An interview with 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, on the Renegade Economists radio/podcast. His latest book is “The Bubble and Beyond.” Originally published at his blog.
Karl Fitzgerald: Our favourite guest, the man that Max Keiser from www.MaxKeiser.com described as the world’s greatest living economist, yes, Professor Michael Hudson is here to give us a wrap on 2013 and the economic forces that have surrounded us for centuries.
How have you actually seen 2013? What’s played out for you in terms of the big trends?
Michael Hudson: Oh, the same shrinkage that you’ve seen since 2008. We’re still in the backwash; the economy is still unable to pay its debts. The difference in trend is that now you have hedge funds coming in to the real estate market here buying a lot of properties from the banks at great discount prices for all cash.
So, for the last 30 years you’ve had a declining proportion of equity ownership of US real estate. All of a sudden that’s turned around and gone up because you have hedge funds buying for 100% cash. Now that you have Treasury Securities yielding only 1/10th of a percent, the financial sector says “How are you we going to make a higher rate?” The highest rate they can make is in mortgages, so they’re buying the discounted properties and they’re renting them. One of the consequences is that rents are going sharply up for the United States so that not only can people not afford to buy houses now, they can’t get mortgage credit, but they can’t even afford to pay their rent. So the squeeze is on. Only about 25% of workers’ pay cheques here can be spent on goods and services, all the rest is spent on rent and social security, medical care, interest payments and taxes.
Karl: You’re talking there about the growth of rental-backed securities and Blackstone Capital buying up properties at $100million a week from what I’m reading?
Michael: Friends of mine have called and asked me to invest. The problem is, they want $5million at a time and I just don’t have enough money to throw at it otherwise I think that was the best investment around, if I wanted to go around kicking people out of their apartments.
Karl: And that’s really the wash of it isn’t it, is that the one-percenters have got off Scott free, the banking industry’s come up for some criticism, but really there’s been very, very little criticism of the role of land speculation and the whole property Ponzi game. And from that, they’ve just seen it as a go-ahead to develop these rental-backed securities where they can access cheap credit from the markets and just pile in now to not only capture the rents from the mortgage market, but also from the rental market.
Michael: That’s the big change in the last year. Before 2008 you’d have home owners’ mortgages that were being packed and sold and now you have the hedge funds packaging rental properties to absentee owner mortgages that are being sold. That’s the change that’s occurred in the structure of the financial markets this year.
Karl: And meanwhile in America there’s vacancy rates of 10.2%. It’s staggering that people are taking this sort of pain and the Wall Street mob must be just laughing saying “Look, we can push this even further than we expected”?
Michael: That statistic you just cited is way under-reported because the banks are leaving a lot of families in the homes that haven’t paid mortgages in a half-year or a year. They’re not foreclosing because they know that if they do kick the people out of the homes and leave them vacant the homes are going to be stripped of copper, stripped of any wiring and just stripped and the value will go down.
So the banks are leaving people in the homes that are not paying any mortgages just so that they’ll be there and, sort of be the watch guard dogs of the home until they can be picked out and replaced with other people. But nobody sees who’s going to replace them because the economy’s broke.
Karl: Here in Australia we’ve just had our housing finance figures that revealed investors are at 38% of all loans being taken out. It’s shocking how rapidly this is increasing and first home owners are being crunched. They usually average around 19% – 20% of the market, they’re down to 12.6% and in cities like Sydney, the pride and joy of Australia, first home owners are just over 7.5% So we’re being crowded out.
Michael: Yes, what you’re described is inherently unstable. At the peak of the investment boom in the United States in 2008 speculators made up only 1/6th of the market, about 16%. So when you say 38% of Australia, that means people have too much money, to make a long story short. They don’t know where to put it, so they’re putting it there without much thought of how on Earth can Australians ever pay these rents and get jobs where they have to pay so much for their income in rent? How can Australia compete, whether it’s in industry or it’s in services or whatever, how can it compete if people have to pay such a big portion of their pay cheque out for housing?
Karl: So the underlying fundamentals aren’t good. Here in Australia, the jump in part-time workers is the only thing saving the unemployment rate from sky-rocketing and I dare say it’s the same thing in America. But here we have our stock exchanges at record levels, they just keep piling ahead and it all comes down to this quantitative easing, the tapering issue, to taper or not. What are you seeing on the horizon with the tapering?
Michael: Well, whenever they talk about stopping the quantitative easing and letting rates go up, the stock market takes a plunge. So the Fed’s sort of locked itself into a corner. If it does begin to let interest rates rise then stocks and bond prices are going to go down and that’s going to create huge losses for the banks. On the other hand, if it doesn’t let interest rates rise then the pension funds are going broke because they can’t make money by lending out the money.
So here the pension funds are turning their funds over to Wall Street just to gamble. And if you’re going to go broke and you’re a pension fund you think “Okay, I’m gonna default, there’s only one thing to do. I’m gonna take all the money in the fund and I’m going to Las Vegas and I’m gonna put it on the black or the red, 50/50; either I double the money or I’m broke and if I’m broke I’m broke anyway, at least this way I can play for time”. So they’re all gambling and I’m afraid the Wall Street Sharpies are taking their money away.
Karl: Yes, well, we just wonder what is going to be the exit plan there because somewhere along the line they’re going to have to pull the pin on it. More and more countries are starting to question the value of the US dollar.
Michael: In today’s paper there was a report about Madoff’s people, for the Ponzi scheme, and they’re on trial and they were asked in court about in 2006 they begin to think “Something is wrong” and they said “I wonder if Madoff has an exit plan?” And finally they asked him, “Do you have an exit plan in the Ponzi scheme?” and the answer was “No, there’s no exit plan”. When you’re in a scheme that can only crash you don’t have an exit plan; you go on as long as you can and then it crashes. That’s how the game works.
Karl: The wealth gap is expanding at a rate of knots and many commentators, economists are struggling to really get a grip on where this divergence is coming from.
Michael: Yes, it’s coming from the fact that for the 99%, their income’s going down and for the 1% they’re making capital gains and interest. The 1% have the 99% of the population in debt to themselves, so they’re collecting and it’s like a siphon taking all the wealth upwards. And first the 1% are looking for all the income that the 99% have to be pledged to pay the debt and then they want all the assets. So the wealth gap is coming.
For one thing, now people have to pay for their education and that means they have to pay so much they have to borrow, so student debt is increasing and once you graduate you have to spend the next 10 years of your life paying off the student debt. They can’t afford to buy their own homes; they have to live with their parents because if they do buy a home they have to sign away the next 30 years of their life to paying the mortgage. So the entry price to get a job in this society, start a family and getting a home is running into a lifetime of debt to pay the 1%. That’s why the economy’s polarising.
Karl: Is it not also the element of unearned income that’s being bought and sold through property transactions, any sort of buy and sell arbitrage?
Michael: Unearned income sure, if you mean capital gains, riding asset price inflation, financial speculation or just making – unearned income is getting money without working for it, getting money simply by lending money or by owning property and putting up a toll booth and charging people an access price. So the economy is putting up toll booths for education. If you want an education, you have to borrow from the bank. If you want to drive a car on a road, well, we’re putting up toll booths on the roads; we’re turning the roads into toll roads. If you want to park your car, we’re now putting parking meters on the sidewalks and the parking meters’ revenue’s sold off in Chicago to Wall Street for the next 30 or 40 years to get money to pay the interest to Wall Street now.
So the economy’s getting deeper and deeper into debt while all this is occurring. So if you look at the polarisation of wealth, you can just look at the increase in the debt ratio and that’s a mirror image of it.
Karl: You’re on 3CR’s Renegade Economist with your host Karl Fitzgerald and this week it’s Professor Michael Hudson. He’s back on the air giving us the overview of what’s going on with this global economy. Never before have so many handouts been given to those at the top and trickle-down economics is still not working.
And when it comes to ground zero for the failure of public finance, we can go no further than Detroit. The bankruptcy push there is storming ahead and apparently now there’s some sneaky manoeuvres going on with public workers’ pension funds there. It just sounds like an absolute disaster zone. What have you been seeing in Detroit?
Michael: A lot of the pictures are fictitious there. The question is “How do they calculate the pension fund deficit?” and in Detroit the technocrat, Orr, who’s been put in charge of Detroit has more authority than the mayor, the city doesn’t have any authority at all. The technocrat says, “Okay, we’re coming in and if we capitalise the pension shortfall and it all has to be paid in a short period of time then somebody has to lose”.
Now, under normal circumstances, until last week everybody assumed that pensions were a guaranteed contract. They were like deferred wages. Workers in Detroit said “Okay, you can pay us less if we’re a policeman or a fireman, we’d rather play for security and get a pension” and the Michigan State Constitution said that under no circumstances could municipal pensions be cut back. But the judge ruled that under federal bankruptcy only the bond holders are secured. All of a sudden the pensioners are unsecured counterparties and they can receive only pennies in the dollar.
So now, if somebody has to lose the question is, is it going to be the 99% or the 1% – just like your previous question – and in Detroit they say “Only the rich can be paid when somebody has to lose. The workers have to lose, the pensioners have to lose. When there’s no money to go around, the rich get paid first and, if there’s anything left for the 99%, they can get the crumbs”.
Karl: What I see that’s interesting is that around the world we’ve got now these bail-in policies where depositors do come second to creditors, which is a reverse of the bedrock of the financial system. The depositors being first in line created a sense of trust that you would be looked after and now we’re seeing that not even our deposits are safe, so we might as well all just go into debt and join this Ponzi game and speculate wherever we can because savings in this day and age is virtually over?
Michael: That’s not really around the world, that’s in Cyprus and the only reason that was in Cyprus was most of the depositors were Russian.
Karl: In New Zealand this is the case and there are elements of it here in Australia. I’ve heard that in other countries too this is really moving forward.
Michael: Oh, alright, I didn’t know about that. Then indeed, there’s no safety. I don’t know where to put the money. I would imagine people are beginning to buy gold bars. I don’t know what to put it in. In America they’re buying farmland, they’re buying anything that’s tangible that can’t be wiped out.
Karl: Well that’s right. Isn’t it interesting that it comes back to the most trustworthy thing you can have on this planet is land in a prime location that’s productive? And much of what I like to talk about here is the unearned income that can be earned by just owning a piece of property, waiting for society to develop and then being able to sell that.
Now, a lot of people have difficulties understanding the difference between rent and price. Michael, could you give us an outline on what the difference is between rent and price?
Michael: Well, this is what classical value theory was all about for about 800 years, especially from our Quesnay in France, to Adam Smith and Ricardo and John Stuart-Mill. There’s cost value on the one hand and almost all the cost of production, whether it’s machinery or buildings or labour, all the costs can be reduced to labour. However, if there’s a price that’s higher than the cost of production that difference is called economic rent. So that’s why people talk about rent extraction in these days.
For instance, in America about a century ago, unlike other countries, we left the electric utilities, gas companies, power utilities in private hands, like the railroads were here, and so the government developed a way of analysing what is a fair price for utilities to charge for gas, electricity, for railroads, and so it was all based on actual cost of production. The idea was you want to get rid of monopoly pricing. A monopoly pricing economic rent, monopoly rent, is when a company charges more than the cost of production, including normal profits, will reflect. And traditionally you have that in land, in real estate, in mineral rights, in finance when banks can create money on their computer keyboard freely and then lend it out to get interest.
So rent and interest are created without any real cost of production, they’re simply a result of a legal privilege, whether it’s a legal privilege to erect a toll booth or to somehow impose a tariff or a special monopoly price gouging.
Karl: And what is the cause of this market power that gives them the ability to enforce these higher prices?
Michael: Usually, the failure of the government to apply anti-monopoly laws. Until Margaret Thatcher’s time, Europe kept its roads, its railroads, its airlines, its gas and power utilities in the public hands. So the whole idea was that basic needs and infrastructure would be supplied to the private sector economy either at cost or at a subsidised price so that you’d made the economy more competitive. If you have to begin selling off the roads and putting toll booths there and people have to pay more for that; if you begin selling off land or real estate and the value goes up and you build public infrastructure and you don’t tax it away then all this rent is going to be capitalised into a bank loan and the house is going to cost much more and you’re going to increase the cost of living, and if you increase the cost of living, that’ll increase the cost of labour and it’ll make countries uncompetitive.
So right now you have Thatcherism and neo-Liberalism spreading throughout the world. Every country is trying to be as uncompetitive and high cost than the other country because being high cost means that somebody can borrow money against it and leave somebody else holding the bag.
Karl: So that’s why trade theory in comparative advantage has really gone out the window due to this financialisation of the economy?
Michael: Yes, if you have three-quarters of the American budget going for housing, either rent or a mortgage, and for debt service and for taxes and medical care, then you no longer have the price of grain or the price of bread determining the price of labour as it did in Ricardo’s day. You have really a financialisation of everybody’s income and it’s a rent theory of international trade instead of a cost of production theory of international trade competitiveness.
Karl: And it is bizarre when you look at the privatisation arguments that are going on around the world, it’s almost as if economies of scale have been superseded by crony competition?
Michael: It affects the markets, that’s right. The whole idea now of economies of scale means the ability to control the market and extort economic rent higher than the cost of production and get a free lunch. So today’s economy is all about getting a free lunch. This is exactly the opposite of everything that the classical economists thought they were pressing for.
Karl: Now, back in the mid-1850s there was a lot of talk about this issue of unearned income, of rent theory and being able to enforce your monopoly privileges on society. I’ve seen you write a lot about the physiocrats, John Stuart Mill, David Ricardo, Malthus and, of course, the great man, Henry George. But someone who I haven’t really seen you write much about said the following quote: “One section of society exacts from another a tribute for the permission of inhabiting the Earth. Private property in land implies the privilege of the landlord to exploit the body of the globe, the boughs of the Earth, the air and with them the conservation and development of life”. Now, that was Karl Marx in Das Kapital Volume III on page 898.
Why haven’t we heard more about you on Karl Marx talking about unearned income, because really we need people to understand just how widespread this knowledge was back in that day and age?
Michael: Well, in my book The Bubble & Beyond I have a whole discussion of Marx’s Volume III. And basically he went on from the quote that you’re saying to say that now there’s been a change in all of this; now property’s being democratised, now everybody’s able to buy their property on credit and so on the landlord’s back there’s the banker. So it’s true that in the foundation of industrial capitalism that Marx was driving people off the land into the cities where they had to work for wages, but now the real estate owners pay all the rent to the bankers so it’s the bankers that end up with the bounty.
Now, Marx is of two minds and when you remember he didn’t live to complete Volume III, all we have are his notebooks that he was going to write and there are two different strands in his notebooks. On the one hand he’s going to say “Look, it’s the role of industrial capitalism to make banking productive and to industrialise banking and to make banking finance industry”. On the other hand, he collected all the quotations he could from all the earlier writers saying “Look, you have compound interest, you have banks being fraudulent, rip-offs, look at the Panama Canal fraud, look at all of the big frauds the banks are involved in”.
So the big question that he never lived to answer and, given when he died in the 1880s there wasn’t time to answer it yet, was banking going to be subordinated to serve industry or was industry going to be essentially starved to finance banking? And that’s basically what I wrote about Marx there, but certainly Marx’s theories on surplus value, which he planned to be the first volume of Capital, it was the first history of economic thought and in that he summarised what all of the economists of his day – from William Petty onwards – had been writing about, land rent and interest and the whole evolution of rent, interest and wages.
So I think that if one’s going to analyse any economy such as today the best way to start is with the history of economic thought to get the concepts of value, price and rent. That’s really the key to analysing anything and that’s what’s missing in the economic education today.
Karl: So Iceland has been lauded as one of the few nations to really take on the banking elite and recently they’ve engaged in some sort of mortgage write-down where all mortgage holders have been given $30,000-odd each to pay off their mortgage. How have you seen that policy Michael?
Michael: Iceland’s in a mess because it hasn’t taken on the banks. The pension funds in Iceland have a lot of their money invested in the banks and Iceland has probably the worst kind of creditor rule that you’ll find in any country. The amount of debt that’s owed on a home or a mortgage is linked to the consumer price index. Well, in Iceland, because mainly all they produce is fish and aluminium, the prices are set by imports. So when the banking crisis led to the currency devaluation, all of a sudden all the prices went up and if you bought a home with a mortgage of kr100,000 now all of a sudden you owed kr180,000. So what they’ve done is just tried to cancel some of this bizarre increase in the price adjustment of the debt. There’s nothing like that in Australia or the United States. It’s unconstitutional in Iceland but the banks are still running the country, or at least they were under the Social Democrats and the Green Party that essentially were the bank lobbyists in power.
So, nobody knows what’s really happening in Iceland now. The banks have so much money that Iceland can’t afford to make the currency convertible so it has a blocked currency. If you’re in Iceland, you can’t transfer your funds abroad. The banks have so much money that they’d like to send abroad that if there was a free capital market, like in other countries, the currency would fall another 90% or so. So, nobody has a clue as to how they’re going to get out of that situation, unless it’s a total write-down of debt.
Karl: They’ve certainly arrested bankers, they’ve re-written their constitution. They’ve tried so much, but they haven’t got these fundamental economic principles in order and from that I see it as a great tragedy in Iceland that, according to their Statistics Bureau, property prices have increased 35% since 2008. So they’re back on the bubble agenda again and by writing off this mortgage debt it’s only going to encourage people to go and borrow more money to push up the price of real estate yet again.
Michael: No, the prices are still way down from before. All this was a sort of bounce from the distress sales and it’s very hard to borrow money in Iceland for a house if you’re already in negative equity. So, I don’t think you can look at Iceland and assume that it’s like Australia or the United States. It’s a uniquely financially distressed economy and the newspapers are not giving the whole story because to explain the whole story would take more space than the average newspaper has.
Karl: So what nation do you see is moving in the right direction in terms of economic policy? Is there any nation, Michael?
Michael: I can’t think of anyone particular. All you can say is who’s avoiding the problems? China seems to be avoiding the problems for the time being. Everybody else, the Eurozone is a dead zone, they’re not doing very much; the US is in the doldrums; the Third World is now in trouble, especially India; Russia hasn’t really rebuilt its manufacturing base. The whole world is sort of falling apart.
Karl: As Blackstone Capital and crew build up their easy finances to roam through Spain and snap up all sorts of distressed properties there. I mean, you’re just starting to see these heat maps of the properties Blackstone are buying up. There’s been some great articles on Truthout about it and, gee whizz, it’s heading back to the neo-feudal era more rapidly than I would have thought, Michael. I mean, you’ve been talking about this concept for a while, did you think we’d be moving this fast into the rent extraction reality?
Michael: It always moves this fast. Every business cycle for the last 200 years, you have a slow upsweep and then a sudden drop, slow upsweep and a sudden drop. So it’s not really a cycle like a sine wave, it’s a ratchet up and down, so all of the declines are fast. And now, as any Wall Streeter knows, it’s easier to make money in a distressed situation than it is in a healthy growth situation. And that’s what you’re seeing now; you’re seeing Blackstone pick up distressed properties.
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it’s always about rent extraction (the free market theory is that if you have a truly free market then it doesn’t matter as people will have to fight for the rent – the major failing being an assumption that you can have a situation like that in the first place of course). Anything assuming else is in the same as believing that there are criminals who when caught will say “fair cop guv” and happily go to do their prison sentence.
“”So I think that if one’s going to analyse any economy such as today the best way to start is with the history of economic thought to get the concepts of value, price and rent. That’s really the key to analysing anything and that’s what’s missing in the economic education today.””
Getting a handle on rent does seem to be a major problem. An analysis of the repo market shows an amazing amount of daily activity that is generated unproductively to try and make money off of money.
If we look at cash and Treasuries as the foundation of our economic system they need to be used to build value. I think a lot of people that put their money in a money market feel that somehow that cash is being used for productive purposes to generate interest. It seems that we need a stronger equity based system of rewards that encourages the development of industry and labor over finance. Things like factories, education and medical care which our money foundation could be used to support.
Things like the superpriority of derivatives and clearing banks having the right to seize collateral based on repo on a daily basis and being above bankruptcy stays are definitely moving in the wrong direction.
It seems that we need a stronger equity based system of rewards that encourages the development of industry and labor over finance. financial matters
The ultimate rentiers are the government-backed banking cartel since they rent the economy its blood supply, private money, aka “credit.” And yet Progressives endlessly prattle about the failure of the free market as if we actually had one. And they talk about “SHARING” and “EQUITY” while they implicitly accept the right of the banks and so-called “creditworthy” to steal the equity of everyone else. And then turn around and implicitly blame the victims by saying they need a Job Guarantee instead of restitution. And then wonder why the population hates and despises them.
Otoh, the Austrians make the Progressives look good by comparison. Faint praise indeed.
Whether left or right on the ideological spectrum, if one is a capitalist then class society and the stultifying caste it spawns will always be the end result. That’s just the way capital flows in such a system–mostly to the few on the backs of the many. Always has, always will. Oh, and both ideological camps are authoritarian to the core, only in different ways. We need a post left, post right society before we’ll ever wave bye bye to the rentiers.
Even Marx preferred capitalism to feudalism. Capitalism, depending on the era we are speaking of created relatively egalitarian societies–not by itself, of course, but through both state and private (charities, churches, etc.) interventions. At present, capitalism is beginning to move away from social-democracy back into feudalism (of a very new kind) for various political reasons, i.e., the rich are realizing there’s nothing stopping them from absolute power since the global collapse of the left.
No, the reactions and backlash to capitalism “created relatively egalitarian societies.”
Reinhold Niebuhr, for example, noted that “Marxism is so formidable as a political creed precisely because it expresses the convicitons of those who have discovered the errors in the liberal-bourgeois creed in bitter experience.”
And the notion that “Capitalism…created relatively egalitarian societies…through both state and private (charities, churches, etc.) interventions” is nothing but a pious capitalist fiction.
If, according to the capitalist formula, necessity was to replace the whip as the #1 instrument of social coercion, then the old morality of feudal Christianity would have to go, and it was the wave of Christian humanism which swept western Europe in the late 15th and early 16th centuries, followed by the Reformation, which was to provide the new morality. As Jonathan I. Israel explains in The Dutch Republic: Its Rise, Greatness, and Fall 1477-1806:
“During the first half of the sixteenth century, western Europe, both Protestant and Catholic, was swept by new attitudes, and a new approach, to the problem of poor relief. There were several factors behind this change. Partly, it was a response to humanist criticism of monks and friars and the principle of unrestricted giving of alms, and charity, to beggars. Partly, it was an inherent result of the Reformation which, by sweeping away the Catholic clergy, and confiscating Church property and revenues, left a large gap in urban welfare…
Both the administration and the aims of welfare changed. Late medieval religiosity accorded a sacred value to poverty, begging, and giving alms, which the new humanist philosophy of poor relief was unwilling to share. Priority was now assigned to checking the growth of poverty, vagrancy, and idleness, so the new approach tended to be much more questioning, if not outright hostile, to begging and alms-giving.”
And your claim that “Even Marx preferred capitalism to feudalism” doesn’t seem to jive with Michael Hudson’s comment that “the foundation of industrial capitalism…was driving people off the land into the cities where they had to work for wages.”
The time of our lives is one commodity that is extinguished the moment it is experienced. If all that we do in our most alert hours of the day is being prongs in the world of production, and do this for 50 years + of our lives and then die, what joy is in that arrangement? All the economic isms are built around carrot or the stick induced production. Of course capitalism isn’t the only workerist/productionist system, but it is the one we labor under in the states. By itself it’s not the enemy. Its apparatchiks shoulder much of the blame, but it is the totality it spawns that sucks our collective daily life dry. It’s also the system promoted by virtually all the establishment left and right on this side of the pond. Thus if the left gets their engineered, so called replacement egalitarian world, all that will really change is the name of your boss. You’ll still be dis-empowered, and your life’s direction steered by those gurus at the top who know what’s best for the collective. The privileged will still rule the roost on the backs of the masses, just as they always have even minus the rentier class they rightly desire to abolish. So to hell with the left and the right and all their authoritarian puppet masters. I pine for a post left/right world; a world promoting less work, less production, greater flexibility for those who do work. That’s an important and necessary step to free us from what the systems economic have foisted on us all. And just remember virtually none of the economic gurus and policy prescribes will ever do any of the heavy lifting their brave new world entails. Never.
My above reply was for Banger.
Maemo, I agree with you and well-said.
Are you related to your ghost, btw?
My twin brother.
You want anarchy I think. It’s a good ideal, and anarchists the only ones who seem to address these issues (and not just pine for slightly improved capitalism).
But short of that less work – we need guaranteed minimum income, work sharing, less dependency on jobs for say healthcare, protection for workers who choose to go part-time (some countries have it – the U.S. does not). Heck even expansion of overtime laws would help, real vacation time. Even within the capitalist system they aren’t all slave labor colonies the way the U.S. is. Some countries have other values than work.
Which Capitalism are you referring too?
Capitalist mode of production
Company and Corporation
Free price system
Supply and demand
Age of Enlightenment
Atlantic slave trade
Capitalism and Islam
Simple commodity production
John Stuart Mill
John Maynard Keynes
Ludwig von Mises
Criticism of capitalism
History of theory
Periodizations of capitalism
Perspectives on capitalism
skippy… and some people have issues with mulitiverse theory…
American capitalism – trope
skippy… please unpack
You know what is meant, but I’ll play along .At the very least I need a job to survive and live relatively well. That doesn’t mean I will live well, but it’s my only realistic chance for that outcome. No matter if I’m self employed or not I need to trade my labor for some form of compensation, usually money. I’ll have to do this for about 50 years of my life, day in and day out. The market pretty much decides what my labor is worth above and beyond a minimum set by the government. Like most workers most of the surplus I produce will flow from the many to the few. A virtual caste system will embed itself among the plebs. Class society will reign. Some leveling will take place through redistributions vis a vis taxation but not enough to unseat those at the top of the pyramid. I along with 100’s of millions of others will acquire a myriad of social pathologies through this work arrangement. In the end what drives the system? Capital, and where said capital mostly accumulates and who it most empowers.
If it’s a hyphenated capitalism you prefer, then fine. I realize the term’s largely an abstraction anyway, but a close enough approximation to the spirit of the term works just fine with the lone term, capitalism. Same applies when using the word right winger, Christian, anarchist or liberal..It’s shorthand, but most get the jist.
@Malmo – “You know what is meant” – no I did not and that is the reason I asked, to clarify a gross generalization and avoid misinterpretation.
For interest sake I’m a feral carrying capacity [eco]nomist i.e. preserving the system we evolved in, in order to enable life down the road. Weaved into this is Post Keynesian (well being for all) and MMT (Money is accountancy and nothing more).
Your ire – amongst others here – seem to have a misdirected sense of why you fear your own personal demise (future security). Which always boils down to the Government is the root of all evil on this world. When through out history the tale is not so simple, it is the human agency which resides within said institution, that flummoxes the ideologue of unique individualism. A dog eat dog – every man for him self ethos – that is a self fulfilling prophecy.
Personally I find the anarcho’s and libertarians cowards – with strong anti social tendency’s – for all the chimera the deceitful can project – its a master and slave ethos.
Skippy… my knife is out for Austrians and Neoclassical libertarians.
I’m not an anarchist. I still want cops, firemen, and a standing army. I merely desire a change in how we spend the time of our lives. Your ideas are a great start to that end.
I get it. Lumping me with the Austrians, anarchists and libertarians is an insult. Then proceeding from there you deign a psychological profile of who you think I am based on my dislike of the disempowering nature of wage labor, which in fact partially negates your previous insult of lumping me with the libertarians and the Austrian nuts, given their fealty to such an arrangement.
As for this misdirected sense of my own personal security you claim I labor under I’ve not a clue of what you speak of. I’m doing just fine, thank you, and personally happy to boot.
Oh, and where I have I claimed government is the root of all evil? That’s right, I haven’t ever said that. What I have said is that many technocrats, academics, economists and various self appointed world improvers get their jollies out of telling us, and in some cases, implementing how we all should live. I suggest there is a better way to spend one’s time from my own personal experience in the daily grind called work. I didn’t need Karl Marx’s description in a text book to set me straight, given I’ve been there done that like most others. And one more thing. Kropotkin runs intellectual circles around Marx.
Thank your concern though and good day.
Just one more thing, Skippy.Speaking of generalizations, since we’re here at Naked Capitalism, can you unpack what type of capitalism is being spoken of as naked?
“can you unpack what type of capitalism is being spoken of as naked?” – Virtual Privatization of – everything – via liens on the future, in perpetuity, by super persons (corporate architecture).
FYI I’m coming to find the the linguistics of the enlightenment a self perpetrating mental prison, establishes a cognitive bias built on the ignorance of duality in dark antiquity. Always looking in the rear view mirror whilst trying to move forward. Yet while those that suffer under that conceptual frame work, a new one is being built upon it like all civilizations have in the past.
Kropotkin is as dated and irrelevant as Marx is today. Try the 2010 English-language edition of Christian Marazzi’s The Violence of Financial Capitalism made a groundbreaking work on the global financial crisis available to an expanded readership. This new edition has been updated to reflect recent events, up to and including the G20 summit in July 2010 and the broad consensus to reduce government spending that emerged from it. Marazzi, a leading figure in the European postfordist movement, argues that the processes of financialization are not simply irregularities between the traditional categories of wages, rent, and profit, but rather a new type of accumulation adapted to the processes of social and cognitive production today. The financial crisis, he contends, is a fundamental component of contemporary accumulation and not a classic lack of economic growth. Marazzi shows that individual debt and the management of financial markets are actually techniques for governing the transformations of immaterial labor, general intellect, and social cooperation. The financial crisis has radically undermined the very concept of unilateral and multilateral economico-political hegemony, and Marazzi discusses efforts toward a new geomonetary order that have emerged around the globe in response. Offering a radically new understanding of the current stage of international economics as well as crucial post-Marxist guidance for confronting capitalism in its newest form, The Violence of Financial Capitalism is a valuable addition to the contemporary arsenal of postfordist thought. This edition includes the glossary of the esoteric neolanguage of financial capitalism—”Words in Crisis,” from “AAA” to “toxic asset”—written for the first English-language edition, and offers a new afterword by Marazzi.
skippy… I’m concerned about everyone – thing, with an eye to getting through the next 100 years. With out being overly fixated on the – I self – in the first order of things. Hence the Austrians, anarchists, neoclassicals and libertarians lumping, ergo for ***The Self***.
You’re one of the best posters here. I like you’re contributions a lot. I’ll leave it at that.
What part of capitalism requires government-backed banks? Whence government deposit insurance? Whence the central bank? Whence borrowing by monetarily sovereign governments?
Our money system is fascist, fascism being welfare for the rich. Think about it: Why should having collateral, such as land, entitle one to a loan of new purchasing power when said new purchasing power dilutes the purchasing power of others not so blessed? So the rich get richer and the poor get poorer via a government privileged banking cartel.
Market imperialism is a direct result of Locke imo… that the mind is a blank slate or tabula rasa is not holding up under new data and numbers can not quantify reality even if a black hole was deployed… to power that calculation.
Lets not forget whom we are dealing with and the forces that molded him…
Some scholars have seen Locke’s political convictions as deriving from his religious beliefs. Locke’s religious trajectory began in Calvinist trinitarianism, but by the time of the Reflections (1695) Locke was advocating not just Socinian views on tolerance but also Socinian Christology; with veiled denial of the pre-existence of Christ. However Wainwright (1987) notes that in the posthumously published Paraphrase (1707) Locke’s interpretation of one verse, Ephesians 1:10, is markedly different from that of Socinians like Biddle, and may indicate that near the end of his life Locke returned nearer to an Arian position.
Locke was at times not sure about the subject of original sin. So he was accused of Socianism, Arianism, or Deism. But he did not deny the reality of evil. Man was capable of waging unjust wars and committing crimes. Criminals had to be punished, even with the death penalty. With regard to the Bible Locke was very conservative. He retained the doctrine of the verbal inspiration of the Scriptures. The miracles were proofs of the divine nature of the biblical message. Locke was convinced that the entire content of the Bible was in agreement with human reason (The reasonableness of Christianity, 1695). Although Locke was an advocate of tolerance, he urged the authorities not to tolerate atheism, because the denial of God’s existence would undermine the social order and lead to chaos. That excluded all atheistic varieties of philosophy and all attempts to deduce ethics and natural law from purely secular premises, for example, man’s “autonomy or dignity or human flourishing”. In Locke’s opinion the cosmological argument was valid and proved God’s existence. His political thought was based on “a particular set of Protestant Christian assumptions.” Locke’s concept of man started with the belief in creation. We have been “sent into the World by [God’s] order, and about his business, [we] are his Property, whose Workmanship [we] are, made to last during his, not one anothers Pleasure.” Like the two other very influential natural-law philosophers, Hugo Grotius and Samuel Pufendorf, Locke equated natural law with the biblical revelation, since in their view both had originated in God and could therefore not contradict each other. “As a philosopher, Locke was intensely interested in Christian doctrine, and in the Reasonableness he insisted that most men could not hope to understand the detailed requirements of the law of nature without the assistance of the teachings and example of Jesus.” Locke derived the fundamental concepts of his political theory from biblical texts, in particular from Genesis 1 and 2 (creation), the Decalogue (Exodus 20), the Golden Rule (Matthew 7:12), the teachings of Jesus (e.g. his doctrine of charity, Matthew 19:19), and the letters of (Paul). The Decalogue (Ten Commandments) puts a person’s life, his or her honourable reputation (i.e. honour and dignity), and property under God’s protection. Freedom is another major theme in the Old Testament. For instance, God’s actions in liberating the Israelites from Egyptian slavery in the Decalogue’s prologue (Exodus 20:2) were the precondition for the following commandments. Moreover, Locke derived basic human equality, including the equality of the sexes (“Adam and Eve”) from Genesis 1:26–28, the starting point of the theological doctrine of Imago Dei. To Locke, one of the consequences of the principle of equality was that all humans were created equally free and therefore governments needed the consent of the governed. Only when Locke had derived the fundamental aspects of his concept of man and ethics from the biblical texts – life, equality, private property, etc. –, did he examine as a philosopher which consequences they had in the abovementioned way. Following Locke, the American Declaration of Independence founded human rights on the biblical belief in creation: “All men are created equal, (…) they are endowed by their Creator with certain unalienable rights, (…) life, liberty, and the pursuit of happiness.” Locke’s doctrine that governments need the consent of the governed is also central to the Declaration of Independence.
Skip here… The market is not the ultimate authority beard. How you conflate government as having anything to do with the problems ongoing, when its the ideological coup, bought and payed for, by the usual suspects is quite a tell.
Skippy… anarcho libertarian capitalists are a special kind of breather – everything is a extenuation of some “totality of thought” which is plucked from a vacuum ergo burning bush.
I think that’s true. And I don’t see how one can get a handle on the rent thing until the contradictions, partial truths or outright lies of capitalism are exposed.
The Holy Grail of capitalism is putatively the maximization of aggregate utility, of aggregate production. And supposedly the best way to achieve this is by letting man’s greed run wild. According to this creed, a rational distribution of goods and service was also achieved with this greed-is-good doctrine. This was done through the mysterious workings of a magical, mythical speculation of the human mind called “the invisible hand.”
As John Maynard Keynes said, capitalism is “the astonishing belief that the nastiest motives of the nastiest men somehow or other work for the best results in the best of all possible worlds.”
What experience and history have demonstrated repeated, however, is that the Holy Grail of capitalism is not maximizing aggreate utility. It is, in reality, maximizing greed, profit. That is the holy grail of capitalism.
Marx was on the right track with his formula
c + v → c + v + s
where c is the materials and fixed costs (constant capital) embodied in production of a commodity, v is the value of the labour-power (variable capital) used in making it and s is surplus value.
But it has to be modified to look something like this:
c + v + rent → c + v + s
It will also be necessary to debunk the neoclassical C-M-C’ fiction and replace it with something more realistic like Marx’s M-C-M’ formulation.
The other day I got an email informing me that the political hacks who run the UC system are going to force the closure of the Lick Observatory because 11 people there have contracts that are not identical to standard UC contracts, and since they are spending too much of their time maintaining and using the telescope and not enough time teaching, the whole operation must be closed. My response to the group that sent the email was simple: “I wish we could go back to that day when economic efficiency came to trump all other human values, and strangle those responsible.”
Many solid societies existed throughout history without an endless mandate to grow ceaselessly and become more efficient. No person in their right mind would have traded life in England in 1740 for life in 1840. The economy had grown by leaps and bounds, and become more “efficient” as measured by economists, but diet, working conditions, health, and personal autonomy had all gone to hell. Efficiency is a useful tool. It should not be our master. We have allowed it to become our god.
I think the question needs to be broken down into two parts:
1) Should the maximization of aggregate utility be the alpha and the omega of man’s existence?
2) If the answer question #1 is “yes”, is the greed-is-good creed of capitalism the best way to achieve this end?
Marx, what with his alleged “metaphysical materialism,” is more often than not accused of answering quesiton #1 with a “yes.” But I’m not entirely convinced that’s true. Of course I suppose it’s also possible to argue it isn’t entirely true of Adam Smith. But with the neoclassicists, I don’t think there’s any doubt: the answer to both questions is a definitive and unambiguous “yes.”
I think Hudsons Georgist views need to be questioned.
(most especially in a debt money system where the money must always flow upwards)
We have insiders buying up vast areas of Dublin and perhaps elsewhere in Ireland.
Smaller domestic buyers who are outside the information loop & lack cashflow in their other business have been deterred from buying property because of a new property tax – this opened the way for the carpetbaggers.
In Ireland now we are sprouting huge leakages of money which is crashing domestic demand.
mainly from 3 sources
Interest on the money (so called sov debt)
External rentier extraction on property and other areas such as road tolls.
And labour remittances which have been reported as 3 times higher then what the old Irish population is sending back.
A compete reversal of 1970s labour type remittance flows when the Irish remained in the Sterling area.
I like Hudson–he turned me on to the whole world of dollar hegemony which I was confused about, though still a bit confused much less so after Hudson. However, he and many economists and commentators have been off base, including people here at NC, since 2008 in predicting imminent collapse whether it was Dimitry Orlov or James Kunstler or Max Keiser or any number of people around the web. Here we are in what is basically a steady-state economy. Yes, wealth, income and power is migrating to the top of the pyramid but that has been going on since 1978. Poverty is increasing and will continue to increase not just in the U.S., where the existence of large numbers of poor has not been seen as a negative, but in increasing areas of Europe.
Why no collapse? Why not revolt against the oligarchs who caused the 2008 crash? I believe those creating the fraud knew what was coming but probably believed the system could absorb it and knew that the attention of the regulators and the feds was on the phony “War on Terror” so this was the time to steal money. Yet, we survived it–I lost half of my “wealth” such as it was and my wife lost her business and her credit as a result. Something like that, in varying degrees happened to many people but most people got on with it or had nothing to lose because most people see the economic situation as the weather–it just happens.
I don’t believe our system, as a whole, can be understood–it is too complex. Marx could make that attempt when he was alive–but Marx would have thrown up his hands at the world we live in with wheels within wheels within wheels attached to other wheels within wheels. It is a chaotic system of systems all operating with different cycles and different frames of reference.
Some things are clear. Globalization as a force for efficiency has reached its limits and we will be going in the direction of mechanization of production through robotics and AI which will make more jobs we see today as obsolete over time. People will and are finding other ways to get income and sustenance perhaps in the underground economy or through finding ways to live more efficiently perhaps in groups rather than the current nuclear family model that the mainstream promotes.
The system is breaking down and I believe the oligarchs are coming to terms with this and making their plans–some, I believe want to help in creating a new political econom, others, being criminals, will do what criminals do–steal from each other and us as much as they can. But eventually we will have to deal with the effects of various kinds of environmental breakdowns either climate change or a host of other subsidiary ecological problems that could act in a positive feedback loop to create little catastrophes, die offs, diseases and so on. We face a host of problems all which are barely being addressed by anyone other than the few “crazy” people who have studied the issues.
For the present time, I believe the current system is, in the U.S. at least, relatively stable. People have become used to living from paycheck to paycheck and gradually cutting back on aspirations. They are focusing on other areas of life and experimenting–I believe spirituality will be an increasingly important focus–this can mean religiousity perhaps but more likely means an interest in deeper areas of consciousness. What those of us who were a part of the psychedelic movement began to explore before the state in a violent fury attempted to destroy will now flower in a broader exploration of levels of consciousness, i.e, spirituality. Not as a sudden “craze” but as a gradual migration. That’s actually the focus of my own work at the moment.
To sum up, the smoke and mirrors the oligarchs throw our way have worked regardless of the nay sayers. The happy talk on television works to buoy people’s attitudes towards the economy regardless of the reality. And if they continue to be mildly optimistic, the wheels, even while gathering rust and cracks, will keep turning. At some point in the future things will break down and some new order will leave the ruins of the old mechanism behind and massive 3-d printers and bots of various sizes will create what we need without the usual toil and victorian nose-to-the-grindstone view of life where hard work (it has to be “hard”) is the highest ideal. Perhaps we will a world that is much more enjoyable and fulfilling or something like the Matrix or something much worse.
Banger stated: “What those of us who were part of the psychedelic movement began to explore…will now flower in a broader exploration of levels of consciousness (spirituality)…that actually is the focus of my own work at the moment.”
Banger it strikes me that one catastrophic mistake of the counter-culture of the 1960s was the apparent acceptance of the assumption that our primary biological impulses were pure and good until they became adulterated by the supposed repressions (especially authoritarian family structures) of modern society. The political/cultural message seemed to be–abolish the repressions and free our deep natural core of instinct. Such an analysis was prominent in the writings of Wilhelm Reich (see for example, Mass Psychology of Fascism and Character-Analysis) which appeared popular among 1960s counter-culture activists. Such an analysis of freeing desire/instinct/impulse also seemed to fit in nicely with the evolving logic of consumer capitalism.
In contrast to this approach, the spiritual systems that originated during the Axial age (around 800-200 B.C—Stoic exercises, Buddhist training in detachment, repetitions of Indian Yogis) seemed to center around containing are passions and instincts—or participating in spiritual exercises that attempted to disable our compulsions/impulses/desires partially through the creation of a type of observer consciousness which enabled us to view from a distance and consequently not be completely possessed by such impulses. Such exercises/practices seem to me to be a a much better foundation for cultural revolution in in the 21st century.
Many mistakes were made by the counter-culture of the 1960s, and a careful analysis–which I don’t think anyone has done–would be worthwhile. In a general way, although the counter-culture had a talent for improvising effective tactics, strategy was more or less deliberately neglected, and this was ultimately disastrous.
To your specific criticism, a means of attacking the thought-system of the existing system was a first priority, and the revealing of structural oppressions in a land of ostensible freedom was actually an effective approach. The problem came at the next stage when it is time to ask: What next?
An insane system needed be supplanted by a sane modes of being, but it was not obvious what they would be. Certainly there was a shortage of agreement. Meanwhile the counter-culture was under attack from without (the Establishment certainly was used to doing strategy) and from within (anything beautiful attracts freeloaders and exploiters). The rest is history, or rather the absence of history, since the whole episode has been distorted and written into nonexistence.
But some of us remember.
You allude to several spiritual systems that have much to teach, since it is true that a sane way of being must look beyond the self and serve larger, worthy goals.
”Karl: And what is the cause of this market power that gives them the ability to enforce these higher prices?
Michael: Usually, the failure of the government to apply anti-monopoly laws.
The whole idea now of economies of scale means the ability to control the market and extort economic rent higher than the cost of production and get a free lunch. So today’s economy is all about getting a free lunch.”
Lord Alfred Douglas wrote in one of his poems that homosexuality is “the love that dare not speak its name.”
And violence is without a doubt the capitalism that dare not speak its name.
Capitalism uses three forms of coercion:
1) Necessity. As Hannah Arendt observed, “For the liberation of the labourers in the initial stages of the Industrial Revolution was indeed to some extent contradictory; it had liberated them from their masters only to pu them under a stronger taskmaster, their daily needs and wants, the force, in other words with which necessity drives and compels men and which is more compelling than violence.”
2) Proaganda. Need I say more?
Violence comes into play when the first two don’t work, or when the lords of capital decide they no longer need to attend to workers’ necessities.
Violence comes into play more frequently in the foreign arena than the domestic arena. It’s far more prevalent in the capitalists’ dealings with foreign populations than with domestic populations. It’s called empire. As Hannah Arendt noted, “the state’s instruments of violence, the police and the army, which in the framework of the nation existed beside, and were controlled by, other national institutions, were separated from this body and promoted to the position of national representatives in uncivilized or weak countries.” And in this environment “Money could finally beget money because power, with complete disregard for all laws – economic as well as ethical – could appropriate wealth.” In Marx’s equation, the lords of captial gotta keep the cost of labor and primary materials down, and the value of those finished commodites up, and violence is an effective means of achieving those ends.
Violence of course never completely disappears on the home front. It’s always floating there, right beneath the surface, in the corporations’ private security forces and the state’s criminal justice system, which in modern-day America the corporations have bought lock, stock, and barrel. Witness the Ludlow massacre, Kent State, and the treatment of the Bonus Army, and more recently the way the OWS protesters were treated.
But there are, at least temporarily, some limits placed on the capitalists’ use of violence in the home country. “Our perception of the United States has been that of a democracy inside and an empire outside: Dr. Jekyll and Mr. Hyde,” wrote the Mexican politilogue Carlos Fuentes. But this happy state of affairs usually doesn’t last. Henry Steele Commager is entirely right: “If we subvert world order and destroy world peace we must inevitably subvert and destroy our own political institutions first.” Or as Hannah Arendt surmised: “The much-feared boomerang effect of the ‘government of subject races’ on the home government during the imperialist era meant that rule by violence in faraway lands would end by affecting the [home] government, that the last ‘subject race’ would be the” home population itself.
Violence against workers in the 1910s was excused by calling strikers foreigners; in the 1960s-70s by calling protesters Communists (and therefore foreign agents), or, worse, Black (and therefore not American); in the past decade by calling them dirty jobless hippies (and therefore not part of society; aka foreigners).
For the tenants of these houses, if there are ongoing repair problems, look to local ordinances.
Often a tenant can after a reasonable number of requests unmet by a landlord, call a local contractor, plumber etc, to do the necessary work to meet local codes of a safe and habitable structure and then deduct this cost from their rent.
Great post. I’m too skeptical of the current push for global trade in the tafta and tpp accords to like it when MH talks about competitiveness, even tho’ he comes with the correct analysis which he clearly stated today – paraphrasing here, “The increase in the cost of living because of asset inflation due to financialization increases the cost of living and labor, making that country uncompetitive.” And it was interesting to learn that Marx was looking at the problem of (what we are now calling) financialization, the banking industry under elite capital rule, and working on a new book. I assume the book would have proposed a solution which made “banking subordinate to industry.” Probably the reason Marx didn’t succeed as the best economic model is because US capitalism bought off all their opponents, or enough to screw the rest. I wonder if that now becomes harder to do on a global scale. Looks like it. Riots everywhere.
As an example on how profitable is this business, Blackstone bought in a small satellite city near Madrid 420 apartments at 59.500€ per apartment to an almost bankrupt RE developer (25 million € in total). Those apartments were originally developed for renting to young people for 6.600€ anually and these conditions have to be accomplised by Blackstone for 7 years. This means that the buyer, if it manages to rent all the apartments could earn annually 11% on its investment. Then, after 7 years, if 11% was not enough, rent restrictions would disappear and the Big Business starts. They could easily sell the apartments for twice or triple the price they paid for them.
I don`t understand why on earth, those apartments couldn’t be first offered to young buyers for 60.000€. You cannot find any offer for less that 120.000€ in this city!!! The town hall of a small city in Spain, tries to find an affordable housing solution for young people and ends providing a very profitable speculative business for a multinational hedge fund. Thats how the world is functioning!
Yeah, that seems to be the operating model.
Someone comes up with an idea for the government to do something, the rationalization for doing it is that it is in the interest of some plausible constituency amongst the public, and then they pull a big bait and switch.
The function of a capitalist system is not to produce a surplus of usable goods and services.
The system depends on scarcity.
In the euro the system depends on extreme scarcity.
The function of a capitalist economy is not to produce a surplus of goods and services.
The system depends on scarcity.
The eurosystem depends on extreme scarcity.
This is how the world has functioned or not functioned for 4 -600 years.
Mercator by Nick Crane
Chapter 1 :A little town called Gangelt
“In Gangelt they were locked into the fate of the peasant, who was currently enduring rural Europe transition from an ancient feudal system to a money economy ,where the freedom to work for a wage came at the cost of dispossession from the land , as owners consolidated their estates for commercial production”
The rising prices of farm produce benefited the large farmers and estate owners,but crippled the peasants who were forced to work more ,for lower wages for crops that were not theirs.
As larger farms became more viable ,the ancient privileges which gave peasants the wherewithal to live off the land was eroded.
A new term emerged ,”roboten” , meaning drudge ,toil ,fag , sweat.
The peasant became a wage slave ,a Robot.
Yes, and the English word “robot” was first widely used in the 1920’s after the English-language production of a play by the Czech writer Karl Capek: Rossum’s Universal Robots, http://www.umich.edu/~engb415/literature/pontee/RUR/RURsmry.html
Australia is starved of this sort of intelligent and insightful debate. Karl’s programme is one of the few that discusses the real issues such as the financialisation of our economy and the appalling tax advantages that are shutting young people out of home ownership. Even the US controls investment from foreign nationals. Investment housing as a % of all loans for housing 38% is an astonishing figure. This figure doesn’t even include cash purchases by foreign nationals. RealEstate4Ransom indeed. As Michael Hudson says, people have too much money. Some do, anyway. Bill Mitchell’s figure on youth unemployment, plus student fees and now their shutout of the market does make you wonder why they are not marching in the street. I would join them. Great work Karl,
The Levellers who revolted in the 17th c. against enclosures, and the forcible conversion of the peasantry into the proletariat, were absolutely correct in their resistance! Oliver Cromwell was quite brutal in stamping them out.
[[“Karl: So what nation do you see is moving in the right direction in terms of economic policy? Is there any nation, Michael?
Michael: I can’t think of anyone particular. All you can say is who’s avoiding the problems? China seems to be avoiding the problems for the time being. Everybody else, the Eurozone is a dead zone, they’re not doing very much; the US is in the doldrums; the Third World is now in trouble, especially India; Russia hasn’t really rebuilt its manufacturing base. The whole world is sort of falling apart.”]]
There you go. Simple honest truth.
…almost makes me forget I’m still mad at him for discarding the Malthusian issue…
Really %$&*in’ mad because he was\is –(as I imagine is the same for a lot of other people recently educated to finance and economics since the crisis)– my favorite. The one who gave me the richest, broadest picture of the system.
But Mike, I’ll be bloody mad at you as long as you postpone brushing up on the laws of physics, and hopefully …reconsider your position…
And I’m not a nice guy, so I hold my grudges pretty damn long…you are warned !
This being said; may it be noted that still reserve the right to continue reading and enjoying his posts from time to time– It’s hard hating on such a benevolent-revolutionary-Grandpa’-educator-agitator …