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Simon Brooke

@yogthos The dollar being the world's principal trading currency has effectively allowed the US to extract rent out of everyone who traded commodities round the world, because they had to hold dollars in order to do so.

Of course, that rent-seeking opportunity is not disappearing, it's just switching to China. Big economic powers will always systematically benefit from market economies at the expense of the poor.

6 Apr 2023 at 22:11 | Wall-to-wall | Open on mastodon.scot
2 comments
Yogthos

@simon_brooke I don't think that's going to happen. China is not positioned the same way US is, nor does it have 800 military bases around the globe to force its will on others.

I think what we'll see is a multipolar world where there isn't a de facto reserve currency that allows one country to dominate others.

6 Apr 2023 at 22:49 | Open on mas.to
Yogthos

@simon_brooke it's also worth looking at the Soviet Union as a counter example to the idea that a larger economy has to exploit smaller ones.

USSR spent a lot of its resources helping developing countries like Cuba and Vietnam. Once USSR dissolved the conditions in these countries became worse. If USSR was extractive then the opposite would've been the case.

6 Apr 2023 at 22:52 | Open on mas.to
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