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College Publications, World Economics
Association,  2015, 151 pgs., diagrams, paperback
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Reviewer comment:
The Author is basically a Marxist but with very different ideas and
theories.This is a very important study of the reality of the finance industry
today - and its direct role in one of the central struggles thoughout human
history - that between creditors and debtors. I have not found another author
who describes the current real financial situation in such stark terms. He
describes the 20th - 21st century as a time when 'financial capitalism' has
pushed 'industrial capitalism' aside. The author has published articles and
books about this and organized seminars and meetings.
This explains why in the Forbes annual magazine issues that list the world's
billionaires and the 400 most wealthy Americans with the sources of their
wealth the majority of the Americans obtained this via financial manipulation,
hedge funds, private investment, and similar activities. It also appears in the
Fortune Magazine April/May 2021 issue in their very clever graphic article
'Painting a Picture of Corporate Misdeds' in which the financial/insurance
industry had by far more fines from regulators than any of the other 8
categories. He seems to approve of the economic/political structure of ancient
societies such as in Mesopotamia (ignoring Karl Wittfogel's description of them
as' oriental despotisms'). He considers the change that took place in ancient
Greece and Rome to private property protected by law to be bad.
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Chapter 1 - Finance as warfare:
Dr. Hudson makes his point clear: "The financial sector has the same
objective as military conquest to gain control of land and basic infrastructure
and collect tribute."
Further: "The creditor's objective is to obtain wealth by indebting
populations and even governments, and forcing them to pay by relinquishing
their property or income."
The rest of the book elaborates on this theme. The sections are titled:
"The financial warfare to gain the land and/or its rent":
"Rome's financial war against government protection of debtor
rights": (This is not the account found in history books)
"War as the catalyst for national debts":
"War debts as the mother of royal monopolies"
"Avoiding war's financial cost leads to classical liberalism"
"Financial avoidance of public taxes and duties"
"The role of debt in the war against labor"
"Financial appropriation of labor's disposable personal income" (This
stems from the 'labor theory' of value)
"Financializing education"
"From finance capitalism to neofeudalism"( in this section he
correctly notes "Without contributing to production, rentier income
is overwhelmingly responsible for the wealthiest 1% obtaining 73% of the U.S.
income growth since the 2008 crash, while the 99% have seen their net worth
decline." I point out each year that th eevidence of this is in the annual
Forbes magazine list of the 400 wealthiest Americans, But an estimated 30% of
Americans - also do NOT contribute to production but live on government
supplied credit)"
"The financial fight to reverse classical tax and economic reforms"
(He favors that government should receive the rental income of land and natural
resources and receive high taxes. BUT that was the core situation of the
ancient "oriental despotisms' - taxes are tribute and this is a result of
lack of private ownership of land and assets.
"The destructive character of financial conquest" He believes
that:"Roman historians clamed their epoch's collapse on creditors reducing
the population to debt bondage and outright slaveery." NO, the slaves in
Roman society were foreigners. The population included many living off the
government 'welfare' grain subsidies.
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Chapter 2 - Piketty vs. the classical
economic reformers:
Dr. Hudson approves of pPketty's work allthough it has been found faullty by
many other economists. He writes: "Thomas Piketty has done a great service
in collating the data of many countries to quantify the ebb and flow of their
distributrion of wealth and income"
"Limiting Picketty's reform proposals to what anti-reform statistics
reveal"
"Why is inequality increasing" False leads that Picketty avoids, but
does not controvert"
"The 1980 rurning point in wealth and income distribution"
"1. Interest rates and easier credit terms promoting debt leveraging
(pyramiding)"
"2 Privatization and rent seeking"
"3 The tax shift off wealth and capital gains onto wages and consumer
spending" But the Constitution prohibited taxtion of wealth from the start
and also income which was put on wages by the 13th Amendment to finance
government welfare and VAT taxes are directly on consumer spending..
"Financing budget deficits via bondholders instead of government money
creation"
"Debt deflation" "Ideological support for the 1%'s conquest of
the 99%"
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Chapter 3 - Incorporating the rentier
sectors into a financial model with Dirk Bezemer "Abstract" "1
Introduction"
"2 Finance is not the economy"
"3 Towards a model of financialized economies"
"4 The FIRE sector, rents, and the progressive response" (In this
section Dr. Hudson discussed Henry George whose economic theories he studied.
"5. How the FIRE sector operates"
"6. Effects on the environment, demography and the economy"
"Conclusion"
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Chapter 4 - From the Bubble economy to debt
deflation and privatization
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Chapter 5 - How economic theory came to
ignore the role of debt
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Chapter 6 - The use and abuse of mathematical
economics
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Chapter 7 - U.S. 'quantittive easing' is
fracturing the global economy
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Michael Hudson - ... and forgive them
their debts
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Kaufman, Henry - Tectonic Shifts in
Financial Markets
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Michael Hudson -Privatization in the Ancient
Near East and Classical World
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Michael Hudson
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Michael Hudson
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