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Marx and many of his less radical contemporary reformers saw the historical role of industrial capitalism as being to clear away the legacy of feudalism – the landlords, bankers and monopolists extracting economic rent without producing real value. But that reform movement failed. Today, the Finance, Insurance and Real Estate (FIRE) sector has regained control of government, creating neo-rentier economies.
The aim of this post-industrial finance capitalism is the opposite of that of industrial capitalism as known to 19th-century economists: It seeks wealth primarily through the extraction of economic rent not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, banking and infrastructure monopolies add to the cost of living and doing business. Labor is being exploited increasingly by bank debt, student debt, credit-card debt, while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation.
Today’s New Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain of European and American economies so as to keep their costs low and minimize their cost structure.
In the Western economies such privatizations have reversed the drive of industrial capitalism to minimize socially unnecessary costs of production and distribution. In addition to monopoly prices for privatized services, financial managers are cannibalizing industry by debt leveraging and high dividend payouts to increase stock prices.
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Today’s neo-rentier economies obtain wealth mainly by rent seeking, while financialization capitalizes real estate and monopoly rent into bank loans, stocks and bonds. Debt leveraging to bid up prices and create capital gains on credit for this “virtual wealth” has been fueled by central bank Quantitative Easing since 2009.
Financial engineering is replacing industrial engineering. Over 90 percent of recent U.S. corporate income has been earmarked to raise the companies’ stock prices by being paid out as dividends to stockholders or spent on stock buyback programs. Many companies even borrow to buy up their own shares, raising their debt/equity ratios.
Households and industry are becoming debt-strapped, owing rent and debt service to the Finance, Insurance and Real Estate (FIRE) sector. This rentier overhead leaves less wage and profit income available to spend on goods and services, bringing to a close the 75-year U.S. and European expansion since World War II ended in 1945.
These rentier dynamics are the opposite of what Marx described as industrial capitalism’s laws of motion. German banking was indeed financing heavy industry under Bismarck, in association with the Reichsbank and military. But elsewhere, bank lending rarely has financed new tangible means of production. What promised to be a democratic and ultimately socialist dynamic has relapsed back toward feudalism and debt peonage, with the financial class today playing the role that the landlord class did in post-medieval times.
Marx’s view of the historical destiny of capitalism: to free economies from feudalism
The industrial capitalism that Marx described in Volume I of Capital is being dismantled. He saw the historical destiny of capitalism to be to free economies from the legacy of feudalism: a hereditary warlord class imposing tributary land rent, and usurious banking. He thought that as industrial capitalism evolved toward more enlightened management, and indeed toward socialism, it would replace predatory “usurious” finance, cutting away the economically and socially unnecessary rentier income, land rent and financial interest and related fees for unproductive credit. Adam Smith, David Ricardo, John Stuart Mill, Joseph Proudhon and their fellow classical economists had analyzed these phenomena, and Marx summarized their discussion in Volumes II and III of Capital and his parallel Theories of Surplus Value dealing with economic rent and the mathematics of compound interest, which causes debt to grow exponentially at a higher rate than the rest of the economy.
However, Marx devoted Volume I of Capital to industrial capitalism’s most obvious characteristic: the drive to make profits by investing in means of production to employ wage labor to produce goods and services to sell at a markup over what labor was paid. Analyzing surplus value by adjusting profit rates to take account of outlays for plant, equipment and materials (the “organic composition of capital”), Marx described a circular flow in which capitalist employers pay wages to their workers and invest their profits in plant and equipment with the surplus not paid to employees.
Finance capitalism has eroded this core circulation between labor and industrial capital. Much of the midwestern United States has been turning into a rust belt. Instead of the financial sector evolving to fund capital investment in manufacturing, industry is being financialized. Making economic gains financially, primarily by debt leverage, far outstrips making profits by hiring employees to produce goods and services.
Capitalism’s alliance of banks with industry to promote democratic political reform
The capitalism of Marx’s day still contained many survivals from feudalism, most notably a hereditary landlord class living off the land rents, most of which were spent unproductively on servants and luxuries, not to make a profit. These rents had originated in a tax. Twenty years after the Norman Conquest, William the Conquer had ordered compilation of the Domesday Book in 1086 to calculate the yield that could be extracted as taxes from the English land that he and his companions had seized. As a result of King John’s overbearing fiscal demands, the Revolt of the Barons (1215-17) and their Magna Carta enabled the leading warlords to obtain much of this rent for themselves. Marx explained that industrial capitalism was politically radical in seeking to free itself from the burden of having to support this privileged landlord class, receiving income with no basis in cost value or enterprise of its own.
Industrialists sought to win markets by cutting costs below those of their competitors. That aim required freeing the entire economy from the “faux frais” of production, socially unnecessary charges built into the cost of living and doing business. Classical economic rent was defined as the excess of price above intrinsic cost-value, the latter being ultimately reducible to labor costs. Productive labor was defined as that employed to create a profit, in contrast to the servants and retainers (coachmen, butlers, cooks, et al.) on whom landlords spent much of their rent.
The paradigmatic form of economic rent was the ground rent paid to Europe’s hereditary aristocracy. As John Stuart Mill explained, landlords reaped rents (and rising land prices) “in their sleep.” Ricardo had pointed out (in Chapter 2 of his 1817 Principles of Political Economy and Taxation) a kindred form of differential rent in natural-resource rent stemming from the ability of mines with high-quality orebodies to sell their lower-cost mineral output at prices set by high-cost mines. Finally, there was monopoly rent paid to owners at choke points in the economy where they could extract rents without a basis in any cost outlay. Such rents logically included financial interest, fees and penalties.
Marx saw the capitalist ideal as freeing economies from the landlord class that controlled the House of Lords in Britain, and similar upper houses of government in other countries. That aim required political reform of Parliament in Britain, ultimately to replace the House of Lords with the Commons, so as to prevent the landlords from protecting their special interests at the expense of Britain’s industrial economy. The first great battle in this fight against the landed interest was won in 1846 with repeal of the Corn Laws. The fight to limit landlord power over government culminated in the constitutional crisis of 1909-10, when the Lords rejected the land tax imposed by the Commons. The crisis was resolved by a ruling that the Lords never again could reject a revenue bill passed by the House of Commons.
The banking sector lobbies against the real estate sector, 1815-1846
It may seem ironic today that Britain’s banking sector was whole-heartedly behind the first great fight to minimize land-rent. That alliance occurred after the Napoleonic Wars ended in 1815, which ended the French blockage against British seaborne trade and re-opened the British market to lower-priced grain imports. British landlords demanded tariff protection under the Corn Laws – to raise the price of food, so as to increase the revenue and hence the capitalized rental value of their landholdings – but that has rendered the economy high-cost. A successful capitalist economy would have to minimize these costs in order to win foreign markets and indeed, to defend its own home market. The classical idea of a free market was one free from economic rent – from rentier income in the form of land rent.
This rent – a quasi-tax paid to the heirs of the warlord bands that had conquered Britain in 1066, and the similar Viking bands that had conquered other European realms – threatened to minimize foreign trade. That was a threat to Europe’s banking classes, whose major market was the funding of commerce by bills of exchange. The banking class arose as Europe’s economy was revived by the vast looting of monetary bullion from Constantinople by the Crusaders. Bankers were permitted a loophole to avoid Christianity’s banning of the charging of interest, by taking their return in the form of agio, a fee for transferring money from one currency to another, including from one country to another.
Even domestic credit could use the loophole of “dry exchange,” charging agio on domestic transactions cloaked as a foreign-currency transfer, much as modern corporations use “offshore banking centers” today to pretend that they earn their income in tax-avoidance countries that do not charge an income tax.
If Britain was to become the industrial workshop of the world, it would prove highly beneficial to Ricardo’s banking class. (He was its Parliamentary spokesman; today we would say lobbyist.) Britain would enjoy an international division of labor in which it exported manufactures and imported food and raw materials from other countries specializing in primary commodities and depending on Britain for their industrial products. But for this to happen, Britain needed a low price of labor. That meant low food costs, which at that time were the largest items in the family budgets of wage labor. And that in turn required ending the power of the landlord class to protect its “free lunch” of land rent, and all recipients of such “unearned income.”
It is hard today to imagine industrialists and bankers hand in hand promoting democratic reform against the aristocracy. But that alliance was needed in the early 19th century. Of course, democratic reform at that time extended only to the extent of unseating the landlord class, not protecting the interest of labor. The hollowness of the industrial and banking class’s democratic rhetoric became apparent in Europe’s 1848 revolutions, where the vested interests ganged up against extending democracy to the population at large, once the latter had helped end landlord protection of its rents.
Of course, it was socialists who picked up the political fight after 1848. Marx later reminded a correspondent that the first plank of the Communist Manifesto was to socialize land rent, but poked fun at the “free market” rent critics who refused to recognize that rentier-like exploitation existed in the industrial employment of wage labor. Just as landlords obtained land rent in excess of the cost of producing their crops (or renting out housing), so employers obtained profits by selling the products of wage-labor at a markup. To Marx, that made industrialists part of the rentier class in principle, although the overall economic system of industrial capitalism was much different from that of post-feudal rentiers, landlords and bankers.
The alliance of banking with real estate and other rent-seeking sectors
With this background of how industrial capitalism was evolving in Marx’s day, we can see how overly optimistic he was regarding the drive by industrialists to strip away all unnecessary costs of production – all charges that added to price without adding to value. In that sense he was fully in tune with the classical concept of free markets, as markets free from land rent and other forms of rentier income.
Today’s mainstream economics has reversed this concept. In an Orwellian doublethink twist, the vested interests today define a free market as one “free” for the proliferation of various forms of land rent, even to the point of giving special tax advantages to absentee real estate investment, the oil and mining industries (natural-resource rent), and most of all to high finance (the accounting fiction of “carried interest,” an obscure term for short-term arbitrage speculation).
Today’s world has indeed freed economies from the burden of hereditary ground rent. Almost two-thirds of American families own their own homes (although the rate of homeownership has been falling steadily since the Great Obama Evictions that were a byproduct of the junk-mortgage crisis and Obama Bank Bailouts of 2009-16, which lowered homeowner rates from over 68% to 62%). In Europe, home ownership rates have reached 80% in Scandinavia, and high rates characterize the entire continent. Home ownership – and also the opportunity to purchase commercial real estate – has indeed become democratized.
But it has been democratized on credit. That is the only way for wage-earners to obtain housing, because otherwise they would have to spend their entire working life saving enough to buy a home. After World War II ended in 1945, banks provided the credit to purchase homes (and for speculators to buy commercial properties), by providing mortgage credit to be paid off over the course of 30 years, the likely working life of the young home buyer.
Real estate is by far the banking sector’s largest market. Mortgage lending accounts for about 80 percent of U.S. and British bank credit. It played only a minor role back in 1815, when banks focused on financing commerce and international trade. Today we can speak of the Finance, Insurance and Real Estate (FIRE) sector as the economy’s dominant rentier sector. This alliance of banking with real estate has led banks to become the major lobbyists protecting real estate owners by opposing the land tax that seemed to be the wave of the future in 1848 in the face of rising advocacy to tax away the land’s entire price gains and rent, to make land the tax base as Adam Smith had urged, instead of taxing labor and consumers or profits. Indeed, when the U.S. income tax began to be levied in 1914, it fell only on the wealthiest One Percent of Americans, whose taxable income consisted almost entirely of property and financial claims.
The past century has reversed that tax philosophy. On a national level, real estate has paid almost zero income tax since World War II, thanks to two giveaways. The first is “fictitious depreciation,” sometimes called over-depreciation. Landlords can pretend that their buildings are losing value by claiming that they are wearing out at fictitiously high rates. (That is why Donald Trump has said that he loves depreciation.) But by far the largest giveaway is that interest payments are tax deductible. Real estate is taxed locally, to be sure, but typically at only 1% of assessed valuation, which is less than 7 to 10 percent of the actual land rent.[2a]I provide the charts in The Bubble and Beyond (Dresden: 2012), Chapters 7 and 8, and Killing the Host (Dresden: 2015).
The basic reason why banks support tax favoritism for landlords is that whatever the tax collector relinquishes is available to be paid as interest. Mortgage bankers end up with the vast majority of land rent in the United States. When a property is put up for sale and homeowners bid against each other to buy it, the equilibrium point is where the winner is willing to pay the full rental value to the banker to obtain a mortgage. Commercial investors also are willing to pay the entire rental income to obtain a mortgage, because they are after the “capital” gain – that is, the rise in the land’s price.
The policy position of the so-called Ricardian socialists in Britain and their counterparts in France (Proudhon, et al.) was for the state to collect the land’s economic rent as its major source of revenue. But today’s “capital” gains occur primarily in real estate and finance, and are virtually tax-free for landlords. Owners pay no capital-gains tax as real estate prices rise, or even upon sale if they use their gains to buy another property. And when landlords die, all tax liability is wiped out.
The oil and mining industries likewise are notoriously exempt from income taxation on their natural-resource rents. For a long time the depletion allowance allowed them tax credit for the oil that was sold off, enabling them to buy new oil-producing properties (or whatever they wanted) with their supposed asset loss, defined as the value to recover whatever they had emptied out. There was no real loss, of course. Oil and minerals are provided by nature.
These sectors also make themselves tax exempt on their foreign profits and rents by using “flags of convenience” registered in offshore banking centers. This ploy enables them to claim to make all their profits in Panama, Liberia or other countries that do not charge an income tax or even have a currency of their own, but use the U.S. dollar so as to save American companies from any foreign-exchange risk.
In oil and mining, as with real estate, the banking system has become symbiotic with rent recipients, including companies extracting monopoly rent. Already in the late 19th century the banking and insurance sector was recognized as “the mother of trusts,” financing their creation to extract monopoly rents over and above normal profit rates.
These changes have made rent extraction much more remunerative than industrial profit-seeking – just the opposite of what classical economists urged and expected to be the most likely trajectory of capitalism. Marx expected the logic of industrial capitalism to free society from its rentier legacy and to create public infrastructure investment to lower the economy-wide cost of production. By minimizing labor’s expenses that employers had to cover, this public investment would put in place the organizational network that in due course (sometimes needing a revolution, to be sure) would become a socialist economy.
Although banking developed ostensibly to serve foreign trade by the industrial nations, it became a force-in-itself undermining industrial capitalism. In Marxist terms, instead of financing the M-C-M’ circulation (money invested in capital to produce a profit and hence yet more money), high finance has abbreviated the process to M-M’, making money purely from money and credit, without tangible capital investment.
The rentier squeeze on budgets: Debt deflation as a byproduct of asset-price inflation
Democratization of home ownership meant that housing no longer was owned primarily by absentee owners extracting rent, but by owner-occupants. As home ownership spread, new buyers came to support the rentier drives to block land taxation – not realizing that rent that was not taxed would be paid to the banks as interest to absorb the rent-of-location hitherto paid to absentee landlords.
Real estate has risen in price as a result of debt leveraging. The process makes investors, speculators and their bankers wealthy, but raises the cost of housing (and commercial property) for new buyers, who are obliged to take on more debt in order to obtain secure housing. That cost is also passed on to renters. And employers ultimately are obliged to pay their labor force enough to pay these financialized housing costs.
Debt deflation has become the distinguishing feature of today’s economies from North America to Europe, imposing austerity as debt service absorbs a rising share of personal and corporate income, leaving less to spend on goods and services. The economy’s indebted 90 percent find themselves obliged to pay more and more interest and financial fees. The corporate sector, and now also the state and local government sector, likewise are obliged to pay a rising share of their revenue to creditors.
Investors are willing to pay most of their rental income as interest to the banking sector because they hope to sell their property at some point for a “capital” gain. Modern finance capitalism focuses on “total returns,” defined as current income plus asset-price gains, above all for land and real estate. Inasmuch as a home or other property is worth however much banks will lend against it, wealth is created primarily by financial means, by banks lending a rising proportion of the value of assets pledged as collateral.
Chart 10.4: annual changes in GDP and the major components of asset price gains
(nominal, $bn)
The fact that asset-price gains are largely debt-financed explains why economic growth is slowing in the United States and Europe, even as stock market and real estate prices are inflated on credit. The result is a debt-leveraged economy.
Changes in the value of the economy’s land from year to year far exceeds the change in GDP. Wealth is obtained primarily by asset-price (“capital”) gains in the valuation of land and real estate, stocks, bonds and creditor loans (“virtual wealth”), not so much by saving income (wages, profits and rents). The magnitude of these asset-price gains tends to dwarf profits, rental income and wages.
The tendency has been to imagine that rising prices for real estate, stocks and bonds has been making homeowners richer. But this price rise is fueled by bank credit. A home or other property is worth however much a bank will lend against it – and banks have lent a larger and larger proportion of the home’s value since 1945. For U.S. real estate as a whole, debt has come to exceed equity for more than a decade now. Rising real estate prices have made banks and speculators rich, but have left homeowners and commercial real estate debt strapped.
The economy as a whole has suffered. Debt-fueled housing costs in the United States are so high that if all Americans were given their physical consumer goods for free – their food, clothing and so forth – they still could not compete with workers in China or most other countries. That is a major reason why the U.S. economy is de-industrializing. So this policy of “creating wealth” by financialization undercuts the logic of industrial capitalism.
Finance capital’s fight to privatize and monopolize public infrastructure
Another reason for deindustrialization is the rising cost of living stemming from conversion of public infrastructure into privatized monopolies. As the United States and Germany overtook British industrial capitalism, a major key to industrial advantage was recognized to be public investment in roads, railroads and other transportation, education, public health, communications and other basic infrastructure. Simon Patten, the first professor of economics at America’s first business school, the Wharton School at the University of Pennsylvania, defined public infrastructure as a “fourth factor of production,” in addition to labor, capital and land. But unlike capital, Patten explained, its aim was not to make a profit. It was to minimize the cost of living and doing business by providing low-price basic services to make the private sector more competitive.
Unlike the military levies that burdened taxpayers in pre-modern economies, “in an industrial society the object of taxation is to increase industrial prosperity” by creating infrastructure in the form of canals and railroads, a postal service and public education. This infrastructure was a “fourth” factor of production. Taxes would be “burdenless,” Patten explained, to the extent that they were invested in public internal improvements, headed by transportation such as the Erie Canal.[3a]“The Theory of Dynamic Economics,” Essays in Economic Theory ed. Rexford Guy Tugwell (New York: 1924), pp. 96 and 98, originally in The Publications of the University of Pennsylvania, Political Economy and Public Law Series 3:2 (whole No. 11), 1892, p. 96. Europe’s aristocratic governments developed their tax policy “at a time when the state was a mere military organization for the defense of society from foreign foes, or to gratify national feelings by aggressive wars.” Such states had a “passive” economic development policy, and their tax philosophy was not based on economic efficiency. I provide the details in “Simon Patten on Public Infrastructure and Economic Rent Capture,” American Journal of Economics and Sociology 70 (October 2011), pp. 873-903.
The advantage of this public investment is to lower costs instead of letting privatizers impose monopoly rents in the form of access charges to basic infrastructure. Governments can price the services of these natural monopolies (including credit creation, as we are seeing today) at cost or offer them freely, helping labor and its employers undersell industrialists in countries lacking such public enterprise.
In the cities, Patten explained, public transport raises property prices (and hence economic rent) in the outlying periphery, as the Erie Canal had benefited western farms competing with upstate New York farmers. That principle is evident in today’s suburban neighborhoods relative to city centers. London’s Tube extension along the Jubilee Line, and New York City’s Second Avenue Subway, showed that underground and bus transport can be financed publicly by taxing the higher rental value created for sites along such routes. Paying for capital investment out of such tax levies can provide transportation at subsidized prices, minimizing the economy’s cost structure accordingly. What Joseph Stiglitz popularized as the “Henry George Law” thus more correctly should be known as “Patten’s Law” of burdenless taxation. [4a]George advocated a land tax, but his opposition to socialism led him to reject the value and price concepts necessary to define economic rent quantitatively. His defense of bankers and interest rendered his policy recommendations ineffective as he moved to the libertarian right wing of the political spectrum, opposing government investment but merely taxing the rent taken by privatizers – the reverse of what Patten and his pro-industrial school of economists were advocating, based on classical value and price theory.
Under a regime of “burdenless taxation” the return on public investment does not take the form of profit but aims at lowering the economy’s overall price structure to “promote general prosperity.” This means that governments should operate natural monopolies directly, or at least regulate them. “Parks, sewers and schools improve the health and intelligence of all classes of producers, and thus enable them to produce more cheaply, and to compete more successfully in other markets.” Patten concluded: “If the courts, post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity of society they should not be conducted by the State.” But this prosperity for the overall economy was not obtained by treating public enterprises as what today is called a profit center.[5a]“The Theory of Dynamic Economics,” p. 98.
In one sense, this can be called “privatizing the profits and socializing the losses.” Advocating a mixed economy along these lines is part of the logic of industrial capitalism seeking to minimize private-sector production and employment costs in order to maximize profits. Basic social infrastructure is a subsidy to be supplied by the state.
Britain’s Conservative Prime Minister Benjamin Disraeli (1874-80) reflected this principle: “The health of the people is really the foundation upon which all their happiness and all their powers as a state depend.”[6a]Speech of June 24, 1877. He used Latin and said “Sanitas, Sanitatum” and translated it as “Sanitation, all is sanitation.” It was a pun on a more famous aphorism, “Vanitas, vanitatum,” “Vanity, all is vanity.” He sponsored the Public Health Act of 1875, followed by the Sale of Food and Drugs Act and, the next year, the Education Act. The government would provide these services, not private employers or private monopoly-seekers.
For a century, public investment helped the United States pursue an Economy of High Wages policy, providing education, food and health standards to make its labor more productive and thus able to undersell low-wage “pauper” labor. The aim was to create a positive feedback between rising wages and increasing labor productivity.
That is in sharp contrast to today’s business plan of finance capitalism – to cut wages, and also cut back long-term capital investment, research and development while privatizing public infrastructure. The neoliberal onslaught by Ronald Reagan in the United States and Margaret Thatcher in Britain in the 1980s was backed by IMF demands that debtor economies balance their budgets by selling off such public enterprises and cutting back social spending. Infrastructure services were privatized as natural monopolies, sharply raising the cost structure of such economies, but creating enormous financial underwriting commissions and stock-market gains for Wall Street and London.
Privatizing hitherto public monopolies has become one of the most lucrative ways to gain wealth financially. But privatized health care and medical insurance is paid for by labor and its employers, not by the government as in industrial capitalism. And in the face of the privatized educational system’s rising cost, access to middle-class employment has been financed by student debt. These privatizations have not helped economies become more affluent or competitive. On an economy-wide level this business plan is a race to the bottom, but one that benefits financial wealth at the top.
Finance capitalism impoverishes economies while increasing their cost structure
Classical economic rent is defined as the excess of price over intrinsic cost-value. Capitalizing this rent – whether land rent or monopoly rent from the privatization described above – into bonds, stocks and bank loans creates “virtual wealth.” Finance capitalism’s exponential credit creation increases “virtual” wealth – financial securities and property claims – by managing these securities and claims in a way that has made them worth more than tangible real wealth.
The major way to gain fortunes is to get asset-price gains (“capital gains”) on stocks, bonds and real estate. However, this exponentially growing debt-leveraged financial overhead polarizes the economy in ways that concentrates ownership of wealth in the hands of creditors, and owners of rental real estate, stocks and bonds, draining the “real” economy to pay the FIRE sector.
Post-classical economics depicts privatized infrastructure, natural resource development and banking as being part of the industrial economy, not superimposed on it by a rent-seeking class. But the dynamic of finance-capitalist economies is not for wealth to be gained mainly by investing in industrial means of production and saving up profits or wages, but by capital gains made primarily from rent-seeking. These gains are not “capital” as classically understood. They are “finance-capital gains,” because they result from asset-price inflation fueled by debt leveraging.
By inflating its housing prices and a stock market bubble on credit, America’s debt leveraging, along with its financializing and privatizing basic infrastructure, has priced it out of world markets. China and other non-financialized countries have avoided high health insurance costs, education costs and other services freely or at a low cost as a public utility. Public health and medical care costs much less abroad, but is attacked in the United States by neoliberals as “socialized medicine,” as if financialized health care would make the U.S. economy more efficient and competitive. Transportation likewise has been financialized and run for profit, not to lower the cost of living and doing business.
One must conclude that America has chosen to no longer industrialize, but to finance its economy by economic rent – monopoly rent, from information technology, banking and speculation, and leave industry, research and development to other countries. Even if China and other Asian countries didn’t exist, there is no way that America can regain its export markets or even its internal market with its current debt overhead and its privatized and financialized education, health care, transportation and other basic infrastructure.
The underlying problem is not competition from China, but neoliberal financialization. Finance-capitalism is not industrial capitalism. It is a lapse back into debt peonage and a rentier neo-feudalism. Bankers play the role today that landlords played up through the 19th century, making fortunes without corresponding value, by capital gains for real estate, stocks and bonds on credit, by debt leveraging whose carrying charges increase the economy’s cost of living and doing business.
Today’s New Cold War is a fight by finance capitalism against industrial capitalism
Today’s world is being fractured by an economic warfare over what kind of economic system it will have. Industrial capitalism is losing the fight to finance capitalism, which is turning to be its antithesis just as industrial capitalism was the antithesis to post-feudal landlordship and predatory banking houses.
In this respect today’s New Cold War is a conflict of economic systems. As such, it is being fought against the dynamic of U.S. industrial capitalism as well as that of China and other economies. Hence, the struggle also is domestic within the United States and Europe, as well as confrontational against China and Russia, Iran, Cuba, Venezuela and their moves to de-dollarize their economies and reject the Washington Consensus and its Dollar Diplomacy. It is a fight by U.S.-centered finance capital to promote neoliberal doctrine giving special tax privileges to rentier income, untaxing land rent, natural resource rent, monopoly rent and the financial sector. This aim includes privatizing and financializing basic infrastructure, maximizing its extraction of economic rent instead of minimizing the cost of living and doing business.
The result is a war to change the character of capitalism as well as that of social democracy. The British Labour Party, European Social Democrats and the U.S. Democratic Party all have jumped on the neoliberal bandwagon. They are all complicit in the austerity that has spread from the Mediterranean to America’s Midwestern rust belt.
Finance capitalism exploits labor, but via a rentier sector, which also ends up cannibalizing industrial capital. This drive has become internationalized into a fight against nations that restrict the predatory dynamics of finance capital seeking to privatize and dismantle government regulatory power. The New Cold War is not merely a war being waged by finance capitalism against socialism and public ownership of the means of production. In view of the inherent dynamics of industrial capitalism requiring strong state regulatory and taxing power to check the intrusiveness of finance capital, this post-industrial global conflict is between socialism evolving out of industrial capitalism, and fascism, defined as a rentier reaction to mobilize government to roll back social democracy and restore control to the rentier financial and monopoly classes.
The old Cold War was a fight against “Communism.” In addition to freeing itself from land rent, interest charges and privately appropriated industrial profits, socialism favors labor’s fight for better wages and working conditions, better public investment in schools, health care and other social welfare support, better job security, and unemployment insurance. All these reforms would cut into the profits of employers. Lower profits mean lower stock-market prices, and hence fewer finance-capital gains.
The aim of finance capitalism is not to become a more productive economy by producing goods and selling them at a lower cost than competitors. What might appear at first sight to be international economic rivalry and jealousy between the United States and China is thus best seen as a fight between economic systems: that of finance capitalism and that of civilization trying to free itself from rentier privileges and submission to creditors, with a more social philosophy of government empowered to check private interests when they act selfishly and injure society at large.
The enemy in this New Cold War is not merely socialist government but government itself, except to the extent that it can be brought under the control of high finance to promote the neoliberal rentier agenda. This reverses the democratic political revolution of the 19th century that replaced the House of Lords and other upper houses controlled by the hereditary aristocracy with more representative legislators. The aim is to create a corporate state, replacing elected houses of government by central banks – the U.S. Federal Reserve and the European Central Bank, along with external pressure from the International Monetary Fund and World Bank.
The result is a “deep state” supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not labor, whose resentment is turned against foreigners and against designated enemies within.
Lacking foreign affluence, the U.S. corporate state promotes employment by a military buildup and public infrastructure spending, most of which is turned over to insiders to privatize into rent-seeking monopolies and sinecures. In the United States, the military is being privatized for fighting abroad (e.g., Blackwater USA/Academi), and jails are being turned into profit centers using inexpensive convict labor.
What is ironic is that although China is seeking to decouple from Western finance capitalism, it actually has been doing what the United States did in its industrial takeoff in the late 19th and early 20th century. As a socialist economy, China has aimed at what industrial capitalism was expected to achieve: freeing its economy from rentier income (landlordship and usurious banking), largely by a progressive income tax policy falling mainly on rentier income.
Above all, China has kept banking in the public domain. Keeping money and credit creation public instead of privatizing it is the most important step to keep down the cost of living and business. China has been able to avoid a debt crisis by forgiving debts instead of closing down indebted enterprises deemed to be in the public interest. In these respects it is socialist China that is achieving the fate that industrial capitalism initially was expected to achieve in the West.
Summary: Finance capital as rent-seeking
The transformation of academic economic theory under today’s finance capitalism has reversed the progressive and indeed radical thrust of the classical political economy that evolved into Marxism. Post-classical theory depicts the financial and other rentier sectors as an intrinsic part of the industrial economy. Today’s national income and GDP accounting formats are compiled in keeping with this anti-classical reaction depicting the FIRE sector and its allied rent-seeking sectors as an addition to national income, not a subtrahend. Interest, rents and monopoly prices all are counted as “earnings” – as if all income is earned as intrinsic parts of industrial capitalism, not predatory extraction as overhead property and financial claims.
This is the opposite of classical economics. Finance capitalism is a drive to avoid what Marx and indeed the majority of his contemporaries expected: that industrial capitalism would evolve toward socialism, peacefully or otherwise.
Some final observations: Financial takeover of industry, government and ideology
Almost every economy is a mixed economy – public and private, financial, industrial and rent-seeking. Within these mixed economies the financial dynamics – debt growing by compound interest, attaching itself primarily to rent-extracting privileges, and therefore protecting them ideologically, politically and academically. These dynamics are different from those of industrial capitalism, and indeed undercut the industrial economy by diverting income from it to pay the financial sector and its rentier clients.
One expression of this inherent antagonism is the time frame. Industrial capitalism requires long-term planning to develop a product, make a marketing plan, and undertake research and development to keep undercutting competitors. The basic dynamic is M-C-M’: capital (money, M) is invested in building factories and other means of production, and employing labor to sell its products (commodities, C) at a profit (M’).
Finance capitalism abbreviates this to a M-M’, making money purely financially, by charging interest and making capital gains. The financial mode of “wealth creation” is measured by the valuations of real estate, stocks and bonds. This valuation was long based on capitalizing their flow of revenue (rents or profits) at the going rate of interest, but is now based almost entirely on capital gains as the major source of “total returns.”
In taking over industrial companies, financial managers focus on the short run, because their salary and bonuses are based on current year’s performance. The “performance” in question is stock market performance. Stock prices have largely become independent from sales volume and profits, now that they are enhanced by corporations typically paying out some 92 percent of their revenue in dividends and stock buybacks.[7a]William Lazonick, “Profits Without Prosperity: Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,” Harvard Business Review, September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored (Oxford: 2020).
Even more destructively, private capital has created a new process: M-debt-M’. One recent paper calculates that: “Over 40% of firms that make payouts also raise capital during the same year, resulting in 31% of aggregate share repurchases and dividends being externally financed, primarily with debt.”[8a]Joan Farre-Mensa, Roni Michaely, Martin Schmalz, “Financing Payouts,” Ross School of Business Paper No. 1263 (December 1, 2020), quoted by Matt Stoller,” How to Get Rich Sabotaging Nuclear Weapons Facilities,” BIG, January 3, 2021. This has made the corporate sector financially fragile, above all the airline industry in the wake of the COVID-19 crises.
While the subject deserves a more thorough discussion than can be elaborated here, the journalist Matt Stoller summarizes in popular terms the essential business plan of private equity: “financial engineers raise large amounts of money and borrow even more to buy firms and loot them. These kinds of private equity barons aren’t specialists who help finance useful products and services, they do cookie cutter deals targeting firms they believe have market power to raise prices, who can lay off workers or sell assets, and/or have some sort of legal loophole advantage. Often they will destroy the underlying business. The giants of the industry, from Blackstone to Apollo, are the children of 1980s junk bond king and fraudster Michael Milken. They are essentially are super-sized mobsters.”[9a]Matt Stoller, ibid. See also his article “Crime Shouldn’t Pay: Why Big Tech Executives Should Face Jail,” BIG, December 20, 2020.
(Joan Farre-Mensa, Roni Michaely, Martin Schmalz, “Financing Payouts,” Ross School of Business Paper No. 1263 (December 1, 2020), quoted by Matt Stoller,” How to Get Rich Sabotaging Nuclear Weapons Facilities,” BIG, January 3, 2021.)
The classic description of this looting-for-profit practice process is the 1993 paper by George Akerloff and Paul Romer describing how “firms have an incentive to go broke for profit at society’s expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.”[10a]George Akerloff and Paul Romer, “Looting: The Economic Underworld of Bankruptcy for Profit,” https://www.brookings.edu/wp-content/uploads/1993/06...iw.pdf
The fact that “paper gains” from stock prices can be wiped out when financial storms occur, makes financial capitalism less resilient than the industrial base of tangible capital investment that remains in place. The United States has painted its economy into a corner by de-industrializing, replacing tangible capital formation with “virtual wealth,” that is, financial claims on income and tangible assets. Since 2009, and especially since the Covid crisis of 2020, its economy has been suffering through what is called a K-shaped “recovery.” The stock and bond markets have reached all-time highs to benefit the wealthiest families, but the “real” economy of production and consumption, GDP and employment, has declined for the non-rentier sector, that is, the economy at large.
How do we explain this disparity, if not by recognizing that different dynamics and laws of motion are at work? Gains in wealth increasingly take the form of a rising valuation of rentier financial and property claims on the real economy’s assets and income, headed by rent-extraction rights, not means of production.
Finance capitalism of this sort can survive only by drawing in exponentially increasing gains from outside the system., either by central bank money creation (Quantitative Easing) or by financializing foreign economies, privatizing them to replace low-priced public infrastructure services with rent-seeking monopolies issuing bonds and stocks, largely financed by dollar-based credit seeking capital gains. The problem with this financial imperialism is that it makes client host economies as high-cost as their U.S. and other sponsors in the world’s financial centers.
All economic systems seek to internationalize themselves and extend their rule throughout the world. Today’s revived Cold War should be understood as a fight between what kind of economic system the world will have. Finance capitalism is fighting against nations that restrict its intrusive dynamics and sponsorship of privatization and dismantling of public regulatory power. Unlike industrial capitalism, the rentier aim is not to become a more productive economy by producing goods and selling them at a lower cost than competitors. Finance capitalism’s dynamics are globalist, seeking to use international organizations (the IMF, NATO, the World Bank and U.S.-designed trade and investment sanctions.) to overrule national governments that are not controlled by the rentier classes. The aim is to make all economies into finance-capitalist layers of hereditary privilege, imposing austerity anti-labor policies to squeeze a dollarized surplus.
Industrial capitalism’s resistance to this international pressure is necessarily nationalist, because it needs state subsidy and laws to tax and regulate the FIRE sector. But it is losing the fight to finance capitalism, which is turning to be its nemesis just as industrial capitalism was the nemesis of post-feudal landlordship and predatory banking. Industrial capitalism requires state subsidy and infrastructure investment, along with regulatory and taxing power to check the incursion of finance capital. The resulting global conflict is between socialism (the natural evolution of industrial capitalism) and a pro-rentier fascism, a state-finance-capitalist reaction against socialism’s mobilization of state power to roll back the post-feudal rentier interests.
Underlying today’s rivalry felt by the United States against China is thus a clash of economic systems. The real conflict is not so much “America vs. China,” but finance capitalism vs. industrial “state” capitalism/socialism. At stake is whether “the state” will support financialization benefiting the rentier class or build up the industrial economy and overall prosperity.
Apart from their time frame, the other major contrast between finance capitalism and industrial capitalism is the role of government. Industrial capitalism wants government to help “socialize the costs” by subsidizing infrastructure services. By lowering the cost of living (and hence the minimum wage), this leaves more profits to be privatized. Finance capitalism wants to pry these public utilities away from the public domain and make them privatized rent-yielding assets. That raises the economy’s cost structure – and thus is self-defeating from the vantage point of international competition among industrialists.
That is why the lowest-cost and least financialized economies have overtaken the United States, headed by China. The way that Asia, Europe and the United States have reacted to the covid-19 crisis highlights the contrast. The pandemic has forced an estimated 70 percent of local neighborhood restaurants to close in the face of major rent and debt arrears. Renters, unemployed homeowners and commercial real estate investors, as we4ll as numerous consumer sectors are also facing evictions and homelessness, insolvency and foreclosure or distress sales as economic activity plunges.
Less widely noted is how the pandemic has led the Federal Reserve to subsidize the polarization and monopolization of the U.S. economy by making credit available at only a fraction of 1 percent to banks, private equity funds and the nation’s largest corporations, helping them gobble up small and medium-sized businesses in distress.
For a decade after the Obama bank-fraud bailout in 2009, the Fed described its purpose as being to keep the banking system liquid and avoid damage to its bondholders, stockholders and large depositors. The Fed infused the commercial banking system with enough lending power to support stock and bond prices. Liquidity was injected into the banking system by buying government securities, as was normal. But after the covid virus hit in March 2020, the Fed began to buy corporate debt for the first time, including junk bonds. Former FDIC head Sheila Bair and Treasury economist Lawrence Goodman note, the Federal Reserve bought the bonds “of ‘fallen angels’ who sank to junk status during the pandemic” as a result of having indulged in over-leveraged borrowing to pay out dividends and buy their own shares.[11a]Sheila Bair and Lawrence Goodman, “Corporate Debt ‘Relief’ Is an Economic Dud,” Wall Street Journal, January 7, 2021.
Congress considered limiting companies from using the proceeds of the bonds being bought “for outsize executive compensation or shareholder distributions” at the time it approved the facilities. but made no attempt to deter companies from doing this. Noting that “Sysco used the money to pay dividends to its shareholders while laying off a third of its workforce … a House committee report found that companies benefiting from the facilities laid off more than one million workers from March to September.” Bair and Goodman conclude that “there’s little evidence that the Fed’s corporate debt buy-up benefited society.” Just the opposite: The Fed’s actions “created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit.”
The result, they accuse, is transforming the economy’s political shape. “The serial market bailouts by monetary authorities – first the banking system in 2008, and now the entire business world amid the pandemic” has been “a greater threat [to destroy capitalism] than Bernie Sanders.” The Fed’s “super-low interest rates have favored the equity of large companies over their smaller counterparts,” concentrating control of the economy in the hands of firms with the largest access to such credit.
Smaller companies are “the primary source of job creation and innovation,” but do not have access to the almost free credit enjoyed by banks and their largest customers. As a result, the financial sector remains the mother of trusts, concentrating financial and corporate wealth by financing a gobbling-up of smaller companies as giant companies to monopolize the debt and bailout market.
The result of this financialized “big fish eat little fish” concentration is a modern-day version of fascism’s Corporate State. Radhika Desai calls it “creditocracy,” rule by the institutions in control of credit.[12a]Desai, Radhika. 2020.‘The Fate of Capitalism Hangs in the Balance of International Power’. Canadian Dimension, 12 October. https://canadiandimension.com/articles/view/the-fate...-power. See also Geoffrey Gardiner, Towards True Monetarism (Dulwich: 1993) and The Evolution of Creditary Structure and Controls (London: Palgrave, 2006) and the post-Keynesian group Gang of 8 popularized the term “creditary economics” in the 1990s. It is an economic system in which central banks take over economic policy from elected political bodies and the Treasury, thereby completing the process of privatizing economy-wide control.
Industrial Capitalism’s aims Finance Capitalism’s aims
| Make profits by producing products | Extract economic rent and interest |
| Minimize the cost of living and prices | Add land and monopoly rent to prices |
| Favor industry and labor. | Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors. |
| Minimize land rent and housing costs by taxing land rent and other rent-yielding assets, not capital or wages | Shift taxes off land-rent taxation to leave it available to pay as interest to mortgage bankers |
| Provide public infrastructure at low cost | Privatize infrastructure into monopolies to extract monopoly rent |
| Reform parliaments to block rent-seeking
Avoid military spending and wars that require running into foreign debt |
Block democratic reform, by shifting control to non-elected officials
 ORDER IT NOW Use international organization (such as the IMF or NATO) to force neoliberal policy |
| Concentrate economic and social planning in the political capital. | Shift planning and resource allocation to the financial centers. |
| Concentrate monetary policy in the national treasury | Shift monetary policy to central banks, representing private commercial banking interests. |
| Bring prices in line with cost-value | Maximize opportunities for rent seeking via land ownership, credit and monopoly privileges |
| Banking should be industrialized to finance tangible capital investment | Banks lend against collateral, bidding up asset prices, especially for rent-yielding assets |
| Recycle corporate revenue is into capital investment in new means of production | Pay out revenue as dividends or use it for stock buybacks to increase stock price gains |
| The time frame is long-term to develop products and marketing plans: M-C-M’ | The time frame is short-term, hit-and-run by financial speculation, M-M’. |
| Industrial engineering to raise productivity by research and development and new capital investment. | Financial engineering to raise asset prices – by stock buybacks and higher dividend payouts. |
| Focuses on long-term development of industrial capitalism as a broad economic system. | Short-term hit-and-run objectives, mainly by buying and selling assets. |
| Economy of High Wages, recognizing that well fed, well-educated labor with leisure is more productive than low-priced “pauper” labor, and long-term employment | A race to the bottom, burning out employees and replacing them with new hires.
Mechanization of labor treats workers as easily replaceable and hence disposable. |
| M-C-M’ Profits are made by investing in means of production and hiring labor to produce commodities to sell at a higher price than what it costs to employ labor. | M-M’ “Capital” gains made directly by asset-price inflation |
| Banking is industrialized, to provide credit mainly to invest in new capital formation. This increased credit tends to bid up commodity prices and hence the living wage. | Increased bank credit to finance the bidding up of housing, stocks and bonds raises the cost of housing and of buying pension income, leaving less to spend on goods and services. |
| Supports democracy to the extent that the lower house will back industrial capital in its fight against the landlord class and other rentiers, whose revenue adds to prices without adding value. | Finance capital joins with “late” industrial capitalism to oppose pro-labor policies. It seeks to take over government, and especially central banks, to support prices for stocks, bonds, real estate and packaged bank loans gone bad and threatening banks with insolvency. |
| Industrial capitalism is inherently nationalistic, requiring government protection and subsidy of industry. | Finance capital is cosmopolitan, seeking to prevent capital controls and impose free trade and libertarian anti-government policy. |
| Supports a mixed economy, with government paying for infrastructure to subsidize private industry. Government works with industry and banking to create a long-term growth plan for prosperity. | Seeks to abolish government authority in all areas, so as to shift the center of planning to Wall Street and other financial centers.
The aim is to dismantle protection of labor and industry together. |
| Banking and credit are industrialized. | Industry is financialized, with profits used mainly to increase stock prices via stock buyback programs and dividend payouts, not new R&D or tangible investment. |
| Favor industry and labor. | Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors. |
[1] I provide the charts in The Bubble and Beyond(Dresden: 2012), Chapters 7 and 8, and Killing the Host(Dresden: 2015).
[2] “The Theory of Dynamic Economics,” Essays in Economic Theoryed. Rexford Guy Tugwell (New York: 1924), pp. 96 and 98, originally in The Publications of the University of Pennsylvania, Political Economy and Public Law Series 3:2 (whole No. 11), 1892, p. 96. Europe’s aristocratic governments developed their tax policy “at a time when the state was a mere military organization for the defense of society from foreign foes, or to gratify national feelings by aggressive wars.” Such states had a “passive” economic development policy, and their tax philosophy was not based on economic efficiency. I provide the details in “Simon Patten on Public Infrastructure and Economic Rent Capture,” American Journal of Economics and Sociology70(October 2011), pp. 873-903.
[3] George advocated a land tax, but his opposition to socialism led him to reject the value and price concepts necessary to define economic rent quantitatively. His defense of bankers and interest rendered his policy recommendations ineffective as he moved to the libertarian right wing of the political spectrum, opposing government investment but merely taxing the rent taken by privatizers – the reverse of what Patten and his pro-industrial school of economists were advocating, based on classical value and price theory.
[4] “The Theory of Dynamic Economics,” p. 98.
[5] Speech of June 24, 1877. He used Latin and said “Sanitas, Sanitatum” and translated it as “Sanitation, all is sanitation.” It was a pun on a more famous aphorism, “Vanitas, vanitatum,” “Vanity, all is vanity.”
[6] William Lazonick, “Profits Without Prosperity:Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,”Harvard Business Review, September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored(Oxford: 2020).
[7] Joan Farre-Mensa, Roni Michaely, Martin Schmalz, “Financing Payouts,” Ross School of Business Paper No. 1263(December 1, 2020), quoted by Matt Stoller,”How to Get Rich Sabotaging Nuclear Weapons Facilities,” BIG, January 3, 2021.
[8] Eileen Appelbaum and Rosemary Batt, Private Equity at Work: When Wall Street Manages Main Street (Russell Sage: 2014). See also Eileen Appelbaum, Written Testimony before the U.S. House of RepresentativesCommittee on Financial Services, November 19, 2020.
[9] George Akerloff and Paul Romer, “Looting: The Economic Underworld of Bankruptcy for Profit,”https://www.brookings.edu/wp-content/uploads/1993/06/1993b_bpea_akerlof_romer_hall_mankiw.pdf
[10] Sheila Bair and Lawrence Goodman, “Corporate Debt ‘Relief’ Is an Economic Dud,” Wall Street Journal, January 7, 2021.
[11] Desai, Radhika. 2020.‘The Fate of Capitalism Hangs in the Balance of International Power’. Canadian Dimension, 12 October. https://canadiandimension.com/articles/view/the-fate-of-capitalism-hangs-in-the-balance-of-international-power . See also Geoffrey Gardiner, Towards True Monetarism(Dulwich: 1993) and The Evolution of Creditary Structure and Controls(London: Palgrave, 2006) and the post-Keynesian group Gang of 8 popularized the term “creditary economics” in the 1990s.
[1a] This article is based on Chapter 1 of Cold War 2.0. The Geopolitical Economics of Finance Capitalism vs. Industrial Capitalism (Dresden, ISLET: in press; Chinese translation 2021). © 2020. All rights reserved.
[2a] I provide the charts in The Bubble and Beyond (Dresden: 2012), Chapters 7 and 8, and Killing the Host (Dresden: 2015).
[3a] “The Theory of Dynamic Economics,” Essays in Economic Theory ed. Rexford Guy Tugwell (New York: 1924), pp. 96 and 98, originally in The Publications of the University of Pennsylvania, Political Economy and Public Law Series 3:2 (whole No. 11), 1892, p. 96. Europe’s aristocratic governments developed their tax policy “at a time when the state was a mere military organization for the defense of society from foreign foes, or to gratify national feelings by aggressive wars.” Such states had a “passive” economic development policy, and their tax philosophy was not based on economic efficiency. I provide the details in “Simon Patten on Public Infrastructure and Economic Rent Capture,” American Journal of Economics and Sociology 70 (October 2011), pp. 873-903.
[4a] George advocated a land tax, but his opposition to socialism led him to reject the value and price concepts necessary to define economic rent quantitatively. His defense of bankers and interest rendered his policy recommendations ineffective as he moved to the libertarian right wing of the political spectrum, opposing government investment but merely taxing the rent taken by privatizers – the reverse of what Patten and his pro-industrial school of economists were advocating, based on classical value and price theory.
[5a] “The Theory of Dynamic Economics,” p. 98.
[6a] Speech of June 24, 1877. He used Latin and said “Sanitas, Sanitatum” and translated it as “Sanitation, all is sanitation.” It was a pun on a more famous aphorism, “Vanitas, vanitatum,” “Vanity, all is vanity.”
[7a] William Lazonick, “Profits Without Prosperity: Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off,” Harvard Business Review, September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored (Oxford: 2020).
[8a] Joan Farre-Mensa, Roni Michaely, Martin Schmalz, “Financing Payouts,” Ross School of Business Paper No. 1263 (December 1, 2020), quoted by Matt Stoller,” How to Get Rich Sabotaging Nuclear Weapons Facilities,” BIG, January 3, 2021.
[9a] Matt Stoller, ibid. See also his article “Crime Shouldn’t Pay: Why Big Tech Executives Should Face Jail,” BIG, December 20, 2020.
[10a] George Akerloff and Paul Romer, “Looting: The Economic Underworld of Bankruptcy for Profit,” https://www.brookings.edu/wp-content/uploads/1993/06/1993b_bpea_akerlof_romer_hall_mankiw.pdf
[11a] Sheila Bair and Lawrence Goodman, “Corporate Debt ‘Relief’ Is an Economic Dud,” Wall Street Journal, January 7, 2021.
[12a] Desai, Radhika. 2020.‘The Fate of Capitalism Hangs in the Balance of International Power’. Canadian Dimension, 12 October. https://canadiandimension.com/articles/view/the-fate-of-capitalism-hangs-in-the-balance-of-international-power. See also Geoffrey Gardiner, Towards True Monetarism (Dulwich: 1993) and The Evolution of Creditary Structure and Controls (London: Palgrave, 2006) and the post-Keynesian group Gang of 8 popularized the term “creditary economics” in the 1990s.
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I have heard MICHAEL HUDSON talk about this before and it makes perfect sense to me. Industrial capitalism is when people try to produce real goods and services that other people need in the most efficient way. Whereas financial capitalism is when people try to accumulate the financial wealth of others in the most efficient way.
“One of his key conclusions:
The result is a “deep state” supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not labor, whose resentment is turned against foreigners and against designated enemies within.”
Yawn.
So, in conclusion, “”we” need even more government to save us all from “finance capitalism” [however defined]”, and become “more like” China’s “superior” economy, right?
Conclusion: Hudson is just yet another know-nothing-know-it-all Marxist proscribing yet more government [and presumably Marxist] fake “solutions” to problems [eg “Finance Capitalism”] mostly caused by the government in the first place.
Same old Marxist B.S. from the Marxist Hudson. It never ends.
“Similarly, the dominant mobile payment platform player, Alibaba, is private.”
Yeah,right. 😂. In China, firms like AliBaba are private!🤣 Get a grip! Do you understand that the Alibaba CEO [Jack Ma] has apparently completely disappeared recently? Either he wised up, or , far more likely] he’s been disappeared by the Chink communo/fascist elite. Either way, it would appear to demonstrate that Alibaba is not private now, even if it started out that way [unlikely, but admittedly possible].
No regards, onebornfree
Excellent dissertation on what is driving this country to the crapper.
Ava Rice is a greedy bitch.
“Hudson is just yet another know-nothing-know-it-all Marxist proscribing yet more government [and presumably Marxist] fake “solutions” to problems [eg “Finance Capitalism”] mostly caused by the government in the first place.”
Don’t you mean ‘prescribing‘? I can’t make sense of it as it is.
Disraeli was a psychotic Zionist who wanted the British people empowered because he wanted to rule the world via Imperialism, not out of the goodness of his heart. He was the equivalent of the liberal-neocon axis roosting in the U.S. today.
Now, one may argue that the British Empire was good for the world, or at least good for “progress” and “modernity,” just as one may argue that the U.S. Empire and its wars are good for progress and modernity or Communism and its wars were good for progress and modernity.
The question is, At what price? Another question is Would progress and modernity take place anyway if Zionists were eliminated from the face of the earth, only at a more measured and natural pace, as opposed the frenetic killing frenzy and greedy, no-holds-barred push for Ever More Money And Power that Zionists epitomize?
I believe the answer is a resounding Yes!, because by eliminating Zionists, one is eliminating ruthless, insatiable, rapacious, irrational (to the point of fanaticism), greed. One is also eliminating the totalitarian control pathology (control freakery) which at its root is motivated by irrational greed.
Yes, the story of Jesus’ crucifixion at the instigation of the Hebrew Moneychangers in order to preserve the corrupt racket and inside job that they had set up (and are still running) is all one needs to know about the nature of the “Jews” and their like-minded lickspittle. But it’s also all one needs to know about the nature of the Imperial Romans who carried it out.
And it’s all one needs to know about the nature of this three headed Marxist-Zionists-Imperialist beast known as Neoconservatism today.
It’s got multiple ways of taking in the suckers, most of whom are only “suckered” by their own greed or egomania. It’s really not hard to sucker scum of low character. Just wave a few shekels under their flaring nostrils, or maybe their vice of choice. They’ll melt right into your arms like the whores they are.
Michael Hudson makes a lot of good observations,
but then strews in some absolute bullschiff statements such as
I really don’t know what to make of the author – is he trying to put a nice wrapper around things he believes we should target to make them more appealing to average readers, just like Marx’s messianic ‘classless society’ supposed goal?
Why can’t we have some real, honest debate about things without Orwellian redefinitions of terms, such as ‘socialism’?
The problem with philosophical narratives is that they aren’t rigorous. Political philosophers see a world from a perspective of what is morally fair, rather than from a rigorous scientific view. Only in philosophical or political thought is “debt capital” evil. In proper scientific thought, a mathematical model composes the various forms of capital, into system, without judgements as to whether they are bad or good. In a free market, there are many game players. In the case of debt and equity capital, those who make the right or optimal decisions end up controlling most of this capital. In mathematical game theory, they are better at optimizing the allocation of resources. In contrast, Marxist or Socialist philosophers think their socialist virtues are always right, so that makes them best at allocating resources fairly. So, which would you choose? the mathematical efficiency of the market or the moral superiority of a Marxist philosopher who knows what’s fair?
To understand the psychology of a brainwashed Jew — from Marxist to Capitalist to Zionist — you need to understand the psychology of the Moneychanger Hebrew.
The Moneychanger Hebrews (the Jewish establishment) had long betrayed the nationalist Prophets, who manifested in Moses. In fact, they had betrayed them for so long that they changed the nature of the Jewry from a nationalist entity to a grifter nation.
This grifter nation is still with us today, and with its acolytes, now bigger than ever. And they putrefy everything the touch because their character is putrid. The entire psychology of Jewry today is “Defend the Grift at any cost!”
What is the Grift? World fiat currency, and total control of it. And only when Zionists have totalitarian control will the world be delivered into Paradise, heaven and earth united.
Of course, it’s all a big lie — the Biggest Lie — because it’s a concoction of Moneychanger liars who have piled lie upon lie for centuries, so much so that their very essence has become the Big Lie.
“You are of your father the devil, and your will is to do your father’s desires. He was a murderer from the beginning, and has nothing to do with the truth, because there is no truth in him. When he lies, he speaks out of his own character, for he is a liar and the father of lies.”
Christian nonsense? Or a statement of truth from a Jew about putrefied character of the “Jewish” establishment?
So Judeofascist wealth and monopoly control is because they have “made the right or optimal decisions about controlling most capital, and are better at optimizing the allocation of resources,” and not because they have successfully set up a Satanic racket that funnels the lion’s share of earnings and resources of honest folk to themselves and their totalitarian Zionist quest?
It’s really interesting how the soulless materialist left and right are in complete agreement that the Judeofascist conspiracy must be studiously ignored, lest the chameleon string-pullers behind the Satanic status quo that is the source of their corrupt and bogus wealth get their boat rocked. I guess primitive, reptilian minds think alike.
Hudson
Chris Moore
This comment is off-topic. From the point of view of the discussion of the effect of what Disraeli was doing, Disraeli’s ultimate motives are completely irrelevant.
The brilliance of this analytic history of economics is outstripped by the genius of the pedagogic presentation.
By far the most significant, and understandable article I have ever read on political economy.
So the fact that Disraeli was an eternal “Jew” with his ultimate eye on Zionist totalitarianism is irrelevant? Sorry, I don’t compartmentalize like that. Advanced reptiles and ZOGbots might. My computer might. AI might. I’m still a human being and intend to stay one.
There’s talk of Big Tech, Big Bank, Big Media, Big Government, and etc.
But it all comes down to the Big Jew.
Why are people so silent about the financialization of the economy? Because Jews run it, and it is taboo(aka ‘antisemitic’) to call out on bad Jewish behavior.
Just think. If Wall Street were run by Mormons or Hindus, lots of people(not least pushy Jews) would be calling for more ethical behavior, more transparency, and more justice. The reason for the silence is JEWS run finance. Likewise, because blacks are Holy, there’s so much silence about black criminality and violence. When blacks act like animals, they are called ‘teens’ or ‘youths’. So, the blackness of criminality is ignored when a single criminal black is killed by cops, it is a big big BLM news about ‘systemic racism’.
Financial corruption got out of hand because Jews are the Made Men of America. But it’s the same in foreign policy. Why do Jews get away with all those mass-murderous Wars for Israel? Because of the power of the Big Jew, which is behind Big Tech, Big Banks, Big Media, and etc.
Indeed, Karl Marx mentioned the Jewish Factor in capitalism. One of his main reasons for wanting to end capitalism was it made Jews act like total louts and made anti-Jewish feelings worse.
With Jews in command of things, so much is crooked. Is there something about Jewish nature that makes them more corrupt and sneaky? Perhaps, the reason isn’t only the lack of criticism as the result of the Jew Taboo. After all, it was permissible and even encouraged in many quarters to stick it to Jews. It was commonplace for people to be critical of Jews in the US and Europe, but Jews back then were acting much the same. Consider Jewish behavior during the Weimar Period in Germany. Back then, it was permissible for National Socialists and others to call out bad Jewish behavior, but Jews still wouldn’t stop and caused a massive backlash.
In finance, Jews mastered the con-art of the ‘Short-Sell’. In Big Media, Jews mastered the con-art of what might be called the Short-Tell. Both cons operate pretty much on the same principle. Jews bet on the future by creating a particular future scenario through their manipulation of money or information.
The Big Jew needs to be named.
Only way Big Labor can come back is with National Capitalism. Open Borders means the globalist elites win both ways. They can ship factories overseas to where labor protection is weak and can import cheaper labor to undermine the native work force.
Another problem is universal elitism. Everyone is told
(1) you need to get a college degree and do white collar work… or else you’re a loser. The end result of this is too many people want ‘clean’ jobs and don’t want to raise kids who might turn out to be ‘losers’. And as women take jobs from men, there are fewer men with good jobs to attract women with.
(2) look at all the famous celebrities with fame and fortune; if you can’t be like THOSE people, you’re a loser. So, many people prefer to stare at TV fantasies than develop ‘loser’ lives of their own.
So, if Hudson isn’t for nationalism and secure borders, he’s not for real. Labor movements can work nationally but not globally. It’s hard enough to unite workers in a single nation. Unite workers around the world? A pipe dream, esp as the elites can exploit national and cultural differences.
National Socialism was good in emphasizing the Volk. It meant all Germans mattered. It didn’t matter if they worked with a pen or a shovel. They were special as part of the national family.
Today, Zionism has this element, and it’s why Israel has healthy birth rates. But of course, Jews want Volkism only for themselves. “Volkowicz for me, Dorkobitch for thee.”
Who will bell the cat?
The systematically degraded character of the Western Man, and the relentless “anti-Semitism” shtick — by the Big Jew and its belly-crawling lickspittle — guarantees that no critical mass will form to name it.
Muscular Christianity had no problem naming the Big Jew, which is why it had be destroyed by Zionist scum.
Some things never change. The gutless Zionist scum assassins will kill and kill and kill until the final confrontation.
Oops! Thanks for noticing my mistake. At least you seem to have understood what I actually meant, despite my error in grammar.
Regards, onebornfree
I had said : “Alibaba CEO [Jack Ma] has apparently completely disappeared recently? Either he wised up, or , far more likely] he’s been disappeared by the Chink communo/fascist elite. ”
Apparently he’s now reappeared after a 2 month absence. And I’m sure there’s a really good “believable”explanation that completely exonerates the Chinese government from having any involvement in his mysterious absence 😎
Regards, onebornfree.
Not really true. These businesses are valued based on reliable profitability. Let’s say a private equity fund buys a company valued at nine times profits, e.g., using a small down payment. If the ‘financial managers’ can then sustainably increase profits by 25-50%, they win.
How to do it? Slash costs, even if it also causes revenue to go down a bit. Some of that revenue is from annoying, unprofitable customers. Fire any unprofitable customers and profit immediately increases. Next, try increasing prices. Monitor your sales staff so they don’t give out discounts at the drop of a hat to win deals the easy way.
Next, acquire a competitor and repeat all of the above with what you learned in the first go-around.
Not every firm has to be innovative.
Hudson’s idea that it is so awful to run the private equity playbook – apparently he wants a bunch of firms with rocking chairs for their aging-in-place employees. Face it, most firms can’t innovate from within. Cut the fat, cut some fatty muscle as well. Employees who are nice folks, but who are unimportant to collaboration, sales and profits, need to hit the bricks. Their workaday efforts smother any sense of urgency or innovation in the firm.
agree. the clarity of the ongoing power struggle is stunning, brilliantly described. we are in a final fight for humanity: feudal oligarchy slave based or human & climate valued rather than mere commodities. michael hudson has made it that clear. all the hate based propaganda is simply to numb & blind the crowd. zh will demonize china, the msm will demonize russia…left right centre, not one seeing the game or what’s @ stake or how we are being played. bless you, michael hudson we are so fortunate to have you, an avatar, amongst us. thank you for your light.
You have a good point that free markets don’t function well (nor does governance) if a segment of the population has distrustful and uncooperative behaviors. A free-market economy relies on competition between players who engage in “cooperative” competition (i.e. conforming to “cooperative” mathematical game theory) instead of “uncooperative” games. In the later case, the uncooperative players tend to win and degrade the game.
Is there “Judeofascist wealth”? That’s an interesting question, because the per capita gdp of Jewish Americans is far higher than the per capita of Israeli Jews. This suggests they are scoring uncooperative gains in our free market economy. It’s not going to last much longer, because 58% of Jewish Americans are now marrying non-Jewish partners.
“You have a good point that free markets don’t function well (nor does governance) if a segment of the population has distrustful and uncooperative behaviors. A free-market economy relies on competition between players who engage in “cooperative” competition (i.e. conforming to “cooperative” mathematical game theory) instead of “uncooperative” games. In the later case, the uncooperative players tend to win and degrade the game.”
You obviously do not understand how free markets work in reality. It has nothing to do with game theory, for one, and for another, in free markets, people are free to either cooperate [buy/sell], or not if they feel that that [i.e. non-cooperation] is in their best interest, at any point in time.
Thats what makes them free markets, fer chrissakes!
In free markets, people are free to “non-cooperate”, and do so all the time , by not buying, and not selling when they supposedly “should”. It’s not a problem- the free market will _always_easily adjust to either type of “non-cooperation”, and goods and services prices then are forced to readjust accordingly until prices/terms of buy and sell again reflect approved of levels, and exchange of goods and services resumes naturally, because its now in everyone’s personal interest to “cooperate” and exchange.
What _is_ a problem is government interference [via regulations] in markets, where people are either forced to not sell at a price they want, or forced to sell at a price they don’t want, by the government, because of that interference.
In other words, the government enforces non-cooperation on individuals via its interference in the markets natural processes. But even then, the market ultimately readjusts, either directly via price adjustment [dramatically up or down], or via the safety-valve substitution of both grey, and black markets, wherever possible.
Bottom line: Mr Free Market always wins the governments battle against him, no matter what it tries to do to him.
And being “jewish”[however defined], or any other race/ethnicity/religion, makes absolutely no difference one way or another to the natural, constantly occurring despite government interference, market processes, BTW. 😎
“Regards” onebornfree
So ethno-religious organized crime (Zionists) infiltrating government to corner the market (e.g. mass media monopolies working hand in glove with the state) has absolutely no effect on “free markets”?
That’s what Zionists are working to eliminate. They want the People forced into a choice between ZOG propaganda channel A and ZOG propaganda channel B — and eventually even that “choice” is to be eliminated.
This is destructive to society. For example, “free market” advocates ignored the Zionist conspiracy to infiltrate government and monopolize mass media in the decades leading up to the Zionist 9/11 inside job. Consequently, when three towers were supposedly knocked down by two planes in what by all appearances was a controlled demolition, the mass media and corrupt government repeated over and over (brainwashed) the public into believing it was two planes hijacked by Islamic terrorists that knocked down the towers, and used it as a pretext to take America to war.
“Free market” advocates can only sustain their narrative by ignoring the Judeofascist monopolists right under their nose — and in many cases paying them plenty of filthy lucre to see no evil, speak no evil, hear no evil.
And because they’re soulless materialists, they have absolutely no problem taking their Judas silver. Oh, but they’re “born free” — free to betray.
I don’t much care for economists. But I do like Hudson’s point of there being two kinds of capitalism: industrial and financial.
In the common vernacular, I would break these concepts into two categories: (1) people who make stuff and (2) people who buy and sell stuff others make.
For the last five hundred years, Europeans of “Christendom” were really good at making stuff. We are very good applied scientists as well as theoretical scientists. There really has not been anything like the industrial revolution any other time in history. As long as we made stuff, the wealth and prosperity produced by these things made things better for most of America and Europe. Not better for all. But better for most.
But in the last fifty years, the people who buy and sell the stuff others make, have been allowed to become the dominant force in our economy. And the end result is that a few of those who buy and sell stuff have made a fast fortune and the vast majority of the rest of us have seen things significantly decline.
I really don’t care if the few who made these vast fortunes are mathematical geniuses. For the good of us all, they need to be stopped, the market be damned. Screw market ideology.
And the reason they need to be stopped is because history has shown that when the buy-and-sell people take over, civilizations fall. If you don’t want civilization failure, there are only two options: (1) have the government stop them, or (2) have a people’s revolt of some kind that takes stops them.
Having the government do it is preferable to a people’s revolt.
Alas, your valiant attempts to make a dent in the titanium-coated dogma of a Lolbertarian such as onebornfree-of-the-ability-to-see-what-stares-him-in-the-face will never bear fruit. He and all his ilk are nothing more than the (((masters of the free market)))’s bitch. Moreover, they appear to revel in this accursed role, and they are utterly impervious to all reason.
Let them wallow in the Jews’ triumph. They are not our friends, and no amount of polite entreaties will ever call them to the action so necessary if we are ever to throw off our burdensome and repulsive yoke.
I think there were quite a few lesbian undertones in Nina and Cassie’s relationship. When Molly Shannon tells Carey Mulligan to move on, we can see how Cassie is unable to do so. And also the fact Cassie hangs on the memory of her deceased beloved friend with such intensity seems to indicate a platonic (at least) relationship with Nina. It’s that the reason Cassie cannot forgive Ryan.
All the Marxist talk about the “non-productive”, “rentier” landord class is ahistorical and idiotic nonsense (never mind the fact that Marx traced accumulation of capital itself necessary to kickstart capitalism to the loot extracted by that class, and so the very word “capitalism” he clearly applied as a brand of shame, intended to delegetimize the emerging political order from the start). Chiefly because of the assumption – inherited by Marxism from then on and up to this date – that local administration, maintenance of order necessary for the society to function, and mobilization of resources against neighbors who think that your stuff should be their stuff, just occur magically on their own. There is a (probably intentional) blind spot the size of state apparatus in all the Marxist thought constructs, and they completely disregard the fact that the state bureaucracy can be a social class of its own (indeed, the class that came to rule, and rule far more oppressively than any feudal lord in every country that fully succumbed to Marxism).
Today’s world has indeed freed economies from the burden of hereditary ground rent. Almost two-thirds of American families own their own homes (although the rate of homeownership has been falling steadily since the Great Obama Evictions that were a byproduct of the junk-mortgage crisis and Obama Bank Bailouts of 2009-16, which lowered homeowner rates from over 68% to 62%). In Europe, home ownership rates have reached 80% in Scandinavia, and high rates characterize the entire continent.
The last time I checked, if you have to regularly pay someone if you want to keep your home, you do not own it. In USA and across Europe, you have to pay real estate taxes – and usually pretty hefty taxes – for the privilege of being deluded about your “homeownership”. The afore-mentioned state bureaucracy needs to eat too.
Marx expected the logic of industrial capitalism to free society from its rentier legacy and to create public infrastructure investment to lower the economy-wide cost of production.
Marx lived in the age when the tragedy of commons was an everyday occurrence, and the major barrier on the way of developing the agrarian sector, yet somehow overlooked the fact that such investment will inevitably (a)disproportionally benefit all the rich people who game the system to avoid contributing their fair share, and consequently punish honest entrepeneurs (b)massively expand the bureaucratic class, as to manage said infrastrure, a class which will not naturally be interested in making the infrastructure it manages run efficiently, for gains from lowering the economy-wide cost of production will not benefit it directly (the very reason why USSR economy operated so inefficiently).
“(1) have the government stop them.”
I agree, but the problem is that the government is currently in LEAGUE with finance capitalism. The two are colluding together. The politicians are owned by these guys.
If the government had been actively enforcing already-existing monopoly laws, things would not have gotten out of hand.
But I do agree with onebornfree as well. Look at what the Federal Reserve is getting away with. If they weren’t manipulating interest rates, rates would have risen, which would have caused asset prices to decline. Instead, they continue to expand the bubble THEY have created. The world is awash in cheap money, creating so much inequality and destruction of precious commodities.
How about Biden’s $15.00/hour? “Yay,” the people cry, but what they don’t realize is this will just produce more inflation (more dollars chasing assets) and forcing up prices, and they’ll be back in two years’ time asking for more. It’s not how much you make, but what you can buy with what you make.
Look at what welfare has done to the Black population. It has made them dependents, unable to stand on their own two feet, and it has cost the white middle class dearly in terms of tax dollars.
I agree governments should be active on behalf of the PEOPLE, but only in a few select areas. Whenever they get involved, they just create winners and losers.
And right now the winners are the multinational corporations and finance capitalism, along with the politicians who are lining their pockets.
A people’s revolt is what worries them, and a people’s revolt is exactly what it’s going to take to wrestle control from their greedy little hands. They will not give it up willingly.
Casino scrapitallism has arrived at its gamestop moment
….as it says at the end of the book of revelation “Time is no more”
President Trump is the last 45th Holy Roman Emperor
The deep state Napolean Bonerparts will now try to dominate
themasses with their strip poker game
“I agree governments should be active on behalf of the PEOPLE, but only in a few select areas. “
Asking/expecting government to fix _anything_ is a guaranteed recipe for disaster, because:
“The State is a gang of thieves writ large – the most immoral, grasping and unscrupulous individuals in any society.” Murray Rothbard
“The state has typically been a device for producing affluence for a few at the expense of many.”
Murray Rothbard
And besides which : “Everything government touches turns to crap” Ringo Starr
Which, in conclusion means that:
“The kind of man who wants the government to adopt and enforce his ideas is always the kind of man whose ideas are idiotic” H.L.Mencken
Regards, onebornfree
Mr. Hudson,
Some claim that your ICIJ affliations make you suspect.
https://www.icij.org/journalists/michael-hudson/
Others claim your main mission is ultimately a promotion of Great Reset and related NWO projects:
https://www.weforum.org/agenda/2020/06/now-is-the-time-for-a-great-reset/
https://www.inclusivecapitalism.com/our-guardians/
Care to respond?
I find the relationship between Jack Ma and the Chinese ‘State’ (aka Masonics for Marxists) to be very revealing as to how China really works.
I believe that Ma represented a group of people, party members with day jobs and excess capital from bribes, that wanted to put their money to work in the new China were to get rich had become ‘glorious’. He eventually decided that it was his because he ran it. He found out the hard way that the deal he had originally made was going to have to be honoured after being shown some empty, barren rooms lit by single, low-watt bulbs with bars in the tiny windows that faced north.
It’s actually not that different from America. The idea that Eric Schmidt, Sergey Brin, Mark Zuckerberg or any of the rest of those tech ass-clowns, including Steve Jobs, were independent entities is laughable. All of these people are the public face of private partnerships. The real power does not reveal itself in America but it is now called the Deep State. It’s not okay that China have one, according to Americans like Mike Pompeo, but it is okay for America to have one although they will all deny it to their dying breath.
Labelling 100 million Americans as ‘deplorables’ and then removing their political rights is precisely the type of move that the Chinese would love to be able to do but can’t. Only in America does the Deep State (in my view, the toxic marriage of Jewish Rentier Parasitism with the Military Industrial Complex-another type of parasite) believe it has the power to tell the people to go fuck themselves.
They have no idea how badly they’ve screwed themselves.
How explain Britain, the US (Biden is saying he will) joining the Asia-Pacific free trade pact CPTPP, which China may join too.
Professor Hudson’s perspective is illuminating in many ways, but I think he sees the Western nation states’ rivalries with other countries as part of the toolkit of elites. That is not a viewpoint shared by the Western elite themselves, who are all investing in Chinese industrial growth as fast as they can. Japan is hardly based on financial capitalism; why is Japan not seen as an enemy of the US?
Conservative right-wingers are always opposing some sort of UBI or even those Covid relief checks.
But at the same time these same conservative right-wingers cheer when the stock markets goes up and when their houses appreciate in value – both of those being the result of low interest rates and money printing.
Instead of printing up trillions of dollars and giving it to Wall Street bankers, they could simply deposit UBI in everyone’s bank account, increasing M1 without adding to the debt.
We are not in danger of consumer price inflation – we are in the middle of a massive deflationary collapse as the money supply is constricted due to the failure of various quasi-fraudulent financial “instruments” – the same types that cause the 2008 collapse.
If we were to stop pumping up Wall Street and the FIRE economy, and instead replaced all of the destroyed money with direct M1 payments to citizens, we’d be a lot better off.
You make some excellent points. Let me add a few or my own…
Jew-run Wall street sees “labor” as being a necessary evil, its true value to be minimized at all cost while valuing the CEOs and “stockholders” above and beyond their true worth.
This even applies to CEOs, that run their corporations into the ground while still receiving massive “rewards” for their “expertise”.
Let’s not forget the corporate vultures (a la Mitt Romney) that specialize in parting out viable businesses in order to maximize their “profits”
Henry Ford “got it right” when he CREATED a market for his cars by making them inexpensive while paying his workforce a decent wage. He realized that a well-paid workforce would be able to buy his products, among other things. It could be safely argued that Ford, CREATED the middle class. Automobiles, once “playthings for the rich” were made affordable for the “ordinary common man”.
Henry Ford KNEW who the banksters and vulture capitalists were and made no bones about calling them out and naming them, Father Charles Coughlin did the same thing and was ostracized by the Catholic Church for pointing out the TRUTH about our vulture capitalist society.
“Vulture capitalism” can be defined as the owners of businesses and industries that collude with each other, also in collusion with the “money types” (banksters) depressing wages solely to increase their stockholder “profits” at the top while impoverishing those who actually WORK, producing their products.
All one has to do is look at today’s CEOs, even in failing companies, being paid exorbitant salaries, along with stock options and other “perks” while pleading poverty, pushing down wages for their employees.
Today’s capitalist “mantra” is that labor costs must be as cheap as possible while the “value” (profit) to the stockholder must be as great as possible. Sacrificing labor on the altar of “maximum profits” NEVER works in the long term.
Of course, in the short term, with cheap Chinese goods flooding the market, the economy looks, good, but without CONSUMERS who hold jobs that pay reasonably well, all bets are off. There needs to be a balance between profits and labor.
Presently, labor is looked upon as a “necessary evil” to be minimized at all costs. The problem arises-without labor there are no consumers. As I previously stated, a “balance” must be maintained. Labor is not evil, but a necessary component of capitalism.
Pre-WW2 Germany’s economic successes and the rapid rise of the German economy was predicated on labor being assigned “value”and monetized-something that is (and has been) missing in capitalist societies today.
If labor costs need to be trimmed to assure “profit” at the top, something is seriously wrong. In fact, in the well-paid American automobile industry, labor costs account only for approximately 10% of total costs.
Offshoring production results in consumers (customers) being “lost”.
As to “tariffs”, the American country ran on tariffs from its inception until 1913, when the “income tax” and “federal reserve” was established.
The American economy is being propped up by the “social safety net” which obscures the TRUE economic situation in the U S .
Why in the hell is Marx still revered when his theories put into practice have never worked anywhere they’ve been tried?
Ma represented a group of people called ‘Globalists’ in both his NYSE-listed Alibaba and proposed HK-listing of ANT Financial. CPC members don’t have the ‘Capital’ to finance Ma’s business ventures; that’s why Ma sought financial backing from the ‘Globalists’. How much money does a CPC bureaucrat makes from bribes? Compare that to the trillions of Capital controlled by Wall Street/City-of-London hedge funds which have been waiting for this chance of a lifetime to own a piece of China’s Fintech Sector as represented by ANT Financial. But Chinese authorities scrubbed its HK listing for the simple reason that ANT Financial didn’t have a banking license to run its Fintech consumer/business lending services. That’s why Ma was told to stick to his mobile payment services business called Alipay and restructure ANT Financial to eventually phase out its quasi-banking business. Instead of complying with Chinese regulators, Ma went to a high-profile banking forum in Shanghai where he criticized China’s banking/financial system as antiquated and mocked its collateral-based lending practices as similar to a ‘pawnshop’.
That was perceived as an attack against the Chinese System because 99% of Chinese banks are State-owned. Ma like other Chinese billionaires are allowed to own their private wealth and run their private enterprises but they are not allowed to attack the Chinese System and its Sovereign Power to control the allocation of both State and Private Capital in China’s Socialist Market Economy.
The difference between the Capitalist West and Socialist China is this: Capitalists in the West control the State and allocate Capital to serve the interests of Private Wealth while the Socialist State in China has the Sovereign Power to control the allocation of both State and Private Capital to serve the interests of the Nation.
“this will just produce more inflation”
Absurd. We’re in the middle of a deflationary collapse – due to the massive money printing that was dumped into the stock market and financial assets – which are now collapsing and destroying money. The Fed can’t print money fast enough to stave off the deflation.
The inflation is in the stock market – there is no oversupply of dollars in the consumer economy, thus, $15/hour minimum wage isn’t going to cause hyperinflation.
The best course of action is the put more M1 directly in the hands of the “consumer” – i.e., the “worker” – and allow the overinflated stock market to disinflate.
As for all the “funny money” in the various financial instruments – let them go bankrupt. GOOD.
Why is it that so-called “conservatives” and “libertarians” don’t have a clue about basic economic reality?
https://en.wikipedia.org/wiki/Triffin_dilemma
The finance Bull is safe!!
I’m afraid you’re confusing me with Michael W. Hudson at ICLJ. He’s from Virginia.
You can compare our pictures on Wikipedia — or read “The Two Michael Hudsons.”
I like him, by the way. We’ve had lunch together when he was at the WSJ.
You lack common sense. Stop the government checks and at least half the American population starves to death. 75 million receive social security retirement and disability scam checks alone. There are 25 million direct federal, state, county, city employees. Add in all the flunkies extracting a paycheck from government contractors like Boeing, Raytheon, General Dynamics and the government granted monopolies like utilities, post office, etc. The 20% of the GDP medical industry collapses without government support. Get it, dummy? And skip the assorted quotes from Mencken until you read his body of work. Ole Henry sucked up to yids hard to get published, and made several trips to the Levant where he sucked up to the Cock Cutter Cult even harder.
Some people cannot change after a lifetime of bad programming. To do so would make their life meaningless.
Who wants to admit that they were duped? Only somebody who is strong can change course.
Note that Hudson puts Lolbertarianism in the finance capitalism category:
Industrial capitalism is inherently nationalistic, requiring government protection and subsidy of industry.
Finance capital is cosmopolitan, seeking to prevent capital controls and impose free trade and libertarian anti-government policy.
Libertarians are dupes and apologists for finance capital.
Also, ask yourself how it is that lolbertarians are so well funded? Clown world is unnatural and requires funding in order to dupe and propagandize the population.
Directing new M1 toward a debt instrument changes the ratio of debt to circulating M1.
Treasury creates new debt free money, and then CHANNELS it directly at debt instruments. Housing is a good target, especially because house prices were run up in a bubble of finance corruption.
This then unburdens FUTURE payments that would go to service debt instruments. The future M1 is then allowed to stay in the supply to buy goods and services rather than vector to finance.
The former debt free money (from Treasury), when it enters mortgage ledger, disappears. Both the debt instrument and the debt free disappear simultaneously.
Ostensibly, new production of goods and services (real economic output) will come on line to match future released M1, as people are now more economically free to buy and sell from each other.
Whenever you think of the money supply, it is better to think of it as containing both debt instruments and money..
But, overall good post… thanks. Conservatives don’t understand things because they were not taught. Keeping people confused is not a bug of the system, it is a feature.
I take it then, that you think former Under Secretary of the Treasury Paul Craig Roberts doesn’t understand what is happening either. Roberts and the late Jude Wanniski were proponents of supply side economics. Both claimed that while “Reaganomics” purported to be supply side, it wasn’t. Roberts, who agrees with Hudson explains why it never happened here: https://www.paulcraigroberts.org/2018/01/03/phillips-curve-r-p/
Both Roberts and Wanniski were opposed to the Clinton crowd forcing privatization of state owned assets on Russia, claiming that it had to be organically. Both predicted what would happen if it wasn’t done slowly. Wanniski explains what happened here.: http://www.polyconomics.com/ssu/ssu-990827.htm Note that Wanniski states:
Let’s move away from economists for a minute. Even libertarian Ron Paul has recognized that the Chinese are the real capitalists.
There are several premises out of context for the start of industrial capitalism and feudalism by Hudson with which I don’t agree. However, his summation of how economies are hobbled by finance capitalism, is little different in substance than what Clifford Douglas saw when developing his Social Credit economic theory.
Anarchy looks good on paper, like a lot of other political theories do, but don’t work well in practice.
It helps to have some sense of history.
______________
A good case can be made that Industrial Capitalism was invented in Massachusetts Bay Colony. The Colony directed new bills of credit at industry, especially the first iron works. Merchants were enjoined to take the bills of credit as if they were money. In those days, people thought of money as gold or silver.
The bills of credit were like bank money but issued by sovereign authority, where they were allowed to circulate for a time, and then were recalled to the sovereign’s ledger.
At the same time, Mass Bay also issued debt free money in the form of Mass Bills. The Massachusetts Bills paid the interest on the Bill of Credit debt instruments.
This form of economy transmitted through John Winthrop finding Benjamin Franklin, and then making its way into the constitution, especially the general welfare clause.
General Welfare is a form of socialism. The “social” is fire departments, public health, and improved labor value to produce goods in an evolving industrial setting.
Michael Hudson notes that Bismark was running industrial capitalism and is aware the Frederick List transmitted the American System to Germany. List learned of the system from the writings of Matthew Carey, who was Franklin’s protege.
_______
The second good case can be made that Finance Capitalism was invented in Amster-damn, by our (((friends))).
This revolutionary finance capitalist system included new elements:
1) Private banking ledger credit money
2) Stock market innovations, such as gets/puts and future contracts
3) The first corporations
4) Corporate stock is on-sold into “free markets.”
Stock Market was capitalized with private bank credit, which then morphed into a cross directorate of owners.
When finance capitalism jumped to City of London, it could then spread world wide on the back of mercantilism and colonialism.
Thanks for this. I would add, however, that the hated “feudalistic” monarchy (led by Prince Albert) and long before Disraeli, with support from several “evil” feudalistic large land owners, were the push behind many of the reforms that improved the living conditions of the working poor. They understood that revolution was inevitable if they didn’t. While the following appeared on PBS, it is a British production.
https://www.pbs.org/show/prince-albert-victorian-hero-revealed/
It takes a lot of optimism, courage and goodwill to do what Michael Hudson is doing:
Take the dialectical materialism as it explains a natural and inevitable progression
from early days industrial capitalism through financial oligarchy to socialism
To take this explanation to Americans – without a doubt – the most retarded and brainwashed nation in the world in terms of understanding the subject of Political Economy ?!
I will try an lend a pessimistic helping hand here:
https://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch03.htm
Hudson, like most Americans, conflates socialism with communism. Most of Marx’s “observations” on capitalism, were “borrowed” from whom Hudson refers to as Marx’s “less radical contemporary reformers”. Marx’s solutions were the problem, not the already well established “observations”. Under Marx, the international movement purged the real socialists who saw Marx’s solutions as authoritarian. Proudhon, whom Hudson mentions, is known as the father of anarchy, and called Marx “the tapeworm in socialism”. It was Proudhon’s 1840 book What Is Property? An Inquiry into the Principle of Right and of Government that began the concept of “property is theft”. Bakunin was less charitable https://libcom.org/library/bakunin-marx-rothschild
In short, the extreme socialism is an anarchy, believing co-op like structures trading freely with other like structures, were the future inheritors of capitalism. Marxism is an all powerful state. They are polar opposites.
Well, this article is better than the previous one, parts of it can be useful. The real problem is government failure and how to get it back on track. It’s a political problem, the economics of it is only one side of the story. The government is no linger of/by/for the people, it’s now servicing a narrow circle of scammers who crave dictatorial powers, the process has been called “regulatory capture” for quite some time.
Nice to have stats describing the extend of this Ponzi scheme, protected and financed by the government. It’s not the only one, of course, I’m not sure if the article mentions others, I’ll have to finish reading it later.
As I have stated elsewhere, most of Marx’s economic theories were not his, and his solutions were the division between Marxists and his socialist opponents. That being said, tell me where they have been allowed to be tried without capitalists engaging in some sort of war on them to disrupt any chance of succeeding. All wars are economic wars. Reagan sent out Lee Wanta in a clandestine operation to crash the ruble, which led to the dissolution of the USSR. Sanctions on Venezuela and others are wars without shooting.
I suppose you believe that WWII was about German plans to rule the world, not that they had shed themselves of domination by the international banking cartel and were engaging in trading commodity for commodity, which was growing more popular.
So, in the incredible world of ruralguy, these are the only two options???
If I try to parse what you wrote, I can only come up with:
– extreme socialism is [close to] anarchy
– but even in [close to] anarchy circumstances, co-op like structures form
– but then somehow those co-op like structures are not all powerful mini-states.
The self-contradiction is exactly in the ‘property’: someone owns it – if not individuals, then the co-op which becomes [locally] all powerful, just by that.
(I.e. you cannot “define away” the concept of property.)
You are really scared of Truth
God, you are shivering in every word and sentence!!!
Of what? Of the clear sequence of progress?
Natural and inevitable progression
from
early days industrial capitalism through
financial oligarchy of imperialism
to socialism and followed by
communism
It is easy to understand for anyone who is not an American:-)
This article is just a long trope about “bankers” and “debts”. The only question in life is legal enforcement, completely ignored throughout the essay, as usual. Who cares what the “money” is when we al have lot’s of it anyway? Always assuming scarcity: land is not scarce, ecological time is constant, and resources are effectively limitless.
Mortgage bankers do not “accumulate” the rental value of land, they hold mortgages on land titles. It’s just a lien position, and this is the fatal defect in all economists: they never understand the operation of law. A thousand people hacking away at the branches, almost no one striking the root.
Debt is just a calculus, otherwise it’s completely unreal. The opposite conclusion is true, that all “wages and profits” must vanish over time, and EVERYTHING will become ‘financialised’, as it should be. Break all economy down to network tokens that actually integrate instead of jostle.
More people literally walked away from their homes and left them abandoned than were ever “evicted”, and the 10 year free stay that most resistors gained was enough to literally buy a home for cash, if you wanted. Low cost housing abounds almost everywhere, and it is only cultural and ideological limitations that refuses to see it. The Rust Belt is due to the rusty people that made it that way, not because of “financial capitalism”. More excuses more excuses more excuses for decrepit white people.
That’s because Marxism is realistic, and Proudhon just idealistic nonsense. Property is NOT theft, it is the title of things and places which develops over the course of time among people in society. It’s defining the property which counts, and this is the English genius of law at work. I’m sure the French genius is similar, and most legal systems recognise the same principles, but there is something dissolute and worthless about Proudhon, and notice it went nowhere either.
People that have to focus on real life and make immediate gains quickly lose patience with intellectualism. Agree or disagree, Marxism has been effective, and this is the only standard that counts. Same for Bakunin and all the rest: in reality mainstream society will always tilt “Marxist”, which is just the modernisation of liberal capitalism into the State, something unavoidable anywhere. The state is the health of the nation, and this was ordained by God from on high at the beginning.
I choose mathematical efficiency, but somebody has to define the “game theory” first:
I am better because I will defeat them in combat each time. All markets draw the form of combat, but what has taken hold now is pestilent lawyer-driven fantasy trope. The article assumes everything as “given” and “fixed”, while missing about 90% of the game.
Who cares about “mortgages” and “banks” when all claims are defeated by adverse possession and legal time limits? The system is so disorganised and chaotic that anyone can show up and claim the rights of a mortgagee, while at the same time anyone can easily deny payments or even signing the mortgage from day one. The utter disconnect between form and substance today leaves only chaos, not “market efficiency” in the ordinary sense of resource allocation.
What’s the point for any of it when money is just digits authorised in a computer? The market IS socialism, it socialises virtues according to the regulated plan of banking. It is much more efficient to unify and counter balance, like every structure in life.
It takes a long time for war-time propaganda and Jewly-wood conditioning to exit the brain-space of a population. It takes a lot of effort to overturn old stale narrative.
Schacht’s trading banks were commodity to commodity, and also commodity to goods.
For example if Germany wanted Tin from Burma, it would make an order to a Burmese trading bank. The bank would then issue Kyats to start mining. Tin, a commodity, would transfer to Germany, and meanwhile Burmese workers were paid in their national money i.e. Kyats.
In the meantime, a trading bank in Germany would issue an order for industrial goods, say sewing machines. The bank would issue Reichsmarks to start the industrial production of sewing machines.
Burmese were paid in Kyats, and Germans were paid in Reichsmarks, and the (((international))) finance class was cut-out of their chance for profit. Purchasing power exchange rate was negotiated between the nation states.
http://www.renegadetribune.com/winston-churchill-germanys-unforgivable-crime/
Article I, Section 8 says:
“The Congress shall have Power To … provide for the common Defence and general Welfare of the United States;”
Notice it says provide for the … general Welfare not the specific Welfare. And therein lies the problem.
Adjudicating need is far harder to accomplish than adjudicating guilt. While it may appear to be more equitable to adjudicate need than to give the need to everyone, the process of adjudication leaves those who receive no benefit from the government resenting those who do. Adjudicating need is a fool’s errand and it can change from minute to minute. And adjudication requires a vast fortune which probably costs more than the cost of giving benefit to those who don’t need it.
There is an axiom about adjudicating guilt that goes like this: Better to let nine guilty men go free than to punish an innocent man.
Conversely it would seem that it is better to give a benefit to one who does not need it than to fail to give it to nine who do.
If we are going to do welfare, do it for all or none, because adjudicating need never works. It just splits every one up.
And we should have never passed the Federal Reserve Act. On that he and I agree. I have posted here many times that we should have used bills of credit as our currency rather than debt based currency. You can print a bill of credit as easy as you can print a debt. We could cancel all debt tomorrow with bills of credit. And that is what we should do. But we don’t do it because banks hate bills of credit. Why? Because if the government issued them, banks would be out of the currency business.
Banks CREATE bank credit at debt.
When a person hypothecates themselves for a house, then the title is attached BY LAW to the asset side of the banker’s double entry ledger. The banker’s liability is the credit the bank creates.
The debtor receives an asset – the banker’s newly created money. The debtor also receives a new debt, the mortgage.
All debt derived economies have an sawtooth output, where the debt instrument recalls MORE than the bank credit created.
This sawtooth drives the economy upward and then into debt collapse (the sharp edge of the sawtooth).
When the drop occurs, then the banker FORECLOSES on the property in order to cancel the debt instrument. Maybe 2008 foreclosures were a figment of my imagination?
This mechanism is yet another form of usury, which allows the finance class to put “house to house.”
Jesus mission started on the Jubilee year, to cancel debts and not allow a permanent pharisee class of “creditors” emerge. Society always polarizes as debts accumulate.
Lolbertarianism is junk economics at variance with reality.
If you’re old enough, you’ll remember it kind of was during the 80s:
https://www.nytimes.com/1984/07/08/magazine/the-japanese-challenge.html
https://www.foreignaffairs.com/reviews/capsule-review/1991-09-01/coming-war-japan
But the scale of Japan was much smaller than China, and it was a military vassal of the US.
During its rise in the 70s and 80s, Japan was using its trade surpluses to aggressively invest in industry and move up the value chain, much like China is doing today with its Made in China 2025 initiative and Belt & Road Project. The US was alarmed and was able to twist Japan’s arm into the Plaza Accord, which resulted in Japanese investment turning towards a financial capitalist, massive asset price bubble:
https://en.wikipedia.org/wiki/Plaza_accord#Effects
I think the US would like something like this to happen again with China and for China to invest its trade surpluses in US dollar denominated financial assets and away from spending on its military, Made in China 2025, and Belt & Road. One of the reasons Xi is despised by US elites is because of his anti-corruption drive which purged a lot of the more compliant Chinese officials who would be more amenable to the US’s preferred financial modus vivendi.
If the US could just replicate something like what it did to Japan to China, with a financial bubble and subsequent “lost decade” or two in China, China would be stuck in the middle income trap, and it would be too old demographically to challenge the US. It would be incorporated into the US financial empire and order, and the only domino left would be Russia, assuming it hadn’t fallen by then. Then US/Western financial hegemony would be universal and unchallengable, and it would truly be “The End of History.”
Disraeli was great man recognised by all his peers at the time. If you’re lucky enough, maybe there will be a special reservation for the mentally ill and you can all rant and rave at each other in peace about how what “doesn’t really count” and how unfair it is that gibsmedat and Palestine.
Meanwhile everyone else will be riding starships to cities of the future and actually grasping the divinely ordered law of cooperation. Speaking of Jesus, here’s the Gospel on that subject:
“For the kingdom of heaven is like a landowner who went out early in the morning to hire workers for his vineyard. He agreed to pay them a denarius for the day and sent them into his vineyard.
“…”But he answered one of them, ‘I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?’
“So the last will be first, and the first will be last.”…
— Matthew 20:1–16, New International Version
You will be last, of course.
The 2008 foreclosure were definitely a figment of your imagination, they literally never happened, most people simply walked out of their homes, like most “foreclosures” even today.
I don’t think you could remotely begin to describe, much less cite the legal process called “mortgage foreclosure”. Or what “eviction” is about either. Hint: it doesn’t “just happen”, like in the movies.
Thanks for sharing a parrot of BS economics textbooks to “explain” like nobody else knew but just needed to hear it from you, garbled up with wrong language too. Here’s an example:
It’s the opposite, houses are hypothecated for people.
only in your mind. deeds get recorded in a local office and “title” is just a claim barred in time limits, usage, adverse possession, equity, or any number of other defenses.
title is figment of your imagination.
who cares and wrong, there is no such thing as “banker’s liability”, it’s just a mostly pointless book keeping system.
Dec 16, 2020 Markets of Tomorrow | Jobs Reset Summit 2020 by The World Economic Forum is the International Organization for Public-Private Cooperation.
An inclusive and sustainable reset of our economies is needed. How can we combine technological and institutional innovation to create “markets of tomorrow” to deliver the new services and products our societies need?
Dec 4, 2020 Your Guide to the Great Monetary Reset
Do you know what it means when the Managing Director of the IMF warns of a “new Bretton Woods moment?” How about when the head of the BIS revels in the total surveillance power that digital currencies will afford the central bankers?
That’s anti-Semitic!
low cost housing abounds??? where do you live? i’m in victoria canada…we have people camping in our beloved park b/c there is no low cost housing. paris, rome, london have people camping on sidewalks. between the ‘axis of kindness’ bringing democracy & peace to the middle east, amerika bringing democracy to central america, as well as justin’s joining the banking brigade to hoist land prices in hope of allowing the middle class to imagine they are rich we have lost the ability or belief we ought to house our citizens. the best we can manage for those who’ve had the great misfortune to slip between the grate, including the lost souls sufferingo the ravages of CIA drugs, 5 eyes forever wars, covid or our youth crippled beneath huge student debt & job loss due to lockdown, we—our leaders, civic, provincial, national—all can think of nothing else but save the banks & open our parks to become campgrounds. this as china has taken 800,000 from poverty & russia is trying to do the same.
We could all use less bureaucracy. The problem of financialization could be dealt with by having an actual market. In our financialized regime, there is no real price discovery, since the state always intervenes to keep certain select players solvent, regardless of market outcomes. The free market of the gilded age did not include he freedom of men to organize themselves in guilds “unions” to bid up the price of labor. This was held to be some kind of interference with the market, when it is a basic function of it. I suppose ‘onebornfree’ means one ‘born free to obey the boss’. If you are your own boss, good for you. You should not have the state interfering with every aspect of your life, which is the predictable result of a system which rewards not industry, but corruption and gangsterism. Think about it: We are trained to cheer the strutting tech heros of the age, but these are the same people who have decided to organize a Great Reset. It’s not commies who came up with that. It’s Big Finance.
it can’t work and it won’t. These people are running legacy systems into a mountainside at 600 km a second. Digital currencies presuppose a lot of things lasting forever.
(((Lolberturdianism))) is the perfect weapon to target the sociopathic demographic of any nation.
It spreads immorality and funny money finance capitalism, while disabling any form of organization, which means no more resistance to predatory yid/golem packs.
The Gamestop kids will soon learn how worthless the laws of their lands truly are. Money is, like you said many times before, a function of law/true power.
Still holding the squeeze though 😝 Put those diamond fingers on the gas switch, Kameraden!
He is a mummified boomer coon. Of course he can only recite quotes from kike lovers without a single shred of original thought or just get down to the gist of things.
Most huwhite mutts or Euros are fundementally rotten and spineless. Cowardice has many forms. Mostly intellectual these days.
The CHOSENJEWS ….claimed that they invented the rules of FIANCIAL SYSTEM, they wrote the rules, make the rules, change the rule, ignored the rules, hide the rules, violate the rules, prosecute the rules, enforce the rules….and back to the jewcycle making new rules BUT when in spite of having complete 100% airtight dominance…and they still lose to the inhuman goyim gentiles then they cried ANTISEMITISM…and now is illegal for goys/gentiles to buy/sell/sepculate/bet/risk and profit…thats realm of the kingdom/financial galactic universal cosmos belongs not to humanity/best/brightest/smartest…but to the ziochosenjews…PD Gamestop…
The band plays on as the Titanic sinks?
‘We’ have ten years?
“ . . . our best estimate is that the net energy
33:33 per barrel available for the global
33:36 economy was about eight percent
33:38 and that in over the next few years it
33:42 will go down to zero percent
33:44 uh best estimate at the moment is that
33:46 actually the
33:47 per average barrel of sweet crude
33:51 uh we had the zero percent around 2022
33:56 but there are ways and means of
33:58 extending that so to be on the safe side
34:00 here on our diagram
34:02 we say that zero percent is definitely
34:05 around 2030 . . .
we
34:43 need net energy from oil and [if] it goes
34:46 down to zero
34:48 uh well we have collapsed not just
34:50 collapse of the oil industry
34:52 we have collapsed globally of the global
34:54 industrial civilization this is what we
34:56 are looking at at the moment . . . “
Really great article – thank you for taking the time to condense these ideas.
If nothing else is retained, the first two sentences above pretty much distill the American collapse from altitude / overview.
I would take issue with the assertion that the Chinese intent is to liberate its population from monopolistic private schemes, given that the oppression is replicated through their own mono-party absolute authority.
I would posit that a central factor is left out, which is the missing ingredient –
What is and what defines a ‘Nation’?
As a contrast, Chinese populations clearly accept what defines a Chinese national, and at least historically are willing to sacrifice some personal liberties in exchange for absolute adherence to an unelected govt that operates to exclusively protect its own loyalty-tested nationals. This is effectively a ‘closed-loop’ Nation.
With the USA, (the only remaining example of an ‘open-loop’ pseudo-state) centrifugal force has torn it apart, in large part due to having no actual concept of what it actually is, beyond cut/paste jingoism. The traditional defined tests of historical Nation-hood currently all fail.
The defining element of a late-stage (former) Republic has to be the sale of its own Citizenship.
This ’empire masquerading as nation’ creates factional turmoil that makes the unwary easy to exploit, and makes the vigilant perceived enemies of the state.
Any Nation of people, to hold off the decay of Empire, has to have some central defining concept of who is part of the nation, and who is not. For every other new world state, you have a defining settler population, combined with the native indigenous population, that during a period of settlement established a culture and un-apologetically cut off settlement ingress to their society, long ago.
The USA should have largely concluded all settlement arrivals with the repeal of Homesteading Act in 1976. That repeal announced that the open land, or need to offer inducement to settle was no longer in the communal interests of the citizenry.
This is not merely to establish/limit who is, and who is not, entitled to citizenship within the worlds (then still) major power, but it was needed to hold at bay the inevitable divide-and-conquer proponents of Outsourcing and the Labor Speculators who would seek to co-opt governance to (re)authorize their own mass servant-importation schemes (chattel slavery initially served this purpose).
If such limits are not established and adhered to (especially important in a non-ethnically heterogeneous state) you no longer have a nation state, merely a competing static pie-chart in which allied rentier interests clumsily and voraciously seek to stack the deck in their temporal benefit, in order to reap profits.
Without some clearly defined National population and purpose, the most scheming and devious will arrange to throw overboard those of no value to their purposes, or who oppose their domination. Paper restraints have all failed, as was warned would be the case by the wiser voices, at the outset of a forced Federalization.
In the USA, concepts totally alien to the union’s creators now fully control the levers of power. National parties, who have acted to ‘split the take,’ now deprive any outside challengers of entry, sell their platform to global and international paying interests, wholly hostile to the national population.
The Hamiltonian USA was essentially founded on a denial of the basic principal that local interests predominate, and that they can never be fully reconciled across vast regions – only ruthlessly crushed and homogenized.
A docile emperor can historically provide popular governance, but the successor may not.
The tenants of the US Constitution differ from the preceding Articles of Confederation in that –
The Constitution assumes that seekers of power will abide by written rules and not amass in numbers sufficient to corrupt or bypass them,
while the AoC correctly assumed that seekers of power will eventually combine to abuse them, and were constructed to pre-emptively attack despotic and moneyed interests which have historically undermined the rights of the (defined) people.
When rent or interest charges are collected or stock or real estate speculation occurs, money is transferred from one pocket to another. When a new product is created, where none existed before, new wealth is created where none existed before. New wealth is created in farming, manufacturing and mining. Wealth creation requires the input of labor.There can be no capital accumulation without performing real work. Goldmen-Sachs extracts wealth from the population and gives nothing back in return.
The IRS has long distinguishes between passive and active earnings, but there is an ideological battle, led by Greenspan which claims both earnings contribute equally to the health of our economy. This is not true. Wealth transfers concentrates wealth into fewer and fewer hands. Paul Ryan’s Republican Tax Plan, which Trump embraced, has enhanced wealth concentration and taxes stock and real estate gains at a lower rate than labor wages. This is madness.
The dominant argument for capitalism in the 20th century after the 1930s Great Depression was that it “produced a great middle class.” Real U.S. wages had risen even during the Depression. However, the U.S. working class fought harder for major economic gains in the 1930s than at any other time in U.S. history. The Congress of Industrial Organizations (CIO) then organized millions into labor unions utilizing militants from two socialist parties and a communist party. Those parties were then achieving their largest-ever numerical strengths and social influences. That is how and why together the unions and the parties won the establishment of Social Security, federal unemployment compensation, a minimum wage, and a huge federal jobs program: all firsts in U.S. history. The second fact is that capitalists in the 1930s and afterward fought harder than ever against each and every working-class advance.
No advanced economics is required to grasp that divisions, bitterness, resentment, and anger flow from such a persistently widening gap between haves and have-nots.
In capitalist enterprises, tiny minorities of the persons involved occupy positions of leadership, command, and control. The owner, the owner’s family, the board of directors, or the major shareholders comprise such minorities: the class of employers. Opposite them are the vast majorities: the class of employees. The employer class determines, exclusively, what the enterprise produces, what technology it uses, where production occurs, and what is done with its net revenue. The employee class must live with the consequences of employers’ decisions from which it is excluded. The employer class uses some of its profits to buy and control politics.
To solve the extreme inequality of U.S. capitalism requires systemic change, an end to capitalism’s specific class structure pitting employers against employees. Excerpts from Richard Wolff i
I can’t help feeling that these attacks on the financial industry are but thinly veiled ‘antisemitic’ ‘blood libels’. Furthermore, one astute CNN commentator noted this week that the Reddit-organised short squeeze on GameStop speculators-sorry, ‘financial intermediators’-was timed to reach its peak on Holocaust Memorial Day, and targeted that traditional Jewish cottage industry-hedge funds.
Very droll-the Holy Market is simply mathematics and probability at work. Human intervention, meddling, conspiring, disinforming, finagling etc, do not exist. Just the amoral workings of some great divine mechanism, rather like Laplace’s Daemon, but more cuddly. It is to laugh!
Or oppressive capitalism vs creative capitalism .
cleverly gerrymandering about how he desperately needs un to make it happen
Which is why the ‘Antisemitism’ Industry is so pernicious. That a life-long and notable anti-racist and a friend of many Jews and the Jewish communities in his constituency like Corbyn can be smeared with totally and utterly confected denunciations as an ‘antisemite’, and all Labour members who dared ever express support for the eternally oppressed Palestinians or dared answer a rabid Zionazi back, are being expelled from the Party, shews how far Jewish control and arrogance have run amuk.
And when the totally fabricated Holocaust ‘definitions’ of ‘antisemitism’ amount to the end of free speech, the deification of Israel and the imposition of a diktat that imposes a worldview where ALL criticism of the behaviour of any Jew anywhere, no matter if that behaviour would be roundly denounced if performed by any goy, is forbidden, absolutely, with condign punishment for any who dare deviate, as ‘antisemitic’ racial and religious hatred, then the situation is rapidly reaching a climax. That the Jewish elites do not care that their behaviour MUST cause resentment and hatred, say among the 500,000 UK Labour members slandered as bigots and racists, and who had their first, and last, hope of being delivered from the Hell of neo-liberalism destroyed by lying, slandering, hate-crazed thugs, is no surprise. For 3500 years Judaism has existed on the basis of hatred and fear of the goyim, and that hatred, exacerbated by Zionist hatred of the indigenous untermenschen who must be expelled or annihilated in order that the European ubermenschen might have their lebensraum and hatred born, understandably but still self-destructively, from the horror of the Nazi Judeocide, is their natural habitat, their milieu. The more hatred the better, a worldview being replicated in those Western states that they have taken over, particularly the USA. It will not end well for any of us, Jew and the Universal Palestinians that the rest of us have become.
It is not just employers vs. employees. Even more important is the production of useful and desirable tangible products.
The only thing worse than being exploited by a Capitalist is not being exploited by a Capitalist.
If you outsource labor, you profit from the work of others.
If you outsource thought, you submit to the agenda of others.
White goy globalists outsourced labor to the Third World and gained the world.
White goy globalists outsourced thought to Jews and lost their souls.
The problem with this analysis is that it doesn’t take into account the equity agenda that has swamped the US and Europe. The landlord rent-seekers are now perfectly willing and enthusiastic to take a huge loss in order to prop up certain demographic groups and level the playing field. So what exactly is the problem now?
In 2006 the Chinese Ministry of Education launched the grueling Masters Degree programs for interpreters. These are elite industrial interpreters who assist U.S. promoters visiting China to set-up a local factory. The interpreters specialize in various industries and know how to find sources, get permits, and so on. The end result is a factory filled with jobs for China, versus a paper profit for the U.S. promoters. In sum, the Chinese Government makes it as efficient as possible to set up a factory, whereas the US makes it as difficult as possible.
Head caves in due to vacuum between ears.
Agreed, which creates all new wealth, based on actual production in a real economy. All the rest are various forms of parasites.
More like “conflicts with an unstructured meaningless fantasy world”.
In real life go get some real experience defeating foreclosure and eviction cases like the many millions of homeowners who are still defiantly holding put since 2008.
There is no such thing as usury. This is like trying to forbid calculation or counting. Borrowing and lending are an illusion.
Then we are all parasites on the 3rd world races who do the actual work. Ideally man was created to live in balance with nature, which requires very little “work” at all.
The Jews INVENTED thought and THEN came the other nations. Abraham was first and the father of many, and everyone gained their soul at all from that original spark, which really goes back to Adam.
The whole thing is “Jewish” from the beginning, the Noble Savage is a myth.
“So, if Hudson isn’t for nationalism and secure borders, he’s not for real. Labor movements can work nationally but not globally. It’s hard enough to unite workers in a single nation. Unite workers around the world? A pipe dream, esp as the elites can exploit national and cultural differences.”
Never truer words spoken.
What do Third World peasants about to enter a brand new (often) Wall Street financed factory in their nation – and be newly proletarianised – have in common with workers in a Western nation whose factory has closed, been ‘sent abroad’ and who thus are about to be de-proletarianised and put on the low paid labor scrapheap or worse, permanent welfare? All the skill of the best internationalist union leader would be to no avail. Nor is it even exercised.
And yet the Left (the Globalist Left, supporters of Globalising Imperialism in fact) have lyingly propagated this phony “Internationalist” myth, along with that in which the – complementary – Globalist importation (or outsourcing) of hugely displacing endless in supply of Third World labor prevails while the creation of decent jobs steeply decline.
The Chinese Government runs the country, unlike the ‘Free World’ where the rich oligarchs have all the real power, and politicians are their paid for servants. It’s a subtle difference.
You were never ‘born free’. You are mortal, subject to disease and accident, must live among others, and needed others to keep you alive from birth to God knows when. If you starve, others may feed you, if you are ill, others may treat you, possibly cure you. If you blather away, you’ll need others to answer, whether to laugh in contempt or cry from sympathy for your ‘freedom’ one cannot say.
This conversation is about finance; take your racial slurs elsewhere.
I cannot fix your deluded and racist feelings. This is a discussion about financial matters. I suggest you ask your family doctor for a referral to a psychiatrist.
That being said, tell me where they have been allowed to be tried without capitalists engaging in some sort of war on them to disrupt any chance of succeeding.
(1)The main purpose of having a state is protection against external hostility. Peer or stronger states may well be assumed to be hostile by default, even if today this hostility may not necessarily manifest as an open invasion.
(2)There is no and will never be such thing as the world allowing you to try your theories about proper configuraiton of society without hostile intervention.
(3)Socialism is shit, because it invariably created economic and social weaknesses that allowed capitalists to isolate and defeat it.
I suppose you believe that WWII was about German plans to rule the world, not that they had shed themselves of domination by the international banking cartel and were engaging in trading commodity for commodity, which was growing more popular.
(4)It is not a question of “belief”. Germany firmly, and with no meaningul outside input, set itself on the course to war by autumn of 1938, with total militarization of economy and about 40% of raw resources going into military production, after that it was only a matter of whether Germans manage to cook up a good-looking pretext for war that could convince any meaningful numbers of people outside of the sphere of German state propaganda (they didn’t).
(5)And even IF that wasn’t true it still doesn’t matter, because see ##1-2. “But our enemies hostility to whom we openly proclaimed were perfidious enough to take action against us” is still an incredibly retarded excuse for failure, no natter how much Socialists, National or otherwise, like it. No shit, Sherlock, that’s what enemies do.
Both Germany and Japan run their export economies based on industrial capitalism. But they’re not seen as enemies of the USA because they’re both under US military occupation. This is also the reason why you don’t hear US politicians blaming Germany or Japan for decimating US auto manufacturing industries. Instead, all you hear is Trump blaming China for allegedly ‘raping’ America. It’s all a show.
I don’t know what this guy is on, but whatever it is it ought to be made illegal! (Actually, I have him down as a prototype of the new ‘secret weapon’ which the JIDF have just developed. ‘troof’ very possibly represents their first ever test of this new prototype. Its aim is to carry mere gaslighting and Talmudic hair-splitting into levels which, to quote Star trek, shouldn’t even be possible).
Mr Hudson’s article is about rentier and FIRE sector looting and has nothing to do with ethnicity.
Rentier income in the US has been around for a long time – in fact, one of the main reasons for HUD’s existence is to provide payment for political support through allocation of rentier properties. The beneficiaries are multi-ethnic, but perhaps more skewed toward the WASPish power structures.
Also, labor union leadership takes dues from workers and provides property loans to build rentier properties, without providing long term housing benefit for the laborers who provided the capital. Clearly this is not [totally] a Middle Eastern ethnic conspiracy.
And what about organized crime (see Russo’s SuperMob). They targeted real estate with the sole purpose to extract rent. As the books says, they only embarked on this because in those days you did what you could to make money. This, again, is multi-ethnic.
The list goes on and on. What about doctor’s and lawyers who invest in and build rental properties, even though they are mostly feeding off the government and insurance companies. What about the Rockefeller Foundation finding that people couldn’t afford the rising cost of healthcare, so they invented the insurance industry to collectivize the costs. What about the CDC issuing mask edicts to extract ‘rent’ based on internal patents from the general population through fear induction. All of these are multi-ethnic as well.
Rather than an ‘anti-Semitic’ conspiracy, I see the entire economy as composed of a wide range of dispassionate, brutally predatory ethnic and business groups. In fact, this may be the definition of the US social structure.
And, of course, it’s always worth remembering that one’s enemies exist only in one’s own mind (unless there’s something not being clearly disseminated), and that everything we do in life is meaningless (and potentially ill-advised) in the context of personal end of life perspectives.
He was, however, a man of his time.
Benjamin Disraeli, Prime Minister 1874-80, Great Britain, was a racist! In his novel Tancred, his Semitic superman, Sidonia tells Tancred in the third of Disraeli’s “Young England” trilogy, “All is race, there is no other truth”
You identified the very biggest cities, in most of the States houses run $30,000 if you want. Take over a foreclosure and dig in, while the eviction moratorium means that vast swathes are in the process of being liberated from landlordism. “housing” doesn’t mean existing houses either, get an acre off grid or even on grid, put up earth built shelter, yurts, RV and many other solutions.
Nothing is perfect, but you have to dig at the margins and soft spots to crack a pile. The world is huge… move to Ohio, it’s a great State full of cheap houses. Tennessee, Kentucky…think geographically and in terms of climate. Case in point, go find the “unbuildable” land (which is cheap) near your area and homestead away… learn how to squat and take property back from the system.
WW2 was about building up Germany so it would crash against the decayed Western Powers then “gotterdamerung” itself against Soviet Russia, leaving the post war result exactly as it did.
I would say nobody cares about “trading commodities” all that much, the world is about much more than things us little fish care about, like community stability and prosperity.
Trump did in fact blame Germany, Japan, and South Korea for doing just that, while they were getting defended at the expense of the US taxpayer by the so called ‘military occupations’ of those countries. Trump does not fit into Hudson’s taxonomy very well, and the reason is the nation state perspective is something he totally neglects through discounting it as an elite ploy. There is a reason why working people voted for Trump’s MADA slogan. And why the elite hated Trump. The elite are making money off of China’s growth, in case you haven’t noticed.
I once told a class of kids, “If you don’t learn to think for yourself, someone else will think for you.” This was part of a highschool classroom tangent about being competent enough to feasibly work for yourself, and not forever be someone else’s laborer. Not that everyone actually needs to be (or can be, or should be) their own CEO, but that a little ability to read, write, and analyze keeps one from being an abject slave.
Anyhow, long story short, the boy who was going to follow his Dad into construction decided that running a business could use a little comprehension and literacy at least (gotta know what contracts you’re signing.)
#4: they had no choice, Poland attacked Germany in the time leading up to 1939, and according to many, the USSR was primed to invade Europe in July 1941, Axis beating them to the punch by mere weeks. Even a liberal democratic Germany would have gone to war under either of these conditions.
The problem with Germans in general is their inability to see things from anyone else’s point of view: everything is black or white, nothing in between. Very blind to there own weakness, and as you said, immune to culture of other nations in many ways. I did some editing work for a German fellow many years ago (it was just a resume), and he had written “according to my obviously brilliant career I am the best candidate for the job”… something like that.
He understood however once it was identified, that this does not fly in the English speaking world, and sounds ridiculous. Germans are geeky, ridiculous nerds with unawareness of anything outside their admittedly “brilliant” world. Very brilliant people, very clumsy in other ways.
Tell that to hunter gatherers who spent most of the hours of every day trying to find food. The harsher the climate, the more work it took.
All money is debt free: when reduced the lowest common denominator, it becomes a token coin.
Debt is imaginary, the only real things in life are tangible, QED
Even the idea of “interest” is wrong: the money supply is always expanding and all “interest” is paid in new money regardless of imaginary “contracts”.
Simple question: are these “debt instrument” negotiable instruments or common law? If you can’t answer that question then you missed the whole boat.
I will sell you a bond for $100 due in 90 days, no interest. You will buy it at a discount, creating interest by implication. Math is just numbers
Currency is not a negotiable instrument. As defined in the Uniform Commercial Code:
§ 3-104. NEGOTIABLE INSTRUMENT.
(a) Except as provided in subsections (c) and (d), “negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.
Excuses, excuses. The best you can hope for is a commune, and they haven’t done very well because almost all people like private property.
Ridiculous, when my ancestors were writing the Vedas, Jews were savage monkeys in some desert somewhere. Living in tents bonking sheep. And somehow we are supposed to take the fake tales and fables of these filthy vagabond savages seriously.
There is no Jewish civilization. On the other hand there was a great Arab civilization.
You literally just described a negotiable instrument, and all “currency” is absolutely transferred from hand to hand, with the “urge” or demand merged into the instrument itself.
A dollar bill is signed and makes a promise to pay, or to “be” a dollar. It is both (credit) for all (debts), public and private. FRN stands for “federal reserve note”.
because all reactionary politics are a mentally ill delusional fantasy, including antisemitism. It is all founded on emotional outbursts and thoughtless, childish enthusiasms.
Looks negotiable to me, all “currency” is a bearer instrument. It even reads “this note is legal tender for all debts”, which is a promise to pay or credit “one dollar”.
Nonsense, all history is biblical. You’re the savage of course, projecting as usual, melting with resentment and envy. Everybody across all eras has always taken the Bible seriously, from Arabs to Europeans.
Your ancestors did nothing, obviously, and no they did not write the Vedas. Not a hero
I’m thinking more in line with “Adam and Eve”… one way or another, there is natural balance in this creation. Permaculture, free energy tech that is thousands of years old… medicinal and health advances that are rooted in ecology and the environment.
If you practice martial arts long enough, the vision becomes more apparent. Lawyering on the other hand is founded on hatred and opposition, artificial divisions, and getting everything backwards. Take up gardening, instead.
I was going to say something similar, but then I realized “What was even the point?” What are the Vedas and Ancients of China and the pre historic societies who built Gobekli Tepi to a man who doesn’t believe in Egypt or Babylon, things which even the Bible states came before the Jews, and whom Abraham begged and was birthed from, respectively?
Those Arabs sure did get around. It’s a real shame how little of them is known before Islam, despite the fact coastal Arabs had been sailing around and selling things before for centuries.
LOL all those biblical tales were plagiarized off, real civilized people like the Sumerians, Hittites etc…by vagabond barbarians called Jews who were great salesmen though.
Jews are the descendants of Yehuda-Judah only anyways. Not all the tribes of the Israel. Yehuda out of jealousy, sold off Joseph. LOL, what a great grand…..dad you guys have. Hmmm….now I see why the same behaviour even now. Explains everything.
Only a buffoon would believe that someone whose ancestors lived in palaces and temples of gold would be jealous of desert barbarian shepherd, smelling of sheep, bonking sheep and sleeping with lice. Yuck. Think of the smell in those tents. What filthy savages!!!
They made a mistake. So what? We all make mistakes right? You forget India, China, Japan etc.. Bible meant nothing to us.
ya stop crying lika baby.
The guy is obviously a certified pompous idiot.
I think we do know a bit about them, about their pagan gods etc… Before Islam most Arabs lived simple lives in deserts except maybe the Yemenis who built some civilization using canal systems. Most of Arab peninsula was desert anyways, not conducive for building civilizations which in those days before the Industrial Revolution depended on agriculture.
Anyways whatever good or bad happened during the Islamic invasions, the Islamic Arabs kind of united the Middle East and thus there could be flow of ideas among the various Middle Eastern peoples like the Syrians, Persians, Egyptians as well as Greek and Indian. Thus there was exchange of thought which during a certain liberal period of Islam was very fruitful. Of course soon the Islamic fundus (Wahabis of their days) destroyed that party.
The Mongols did the same when they opened up China during the Yuan dynasty within the wider Mongol Empire. There could be good exchange of ideas in between China/East Asia and the outside world. Very fruitful.
Anyways Arabs did build a magnificent civilization in those days from Damascus to Baghdad. Sure they took a lot from earlier civilization, but so what?
Compared to Jews atleast they have better history in this respect even though most Arab societies are more backward than Israel today.
Mefobills says:
“Germany’s most unforgivable crime before the Second World War was her attempt to extricate her economic power from the world’s trading system and to create her own exchange mechanism which would deny world finance its opportunity to profit”
As usual, this is another hoax Churchill quotation. Try better.
More myths from Mefobills, says:
“Jesus mission started on the Jubilee year, to cancel debts and not allow a permanent pharisee class of “creditors” emerge. Society always polarizes as debts accumulate.”
See the essay “Five Myths about Jubilee” by Art Lindsley [October 9, 2012]
https://tifwe.org/wp-content/uploads/2012/10/Five-Myths-About-Jubilee-Lindsley.pdf
Myth #1: Jubilee meant a forgiveness of debt.
Myth #2: Jubilee involves a redistribution of wealth (land).
Myth #3: Jubilee shows the relative nature (relativization) of private property.
Myth #4: Jubilee leads to income equality.
Myth #5: Jubilee is a universally applicable principle (applies to all people).
Always scraping after the white man, desperately trying to imitate:
https://www.biblegateway.com/passage/?search=Psalm+2&version=KJV
2 Why do the heathen rage, and the people imagine a vain thing?
2 The kings of the earth set themselves, and the rulers take counsel together, against the Lord, and against his anointed, saying,
3 Let us break their bands asunder, and cast away their cords from us.
4 He that sitteth in the heavens shall laugh: the Lord shall have them in derision.
5 Then shall he speak unto them in his wrath, and vex them in his sore displeasure.
6 Yet have I set my king upon my holy hill of Zion.
7 I will declare the decree: the Lord hath said unto me, Thou art my Son; this day have I begotten thee.
8 Ask of me, and I shall give thee the heathen for thine inheritance, and the uttermost parts of the earth for thy possession.
9 Thou shalt break them with a rod of iron; thou shalt dash them in pieces like a potter’s vessel.
10 Be wise now therefore, O ye kings: be instructed, ye judges of the earth.
11 Serve the Lord with fear, and rejoice with trembling.
12 Kiss the Son, lest he be angry, and ye perish from the way, when his wrath is kindled but a little. Blessed are all they that put their trust in him.
Here is the REAL source of your “Vedas”:
https://biblestudyministry.com/abraham-and-keturah-and-their-sons/
Why do you think the highest class of India are called “Brahmins”? A-Braham-ini
TL;DR: only I count, never you.
LOL. You got it the other way round, it is from the Vedas that you barbarian guys got your culture. Abraham was a Brahmin who was kicked out from India for committing some crime. Those Brahmin rejects went to the Middle East and created a low grade version of vedic culture. His wife Sarah is a short form of our Sarawati. Watered down twisted abnormal version of our culture. Yehsiva comes from Lord Shiva.
That is why they were living in tents and bonking sheep like savage monkeys. Such people are considered unclean low caste by us Hindus (Dhangaars). LOL
You are obviously not a lawyer and I don’t want to argue with you about the technical differences between a negotiable instrument and currency. Suffice it to say that you can not use a negotiable instrument as currency. You can’t take a promissory note to the grocery store and buy groceries with it. And yes I know that US currency are primarily bank notes and not US treasury notes. But our coins are still issued by the treasury and are the equivalent of bills of credit and not the equivalent of debt instruments.
Take up thinking instead of martial arts. I used to do Aikido when I was young. Useful only to a point. And I am a carnivore now, so I don’t have much use for gardening any more.
Thank you. Its interesting how much detail and time is required to debunk or assert any conspiracy compared to the mutterings on the right wing who pretend, for example, that Capitalism created the American middle class. Nothing could be farther from the truth. Labor Unions, socialist and communist organizations fought tooth and nail to establish Government Work programs, Social Security, Workers Compensation, Unemployment …. Capitalists have been doing their best to unwind these programs ever since, beginning with Taft Hartley after WWII.
Another point, Galbraith, America’s most famous economist, also responsible for rationing programs during WWII, did a detailed study of the effectiveness of alliance bombing of Germany and proved that these efforts had zero impact on German War production. They did hurt civilian infrastructure. He proved this using German manufacturing records. He proved the bombing had little or no impact on victory over Germany. This so infuriated the US Military leadership that they prevented Galbraith from ever becoming head of the Treasury Department or Federal Reserve.
Troof, do you disagree with anything that was said? At least from someone of British descent, Disraeli doesnt seem to have been a good prime minster. He was respected, but so are Joe Biden and Barack Obama in the US today. Is status within a society what matters or true actions?
If you could save the UK from nuclear destruction but at the cost of your status, would you? It’s but a disagreement over what matters in life.
Do Hindus even know what they believe in? For awhile it was the sacrifice, then it was asceticism, then it was the words and sounds of the Vedas. Today there are multiple religions as seen as Hindu, many with parts originating as secular. Do you, today, just struggle against rebirth?
It’s an admirable culture, but you remember too much. The Muslims would have erased you as they did your Zoroastrian brothers had it not been for Europe. Christianity and the Greeks likely influenced India as well at times, before the Muslim invasion. The influence works both ways.
The oldest religious remnant, a ruin, seems to be in Turkey.
It seems to me that you, like virtually all Americans, conflate socialism with Marxism. There are many “socialist” models, the most extreme being anarchy. https://slife.org/socialism/
Sweden was a form of socialist state until Olaf Palme sold them the same global capitalism bullshit of multiculturalism. https://redice.tv/news/how-and-why-sweden-became-multicultural It had the world’s highest standard of living, lower taxes than the US, and a robust arms industry through their armed neutrality position. Norway was similar to Sweden, until they bought the same story of multiculturalism. By US standards, Switzerland is a “socialist country”.
Germany began to re-militarize, because the other signatories to the Treaty of Versailles refused to meet their obligations to disarm. Something Germany had completed by the mid 1920s.
https://www.wintersonnenwende.com/scriptorium/english/archives/articles/fichteEwhobroke.html
On top of that, Germany had proposed many further arms limitations, all were rejected. https://www.wintersonnenwende.com/scriptorium/english/archives/nothanks/wwr00.html
In 1937, Chamberlain approved the project for a long range bomber requested by the military a year earlier. https://www.britannica.com/technology/Lancaster-airplane Who were they going to bomb? Norway? Iceland?
The NSDAP were socialists. Germany was successful and prosperous. Their success could not have been allowed to spread.
Were is it written that socialism prohibits private property?
Your computer is private property. Proudhon’s “property is theft” had nothing to do with real estate (real property) per se nor personal possessions. It was in reference to capitalists stealing the profit of labour produced goods and services.
Your clothes are “property”. Land is “real property”. Not so long ago, people understood the difference. The original socialists saw the profit of something produced by labour, but owned by capital, as “theft of property”. I am a member of a co-op. I own what I own, the co-op doesn’t.
Free market capitalism, in whatever warped form it may take, has lifted more people out of poverty than any other system.
I see no reason to reinvent the wheel, and no reason to harass anyone who wants to try something else.
This is outrageous. Michael Hudson is an establishment propagandist acting as the Peter Drucker for bail outs! The majority of claims made by Hudson regarding China are patently false. China has exercised global predation that has surpassed America, and is on par with European countries who have had an extremely lengthy history of the same methods that China is currently employing. China may have forgiven the debts of its own corporations, but it certainly did not forgive the debts of Brazil when it seized gold mines in the Amazon rain forest. China is currently using finance capitalism in BRI countries, demanding that countries borrow Chinese currency with interest and also demand tbat Chinese companies build infrastructure including 5G, ports, roads, rail, and pipelines for those countries. Iran is another classic example that has fallen prey to China. Iran has the technology, expertise, equipment, and raw materials to build ports, rails, and pipelines, and has been doing so throughout its history. China refused to trade with Iran until Iran agreed to sign a 25 year agreement with China. It is win win for China, and lose lose for Iran. Iran will borrow money with interest from China to build ports, pipelines, and rail from China, and Iran will agree to divert oil to China for repayment of the loans. It is the worst deal imaginable, and the most Iranians are extremely upset about it.
Hudson is basically asserting that US corporations that have terrorized the entire country and demanded that small and medium businesses that were profitable be forced to shut down resulting in the permanent closure of the majority of those businsses so that the large corporations would not be required to compete with the small and medium businesses.
The problem is that the United States corporations that are habitually being asked to be bailed out by the government are enriching other nations far more than our own since the majority of them manufacture and are even managed over seas, which anyone who has ever called any large corporation ranging from telecom, to appliances, to tech, to credit cards knows. Many of the investors are over seas as well.
The corporations that are pathologically asking to be bailed out also spy on American citizens, refuse to respect the rights and property of American citizens, provide exhorbitantly priced, inferior products that use engineered obsolescelence, and bait and switch through constant updates. Then there is the medical mafia that has turned hospitals and clinics effectively into CIA black op sites including assassination through covid vaccination. Medical error has been the third leading cause of death in America for a very long time. The pharmaceutical companies use scientific fraud and addiction as a business model.
Bailing them out again is really a crime against humanity because they are terrorists, which they are currently doing with the scamdemic.
The problem is the corruption and the corrupt corporations must not be bailed out again!
The bail outs are a save the terrorists relief plan!
Andrea Iravani
Yes, but the German air defences were a huge drain on Germany’s limited resources. German divisions on the Eastern Front would have had vastly more firepower, had the money not being poured into extremely expensive high tech aircraft. So counter measures against the US bombers were about half of what defeated Nazi Germany. The Soviets would have ran out of soldiers well before the Germans ran out of ammunition, if German had been able to turn its full strength on the Soviet army.
What Hudson calls industrial capitalism as practiced in China has a realpolitik aspect that one might characterise as mercantilism. China controls its currency’s exchange rate, and US corporations cannot repatriate the profits from their Chinese investments. The productive capacity of China is grown with US capital, which is being held hostage in Cathay. Those wily Orientals are not playing a straightforward nothing-is-too-good-for-the-workers game that just happens to be building China up into a giant Hong Kong. Hudson is right about a lot of things though.
Wrong. Airpower and air-superiority were the single most important factor in the allies’ victory.
Strategic bombing was only one part of that.
The air-cover provided allied beach assaults was huge. No German formations could move towards beachheads in daylight without being annihilated. None.
No production could move towards fronts because allied bombing wrecked train depots, tracks, and locomotives.
As Sean points out above is, this forced Germany to produce aircraft and air defences when what they really needed was more offensive machinery and firepower.
The tens of thousands of 88mm tubes that were used against British and American bombers would have stalemated the war in the east had they been used there against Soviet armor and had some of that production been used to build infantry-support/heavy machine gun armored vehicles.
The 88mm tube used on the Tiger and Flak-88 was the single most important weapon the Germans produced.
If allied bombing influenced that weapon’s deployment I would say that is 100% impact on production.
Your point that bombing civilian infrastructure, rails, roads is correct in that it impeded the flow of supplies to the troops. But unarmed civilian populations always suffer the most from bombing and there is no victory without troops on the ground.
We should be ashamed of what our bombing has done to South East Asia, the Middle Est and Northern Africa, leaving tens of millions of unarmed civilians with no way to live or even eat or drink.
The point was the bombing had no impact on German war production or entrenched troop positions.
“Socialism or Fascism”…that was the title of a provocative pamphlet circulating among anti-war and leftist organizations in the late Sixties. Interesting history how that worked out.
In any, an Excellent essay, but perhaps incomplete and a bit muddles. Marx may have liked industrial capitalism, but according to his dynamics capitalistic competition drives wages to social subsistence, leaving the working class with sufficient income to purchase the every rising abundance of industrial capitalism. Capitalists pocketing as much social surplus as possible can no longer invest in capital production. Who’s going to buy-back their products. This leads capital into crisis, in which immiserated workers into revolutionary action.
It was the American industrial capitalists (who, in the end are capitalists, not socialists) who envisioned a Harmony of Interests between capitalists and workers.
Sorry. Should have edited my comments more closely.
“Socialism or Fascism”…that was the title of a provocative pamphlet circulating among anti-war and leftist organizations in the late Sixties. Interesting history how that worked out.
In any case, an Excellent essay, but perhaps incomplete and a bit muddled. Marx may have liked industrial capitalism, but according to his dynamics, capitalistic competition drives wages to social subsistence, leaving the working class with insufficient income to purchase the every rising output of industrial capitalism. Capitalists pocketing as much social surplus as possible (ie wages of labor) can no longer invest in capital production. Who’s going to buy-back their products? This leads capital into an asset-inflation crisis, and immiserated workers into revolutionary action.
It was the American industrial capitalists (who, in the end are capitalists, not socialists) who envisioned a Harmony of Interests between capitalists and workers.
The good news is that Chinese “Industrialism” (mixed capitalist and socialist) is now on a track to bury “finance capitalism”… Even US “industrial” capitalists refuse to invest in R&D unless the profits are fast and clock in at around 30% ROI.
Meanwhile the PRC has laid out a blueprint to global dominance of an array of current and soon-to-be industries. The Chinese have marshaled a vast array of capital resources and labor behind a large cadre of elite scientific and engineering elites. Built around millions of g5 base stations, the apps that are emerging are all truly “disruptive”, including self-programming robotics, autonomous vehicles, advanced logistics etc.
The financialized economies in the West can’t compete because they don’t have the infrastructure even to “play the game”. Short of a disastrous blunder or foolish hubristic move, the “industrial capitalism” of China really will make a huge historical leap and finish off “financialized” capitalism.
The USA is at war with Venezuela. It has confiscated all the gas stations Venezuela owned in the USA and convinced England to confiscate all gold Venezuela held in London. It has blockaded Venezuela, preventing medicine and food to reach the population, hoping to destabilize the country, just like it has done to Iran.
Why? For Exxon-Mobile, for one thing. A Corporation that lost assets when Venezuela’s petroleum resources, the largest on the planet, were nationalized.
Tensions rise between neighboring Guyana and Venezuela over a piece of land that has been disputed since at least 1835. Both Guyana’s President Irfaan Ali and Venezuela’s President Nicolás Maduro have exchanged sharp words about the status of the Essequibo region, which both countries claim.
Backed by US military forces, ExxonMobil, signed an agreement with the government of Guyana in 1999 to develop the Stabroek block, which is off the coast of the disputed Essequibo region. A Production Sharing Agreement (PSA) between Guyana’s government led by then-President David Granger and ExxonMobil should shock any sensitive person. ExxonMobil was given 75% of the oil revenue toward cost recovery, with the rest shared 50-50 with Guyana; the oil company, in turn, is exempt from any taxes. Article 32 (“Stability of Agreement”) states that the government “shall not amend, modify, rescind, terminate, declare invalid or unenforceable, require renegotiation of, compel replacement or substitution, or otherwise seek to avoid, alter, or limit this Agreement” without the consent of ExxonMobil. This agreement traps all future Guyanese governments in an inexcusable deal that has been made on disputed waters.
By international standards, this worst deal on the planet. Guyana, is being “re-colonized,” by which the deal will make a few local business people and politicians rich from oil so they will work for the exploiters and so the Guyana population will receive no benefit whatsoever from the discovery.
The planet will continue to heat, another windfall will be handed to Exxon-Mobile executives and stockholders while Guyanans get little or nothing. Crushing Venezuela was a key to writing a totally corrupt agreement with Guyana. An agreement Biden, Trump, Obama, Bush and Clinton fully support.
Nothing matters anymore except the money.
Those would have never succeeded if America had not been a industrial capitalist economy to start out. You actually have to make things people need and want for any of these things to have a chance of success. They don’t work anymore because we are a financial capitalist country now.