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Michael Hudson: C is for Camouflage

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By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond. Originally published on michael-hudson.com.

Lambert here: I love dictionaries. This is Part C from Hudson’s ongoing Insider’s Economic Dictionary: It includes Capital, Chartalism, Chicago Boys, Class, Corruption, and Credit, and much else. It’s hard to believe that other letters will have such a rich set of entries, but we’ll have to see. Mix ‘em, match ‘em, share ‘em with your friends!

* * *

Camouflage: A cloak of artificial attractiveness or even of invisibility. Financial debt-claims on the economy’s income and assets camouflage themselves as wealth, although the financial tactic is to strip it. (See Euphemism and Parasite.)

Capital: From Latin caput, “head,” as the political seat of government, society’s guiding intelligence or brain. Economically, the term is used ambiguously to represent two antithetical forms of capital. Physical capital in the form of tools, machinery and buildings are means of production evaluated by the cost of producing or acquiring them. Finance capital represents the rentier claims on these means of production and their revenue. Its dynamics tend ultimately to strip the means of production via the claims of compound interest in excess of the ability to pay out of current income and production.

Capital flight: The effect of global finance capital and local oligarchies stripping domestic capital to move it safely offshore, to the United States, Britain or intermediate tax havens. Russia lost an average $25 billion annually during the 1990s as its kleptocrats moved their money abroad, accompanied by an emigration of labor. Depopulation typically accompanies capital flight as the economy shrinks. Argentina is reported to have lost a million workers during the balance-of-payments crisis of 2002-03 in which a decade of IMF planning culminated, over and above its flight-capital losses. (See Asset Stripping, Hyperinflation and Washington Consensus.)

Capital formation: The full term is “fixed capital formation” or “real capital formation.” The United Kingdom’s National Accounts define it as “investment in tangible assets[. It] consists of gross domestic fixed capital formation and acquisition of stocks and work in progress.” It continues “Gross domestic fixed capital formation is defined as expenditure on fixed assets (buildings, plant and machinery and dwellings) which either replace existing assets that are no longer productive or increase the availability of productive assets.”

Capital gain:
The objective of investors and speculators under a policy of asset-price inflation. Machinery and other physical capital tends to wear out or obsolesce (see Depreciation), but prices for real estate, monopoly privileges and other rent-yielding assets, as well as financial securities (stocks, and bonds since 1980) tend to rise or be inflated over time.

Although the great bulk of capital gains occur in real estate, most popular lobbying and journalistic discussion treat capital gains as the reward for industrial innovation and enterprise. Investors claim that capital gains are required as an incentive to induce them to seek out opportunities likely to rise in price, and conclude that this price appreciation helps allocate resources to the most profitable (and implicitly, most beneficial) sectors. This logic succeeded in getting the U.S. tax rate on capital gains reduced to just half the normal income-tax rate. (They originally were treated as normal income.) Many countries fail to tax these asset-price gains at all, as if they did not exist. But they are now the main objective of investors seeking total returns.

Capitalism: The term popularized by Werner Sombart in Das moderne Kapitalismus [1909] to describe the social system based on promoting the accumulation of capital. (Marx himself did not use the term capitalism.) Long used mainly as an economic invective, the term only recently has become more glorified by neoliberals, referring mainly to finance capitalism.

Capitalism, finance: See Finance Capitalism.

Capitalism, Pentagon: See Pentagon Capitalism.

Cash flow: In older usage, the sum of profits plus depreciation. The more recent usage is ebitda, the acronym for earnings before interest, taxes, depreciation and amortization. This flow of income is available for new direct investment, to pay creditors or stockholders, although under finance capitalism it is absorbed increasingly by interest charges.

Central bank: Starting with the Bank of England, capped by the U.S. Federal Reserve Bank, a semipublic (although initially privately owned) institution administered by the commercial banks to provide sufficient liquidity to “avoid financial collapse,” which may become a euphemism for providing enough credit to keep inflating financial bubbles at a rate that will save debtors from defaulting and hence avoiding real-estate and stock-market loans from going bad and threatening the solvency of commercial banks. (See Bond, Treasury.)

Chartalism: Another term for the State Theory of Money. As Henry Liu has described it, “When the state issues fiat money under the principle of Chartalism, the something of value behind it is the fulfillment of tax obligations. Thus the state issues a credit instrument, called (fiat) money, good for the cancellation of tax liabilities. By issuing fiat money, the state is not borrowing from anyone. It is issuing tax credit to the economy.” (“Dollar Hegemony Against Sovereign Credit,” Asia Times, June 24, 2005.)

Chicago Boys: The University of Chicago economists brought to Chile in 1974 by its military dictatorship to turn economic control over to the junta’s supporters. Euphemizing their policy as introducing “free markets,” the Chicago Boys engineered a free lunch by giving away public enterprises. To silence criticism, they shut down every economics department in Chile except that of the Catholic University where the Chicago School had gained control. (See Labor Capitalism, Privatization and Washington Consensus.)

Chicago School: Named after the University of Chicago’s Business School where Milton Friedman and other monetarists established an early beachhead. The essence of their ideology is that government has no positive role, being only a deadweight burden. Starting with John D. Rockefeller, substantial funding for these economists came from rentiers seeking to replace the tax burden on property, monopoly power and finance with a tax shift onto the rest of the economy and give free reign for the FIRE sector to charge rent and interest free of regulation. Hence the euphemism “free-market school.” (See Free Lunch and Market Fundamentalism.)

Choice: What monopolists and other opponents of public regulation seek to limit, because limiting choice is what makes rent-seeking possible. The most successful monopolies sell essential products or services, giving them an ability to administer prices (e.g. for insurance, health care, oil and privatized monopolies). The idea that everyone chooses their own economic fate by being left “free to choose” is a euphemism for withdrawing public oversight of financial and property abuses. The result on the macroeconomic level is called “freedom of choice” only in the sense that Anatole France poked fun at when he quipped that “The poor man has as much right to sleep under a bridge as a rich man.”

Circular flow: The reciprocal flow of receipts and payments. The earliest model of circular flow was by the royal surgeon and founder of Physiocracy, Francois Quesnay, inspire by the circulation of blood in the human body. Most economic models since J. B. Say have focused on the reciprocal flow of income between producers and consumers, leaving out payments for debt service and property rent. (See Say’s Law and John Maynard Keynes.) But a rising proportion of income is diverted to pay interest charges as the economy’s debt overhead grows over the course of each business cycle and from one business upswing to the next. Because most net creditors either are institutional investors or belong to the population’s wealthiest layer, this debt service appears as “saving,” which Keynes criticized in his General Theory for reducing the demand for current output.

Circular flow (new model): The old circular flow: from industrial companies to their employees, who use their wages to buy what they produce. This is why Henry Ford famously paid his workers the then-towering $5 a day. This was Say’s law: Income paid for production is matched by consumption, in order for equilibrium to be maintained in a way that enables the economy to keep on growing.

The new circular flow: from the Fed and Treasury to Wall Street in bailouts, back to Washington in the form of campaign contributions. The money is circulated without having to go through the “real” economy of production and consumption at all.

Class: Classical political economy defined classes by their relationship to the means of production – land, labor and capital. Landlords charged rent, workers earned wages, and capitalists employed wage-labor to produce commodities to sell at a profit. The implication was that each form of income was a payment to a factor of production, without paying much attention to taxes or interest payments to the government and to creditors. All classes tend to be taxpayers and also to be debtors and creditors simultaneously.

A class approach thus relates only to one part of the overall economy. The American protectionist Simon Patten suggested that public improvements (such as the Erie Canal, roads and communications) were a fourth factor of production. Governments levy taxes to support a royal or civil bureaucracy (see Milovan Djilas, The New Class for a study of a Soviet-style government class), and to wage wars. Meanwhile, creditors supply money in exchange for interest; but money is not a means of production. One cannot really speak of a “saver” or “creditor” class as such, because all classes are savers, and most also are debtors.

Class warfare: The 19th century’s most characteristic economic warfare saw industrialists fight to keep profits high by minimizing labor’s wages. Toward this end they fought not only against labor unions and socialists but also against landlords and monopolists, so as to obtain a competitive advantage against foreign industrial employers by purchasing food in the cheapest markets and supply necessities at the lowest price. Class warfare and free markets thus were intertwined in Ricardo’s day.

Today, financial managers have taken control of industry, using its profits to pay interest and other financial charges. Meanwhile, finance supports real estate and monopolies as its major collateral for loans. The upshot is that interest now is paid more out of economic rent than profit, prompting the financial lobby to defend monopoly rights and economic deregulation. The banking and financial sector finds its major source of business in real estate, the economy’s largest sector (accounting for 70 percent of bank loans), followed by mining and other natural monopolies, including the public monopolies such as water, power and communications that are now being privatized.

Labor has won concessions from industry, but still has not come to terms with the role of finance in squeezing an economic surplus out of companies that are “financialized.” Having transmuted industrial capital into finance capital, the latter is now moving to take over governments to promote its interests (see Moral Hazard and Washington Consensus). In colloquial language, however, the term “class warfare” is applied only to debtors and employees seeking to protect their position as wealth is increasingly concentrated at the top of the economic pyramid. (See Compound Interest.)

Classical political economy: The body of economic analysis emerging out of 18th-century Enlightenment’s progressive moral philosophy, extending from the Physiocrats (see Economists) and Adam Smith through David Ricardo and John Stuart Mill, culminating in Karl Marx. The common denominator of these writers was the labor theory of value and the complementary theory of economic rent, developed to isolate non-labor costs (see Free Lunch). Their critique of rentier income was countered by a post-classical “neoclassical” school of economists (see Marginal Utility, Neoliberalism and Road to Serfdom.)

Clean Slate: The policy of annulling debts to save the economy and society from being torn apart financially and property being transferred to creditors through debt foreclosure. Originally a royal practice in Bronze Age Sumer and Babylonia, this policy became the core of Judaic Law in the form of the Jubilee Year. In modern times a moratorium was declared on Inter-Ally World War I debts and German reparations in 1931, but debt cancellations now occur only through personal or corporate bankruptcy, not on an economy-wide basis.

Client oligarchy: The ruling class of a “developing” (that is, backward) country that has been co-opted into serving U.S. and cosmopolitan finance capital in exchange for agreeing to IMF and World Bank “conditionalities” and permit capital flight (“free capital movement”) and un-taxing monopoly capital and other property, mainly for the benefit of foreign investors, including the client oligarchy via its own offshore financial accounts (see Offshore Banking Centers and Democracy).

Colonialism: A policy whereby a mother country underdevelops its periphery by imposing a double standard favoring industry, food self-sufficiency and high technology at home, and raw-materials production and low-wage manual labor abroad; and democracy at home, in contrast with client oligarchies in the colonies, whose loyalty and even identity lies mainly with the mother country and helps provide it with inexpensive raw materials and other products which it chooses not to produce at home. See Gains from Trade and Underdevelopment. Superceded by Dollar Hegemony.

Commons: Publicly held land and other economic infrastructure in the public domain, such as water, land, radio airwaves, forests and air, and natural monopolies such as transportation, power and telephone service, to be organized in society’s overall long-term self-interest rather than monopolized by private-sector rentiers. The idea of an inherent “tragedy of the commons” resulting from overuse often is cited as the reason why this policy cannot work over time. However, that ideological position does not reflect historical reality. The commons traditionally have been treated with a view toward long-term preservation of social integrity and balance.

Communism: In Marxist and Leninist terminology, the final stage of socialism in which the state is to wither away. But the outcome of the Soviet model turned out to be a Stalinist dictatorship by the party bureaucracy. Anti-government ideologues claim that this is the inherent fate of socialism, statist, or even mixed economies that wield public regulatory power.

Company: From “companion,” literally those who break bread together; originally a “company of men” in the form of marauding bands seizing lands and subduing their populations. The narrowing of this term to mercantile commerce retains the idea of a closed band, most notoriously in the form of the limited-liability corporation (LLC). The latter is a legal filter to protect businessmen from economic liability for their actions. As such, a limited liability company is the alternative to taking responsibility for the so-called “external” environmental and social costs of doing business, shifting these onto society at large. (See Externality.)

Compound Interest: The exponential rate at which an interest-bearing loan or debt doubles under conditions where the interest is added onto the loan principle, earning interest itself. (See Doubling Time, Rule of 72 and Sinking Fund.) The basic doubling curve is described mathematically as y=x2. The phenomenon was known already in the Old Babylonian period c. 2000 BC by the term “interest on interest” (mash-mash). However, loan contracts were for a specified duration, and when they expired the creditor had to draw up a new contract to receive further interest.

Prior to 1972 it was normal for Latin American countries simply to borrow the interest charges due on their foreign debt each year. This practice now (2005) characterizes over 20 percent of home mortgage loans, in order to “free” debtors from having to pay the amortization charges (and thereby leaving their debts to continue to multiply rather than being paid off).

Conditionalities: The requirement by the IMF and World Bank that indebted governments sell off their public domain and public enterprises, and also deregulate their monopolies and markets in exchange for creditor nations rolling over their foreign debts and refraining from overthrowing their governments either by covert means or by force. Conditionalities are imposed mainly on hapless third-world debtors and the post-Soviet bloc, with the support of local client oligarchies. (See Washington Consensus.)

Consumer: A euphemism for wage earner, viewed in terms of spending power rather than earning power. Today, a consumer is a debtor, as consumption standards have been maintained only by running deeper and deeper into debt. (See equity withdrawal.)

Consumer economy: As part of the postindustrial service economy, employees and workers are referred to as “consumers” and proclaimed king rather than the exploited factor of production. But it is the advertisers and mass-market producers who occupy the commanding position in shaping consumer tastes. Television and radio as well as the printed media have been turned into advertising vehicles and only incidentally for the news or culture. Poll-takers have found that the most open to being influenced are youth, up to the age of 25; after that age, they tend to become cynical. This helps explain why adult programming has been largely ignored by today’s media, throwing into question the real meaning of participatory democracy.

Corruption: Progress in a direction that depletes society’s power to live and grow, e.g. as democracy is transformed into oligarchy. It may take the form of an originally useful idea gone bad or turned into a zero-sum activity. See Law of Unintended Consequences.

Creative Destruction: Joseph Schumpeter famously cited creative destruction as the motive force of entrepreneurial capitalism. He defined it as innovations that were able to undersell and hence replace earlier production or distribution technologies.

Socialists accused capitalism of being a system that makes money out of, and in fact, thrives on, destruction and tragedy. Is there truth in this?

Ancient communities sought to protect the weak and poor, especially debtors (but not slaves captured from other communities, to be sure). Hardship was made temporary. Individuals reduced to debt bondage (usually as a result of natural disaster, warfare, death or infirmity) were released after a given period. Rulers decreed Clean Slates that annulled the backlog of debts, liberated the bond-servants and returned the land-tenure rights to debtors who had forfeited them to creditors or sold them under economic duress.

The reason for avoiding creative destruction was that by depriving the citizenry of land and liberty, it destroyed the community’s ability to field an army, as a prerequisite for citizenship was land tenure and personal liberty. This is why even classical antiquity (Judah and Rome) liberated debt servants and even slaves in times of military attack so that they could fight in defense of their communities. This was in an era where a community’s survival reflected largely the size of its free population.

This no longer was the case as armies shifted to mercenaries rather than depending on the draft of citizens. Today, a nation’s economic surplus is likely to be larger with less population. Prosperity under industrial and finance capitalism often is achieved in a manner that breaks up families and reduces the population.

Most notoriously, neoliberal anti-labor policies have led to severe demographic collapse in Russia and the Baltic states, and even Western Europe is losing population. Destruction is becoming less “creative” as this collapse is not associated with rising productivity and investment, but merely with the destruction of government’s ability to tax and spend.

Credit: A debt that has not been paid. As a verb, credit is the act of establishing a debt on the part of a loan recipient or buyer. Money is a form of credit, putting its holders in the position of a creditor vis-à-vis the rest of society willing to accept money in payment for their goods, property or labor.

Crusade: An attack that unifies both the attacking body and the body being attacked, as when Christian Europe attacked the Moslem Near East in the 12th century. However, crusades typically end up being politically divisive and cult-like, polarizing society between crusaders and their enemies. In this respect political and economic crusades are like religious crusades. (See Fundamentalist, Neoconservatives, Neoliberalism and Road to Serfdom.)

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23 comments

  1. psychohistorian

    Conundrum: Inheritance is not an inherent component of a social order but look what it got us, the myth of Capitalism covering for an inherently immoral social order.

  2. Skeptic

    I’ve been thinking about language a lot particularly having read Klemperer’s I Will Bear Witness: A Diary of the Nazi Years: 1933-1941 and To the Bitter End: 1942-1945 a number of years ago. I am also reminded of the great American writer H.L.Mencken who used to use such descriptive words as buncombe and booboisie. Reading Mancken at the age of twenty one destroyed much of my programmed American “education”. Too bad Mencken is not here today to savage these Word Beasts.

    If the 1% own and control most of our lives and our assets, it seems likely that they also control our language. MSM would be a big player in this control. I suspect research would show that the major English dictionaries are controlled by the Elite. That language itself, English, is the spawn of a colonial empire. My ancestors used to speak Irish but that language and culture were wiped out. In North America, the Quebecois were subjected to the same attempts of linguistic and cultural extermination but, much to their credit and stamina, the Quebecois have survived and thrived with their language intact.

    In the US itself, there is the example of Ebonics to offset that “…African Americans are forced to conform to European American society in order to succeed, and that conformity ultimately means the “eradication of black language . . . and the adoption of the linguistic norms of the white middle class.” ”
    https://en.wikipedia.org/wiki/African_American_Vernacular_English

    I note also that many alternative folks are talking about language more and more. I believe Zero Hedge recently had an item on this subject. So, it seems to be gaining traction.

    Rather than simply redefine old words though, I think we need new words and phrases to describe our situation and how we feel about it. Bankster, for example, is a wonderful, descriptive word which really hits the target. This word does not allow for ambiguity.

    So, maybe we can create our own language and use it among ourselves. So get to work and let’s build words that we created and own.

    My offerings:

    affluenza—I first saw this at Adbusters.
    Mondiablo—Monsanto
    Homedebtorship—Only 30% of Americans actually OWN their homes.
    Inyerpantsers—TSA cops or other enforcers
    “If you see something, say something.”—The Snowden Principle
    I was Corzined.—I was defrauded, robbed. A la Monsieur Ponzi.
    Manning Up—Do the right thing, dude!
    Robbers’ Court—Explanation needed?
    Frankenfood—A marvelous creation.
    Department of Injustice

    What say you, Ncers?

    1. susan the other

      We an take a page out of Confucius and Mao. Cleanse the language. It’s funny how new words so often are puns on two old words. But formerly (original) words described an action or a process. Hudson’s example of “companion” as the person you break bread with becoming the root of “company” , which has a far less sentimental connotation.

    2. Android 16

      Thank you for a great post. One term that I find pithy is ‘inverted totalitarianism’.

      “A culture that communicates through image and spectacle is a totalitarian culture. We have created in the words of great political philosopher Sheldon Wolin a system of inverted totalitarianism. Inverted totalitarianism is different he writes, from classical totalitarianism. It does not find its expression in a demagogue or a charismatic leader but in the anonymity of the corporate state. In inverted totalitarianism you have corporate systems that purport to pay loyalty and fielty to the constitution and electoral politics and the language and iconography of american patriotism and nationalism, but have so corrupted the levers of power as to render the citizens impotent. In inverted totalitarianims economics trumps politics which is different from classical totalitarianism where politics trumps economics. And with that inversion comes a different form of ruthlessness. The commodification of american culture, the comodification of human beings whose worth is determined by the market, as well as the commodification of the natural world whose worth is determined by the market, means that each will be exploited by corporate power until exhaustion or collapse. Societies that can not regulate capitalist forces cannibalize themselves until they die.” (Christopher Hedges)

    3. Android 16

      “The secret of life is sincerity and fair dealing. If you can fake that, you’ve got it made.”

      It seems to me that efforts have been made to deconstruct human psyche and manufacture ‘acting as if’ agents to exploit the unconsciousness.

    4. anon y'mouse

      this is why they need to keep the main page link section’s title as “Big Brother Watches You Watch” instead of what they’ve changed it to for today.

      it has that multiple interpretation/society of the spectacle thing going for it. who is watching whom? who watches the watchers? which side are you on?

    5. gonzomarx

      sounds like Newspeak
      “It is a reduced language created by the totalitarian state as a tool to limit free thought, and concepts that pose a threat to the regime such as freedom, self-expression, individuality, peace, etc”

      http://tinyurl.com/l24j7d6

  3. from Mexico

    Michael Hudson says:

    Commons: Publicly held land and other economic infrastructure in the public domain, such as water, land, radio airwaves, forests and air, and natural monopolies such as transportation, power and telephone service, to be organized in society’s overall long-term self-interest rather than monopolized by private-sector rentiers. The idea of an inherent “tragedy of the commons” resulting from overuse often is cited as the reason why this policy cannot work over time. However, that ideological position does not reflect historical reality. The commons traditionally have been treated with a view toward long-term preservation of social integrity and balance.

    I would like to take this one step further, to point out the relationship between the commons and the self-interest axiom. The self-interest axiom is the principle ideological weapon in the arsenal of the tragedy-of-the-commons proselytizers. These neoclassicists or neoliberals want to privatize everything, with the goal of plundering the commons.

    If one accepts the self-interest axiom, or what Peter Turchin calls “the myth of self-interest,” then realizing the commons is impossible. Understanding the relationship between the self-interest axiom and the tragedy of the commons is thus necessary to understand why necoclassical economists and neoliberals are so hellbent on proselytizing the one true faith: the myth of self-interest. “In a society of rational agents, everybody will defect, with the end result that collective action will always fail,” Turchin writes in War and Peace and War. “The economist Mancur Olson called this the ‘collective-action problem’.” Here’s the logic: if collective action, which is necessary to achieve the commons, is fated to failure because of the nature of man, then striving towards the commons is futile.

    Dan M. Kahan in “The Logic of Reciprocity: Trust, Collective Action, and Law” elaborates:

    The Logic of Collective Action has for decades supplied the logic of public policy analysis. In this pioneering application of public choice theory, Mancur Olson elegantly punctured the premise — shared by a diverse variety of political theories — that individuals can be expected to act consistently with the interest of the groups to which they belong. Absent externally imposed incentives, wealth-maximizing individuals, he argued, will rarely find it in their interest to contribute to goods that benefit the group as a whole, but rather will “free ride” on the contributions that other group members make. As a result, too few individuals will contribute sufficiently, and the well-being of the group will suffer.

    [….]

    The main — indeed, only — selling point of the conventional theory of collective action is its asserted behavioral realism. Individuals, it tells us, are inherently self-seeking. Accordingly, we can’t count on them voluntarily to subordinate their material interests to the good of society…

    But, as Kahan goes on to conclude:

    It turns out, however, that the conventional theory isn’t right. Individuals in collective action settings might not behave like saints, but they don’t behave like fiends either… Whatever truth there is in the conventional theory is an artifact of the common acceptance of that theory’s bleak assumptions.

    So we should now reject them. To replace the conventional theory of collective action, we should construct a new and more appealing one founded on our nature as reciprocators. The logic of reciprocity not only reflects a more realistic understanding of individual emotional and moral commitments. It makes the hope that citizens will be morally and emotionally committed to contribute to the common good more realistic.

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=361400

    1. Alejandro

      “I am because we are.” -Proverb of controvertible origin

      Attribution may be controvertible, but the spirit behind the words, imho, is not.

      1. psychohistorian

        Think about that the original motto of the United States of America was:

        Out of many, one…..or E Pluribus Unum

        And then think about what it was changed to in the 1950′s and the fact that regularly our compromised congress critters vote overwhelmingly to “reaffirm” that In Gawd We Trust.

        We use to have an attempt at a secular Republic. Not so anymore.

    2. Saddam Smith

      “Governing the Commons” by Elinor Ostrom destroys the myth than the commons can only be over-expoited and thus ruined by greed and uncooridnated self-interest.

      I would like to add that Universe can only be a commons, and that ‘private’ is a temporary illusion – as important as solitude and retreat (the domestic sphere) are. Private property is an add-on, a social technology to manage or govern the commons. There are many other such technologies but based on cooperation rather than competition which, as Ostroy points out, are more sustainable than the price system and Invisible Hand. The hard part is unlearning the latter and learning the former, and in very large numbers (of humans) to boot; culture cannot be forced into lasting and wise change, it has to evolve.

  4. JTFaraday

    “Capitalism: The term popularized by Werner Sombart in Das moderne Kapitalismus [1909] to describe the social system based on promoting the accumulation of capital. (Marx himself did not use the term capitalism.)”

    Interesting.

    “Client oligarchy: The ruling class of a “developing” (that is, backward) country that has been co-opted into serving U.S. and cosmopolitan finance capital…”

    This seems too specific to me. Why does it only apply to developing countries?

    1. Massinissa

      Notice the word ‘Client’ in front of Oligarchy.

      Israel aside for the moment, since that complicates matters, America’s oligarchy is largely independent. One may want to call them a Sovereign Oligarchy.

      Whereas, in say Columbia, the local oligarchy pretty much only functions as such by U.S. consent. They are not a sovereign oligarchy.

      I suppose a few first world oligarchies might be considered ‘client’ oligarchies (I dont know, Latvia?), by and large this term should be more for third world nations.

      1. JTFaraday

        I don’t see why the government of any country, “economically developed” or not, might not be thoroughly “co-opted into serving (U.S. and) cosmopolitan finance capital.”

        Why does this description not apply to any number of EU governments right now?

  5. Alejandro

    CONsumerism: Quasi-religious cult of buying what we don’t need with money we don’t have, trying to “be” who we aren’t.

  6. diptherio

    Hudson left out Captured (as in regulators), Confidence Trick (as in Wall Street), Criminogenic and Criminality (see Banksters). And, of course, everyone’s favorite:

    Crusty Sushi — often used as a form of alternative currency by financial professionals when engaged in Criminality. Ex: “I’ll give you some crusty sushi if you help me rig LIBOR today.”

  7. allcoppedout

    The classic statement ‘against language’ is probably in cryptic Wittgenstein – that we are bewitched by it. Even Plato thought it might not survive a generation, Bacon that were we transfixed by its Idols, Saussure, Freud, deconstructive conversation analysis, Critical Theory and now biological-evolutionary concerns of ‘argumentative theory’. Even the many positivisms were largely concerned (intellectually) with language.

    Science is seeking a base in what works and what doesn’t – the re-drawing of thermodynamics in Deutsche’s ‘construtor theory’ – partly an attempt to escape working from what may be mythical like ‘origin’, a very deep attack on language.

    My own view for many years has been that the only subjects with real peer review are in hard science and maths. Other subjects use camouflage, much as Michael suggests above. Science once appeared to escape language because it had experiment with the ‘real’ – but this is not how we consider matters now in ‘structural realism’ – broadly an attempt to show continuity in changes in theory, accepting that observations are in spin with theory and that observation language itself is not neutral. Our universe is probably beige and colour a virtual construction. this does not stop my brother and I agreeing on experiments, once we understand his colour-blindness, or my blind friend who has to take our observations on trust.

    People my age were taught on trust of Roman historians that Julius Caesar invaded Britain in 53 BC – he did not. We were taught we were the heroes our wars started by nasty Germans in 1914 and 1939 – this isn’t true either. Forms of such chronic teaching are everywhere, often in inverted form. The term ‘crusader’ is one of contempt in the Middle East, whereas I was taught to sing ‘Onward Christian Soldiers’.

    Some of us know we have been fed one daft version of non-history or another. Few Brits would understand why the crew of HMS Temeraire mutinied on rumours of being sent to the West Indies – an almost certain death from disease trip then – probably imagining a holiday paradise and playing cricket with the locals.

    We need mutiny now, but the fact is we are still as dumb, cowed, filled with the drumbeat as ancestors of Mexico and me signing up or drafted by poverty on either side of the Spanish Armada. Those of us who want change are speaking and writing very different language than the neo-liberals and neo-classicals, much of this language existing ‘before’ our lips move or electronic quills twitch. We also want a very different future.

    Take the question ‘what is money’? I think a key element in understanding is that it has largely ended-up in the hands of rich, mean bastards throughout history. What it is and does varies with how much of it you have – imagine how much similar we could list on flip-charts. Now point me to the “economics” that even considers such! I have inflation at about 6% (2.9 is our quoted figure) and it’s 20% for a neighbour on benefits with kids. ‘Big data’ approaches could be used here instead of averages hiding effects on the poor, but are on holiday not catching terrorists.

    If you think about stochastic approaches including all sorts of stuff, ask what they leave out. They left out asking us what might go in for a start, like an economics designed for more egalitarian outcomes.

    I think we should be asking ourselves how economics could be subject to peer review, what we would have to do to stop the standard bickering prevalent between paradigms and arguing to win instead of finding the best answers.

  8. damian

    compound interest: if an income stream from a riskless investment – treasuries say less than 5 years – and has a limitless recurring horizon – “infinite” –

    in contrast:

    why would a man’s income – from wages due to labor – which has a “finite” life do to the limitations of life itself, skills becoming outmoded, geographic limitations to apply their labor

    be taxed at a higher rate than an “unlimited” income stream from compound interest?

  9. fairleft

    The following is genius, and teaches me we should front that school privatization advocates are really advancing monopolized or duopolized school systems where the educational ‘choice’ is between Coke and Pepsi and just as intellectually nutritious:

    Choice: What monopolists and other opponents of public regulation seek to limit, because limiting choice is what makes rent-seeking possible. The most successful monopolies sell essential products or services, giving them an ability to administer prices (e.g. for insurance, health care, oil and privatized monopolies). The idea that everyone chooses their own economic fate by being left “free to choose” is a euphemism for withdrawing public oversight of financial and property abuses. The result on the macroeconomic level is called “freedom of choice” only in the sense that Anatole France poked fun at when he quipped that “The poor man has as much right to sleep under a bridge as a rich man.”

    1. MaroonBulldog

      Anatole France? Are you sure? I thought it was Guy de Maupassant in “A Bit of String”: something along the lines of, “The law, in its majesty, forbids the rich man as well as the poor to beg in the streets, to sleep under bridges, to steal bread.”

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