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Transcript of Interview on The Left Lens with Danny Haiphong May 25th, 2022

DANNY HAIPHONG: Good afternoon, everyone. Happy Wednesday, May 25th, welcome to the stream, to another left lens. Today we have a very special guest so as you’re coming in make sure you are liking the stream sharing it, make sure that you are subscribing to the channel and hitting that notifications bell, and as always you know please do support this work here at this channel and all the work that I do at But with that said I want to introduce our guests because we have a lot to talk about over the next hour and it is economist Michael Hudson.

He is the author of the new book, The Destiny of Civilization: Finance capitalism, Industrial Capitalism or Socialism and I’ll pull that up from his website very soon but I want to just say about Michael Hudson is that he’s been someone I’ve been following for quite some time. He has been making the rounds on various programs talking about political economy and he’s one of the foremost voices of understanding political economy today. Hi Michael, good to be with you thanks so much for joining us today

MICHAEL HUDSON: Good to meet you, Danny.

DANNY HAIPHONG: Very very good to meet you. So I’m going to pull up your new book in a second just on your website so people know where to go and I’ll make sure to link that in the chat so people know where to get it but I want to talk about first, so I mean we’re in an economic catastrophe in a lot of ways currently and there’s a lot of talk about, inflation and money, prices are skyrocketing, and one thing I really appreciate about your work is that you really do focus on political economy and you have been talking a lot about finance capital and something called super imperialism which you’ve written a book about and that has been updated several times even just last year so I wanted to get your take on the role of finance capital uh under this imperialist arrangement and in this time of the neo-liberal era in the united states and across much of the West in the world.

What is finance capital’s role? It seems so dominant now, it seems like the dominant class at this moment that really does control the levers of economic development. Could you talk about what role it plays and how it has spurred the crises that we’re going through today and you could talk about inflation but I definitely want to just kick it to you there so our viewers can get an understanding of the economics and an analysis of this.

MICHAEL HUDSON: Well, most people think of all kinds of capitalism as being the same and the assumption is that industrial capitalism of the nineteenth century somehow was always financialized because there were always banks but financial capitalism is you just pointed out is a political system and as a political system it’s very different from the industrial capitalism dynamic. In industrial capitalism, the whole aim or the hope of the industrial capitalists in the late nineteenth century, especially in Germany and central Europe was that banking would no longer be just usury, it wouldn’t be just consumer lending to exploit labor, and it wouldn’t be lending to the government somehow.

The financial system would recycle the economy savings and money creation and credit into industrial production and would finance the means of production to make that productive instead of predatory and parasitic as it became and that seemed to be the way that industrial capitalism was evolving up until World War I. Everything changed after that all of a sudden you had the financial system take over as a result of the crisis caused in the 1920s by the German reparations debt that couldn’t be paid and the inter-ally debt that was insisted upon to repay the United States for the arms that have supplied Europe for a century into World War I. Well, the result was a huge depression.

The allies said, well, we didn’t expect to actually have to pay the United States. If we have to pay the United States, then we have to charge reparations on Germany and for a decade there was a debate between John Maynard Keynes and Harold Moulton and others saying that these debts can’t be paid. How are you going to handle a situation where the debts can’t be paid?

The finance capitalists then were the basically the ancestors of today’s neoliberals and they said any amount of debt can be paid by any country if it just lowers the living standards and squeezes labor enough and that’s what basically the philosophy of the IMF ever since world war II when third world countries can’t pay the debt, the IMF comes in with an austerity program and say you have to lower wages, you have to break up labor unions, if necessary you have to have a democracy, and you can’t have a democracy unless you’re willing to assassinate and arrest the labor leaders and the advocates of land redistribution because a democracy means basically rule by the financial sector centered in the united states. And so finance capitalism ever since WWI and especially WWII and especially since 1980 is the nationalistic doctrine of American banks and the American one percent, and the American financial sector that is sort of merged into a symbiotic unit with the finance insurance and real estate.


In other words, finance capitalism instead of trying to promote overall economic growth for the 99 percent, instead of financing the industrialization of an economy with rising productivity and rising living standards, is now cannibalizing the industrial sector, cannibalizing the corporate sector. As you’re seeing in the U.S., finance capitalism is the economic doctrine of deindustrialization that has occurred in America in England and is now occurring in Europe.

Well, the problem is how do you survive if you’re not industrializing, if you’re not producing your own means of subsistence and how are you going to get this from other countries? Well, the answer is you don’t go to war with them like countries used to go to war with each other to grab their money and their land, you use finance as the new means of war so finance capitalism is the tactic of economic warfare by the United States against Europe and the global south to sort of draw all of the economic surplus of these countries in the form of debt service and the debt service is supplied by basically economic rent seeking from land rent, natural resource rent, and just plain interest charges on economy. So, none of these are really the result of industrial profits that are made by employing labor and uh selling its products at a markup.

Finance capitalism is not based on surplus value like industrial capitalism was. In fact, it destroys industry and in this cannibalizing of industrial capital, it basically dries out the economy and makes it unable to break even or even to function and in the United States today, for instance, if you look at the balance sheets of corporate revenue much of it is spent on stock buybacks. You buy back your own stock or dividend payouts. Only eight percent of corporate earnings are spent on new capital investment research and development: factories, machinery, and means of production to employ labor.

How did General Electric (GE) go broke? Basically, Jack Welch said let’s use our income not to continue to invest in making more electronic goods and services and appliances, let’s use it to buy our own stock that’ll push up our stock and essentially, we’ll just sell off our divisions and we’ll use the money of selling off our washing machine companies and stoves and sell it off and we’ll just pay it to the stockholders. That’ll push it up and by the way his salary was based on how much he could push up the stock of GE and he was paid in the form of stock options. Well, all of this is now the normal corporate behavior in the United States and corporations are no longer led by industrial engineers as they were a few centuries ago in the nineteenth and twentieth century.

They’re led by financial engineers of the chief financial officer and the ideal of these corporations is to make money financially not by industrial investment….. so on the narrow microeconomic level finance capitalism is a way of basically selling out a company and giving the proceeds to the stockholders and the bondholders but as a political system, because it is so destructive of the economy as you’ve seen in the United States and you’ve seen in Britain through de-industrializing it, it becomes belligerent in an attempt to make other countries just as equally paralyzed by making these countries pay tribute to the U.S. and England and the financialized economies by means of financial engineering, by means of debt service, by means of selling their mineral resources, their public utilities, their land, their roads all to foreign investors–basically to who borrows the money that’s just simply created in the U.S. and to save all of their money in their central bank reserves in the forms of loans to the U.S. treasury holding treasury bonds which is how the international monetary system worked until just a few months ago when everything changed.

So if you’re England and America right now you can look at President Biden’s speeches and he said well, China is our number one enemy because it’s competing unfairly. China is actually subsidizing industrial development by having its own infrastructure. It gives free education instead of privatizing education and making its labor pay for it. It has public health instead of privatizing social medicine like we do in the United States and making employers and workers pay for it.

Well, industrial capitalism in the nineteenth century was all in favor of strong government infrastructure. The ideal of industrial capitalism was to keep the wage costs of production down not by reducing wages but having government provide a basic infrastructure to cover the basic
needs of employees. The governments would provide free education so that employers didn’t have to pay for it. The governments would provide medical care so that employees didn’t have to pay for it and employers wouldn’t have to pay employees enough money to cover the education costs and to cover the medical care costs. The government would build roads and infrastructure and everything to facilitate the overall cost of doing business by industrial capital.

Well finance capitalism is just the reverse. Finance capitalism wants to privatize and take education, medical care, roads, turn the roads into toll roads, and take all of these and privatize them and make them financial corporations that will essentially pay out their economic rent to the bondholders and the stockholders and this economic rent adds to the cost of education and everything else that workers need to live on so the result is to make it a high cost economy and that’s why Biden has said China and Russia are America’s enemies because the only way that America can succeed given our privatized economy, given the fact that Americans have to pay up to forty three percent of their income for rent, given the fact that eighteen percent of America’s GDP is for medical care, given the heavy student loan debt–only if other countries tie themselves in the same knot, only if other countries impose the same economic overhead on their labor force and on their industry can there be equal competition.

If other countries have a mixed economy and are more efficient because they have an active government providing basic needs, that’s “autocracy” and that’s the opposite of “democracy.” Democracy is where everything is privatized and ultimately the one percent own everything.


Autocracy is any government that’s strong enough to have its own public investment. Any government strong enough to tax or regulate the financial sector is called “autocracy” so the U.S. in the 19th century would be called an autocracy as I guess the Austrian school called it
– civilization is basically an “autocracy.”

There never has been an unmixed economy without government regulation, without a government investment, although Rome began to get to that point at the end of its empire and we all know what happened to it. So basically, finance capitalism is a predatory international economic policy aimed at draining the rest of the world all to pay the leading one percent of wealth holders in the U.S. and their satellite oligarchy in England and a few European countries.

DANNY HAIPHONG: Well, I mean that was an incredible summary with so much in there. I mean what you describe reminds me of what we have called at Black Agenda Report, this Great Race to the Bottom, like that is what finance capital facilitates because it’s you know there’s a lot of talk about outsourcing and production going from the U.S. and the West to other places, the global south, poor countries, oppressed nations, and all of it is underwritten by finance capital because it’s this international monetary system that you describe which is actually plundering the Global South for super profits and also plundering the United States and the West’s economic base for super profits.

So it’s like the super profits come rolling in from all sides and oftentimes the jingoists and the chauvinists will frame things as oh well China is taking our jobs. They rarely say Bangladesh or some other country that is actually being super exploited. So in many ways it’s framed like that to distract us from everything that you described. The fact that this class and this policy are plundering from all sides.

MICHAEL HUDSON: Well, you use the word super profit and, in a way, what is super profit? Super profit is what the classical economists called economic rent. It’s over and above profit. Profits are made by employing labor and basically that’s not how most wealth is created in
today’s world. A financialized economy sees wealth is not created by making profits by investing in factories and plant and equipment and employing labor to make a profit, it’s made on getting a third world country, a global south country in debt and saying well if you can’t pay the debt yeah that we’ve given you then you have to sell off your raw materials, your land, all of your natural monopolies and the way to make money in finance capitalism is to buy up the monopolies and the whole idea of industrial capitalism was to get rid of economic rent.

The main aim was to get rid of the landlord class that was the carryover from feudalism, the warrior warlords that had conquered England and France and other countries. Land was to be brought into the public domain. That was the first item in the communist manifesto. You tax the land rent and then nationalize and socialize the land. The idea was to get rid of monopoly rent because monopoly rent is unearned income and to get rid and essentially to get rid of financial rent of interest that is just made as John Stewart Mill said and you ‘make it in the sleep’ if you’re a bond holder or a landlord. You get the rents not from playing any productive service at all but making this money in the sleep and so that has nothing to do with profits.

Unfortunately, the national income accounts don’t label economic rent as a distinct category they call any income that someone makes whether it’s a Goldman Sachs and Citibank or GE or any country and call it earnings and the theory is that everybody earns what they make but that wasn’t the idea of industrial capitalism.

The idea of industrial capitalism is from the physiocrats and Adam Smith and John Stewart Mill and Marx was that earnings were something that was actually made productively with money by employing labor to produce a surplus that would be reinvested but economic rent was unearned and that’s why natural monopolies should all be kept in the public domain instead of being available to be monopolized. So, like in America when Indiana ran into trouble it privatized and sold out the roads to be made into a toll road and now almost everybody avoids the toll roads and drives on the side roads.

When Chicago had problems paying its local debt, they sold the rights to the sidewalk and parking meters causing vast increases in the cost of living and doing business if you live in downtown Chicago where you have to park a car. So the ideal of industrial capitalism was I guess what Schumpeter called creative destruction by lowering the cost of production the way that a country would, an industrial country would win out in the world market, first England then the United States, Germany, Japan, and the way that they went out was by underselling competitors.

But finance capitalism adds as much as it can to the cost of production. It adds as much as it can to the cost of living because instead of treating education and healthcare and transportation as a public right, a natural human right, it’s all privatized by the one percent.


DANNY HAIPHONG: Yeah, I mean it’s so true. Even in the Communist Manifesto there’s a section where Marx outlines the very idea of what socialism would look like and in it, it’s explicit how socialism will begin with the commanding heights of the economy, as you said these natural monopolies, they were going to be public owned like that’s the only way that you can have anything remotely socialist and now we’ve gotten to the point where finance capital has usurped them, has completely privatized them or is attempting to with whatever is left of the public domain, the public sector so to speak globally. And you bring up this really interesting point about the cost of everything going up, especially the cost of production.

I mean that’s just seen in how a lot of these big corporations have enormous amounts of debt now, corporate debt is at this astronomical level and you think well, look at all these super profits they’re making, look at all these huge profits they’re making. We always hear about all these corporations making these huge profits but we rarely hear about all the debt that these corporations are accumulating because of finance capital and so it’s really incredible.

I love talking about this because it’s these things that we don’t hear about because finance capital really is writing the rules and they have such undue influence over the media and over so many things. So I wanted to ask though about China so let’s just jump there because I want to ask you a question because I recently got into a debate with this, I don’t even know if I want to call a journalist but he’s a commentator, Matt Stoller. He’s very anti-China and this is a talking point especially on the far right but I would say that a lot of people think this, a lot of people think China and Wall Street are merged together, that they work together to undermine workers across the world especially in the capitalist epicenters, of the finance capitalist epicenters so to speak, U.S. and the Western countries.

Could you talk about China and its monetary system? You mentioned it briefly about why the U.S. is so hostile right now, why Biden can’t stop talking about competition and autocracy versus democracy. You talk about the differences in the monetary systems and how China treats finance because I think this is not really well understood and it has global implications. I think it has huge implications because I think there’s a general shift in a direction of how we address this flailing dollar-led economy, the global economy of imperialism and China is really at the center of this so could you speak on this if you would?

MICHAEL HUDSON: Well, what gets Americans so upset is that China’s getting rich by doing
exactly what the United States did in the 19th century. I’ve written a book America’s protectionist takeoff where I described the whole idea of American protectionism was tariff protection for its industry, government subsidized research and development, government subsidy of industry by having infrastructure as a fourth factor of production alongside land labor and capital – and it was supposed to have public banking.

So basically China, like the United States, said we want to raise the living standards of labor not because of an abstract ideal but because highly paid labor is more efficient labor, a highly paid labor is more educated, it’s better fed, it’s healthier and the Americans in the nineteenth century pointed out that America was the highest paid labor in the world but it was also the most productive and high paid labor outsold pauper labor.

Well China began under Mao with, you’d look at pictures back in the fifties, and even early sixties and you’d see masses of beggars and I’d look at the pictures and I said how on earth are they going to solve this problem? Well, they actually did it and China realized that in order to survive in the modern world you had to have uh well-paid, well-housed, well-fed, well-educated labor and they’ve done it.

The difference is that America had kept money creation in the hands of the treasury ever since the greenbacks in America’s Civil War. Basically, the government created money but in 1913, JP Morgan and the financial sector got together and they said we’ve got to get the government out of money and credit. If we can control money and credit, we can control the economy so they convinced President Wilson to have the Federal Reserve. They said we’re not even going to let a treasury official be on the Federal Reserve.

We’re going to move the Federal Reserve banks out of Washington. We’re going to have the key bank in New York where Wall Street is the ideal of a Federal Reserve to make a centrally planned economy and America is a much more centralized planned economy than China but its centralized planning is on Wall Street by the financial sector, by the leading financial corporations instead of the government.

So, where America took economic forward planning out of the hands of the government in 1913, China has kept the financial system in the hands of the government. Let’s look at how these two countries create money in a different way since the Obama depression began in 2008.

The Federal Reserve has created a tidal wave of credit, all into the stock market, in the bond market, all of this recent zero interest policy. This flood, these nine trillion dollars of federal reserve credit has only been to support banks, real estate prices, bond and stock prices, to support property prices. That’s not what they do in China, although the prosperity that China has created has increased uh housing prices and there has been private credit increasing housing prices. China has kept money creation in the hands of the government itself so that when the government creates money it can finance the creation of factories plant and equipment, dams, transportation infrastructure, public housing.

It doesn’t create money to lend to financial speculators and stockholders to increase their holdings, it creates actual tangible means of production. Now of course, if you create tangible means of production and employ labor and have high speed railroads and research laboratories, you’re going to overtake countries that are busy closing down the factories and cutting back research and development because they want quick payouts.


So the chief public utility to be kept in the public domain, (China realizes and has realized from the beginning) is the banking system and credit creation even so there’s still private credit creation to some extent. They’ve also let some participation by American Wall Street firms such as Goldman Sachs because it’s hoped, it wants to avoid war and it hopes that it can by providing opportunities for financial profit to American companies that will somehow uh convince Wall Street to resist the Biden administration’s race hatred of China and the attempt to move towards a new war against China.

Obviously, the assumption that China made that seemed rational at the time was well the American economy is run by Wall street so if we can have Wall Street say we’re doing just fine with China, everything’s going to be okay. But Wall Street and the Federal Reserve bank and the treasury have not even been consulted on this year’s war, NATO’s war with Russia in Ukraine at all. It’s Blinken and Biden and the neocons basically are waging a war that has sidelined finance and the result is to create the present crash in stock market prices and the parallel decline in bond prices.

So, finance capitalism is intrinsically self-destructive whereas industrial capitalism is self-expansive. Finance capitalism is self-destructive and that’s exactly what’s happening today and that’s what China wants to avoid by basically following the logic of what used to be called industrial capitalism.

By the 19th century, everybody used the word socialism and it wasn’t only the Marxists that were using the word socialism. There were Christian socialists, libertarian socialists, anarchist socialists and all different kinds of socialists. They recognized that you have to have the government sponsorship of a balanced and fair economic development. You have to prevent people from getting rich not by providing any productive service at all but just by being good rip-off artists and that’s basically what finance capitalism is: opportunity for rip-off artists to get rich uh by taking money away from the 99 percent, into their own hands.

DANNY HAIPHONG: Yeah, and that’s exactly what has happened and we’ve seen the differing results between China and the United States since that crash. China was able to sustain growth despite the worldwide economic crisis. As you said, living standards still rose. I think wages were going up something like seven to ten percent every year after the financial crisis and a lot of that was because of investment in jobs.

I’ve spoken to people in China and they say well in China if you go work for a factory, wages tend to rise and actually workers want to go there and sometimes they don’t want to leave even though China is trying to move more into the high-tech sector and the service sector. A lot of people want to stay in the factory jobs because it’s paying and it has some of these benefits and subsidies that are very alien here now.

I tell people there’s a housing allowance and they’re like what’s that? Like how could you say that? It’s China! China’s horrible! It’s like, well, you know factory workers have a housing allowance. How are you going to reproduce labor? We look at Marx and China’s very big on Marx. Look at what Marx was saying you got to reproduce the worker, you got to make sure that the worker has what they need, like that’s the bare minimum of what any economy should do but that’s what capitalism was originally supposed to do.

You reproduce the worker so you can extract the surplus. Finance capital is a great race to the bottom that workers oftentimes are not reproducing themselves. There’s a huge crisis of life expectancy and all sorts of things that didn’t used to be characteristic of capitalism. Standards used to rise as capitalism developed more advanced productive forces.

You mentioned this current crisis of the dollar and finance capital kind of being sidelined in the Ukraine crisis. I find this very interesting because finance capital is so hegemonic and it has so much influence over Washington and Europe but what you’re saying is very true because and we just see it that there’s just a catastrophe. There’s this huge inflation and there’s the crisis of the dollar like what’s happening here?

How come it seems that the further and further the United States gets into this proxy war with Russia over Ukraine, the more and more it deepens its involvement, and it’s been a long involvement, it’s not just since February, but ever since this period we’ve seen just this impending economic collapse. So, what’s happening here? Why is it that finance capital is sidelined and how do you see this going with the Ukraine crisis especially around the dollar?

MICHAEL HUDSON: What do you mean by crisis of the dollar?

DANNY HAIPHONG: Well, it seems like what the United States is trying to impose its hegemony through its foreign sanctions, is having this blowback effect where now you have countries seeking alternatives to the dollar and the U.S. seems to be more economically vulnerable even though it’s expanding and trying to dominate. It’s this very strange contradiction that feels very unstable and it feels like the dollar is artificially inflating itself as it is also dealing with the fact that there is no end game here in Ukraine. It seems like messing with a big country like Russia and its relationship to Europe is moving us toward economic catastrophe, an economic crisis if there’s not already one underfoot.

MICHAEL HUDSON: No that’s not what’s happening with the dollar at all. People with all of the emphasis on America’s war against Russia to try to break it away from China before going to war with China, the first thing that America wanted to do was to lock in its control over Europe because that’s the easiest way to get things is you want to take over the richest economies in the
world and lock them into the United States and that means taking over the Eurozone, England and Japan. And the dollar has been soaring against these currencies.

To put it another way, the Euro has been plunging toward one dollar per Euro. The pound sterling has been plunging to one dollar per sterling. The Japanese yen has been plunging even more so there’s a huge movement to safety into the dollar.


The Americans have successfully destroyed the basis of European industry. They’ve finally beaten Germany. They’ve left Germany without energy and GDP in any country compared to energy per worker and basically the productivity that makes goods is basically embodied energy and Europe has been getting its energy from Russia in the form of gas and oil.

Well, the United States has asked Europe to commit economic suicide basically by saying, “don’t buy Russian gas, wait three or four years, spend five billion dollars on building new ports so that you can import American liquefied natural gas at seven or eight times the price and meanwhile let your chemical industry, your car industry, your basic industries go bankrupt. Take it on the chin for America and Europe said, “okay not Europe but the politicians that America have meddled in European politics to promote to sign on the dotted line for treaties” made that decision so even if the Europeans don’t want to commit suicide, America has its proxy politicians in its Tony Blairs, in the head of the social Democratic Party in the advocates of pollution and global warming at the head of the Green Party.

You have in England you have a Boris Yeltsin and in Japan you have leaders who are willing to continue to sacrifice Japan’s growth to serve the United States. So these countries, the investors in Europe, England, and Japan are moving their money into the United States especially because the United States is raising its interest rates through the Federal Reserve and that’s telling Japan and Europe not to do it so the Eurozone has very low rates.

People are borrowing at under one percent and moving it into the United States to make two, two and a half percent. Japan has almost interest-free money from the central bank. It’s moved its money into the U.S. so the dollar, while I won’t say it’s soaring against these currencies, other currencies in the U.S. orbit are collapsing against the dollar because they’re following U.S. advice.

So, I think when you say other countries are breaking away, you’re talking about the bulk of the world, Central Asia and Latin America and China and the key to the present New Cold War is America has to achieve its almost dictatorial dominance over Europe and Japan. It’s the client oligarchies and client dictatorships and without realizing that this is American democracy, where the leaders of the whole world follow what the United States tells them to do because the United States identifies itself as the democratic center.

So democracy no longer means a political system where voters get to determine who is in charge, democracy is the policy dictated by the United States State Department. Any country that goes its own way or develops the power potentially to go its own way such as China and Russia is called an autocracy. So, you have to realize in today’s world democracy is autocracy and autocracy is democracy.

You could say yeah, the question is of course will the world really break into two halves and it looks like it is breaking into parts and there will be the U.S. and its allies, the U.S., Europe, and Japan against a Eurasian core that will go hand in hand with Africa and Latin America and other Asian countries who are able to rely on trade and investment among themselves. And the United States by seeming to isolate Russia and China and Iran and other countries actually is isolating its own dollar from the rest of the world. So, there is an iron curtain but it’s not to keep other countries out, it’s to keep its own allies within.

DANNY HAIPHONG: Do you see this succeeding? We’ve been hearing a lot about Russia’s relationship with Europe and just how deep its energy sector is with Europe and how that relationship is a very difficult relationship to break economically. Although Europe is doing everything it can, everything you’ve described. It made me think about how throughout this crisis Europe, because of the dominance of the U.S. and just listening to whatever the U.S. said, was actually going way above and beyond what the U.S. would commit to in terms of Russia and how economically they would wage this kind of warfare. But China and Russia, with Russia’s energy and its natural resources but China I think in a broader kind of portfolio, have so much to offer to Europe, do you think that this will succeed?

Europe has been going the road of austerity for many years but this seems like such a huge step in that direction. Europe could look very much like the United States very soon. Do you see this working given how China has so much to offer it and already has a lot of countries in Europe maybe not the biggest of the clients like the UK for example but a lot of European countries have big relationships with China even the UK does despite all of the nonsense, all the New Cold War stuff. What do you think? Do you think this will work?

MICHAEL HUDSON: There’s a lot of crap that futurists tend to fall into and that’s imagining that countries are going to act in their self-interest. This is the mistake Stalin made with Hitler. He thought if Germany attacks Russia in World War II, it’s obviously going to lose. No sane country would attack Russia just as winter’s coming but Hitler attacked Russia. You’d think that if you tried to say what is a logical future.

Let’s go back to 1991 when the Soviet Union self-dissolved. The whole idea, the dream at that point according to Russia’s leaders was well, if we can have peace, we’re not going to have a war budget anymore. Europe is going to invest in us and help us rebuild a rationalized, efficient industry and we will trade with Europe and we’ll both get rich on mutual trade.


Well, this terrified the United States. It said, “oh my! We want it, we Americans want to be the beneficiaries of Russia.” We don’t want to trade with it. We want to carve it up and privatize it and take over. Basically, have Wall Street take over its oil resources, its gas resources, its nickel resources, its electric utilities. The last thing America wanted was this symbiotic mutual gain between Europe and Russia and I think that Putin and most of the leaders at that time expected that Europe would act in its self-interest and they could both end up gaining.

But that’s not what happened obviously. Europe followed American dictates and continues to because it’s, again, its leaders follow, its leaders are really just like Zelensky in Ukraine, they’re just as dependent on what the State Department dictates to them to do as Zelensky is. And there’s something evangelistic about it.

The Europeans I’ve spoken to really believe that America is the land of the future and that neoliberalism, that finance capitalism, somehow is going to be an ideal of private enterprise. They’ve bought the rat poison, they’ve eaten the rat poison, and they actually believe it and think of themselves not simply as servants of the United States following what it’s doing. As the Pakistan former Prime Minister said a few weeks ago, slaves of the United States policy, they actually are evangelistic promoters of neoliberalism and as sort of disciples, just as bishops you could say really. It’s like a religion and they treat the American-centered neoliberalism as the new religion . It’s literally a crusade against Russia and Europe and I think this has shocked Putin.

I would imagine the Chinese leadership also thinking: How can Europe be so completely unrealistic? How can its media lie so constantly about what’s really happening in Ukraine? How can Europe deify the neo-Nazis in Ukraine as freedom fighters, as heroes, as wonderful people to be supported? I think this has been such a shock to the Russian leadership that they realize finally that, well, Europe is not going to act in its self-interest.

There is not going to be any mutual gain. Europe again and again is just going to grab any money that we have there like they’ve grabbed our whatever was in European or American banks. There’s really nothing we can do. So there’s been a fundamental reorganization with Russia and the rest of the Shanghai Cooperation Organization (SCO), meaning not only with China but with Iran, with India, with all of the other Eurasian countries. So, in that sense the United States has brought about exactly what it feared. The whole rest of the world is going its own way productively in a capital investment way, raising living standards, things that democracies are supposed to do well.

In the United States, we really don’t have democracy because the political parties are controlled by the donor class, the one percent, that’s what the Citizens United Supreme Court ruling meant. The United States is left without any means of self-support and Europe will be left without any means and self-support at some point. Europe may say, gee we made a mistake, maybe we should have tried to profit from Russia because everybody else is profiting with and getting Russian gas and nickel and China and other countries are rebuilding Russian industry and we could have had our car industry build up Russia but we don’t have a car industry anymore because it doesn’t have the gas that it needs and the raw materials and titanium it needs from Russia so now, we’ve seen other countries replace us.

And so, Europe has been rendered pretty much obsolete and even if it says we made a mistake, let’s be friends again, I don’t think Russia or other countries will trust it mainly because they can afford not to trust it.

They say, why take a risk with trusting Europe may not just continue to be America’s poodle?

Why take a risk? Why not just say, we’re doing just fine the way we are? Why not just work with each other peacefully? And all that the United States can do about this is threaten to bomb it and the way to stay away from this threat is simply to say look, you go your way, we’ll go our way and to have enough of the military between them to defend themselves against the American potential military attack despite the almost eight hundred military bases the United States has. If the United States is not getting foreign exchange from these countries anymore, the dollar with the euro and the yen and the sterling will all go way down against the Eurasian currency block and they’re going to move into a common block with their own counterpart to the IMF, their own counterpart to the World Bank, their own trade organization and the world will be split into two parts – just like the world split when the Roman empire fell apart and the east went forward, Western Europe went down. This is really the final submergence of western Europe.

DANNY HAIPHONG: Yeah, I mean you have more activity now in the BRICS plus, right. The BRIC countries are trying to move forward and add more partners and expand their financial operations. I mean there’s so many multilateral institutions mainly led by China with Russia’s heavy involvement and in other countries that are building a kind of independent monetary system and economic development system that can as you said ‘avoid the risks’.


The Ukraine crisis is such a huge deal in part because of how geopolitics like you were saying, geopolitics plays such a big role. What the United States has done and what Europe has done during this Ukraine crisis is show countries like Russia and China that they not only cannot be trusted but it’s almost a guarantee that not only will this Ukraine situation have no quick ending right, there’s no like, we’re pulling out! The ball is rolling and they can’t catch it. They’re not going to be able to stop what they’re doing. There’s so many issues with that but they’ve even escalated the situation. You have countries like Finland and Sweden saying we’re going to join NATO. You have just so many, just all of these points that show that the United States and Europe can’t be trusted.

What are you to do other than make sure that you can keep the right, as China says, to sovereign economic development safe? And the only way you do that is by increasing that sovereign part, sovereignty, and I think Russia learned a big lesson here. I mean you mentioned those assets that were stolen. They were just stolen. It was bigger than Afghanistan which had the same situation happen to it but with Russia it was probably the biggest problem with all the economic moves that were made against Russia, the assets being stolen right out from under it. That’s a huge blow economically and it facilitated so much change.

But I wanted to and you know this is the last question because I feel like a lot of these developments are leading to a positive thing that we see countries like China and Russia increase the sovereignty of their economic development models. Can you end with talking about socialism and you know, where do you see this concept of socialism going as an economy, as
a political economy?

We know China has its model, other countries are trying their own models, but what do you think are its prospects now in this environment because China has its particular model, it seems like a lot of countries want to emulate that. You see Cuba and other countries wanting to understand how to do what China has done because it is an economic miracle in a lot of ways.

You were talking about how China was living, how people were living in China just in the sixties and seventies, it’s just a completely different situation. What do you see the prospects of it in this a very chaotic environment, the geopolitics imperialist finance capital it’s creating all this chaos, what do you think the prospects are and could you I guess enlighten our audience about socialism and your work on it?

MICHAEL HUDSON: Well socialism is really how industrial capitalism of the 19th century was
supposed to evolve. Everybody thought that it was going to evolve into a more democratic system because the first aim of industrial capitalism, what it really needed politically was to get rid of the landlord class because there’s no way that, as David Ricardo pointed out, there’s no way that England could become the workshop of the world if you let the landlord class continue to get more and more land rent and force labor to pay more and more for its food.

Today, it’s housing as well as food. There’s no way that it could be competitive so in order to get rid of the landlord class, you had to get rid of the house of lords in England and the upper house in every European country because the upper house and the senate were controlled by the hereditary landlords and so industrial capitalism backed democracy.

Already by 1848, the year that the Communist Manifesto was written, that led to revolutions all over European countries getting rid of the old aristocracy. Well, the rentiers fought back and actually it was wasn’t until World War I that the monarchies were overthrown and the aristocracies connected to the monarchies and land no longer was owned by a hereditary class. It was democratized but it was democratized on credit and that you had the banking system replay the role that the landlord class had played out before and the bankers were the new rentier class. The bankers were the new people whose interest charges and debt services and privatization of economic rents prevented economies from underselling non-rentier economies.

So, socialism was basically getting rid of the free lunch. Marx described capitalism as being revolutionary because he said what was revolutionary was getting rid of all of the unnecessary cost of production and that meant the unnecessary rentiers, the rent seekers, the coupon clippers, the financiers, and the monopolists. Everybody could agree that socialism was getting rid of this parasitic class that was not necessary for economies to grow and actually whose takings slowed the economy.

Socialism was to free economies and free markets from rent seeking, not freedom for rent seeking. After the 1890s, socialism was to get rid of a free lunch income whereas finance capitalism is all about how to get a free lunch if you’re a member of the one percent.

So in one sense, socialism is freeing economies from the legacy of feudalism which fought back in the modern world into a kind of neo-feudalism operating through financial control, not simply land ownership and monopoly ownership. And China has been able to get rid of this and at the same time avoid the central planning that gave socialism a bad name under Stalinism because China said well, let one hundred flowers bloom and we’re going to we realize that we can’t plan all sorts of innovations because there are so many possibilities of productive innovations.

We’re going to let people get rich by being creative, by being productive, by adding but we’re not going to let them get super rich. They can get pretty rich but then at a certain point they’re so rich that they’re getting rid of a monopoly we’re going to sort of cut down the high grains of wheat as they say so they’ve got a sort of consensus government where this occurs.

Other countries will have great difficulty putting this in place because there really isn’t any economic doctrine of socialism that’s been developed recently. There’s been just an out of hand rejection of all discussion of what socialism really was and what makes a socialist economy more efficient than a finance capitalist economy and that really is the key.


If countries, if economic theory, would talk about what makes a socialist country more efficient- lower cost with higher living standards-then it wouldn’t be economics anymore because economics are what gets published in the University of Chicago economic journals. I don’t know what you should call it, futurism or reality economics. There has to be a new discipline that our countries are going to develop to try to explain how to think about developing a world that doesn’t have parasites in it.

DANNY HAIPHONG: Right, so true. I mean what you were saying about all this, it just gets you thinking about what China has done to be able to control these forces. You see it in the tech sector especially, now you see it with this common prosperity drive. Like there is a drive to control these forces that can, as industrial capitalism found out of the old in America and Europe, you let those forces get out of control and then finance capital turns around and takes everything. And China has prevented that and you don’t hear it, even in like the Bernie Sanders social democracy milieu, you don’t hear them talk about this.

They’ll say like socialism is when you have Medicare for All but it’s not just that, it’s how as you were saying, what are the forces that need to be arrested? What are the forces that need to be strengthened to be able to ensure that the public good and public wealth is protected? That’s not in the discussion. It’s still not in the discussion.

I mean, it’s not on discussion even among the most so-called progressives. But they don’t talk about it like that because as you said earlier, it’s like autocracy or authoritarianism or something when a government is strong in the interests of economic development for people. It’s almost like finance capital has dominated even just the idea of it and the idea of what socialism is and what it could be.

But Michael, do you have like five to ten more minutes for a couple of questions? We had some in the audience and I think one of them is very good and I wanted to know your take on it.
Thank you for the super chat. So, they said that the People’s Republic of China has three trillion in USD foreign exchange reserves. What measures, I know that you’ve done a lot of work in China and you’ve done a lot of work around this. This person’s asking, what measures should the central government take to ensure they don’t get seized just like how the U.S. seized Russia’s foreign exchange reserves but I’ll let you answer that because I think that’s a great question.

MICHAEL HUDSON: Well, I bet this is just what they’re discussing right now in China. Because of COVID, I haven’t gone there since 2019 because I’d have to be isolated in a hotel room for two weeks so I’m not party to their discussion but they’re obviously worried that the Americans can do to them what they did to Russia. What are they going to do?

They need to keep some dollars just to intervene in the foreign exchange market to stabilize their exchange rate but they don’t need too many dollars and in fact in the third edition of my book Super Imperialism, which is coming out in Chinese now, the first edition sold about sixty thousand copies there and it is the first book of mine translated in China. So that was all about this question that you asked. This is very much in discussion now.

How do they run down their dollar holdings and what are they going to replace it with? Well, in principle they can replace it with holding each other’s currencies: Rubles, Indian currency and Pakistan currency and with gold because gold doesn’t have a liability attached to it. It’s a pure asset.

The world, the whole world is now de-dollarizing. America has, or Biden has, killed the dollar standard. This was America’s free lunch, being able to print dollars and never have to pay them back and now countries are all going to be dumping the dollars. They realize that America is just a gangster state financially and obviously they’re going to dump the dollars and this probably will push up China’s exchange rate and countries selling the dollars will increase their exchange rate against the dollar and that will hurt their relative exports. So, I think they’re trying to figure out how we can all do this together and keep a rough parity among our own currencies while really de-dollarizing. I don’t know what they’re doing but you can be sure this is what is on the forefront of everybody’s mind there.

DANNY HAIPHONG: Indeed indeed. It’s a huge question. I mean it really is trying to unravel and get oneself out of this hegemonic system, the dollar system. It’s something that you cannot escape and there’s been so much unfair, I feel like unfair condemnation and criticism of China and other countries trying to go their own path, for just their participation, it’s something you need to participate in right now to survive absent of another system.

Last question and I mean this isn’t so related to what we’re talking about but it is I think a good super chat question and I think it gets into economics too. What are the chances that China will simply not open back up for the next ten years or so looking at this long term because of COVID-19. I don’t know what you think Michael. My opinion of that from what I’ve learned about China there is a huge domestic tourism industry and foreign tourism is very important but I don’t know for me it feels like it’s going to open up before that. It seems like the economic situation that COVID-19 restrictions are difficult to continue on permanently but what do you think? Do you think that China could maintain these kinds of hard travel restrictions for a long period? I hope not. I want to go back; I need to go back and learn more but what do you think?


MICHAEL HUDSON: Well, I asked that very question of the universities that I’m associated with yesterday. We had a long discussion and the answer is nobody has a clue. They’ve been criticized in the West for avoiding COVID-19 but there’s no discussion in America or Europe of
long COVID and now that there’s a report that a million Americans have long COVID and it really seems awful, your IQ goes down by ten percent and it’s almost like inheriting a trust fund. You’re stupefied. As a result of that they’re also tired. Some professors I know there say that
they still have not fully recovered from COVID months and months ago. They still had very low
energy. There’s no way of knowing. This doesn’t look good and if the thought of staying in you know traveling all the way over there, staying in an isolated hotel for two weeks just to have a few days of meetings and then come back and be isolated again, nobody has a clue but it doesn’t look good.

DANNY HAIPHONG: No, it doesn’t and I myself, I’ve avoided COVID unironically like the plague like I am so lucky not to have caught it and part of it is U don’t want, exactly what you’re saying, long COVID. I don’t want that. I don’t want that in my life and I feel like you know I know so many people who have gotten COVID-19 and they lived through it and while they had it, it was awful. It was bad but they lived but now they have all of these other symptoms like I know people who had their whole lives kind of turned upside down because they just can’t get the energy back or the motivation or whatever it is.

It has an effect on your breathing and mental health and there’s so many aspects of long COVID that are difficult to understand and I think china you know at one point it was like a twenty one day quarantine. I know people who are traveling there and who go there often and they were staying twenty-one days you know in a quarantine hotel. I mean you know China has done such a great job containing and addressing COVID as best that they can under these circumstances. And so well of course I have my own deep desires to go back, but I totally understand why the government and why the people there who support this policy would be very careful because you have in China a population so huge. If they did what the United States did, I think the recent estimates are like one point seven million would die and then how many would have long COVID? Millions upon millions more because the case numbers would be astronomical through the roof.

MICHAEL HUDSON I am sure they’re watching what happens in North Korea which is just experiencing its first outbreak. I mean that’s sort of an example. The difference of course is that China is inoculating people and there are also pills the Chinese have sent me and many kinds of medicine in case I get COVID.

DANNY HAIPHONG: That’s great. Amazing, so before we depart Michael, I’ll stay on for another fifteen minutes or so but I definitely want you to plug whatever you’d like to plug now I will pull up the book again and your website. So, if there’s anything you’d like to plug please everyone, keep liking the stream, keep sharing and subscribing to the channel all that good stuff supporting the work at but Michael is there anything you would like to plug?

MICHAEL HUDSON: All of my articles are on my website and I’m also
on patreon and they can join on patreon and I have an ongoing discussion there so the website, patreon are my favorite sites where I publish, and Naked Capitalism, the Saker, Counterpunch, my articles are usually on a lot of these different websites and you’re showing it now so yeah
and the books are available on Amazon or Xlibris and you can all buy them and they’re well printed and priced not very expensively.

DANNY HAIPHONG: Great conversation Michael. Thanks so much for coming. We will have to talk again as things continue to develop so thanks so much.

MICHAEL HUDSON. It’s good to be here Danny. Thanks for having me.

• Category: Economics • Tags: Banking Industry, Capitalism, Wall Street 
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  1. Give ’em hell, Michael!

    • Replies: @Doug Ryler
  2. Jim H says:

    ‘If countries, if economic theory, would [only] talk about what makes a socialist country more efficient – lower cost with higher living standards.’

    Where is the data to support this notion that socialist countries are more efficient?

    Socialist Europe persistently is unable to match the economic growth of the US.

    Socialist China, with its state-controlled banks and financial repression, created a housing bubble that’s now collapsing in the face of a debtors strike. It’s malinvestment on a grand scale.

    Public schools are one of the last remnants of socialism in the US. In California, fully-burdened per capita K-12 spending is about \$20,000 per pupil. Efficient? I reckon not!

    Rhetorical economics unsupported by data essentially is philosophy — unfalsifiable.

    • Replies: @Hillaire
    , @Alrenous
    , @Meena
  3. Hitmarck says:

    J aint for Junk J is for Jude.

  4. [I]n the United States today, for instance, if you look at the balance sheets of corporate revenue much of it is spent on stock buybacks.

    When you liquidate all assets and pay back all stockholders, the company is over for good.

    But when you liquidate some assets and pay back some stockholders, it’s somehow supposed to be good news.

    • Replies: @sally
  5. Jimmy1969 says:

    Mike you are no Niall Ferguson

    • Replies: @Anon
  6. A123 says: • Website

    Finance Capitalism’s Self-Destructive Nature is on display in Europe and China.

    The European Empire is indeed struggling. The EURO € is trapped between Fire and Flood. The inherent inconsistency between German (a.k.a. ECB) policy and Italian reality is grim. Trying to keep Italy in line is a failure: (1)

    the market realized that the ECB’s newly unveiled Transmission Protection Instrument (TPI) – because Italy specific QE sounds a little gauche – is just another OMT-like word salad, which is meant to scare markets and never to be actually implemented practically. Here’s why:

    First, as Lagarde explained, the ECB alone will decide where to deploy this “crisis tool” and that all eur-area members are eligible for the TPI.

    Here is what she said: “obviously the Governing Council is going to conduct a thorough assessment of the situation in the affected countries. And the decision to begin TPI purchases, as I said, will be in the entire discretion of the Governing Council.”

    She added that “TPI is a program that is designed to address a specific risk that all euro-area countries can face” and “now clearly, to assess whether you have unwarranted disorderly market dynamics, the Governing Council will take into account, multiple indicators to determine the warranted versus unwarranted.”

    Lagarde’s disclosure of the four specific eligibility criteria for TPI as she claims that “the ECB determines in its own discretion, not hostage to anyone.” The conditions are the following:

    -1- Compliance with EU fiscal framework, borrowing from the European Commission
    -2- Absence of severe macroeconomic imbalances, again borrowing from the Commission
    -3- Fiscal sustainability, taking into account European Commission analysis and others such as IMF
    -4- Sound policies that are in line with the country’s commitment to the recover fund plans

    There is a problem with this: since the TPI is meant to rescue Italy, if these conditions are closely adhered to, it will make TPI usage in the case of Italy impossible, or as some sarcastically pointed out, Italy will surely be in “compliance” after the elections in Sept/Oct:


    The CCP Empire is in even worse shape. The trifecta that CCP Elites have generated for the country is grim.

    #1 is property: (2)

    China On Verge Of Violent Debt Jubilee As “Disgruntled” Homebuyers Refuse To Pay Their Mortgages

    As Bloomberg reports overnight, a rapidly increasing number of “disgruntled Chinese homebuyers” are refusing to pay mortgages for unfinished construction projects, exacerbating the country’s real estate woes and stoking fears that the crisis will spread to the wider financial system as countless mortgages default.

    According to researcher China Real Estate Information, homebuyers have stopped mortgage payments on at least 100 projects in more than 50 cities as of Wednesday, up from 58 projects on Tuesday and only 28 on Monday, according to Jefferies Financial Group Inc. analysts including Shujin Chen

    What’s behind this grassroot movement to halt mortgage payments altogether? Negative equity:

    According to Citi analysts, average selling prices of properties in nearby projects in 2022 were on average 15% lower than purchase costs in the past three years. Meanwhile, it’s only getting worse as China’s home prices fell for a ninth month in May, with June figures set for release Friday.

    #2 is retail banking: (3)


    Chinese Bank Run Turns Violent After Angry Crowd Storms Bank of China Branch Over Frozen Deposits

    On Sunday, about 1,000 people gathered outside the Zhengzhou branch of China’s central bank on Sunday to demand action; they held up banners and chanted slogans on the wide steps of the entrance to a branch of China’s central bank — many were injured as they were taken away. — The banks froze millions of dollars worth of deposits in *APRIL* — According to Chinese media the frozen deposits across the various local banks could be worth up to \$1.5 billion and authorities are investigating the three banks.

    #3 is negative return on government investments (4)

    Lefty sorts are always whining that other countries have high speed rail networks and we don’t. Many point to China’s extensive network of high speed rail as what we should be doing.

    Tiny problem: China’s high speed rail network is a giant, unprofitable sinkhole of \$1.8 TRILLION worth of debt.

    — The average operating loss for the system is \$24 million per day.

    — The official amount for China National Railway debt for high speed rail is \$900 billion, but since roughly half of the debt comes from local governments, the total is probably closer to \$1.8 trillion.

    — It’s extensive: 37,900km, nearly double the length from 2015.

    — Return on high speed rail investment is only about 2%, and the bulk of bond payments for loans are coming due over the next few years. “Cash flow from railway transportation revenue isn’t enough to cover the operating costs, let alone the ability to pay the debt and interest.”

    So why all the money poured into high speed rail? — Opportunities for corruption.

    Officials see the high-speed rail project in which China is involved as a lucrative opportunity. China’s former minister of railways, known as the father of high-speed rail, was sentenced to death for corruption. Emerging industries such as high-speed rail, which offer both substantial commercial value and political achievements for local officials, have enormous room for corruption. In a systemically corrupt environment white elephant projects, that is a large project that falls significantly short of its goals, and the costs of upkeep outweigh its usefulness, are favored by many officials and businessmen looking to make a fortune. The vast majority of high-speed railways around the world can’t make ends meet on passenger revenues alone to cover their construction and operating costs. Most operate at a loss.

    In light of all that, why do American leftists keep complaining about America’s lack of high speed rail? Simple: It’s the corruption, stupid. High speed rail construction offers boundless opportunities for graft and corruption, and refusing to build any keeps them from getting their snouts into another giant trough of taxpayer money

    Solving one of these problems would be difficult. Can the CCP Elites deal with all three simultaneously?

    As bad as the U.S. may be, it is in vastly better shape than the:

    — German controlled European Empire
    — CCP controlled Chinese Empire.

    Bet on America, not Empires.

    PEACE 😇





  7. Wow… more nasty anti-Dr. Hudson comments at UR. I read the first 50 comments to Dr. Hudson’s previous (recent… less than a week ago?) posting… and I couldn’t believe how radical/extreme anti-“socialism” the UR comments were (almost all of them… in what seemed like a really neurotic, ignorant, closed-minded, brainwashed sense?). Maybe they’re just trolls stalking Dr. Hudson around the internet??? Even so, clearly UR readers are not interested in what Dr. Hudson is saying… and that surprises me… I would have thought that they would be, like myself, VERY interested in everything Dr Hudson has to say. I’ll go further… after reading those 50 really nasty comments I now hesitate to recommend UR to others (i.e. the anti-jew stuff doesn’t bother me so much… strikes me as somewhat open-minded… whereas the hysterical “ANTI-SOCIALISM” stuff strikes me as… “neurotic, ignorant, closed-minded, brainwashed”).

    Anyway… I am a HUGE fan of Dr. Hudson… I can’t think of any person or organization that is more precisely describing what’s been happening to the western world for the past 50 years.

    From now on I’m going to stop and write my thoughts (i.e. things I wish Dr. Hudson would say) when I read/listen to him. Here’s two…

    1) On the subject of… “Europe is acting against its best interests… i.e. doing severe damage to itself… by aligning with the U.S.”… I would love to hear Dr. Hudson (with his usual laugh and shrug) say (after he said “no you’re wrong… all the [add… wealthy 5%] Europeans and Westerners are moving to the dollar… for safety… like always”)… “YES, clearly, the European bottom 95%’s best interests are being destroyed… you always have to recognize that, like in all Western-aligned countries, there is a HUGE difference between the 5% Managerial-Class (the looters) and the 95% Working Class (the sheep being systematically, methodically reduced to slavery)… for 50 years now the 5% (not just the 1%) have been reaping massive, accelerating, mind-blowingly-huge, year-after-year income and wealth increases. The 5% European “Technocrats”, like the 5% American Technocrats (i.e. the Managers/Administrators/Credentialeds!), live in a world of extreme, “self-generated” wealth/power/success… and they’re going to continue doing what they’ve been doing, very successfully, for 50 years… raping, pillaging, killing, the worthless-scummy 95%… with complete abandon… without the slightest fear of negative consequences to themselves.”

    2) On the subject of… “The Western elite have stolen \$100s-of-billions from Russians/Iranians/Venezuelans/etc and will probably steel \$trillions from the Chinese”… I would love to hear Dr. Hudson laugh and shrug and say… “Can you imagine how many billions/trillions the Americans would steel from the 5% (repeat… “5%”) Europeans/Japanese/Canadians/Australians/Saudis/etc… if they didn’t do what they were told???”

    • Thanks: Ann Nonny Mouse
    • Replies: @James Charles
  8. Franz says:

    Finance capitalism wants to privatize and take education, medical care, roads, turn the roads into toll roads, and take all of these and privatize them and make them financial corporations


    Most of these (especially medical care) are in the toilet for that reason. Community hospitals that were built by the people and institutions in the area have now sold out. They’ve turned into McMedicine and most are disastrous.

    All this is going to create a counter-move, something nobody will like but quite a few will support just to see Wall Street get their balls handed to them before the real action begins. Maybe sooner than later.

  9. I won’t dispute the fact that Marx’s Communist Manifesto started revolutions throughout Europe, but I will say that Marx’s “socialism”, at the time, was not seen as “socialism” by many of the early socialists from whom Marx stole his economic theories. The situation in the UK and its “Lords” was not the same as on the continent. Traditionally, the “Lords” through their estates had their wealth through the land itself. They were virtually self sufficient, and not necessarily cash rich. That didn’t make them perfect, and that was not to say that those who owned the land upon which cities began being built, were not part of the rentier class. It was the Bank of England and Trade Guilds the banker/merchant class where the actual money was. It is ironic that as the “Lords”, like the Monarchy in the UK, had their power stripped, things got worse for the working class. It was the Lords, not intermarried or beholden to the bankers, who were standing in the way of the banker takeover. As Enoch Powell noted 40 years ago “In the end, the Labour party could cease to represent labour. Stranger historic ironies have happened than that.” That has happened in the UK and in virtually all of the so-called Western liberal democracies.

    • Replies: @Ann Nonny Mouse
    , @Franz
  10. Anon[116] • Disclaimer says:

    Hudson gives us his usual 10,000-word defense of wage slavery, with an expression of his jealous hatred for trust funders thrown in for free.

    • Agree: Thim
    • Troll: Ann Nonny Mouse
  11. For many years (i.e. since early 2008) I have tried to explain to people what I have learned from Dr. Hudson

    (NOTE… and Dr. Bill Black… the amazing “criminologist”… who explains very precisely how, since 2001 and the War On Terror, Western “judicial systems” have completely replaced their white-collar crime investigation/indictment/prosecution/punishment systems with a massive “terrorist hunting” “homeland security” industry… i.e. the Western world has essentially legalized organized/corporate/institutional white-collar crime… while criminalizing the actions of anyone who tries to speak-out or push-back against the organized/corporate/institutional criminals… the 5% “managerial class”… NOTE: not the “1%”… it’s the billionaire/trillionaire 0.01% brains who are very precisely/methodically structuring “the system”… and their now filthy rich 5% army of sociopath managers/administrators/credentialeds who operate “the system”).

    Here’s how I’ve tried for 14 years to encourage people to read/listen to Dr. Hudson…

    In early 2008 (after 20 years of reading the Wall Street Journal daily… when Rupert Murdoch (FOX News) bought WSJ… as Obama started his campaign-of-fully-conscious-lies… as the global economy was crashing) I went to the internet and I quickly discovered Dr. Michael Hudson (and Dr. Bill Black!) at places like the Huffington Post, CounterPunch, AlterNet, TruthDig, TruthOut, etc. (all of which are now extremely horrible, establishment-captured, woke-crazed, evil, mal-information, propaganda rags).

    Instantly upon reading Dr. Hudson I learned what ‘money’ is… and in that instant I understood that the WSJ and essentially all our ‘Western’ institutions are a scam (i.e. an organized criminal enterprise) designed to make us (the 95% sheeple) ignorant and weak. I knew that this had to be true because, if our society’s institutions were acting to make us strong and successful, they wouldn’t be making us ignorant and weak by preventing us from understanding what ‘money’ is.

    So what do I think money is (i.e. what do I think I learned from Dr. Michael Hudson… which I don’t think I could/would have learned from anyone else?

    A blanket maker loads up his cart full of blankets and brings them to the town-center trading post (what Dr. Hudson recently called the “Chieftains… kings… temple administration… palace rulers… civic governments…

    Like others in the local community the blanket-maker trusts the trading post (essentially the community’s governing authority). At a counter he exchanges his blankets for ‘money’ (i.e. a ‘receipt’ that he has deposited a certain amount of ‘value’ into the local communities warehouse, controlled and protected by the local governing authority). The ‘money’ is broken into multiple ‘receipts’ so that the blanket-maker can then use the money/receipts to purchase other things.

    At this point in the story most people (everyone?) become VERY angry (like little babies throwing a fit)… I’m insulting their intelligence by describing what “every child knows”. They then completely tune out… and miss the very next part of the story… that clearly proves that what “every child knows” about money is only a SMALL FRACTION (essentially nothing) of what money really is.

    As Dr. Hudson describes (and proved… to ‘me’) so perfectly… throughout human social history the local trading post (i.e. community-accepted local governing authority… of MANY different types) not only creates money/receipts in exchange for blankets and other physical items of value (i.e. the asset-based part of the economy)… the trading post authority also creates and gives money/receipts to other people (people of their choosing!!!) in exchange for a promise that… the money/receipts will be used for a specific purpose… will be paid back to the trading post, with or without interest, within a specified time period. This creation of money/receipts is called “credit” (i.e. the finance-based part of the economy).

    At this point in the story most people yawn, roll their eyes and tell me I’ve bored them to death… that I’ve totally wasted ten minutes of their precious lives. Still, I try to continue… but by now nobody is listening… they’re completely tuned out… and extremely angry with me… how dare I assume that they don’t know everything about everything. I truly believe Americans are brain-washed zombie babies. Anyway, no more about the zombies… finish the story…

    In 2008, at age 45 (after my wonderful, highly-educated parents, 12 years of grade-school, 7 years of college in mechanical engineering and 20 years in the corporate freak show) I was reading Dr. Michael Hudson and it clicked (i.e. in an instant I understood that not only was my understanding of my “society” totally wrong… but clearly my society had been purposely lying and deceiving me)… the “financial-based economy” is actually HUGE compared to the “asset-based economy”. How could 19 years of school and 20 years of reading the WSJ not have taught me that???

    As Dr. Hudson explained… the trading-post, money-creating authorities (i.e. government and/or private-controlled “banks”) typically (repeat… “TYPICALLY”) create (i.e. dole out) TEN TIMES more credit-based money/receipts than asset-based money/receipts. THINK ABOUT THAT… I had been taught that the ‘economy’ was ONLY the asset-based economy… and it turns out that… NO… when you add the credit-base money/receipts… the economy is actually… AT MINIMUM… NORMALLY… TEN TIMES BIGGER than we have been led to believe.

    If you don’t understand, don’t believe, or simply don’t care about the enormity of the above FACT… consider just a few of the implications that “money” really is mostly “credit” (doled out by who?… who are the GODS OF CREDIT?)…

    1) Credit/Money creation has been the most fundamental and powerful social force throughout human history. There’s nothing different about the credit/money created today than the credit/money created thousands of years ago. The people who decide where credit/money goes are by far the most powerful people in society (e.g. today’s American presidents are nothing compared to these people).

    2) With thousands of years of experience, the trading post operators (i.e. the bankers… the money authorities… either government controlled or private interests) know that under normal economic conditions they can easily (i.e. with very little ‘risk’) dole out TEN TIMES more credit money/receipts than are created in exchange for physical assets like blankets.

    3) Done correctly (i.e. in the interest of society as a whole) the doling out of credit/money is a fundamental, centrally important, and essential function in ANY and ALL societies… credit acts as a fertilizer or lubricant that simply directs and facilitates the production/distribution of blankets and everything else… the credit/money appears with the creation of a receipt, is doled out to borrowers/producers, and as the credit/money is paid back the credit/money disappears, typically leaving behind (i.e. producing) physical assets (i.e. revenue streams) that have more value (sometimes MUCH more value) than the credit/money.

    4) Dr. Hudson makes perfectly clear, credit/money in itself is NOT and never has been a social “problem”… it is by definition an fundamentally essential social good… BUT… it’s the people who dole out the credit/money who either 1) allocate credit/money competently and benevolently to help societies function properly (typically referred to as “growth”… which to me is obviously NOT the same thing), 2) destroy societies by criminally and/or incompetently misdirecting society’s credit/money, or 3) any combination between the two above extremes.

    Early in 2008 Dr. Hudson and Dr. Black proved to me that, in my lifetime, the U.S. had radically transitioned from a relatively good society (that benevolently allocated credit/money resources) to a really bad, evil society (that does almost nothing but malevolently/criminally misallocate our credit/money resources).

    Here’s what they explained…

    The Roaring 1920s was a time when control of the credit/money system was given to sociopathic criminals (the typical, ever-present corporate/Wall-Street cabal of asset consolidators… who easily convince the sheeple that everyone will be richer if they get enormously rich… by simply redirecting societies credit/money into their pockets). They quickly destroyed the economy and during the consequent Great Depression 1930s the U.S. government (fine leave the room you “anti-socialism” freaks) decided to design a ‘system’ to control (i.e. “regulate”) the allocation and distribution of society’s credit/money (I know… you crazy anti-socialism freaks… the American “conservative core” who think Trump will solve all our problems?… your heads are exploding with rage… oops, I said “government” and “regulation”… call the FBI and have them take me away… please, save yourselves… leave the room now… you’re too closed-minded to consider this type of thinking).

    The new ‘system’, created with the Glass Stegal Act (with the other anti-trust acts), gave all (repeat… “ALL”) control of our (repeat… “OUR”) credit/money creation/distribution system to “Commercial Banks” which were, by design, small local lenders, widely distributed all over the country (i.e. tens-of-thousands located in ALL small/medium/large American cities!!!), who were 1) very limited to lending to only small and medium-size local businesses within a small radius from the commercial bank’s physical offices, 2) very limited to only lending for certain types of proven productive enterprises (housing, startup/operating business of every type, etc.) and 3) commercial banks were required to maintain and service ALL of the loans they created (i.e. they were completely responsible and liable for any bad/unsuccessful loans… and any commercial bank that didn’t have an adequately positive return on loans was simple shut down… this was quick and easy because commercial banks were, by design, small local businesses).

    So… THINK ABOUT HOW AMAZING THIS SYTEM WAS… AND HOW SUCCESSFUL IT HAD TO BE… By feeding the credit/money supply evenly across the entire country… our credit/money was being used to fertilize and grow a huge number of small and medium size American businesses across the entire country… including the tens of thousands of small bankers who made a basic humble American living providing a fundamental service (like a plumber) to their communities. The fact that the Glass Stegal system used to exist in the U.S. is 100% proof that the U.S. used to be a MUCH better, more egalitarian, benevolently-managed society/culture.

    Most Americans will still argue that a system of more widespread and fair distribution of our credit/money makes no sense in today’s scientically-perfected high-tech societies… it only makes sense to “follow the science and the experts”… by continuing to give complete control of our annual \$multi-trillion credit/money creation/distribution system to our wonderful globalist mega corporate leaders… and their wonderful, immensely productive 5% managerial staffs.

    Actually Dr. Hudson and Dr. Black also proved (to me) that… TRUSTING MEGA-CORPORATIONS IS ABSOLUTELY THE WORST THING ANY SOCIETY CAN DO… that the consolidation of production/service industries into mega corporations is just one of the really bad consequences to any society that loses control of its credit/money system… and that loss of credit/money control is as destructive today as it was thousands of years ago. Like the MANY systems designed to better distribute credit/money throughout history, the Glass Stegal and Anti-Trust regulations (i.e. the creation of a grid of tens-of-thousands of commercial banks spread out across the entire country… and the breaking up of uncompetitive, stagnant, corrupt monopolies) required that mega corporations be broken up and their medium-size pieces be forced to compete against each other in much more geographically distributed, competitive and dramatically more innovative markets.

    • LOL: Emslander, Thim
    • Replies: @HdC
    , @36 ulster
    , @MA
    , @TPM
  12. Anon[369] • Disclaimer says:

    Mike you are no Niall Ferguson

    Yeah, Mike, you’re no neocon with a sinecure at Camelot High (as Harvard Kennedy School is affectionately known as here in Cambridge [MA]).

  13. @Curmudgeon

    Hmm. So Marx stole his economic theories from economists? The way little children at school steal the thoughts of their teachers? So you’re standing the two thieves Marx and Hudson shoulder to shoulder? You must love Karl Marx! What a Marxist you are!

    • Replies: @Curmudgeon
  14. Biff says:

    Yea, I’ve been reading about China’s failing economy for the past thirty years – will the predictions ever come true?

  15. Franz says:

    As Enoch Powell noted 40 years ago “In the end, the Labour party could cease to represent labour.

    Exactly what happened in the states when the “democratic” party stopped caring about the American working class in the years after the old elites lost out to the new global finance crowd. And amazingly few Americans knew what was happening.

  16. Miro23 says:

    So in one sense, socialism is freeing economies from the legacy of feudalism which fought back in the modern world into a kind of neo-feudalism operating through financial control, not simply land ownership and monopoly ownership.

    An easy way to identify feudalism ( or neo-feudalism) is through the GINI Coefficient:

    The Gini coefficient, also called the Gini index or Gini ratio, is the most commonly used measure of income distribution—simply put, the higher the Gini coefficient, the greater the gap between the incomes of a country’s richest and poorest people. A country’s Gini coefficient is important because it helps identify high levels of income inequality, which can have several undesirable political and economic impacts. These include slower GDP growth, reduced income mobility, greater household debt, political polarization, and higher poverty rates.


    DR Congo 42.1
    Papua New Guinea 41.9
    Bolivia 41.6
    Ivory Coast 41.5
    United States 41.4
    Haiti 41.4
    Tanzania 40.5
    Morocco 39.5


    Hungary 29.6
    Denmark 28.2
    Holland 28.1
    Norway 27.6
    Finland 27.3
    Belgium 27.2
    Slovakia 25.2
    Czech Republic 25.00
    Slovenia 24.6


    The Asian average is 35.0 and heading down. South Korea 33.0, Japan 32.9

    China is an interesting 38.5. The gains from economic development (while still benefiting all Chinese) are disproportionately going to its elite which may be because of relatively recent industrialization.

    • Replies: @Yee
  17. In Charles Walter’s great book Unforgiven: The American Economic System of SOLD for Debt and War, there an extract from testimony before Congress of Georgia Commissioner of Agriculture Tom Linder in 1947, to the effect that one of the great mistakes was that after World War I, the war debt was not just written off by the fiat of the United States, but that instead war reparations were issued, to pay the banks, by Europe to pay debts to banks and U.S Treasury, pushed by the newspapers in U.S owned by the banks. In order that the debts to U.S. be paid, pressure was pushed to drop tariffs so Europe could sell goods to pay off the debt.
    The point made is that the U.S. did not need Europe’s goods, much less importing them at cut rates, but this is what happened, and it was the productive economy the hurt, starting with raw material producers, whose price levels on open markets dropped creating the post war depression.
    Congress would twice try to implement legislation to support agricultural prices, but Coolidge said no…a stock market bubble was pushed, and then that went pop, with the land of plenty starving, all because raw material incomes, (interest free money in circulation collapse causing the Great Depression, not the stock market collapse….While Agricultural Parity was made law 7 USC 602 by FDR in 1933, the government did not know how to implement the law, until forced by World War II to implement full parity to farmers, creating earned income that then prevented a post war depression but actually a boom….until the war merchants, the banks, pushed more war and debt, and destroyed parity first in 1947 then fully in 1952, though it still is the law today, except family farms are now dead…

  18. “China has kept money creation in the hands of the government itself so that when the government creates money it can finance the creation of factories plant and equipment, dams, transportation infrastructure, public housing.”?


    “China initially had a soviet-style
    40:48 economy but in 1978 a new leader came to
    40:53 power in China Deng Xiaoping and he
    40:56 analyzed the situation and he concluded
    40:58 that the Soviet system is doomed to
    41:01 failure and that’s of course dangerous
    41:04 he concluded for you know for the
    41:08 country and it’s better to abandon this
    41:10 system and instead he looked at other
    41:14 countries that had a more successful
    41:16 monetary system such as Japan and
    41:19 Germany and the US and he concluded well
    41:23 we need to decentralize banking and so
    41:26 when he came to power 1978 what what was
    41:28 the key one of the key things he
    41:30 introduced was he found it thousands of
    41:34 banks thousands of new banks local banks
    41:36 small banks regional banks specialized
    41:40 banks all across China and the rest is
    41:43 history that’s how you get high economic
    41:44 growth “

  19. @Steve in Dallas

    Fighting yesterdays battles?

    “The crisis now unfolding, however, is entirely different to the 1970s in one crucial respect… The 1970s crisis was largely artificial. When all is said and done, the oil shock was nothing more than the emerging OPEC cartel asserting its newfound leverage following the peak of continental US oil production. There was no shortage of oil any more than the three-day-week had been caused by coal shortages. What they did, perhaps, give us a glimpse of was what might happen in the event that our economies depleted our fossil fuel reserves before we had found a more versatile and energy-dense alternative. . . . That system has been on the life-support of quantitative easing and near zero interest rates ever since. Indeed, so perilous a state has the system been in since 2008, it was essential that the people who claim to be our leaders avoid doing anything so foolish as to lockdown the economy or launch an undeclared economic war on one of the world’s biggest commodity exporters . . .
    And this is why the crisis we are beginning to experience will make the 1970s look like a golden age of peace and tranquility. . . . The sad reality though, is that our leaders – at least within the western empire – have bought into a vision of the future which cannot work without some new and yet-to-be-discovered high-density energy source (which rules out all of the so-called green technologies whose main purpose is to concentrate relatively weak and diffuse energy sources). . . . Even as we struggle to reimagine the 1970s in an attempt to understand the current situation, the only people on Earth today who can even begin to imagine the economic and social horrors that await western populations are the survivors of the 1980s famine in Ethiopia, the hyperinflation in 1990s Zimbabwe, or, ironically, the Russians who survived the collapse of the Soviet Union.”

    • Replies: @James Charles
  20. Thanks Prof Hudson.
    But “the west” seems unbreakably locked into it.
    Westerners living on the edge of disaster but thanking God they don’t live in China…

    Yesterday I heard about the formation of “several” (don’t know exact number) Battalions of Ukrainian soldiers fighting on the Russian and LPR-DPR side.
    Apparently named “Odessa” Battalions.
    Informs re future intentions in Ukraine.
    Still, Zelenskiy can run away like his sponsor Kolomojskiy.
    He’s been given British citizenship by Boris.
    Join the other all star heroes in London.

  21. The western nations are under zionist control via the zionists privately owned central banks, in Americas case the FED, and in our case, the FED and its tax collector the IRS, are both unconstitutional and 2 of the 10 planks of the communist manifesto and were not saddled on the American people until 1913 and then came the zionist wars and zionist debt and zionist death , all laid on the American people.

    Inflation is the way the zionist central banks are killing the western nations by design and the heads of the FED aka puppets even have come right out and said the name of the game is dollar destruction to bring in a digital so called currency that will be created and controlled by the same zionist banking kabal that created the federal reserve notes here in America, the name of this zionist game is nation destruction and America is well on the way.

    Zionists are destroyers of nations and humanity , it is what they do, it is in their DNA.

  22. HT says:

    The best container of inflation is productivity and having an energy based economy where America is a world exporter of gas and oil. Cheap energy drives productivity. Why does the Jew power structure want to destroy America’s energy industry by pushing the green energy baloney? Because gas and oil is one industry the Jew money changers don’t control. The Jews would have us pay 3 times the cost for energy for no reason at all other than their need to control commerce and push their anti-white social agenda.

  23. Hillaire says:

    Ha Ha.. economics is such a pseudo science (a social science l am informed… which tend on the whole to reinforce the ideologies of any given regime/class and its necessary justifications… but often.. as we see with the current regimes woke (PC) trends it creates its own mutated ideologies and ideologues and these become schools of thought..)…

    much must simply be accepted..

    even in this one small discussion Hudson is contradicting himself by the end…

    and still rattling on about the fraud ‘Marx’..

    • Replies: @Hillaire
  24. Hillaire says:

    There really are no words to describe this level of insincerity…. one must question the honesty of such nonsense….

    They’ve been criticized in the West for avoiding COVID-19 but there’s no discussion in America or Europe of long COVID and now that there’s a report that a million Americans have long COVID and it really seems awful, your IQ goes down by ten percent and it’s almost like inheriting a trust fund. You’re stupefied.

    Yup… (love the capitalization)..

    • Thanks: Kali
  25. Hillaire says:
    @Jim H

    Even supported by Data it’s useless because the Data itself has no real value scientifically.. data is only useful for analysis and so called ‘models’.. not proof of theory.. (just theory… now conflated deliberately and mendaciously with empirical reproducible phenomena)..

    This is why modern hard science is now merely scientism on the whole …with most published drivel from the last 20 years Data driven and un-reproducible … and thus pseudo-science..

    just like economics…

  26. Pablo says:

    The economy is about Class Warfare. And it has always been about Class Warfare. The so-called “Finance Capitalists”, from the very beginning, has maintained that lowering Living Standards, lowering Wages for the Masses is the ONLY way to boost an Economy. It’s what the Financial Pirates at The Fed are starting to say now. Of COURSE it isn’t the fact that CEO’s make 390% more than the average Worker. It is also NOT about how Big Tech has a Monopoly. Or that the Mass Media is formed as a Monooly and they tightly control The Narrative. And it isn’t enough that the USA has the most expensive Health care System in the World. BY FAR. According to the “Financial Capitalists” it is NEVER the fault of the peole who actually run The Economy. Oh No.

  27. Alrenous says: • Website
    @Jim H

    America’s economic “growth” can be almost completely explained by Cantillon effects, due to the fact Bretton Woods was never genuinely revoked.
    The only question is who exactly is paying for it. It would make sense if it’s America’s primary trade partners: China, Mexico, Canada, Japan, and Germany. All these countries except Japan have trade “surpluses,” meaning they’re leaking useful goods and gaining symbolic currency.

    No wonder Germany runs out of energy after a trade hiccup – its sending all its wealth to its conqueror, America.

    Even then it’s clear that the numbers are fudged. Moscow looks like a richer place than anywhere in America, never mind towns like Shenzen. Even Kigali, in Rwanda, can boast superior infrastructure and cleaner streets.

  28. Good to see Dr. Hudson’s latest post reposted… thank you!!!

    Wow… 12 more hardcore ‘right-wing’ UR comments… oh well… here some more “socialism” stuff to make heads explode…

    A few days ago, after posting my comment above, I went back and reread Dr. Hudson’s previous UR posting…

    Again, I have to say… 1) to me Dr. Hudson is clearly explaining the core of what’s going wrong in Western society… and 2) I can’t believe that UR readers don’t get the enormity of what Dr. Hudson is saying…

    1) The creation of money/credit/debt has always and will always be the most central, important and influential function/institution in any and all societies… today and throughout history… the money-credit system is by-far the most powerful force in any human society.

    2) The amount of money/credit/debt created and doled out every year is mind-blowingly enormous (how many \$trillions every year in just in the U.S.???)… the people in charge of doling out this credit/money are mind-blowingly powerful.

    3) Any society can be “grown” or “destroyed” (or anything in between) based on how the money/credit system is being managed (Dr. Hudson provides clear evidence of how the Western world’s money/credit system is being used to destroy… while the Eastern world is now using their money/credit system to grow… and the West is being left in the dust).

    4) The only human institution that has sufficient power to take back control and redirect the distribution of money/credit… away from existing money/credit-system controllers who are incompetently/maliciously/criminally destroying society… is the institution of “GOVERNMENT”… (oooh… socialism… heads popping… pop… pop… pop) i.e. the people must take back control of their governments in order to get control of their money/credit systems.

    I guess I’ll have to be more explicit… to try to get UR readers/commenters to understand why I think it’s critically important they read/listen to Dr. Hudson…

    1) If jews have captured control of most, if not all, of the West’s social institutions… then it’s pretty safe to say the jews control the West’s money/credit system.

    2) If jews have captured control of the Wests institutions… and if the West is not happy with how the jews are managing the West’s institutions (i.e. they think Western society is being destroyed… e.g… education, healthcare, jobs/production/consumption, media, etc.)… then maybe they need to develop a better understanding of where the jews get their power to take control of all the West’s institutions (Hint: mergers and acquisitions… thinktanks… universities… the healthcare-pharma-scam… the Justice/State/Defense Depts… Congress… etc… etc.).

    3) If you want to understand how any organization captures social power… whether it’s jews or anybody else… then there is nothing you can read that better explains how than Dr. Hudson’s last post… PLEASE read carefully…

    I just have to say… if you think Dr. Hudson’s “socialism” (i.e. using government authority to influence the supply of the most basic human/social necessities… against the interests of evil sociopaths who have captured control and are destroy Western society) is wrong… then I not only think that you are terribly wrong… but you are by-far the bigger problem. Of course… that’s just my opinion… pop… pop… pop…

    • Replies: @Kali
  29. HdC says:
    @Steve in Dallas

    Too long and too rambling.
    I’ll simplify. The problem as I understand it is the way fractional reserve banking is, in fact, carried out. For a very long time I was in the mistaken belief that this meant the following:

    An individual deposits say \$1000 into his bank account, and the bank turns around and lends out \$900 to a deserving creditor, holding \$100 in reserve. The bank collects interest on the \$900, and pays interest on the \$1000. Collecting 6% per annum on \$900 got the bank \$54 pa, and paying 3% pa on \$1000 cost the bank \$30 pa, for a net gain of \$24 pa for the bank. Sounded fair and equitable to me.

    Unfortunately, that is not what happens, and the ramifications appeared horrendous to me when I realized the scam for what it was. Let me illustrate what really happens:
    Same individual deposits \$1000 into his account. The banker goes hmmm, I’ll use that \$1000 as my 10% reserve, and loan out \$10,000!

    Note that no value was created for that \$10,000, it was simply conjured up out of thin air. Now the bank collects its 6% pa interest, or \$600, and pays out 3% on the \$1000 original deposit or \$30 pa.
    For a net gain of \$540 per annum! Not a bad racket if you can get into it.

    The fact that there is no control over this money creation, and no values created for the money put thusly into circulation, is what endangers the economic well-being of any society that permits this. Worse, the bank can loan this money that was created out of thin air at preferentially low interest rates to friends and hangers-on, because the only cost to the bank is the 3% pa of the \$1000 deposit, or \$30 pa. The bank can loan out the \$10K for 1% pa to the well-connected, and still make money!
    Now you know why banks own the biggest buildings and pay obscene wages to the head honchos.

    PS.: The phrase “out of thin air” is the statement made by a Federal Reserve banker when questioned by a US senator as to where the money came from.

    • Replies: @Steve in Dallas
  30. Yee says:

    The gains from economic development (while still benefiting all Chinese) are disproportionately going to its elite

    It’s mostly caused by regional disparity.

    China is a large country and not evenly developed. It’s like grouping the whole of Europe in one country. The coastal and western part of China are quite different in level of income, but it doesn’t mean within the regions the Gini coefficient is high. European countries wouldn’t do well if they must group the rich and poor countries together.

    • Thanks: Miro23
  31. @HdC

    Thank you… sorry about the long and rambling… you are absolutely right… ten times more lending than deposits… how can people not understand and not care about who is doling out such huge amounts of money-credit???

    And actually… a 10-to-1 credit-to-deposit ratio is a relatively normal/safe ratio… in 2008/9 many articles were saying that the U.S. system was leveraged 20-to-1… and I saw numerous articles saying the European system was closer to 30-to-1. I don’t know what the leverage is today… nobody is talking about it… but after the recent 10s of \$trillions???

    My argument is this…
    1) the West’s money-credit system has been captured by incompetent, criminal and malevolent people…

    2) this problem alone is the source of most of the West’s problems leading to its social decay and probable (violent?) collapse…

    3) Dr. Hudson is the only person I’ve found in 14 years of searching (since 2008) who is really talking about this most-important issue…

    4) if Western children were taught to understand how centrally important and powerful their society’s money-credit supply and distribution is… we would probably live in a MUCH more successful and civilized society (e.g. explain to children why systems like Glass-Steagall and Anti-Trust are necessary)…

    5) Dr. Hudson is saying… the financialized Western system not only needs war but is war by definition… the Eastern world is rejecting the West’s mafia-based system and are returning to a shared-industrial (i.e. distributed technology/production/consumption) system…

    6) I agree with Dr. Hudson… the relatively new Eastern(/Southern) system looks to be a much better system which is rapidly moving ahead of the now stagnant-at-best Western system.

    • Thanks: JR Foley
  32. Thim says:

    “Dr.” Hudson serving up warmed over Marxism. No thanks. As Bakunin said, Marx had one foot in Socialism and the other foot in the Rothschild bank.

  33. JR Foley says:

    USA war machine and big coin to Ukraine —-why can USA issue billions to JEW Zelenskyy by a twist of Biden’s wrist but to clean up and modernize aged USA infrastructure it was hours of debate and haggling and 0 done ?

    • Replies: @A123
  34. I’ve always thought MH was a very astute and his layout and solutions always jived with me, it just seemed a lot less corrupt than the Financialized we have all been erading about.
    A lot of people agree with his type of economics but some I know, even though they agree with hi system socialism, they always spout something unclear about his political agenda which Im not sure what they’re alluding to.

  35. Once again the author fails to mention how Jews are playing a central role in using capitalism to work the nation over and destroy it as a tribal goal of accumulating wealth and gaining total world political and economic power.

    What the author is doing is making long winded intellectual arguments trying to explain how the current system is collapsing outside the very intentional Jewish goals of destroying Amerika and taking all of her wealth for their own. You simply can not understand the USA position in Ukraine outside of Jewish power, any different than understanding why Amerika hates Iran just to appease Israel. (This topic of Ukraine and Jews is well discussed on this site.)

    If Amerika was rational, it would be friends with Iran which has lots of oil, that it needs, and not with Israel which has nothing the USA needs. In fact since Israel did 911 and was able to get away with it (just like the USS Liberty attack), Israel should be considered the mortal enemy by the Amerikan people. Failure to mention that Jews and Israel are the mortal enemy of this once free nation is not just a mere mistake, it is intentional malfeasance in my opinion.

    One has to think he is doing this intentionally because either he doesn’t understand Jewish power and goals, or he is intentionally provide intellectual cover for Jews to loot an entire nation until it fails. Nor will the author ever write the Israel did 911, and was most active in getting the USA to destroy it’s enemies in the Middle East at a huge cost of morale, human life, and treasure. By not mentioning Jews, Israel, or Judaism’s goal of world conquest the author does patriots a real disservice

    Even as of right now the US Treasury is being massively looted in broad daylight for the Ukraine debacle: so far a whopping (62+) billions of dollars in money and equipment is being stolen in plain sight by Jews for Jews – who don’t give a damn about any consequences of what they are doing, like weakening military moral, shipping valuable and very expensive military arms to Ukraine that Russia uses for target practice (like the very expensive weapon system Himars which are being turned into junk iron upon arrival – it would far cheaper for Biden to just dump them overboard when they leave port).

    So reckless is this foreign policy that Anthony Blinken (Jewish Sec. State) is pushing us into nuclear combat with Russia, and they are doing it without a care in the world. I suggest all watch this video that Russia is now using state of the art hypersonic missiles in Ukraine:

    Russia using tactical nukes in Ukraine?

    Video Link

    Apparently many Unzians think Michael Hudson is some kind of hero, he is not, he is selling us out by not stating the obvious truths as detailed above. The author IMO is intentionally not talking the real politik to maintain his lofty position, because he knows if he were to out Israel and Jews he would be immediately shitcanned. So these articles by him serve no purpose but to waste the readers time and keep readers confused as to what is really going on – which is Jewish power consuming Amerika and putting her into an epic death spiral.

    Finally, how can you even talk about “the empire of inflation” outside of Jewish control? Jews are using inflation to loot the nation. Jews traditionally run the Federal Reserve, Jews with names like Greenspan, Ben Shalom Bernanke, and Jewess Janet Yellen. The latter deflation fighters created huge financial bubbles that only benefit the top 1% while everyone else is screwed by inflation. Well guess which tribe occupies the top 1%?

    The Fed was created by the Jew Paul Warburg:

    And let us not forget all wars are banker wars, and the Jew Rothschilds are at the top of the usury banking pyramid, that fractional reserve banking is the greatest tool of theft ever invented.

    • Replies: @Reginald Elings
  36. MA says:
    @Steve in Dallas

    First comes the moral degeneration all else follows it!
    Michael Hudson is a voice of sanity in ” power and control” oriented cites that have lost their marbles

  37. sally says:
    @Haruto Rat

    Ocean Tomo says 90% of balance sheets reported on exchange registered markets are intangible assets.
    Hudson does not mention monopoly power.. Monopoly power is created from hot thin air by rule of law.
    Monopoly power is copyright, deeds, patents, government contracts, government-private partnerships while stocks, bonds, derivatives, put and call options, are places where people store their savings.

    But to bring this who financial capitalism down in one easy go.. it is necessary only to erase from the books the laws that create monopoly powers. Think what would Microsoft and Google balance sheets look like if there were no copyright and patents for them to own. They could not prevent anyone from completing with them, and all product would be made with labor.. and the real price of those produced products and services would fall to the lowest price of all competitive prices available on the market.

    • Thanks: Kali
  38. @Yukon Jack

    I think that video is a probable fake:

    If you look at the ‘white’ line that separates the ‘explosion’ from the house and green surroundings, that is very suspicious; also no shock wave hits the house or adjacent area. Russia does not need to use ‘nukes’ at this time’ they are winning ON all fronts; economic, militarily and yes, evenly informational. According to some military analysts (Col McGregor for one) Russia seems to be preparing a huge final offensive to end this war- we will see

    Yukon Jack, I like and agree with the majority of your comments; your Idea that mankind was created by alien’s ( I think they are interdimensional) for a slavery is MOST interesting (You can add for WAR as well) I sense the truth of that from the fact that I have seen them a few times in my life-oh well.

    We must be careful of ALL videos/photos that get posted in this CGI/computer dominated world we live in.

    Take care

    • Replies: @Yukon Jack
  39. Fractional-reserve banking is not a system of financing economic activity. Rather it is a mechanism for creating what amounts to legal claims on the property created by the labor of others, which the banking system creates by having a monopoly on the issuance of ex nihilo currency which the producers require in order to engage in productive activity.

    Modern finance is essentially a branch of law and the law favors those who create money over those who create tangible wealth.

    Central banks are essentially institutions that exist to bail out the money creators when their claims cannot be made good on. They are welfare institutions for the parasite class.

    But at the end of the day, modern banking is a system by which the unproductive enforce claims on the wealth generated by the productive and we have reached the point where the bankers intend to enforce those claims even if it means cannabalizing the entirety of the producer class.

    One might say that they will due this inspite of the risk of killing the host, but maybe that was point from the beginning.

    • Agree: HdC
  40. TPM says: • Website
    @Steve in Dallas

    For the vast majority of people, the single most important determinant-in-fact of their quality-of-life is money – or so they believe.

    Yet paradoxically, and near inconceivably, most people do not know the first and most important thing about money, and that is that there is no money.

    Everything that people are habituated to think of as money is in fact a derivative-of money. There are promises-to-pay money, there are orders-to-pay money, there are various kinds of evidence (exchangeable-evidence-of-debt) that one party owes money to another party, and all of the accounts are denominated in money. But there is no money.

    Just as we could have a fully functional otherwise duplicate of the existing system but denominated in unicorn-horns instead of dollars, euros, yen, rubles and yuan. There are no unicorn-horns in fact, but that does not matter because there doesn’t have to be.

    The real problems start when the public is deliberately and systematically induced to believe otherwise, and when law or government-policy provides for it to make a difference depending on who you are.

    Money is an intangible. It is an idea or a concept. It has neither mass nor weight nor dimensions, and you can’t take a picture of it.

    Money is not a noun / fact – it is an adjective / opinion.

    Yet virtually every nominal economist oscillates between the tangible and the intangible to an extent that would make a genuine psychiatrist wet their pants in anticipation.

    Gold is not money. It is gold. Silver is not money. It is silver.

    And it is not a 5% reserve ratio – it is a 95% coefficient-of-fraud.

    Banks are not in the money-lending business – they are in the credit-reinsurance business.

    • Thanks: Kali
  41. @Reginald Elings

    We must be careful of ALL videos/photos that get posted in this CGI/computer dominated world we live in.

    Agreed. But it looks very real to me and Russia admits to using that very missile:


    Both USA and Russia admit they have moved tactical nukes into Ukraine. USA and Israel have been using nukes on a regular basis in the Middle East, the latest was the nuking of the Beirut grain silo:

    Video Link

    Don’t be fooled by the Judenpress cover story of ammonium nitrate bs.


    Also I subscribe to the theory that earth is a prison planet owned by some higher power, perhaps Reptilians who employ Greys to manage the earth population. Greys use telepathy to download holy books into the minds of willing dupes who start religions which keep us enslaved. War is a permanent feature of this planet, because it is what the owners want, and humans are an extremely duped bipedal ape created by crossbreeding with Anunnaki (see All Abrahamic religions are space alien cargo cults, the top elite are in communication with aliens just as portrayed in X-Files. Lloyd Pye’s “Everything You Know is Wrong” is a must read, as is “Alien Interview” by Lawrence Spencer, along with the Holographic Universe by Michael Talbot.

  42. @James Charles

    “Hidden beneath the shiny exteriors of an EV is a story of blood batteries. These cars drive human rights violations, extreme poverty and child labor…”

    • Replies: @mulga mumblebrain
  43. Kali says:
    @Steve in Dallas

    False dicotomy, Steve. If the choice is only between finance capital or centralised/government socialism, then we will always be at the mercy of one power block or anothor, and always blown this way or that, depening which ego(s) come to rule us at any given time. Not to mention we will always be at the mercy of market forces, regardless of the system used to administer them.

    As creative beings we are capable of escaping this dilema if only we engage our imaginations to think outside the box.

    For now I will forego my oft repeated description of my own prefered system (cos I’m tired), which you can read about in my comment archive if you wish.

    My main point in writing this comment is to emphasise that what Mr Hudson – as useful as his “end of civilisation” piece was – and you present as our only alternative is restrictive and unhelpful. Particularly given that we are entering a stage in our evolution which, in my opinion, requires us to mature into fully responsible, conscious actors, rather than the infantilised “wards” of some supposed “authority”. – Dependancy on which has brought us to the brink of our own destruction. – Either we evolve and mature as a species, or we fail as a species.

    Continuing down a road of dependanqy on markets and/or governments, to me, represents a form of spiritual (if not actual) suicide.

    Think outside the box, live outside the cage. 😉

    Best wishes,

    • Replies: @MA
  44. MA says:

    Out of box views are available as a theoretical frame work;

    Wealth must be generated from legitimate trade and asset-based investment. (The use of money for the purposes of making money should be expressly forbidden.)
    Investment should also have a social and an ethical benefit to wider society beyond pure return.
    Risk should be shared.
    All harmful activities (haram) should be avoided.

    This will also require a public-private partnership where
    1) Not so profitable enterprises which are otherwise essential for society such as be controlled and run by public sectors
    2) Private sector be given incentives for investment and wealth creation within the above mentioned principles

    • Replies: @Kali
  45. @Ann Nonny Mouse

    The economic observations of early socialists was standard fare by the time Marx arrived on the scene. They understood the problems that “capital” presented, particularly when it came to large private enterprises dominating any particular endeavour. Most were opposed to state (and church) involvement in the economy and some wanted to abolish the state all together. Marx took those observations and pushed them into state control of everything.
    “Marx is the tapeworm in socialism.” Pierre Joseph Proudhon after collaborating with Marx at his invitation.
    I’m no Marxist.

  46. @Yukon Jack

    Abrahamic religions

    There is no such thing as Abrahamic religions.

  47. A123 says: • Website
    @JR Foley

    USA war machine and big coin to Ukraine —-why can USA issue billions to JEW Zelenskyy by a twist of Biden’s wrist but to clean up and modernize aged USA infrastructure it was hours of debate and haggling and 0 done ?

    Do you mean anti-Semite Zelensky, who went out of his way to offend authentic Palestinian Jews back in March? (1)

    Zelensky’s Address to Israel Didn’t Go Over Very Well

    Ukraine leader insists Israel can’t mediate between good and evil; Knesset Members rip speech riddled with Holocaust references

    The Ukrainian leader also earned the ire of figures in the Likud-led opposition.

    Zelensky is trying “to rewrite history and erase the involvement of the Ukrainian people in the extermination of Jews,” charged far-right MK Bezalel Smotrich (Religious Zionism).

    Senior Likud MK Yuval Steinitz warned that the Ukrainian president’s words “bordered on Holocaust denial.”

    “War is always a terrible thing,” wrote Steinitz in his response to the speech, “but every comparison between a regular war, as difficult as it is, and the extermination of millions of Jews in gas chambers in the framework of the Final Solution is a complete distortion of history.”

    New elections are likely to replace Bennett’s far-left ‘inclusive’ coalition with a more centrist Likud led government. And, they were particularly displeased by Zelensky’s historical revisionism.

    Why is this taking place?

    The European WEF:
        — Hates Judeo-Christian values.
        — Puppetmasters Not-The-President Biden.

    MAGA’s impending midterm wins in the House will mean less money for Anti-Semite Zelensky and his Ukrainian aggression.

    PEACE 😇


    • Replies: @Lysias
  48. Meena says:
    @Jim H

    When money spent on services by government doesn’t yield results to find the answer ,look at the people, loopholes, accountability, bureaucracy and look at the culture wars . Theory of socialism doesn’t explain the rot .Its putrified American culture that explains the rot .

  49. Lysias says:

    I suspect that what I’ve been doing about covid, namely, taking megadoses of vitamin D, is an effective way to avoid long covid.

  50. Lysias says:

    What makes you confident that the midterm elections won’t be stolen?

    • Replies: @A123
  51. A123 says: • Website

    What makes you confident that the midterm elections won’t be stolen?

    MAGA has been working at the state level to improve election security. Swing states have much stronger controls or easily exploited weaknesses (unmanned drop boxes, “Ballot Harvesting”, invalid voter registrations [non-citizens, deceased, left district], etc.).

    I also suspect, but have no direct knowledge, that various GOP election officials will have a significant volume of blank ballot papers on hand in case there is a sudden surge in turnout. If the DNC engages in “Fultoning” (∆), the MAGA GOP will respond in kind.

    PEACE 😇

    (∆) Fultoning (verb) — The practice of “discovering” ballots to be counted and added to reported totals. Named after Fulton County, Georgia’s 2020 vote handling precedent pictured below.


  52. @James Charles

    So? Clean up the supply lines, and do something about poverty. You denialist and anti-Green fanatics are never more odious when you pretend to be concerned over human suffering. As denialists you are working to ensure suffering and premature death for BILLIONS.

    • Disagree: Kali
  53. @A123

    No problems in the Zionazi Empire then? The ZeroHedge stories will all be Epoch Times, ie Falun Gong, ie the CIA, fit only for racist cretins like you.
    The reasons that the worst type of Jews, and their goy arse-kissers, hate China, is basic Judaic racism, and a hatred of the Chinese because they treat Jews as fellow human beings, nothing else. The worst Jews hate that, being far more happy with the groveling boot-licking of the West. Decent Jews, of course, treat the Chinese with mutual respect.

  54. Kali says:

    Wealth must be generated

    False premis, MA.

    Why must “wealth” be generated at all?

    We live on an abundant planet, containing more than sufficient resourses to meet all of our needs. Our common-wealth has been pludered and abused in order that wealth be generated (for the few by the many – we the peasants) at our own expence.

    The entire “wealth generation” ethos has ultimately made dependents of us all, so that we can barely even imagine how life, sans “money”, and sans “the economy-stupid” might work!

    The generation of “wealth” is what’s led us to the situation we face today – i.e perpetual slavery to a self-chosen “elite” for the survivors of their “great reset” and/or their insane war.

    Money is a replacement for trust, for community and for faith. Ultimately it weakens us by creating an artificial dependancy, and by forestalling our natural, God-given creativity and inginuity.

    I guess that, in order to “think outside the box”, first we have to recognise it’s peramiters.

    Best wishes,

    • Disagree: HdC
    • Replies: @HdC
  55. HdC says:

    There are only 3 ways to PRODUCE wealth:
    Grow it in the field and harvest it.
    Dig it out of the ground and refine it.
    Manufacture it through ingenuity.
    If you know any other or better way, kindly advise us, here.

    • Replies: @Kali
  56. Kali says:

    Did you even read my comment, HdC?

    I explicitly asked “Why must “wealth” be generated [bold added] at all?” so obviously I was thinking in terms of monitary/financial wealth, as the rest of my comment also makes obvious, when I equate money as a replacement for “trust, community” and “faith”.

    Your comment: “If you know any other or better way [to PRODUCE wealth], kindly advise us, here.”, given the context of what I wrote, makes no sense at all.

    In fact, I don’t think you actually read a word I wrote and wonder why you bothered to reply..?

    Curious regards,

    • Replies: @HdC
  57. HdC says:

    We obviously disagree on the meaning of the written word. So be it.
    May good fortune shine upon you too.

    • Agree: Kali
  58. @Yukon Jack

    I to subscribe to that general idea of a ‘prison planet’ but I suspect that their is lot more-another source (There are others) of material that ties into that field is run by an individual by the name of Val Valerian(Leading Edge international research group box 2370 Yelm, Washington State 98597 or val_ [email protected]) He had a writer that was called ‘the author’ (now deceased 2016)who delves into that general subject (Warning he does delve into areas about fags and the role of genders, that I do no agree with-well anyway, I digress; also about simultaneous vs sequential incarnations in a internal struggle until ‘Graduation’) that is run by these reptilian entities; who knows, worth a check?

    We all can never have enough knowledge about our lives; spiritual or physical, or what ever: Knowledge is ALWAYS the enemy of fear

    Take Care

    • Replies: @Yukon Jack
  59. @Reginald Elings

    …the role of genders, that I do no agree with-well anyway, I digress; also about simultaneous vs sequential incarnations

    I have a theory that dovetails into captured souls forced into incarnations on prison planet earth. (It bears mentioning because I have not read it elsewhere on the web.) If souls are being captured and forced to endure a prison planet, what better way to torture a soul but to put it into a body whose sex is opposite of where it was captured. For instance, say you were living on a good planet and living hundreds of years as a male, then the empire captures your soul (and steals all of your wealth) brings your soul to earth and forces incarnation into a female body.

    Thus the transgender movement may be rooted in the torture of souls on earth by malevolent space reptilians who torture humans for fun.

    The best book I’ve come across which explains this crystal clear is ‘Alien Interview’ by Lawrence Spencer available here free:


    “…the very unusual combination of “inmates” on Earth – criminals, perverts, artists, revolutionaries and geniuses – is the cause of a very restive and tumultuous environment. The purpose of the prison planet is to keep IS-BEs on Earth, forever. Promoting ignorance, superstition, and war between IS-BEs helps to keep the prison population crippled and trapped behind “the wall” of electronic force screens.

    IS-BEs have been dumped on Earth from all over the galaxy, adjoining galaxies, and from planetary systems all over the “Old Empire”, like Sirius, Aldebaron, the Pleiades, Orion, Draconis, and countless others. There are IS-BEs on Earth from unnamed races, civilizations, cultural backgrounds, and planetary environments. Each of the various IS-BE populations have their own languages, belief systems, moral values, religious beliefs, training and unknown and untold histories.”

    • Replies: @Reginald Elings
  60. @Yukon Jack


    Here is another ‘alien’ interview that was allegedly given to the grandfather of an Indian by the name of Robert Morningsky around the same time (1940’s or earlier-I think) some similarities but more extensive (Dealing with the alleged human history) about our galaxy itself.

    Video Link

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