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Interview with Swedish Positiva Pengar Group
Interview with Swedish Positiva Pengar group, by Jessi Ora, May 27, 2021
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Jussi: So welcome all and welcome Michael. Good to have you here again. How are you?

Hudson: It’s good to be back.

Jussi: Our pleasure as usual. Let me just introduce you shortly first. I think most people know quite a lot about you. I’ll make it short. You have been an advisor to governments, warned correctly about the debt crisis in Latin America and the great financial crisis 2008. You worked on Wall Street as an economist. One of your assignments was to calculate how much it was possible to indebt Latin American countries so all their export income was used to pay interest on loans. Another way to put it, how much can you put these countries in debt. As an associate at Harvard you led research into four thousand years of the history of debt, money and the economy, and published five volumes of colloquia on this history. Also you have written nine books on modern economic relations.

Last time you showed us that big financiers historically have acted to write the rules for their benefit. We call that financialization. For that to succeed, finance must influence our way of thinking, mainly with regard to how we view money, debt and value. Today we will go into value and price theory.

But before that, I think we could do a short summary of last time. You gave us a long-term view of money, debt and the economy. starting from Sumer and Babyloni to today. You showed that there have been thousands of years of power struggles with financial interests wanting to take control of a society and the economy, and it goes on today.

If you look at this picture we can simplify this by dividing history into two parts: First from Sumer until Rome. That’s the green part in the picture. During that time, debt jubilees by palaces to whom most debts were owed were common. Money and credit systems a tool to develop society. Local authorities used bookkeeping to keep track of transactions and to record debt and credit. And rulers used debt jubilees to cancel personal debt in order to preserve self-sustainability in society.

Then we jump over to the reddish parts here on the screen: from Rome to today. There we have the change and suddenly private financiers are in power due to their financial wealth. Money is viewed as wealth, a commodity and scarce. Debt is sacrosanct, otherwise no creditor will give loans and the economy will fail without financing. This made it possible to use private debt as an instrument to grab land from others as long as you can enforce it.

And you were also into, from your Canadian experience and a few other things, that government debt in your own currency is not the problem. High private debt or government debt in foreign currency is a cause for crisis. We also have had Steve Keen here and he showed this clearly, even though common thinking seems to be the other way around. I tried to make that short, is there anything you like to add on that Michael?

Hudson: That’s basically it. You mentioned that financiers write the rules for their own benefit. These rules are called constitutions and bodies of law. Pro-financial laws have been the distinguishing feature of Western civilization since classical antiquity. That represented a sharp break from earlier Near Eastern practice. Greece and Rome didn’t have kings, at least after the kings were overthrown by Rome’s oligarchy early in its history. So the elites succeeded in blocking the tradition of Near Eastern monarchies cancelling personal debts and preventing an oligarchic financial class from emerging.

That is what makes Western civilization so different from everything that went before. Because without kings, without strong central government, or what the Greeks called tyrants, the oligarchy gained control, and managed democracy by a number of political tricks. Like the pro-boule in Athens, the Roman Senate could decide what the public assembly was allowed to discuss. Rome’s oligarchic constitution let everybody vote, but a rich landowner’s vote counted for hundreds of times more than the vote of most people. It was much like the United States today, where the donor class’s campaign contributions to U.S. politicians far overshadow what most voters want. The political rules in the United States reflect the donor class rather than democracy, just as in ancient Rome.

Jussi: Okay so Rome was the cradle for what we see today.

Hudson: Yes.

Financialization’s business plan: Privatizing rents and paying them as interest and fees

Jussi: Okay, thanks. Let’s discuss financialization. Can you tell us a bit about what it is, what is its business plan, and what foundation does it stand on? How is it played out in today’s world? I think you said a bit about it, but please tell us more.

Hudson: Financialization requires going into debt in order to get basic needs – housing for instance. Instead of paying rent to the landlords, like you did ever since feudalism through the 19th century, housing now is bought on credit. So the rent that used to be paid to landlords is now paid to the banks as interest. Renters pay interest, and over the course of a 30-year mortgage the banks end up receiving more money and interest than the seller receives when he or she sells the property. So the idea of paying rent as interest for a loan to get property is how commercial real estate investors as well as homeowners operate.


This debt leveraging goes right throughout the economy. Instead of funding pensions or healthcare on a pay-as-you-go basis as they do in most of Europe, current income has to be set aside in advance and invested in the financial markets – in stocks and bonds, or in just plain financial gambling. The hope is to make money financially. But the way that the financial sector makes money involves exploiting labor. So labor obtains its pensions by financing the exploitation of labor in order go get financial returns to pay its pensions. That’s what Marx called an internal contradiction.

The financialization process is basically anti-labor. Inasmuch as the policy aim of financialization is privatization, it wants to become the government. Financialization wants the banks to be the government and allocate credit and resources, not democratically elected officials. So financialization and libertarian free markets aim at centralizing control in the hands of banks. You have a more centralized control under financialization than you do under democracy or even many state-run economies that are controlled by the financial sector.

That sector uses this control to force the state to sell off its public enterprises, railroads, pension plans, it’s healthcare and all of this, and to privatize education, healthcare and other basic social utilities. Financial charges, management charges and stock buybacks are built into the cost of providing these basic needs. So financialization sharply increases the cost of the economy and it increases the cost of the economy in the form of rents, interest and financial charges paid to the Finance, Insurance and Real Estate FIRE sector – the FIRE sector, in a way that ends up shrinking the economy and preventing its ability to pay the debts. So financialization leads to crises, because its business plan is to get all the money for itself and impoverish the economy. But by impoverishing the economy, it does what Rome did, it leads to austerity and a Dark Age.

You can see this in education that’s been financialized in the United States. It’s provided freely from Germany to China, but to get a college education or even for many high schools in America, you have to take out a loan, at high interest (about 8%). As is the case with housing, the cost of getting an education is however much a bank is willing to lend the student.

The problem is that this leads to debt deflation. Financialization siphons off more and more of the economy’s income in the form of interest, financial fees, penalties and economic rents to the sectors that the financial and banking sector supports.

The classical theory of value, prices, and economic rent as unearned income

Jussi: Okay thanks a lot for that Michael. Let’s get into our perception of value and prosperity and start with classical economists. Can you start by giving us your background and connection to the classical economics, and then tell us how they viewed the economy, and especially their concept of value and price, and a how country should prosper.

Hudson: When I was teaching in the 1960s and 70s, the history of economic thought was still part of the graduate economics curriculum. Students had to learn the history of economic thought as a core course, and they also had to study economic history. Most of my early books were on the history of economic thought, especially international trade theory, balance-of-payments theory and American protectionism. So I had to read all of the classical economists leading up to Marx.

The classical economists were almost diametrically opposed to the kind of economics that’s taught today. That is why it’s not taught in economics courses anymore. The ideas of the classical economists, from the Physiocrats to Adam Smith, John Stuart Mill and his followers, were to free economies from the landlord class. The classical economists wanted to develop Britain, France, Germany and other countries industrially. They thought that the only way of becoming industrially competitive was to minimize the free lunch taken by the landlord class in the form of rent – income that rent recipients make in their sleep, as Mill put it. The classical economists also aimed to get rid of monopolies, which obtained monopoly rent much like land rent. This aim involved getting rid of financial rents and natural-resource rents also.

The idea was to free economies from having to pay such rents so that their costs would only involve paying people who actually contributed to the production process. This was to be achieved in a number of ways. Either you would tax away a land rent by a rent tax, which is what John Stuart Mill urged, or by simply nationalizing the land. There was a debate over whether the state should take control of the land by buying out the landlords, or just plain nationalizing it. But one way or another the idea was to get rid of the landlord class and its income that did not reflect a productive activity adding to real value.

The problem was how to do this with governments ruled by parliaments like those of Europe, dominated by the House of Lords in Britain and other upper houses in continental Europe. That required radical democratic reform. The theory was that with democratic reform, people would vote in their own interest. They were expected to vote to shift the tax burden onto the rentier class, the landlords, monopolists and creditors, not tax labor and industry. That was supposed to make the economies much more competitive industrially. That was the common policy denominator from the Physiocrats through Adam Smith and subsequent classical economists: to free economies from the burden of unearned income and the rentier class that collected rent in their sleep.

Jussi: Okay so it seems like they wanted to get rid of overhead and focus on the value made by those who created something substantial that we could use in society. So that’s actually opposite to the financial sector, which extracts money from the economy.

Hudson: Today’s banking sector is in a symbiosis with the landlord class, because 80 percent of bank loans are mortgage loans. The financial sector’s main clientele are the rentier classes, the very classes that classical economists wanted to free economies from.


Jussi: When we look at the economy today, it seems like it’s very, narrowed down to individual agents and how to optimize, maximize their profits or whatever you would call it. But in a society, you actually have relations with others also, so is there a difference between how the classical economists view society and how the neoclassical views it?

Hudson: Sure. They’re diametric opposites. Neoliberalism is really not individualism, because it ends up destroying individual choice. It’s an anti-government policy. What they call individualism is getting rid of government controls. They don’t want governments to have the power to tax rentiers. They don’t want government to have the power to regulate the banks. Let the banks decide what to make money on, and let them decide who’s going to administer the Federal Reserve or the European Central Bank and other government agencies. This is a travesty of individualism. It’s dictatorialism. That used to be called fascism a century ago.

A financially centralized economy creates an oligarchy and denies 99 percent of the population a voice in policymaking. That’s euphemized as individualism, but it’s fascism basically. The idea is to prevent government from doing anything that does not favor the FIRE sector and the monopolies that it creates.

To defend this as being efficient and productive, neoliberals claim that there’s no such thing as unearned income. The basis of neoclassical economics – now called neoliberalism – is to say that any and all income is earned. Anybody who earns any income, whether by charging interest, being a landlord or inheriting stocks and bonds in a trust fund and living off it – all this is claimed to be reward for contributing to production.

That means that all wealth is earned, and wealthy people are not the parasites that classical economics depicted them as being. The pretense is that they’re productive people, as if the world could hardly exist without banks and landlords to manage it. They now call themselves the “meritocracy.” It’s as if the host needs the parasite, because neoliberal economies are all about the parasites, even if they kill the host. So basically you have a predatory economics using a rhetoric designed to distract attention from what Adam Smith and the classical free market economists were actually talking about.

Jussi: Okay so what was a free market for Adam Smith?

Hudson: The free market was a market free from economic rent. It brought prices in line with actual cost-value. Rent is the excess of price above value, and it was to be minimized, so as to make economies free from interest and from the ability of the landlord class – in Smith’s day the main rentier class – and also the financial class. These elites sought to wage or finance wars, to try to grab more land, to get more land rent, to create monopolies and business plans that essentially were exploitative. Adam Smith wanted a free market from the rentiers, whereas the neoliberals want a free market free from the government and for the rentiers.

Jussi: So it’s the other way around again?

Hudson: Yes.

Jussi: So how come that is allowed today? Why do people buy into it – not everybody, but most anyway. That’s the common order everywhere.

Hudson: Well they don’t know there’s an alternative. That’s what Margaret Thatcher said: There iI No Alternative (TINA). If you don’t teach the history of economic thought anymore, and if you don’t teach economic history in the economics curriculum, how are people to know that there is an alternative and that things don’t need to be this way? The economy doesn’t have to suffer from debt deflation. It doesn’t have to go into debt to get an education. You don’t have to go bankrupt to pay your medical bills. You don’t have to save up your pensions by investing in companies that are trying to cut your wages.

There’s no real economic discussion of how economies actually work. Instead, you have a parallel universe of how ahypothetical economy would work in a completely different world – a world in which governments don’t exist, in which bankers are very productive and help the economy grow. The bankers, landlords and monopolists are depicted as the most productive organizers of society, trying to protect labor and industry from intrusive governments and taxes.

The proper role of the state is to minimize rentier income and prevent a rentier oligarchy

Jussi: So if you look into the state’s role, what was it according to the classical economists?

Hudson: The state’s role for classical economists was to protect the economy from landlords seeking to monopolize wealth. It was to do this is by taxing economic rent or nationalizing the land. The state ideally would enact anti-monopoly legislation, such as you’re seeing in Europe today against Google and other technology companies. It would promote environmental regulations, so that if an oil company or mining company pollutes, either you prevent it from polluting the environment or you fine it to pay for the cleanup costs. The role of government is to protect the economy from the rentiers, not serve them.

Jussi: Okay, then we take the other way around: What do neoclassical economists say the role of government is?

Hudson: To disappear and relinquish its power to the banks and the One Percent. The only role of government is to do what it did in Rome: to assassinate popular leaders who advocating cancelling the debts or redistributing the land. The role of the state for neoliberals is to protect the oligarchy from the people, to prevent real economic democracy and roll back everything that the 19th century was fighting for: creating a parliamentary democracy in order to free economies from the rentiers. You roll back reforms. Essentially they want neo-feudalism, so we don’t have to call it fascism. We can call it neo-feudalism. They want to put things the way they were back in the 12th century.

Jussi: Wow, it seems like it’s going backward, to say the least. So, what should the economy’s role be, according to classical economics?


Hudson: Well not only according to, but in reality. It should prevent rent seeking. The basic idea of an efficient economy is to minimize unearned income, because somebody has to pay this unearned income. If you have landlords charging whatever they want, if you have banks inflating the price of property – so that people have to pay in America up to 43 percent of their income for a government guaranteed mortgage – then you’re going to be priced out of the world market. So a good economy would prevent rent seeking. It would tax away the economic rent, which otherwise would be pledged to the bank, and it would regulate monopolies. Most important money and credit should be public utilities. So it shouldn’t be privatized.

The problem today is the rentier sectors: landlords, monopolists, and the oil and mining natural-resource rent recipients. All these sectors are backed by the banks. It’s the banks and the financial sector that are the mother of trusts.

If you keep money and credit in the public domain then credit will be extended for purposes that actually help promote prosperity, not that counteract it. Government money creation by deficit spending is spent into the economy for labor, for industry to build infrastructure, for productive purposes. Privatizing bank credit siphons off income from the economy. At issue is what’s going to be the priority: the host or the parasite? Governments should help the host, not the parasite.

Jussi: So it’s basically a question of what builds a good society, an what is prosperity and what is real value – back to that question.

Hudson: That really was the crux of classical economics: value and price. Classical economics said that we pay many prices way over what the value of things are. and the difference is economic rent. It’s okay for people to pay the cost of construction, building a house or producing a commodity. But if you have to pay interest and all sorts of financial charges and rent extraction on top of this, that’s not value, that’s empty price, that’s price without value. That’s what economic rent is. So that really should be the key focus of economic reform and for thinking about how economies work.

How China is following the classical development policy of industrial capitalism and socialism

Jussi: Okay, thanks. Is there any country today that builds its economy differently or more according to the classical economics view?

Hudson: The closest is China, which is following pretty much the same industrial logic that Britain, Germany and the United States followed in the 19th century. It’s protecting its industry. It is trying to prevent a financial oligarchy from emerging and gaining power. So it’s doing what everybody thought industrial capitalism was evolving toward before World War I. China’s really the kind of society that people expected Europe and the United States to evolve into before they were sidetracked by financialization.

China has kept banking in the public domain through the Peoples’ Bank of China. It can decide what to create credit for – and it’s creating credit largely to build more factories, to build infrastructure for the Belt and Road initiative, to minimize military spending as much as possible and simply to add to economic efficiency, to provide education freely and provide health care. And not to turn labor into commodity, not to make health care a commodity but a public right, not to make money a commodity but as a public utility,

Jussi: Interesting. In what way have you been working in China?

Hudson: I’m a professor at a number of Chinese universities, I was a professor at Peking University, and now in Hong Kong. I talk with government officials about how they can avoid financialization. One of the problems that China has right now is the same problem that you have in the United States and Europe: What do you do with localities that are unable to balance their public budget?

Right now in China, localities in the rural areas have to balance their budgets by selling off or leasing property to real estate developers. That’s the only way they can get money. Much as Chicago and other U.S cities are selling rights to parking meters or toll roads for that. My recommendation to China is what I would recommend to Europe and America. I’m urging the central bank to create the monetary revenue sharing, so that local governments do not have to sell off land – or if the land is sold off, to tax back its rising rental value so that you don’t have a rentier class developing.

A second thing that we’re talking about right now is why China sends students to the United States to study economics here. It made this decision in around the 1980s, seeing that America was the most prosperous country in the world. How are you going to learn economics? Let’s send our students there and find out what it’s done.

But it turns out that economics students in America don’t learn how America got rich. That’s not taught anymore; that’s classical economics. They are taught about how to go to business school and load the economy down with debt, and avoid protectionist policies.

So I’m developing an alternative agenda, an alternative syllabus of the history of economic thought. A summary of my ideas is going to be published in Chinese and American next month. I have a series of lectures that are right now on youtube in English with Chinese subtitles that are sponsored by the Lingnan University in Hong Kong. I think the first lecture had 148,000 viewers, so you have an idea of how much interest there is in China to see that an alternative to neoliberal thought. If they want to find out how America got prosperous, they should actually look at how America did get prosperous in the 19th century and early 20th century – and also how it’s not getting prosperous anymore, but is destroying its prosperity.

If China were to send its students to America, the essence of what they are taught is that China never should have developed. It was all a big mistake for China to make its population richer, because that’s interfering with the free market. If China would have left a free market, then you’d still have a coolie trade, you’d still have poverty, you’d still have a free market as the status quo. They’re taught that China should just dissolve the government and turn power over to the banks.

You can imagine what the Chinese students must be laughing about when they hear these courses. But they have to get the degree, because that’s what they’re here for.


I’m trying to revive the alternative discussion of classical economics which of course is what led into Marxism. China identifies itself as a Marxist country. Quite right, but I’m saying that Marx was the culmination of a classical tradition that led naturally to culminate in Marxism, so I’m showing the classical foundations of Marxism.

Jussi: What are the classical foundations of Marxism?

Hudson: Rent theory, extended into profits as another kind of exploitation, but one deemed “productive” under capitalism. We’re back to value, price and rent theory, and surplus value.

Jussi: What you’re saying is that China did what they say we shouldn’t do in the Western countries: They use the government to create money to build the country.

Hudson: Yes

Jussi: And that is a bad thing according to common education?

Hudson: Neoliberals say that this would “interfere” with the free market. If you had a free market neoliberal-style, only the banks would create money. They’d create credit for takeover loans to buy out companies, and essentially for corporate raiding and asset stripping. The question is: What are you going to create credit and money for? That’s the real issue: What is the aim of money and credit creation?

Jussi: Yes, what should we use our resources for, that’s true. Is there anything else you think that we should learn from China’s economy? I’m not talking about the political system, because that might be a bit sensitive, but from the economic point of view?

Hudson: You can look at the problems that China’s having right now. Its property prices are going up, and a number of companies are in trouble. Let’s look at how the financial dynamics – as opposed to the industrial dynamics – are developing there. Watch and see what the balance is between finance and industry, and watch whether China is able to maintain a labor-oriented industrial strategy and resist privatization and monopoly.

You’ve already seen that they’ve limited Jack Ma’s attempt to use the Ant system as a telephone credit by saying: “No, only the government can create credit, not you.” So they already have a pretty good feel for this. Watch how they’re de-dollarizing their economy and making themselves independent of U.S. Dollar Diplomacy, which basically is aimed at spreading financialization throughout the world.

The logic of public infrastructure investment: to lower the cost of living and doing business

Jussi: Could you tell us something about the Belt and Road initiative, because quite a lot is written in Swedish media about it, but it’s never like any deep understanding.

Hudson: The basic principle at work when you’re developing ports and other shipping, railroads and basic infrastructure for trade and exchange is whether you are going to do this for profit or for overall economic development? Neoliberals have criticized China for the Belt and Road initiative by noting that the first investors in the Panama Canal all lost their money. The company went bankrupt. The world needs a Panama Canal, but it cost more than early revenues brought in. The same thing happened with the Suez Canal. It was a financial disaster and helped ruin Egypt financially.

China’s response is that it’s not building canals and ports to make money off them as such They are building these ports in order to develop the economy and create an exchange so that the overall economy will be more prosperous. There will be a shared prosperity from China spreading out along the length of the Belt and Road to Europe, developing the economies there instead of lending like the World Bank would do – which would be lending for plantation agriculture and for very expensive American engineering firms.

China is looking at the economy as a broad system, not for quick profit-making. They’re looking at the economy as a mixed public and private economy. How do ports and the other infrastructure investment that that China is developing actually help the country.

Obviously, countries receiving this investment in ports have to pay something for it. But the prosperity created by ports and other infrastructure is what enables them to pay. So China is making productive loans to these countries and if the country is not able to pay, it doesn’t then foreclose in their property and say: “You have to sell off your oil wells and mineral rights to our mining companies, and you have to privatize.” China has shown itself willing to write down the debts or defer payment. It doesn’t try to make loans to countries in order to foreclose. It doesn’t tell countries: “We will lend you the money to pay the debt, but you have to destroy your labor unions, you have to agree to assassinate your land reformers, you have to kill your labor leaders, you have to agree not to teach any economics but the neoliberal economics.” That’s what the USAID, the IMF and the World Bank said to Chile, Brazil and other countries trying to resist U.S. neoliberalism.

China is not trying to finance the impoverishment of countries, which is the business plan of the IMF, World Bank and USAID. They serve the financial sector, whose business plan is to impoverish the economy so that the One Percent, the financial class, ends up with all the wealth, leaving everybody else to shrink. That’s the opposite of what China is trying to do.

Quantitative Easing to support asset prices, “capital” gains and a K-shaped “recovery”

Jussi: Thanks a lot for that Michael. I have a final question before we take some QA: how does Quantitative Easing (QE) fit into the financialization of the economy or society?


Hudson: Its aim is to support asset price inflation. It began in 2008-2009, after the American bank-fraud crisis of junk mortgages – the most massive bank fraud in modern history. The banks had lent so much mortgage credit in excess of the actual value of real estate, with debt service so far above the actual rental yield of this property, that asset prices were going to collapse. If that would have happened, the most reckless banks (especially the largest ones) would have gone bankrupt. Their claims, reserves and collateral were what used to be called fictitious capital. On the balance sheet it was a bank claim saying that the banks were worth X amount of money. But the real value of the collateral backing its loans was much less. Frederick Soddy called this virtual wealth. Ot wasn’t real wealth in the form of tangible real estate and means of production; it was virtual wealth: claims on this real wealth way in excess of realizable valuations.

The purpose of Quantitative Easing was to flood the market with new credit by lowering interest rates, so that speculators and investors could afford to borrow and speculate on credit. QE was a means of subsidizing speculation in order to keep the overvaluation of property going, and essentially to turn the economy into a Ponzi scheme. For central banks, the role is to serve the interest of the banking sector. That’s why there are central banks as opposed to the national treasury. You load the economy with enough credit to “borrow its way out of debt.” That was the phrase that was used.

We’re in the Ponzi phase of the business cycle, to use Hyman Minsky’s term. There’s less and less real value there but prices have been going up. The media trumpet this as a recovery of the real economy, as if this financialization dynamic is sustainable. But the only way to repay the early entrants into a Ponzi scheme is to have new investors. In this case, you have new bank credit coming in today. In the last few years the Federal Reserve has been buying not only stocks and bonds, but also junk bonds. There are companies that Sheila Bair, the head of the FDIC said: look these are zombie companies, these are bankrupt companies, and the Federal Reserve is buying their junk funds so that the investors and the junk funds won’t lose money. This is crazy!

The role of Quantitative Easing is to keep the illusion going that if the stock and bond markets are booming, then the economy must be succeeding and everything is going okay.

The financial sector’s business plan of the that’s behind this Quantitative Easing is to fuel asset-price inflation, even while it’s causing debt deflation for the economy at large. You have to privatize public utilities. And to do all this, you have to shift control of the government into the hands of the banks, to use the central bank or Treasury not to run a deficit to spend into the economy but into the financial markets.

Right now as you know with Covid, the American and the European economies are strapped. This is a case where the government should be creating credit to pay into the economy, to prevent individuals and small businesses and large businesses from becoming insolvent when their employees can’t work because of the virus. But instead of creating credit to spend into the economy, instead of saying: “There’s unemployment, so we’re going to build up infrastructure,” the central bank uses Quantitative Easing only to buy stocks and bonds and real estate already in place. This does not help the economy or create new means of production or infrastructure. It’s supporting fictitious capital! To do that, you have to take over the government and make sure that democracies don’t have a real choice in making policy in the interests of labor or industry.

Jussi: It seems like QE is one way of feeding the financial industry to secure prices in the market, not to secure jobs and cash flow in businesses and for people?

Hudson: That’s right. You talked before about Rome. What Rome did was bequeath the body of law that we’re still in, making all this possible. To get back to what you said at the beginning of the discussion, the principle of Roman law is the opposite of Near Eastern law: Debt is sacrosanct. Rome bequeathed its pre-pro-creditor legal philosophy to Western civilization. What’s called “security of property rights” is actually insecurity of these rights because its priority is creditor privileges to foreclose on the homes and assets of debtors.

What the U.S. calls the rule of law is creditor-based law. This “rule of law” is written by lawyers for the banks and the corporate sector, not by democracies at large. Whenever there’s an attempt to regulate finance to prevent monopolies, to prevent global warming, that’s called “interfering with property rights” as if somehow that’s a bad thing. The classical purpose of government was indeed to interfere with financial property rights, especially of absentee landlords whose rent extraction was impoverishing the economy.

Jussi: What changes are you suggesting that we make?

Hudson: The important immediate change is to free economies from the rentier class, and to make money and credit a public utility to be used to promote prosperity, not to financially cannibalize economies.

Jussi: I understand in principle, but how do you suggest that we go about doing that?

Hudson: Each country is different. I don’t see how it can be done in the US without breaking up the Democratic Party. We have a duopoly here. The two parties are actually the same party. Most Americans want socialized medicine and free education, but they’re not getting it. Most Americans want to tax the wealthy, but we’re not getting it. So you have to somehow recapture government just like the aim was in the 19th century, but failed as the middle class shied from limiting rentier income and protecting labor.

From the 19th century to World War I there was an attempt to democratize economies to reform them in order to get rid of the old predatory financial sector. It failed. The modern world didn’t end up with the classical economic ideal, but with what we have today in the wake of Margaret Thatcher and Ronald Reagan in the 1980s, and neoliberalism. Obviously, you have to change the government in order to write new sets of tax laws.

Jussi: Do you think that we should take money creation out of the hands of the banks and put it into the public domain?


Hudson: Yes, of course! That’s why I supported the Chicago Plan, among other things, in the United States for many years. Of course money creation should be in the hands of government, not banks, because governments create money for different purposes than banks do. Governments don’t create money to take over existing assets and squeeze more money out of them. They spend money into the economy to create prosperity, to create assets, to finance infrastructure and industry. Of course, this structuring of money creation should be in the hands of governments. That’s the most important change.

Jussi: It is not like the central bank should be the sole creator or something like that?

Hudson: No, central banks are there to serve the commercial banks, but to make sure that banks credit that is productive, not predatory.

Jussi: I’m sure they could be made to serve whoever we like, but who would create the money? If I’m a small business and I want 50,000 euros as a loan, would I then go to the public lenders with my application, so the government would take over the entirety of creating new money to make small loans to everybody around the country?

Hudson: Here’s how it is done in China, and basically what the Chicago plan is supposed to do, subject to the principle of hundred percent reserves: You would do just what you do now. You would go to the bank and ask for a loan. The problem is, in order to make the loan to you, if the bank doesn’t already have the deposits available, it will need money in order to create the credit for you. If you’re borrowing for a productive purpose – not to take over a company, but for a productive purpose – the government will simply create the reserves for the bank to lend you the money. The government creates the money, but it will create money only for banks to make particular kinds of loans. If you want to borrow to buy a house, the government will provide the money for it via the banking system – as if it were a depositor in the bank. If you want to start a business that the bank finds credit-worthy, the banks will be able to judge your credit-worthiness and you get the loan. But they cannot create credit out of thin air. They need government deposit backing.

Jussi: Thanks Michael, I’m not familiar with the Chicago plan, where could I read a 20 or 40 page description of this?

Hudson: I was the advisor for Dennis Kucinich, the U.S. presidential candidate, and he had promoted the Chicago Plan. I know that Stephen Zarlenga had a lot of meetings where Steve Keen and I and others spoke about this.

Jussi: Okay, thanks very much, I’ve taken up a lot of everybody’s time, so I’ll stop now.

QA2: Thank you very much, I really appreciate your analysis. My question is this: The Chicago Plan evolved into the Kucinich bill in the United States, the NEED Act, which does set up essentially the government as a creator of money and makes banks essentially like other non-banks, that is it lends pre-existing money. One of the questions that has come up and you’re undoubtedly aware of was raised by the authors of “The End of Banking.” If you just impose the regulation of the NEED Act, that limits essentially what banks can do. It won’t stop the shadow banking industry. So my question to you is: What would happen in terms of shadow banking as we know it, as a result of simply ending bank creation of money and shifting money creation to the government?

Hudson: That’s what 100 reserves means. There will still be rich people with money to lend, especially foreign investors. But financial reform needs tax reform to go with it. You have to tax away the existing economic rent, so that it will not be available to pay as interest. Also, it is necessary to wipe out the overburden of debt that now exists. You cannot restabilize the economy and get out of today’s austerity and debt deflation without writing down the debts, cancelling many of them. But you can’t cancel mortgage debts of absentee owners without replacing former debt service with a land-rent tax, so as not to make an absentee real estate sector debt-free. These reforms would end a lot of the assets on which the shadow banking industry is based. A proper tax policy and with a debt cancellation would create an environment in which new money creation will work.

What if China let many billionaires begin buying out companies and creating monopolies? It wouldn’t happen there, and it didn’t used to happen in the United States under the anti-monopoly laws here. You can’t reform only one part of the economy, like finance, without reform the rest of the system. So you need systemic reform: Monetary and financial reform have to go together with fiscal reform, policy reform and legal reform.

QA3: We live in Switzerland, and I’m here with my father. You said that democracies don’t really decide which policies and laws are enacted. In Switzerland we have the right to make a referendum on laws that we do not like, and we can vote on them as a people, and we can do initiatives to propose changes to the constitution, that also will be voted on by the people. Do you think that it has an influence on how much the economy is beneficial to the people, and if yes, do you also think that it would be a good change for societies and democracies in general if such rights were in most of the countries?


Hudson: A referendum is certainly democratic, but within an overall oligarchic structure in the United States and most of Europe. If you could get a referendum and have the government respond by actually creating a real public health system, cancel student loans and introduce progressive classical tax reform and cut back military spending, that would be fine. The problem in the United States is the Supreme Court. There is a neoliberal majority in the court – with lifetime membership – that would claim that such reform is interfering with free markets and that the “founding fathers” and constitution did not permit this, so they would nullify the referendum. It would take a constitutional amendment, or even a new Constitutional Convention – in today’s right-wing atmosphere. So we have a bizarre structural political and constitutional problem in America that you don’t have in Switzerland.

QA4: Michael it is a pleasure to meet you and listen to you. My question is a bit philosophical but as a student of ancient history, I imagine Egyptian slaves, Roman soldiers, and medieval peasants in a world with less work, more leisure, and more joy, freeing the human spirit and yet here we are today still talking about more work? We all seem to want to work more, and of course value comes from work, and value is what is captured by owners who exploit their ownership to, if you like, enslave other people. Do you think we’ll ever be able to imagine a different world? One in which there is less work and more of what the human experience is supposed to be about?

Hudson: I wrote “Financialization and its Discontents” about this problem. Suppose that you were back in 1945 and were told about all the productivity gains that have been made in the last 75 years. You would think that we would have a four-day week, or even a three-day week. There’s so much productivity that we do not have to work. And yet the more productivity rises, the more people are working overtime.

That is in large part what is making productivity going up, by squeezing more and more out of labour and paying it less and less. Also, consumers are bearing much of the effort that companies used to bear, largely as a result of computerization. So people have to work so much harder now than they used to when I went into the workforce. But this isn’t a product of nature. It doesn’t have to be this way. It’s a result of policy. Employees are working harder basically to pay off the debts that they’re running up. Much of this extra work they’re doing is to carry the financial sector, the FIRE sector and the rest of the rentier sector on their shoulders. If you get rid of the rentier sector you won’t have to work so hard.

Jussi: Thanks for the question Don and great answer Michael. So, I jump over to Stamatis, I think you are next in the queue.

QA5: Thank you very much Michael for your talk! My question is this: I was thinking that if we really had a Chicago plan-based economy, where reserves were in place. There should be some way, which is not exactly clear in the Chicago plan, of how to increase the money supply. This is usually by the debt deficit spending of the government. But this does not say that this deficit would not go to the FIRE sector, or that financialization would be over. So the only two things that would be different, in my understanding, is that we would not have any account of how much of this money goes there. That would only be in the government’s books. Is there any other difference? How would we beat financialization? It would not be only by changing the banking system. It would require other kinds of laws.

Hudson: Yes, you are right. That is why I said the economy is a system, and there have to be other changes. Of course, if the government wanted to keep spending on the military-industrial complex, or to go to war or subsidize corrupt privatizers and financiers, you would have to change the government as well as the banking system. But you are right: Stopping the banks from creating credit solves the problem of bank credit, but it does not solve the rest of the problems that you just brought up.

There has to be overall political reform. That was called socialism in the 19th century. We could still call socialism today. You would need socialist reform and a thoroughgoing political reform to restructure what the government is all about. So, it is not only what money and the financial sector are all about, it is about the role of government. And its role to help society? Is it to help the 99 Percent, or to help the One Percent? Is it to help clean up the world’s environment? Is it to promote peace? Or is it to promote a New Cold War, like the governments today in Europe and America?

QA5: Okay so I will add a follow-up question, one. In our case, in the EU, we have a problem, because the situation is out of the hands of the government. It is inside treaties, it is invisible.

Hudson: Basically, your governments act as a branch of NATO and related U.S. policy, no matter which parties are elected.

QA5: Yes, well, that is one step further than I wanted to take it. In the international sense, yes, that is the situation. The banking system is eventually dependent on New York banks and that is why we depend on NATO.

Hudson: No, you depend on NATO politicians, right-wing politicians, finance, and corrupt right-wing groups because Europe is not really very democratic. Look at Sweden and Britain holding Julian Assange as prisoner, or look at the Netherlands’ kangaroo court trying to frame up Russia for the ML17 shoot-down over Ukraine, or the Baltics, Polish and other opposition to Russia’s Nord Stream 2 pipeline. These are U.S. policies, not in the interests of Europe, but its politicians serve U.S. interests.

QA5: Right. But how does this make us dependent on NATO?

Hudson: I should have elaborated what I meant partly as a quip. The State Department, the CIA and many NGOs through which the U.S. operates essentially pay the checks to buy your politicians, especially in Brussels. My friend Paul Craig Roberts was Undersecretary of the Treasury for International Affairs, and he explained to me that the tactic is simply to buy politicians – and European politicians are about the cheapest in the world because they’re just so free of oversight and punishment.

QA5: I will not disagree there. Okay thank you Michael.

Jussi: Thanks Stamatis. Then we go to Jeremy.


QA6: Thank you Jussi. Hi Michael, would you walk us through how debt deflation works. As I understand it, it is a consequence of the repayment of principal interest and fees to banks, which accept them by reducing the liability side which happens to be our money supply. What happens when government deficit spending – let’s say for the most worthy of causes that we might all agree with, not for oligarchic causes, what happens when that collides with debt deflation? Does that not still create an enormous disparity between the bank reserves that banks get which accrue interest and the deposits that mere depositors get which disappeared via the repayment of principal?

Hudson: No, paying private debts and government budget deficits have gone together with an increasing money supply for many years. The debt dynamic is separate from the money supply dynamic. So regarding budget deficits, what you are suggesting sounds like what is called the crowding-out theory. You think if the government spends money by running a deficit, there is less to be spent in the domestic economy. There actually is more. The government can create as much money as it wants, it has no connection at all with crowding out money elsewhere in the economy. Stephanie Kelton has just published a good book on Modern Monetary Theory explaining all of this, and the economics department of the University of Missouri at Kansas City, where I used to be on the faculty, spent years explaining all this.

QA6: I do not believe I was elucidating the crowding-out theory, but deficit spending does increase bank reserves or bank holdings of treasuries. They augment bank assets, bank liabilities, even if the liabilities is spent for let’s say some flood worker, some fire worker, that individual is simply getting a bank IOU, a deposit and as they repay principal interest and feedback to the bank. Is that not debt deflation resulting in a disparity between what banks are able to earn as in…

Hudson: That is not how the world works at all. The government doesn’t have to borrow from the banks. Again, Stephanie Kelton has explained all of this. The government can create money. It doesn’t need to borrow from the banks, it doesn’t need to pay interest on bonds if it creates the money. It can just print the money. You are suggesting a right-wing Austrian theory that’s been thoroughly discredited. I know you’re not doing it on purpose, but you’ll have to read about Modern Monetary Theory or look at the Federal Reserve Bulletin and lok at balance sheets to trace the flow of money and credit. If you look at the statistics, you’ll find out that what you’ve described is just a fantasy.

Jussi: Thank you Jerome. We have Raize Kaiser. I hope that was the proper pronunciation.

QA7: Hello everyone from the Hague, the Netherlands. I’m very very happy with this lecture of Michael, especially for the fresh economic perspective you are giving. I think that fighting the FIRE sector is difficult, and influencing the democratic discussion is also difficult. What we need is a Sustainable Development Goal #18. I tell it my students there’s missing a SDG 18 about monetary, financial and tax reform. But it’s understandable it’s missing, because the whole world would be against it. So another option is perhaps electronic digital money. What do you think of parallel local monies to create a new flow of money around the FIRE sector. Let them stay where they are and let us focus on creating a new economy.

Hudson: Local currency doesn’t work. This has been discussed for a hundred years. If it would have worked the Weimar Notgeld in Germany would have worked. Money creation has to be at the federal level. Because basically, what gives money its value is the ability to use it to pay taxes. The only way that localities could create money would be to make it acceptable in paying enormous amount of taxes. Most localities are not able to do that. One locality would be played off against another, and would not end up being successful. So in practice local currency doesn’t work out. It’s a long story but there’s a huge literature about that.

QA7: Okay it’s a pity because fighting the FIRE sector is very, difficult. I don’t see any perspective that will change in the near future.

Hudson: We need a revolution. You’re right. It takes a revolution

QA7: I don’t like revolutions. I was also very impressed about your story about the Jubilee in ancient history. Because at home my father reading the Bible told us from Leviticus 25 that thou shalt not economically oppress one another. My father was an economist and taught economics, do not oppress one another. That’s the kernel of a good economy and the FIRE sector will not join us in that.

Hudson: Well, you don’t have to go all the way back to the Bible or biblical times. You can look in 1948 at the German economic miracle. That was the debt cancellation.

QA7: You are right

Jussi: What we’re trying to do here in Sweden with positiva pengar is to actually have a grassroots movement. We think it has to come from there if you want to make a difference. Legally we have a democracy which means we are voting but we need to be aware of what we are voting about. We need to exercise that vote and get away from corrupt thinking and corrupt policies in order to get something done. So actually we do believe it’s possible to change this, I believe it can go quite quickly when it starts to spread properly. That’s our conviction anyway. So I think a grassroots movement can make that go and make it go quickly and forcefully but kindly. Okay, with power but kindly.

Hudson: Especially if you’re armed.

Jussi: Well we are armed with knowledge and we need to trust in our ability to make it happen. Sorry for the interruption but anyway. So I think next up is actually Cecil you’ve been waiting a bit.

QA8: I’m a first-year economic student so forgive me if I sound infantile or if I sound amateur.

Hudson: You’re not as infantile as you will be when you get a PhD in economics.

QA8: You talked about debt cancellation and I was wondering can that be the breakout for African economies? Could debt cancellation be a breakout for African economies?


Hudson: Of course, you will have to write down the existing debts. And that is what makes my analysis different from most other people. Right now the debts cannot be paid. The question is, how are they not going to be paid? The only way to pay them at present is the way they were paid after 2008: by a mass foreclosure on the property of debtors. When the South can’t pay foreign debts, they are told to sell off and privatize their public domain. The other way of not paying debts is to cancel them. I think there has to be a debt write-off, a cancellation of debts.

The good thing about cancelling debts is that you wipe out savings on the other side of the balance sheet. By wiping out the debts of the 99 Percent, you wipe out the predatory savings of the One Percent, the debt overhang that it seeks to collect by imposing austerity on the economy and impoverishing everyone below themselves. A debt cancellation takes away the sledgehammer that the One Percent uses to keep the rest of the economy in debt peonage. This is the existential choice that today’s economy faces. Either you’ll have a debt cancellation or you’ll have barbarism. That’s basically what the book that I’m publishing in the next month, my Chinese lectures, are all about.

Jussi: Thanks for jumping in, hope you’re happy with that answer. Do you have time for a few more questions?

Hudson. My eyes are getting blurry from looking at the screen, so I’m closing them, but yes I can talk now that I’ve turned off the screen.

Jussi: Okay, perfect. I think Joe Polito has been on the queue for some time.

QA9: Thanks, fantastic presentation Michael, as always. I hope this question is on topic. Here in Canada one of our major banks just published a report on affordable housing. One of their suggestions is to increase the capital gains tax on commercial real estate deals. I know you’ve written about this, and I wonder if you could explain the logic of this measure and how it affects land prices and hence the affordability for housing.

Hudson: Capital gains are fueled by banks creating more and more credit to bid up property prices. Stated another way, capital gains are made primarily by banks loading the economy down with real estate debt. Because they are what landlords and speculators make in their sleep, they’re unearned and should be taken away, or at least 90 percent. But the financial and real estate sectors led a political campaign in the United States not to tax capital gains. In England and Europe, many capital gains are not taxed at all. That’s a travesty. Most financial fortunes are made not by charging interest or earning profits, but by capital gains. I published a number of articles on my website showing the charts and how much larger the volume of capital gains is than profit or sometimes even than GDP.

The fortunes of the One Percent are not made mainly by investing productively or by saving up the profits they’ve made. It is by capital gains. They should be taxed away, above everything else. That was exactly what John Stuart Mill wrote in 1848 in his Principles of Political Economy, with Some of their Applications the Social Philosophy. Basically, he wrote, the reason why governments should be the owner of land is so that you will not have landlords making money in their sleep, by what we call capital gains now – by the rising rental yield of their property. He didn’t imagine that property prices would be inflated by bank credit like they are today. So of course it’s good to tax away capital gains. Economies will save themselves from the One Percent, and won’t have to tax Canadian labour and Canadian industry so much.

Jussi: Thanks Joe. Gunnar, you are up next

QA10: Hello Michael. I want to add to Don Wilford’s question about how much should we have to work if the central bank or the government gives out money for universal basic income? What would you say about that? Is the informal sector productive as you see it? As I see it, in Sweden we have a consumption as big as if we had two planets to get our resources from. I also see that the informal sector needs labour, not paid labour, but labour. So what if part of the newly created money were to go to basic income?

Hudson: I think everybody deserves enough income to live. Of course basic income is a good idea. My colleague Pavlina Tcherneva from the Levy Institute has written quite a bit about this. The counter-argument is that if you give everybody a basic income, they won’t go to work. Who’s going to be working at McDonald’s and these things? Well the solution’s simple: pay them a decent wage. Once you pay a decent wage, that’ll solve most of the problem. But if you’re not going to pay them a basic minimum wage, then of course they’re not going to work for an income that does not enable them to live. So everybody has a right to live, and the government should support them. But it should also support a basic minimum wage, higher than what you have in the United States. President Biden and the Democrats refused to support it as part of their revenue bill, despite the fact that raising the minimum wage would reduce the need for government welfare payments to make up the gap between what Walmart and other big stores paid and what workers needed to survive. The low minimum wage in America forces employees to go on public welfare so that their employers can get the government pay what Walmart doesn’t have to do. The effect is to squeeze down labour so it’s absolutely driven into the market and pauperized so that companies can make profits by paying less.

The solution is to raise the basic wage, which no party in the United States has been willing to do. That’s why elections here are so deceptive, preventing candidates like Bernie Sanders or others from getting into a position to legislate a decent living wage.

QA10: Must it be a wage? Why could not everyone have a minimum basic income that you can live on? Then you could choose your employer, and that is important. Maybe you are needed at home or in your local community, so it’s something that makes every person decide her own future and decide what to do with their lives.

Hudson: Yes, otherwise you’ll pauperise the economy as you’re having throughout the post-Soviet countries in Central Asia or the Baltics today. You are forcing a mass immigration from countries that don’t have a basic wage. They have to emigrate in order to find work, in order to live.

QA10: But at the same time you can finance the public sector. Because people won’t go and lie on their bed on their sofa. That is not, for most people, right.

Hudson: There are many ways to administer around that. People want to work, want to be productive in one way or another, but you want to avoid pauperisation.

Jussi: The question is actually how to secure the pension, and I think that is another systemic thing needs to be looked into.

Hudson: So it should be as we’ve just been discussing a basic income. Pensions should be pay-as-you-go, the way Germany does, by the government. You don’t have to financialize pensions. That is one of the big problems of financialization, as we discussed earlier in this interview. Financializing pensions has turned out to be a way of helping the financial sector de-industrialize the economy.

Jussi: Basically, the pension is dependent on the productive capacity of the country you’re living in, because ultimately you’re living on the real economy. But I think the question is a bit bigger than we can take right now. If you don’t mind, both Elizabeth and Michael and we jump forward.

QA11: Hello everyone and thank you so much Michael for a really good talk. I want to return to the theme you mentioned before about this current Ponzi scheme that we’re living in. With ever more Quantitative Easing and this unprecedented zero-interest period that we’ve been in, do you see any natural end to that? Can it go on forever, do they just double the Quantitative Easing every five years? When do you think we will reach a breaking point?

Hudson: There’s no way of knowing just when the breaking point will come. an I’m discussing with my Wall Street friends all the time. We’re watching the economy polarize and go down while the stock market goes up. It’s called a K-shaped recovery: down for the economy, but up for the financial sector. How on earth can it go up? Well, the answer is the Federal Reserve can just do the Quantitative Easing on and on. Of course it can’t last forever, but there’s no way of knowing when the break will come. If you look over the last few hundred years, the break usually comes because some big bank has a fraud somewhere. You have a rogue trader making trades for himself that loses the bank’s money, like the London whale. You have an AIG, the insurance company whose London office made a lot of bad underwriting for derivatives against Goldman-Sachs, which insisted on immediate settlement – using its own valuations. Will somebody make a similar bad bet in aderivatives trade and go under, and will that pull down the whole sector?

Nobody knows where the break in the chain of payments will occur, or when it will come. But as the economy gets more overstretched and more debt leveraged, how can it recover and produce profits to support rising stock prices when we’re in the middle of debt deflation? It’s a contradiction. There’s no way that you can have the finance sector going up and the economy going down unless you end up with feudalism, which is what happened when this occurred in Rome 2000 years ago. So obviously at some point we’re going to end up with a huge crash, but nobody knows when or just what accident will trigger it.

People would have thought that Covid would trigger it, and maybe it will. But in America there has been a moratorium on rent payments and mortgage interest payments. That was absolutely necessary, but the moratoriums are about to expire. When they do, there are going to be evictions, homeless people thrown onto the streets. Will they sleep on the subways and the parks? Will they fight back? Who knows what will happen? We are moving into an anarchic period right now, but nobody can see exactly what’s going to happen in chaos.

QA11: Thank you so much.

Jussi: Thank you John. Michael thank you very much for your sharing your vast experience, and actually practical experience to being in many places and reading. All the things you’ve done and that you take your time to share it with us here. I really really appreciate it and we got to learn quite a lot this time. So I can say from everybody here, and from our association thanks a lot and thanks for everybody who contributed and turned up to this webinar.

We’re going to make a transcript. As usual, it takes some time. Our English is not fluent as you might hear, that is why it takes a bit of time. But then we send it over, and we’re going to send links to everybody who’s been here. Thanks a lot Michael again. I deeply appreciate all you share with us. From everybody else: thank you, thank you very much and thanks everybody else, see you later. Bye.

• Category: Economics • Tags: Financial Debt, Wall Street 
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  1. onebornfree says: • Website

    “The proper role of the state is to minimize rentier income and prevent a rentier oligarchy”

    The usual Hudson underlying assumption is on full display here, as per usual- that assumption being, that:


    government solutions work- therefore “we” need governments to do “this” ( in his case, to “minimize rentier income and prevent a rentier oligarchy”).

    But government “solutions” never work, in fact historically they nearly always cause the exact opposite of the intended consequences- which means that Hudson( and others like him) are living in a fantasy world (as, apparently, classical economists like Adam Smith were too), as too are most of the general population worldwide, even in the (supposedly) freedom and capitalism-loving US.

    All expect governments to “solve” the problems which they deem most important , despite the fact that they never have.(And never will).

    Aaaaand, since, as Hudson correctly (shock/horror!)) points out later, Marxist economic theory is derived almost entirely from classical theory ( most especially from the classicists now totally disproven labor theory of value), this means that Marxists (e.g. Hudson), as well as classical economists, are all living in a fantasy world where government solutions actually work.

    And sadly, not even the masses of “in all our faces” historical evidence disproving that assumption will make any difference to the opinions of either Hudson, nor to millions of people around the world who are essentially ( like Hudson) no more than state indoctrinated slaves.

    And so it goes……😒

    “The kind of man who wants the government to adopt and enforce his ideas is always the kind of man whose ideas are idiotic” H.L.Mencken

    “Government doesn’t work” Harry Browne

    “Everything government touches turns to crap” Ringo Starr

    Regards, onebornfree

    • Agree: frontier, RoatanBill
    • Disagree: Rubicon
    • LOL: Jon Chance
    • Troll: Biff
    • Replies: @Anonymous
  2. onebornfree says: • Website

    From the title of the video heading this article:

    “Professor Hudson: financialization is suffocating the economy”

    No. As per usual, _government_ is suffocating the economy.

    Solution: find ways to get the government entirely out of economic affairs.

    Fact: Government solutions never work.

    “Government doesn’t work” Harry Browne

    Regards, onebornfree

    • Agree: frontier
    • Disagree: Rubicon, Jon Chance
    • Replies: @Rubicon
    , @bayviking
  3. Rahan says:

    Very interesting.
    Incredible how much resistance there is from the pro-market guys to realize that today there is no market, but a field of megacorp monopolies, and that in this situation an honest state would be a counterbalance that by pushing back at eh megacorps, can help free up space for an actual free market.
    What’s the alternative? Create “good megacorps” to force the “bad megacorps” to relinquish their stranglehold? Or create small “coops” to fight them? They’ll crush you from courts downward, unless you have at your back something like the state.
    But not only the free market has been dismantled. The state too. Now it’s just “visible megacorps” and “invisible megacorps” (deep state).
    A society ran by megacorps is not “a free market”, and a society ran by the deep state is not “a society ran by the state”.
    But all this dances around the central issue of power reversal that happened in the last 30 years.
    – Instead of voters telling politicians what to do, politicians tell voters what to do.
    – Instead of taxpayers telling institutions what to do, institutions tell taxpayers what to do. (And yes, the “just print money” theory helps destroy completely the taxpayer-govt link).
    – Instead of the institutions being transparent to the citizen–the citizen is supposed to be transparent to the institutions.
    – Instead of judges applying the law of the land, the judges change the law of the land.
    – Instead of the media being a mirror to reality–they shape reality.
    Either this reversal is addressed and fixed, or a radical revolution is the only other option.
    But all of the above applies to the pre-COVID and pre-Great Reset reality. We’ve yet to see how far this goes and where it leads.

    • Thanks: GMC
  4. Rubicon says:

    You, onebornfree, are about 40 years behind what has been happening in the US.

    The “government:” federal, state, local has become totally SUBSERVIANT to the PRIVATIZED sector of US FINANCE (The FED, Big Banks, Hedge Funds, Wall Street)ALONG with privatized INSURANCE, and REAL ESTATE. These multi-TRILLIONS of \$\$\$s are all in the hands of the top 5% wealthiest population. It includes Big Tech, Big Pharma, Big Medicine – you name it.

    America now has the GREATEST INCOME DISPARITIES BETWEEN THE SUPER WEALTHY AND multi-millions of US citizens.

    That’s what Dr. Hudson is trying to tell you, but you won’t listen.

    • Agree: Biff, Jon Chance
    • Replies: @onebornfree
  5. onebornfree says: • Website

    ” the PRIVATIZED sector of US FINANCE (The FED, Big Banks, Hedge Funds, Wall Street)ALONG with privatized INSURANCE, and REAL ESTATE.”

    Some questions:

    1) Do you understand that all of these entities are incorporations – that is, they are all legally protected via government- since the title of “legal incorporation” can only be obtained via following government incorporation laws?

    2) Do you understand that US government is itself a corporation, and that it then licences/legitimizes those other incorporations who then remain under its purview and protection? So that they then become extensions of government (Inc.) itself?

    If either you , or Hudson, seriously believe that the solution to any of the problems you/he see is going to be via bigger laws and even more government, then you are both living in a fantasy world where government solutions actually work, whereas in the real world they never do( for underlying fundamental reasons I will not get into here).

    “Government is a disease masquerading as its own cure” Robert LeFevere

    “The kind of man who wants the government to adopt and enforce his ideas is always the kind of man whose ideas are idiotic” H.L.Mencken

    “Regards”, onebornfree

    • Agree: frontier, Jon Chance
  6. bayviking says:

    Hudson is right. Bankers are running the country with public funds delivered by the Federal Reserve, which they control, and sending all the good jobs overseas. No one said it better than British Conservative James Goldsmith when he wrote the book “The Trap” in 1993. In it it explains why economic growth is not an end in itself. Our societies improved well being is the only true measure of success. Long term trends: broken labor unions, falling wages, rising unemployment, increased violence, growing poverty with slums and tent cities, environmental deterioration are all indications that something is terribly wrong. The theories based on General Agreement on Tariffs and Trade (GATT) which has morphed into NAFTA and other similar agreements are the problem. The American worker can never compete with Chinese labor. That policy is a fucking disaster.

    • Agree: Biff
  7. Bayviking says:

    “Positive Pengar” positive money group

    Optimistic money makers?

    • Replies: @Mefobills
  8. Antiwar7 says:

    Thanks to the Positiva Pengar Group for transcribing this!

  9. Jon Chance says: • Website

    Here’s a plan to abolish taxation in the USA.

    Any suggestions?

    National Citizens Dividend USA


    Other Ponzi schemes are illegal.

    Why are “bank” corporations legal?

    Taxation is theft, and there’s no such thing as an appropriate amount of theft.

    Legitimate governments fund themselves entirely from Location Value Rent and issue LVR-backed sovereign money such as United States Notes from public treasuries as our National Citizens Dividend.


    Today, our National Citizens Dividend is stolen by the global “banking” establishment, and landlords are acting as the tax collector for these fraudulent banks and fake governments.

    But if we had legitimate governments, money would be issued by public treasuries rather than “bank” corporations, and there would be zero taxation:

    Each Unit of \$overeign Money = One Square Meter of US Territory.

    Sovereign Territory USA = 9,833,517,000,000 Square Meters.

    Population Over Age 18 = 256,000,000.

    9,833,517 / 256 = \$38,412 / Year.

    Each Citizen Receives \$38,412 / Year.

    Landlords retain (invest) ten percent (10%) of the Location Value Rent (LVR) and pay ninety percent (90%) of the LVR to County Treasuries.

    County, State and Federal Expenditures are paid from public treasuries, and the balance is distributed as our National Citizens Dividend.


    Washington DC 1BR Apartment
    40 Square Meters
    Annual Location Value Rent \$24,000
    Citizen Dividend \$38,000
    Dividend Minus LVR \$14,000

    Burwell Nebraska 1BR Apartment
    40 Square Meters
    Annual Location Value Rent \$1,200
    Citizen Dividend \$38,000
    Dividend Minus LVR \$36,800


    Treasury-issued sovereign money entirely backed by Location Value Rent and distributed as our National Citizens Dividend can be gradually phased in during a period of 90 months (7.5 years) by increasing the Treasury’s share of LVR from one percent (1%) in the first month to ninety percent (90%) in the 90th month, at which point the Treasury’s share remains at 90% and ascends no higher.

    Landlords earn a minimum of ten percent (10%) of Location Value Rent in exchange for their entrepreneurial services and maintenance responsibilities.

    No more that ten percent (10%) of the Treasury’s revenue should be spent for government expenses, and ninety percent (90%) or more of the Treasury’s revenue should be distributed as our National Citizens Dividend.


    Treasury-issued sovereign monetary units represent the full Location Value Rent of sovereign territory for a period of ten (10) years, so the demurrage rate or “inflation rate” of the money will be 100% per decade.

    Rather than hoarding this money as long-term “savings”, this money will be used primarily as a medium of exchange.

    Rather than perpetuating the illusion of “saving money”, all participants in the economy will instead be incentivized to invest in genuine productivity, and this will stimulate the production of real wealth rather than manipulating the imbalances of political-financial power as the “banking” business has been doing for over 300 years.


    All charges of war, and all other expenses that shall be incurred for the common defense or general welfare, and allowed by the United States in Congress assembled, shall be defrayed out of a common treasury, which shall be supplied by the several States in proportion to the value of all land within each State.”

    Article 8

    First US Constitution (1776)

  10. BorisMay says:

    So Hitler did get it right. This explains the extreme persecution of him and any followers then and now, by the rentier class.

    • Agree: HdC
    • Replies: @Jon Chance
    , @TheTrumanShow
  11. Emslander says:

    The government creates the money, but it will create money only for banks to make particular kinds of loans.

    Oh, what could go wrong with that?

    This article is a massive overflow of hogwash!

    • Replies: @hardlooker
    , @Mefobills
  12. Jon Chance says: • Website

    Adolf Hitler:  Evil Genius or Zionist Idiot? 

    Thirteen Strategic “Blunders” 


    1 – Hitler admired and emulated the British Empire. 

    2 – Hitler obstructed German development of nuclear technology. 

    3 – Hitler declared war on the US rather than recruiting America as an ally with Germany, Spain, Italy, Romania, Greece, Finland, Sweden, Norway, Switzerland, and other anti-Communist nations. 

    4 – Hitler failed to recruit Japan in the war against the USSR. 

    5 – Hitler obstructed German capture of the British Army at Dunkirk. 

    6 – Hitler obstructed German production of jet fighters essential for effective defense against the UK’s bombings of Europe. 

    7 – Hitler obstructed German targeting of the UK’s military targets during the Battle of Britain. 

    8 – Hitler obstructed Germany’s liberation of Ireland, Scotland, Wales and England from the UK. 

    9 – Hitler obstructed Axis supply of fuel to General Rommel’s panzers in North Africa. 

    10 – Hitler diverted Germany’s Eastern divisions to Leningrad and Stalingrad, thus obstructing Germany from capturing Moscow and liberating Eastern Europe from the Communists. 

    11 – Hitler obstructed the continued deportation of Jews to Palestine (after 1941). 

    12 – Hitler nationalized Germany’s central bank, but he neglected to prohibit fractional-reserve banking. 

    13 – Hitler obstructed competent alternatives from leading Germany in its defense against Communism and the Franco-British Empires. 

    As a result of Hitler’s incompetence, over sixty million (60,000,000) Gentiles were brutally slaughtered by Khazarian-ruled puppet regimes.

    At a minimum, Adolf Hitler and the German National Socialists (Nazis) were useful idiots for Germany’s strategic opponents (Royal Dutch Shell, the French Empire, the Rothschild Dynasty & the Bank of England). 

    But it’s entirely possible that Adolf Hitler and other National Socialists were willing and intentional puppets and agents for the defeat of Germany by the UK, the USSR, and the World Zionist Organization (WZO), is it not? 

    The Greatest Story Never Told (2013) – Dennis Wise

    Inside the Third Reich (1970) – Albert Speer  



    • Replies: @BorisMay
  13. Bro43rd says:

    The problem with the current economy is that the banks, investment funds, wall st, city of london & others have co-opted government power to their needs. The answer is not more government laws & rules. Get government out of the economy completely. Money should be a market phenomenon (species) not some arbitrary government creation (fiat). The only way to eliminate the co-opting of government by oligarchs is to not allow government the ability to create currency.

    Mr Hudson’s suggestions are akin to an alcoholic becoming a saloon operator to curb his drinking.

  14. Koserte says:

    Easy, tax capital, dont tax wages!
    You would change society in a decade.

  15. BorisMay says:
    @Jon Chance

    I’m sorry but you are seriously misguided on all accounts and much of what I will tell you is in German military records.

    Germany invaded Russia because it had no other option. Due to logistical problems the Wehrmacht warned the government that it could only supply the military with six week’s supply of munitions, mostly due to the difference in railway gauges, lack of motorised transport and inadequate roads.

    The next problem was that Germany only had 180 divisions it could commit to the offensive against an estimated Russian army of 220 to 250 divisions. By the time of Stalingrad it became clear Russia had in excess of 600 divisions available with as many more yet to be trained and armed. This was a serious failure of German intelligence and was the actual cause of the loss of the war. Hitler had nothing to do with this except in the fantasies of the rentier class, some of whom, but not all, are Jews.

    Hitler, if you actually read what he wrote, rather than believe the rubbish that you give links to, admired the British Empire from a political perspective but abhorred the practice because he believed the only successful society could be one where everyone was equal.

    You have to go with what you have got and from a military viewpoint you put finances in to what works. Jet fighters even by the thousand could not have won the war. What won the war was enormous reserves of men, material and logistics. Hitler never had these. He chose what worked at that time. It is a wonderful fantasy to state more fighter jets would have won the war. For you to state that means you are nothing more than an arm chair soldier. No war has been won with fighter jets, only with boots on the ground (see Taliban in Afghanistan in 2021 for proof).

    As a final point it was Rothschild who stopped the 500 Jews a week going to Palestine with all their money in the form of tradable goods, and not Hitler.

    While Hitler main battle was against international finance (and usury plus international share trading was part of that) he also had to financially survive is the world as it was. This is why he employed Jews like Margaret Hodge’s (UK MP) father to buy non ferrous metals for Germany. I’m afraid you have a very misguided view re Hitler and Jews, again derived from the rubbish you provided links to.

    You are, unfortunately, Hitler’s worst enemy, because you rely on other people’s false ideas about National Socialism since it is clear you are too lazy to do your own research.

    I hope you have a pleasant afternoon should you be able to drag yourself out of your armchair. But your views on Hitler, National Socialism and the German military are seriously flawed.

    • Replies: @Jon Chance
  16. Mefobills says:

    Hudson normally drills bulls-eyes, but he has to be careful not to touch the (((third rail))), or he will be doxed, or destroyed.

    Hudson: Sure. They’re diametric opposites. Neoliberalism is really not individualism, because it ends up destroying individual choice. It’s an anti-government policy. What they call individualism is getting rid of government controls. They don’t want governments to have the power to tax rentiers. They don’t want government to have the power to regulate the banks. Let the banks decide what to make money on, and let them decide who’s going to administer the Federal Reserve or the European Central Bank and other government agencies. This is a travesty of individualism. It’s dictatorialism. That used to be called fascism a century ago.

    Mussolini nationalized the banks in 1926. The Fascist government then put usurers, pornographers, and prostitutes in a special exclusion zone.

    Fascism arose as a response to the excesses of finance capital taking sordid gain on labor and the common citizen.

    Fascism is the state recapitulating itself over finance oligarchy. Corporations that take sordid gain, and operate against the common weal, were brought to heal. Fascism has much more in common with a Monarchy than dictatorialism. Mussolini and fascism was very popular, hardly a travesty to the Italian people.

    The proper role of the state is to minimize rentier income and prevent a rentier oligarchy

  17. Mefobills says:

    Hudson cannot touch the (((third rail))), and this requires us to decode his language.

    Jussi: Okay, thanks. Is there any country today that builds its economy differently or more according to the classical economics view?

    China today is industrial capitalism. Industrial Capitalism was invented in the Colonies, especially Massachusetts Bay Colony.

    Hudson: The closest is China, which is following pretty much the same industrial logic that Britain, Germany and the United States followed in the 19th century. It’s protecting its industry. It is trying to prevent a financial oligarchy from emerging and gaining power. So it’s doing what everybody thought industrial capitalism was evolving toward before World War I. China’s really the kind of society that people expected Europe and the United States to evolve into before they were sidetracked by financialization.

    Britain’s industrialization was not due to industrial capitalism. Industrial Capitalism is characterized by state credit channeling into industry. The Bank of England formation in 1694, was the first privateer banking corporation to host a country, especially by putting a country into debt.

    For example, James Watt had to borrow from friends and use his own money to invent and make the steam engine. It was mostly speculative capital that industrialized England.

    By contrast, in the Colonies, they had their own script and monetary theory was put on fast-forward, so that the settlers could survive in a wild land. They invented all kinds of new ways of doing things, even using wampum and tobacco leaves as money.

    It was the “bills of credit” and Mass Bills issued debt free, and into industry (especially the first iron works), that created industrial capitalism.

    It is incorrect to include Britain with Germany and the United States. England, especially the (((City of London))) had been parasitized by finance capital after 1694.

    The trajectory of the U.S. and Germany was industrial capitalism, also called the American System. Germany adopted the American System as it was transferred to them by Frederick List.

    WW1 was largely due to finance capitalists in the (((square mile))) and in Wall Street, wanting to preserve their capital ownership position in colonies, and not lose out to industrial capitalist Germany… who was kicking their ass in trade and production efficiency.

    The U.S. was converted by 1913, especially by the rigged election of 1912, a color revolution of sorts paid for by (((guess who))).

    Hudson knows this I’m sure, but Jewish power being what it is, creates a reality distortion field.

    The Goyim have glasses perched on the nose that prevents them from seeing the distortion field.

  18. Mefobills says:

    Michael cannot drill into the “red part” of western history too deeply, or our (((friends))) will attack, much like they did to David Irving.

    Then we jump over to the reddish parts here on the screen: from Rome to today. There we have the change and suddenly private financiers are in power due to their financial wealth. Money is viewed as wealth, a commodity and scarce. Debt is sacrosanct,

    During the Talley Stick Era in England, debts were cancelled yearly at the big fairs like Mayfair. A single laboring man could afford a family of four on about 4 months wages. They had warm housing, woolen clothing, and had enough protein in the form of mutton.

    The Talley sticks were the money, and were also a debt to the King, especially for Corvee labor.

    This beneficial system was overturned by our (((friends))), especially as the operated their schemes out of Amsterdam, where they invented finance capitalism. Finance capitalism was invented in the intervening years between 1492 and 1694. Isabella and Ferdinand kicked the Jews out of Spain in 1492, and our (((friends))) invented new schemes for enriching themselves in that roughly 200 year period.

    The West did fight back against usury and speculative finance; this is especially evident every time the Jews were kicked out from operating their schemes. When King Edward kicked the Jews out, they were allowed to take their gold and silver with them, and hence the King’s talley sticks becoming the money.

    The rise of industrial capitalism in Mass. Bay is another example, where the usurers were around wanting excess interest to use their gold and silver as the money. John Winthrop told them to F-Off, and created Bills of Credit instead, and also issued enough debt free to pay the interest on the STATE LOANS.

    The rise of Fascism and National Socialism, both of which use Industrial Capitalism mechanisms were another example of fighting back.

    Canada’s sovereign economy form 1938 to 1974 is yet another.

    The Reddish part of the screen for modern history has ‘GREEN PARTS’ and virtually all of the green parts relate to jews being kicked out 108 times.

    When Jews were kicked out, it was the body becoming healthy, and ejecting its parasites.

    Typically, the “green parts” happen under a king, or fascist, or national socialist types of government, where said government is looking out for the common weal, and is preventing speculation, sordid gain, and usury.

    • Agree: BorisMay
    • Thanks: Druid55
  19. Jon Chance says: • Website

    Why do you make so many erroneous presumptions?

    The information you provide about the Third Reich in no way contradicts my statements above.

    Please carefully review every point I provided, examine each and every one in full historical-political-economic-financial-cultural-geostrategic context, examine both of the resources I mention, read all available writings and speeches by Adolf Hitler, Albert Speer, Alfred Rosenberg, and other German insiders, fight a real war against Khazarian supremacists, then provide a credible response.

    Both Nazism and Marxism were created by Judeo-Khazarian supremacists to defeat Germany and conquer the world:


    The Pyramid of Power

    Who Rules Today’s “Governments”?

    1 – Bank of England (1694-today, 325 years)

    2 – Rothschild (1769-today, 250 years)

    3 – Brotherhood of the Covenant (1843-today, 177 years)

    4 – WZO (1897-today, 123 years)יושבי-ראש-ההסתדרות-הציונית-העולמית

    5 – Federal Reserve Bank (1913-today, 107 years)

    6 – CFR (1921-today, 100 years)

    7 – CCP (1921-today, 100 years)

    8 – BIS (1930-today, 90 years)

    9 – World Bank Group (1944-today, 76 years)

    10 – UN (1945-today, 75 years)

    11 – NATO (1949-today, 70 years)

    12 – Bilderberg Group (1954-today, 66 years)

    13 – EU (1967-today, 53 years)

    14 – Trilateral Commission (1973-today, 48 years)

    15 – ECB (1988-today, 32 years)

    Welcome to the COVID WORLD ORDER.





    • Disagree: BorisMay
    • Replies: @Mefobills
  20. Mefobills says:

    Hudson with regards to Chinese actions:

    You’ve already seen that they’ve limited Jack Ma’s attempt to use the Ant system as a telephone credit by saying: “No, only the government can create credit, not you.” So they already have a pretty good feel for this. Watch how they’re de-dollarizing their economy and making themselves independent of U.S. Dollar Diplomacy, which basically is aimed at spreading financialization throughout the world.

    The logic of public infrastructure investment: to lower the cost of living and doing business

    China is more Fascist than Marxist. Marxism evolved to become a demand economy with central planning, even for elastic sectors. Intervening into the Ant Group, was government action to prevent a finance oligarchy from arising. Ant Group was flirting with private money power using Ant’s private “ledger” network. Much of the internet “network” was created with public money.

    China has mixed economy, with state planning and regulation, especially for inelastic sectors. China allows some speculative capital, so that the future can be gambled on. Speculators are reigned in when they get froggy, such as when Jack Ma was “fascistically” put down.

    Again, since Fascism gets a bad rap due to postwar propaganda, and since Jewish power creates a reality inversion field, people remain duped and hoaxed.

  21. Mefobills says:

    I’ve corrected onebornfree-dumb many times.

    He is demoralized and hence beyond the ability to reason.

    Here is Hudson on Lolbertarianism in this very article:

    The government can create money. It doesn’t need to borrow from the banks, it doesn’t need to pay interest on bonds if it creates the money. It can just print the money. You are suggesting a right-wing Austrian theory that’s been thoroughly discredited. I know you’re not doing it on purpose


    A little quibble on your statement:

    Bankers are running the country with public funds delivered by the Federal Reserve, which they control, and sending all the good jobs overseas.

    The FIRE sector and fellow travelers (the deep state), is more than just “bankers.”

    Also, the Federal Reserve is the tail on the dog, not the dog. The private bank system creates credit at the moment you show up to become hypothecated. Banks find reserves from other banks on the overnight market, up to the last minute, and at the lowest cost they can find. The FED discount window is only used as a last resort.

    The FED does monetize public debts indirectly, as TBills end up on the FED’s ledger. This action is called “expanding the ledger.” QE is merely the buying of TBills from banks, and swapping dollars.

    This is similar to you swapping from savings to your deposit accounts, with no net change to the ledger at the private bank level. However, it is a change in risk profiles, as the TBills and MBS and other paper is bought by the FED at face value.

    The FED is not really the tip of the pyramid, it is a “system” or money trust of private banks, where their reserves are linked up by law… the Federal Reserve Act.

    Off shoring of jobs was done purposefully to then make “arbitrage” on Chinese debt-free labor. Green mailers like (((Carl Icahn))) would borrow “credit” from his buddies and then attack American Industry to move off shore. The FED was not involved in creating credit directly, and only acted as an adjunct and post facto to the private “finance capital” system.

    • Thanks: profnasty
  22. Once upon a time, in a galaxy far away, there was a tiny planet and on that planet there was only one island. On the island there lived only thirteen people but only one of them produced things which were used by all. After a while, the producer came to own the entire island and at that point in time he called a meeting with the useless ones and asked them why should he keep on producing when he owned everything. So a wit asked him if he can live by himself on the island all by himself without any to admire his hard work or to keep him company. To which he admitted that he indeed needed not only to work but their company to continue but wanted to know what he would get in return for continuing to provide goods and services to others. The answer was to monetize all of the planets, i.e. let him have titles to all of them, in their own solar system to continue doing what he, the producer enjoyed most, and then to monetize the next solar system and after that the next galaxy and after that endless stream of galaxies to no end. Everyone agreed that that was the best solution to the producer’s innate need to keep on producing and the consumers’ need to use up the produce, all the while, their collective need to remain social beings. And the problem was solved and they lived ever after happily!

    • Replies: @Mike321
  23. Mefobills says:
    @Jon Chance

    Both Nazism and Marxism were created by Judeo-Khazarian supremacists to defeat Germany and conquer the world:

    That is myth.

    NAZISM arose as a response by Germany being attacked in WW1 by finance capital.

    NAZISM arose as a response by Germany being attacked by speculators which caused the hyperinflation. The speculators were using dollars and pounds to back up shorts on the Mark. The shorting action is the creation of new marks with new loans at private banks. This all occurred because the Mark was under exchange rate pressure due to Versailles Debts. All hyperinflations in the modern era are because of exchange rate pressure.

    NAZISM arose because NSDAP (national socialist Germany) was never part of Rome. Germany had its own history. Germany especially was influenced by the Dominican Monks, and hence became the best labor in the world.

    The NSDAP party was organic and was funded by small donations. They literally passed the hat at party conventions. Even Schiff admitted that his loan to the NSDAP party was small potatoes, and that they didn’t even know he was a Jew. The loan was mostly to embarrass the Brüning government.

    The German people had been shocked and shocked again by external actors. During the Hyperinflation, as much as 1/3 of the Germany had been bought up by foreign speculators.

    After 1933, when Germans realized they had been maneuvered, they started looking closely at who their new owners were. They found that even Galician Jews had become owners. How is it that poor Galician Jews became owners of Germany? Simple, they borrowed “international credit” from their tribe brothers to buy up Germany when prices were low, and had been busted out by war and privation.

    Churchill admitted why Germany was attacked:

    Germany’s most unforgivable crime before the Second World War was her attempt to extricate her economic power from the world’s trading system and to create her own exchange mechanism which would deny world finance its opportunity to profit.

    Germany was industrial capitalist, and as a consequence was kicking England’s (and finance jews) butts.

    Also, Schacht’s trading banks were bypassing the (((international))) and denying world finance sordid gain.

    Hitler did work with the Zionists, to expel them to Palestine using the Havarra plan. This was a case of trains running on parallel tracks, not one of collusion. It was in Germany’s interest to expel Jews, and it was in Zion’s interests to conquer Palestine.

  24. @Mefobills

    The proper role of the state is to minimize rentier income and prevent a rentier oligarchy.


    Jesus prioritized protecting the population from usury by declaring a return to Mosaic Law mandating a perpetual cycle of debt forgivenesses when he read from Isaiah 61 in his very first recorded public speech (Luke 4:16-30) as Hudson edifies us with new insights gained from The Dead Sea Scrolls in his 2018 book …and forgive them their debts.

    For further explanation see:

  25. Mefobills says:

    Page 134, from Hudson “and forgive them their debts.”

    The scope of Hammurabi’s laws.

    The spirit of the rulers governing in the name of their local sun god is indicated by a Babylonian hymn praising Shamash as “illuminator of the heavens” and “dispeller of darkness.” He is also the patron-god of commerce, at that time a profession closely interfacing with the palace and TEMPLE sectors.

    In other words, the merchant was limited by the TEMPLE authorities.

    You save us from the storm the merchant carrying his capital…
    You give the unscrupulous judge experience of fetters…
    As for him who declines a present, but nevertheless takes the part of the weak,
    It is pleasing to Shamash and he will prolong his life.
    If (the merchant) demanded repayment before the agreed date, there will be
    …guilt upon him. His heir will not assume control of his property,
    Nor will his brothers take over his estate.
    The honest merchant who weighed out loans (of barley) by the maximum standard, thus multiplying kindness.
    It is pleasing to Shamash and he will prolong his life.

    Hammurabi’s laws restrained the (((MERCHANT))) from taking sordid gain.

    The same can be said for Catholics, especially in Germany, where the Guild system prevented sordid gain and the taking of usury. In the upper middle ages, guilds would self-police, to prevent those who were corrupted from taking gain on the weak. This “spirit of the rulers” was transmitted to Germany by Dominican Monks.

    pg 135. As patron god of commerce as well as Hammurabi’s rule, Shamash was assigned oversight of fair weights and measures, the official standards of which were kept in the Shamash Temple in Babylon. Punishment for cheating applied above all to moneylenders and other creditors and corrupt judges. Hammurabi stipulated that merchants who lent grain or money by a small weight, but demanded repayment by a larger one forfeited whatever they had lent.

    Ale women found guilty of using crooked weights and measures were to be cast into the water.

    It takes a Kingdom, or Fascism, to cast ale-women into the water. China essentially cast Jack Ma into the water. Any Kingdom has to work closely with the Temple authorities.

    Rome’s final evolution was in the East as Byzantium.

    Justinian laws to restrict the Jew (merchant) echo Hammurabi.

    In other words, the WEST does have blue dots as I have stated earlier, with the Catholic School Men, Aristotle, and the various economies I mentioned, all of which were attempting to balance civilization.

    National Socialist Germany was striving for balance, and most of the claims against Germany are scurrilous.

  26. This is a good presentation of economic theories and it makes some good points.

    However, it misses the immediate issues which are harming working people “of all stripes” and the country at large.

    For example:

    “Most Americans want to tax the wealthy, but we’re not getting it.”

    This is ridiculous. Current taxes are being spent to fight foreign wars and to hand out money to the wealthy and connected.

    But if you want to tax the wealthy, then tax them when they spend the money, not when they “earn” it. Tax their Bentley and their Rolls Royce, their first class airline tickets, the square footage of their property improvements (mansion, tennis courts, pools, etc. which destroy nature and consume resources.

    Remember that whatever you tax, you will get less of (all else being equal).

    Tax the five P’s: petroleum, pollution, pesticides, poison, and plastic. Tax these materials at the wellhead and/or the manufacturing plant so tax is built into the price (less costly administration).

    Get rid of all taxes on wages. You want more jobs, right? Then quit taxing them.

    The taxes on wages not only take the money out of the pockets of workers, but they destroy the job market; they add to the burden of small businesses (large corporations have the advantage of economies of scale).; They have made your private “employer” an agent of the government who is a tax collector and controls your access to privileges for special benefits, and funnels your earnings into the financial markets. Markets have been booming for the last 40 years due to the 401K plans.

    Create a graduated tax on corporations based on the market value at the end of each day. Make, for example, the tax very burdensome at \$250 billion so that large corporations, which are more powerful than governments, must start selling off the businesses they have accumulated over the years (with borrowed money).

    Do not allow corporations do borrow money. Make them sell shares and dilute their stock price by doing so.

    Make personal debt non-enforceable except for the asset promised as collateral. Lend someone fifty bucks, and if they don’t pay it back, then don’t lend to them again.

    And why do you want more taxes when they are used to fight foreign wars, not do something good for the people?

    Half of the current economic distortions could be solved by policies such as these. We don’t need to create a whole new economic system at once. But we need to start “sculpting” it one policy change at a time.

    • Thanks: RichardDuck
  27. Anonymous[355] • Disclaimer says:

    And now the 1% has the complete control of the country and its \$28 trillion in debt, and all the blathering about what this one or that one said is ever going to change that. What you’re witnessing is the demise of a rotted capitalist system which is going the same way they all have gone before, and may God hurry them along the way.

  28. SafeNow says:

    When China decided it would be cool to appropriate American manufacturing, China created a new university degree – – basically simultaneous translation for the commercial sector. Tens of thousands of translating guides, conducting factory tours, locating sources, and so on, specializing in particular industries. That’s but one example of Chinese understanding of value.

    Where does this dedicated, rational, conscientious, smart, disciplined strategy and effort come from? This understanding of value. From 5,000 years of philosophy and culture to think and act that way. I visited the small condo of a recently naturalized Chinese-American. Inspirational and motivational notes-to-self were posted on the walls. Reminders of an ethos that was inculcated over 5,000 years.

  29. AReply says:

    The great fear attending the eradication of the Nazi state was that what befell Germany could happen elsewhere.

    The debt-burdened, media-saturated, monitored US economy avoids that pitfall by keeping everyone on a treadmill, and while privileging the highest economic ranks beyond wildest dreams of consumption and seeking a practical minimum of freedom. Wealthy people are generally the most mentally enslaved people I meet, because their entire world-view is contorted by patterns of obtaining and tedious preservation of opulence in the face of inevitable decrepitude.

    The dread logic of the Unz alt-right is that there’s something inherently Jooish about silos of privilege and their exploitations.

    The aspect to fear of Hudson’s “revolution” is that without the reins of the rentier economy — if it were to be truly crashed — the Nazis would seem like small potatoes because the rule of law is only intuitively graspable to most people as the privilege over their personal property, and any crisis of deprivation excites the mania of death throes.

    Also great privilege is not tolerant of pitch-fork mobs coming for a rendering.

    Education can be a salve, but these are spiritual matters.

    What’s needed is for the wealthy top-end to have a substantial interest in the promotion of human values through policy. But the top self-selects through greed.

    I follow Chomsky’s dictates for democracy: you know you have a democracy when the people have meaningful influence on policy, and to paraphrase him: ‘The good thing about government in a democracy is that it is potentially influenceable by the people’ of which the U.S has a terrible track record depending on who you define as people.

    There is this un-mendable gap between Enlightenment views of agency and freedom, and who is considered to be in the class free peoples✖️

    In USA this gap grew to size of a chasm of the Civil War and is now a vast scar across the nation which somehow never transcends to the condition of stitched flesh to the character of a fully healed wound.

    It’s notable that Hitler is on record as regarding the US Federal government’s scalp-bounty handling of the injuns as a model for his cleaning program.

    There is a perverse contradiction of Americana as applying only to the class of ennobled “white” people, even as whites brought their traditions of savaging each other along with them to their new world.

    I enjoy Hudson’s rhetoric appearing here in a Californian, libertarian thought silo, because he’s exposing an implicitly communist ideology, in the sense of Zizek’s New Communism: the domain of the commons in all the magnificent independencies of our wealth.

    The super-rich should be mortified, but because of pitch-fork mobs, but because their privilege is openly predicated on the goodwill of a servant class. Bezos and Musk of all people has to know that in space, no one can hear you scream. Maybe this will get around to the bankers.

    • Replies: @Mefobills
  30. Thim says:

    Well, no. America did not become prosperous through Communism.

    We had a tradition of local banking, and restrictions upon usury (interest). Millions got land for free, out in farm country. Our factories prospered behind protectionist walls. Most states and localities operated on a pay as you go basis, zero debt.

    We should follow Moses and cancel all debts at the beginning of each seventh year. That would work.

    We could also follow Moses by forbidding interest. That also would work.

    The Chinese are getting poorer year by year . Almost none of them own any land, and most cannot afford children, or even to marry. The Communists have destroyed what was once the richest country in the world.

    I understand, by capitalist measures the Chinese are getting richer. But they aren’t. They have been stripped bare, same as us. American shills, professors who work for the oppressors of the Chinese people, communist hacks really, are a shameful lot.

  31. @Emslander

    “Oh, what could go wrong with that?”

    Nothing worse than what we have since 2008: one private bank creates the money, bills the government for it, hands the new money to other private banks which disburse it only to Particular Kinds of Borrowers, who then use it to buy back their own stock, which a) raises their P/E ratio and b) triggers executive stock awards, while c) creating zero new capacity for value creation.

    ZIRP? For Non-Particular Kinds of Borrowers, there’s a zero drop in the interest rate applicable to consumer credit debt, LOCs, small business operating loans, in fact, only a rise. The cost of borrowing only goes down as concerning Particular Kinds of Loans.

    • LOL: Emslander
  32. Mefobills says:

    The great fear attending the eradication of the Nazi state was that what befell Germany could happen elsewhere.

    Finance Capital attacked Germany because Finance Capitalism was losing the economic war, and hidden string pullers hiding out in free markets were afraid of losing their cat-bird seat.

    Finance Capital off-shored American jobs to China to then take wage arbitrage. Wall Street passed all kinds of hypnosis about how the U.S. would be the center of innovation, and China would be the world’s workshop, etc. The reality was the selling of U.S. patrimony (which comes from the past) for wage arbitrage today (today was circa 90’s, 2000, 2010) to screw the future. We are living that screwed future.

    The U.S was deindustrialized, but many in the finance sector made out like bandits on the sale of patrimony. I got mine, and screw you is their mantra.

    The debt-burdened, media-saturated, monitored US economy a

    (((Who invented the debt money system?))). Who came to own the media, especially after Clinton’s telecommunication act of 96?

    The dread logic of the Unz alt-right is that there’s something inherently Jooish about silos of privilege and their exploitations.

    UH… no shit. Jooz are the lead agents for Mammonism. The tribe evolved for exploitation and usury as their main method of in group survival. Usury, taking rents, and unearned income is not explicitly Jewish, but Jews are world-class given their full spectrum in-group behaviors.

    There is this un-mendable gap between Enlightenment views of agency and freedom, and who is considered to be in the class free peoples✖️

    In USA this gap grew to size of a chasm of the Civil War

    What? I hope you don’t teach college, or even high school.

    The civil war was because the South and West was falling back into the English Colonial system. King cotton was creating a plantation economy, and the fear was “masters” of the plantation would tell their negroes how to vote. The slavery system not only was breaking away from the Northern Industrial economy, but it was also the tail wagging the dog.

    The war was due to the Morill Tariff. The American System of Economy is high external tariffs (so industry can develop) and low internal tariffs. The North was tariffing up to protect and develop industry.

    The North made the fatal mistake of not rebating the tariff fully, or even more than fully to help the south industrialize, and hence south would no longer have a single type commodity economy with slave labor.

    There is a perverse contradiction of Americana as applying only to the class of ennobled “white” people, even as whites brought their traditions of savaging each other along with them to their new world.

    The whites weren’t savaging each other. A high trust culture developed. The American high trust culture started collapsing with the importation of non-whites, which is the conclusion of of social scientist Putnam in his book “Bowling Alone.” Putnam was a liberal, and didn’t want to believe his own data.

    It’s notable that Hitler is on record as regarding the US Federal government’s scalp-bounty handling of the injuns as a model for his cleaning program.

    There is no evidence in the written record anywhere that Hitler wanted to kill off jews. The solution was a divorce, and Jews were to go to Palestine in accord with the wishes of the Zionists. It was win-win. There was no “cleaning program” that is you making something up to knock it down – a strawman.

    Indians who were pastoral and farming, were left alone. All superior cultures and peoples displace those who are lower on the civilizational scale. If you are butt hurt about that reality, then too bad for you. Indians were still stone age hunter gathers, with no written language, wheel, or sail. Many whites tried to “civilize” the savage.

    I enjoy Hudson’s rhetoric appearing here in a Californian, libertarian thought silo, because he’s exposing an implicitly communist ideology

    What? Hudson goofs on lolbertarianism as junk economics. As far as communism goes, Hudson points out Marx’s book “Capital,” as one of the best treatments on the failure of (((Finance Capitalism))). It is a fair point, Marx analysis is fairly accurate. Hudson has even noticed a sneaky failure on the part of Marx where Marx omits a variable explaining compounding debt. In other words, it seems that Marx was afraid of offending his paymasters.

    Lolbertarianism is junk economics and a dialectic of (((finance capitalism))).

  33. Mefobills says:

    Oh, what could go wrong with that?

    The record on government created money is much better than private created.

    For example, Congress never issued more greenbacks than the law stipulated.

    By contrast, privateers hiding in dark rooms, create as much private credit as they want, to then buy up the world. I mentioned Carl Icahn earlier using green mail tactics to then off shore industry. A great wealth shift is occurring with the Covid hysteria, where the richest are having their wealth increase, so that they can further polarize society.

    Your fears are deflated by the actual historical record. This is why monetary history has been removed from economic curriculum, so people can be programmed with false ideas.

    One headwaters for money creation, say a monetary authority, is highly visible. An armed citizenry can train their guns on the headwaters, and any funny business then the lead can fly.

    Do you know where to train you gun in today’s distributed finance capitalism system? The bond holders and money creation is distributed. Money creation is done by stock owned private banks, and they will create as much as they please provided a good debt risk shows up to their door.

    What can go wrong with that? Well today’s clown world is a a good example of what can go wrong. The wrong-doers are even feted as heroes, as they get rich with their sordid gain.

    The article isn’t hogwash, it is you who is having your precious shibboleths challenged, and cannot articulate a response.

    • LOL: Emslander
  34. @BorisMay

    “This explains the extreme persecution of him and any followers then and now, by the rentier class.”

    Yes. Hitler and the extreme persecution of many others for precisely the same reason of having gotten it right WRT the wrong of ((( our friends ))).

  35. @Mike321

    This time read it slowly, one word at a time and it ought to become clearer that that’s the system in place currently. Think of it this way: you came with nothing in the world and you will go out with nothing, therefore, let Jeff, Mark, Bill et at own it all, so long as the rest of us get to enjoy life here and now. I sign over the deed to the entire universe to them so long as I am allowed to live the life of luxury while I am on this godforesaken earth.

    • Replies: @Mike321
  36. Mike321 says:
    @A Half Naked Fakir

    Thank you for your response. Three things;
    1. My one word original question was probably too cute by half. I apologize for that.
    2. I looked at some of your other comments and found myself nodding in agreement with them.
    3. I still think your allegory is a head scratcher, but that’s not important. Have a good day, sir.

    • Replies: @A Half Naked Fakir
  37. @bayviking

    It’s not a disaster for its beneficiaries.

  38. @Mefobills

    Thank you. This is spot on.

    Can you please reference this:

    “During the Hyperinflation, as much as 1/3 of the Germany had been bought up by foreign speculators.”

    I don’t doubt it one bit, but, a cite would be nice. Sarah Gordon’s 1984 U Princeton book is full of similar indices, solidly documented — one third of Berlin real estate, for example.

    Thanks again.

    • Replies: @Mefobills
  39. @Mike321

    Thanks for the civilized reply. Here are three of mine:

    1. We all get cute from time to time, so don’t worry about it.

    2. I am glad we have some common ideas about other things.

    3. My proposition is that the modern, financialized economy is largely a ponzi scheme, i.e. fraud, therefore, analogous to fantasy. And if it’s that, then one ought not to have a problem thinking beyond the realm of reality, i.e. fantasize about counting the universe as part of the balance sheet. Hopefully, this is not another head scratcher.

    • Replies: @Mike321
  40. Mike321 says:
    @A Half Naked Fakir

    Re: your point 3 — it is certainly not a head scratcher. I agree with you..
    I think I may be allegorically challenged. Studying poems in high school and college always left me cold. I could never quite figure out what the hell they were talking about. I blame it on being potty trained at gun point. :o)
    Have a great day!

  41. Mefobills says:
    @J. Alfred Powell

    Unfinished Victory by Bryant, quoting a Times Correspondent located in Berlin.

    It was the Jews with their international affiliations and their hereditary flair for finance who were best able to seize such opportunities… By purchasing the movable assets of his neighbors for a song during the universal want of Inflation and re-selling abroad for foreign currency, he was able, before the DEBACLE ended, to buy up enough real property in Germany to make him a rich man…They [Jews] did so with such effort that, even in November 1938, after five years of anti-Semitic legislation and persecution, they still owned, according to THE TIMES Correspondent in Berlin, something like a third of real property in the Reich. Most of it came into their hands during the inflation. (pp. 136-137).

    Adolf Hitler: ” The last national property of the whole people is thus passing lightly into the hands of the Jews who are drawing all things to themselves. Millions of existences which were supported on the thrift of a generation are being tricked of everything by this swindle.” (p. 138).

    The same (((group))) who were operating the levers of finance, e.g. the bear raiding mechanism which caused the hyperinflation, had access to dollar/pound/franc credit lines in the same way as “hedgers” do today.

    Germany was busted out by finance maneuvering, then real generational property was bought up when prices were made low.

    • Replies: @J. Alfred Powell
  42. @Mefobills

    Thanks. Bryant is a useful source — as your link shows.

    That being said, it’s something more than a shame to see this discussion diverted from the substance of Michael Hudson’s talk — which is of major importance to our present situation and possible futures — onto this obsessive topic of a few vociferous obsessed diversionaries.

    • Replies: @Mefobills
  43. Mefobills says:
    @J. Alfred Powell

    That being said, it’s something more than a shame to see this discussion diverted from the substance of Michael Hudson’s talk

    Michael attracts the cranks and loons. I’ve explored the topic of demoralization in my comment history.

    The cranks and loons are clinging tenaciously to myths they learned earlier in life, and Michael is a threat to their demoralized status. Some people cannot accept that they have been lied to, or what they hold dear is myth or propaganda.

    I was pretty active on this thread with about six comments related to the substance of Michael’s talk.

    One of my fears is that Ron Unz will stop posting Hudson interviews, especially if the commentariat is incapable of understanding what Michael is communicating.

    • Replies: @J. Alfred Powell
  44. Mefobills says:

    “Positive Pengar” positive money group

    Optimistic money makers?

    Not being sarcastic, but near as I can tell, positive means not negative money. Bank credit is negative money.

    Private corporate banking creates “bank credit” from nothing, and then when it returns to the ledger it disappears. It is a positive at first, and then a negative. The positive and negative cancel out into nothingness. What came from nothing returns to nothing. Private banks create and destroy money, they don’t intermediate existing (positive) money.

    Positive money would be “pre-existing” and savers would loan to borrowers. The money never goes negative and disappears. OK, never is a strong word, there has to be some extinguishing loans, typically at the Treasury level, to then drain the supply to prevent inflation.

    The colonial system of the U.S. was BILLS OF CREDIT, along with some debt free issuance. The money supply was mostly positive.

    Bills of Credit were an issuance from state authority, typically a state bank, and then said credit would stay in the money supply to do useful work. When Bills of Credit were recalled, the money supply would be drained by taxes and fees. Or, the money supply could be drained by not spending debt free into the commons. Benjamin Franklin’s letters give insight into the bills of credit, where they debated when to issue more, or not, depending on economic circumstances.

    It doesn’t matter whether you like it or not. All of life is a hierarchy, and the money system is a control system at the top of said hierarchy. Gravity makes you fall down, and the money system is a control grid. Deal with it.

    The question that should occupy mind space, is how to codify the hierarchy and control systems of civilization.

    This notion that profiteers (especially private money power) working for selfish sordid gain in a “free market” is somehow perfect, because humans in their collective wisdom are rational actors, has been shown to be farce. Today’s clownworld, is in large part, because the average person is walking around with provably false notions rattling around in their brain.

    Positive Money is not “optimistic,” instead it is rational and based on historical epochs, where the results are positive.

    NSDAP Germany had a bill system, Mefobills and Oeffabills, which increased purchasing power and real productivity simultaneously. This is the secret as to why Germany had not great depression and was making the “Western Democracies” look foolish.

  45. @Mefobills

    Fortunately all Michael Hudson’s current work is published on his own website, which is itself a useful resource.

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