Why the Dollar Gets Stronger as the Bombs Fall | Iran War, Oil Prices, and the New Imperialism

Oil just crossed $100 a barrel. The Strait of Hormuz is effectively closed. Gas prices are surging. And the dollar? It's getting stronger — not weaker. That's not a paradox. It's by design.

In this episode of the FREE Podcast, economist Clara Mattei sits down with Costas Lapavitsas (Professor of Economics, SOAS University of London) to explain what no mainstream outlet will: the Iran war isn't a disruption to the global economic system — it's a product of it. From the dollar's imperial grip to the hollowing out of US industry to the $2 billion a day being spent on bombs instead of schools, this conversation maps the economic machinery driving the current crisis.

Costas brings a new theory of imperialism rooted in Marxian political economy — connecting the financialization of the last four decades, the rise of China, the structural decline of the US as a productive power, and the escalation of militarism that follows when a declining hegemon refuses to let go.

In this conversation:

• Why the dollar strengthens during war — and who pays for it

• Oil at $100+: what breaks next in the global economy

• The US spends $2 billion a day on this war — enough to fund free college or universal childcare

• How US multinationals hollowed out the domestic economy they claim to defend

• Trump as symptom, not author — why this crisis predates and outlasts him

• Capitalism and militarism: why markets produce war, not peace

• The military-industrial complex: corrupt, inefficient, and structurally incapable of rebuilding US productive power

• The WWI analogy: why this moment has no natural point of equilibrium

• Why Costas sees hope in American workers and youth

GUEST:

Costas Lapavitsas is Professor of Economics at SOAS, University of London, and a scholar of contemporary capitalism and imperialism. His latest book is The State of Capitalism (2023). Recent articles include "A Topography of the New Dollar Imperialism" (New Left Review) and "Trump's Chaotic Imperialism" (forthcoming, Socialist Register).

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