleading to narrow this to just the exchange and the prices and the cost of production. Because if you’re starving, it doesn’t really matter how much the thing costs to produce domestically.

And that’s why we emphasize the idea of food sovereignty, energy sovereignty. The building blocks of a functioning economy, of a functioning society. But if we’re talking about complementary luxury items, then yeah, they’re being produced somewhere else at a lower cost.

Then importing them is a benefit for you because, you know, somebody somewhere else on the planet worked really hard to produce this special luxury item that they will never ever in their life get to enjoy. And then they ship it to you and you get to consume it and you get to enjoy it and you have the better quality of life.

That is true for complementary items. But for core items, food, fuel, basic technology that will actually allow you to nudge yourself into a better economic and geopolitical position as a country, that is priceless. That’s not something you want to outsource.

And, of course, the US and Europe are realizing now that they’ve gone too far with the outsourcing of production on terms that are favorable, price-wise, to the elite 1% and the US. So that’s really an important distinction to make when it comes to international trade.

Otherwise we’ll just divide the world into two blocks. One block of really poor people living in miserable conditions and have them work like slaves to manufacture all the good stuff for us and make sure that they’re governed by the most corrupt, brutal, military regimes, right? We can do that with our influence; the influence of the United States and Western Europe.

And if they dare challenge the system, we’ll just commit a genocide against them and teach everybody else a lesson that – don’t you dare challenge this hierarchy.

And then we can live in a country with so-called elections and democracies and freedom and get to enjoy the cheaper consumer goods on terms that are favorable to us. That is technically possible. And, to some extent, we’ve lived in a world like this for, for a long time.

But is this the better world that we aspire to achieve for humanity? Of course it’s not.

So there is a difference between technical possibilities and what is socially, morally, economically desirable and possible for us to achieve. To live in a better world.

Steve Grumbine

00:43:34.025 – 00:44:41.825

You know, with that said, I see the UN . . . I’d love to know the UN’s position on the BRICS and how the UN and the BRICS countries might be talking to one another.

Because as I’m looking, the world has, overwhelmingly, condemned the US funded genocide.

The Biden-Harris administration’s funding of genocide in Gaza, where most liberals I know and elite society have stayed mum – quiet with the exceptions of yourself and Jason Hickel, have really stayed quiet.

Hey, I want to keep myself close to power and I’m not going to say anything about this, but overall you’ve got the UN, who is all the members who said, hey, this is a genocide, stop this. And the US’s power, through its hegemony, has been able to squash that.

Help me understand the role of the UN in terms of how it might operate within the BRICS space.

How can the hundreds of countries that are against the genocide be able to express themselves through the UN, through the BRICS, you know, potential architecture framework?

Fadhel Kaboub

00:44:42.165 – 00:48:39.735

So I mean, you have to realize that the UN is increasingly making itself irrelevant to the global majority. So it needs to save face somehow or just cease to exist. And BRICS presents, technically, a viable alternative to the UN over time.

Because you have to remember the UN was created initially by five countries, and then, eventually, invited everybody else. For a long time, you join the UN and go right into the world community.

And that’s how the UN built its legitimacy over time with the slogans of human rights and justice, and all of that.

But with the fact that it’s dominated by major superpowers that can do as they please, it built the reputation of this hypocritical institution that doesn’t really respect international law or human rights – except when they’re convenient for a particular powerful set of countries. So that is the legacy that the UN continues to live with.

But now there’s a block of countries that technically represent the global majority – in terms of economic weight and in terms of populations – that is gaining membership, right?

They’re inviting more and more countries to join the coalition of the willing, so to speak, of the willing who were interested in building a new international economic order. Doesn’t mean that they’ll succeed or know what’s the best economic order, but they’re building it.

They’re building an alternative payment system, alternative trade agreements, alternative currency, eventually, to emerge, and so on.

And at some point in the next few decades, if more countries decide, you know what, we’re joining the BRICS and we’re doing a mass exit from the UN system. Then what’s going to be left in the UN? Europe and the US and Israel. And then, who were they going to govern? They govern themselves and the real estate they have. So that’s the thing.

For a long time there was a debate of reforming the UN system from within.

And I’m of the opinion that it’s not reformable because reforming the existing global economic governance architecture means that the superpowers will have to be willing to give up their power, their abuse of power in the system. And I don’t think they’re willing to do it. So I think it’s doomed to fail.

So the alternative is to build the alternative parallel architecture to the point where the existing architecture has to face two choices.

You either truly reform and you become just and balanced and welcoming to the rest of the world – or you keep your power and then you become completely irrelevant because everybody else is now belonging to an alternative parallel system and that makes you obsolete and redundant.

So BRICS does provide that pathway for building the alternative architecture for a governance system and international trade finance and an investment architecture. It’s not there yet. It doesn’t mean that they know how to build a better design that will actually take into account the needs of the global majority.

It doesn’t mean that BRICS is not going to reproduce the same inequalities and injustices that the existing system does. If anything, as we speak, it looks like this is the path they’re taking. That there’s hierarchy within BRICS, but it’s still a possibility.

And for countries at the bottom who are saying, if I’m going to be at the bottom, do I want to be at the bottom of this system or that system? Which one gives me a better position? And that’s going to be some choices that need to emerge. But as I mentioned earlier, that’s not the system that I aspire for the world to be in.

But with the geopolitical bargain of the century that I mentioned earlier, if China understands that this is actually the better multipolar world that is actually inclusive, then China, because of its dominant role within BRICS, can completely rewire the entire BRICS system to accept this geopolitical bargain of a truly multipolar world that’s not dominated by any particular superpower.

Steve Grumbine

00:48:40.625 – 00:48:53.965

So I have two final questions for you. I’ll start with the first one. I want to just hit Gaza right on the forehead with this one.

What is the US’s interest in funding Israel’s slaughter of the Palestinians?

Fadhel Kaboub

00:48:54.465 – 00:53:43.487

Where do you want me to start? I mean, the very creation of the State of Israel was a project; a Zionist settler colonial project that was funded by the US and Western Europe.

Because Palestine before the creation of the State of Israel, before World War II, before the Holocaust, which was a European genocide – Palestine was a land for all religions. For Muslims, Jews and Christians for thousands of years. And there’s absolutely no question about that.

The Zionist settlers who came from Europe because they were abused in Europe and they were promised by the Europeans some form of reparations, they were shopping around for a land to settle. And the Europeans didn’t want them in Europe. That was the whole Holocaust. This should be telling that even after the Holocaust, they still didn’t want them in Europe.

So they said, well, it looks like in Palestine you have some historical ties, religious affinity to the region. Even though most of you come, actually, from Western Europe, we will help you establish a state there.

And because Europe is so accustomed to the colonial style of asserting its power, they said, we’ll just fund you and weaponize you and send you to claim this land.

We use the phrase land with no people for people without land, which is ironically a phrase that’s still being used in Africa in the context of green colonialism. Here we’ll just take over this land because nobody lives here. We’ll just set up solar panels and export it to Europe.

So it’s a colonial project from the beginning. It’s a racist project from the beginning.

And for the countries that supported this, you have to remember in that historical period, these are countries that were still deeply racist with a colonial mentality that survives to this day. Then, because of the discovery of oil in the Middle east, it was very important for the US to have presence of satellite state in the region.

And you fast forward to today, you have to remember that there were major fossil fuel discoveries off the coast of Gaza. Billions of dollars, hundreds of billions of dollars worth of natural gas that initially some oil companies were interested in extracting.

But then not a single construction company, drilling company, insurance company or financial institution would put a single dollar in a project essentially in a war zone.

So it became a priority for Israel to, essentially, clear that entire area from Gaza all the way to the southern part of Lebanon, by the way, and the Mediterranean. That whole area is full of natural gas.

So that’s why some of Israel’s plan now in southern Lebanon is to build, “quote, unquote,” a “buffer zone” of several kilometers into southern Lebanon. Because that will give them access to the Mediterranean resources in terms of natural gas. So there’s a huge fossil fuel interest in the region. This is not about religion.

This is not about the security or the right of Israel to exist or defend itself. This is nonsense.

And because for decades, the Israeli, the Zionist ideology in the entire culture, from public education, is dehumanizing Palestinians.

It makes it very “quote, unquote,” easy for the IDF to treat Palestinians not as human beings, but as creatures or animals that are disposable. That need to be destroyed.

Because the ideology that is being taught in religious schools in Israel by the Zionist is essentially saying that that child that you’re seeing being murdered is not a regular child. That child is going to grow up to be a killer of Jews.

So you have every right, as a matter of fact, you have a responsibility to prevent that from happening by killing that child, that baby, before they grew up. These are not my words. This is actual religious teachings, not by proper religious scholars who actually understand Judaism, the religion.

These are settler colonial ideological teachings of a Zionist ideology. The justification is there. It’s built from within.

And of course, with the influence of the Israeli lobby in the United States, you get an entire population brainwashed in the US for decades. Now it’s changing a little bit because younger people are live streaming a genocide on their device.

Steve Grumbine

00:53:43.591 – 00:53:44.111

Yes.

Fadhel Kaboub

00:53:44.223 – 00:54:13.275

And they’re saying, this is not making sense, right? This is not right. People starting to ask questions and starting to research and read for themselves.

And they’re rebelling because this is unacceptable in any human society.

To see more than 40,000 human beings being assassinated, killed, tortured, as you’re on TikTok – basically on your device in your pocket – and then you hear a politician saying, well, this is tragic, but it’s really necessary.

Steve Grumbine

00:54:14.135 – 00:54:14.967

Bill Clinton.

Fadhel Kaboub

00:54:15.031 – 00:55:17.255

Yep, tragic, but, you know, unavoidable. We, we kind of have to do it. And you know, intelligent people saying, well, I’m not convinced. You’re not making any sense.

The world didn’t start on October 7th. There was a world before that. And there is a colonial project that was being built in Gaza and Palestine.

And every colonial case we’ve seen in Africa and the rest of the Global South created resistance movements and resistance. Some people resist in the streets, some people resist with little pebbles and stones, some people resist with weapons.

Some people resist with their voice, some people resist with their pen. But it’s resistance. And it’s a legitimate right to resist.

And that’s beginning to click for a lot of people that colonized people have the right to resist.

Yes, they have the right to fight for freedom in every human society, but somehow we’ve been convinced that Palestinians don’t actually have the right to resist.

Steve Grumbine

00:55:17.555 – 00:56:26.425

That’s what I wanted to bring up as a final question. I’m glad you led right to it. And that is one man’s freedom fighter is another man’s terrorist, and vice versa.

And in this case, we are getting a steady fire hose of “these guys are terrorists.” In reality though, they’re fighting for their freedom. They’re fighting for their right to exist.

And as I think about this, Global South, in large part, is either being couped by CIA and US interests . . . I mean, look at what happened to Muammar Gaddafi. Look at what has happened to Thomas Sankara.

Look at what’s happened to every single Global South leader that has said, I see what you’re doing and I’m not putting up with it. They end up getting killed. Their people get genocided, et cetera.

Help our listeners who maybe listen to other people that try to deny this genocide; deny the fact that we’re witnessing this. Help them understand, maybe at a deeper level, the risk that these people put themselves through just for the right to survive.

Fadhel Kaboub

00:56:27.645 – 01:00:33.575

Yeah, I mean, every person listening to this podcast, they have a digital device and it will take them just about three seconds to find unbiased information, video footage, live streaming, the genocide. And all I’m asking for is just spend 30 minutes a day, like really educating yourself, watching this thing.

And if you can, if you can live with yourself with this idea that this is somehow somebody’s right to self-defense, then I’m sorry. I’ve lost faith in humanity. I mean, read history. Algeria, for example. Nobody will debate today whether Algeria is an independent state or not.

It’s one of the biggest countries in Africa.

In order for Algeria to actually gain its independence and be recognized as an independent state and to end French colonialism and violent abuse, 1.5 million Algerians were killed during the resistance to that French colonial project. 1.5 million people were killed in a matter of a few years, essentially towards the end of the French occupation.

Now, did those people have the right to resist occupation? Of course they did. Did France, with Western European support, have the right to support a genocide, the killing of 1.5 million human beings?

Of course they didn’t. Right?

Did France have the right to use nuclear weapons to test its nuclear weapons program in Algeria during colonial times and after independence, they actually negotiated the use of the Algerian desert to continue dropping nuclear weapons in Algeria and spreading nuclear waste not just in Algeria, but all the way across North Africa, all the way to Southern Europe, actually, was affected. Wow. By French nuclear tests in Algeria. And this is the worst part.

The nuclear waste from the French nuclear program was buried in secret locations in the desert of Algeria. Secret locations we don’t even know. To this day, the French government refuses to share the GPS location of where the nuclear waste is.

And to this day, Algerian babies are born with birth defects and diseases that they struggle with for the rest of their lives – to this day. Now, is this right? Is this the world we want to live in? But that’s the world we live in.

So when you look back at Palestine, Palestinians have every right to resist with all the means they can muster. And if other countries want to support the Palestinian resistance, they should.

And if other countries want to wake up and stop supporting the genocide, they should. But the idea of resistance in any human society can never die. It’s part of our DNA as human beings.

Anybody who’s facing injustice will have the courage and the resources and the willingness to sacrifice themselves to fight for justice. To fight for freedom. And that’s exactly what the Palestinians are doing. It’s not unique to Palestine.

We’ve seen it everywhere else – including in Western Europe, including in the United States. People fight for freedom. People fight for their right to exist. And that’s what the Palestinians are doing.

Regardless of what narrative the media builds – whether it started on October 7th or October 8th, whatever it is – that is irrelevant to the fact that people will resist. So whatever the dominant narrative is about who’s right and who’s wrong, the Palestinians will resist.

And that’s why you hear these phrases from young people in Palestine who are being killed as we speak. You say, this is our responsibility, this is our right. We will fight and we will resist until we have our freedom.

And that’s a phrase that you hear across the world in any community, in any society that is being abused and being colonized.

Steve Grumbine

01:00:34.315 – 01:02:43.765

One individual I’ll just keep nameless, but one individual had the audacity to punch down– a person of significant influence and power–had the audacity to go after an anti-genocide, pro-Palestinian activist. And, basically, told him – every time he squeaked louder, every time he got loud about this, every time he did anything about this – caused the Palestinians to suffer more. He didn’t help a single soul by bringing attention to this. He was literally making the pain of the Palestinians that much more difficult.

And I tell you what, this individual is dead to me now. After seeing that, I will never ever speak to that person again. But this is not normal. That is normal trash from US, quite honestly, the liberal elite in this country. I’m sure the conservatives are just as bad in their own right, but I don’t spend any time amongst them.

And watching these liberal elitists, these rich people that are absolutely just a cancer to society, saying this stuff leaves me with so little help. Because you know what you said?

You said there’s no way to really reform the UN because the systems, the way they are, is such that the powerful would have to voluntarily give up power. It’s very similar to that in the political system of the United States.

The Democrats and Republicans would have to literally give up power to allow outside groups that are not in control of the system to have a say at the table.

So within the US, these dominant sources, they can’t be reformed either, because they would literally have to voluntarily give up power to share power, and they will never do that. There’s so many break points in the entire system that show that the ability to reform is absolutely nil. Or damned near nil.

I’m curious, and this will be the way we go out –

What are your words to people who see this and want to do something and are, literally, losing sleep over it, but have no political agency in the current system? How would you advise them to get involved?

Fadhel Kaboub

01:02:43.805 – 01:04:38.285

This is how you build, you know, an unstoppable movement for justice. Whether it’s about climate or genocide or any human rights issues, you have to organize a movement.

And a movement has to be well-informed, empowered, organized, unbreakable, unstoppable. And we’re seeing this movement being built around stopping the genocide in Palestine.

And the stronger the movement; the more educated and empowered and organized the movement; the more ridiculous the genocide deniers become in their arguments. In their narratives. And I think we’re moving towards that.

And I’ll close by saying, if you listen to the Palestinians who are actually on the receiving end of this genocide, the victims of this genocide. When you hear what they’re talking about, they’re talking about their struggle. They’re not begging for anybody’s help. They’re just telling people to watch and learn and educate themselves and do what is right.

And this is the dignity of the Palestinians. If anything, who’s asking for help? Who’s coming to beg for help every single day?

It’s the IDF. It’s the genociders who are constantly begging for money. Begging for weapons. And begging the media to spin their narrative. But the Palestinians are saying, just watch and do what is right. Don’t worry about us. We fight for our freedom.

But your responsibility is to watch, educate yourself, and do what is right. That is the most powerful thing that you see from the resistance. Look at the resistance in Lebanon. Are they begging anybody for help? They’re not.

They’re just live streaming and say, watch and do what is right. This is your responsibility as a human being to educate yourself and to pick the right side of history. And I think that’s the final word on this.

Steve Grumbine

01:04:38.665 – 01:06:18.745

Fadhel, you’ve taught me so much. When we first started talking many, many years ago, I was a newb, man.

I was a newb, not only on the geopolitical front, but I was a former Republican drifting through thinking I was doing good things through the Democratic Party. And now I’m way beyond that, man.

I really appreciate you, and people like yourself and Jason Hickel, who have been unapologetic in speaking truth to power.

And you guys are the ones I follow because I trust that your instincts and your guidance would never put me in harm’s way in terms of being on the wrong side of an issue. Not intentionally, anyway. And I can trust that. And I, I think that’s a really important thing.

Guys like myself who maybe want to be educated, try to be educated, but we clearly aren’t quite there yet. When I hear you all speak, you give me strength. You give people that I know that listen to this program, strength.

To be more than just a yes man to cults of personality within this space that steal the oxygen out. I thank you very much for being willing to do that. I have one bonus. I’m so sorry to do this because I love that close.

But I do have to ask you, you’ve been out of this country now for a long time. I know that you are from Tunisia, but you’ve been out of this country for a few years.

What has changed for you as a result of being abroad, having pulled away somewhat from US culture and being able to see it firsthand in the modern era? What do you think has most changed with Fadhel Kaboub since you’ve gone and deployed like this?

Fadhel Kaboub

01:06:19.525 – 01:09:03.725

I still need the reverse culture shock when I come back to the US in a few months, because I’m going back to teaching at Denison.

But, certainly, the one thing that this distance gives you is a little bit of sanity away from the US political system and a little bit of time to reflect on how absurd and how rotten to the core the US political system is.

And then when you live and interact with a lot of brilliant people in the Global South, and you see the richness of the African continent in terms of resources and people and potential, it helps you better understand and better identify the real geopolitical hierarchies that exist that make one of the richest regions in the world, in terms of people and resources, so impoverished and so weakened and so dominated by the colonial hierarchy that still persists. So that in-your-face interaction with the African continent, in particular, is an amazing experience that I’ll carry with me for the rest of my life.

I mean, I’ve grown up, and I grew up in Tunisia for a long time. But it’s, you know, one small spot in the Global South that, you know, growing up, I thought was so unique. It’s unique in its own ways.

But the structures that we talked about today are so prevalent all over the continent. Even more prevalent in countries that are richer than Tunisia in resources and potential.

And then, as I was spending these two years here, this was the moment when the US and Europe all of a sudden woke up and realized they need critical minerals. And they need to figure out how to convince the African continent that it needs to continue to provide the critical minerals to the rest of the world – except not the entire world, just Europe and the US, but not so much to China.

And you get to see it and participate in whichever way you can in this discourse about putting forward a coherent Pan-African alternative vision for development and green industrialization and geopolitical repositioning. And finishing the unfinished business that our grandparents did their part in, kind of decolonizing the land from military presence and occupation. And our generations need to do the harder work of decolonizing economic structures and decolonizing the mind.

And that’s what I’ve tried to immerse myself into with a large network of brilliant civil society leaders and intellectuals on the African continent. And the struggle continues.

Steve Grumbine

01:09:04.025 – 01:09:10.745

Beautifully said. Thank you, Fadhel. Thank you so much for doing this. You’re such a blessing in my life. I really appreciate this.

Fadhel Kaboub

01:09:10.785 – 01:09:11.457

Thank you.

Steve Grumbine

01:09:11.601 – 01:10:54.975

All right, folks, this is Steve with Macro N Cheese. As you know, Real Progressives is a 501c3 nonprofit. We live and die by your donations.

If you find value in the content that we produce, please consider becoming a monthly donor. You can go to patreon.com/real progressives.

You can go to our website, which is back up, by the way! realprogressives.org and you can also come to realprogressives.substack.com for more of our content and, obviously, our YouTube channels and this podcast, which comes out every Saturday morning at 8am you can also join us on Tuesday evenings at 8pm Eastern Standard Time for our Macro N Chill, which is kind of a follow-up to the pod release. We do a video interaction where we listen to 15 minutes of the show and we come back and we discuss it piece by piece. A great way to build community. It’s also a great way to learn even more.

And with that, Fadhel, one more time, thank you so much. And to you all for listening. Thank you all, so much.

And as Steve Grumbine, the host says, we are out of here.