Michael Hudson: The End of Western Civilization – Why It Lacks Resilience, and What Will Take Its Place

Yves here. Below is the text of a new Micael Hudson speech for China’s Global University, which he delivered Monday morning. It’s already gotten 200,000 views in China and is getting coverage in the Chinese press. It focuses on how neoliberalism is a major culprit in the West’s wrong turn. Michael has graciously given us the first English transcript.

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 Destiny of Civilization. Originally published at his website

The greatest challenge facing societies has always been how to conduct trade and credit without letting merchants and creditors make money by exploiting their customers and debtors. All antiquity recognized that the drive to acquire money is addictive and indeed tends to be exploitative and hence socially injurious. The moral values of most societies opposed selfishness, above all in the form of avarice and wealth addiction, which the Greeks called philarguria– love of money, silver-mania. Individuals and families indulging in conspicuous consumption tended to be ostracized, because it was recognized that wealth often was obtained at the expense of others, especially the weak.

The Greek concept of hubrisinvolved egotistic behavior causing injury to others. Avarice and greed were to be punished by the justice goddess Nemesis, who had many Near Eastern antecedents, such as Nanshe of Lagash in Sumer, protecting the weak against the powerful, the debtor against the creditor.

That protection is what rulers were expected to provide in serving the gods.That is why rulers were imbued with enough power to protect the population from being reduced to debt dependency and clientage. Chieftains, kings and temples were in charge of allocating credit and crop-land to enable smallholders to serve in the army and provide corvée labor. Rulers who behaved selfishly were liable to be unseated, or their subjects might run away, or support rebel leaders or foreign attackers promising to cancel debts and redistribute land more equitably.

The most basic function of Near Eastern kingship was to proclaim “economic order,” misharumand andurarumclean slate debt cancellations, echoed in Judaism’s Jubilee Year. There was no “democracy” in the sense of citizens electing their leaders and administrators, but “divine kingship” was obliged to achieve the implicit economic aim of democracy: “protecting the weak from the powerful.”

Royal power was backed by temples and ethical or religious systems. The major religions that emerged in the mid-first millennium BC, those of Buddha, Lao-Tzu and Zoroaster, held that personal drives should be subordinate to the promotion of overall welfare and mutual aid.

What did notseem likely 2500 years ago was that a warlord aristocracy would conquer the Western world. In creating what became the Roman Empire, an oligarchy took control of the land and, in due course, the political system. It abolished royal or civic authority, shifted the fiscal burden onto the lower classes, and ran the population and industry into debt.

This was done on a purely opportunistic basis. There was no attempt to defend this ideologically. There was no hint of an archaic Milton Friedman emerging to popularize a radical new moral order celebrating avarice by claiming that greed is what drives economies forward, not backward, convincing society to leave the distribution of land and money to “the market” controlled by private corporations and money-lenders instead of communalistic regulation by palace rulers and temples – or by extension, today’s socialism. Palaces, temples and civic governments were creditors. They were not forced to borrow to function, and so were not subjected to the policy demands of a private creditor class.

But running the population, industry and even governments into debt to an oligarchic elite is precisely what has occurred in the West, which is now trying to impose the modern variant of this debt-based economic regime – U.S.-centered neoliberal finance capitalism – on the entire world. That is what today’s New Cold War is all about.

By the traditional morality of early societies, the West – starting in classical Greece and Italy around the 8thcentury BC – was barbarian. The West was indeed on the periphery of the ancient world when Syrian and Phoenician traders brought the idea of interest-bearing debt from the Near East to societies that had no royal tradition of periodic debt cancellations. The absence of a strong palace power and temple administration enabled creditor oligarchies to emerge throughout the Mediterranean world.

Greece ended up being conquered first by oligarchic Sparta, then by Macedonia and finally by Rome. It is the latter’s avaricious pro-creditor legal system that has shaped subsequent Western civilization. Today, a financialized system of oligarchic control whose roots lead back to Rome is being supported and indeed imposed by U.S. New Cold War diplomacy, military force and economic sanctions on countries seeking to resist it.

Classical Aantiquity’s Oligarchic Ttakeover

In order to understand how Western Civilization developed in a way that contained the fatal seeds of its own economic polarization, decline and fall, it is necessary to recognize that when classical Greece and Rome appear in the historical record aDark Age had disrupted economic life from the Near East to the eastern Mediterranean from 1200 to about 750 BC. Climate change apparently caused severe depopulation, ending Greece’s Linear B palace economies, and life reverted to the local level during this period.

Some families created mafia-like autocracies by monopolizing the land and tying labor to it by various forms of coercive clientage and debt. Above all was the problem of interest-bearing debt that the Near Eastern traders had brought to the Aegean and Mediterranean lands – without the corresponding check of royal debt cancellations.

Out of thissituation Greek reformer-“tyrants” arose in the 7thand 6thcenturies BC from Sparta to Corinth, Athens and Greek islands. The Cypselid dynasty in Corinth and similar new leaders in other cities are reported to have cancelled the debts that held clients in bondage on the land, redistributed this land to the citizenry, and undertaken public infrastructure spending to build up commerce, opening the way for civic development and the rudiments of democracy. Sparta enacted austere “Lycurgan” reforms against conspicuous consumption and luxury. The poetry of Archilochus on the island of Paros and Solon of Athens denounced the drive for personal wealth as addictive, leading to hubris injuring others – to be punished by the justice goddess Nemesis. The spirit was similar to Babylonian, Judaic and other moral religions.

Rome had a legendary seven kings (753-509 BC), who are said to have attracted immigrants and prevented an oligarchy from exploiting them. But wealthy families overthrew the last king. There was no religious leader to check their power, as the leading aristocratic families controlled the priesthood. There were no leaders who combined domestic economic reform with a religious school, and there was no Western tradition of debt cancellations such as Jesus would advocate in trying to restore the Jubilee Year to Judaic practice. There were many Stoic philosophers, and religious amphictyonic sites such as Delphi and Delos expressed a religion of personal morality to avoid hubris.

Rome’s aristocrats created an anti-democratic constitution and Senate, and laws that made debt bondage – and the consequent loss of land – irreversible.Although the “politically correct” ethic was to avoid engaging in commerce and moneylending, this ethic did not prevent an oligarchy from emerging to take over the land and reduce much of the population to bondage. By the 2ndcentury BC Rome conquered the entire Mediterranean region and Asia Minor, and the largest corporations were the publican tax collectors, who are reported to have looted Rome’s provinces.

There always have been ways for the wealthy to act sanctimoniously in harmony with altruistic ethics eschewing commercial greed while enriching themselves. Western antiquity’s wealthy were able to come to terms with such ethics by avoiding direct lending and trading themselves, assigning this “dirty work” to their slaves or freemen, and by spending the revenue from such activities on conspicuous philanthropy (which became an expected show in Rome’s election campaigns). And after Christianity became the Roman religion in the 4thcentury AD, money was able to buy absolution by suitably generous donations to the Church.

Rome’s Legacy and the West’s Financial Imperialism

What distinguishes Western economies from earlier Near Eastern and most Asian societies is the absence of debt relief to restore economy-wide balance. Every Western nation has inherited from Rome the pro-creditor sanctity of debt principles that prioritize the claims of creditors and legitimize the permanent transfer to creditors of the property of defaulting debtors. From ancient Rome to Habsburg Spain, imperial Britain and the United States, Western oligarchies have appropriated the income and land of debtors, while shifting taxes off themselves onto labor and industry. This has caused domestic austerity and led oligarchies to seek prosperity through foreign conquest, to gain from foreigners what is not being produced by domestic economies driven into debt and subject to pro-creditor legal principles transferring land and other property to a rentierclass.

Spain in the 16thcentury looted vast shiploads of silver and gold from the New World, but this wealth flowed through its hands, dissipated on war instead of being invested in domestic industry. Left with a steeply unequal and polarized economy deeply in debt, the Habsburgs lost their former possession, the Dutch Republic, which thrived as the less oligarchic society and one deriving more power as a creditor than as a debtor.

Britain followed a similar rise and fall. World War I left it with heavy arms debts owed to its own former colony, the United States. Imposing anti-labor austerity at home in seeking to pay these debts, Britain’s sterling area subsequently became a satellite of the U.S. dollar under the terms of American Lend-Lease in World War II and the 1946 British Loan. The neoliberal policies of Margaret Thatcher and Tony Blair sharply increased the cost of living by privatizing and monopolizing public housing and infrastructure, wiping out Britain’s former industrial competitiveness by raising the cost of living and hence wage levels.

The United States has followed a similar trajectory of imperial overreaching at the cost of its domestic economy. Its overseas military spending from 1950 onwards forced the dollar off gold in 1971. That shift had the unanticipated benefit of ushering in a “dollar standard” that has enabled the U.S. economy and its military diplomacy to get a free ride from the rest of the world, by running up dollar debt to other nation’s central banks without any practical constraint.

The financial colonization of the post-Soviet Union in the 1990s by the “shock therapy” of privatization giveaways, followed by China’s admission to the World Trade Organization in 2001 – with the expectation that China would, like Yeltsin’s Russia, become a U.S. financial colony – led America’s economy to deindustrialize by shifting employment to Asia. Trying to force submission to U.S. control by inaugurating today’s New Cold War has led Russia, China and other countries to break away from the dollarized trade and investment system, leaving the United States and NATO Europe to suffer austerity and deepening wealth inequality as debt ratios are soaring for individuals, corporations and government bodies.

It was only a decade ago that Senator John McCain and President Barack Obama characterized Russia as merely a gas station with atom bombs. That could now just as well be said of the United States, basing its world economic power on control of the West’s oil trade, while its main export surpluses are agricultural crops and arms. The combination of financial debt leveraging and privatization has made America a high-cost economy, losing its former industrial leadership, much like Britain did. The United States is now attempting to live mainly off financial gains (interest, profits on foreign investment and central bank credit creation to inflate capital gains) instead of creating wealth through its own labor and industry. Its Western allies seek to do the same. They euphemize this U.S.-dominated system as “globalization,” but it is simply a financial form of colonialism – backed with the usual military threat of force and covert “regime change” to prevent countries from withdrawing from the system.

This U.S. and NATO-based imperial system seeks to indebt weaker countries and force them to turn control over their policies to the International Monetary Fund and World Bank. Obeying the neoliberal anti-labor “advice” of these institutions leads to a debt crisis that forces the debtor country’s foreign-exchange rate to depreciate. The IMF then “rescues” them from insolvency on the “conditionality” that they sell off the public domain and shift taxes off the wealthy (especially foreign investors) onto labor.

Oligarchy and debt are the defining characteristics of Western economies. America’s foreign military spending and nearly constant wars have left its own Treasury deeply indebted to foreign governments and their central banks. The United States is thus following the same path by which Spain’s imperialism left the Habsburg dynasty in debt to European bankers, and Britain’s participation in two world wars in hope of maintaining its dominant world position left it in debt and ended its former industrial advantage. America’s rising foreign debt has been sustained by its “key currency” privilege of issuing its own dollar-debt under the “dollar standard” without other countries having any reasonable expectation of ever being paid – except in yet more “paper dollars.”

This monetary affluence has enabled Wall Street’s managerial elite to increase America’s rentieroverhead by financialization and privatization, increasing the cost of living and doing business, much as occurred in Britain under the neoliberal policies of Margaret Thatcher and Tony Blair. Industrial companies have responded by shifting their factories to low-wage economies to maximize profits. But as America deindustrializes with rising import dependency on Asia, U.S. diplomacy is pursuing a New Cold War that is driving the world’s most productive economies to decouple from the U.S. economic orbit.

Rising debt destroys economies when it is not being used to finance new capital investment in means of production. Most Western credit today is created to inflate stock, bond and real estate prices, not to restore industrial ability. As a result of this debt-without-production approach, the U.S. domestic economy has been overwhelmed by debt owed to its own financial oligarchy. Despite America’s economy’s free lunch in the form of the continued run-up of its official debt to foreign central banks – with no visible prospect of either its international or domestic debt being paid – its debt continues to expand and the economy has become even more debt-leveraged. America has polarized with extreme wealth concentrated at the top while most of the economy is driven deeply into debt.

The Failure of Oligarchic Democracies to Protect the Indebted Population at Large

What has made the Western economies oligarchic is their failure to protect the citizenry from being driven into dependency on a creditor property-owning class. These economies have retained Rome’s creditor-based laws of debt, most notably the priority of creditor claims over the property of debtors. The creditor One Percent has become a politically powerful oligarchy despite nominal democratic political reforms expanding voting rights. Government regulatory agencies have been captured and taxing power has been made regressive, leaving economic control and planning in the hands of a rentierelite.

Rome never was a democracy. And in any case, Aristotle recognized democracies as evolving more or less naturally into oligarchies – which claim to be democratic for public-relations purposes while pretending that their increasingly top-heavy concentration of wealth is all for the best. Today’s trickle-down rhetoric depicts banks and financial managers as steering savings in the most efficient way to produce prosperity for the entire economy, not just for themselves.

President Biden and his State Department neoliberals accuse China and any other country seeking to maintain its economic independence and self-reliance of being “autocratic.” Their rhetorical sleight of hand juxtaposes democracy to autocracy. What they call “autocracy” is a government strong enough to prevent a Western-oriented financial oligarchy from indebting the population to itself – and then prying away its land and other property into its own hands and those of its American and other foreign backers.

The Orwellian Doublethink of calling oligarchies “democracies” is followed by defining a free market as one that is free for financial rent-seeking. U.S.-backed diplomacy has indebted countries, forcing them to sell control of their public infrastructure and turn their economy’s “commanding heights” into opportunities to extract monopoly rent.

This autocracy vs. democracy rhetoric is similar to the rhetoric that Greek and Roman oligarchies used when they accused democratic reformers of seeking “tyranny” (in Greece) or “kingship” (in Rome). It was the Greek “tyrants” who overthrow mafia-like autocracies in the 7thand 6thcenturies BC, paving the way for the economic and proto-democratic takeoffs of Sparta, Corinth and Athens. And it was Rome’s kings who built up their city-state by offering self-support land tenure for citizens. That policy attracted immigrants from neighboring Italian city-states whose populations were being forced into debt bondage.

The problem is that Western democracies have not proved adept at preventing oligarchies from emerging and polarizing the distribution of income and wealth. Ever since Rome, oligarchic “democracies” have not protected their citizens from creditors seeking to appropriate land, its rental yield and the public domain for themselves.

If we ask just who today is enacting and enforcing policies that seek to check oligarchy in order to protect the livelihood of citizens, the answer is that this is done by socialist states. Only a strong state has the power to check a financial and rent-seeking oligarchy. The Chinese embassy in America demonsrated this in its reply to President Biden’s description of China as an autocracy:

Clinging to a Cold War mentality and the hegemon’s logic, the US pursues bloc politics, concocts the “democracy versus authoritarianism” narrative … and ramps up bilateral military alliances, in a clear attempt at countering China.

Guided by a people-centered philosophy, since the day when it was founded … the Party has been working tirelessly for the interest of the people, and has dedicated itself to realizing people’s aspirations for a better life. China has been advancing whole-process people’s democracy, promoting legal safeguard for human rights, and upholding social equity and justice. The Chinese people now enjoy fuller and more extensive and comprehensive democratic rights.[1]

Nearly all early non-Western societies had protections against the emergence of mercantile and rentieroligarchies. That is why it is so important to recognize that what has become Western civilization represents a break from the Near East, South and East Asia. Each of these regions had its own system of public administration to save its social balance from commercial and monetary wealth that threatened to destroy economic balance if left unchecked. But the West’s economic character was shaped by rentieroligarchies. Rome’s Republic enriched its oligarchy by stripping the wealth of the regions it conquered, leaving them impoverished. That remains the extractive strategy of subsequent European colonialism and, most recently, U.S.-centered neoliberal globalization. The aim always has been to “free” oligarchies from constraints on their self-seeking.

The great question is, “freedom” and “liberty” for whom? Classical political economy defined a free market as one free fromunearned income, headed by land rent and other natural-resource rent, monopoly rent, financial interest and related creditor privileges. But by the end of the 19thcentury the rentieroligarchy sponsored a fiscal and ideological counter-revolution, re-defining a free market as one free for rentiers to extract economic rent – unearned income.

This rejection of the classical critique of rentierincome has been accompanied by re-defining “democracy” to require having a “free market” of the anti-classical oligarchic rentiervariety. Instead of the government being the economic regulator in the public interest, public regulation of credit and monopolies is dismantled. That lets companies charge whatever they want for the credit they supply and the products they sell. Privatizing the privilege of creating credit-money lets the financial sector take over the role of allocating property ownership.

The result has been to centralize economic planning in Wall Street, the City of London, the Paris Bourse and other imperial financial centers. That is what today’s New Cold War is all about: protecting this system of U.S.-centered neoliberal financial capitalism, by wrecking or isolating the alternative systems of China, Russia and their allies, while seeking to further financialize the former colonialist system sponsoring creditor power instead of protecting debtors, imposing debt-ridden austerity instead of growth, and making the loss of property through foreclosure or forced sale irreversible.

Is Western Civilization a Long Detour from Where Antiquity Seemed To Be Headed?

What is so important in Rome’s economic polarization that resulted from the dynamics of interest bearing debt in the rapacious hands of its creditor class is how radically its oligarchic pro-creditor legal system differed from the laws of earlier societies that checked creditors and the proliferation of debt. The rise of a creditor oligarchy that used its wealth to monopolize the land and take over the government and courts (not hesitating to use force and targeted political assassination against would-be reformers) had been prevented for thousands of years throughout the Near East and other Asian lands. But the Aegean and Mediterranean periphery lacked the economic checks and balances that had provided resilience elsewhere in the Near East. What has distinguished the West from the outset has been its lack of a government strong enough to check the emergence and domination of a creditor oligarchy.

All ancient economies operated on credit, running up crop debts during the agricultural year. Warfare, droughts or floods, disease and other disruptions often prevented the accrual of debts from being paid. But Near Eastern rulers cancelled debts under these conditions. That saved their citizen-soldiers and corvée-workers from losing their self-support land to creditors, who were recognized as being a potential rival power to the palace. By the mid-first millennium BC debt bondage had shrunk to only a marginal phenomenon in Babylonia, Persia and other Near Eastern realms. But Greece and Rome were in the midst of a half-millennium of popular revolts demanding debt cancellation and liberty from debt bondage and loss of self-support land.

It was only Roman kings and Greek tyrants who, for a while, were able to protect their subjects from debt bondage. But they ultimately lost to warlord creditor oligarchies. The lesson of history is thus that a strong government regulatory power is required to prevent oligarchies from emerging and using creditor claims and land grabbing to turn the citizenry into debtors, renters, clients and ultimately serfs.

The Rise of Creditor Control Over Modern Governments

Palaces and temples throughout the ancient world were creditors. Only in the West did a private creditor class emerge. A millennium after the fall of Rome, a new banking class obliged medieval kingdoms to run into debt. International banking families used their creditor power to gain control of public monopolies and natural resources, much as creditors had gained control of individual land in antiquity.

World War I saw the Western economies reach an unprecedented crisis as a result of Inter-Ally debts and German reparations. Trade broke down and the Western economies fell into depression. What pulled them out was World War II, and this time no reparations were imposed after the war ended. In place of war debts, England simply was obliged to open up its Sterling Area to U.S. exporters and refrain from reviving its industrial markets by devaluing sterling, under the terms of Lend-Lease and the 1946 British Loan as noted above.

The West emerged from World War II relatively free of private debt – and thoroughly under U.S. dominance. But since 1945 the volume of debt has expanded exponentially, reaching crisis proportions in 2008 as the junk-mortgage bubble, massive bank fraud and financial debt pyramiding exploded, overburdening the U.S. as well as the European and Global South economies.

The U.S. Federal Reserve Bank monetized $8 trillion to save the financial elite’s holdings of stocks, bonds and packaged real estate mortgages instead of rescuing the victims of junk mortgages and over-indebted foreign countries. The European Central Bank did much the same thing to save the wealthiest Europeans from losing the market value of their financial wealth.

But it was too late to save the U.S. and European economies. The long post-1945 debt buildup has run its course. The U.S. economy has been deindustrialized, its infrastructure is collapsing and its population is so deeply indebted that little disposable income is left to support living standards. Much as occurred with Rome’s Empire, the American response is to try to maintain the prosperity of its own financial elite by exploiting foreign countries. That is aim of today’s New Cold War diplomacy. It involves extracting economic tribute by pushing foreign economies further into dollarized debt, to be paid by imposing depression and austerity on themselves.

This subjugation is depicted by mainstream economists as a law of nature and hence as an inevitable form of equilibrium, in which each nation’s economy receives “what it is worth.” Today’s mainstream economic models are based on the unrealistic assumption that all debts can be paid, without polarizing income and wealth. All economic problems are assumed to be self-curing by “the magic of the marketplace,” without any need for civic authority to intervene. Government regulation is deemed inefficient and ineffective, and hence unnecessary. That leaves creditors, land-grabbers and privatizers with a free hand to deprive others of theirfreedom. This is depicted as the ultimate destiny of today’s globalization, and of history itself.

The End of History? Or Just of the West’s Financialization and Privatization?

The neoliberal pretense is that privatizing the public domain and letting the financial sector take over economic and social planning in targeted countries will bring mutually beneficial prosperity. That is supposed to make foreign submission to the U.S.-centered world order voluntary. But the actual effect of neoliberal policy has been to polarize Global South economies and subject them to debt-ridden austerity.

American neoliberalism claims that America’s privatization, financialization and shift of economic planning from government to Wall Street and other financial centers is the result of a Darwinian victory achieving such perfection that it is “the end of history.” It is as if the rest of the world has no alternative but to accept U.S. control of the global (that is, neo-colonial) financial system, trade and social organization. And just to make sure, U.S. diplomacy seeks to back its financial and diplomatic control by military force.

The irony is that U.S. diplomacy itself has helped accelerate an international response to neoliberalism by forcing together governments strong enough to pick up the long trend of history that sees governments empowered to prevent corrosive oligarchic dynamics from derailing the progress of civilization.

The 21stcentury began with American neoliberals imagining that their debt-leveraged financialization and privatization would cap the long upsweep of human history as the legacy of classical Greece and Rome. The neoliberal view of ancient history echoes that of antiquity’s oligarchies, denigrating Rome’s kings and Greece’s reformer-tyrants as threatening too strong a public intervention when they aimed at keeping citizens free of debt bondage and securing self-support land tenure. What is viewed as the decisive takeoff point is the oligarchy’s “security of contracts” giving creditors the right to expropriate debtors. This indeed has remained a defining characteristic of Western legal systems for the past two thousand years.

A real end of history would mean that reform would stop in every country. That dream seemed close when U.S. neoliberals were given a free hand to reshape Russia and other post-Soviet states after the Soviet Union dissolved itself in 1991, starting with shock therapy privatizing natural resources and other public assets in the hands of Western-oriented kleptocrats registering public wealth in their own names – and cashing out by selling their takings to U.S. and other Western investors.

The end of the Soviet Union’s history was supposed to consolidate America’s End of History by showing how futile it would be for nations to try to create an alternative economic order based on public control of money and banking, public health, free education and other subsidies of basic needs, free from debt financing. China’s admission into the World Trade Organization in 2001 was viewed as confirming Margaret Thatcher’s claim that There Is No Alternative (TINA) to the new neoliberal order sponsored by U.S. diplomacy.

There is an economic alternative, of course. Looking over the sweep of ancient history, we can see that the main objective of ancient rulers from Babylonia to South Asia and East Asia was to preventa mercantile and creditor oligarchy from reducing the population at large to clientage, debt bondage and serfdom. If the non-U.S. Eurasian world now follows this basic aim, it would be restoring the course of history to its pre-Western course. That would not be the end of history, but it would return to the non-Western world’s basic ideals of economic balance, justice and equity.

Today, China, India, Iran and other Eurasian economies have taken the first step as a precondition for a multipolar world, by rejecting America’s insistence that they join the U.S. trade and financial sanctions against Russia. These countries realize that if the United States could destroy Russia’s economy and replace its government with U.S.-oriented Yeltsin-like proxies, the remaining countries of Eurasia would be next in line.

The only possible way for history really to end would be for the American military to destroy every nation seeking an alternative to neoliberal privatization and financialization. U.S. diplomacy insists that history must not take any path that would not culminate in its own financial empire ruling through client oligarchies. American diplomats hope that their military threats and support of proxy armies will force other countries to submit to neoliberal demands – to avoid being bombed, or suffering “color revolutions,” political assassinations and army takeovers, Pinochet-style. But the only real way to bring history to an end is by atomic war to end human life on this planet.

The New Cold War Is Dividing the World into Two Contrasting Economic Systems

NATO’s proxy war in Ukraine against Russia is the catalyst fracturing the world into two opposing spheres with incompatible economic philosophies. China, the country growing most rapidly, treats money and credit as a public utility allocated by government instead of letting the monopoly privilege of credit creation be privatized by banks, leading to them displacing government as economic and social planner. That monetary independence, relying on its own domestic money creation instead of borrowing U.S. electronic dollars, and denominating foreign trade and investment in its own currency instead of in dollars, is seen as an existential threat to America’s control of the global economy.

U.S. neoliberal doctrine calls for history to end by “freeing” the wealthy classes from a government strong enough to prevent the polarization of wealth, and ultimate decline and fall. Imposing trade and financial sanctions against Russia, Iran, Venezuela and other countries that resist U.S. diplomacy, and ultimately military confrontation, is how America intends to “spread democracy” by NATO from Ukraine to the China Sea.

The West, in its U.S. neoliberal iteration, seems to be repeating the pattern of Rome’s decline and fall. Concentrating wealth in the hands of the One Percent has always been the trajectory of Western civilization. It is a result of classical antiquity having taken a wrong track when Greece and Rome allowed the inexorable growth of debt, leading to the expropriation of much of the citizenry and reducing it to bondage to a land-owning creditor oligarchy. That is the dynamic built into the DNA of what is called the West and its “security of contracts” without any government oversight in the public interest. By stripping away prosperity at home, this dynamic requires a constant reaching out to extract an economic affluence (literally a “flowing in”) at the expense of colonies or debtor countries.

The United States through its New Cold War is aiming at securing precisely such economic tribute from other countries. The coming conflict may last for perhaps twenty years and will determine what kind of political and economic system the world will have. At issue is more than just U.S. hegemony and its dollarized control of international finance and money creation. Politically at issue is the idea of “democracy” that has become a euphemism for an aggressive financial oligarchy seeking to impose itself globally by predatory financial, economic and political control backed by military force.

As I have sought to emphasize, oligarchic control of government has been the distinguishing feature of Western civilization ever since classical antiquity. And the key to this control has been opposition to strong government – that is, civil government strong enough to prevent a creditor oligarchy from emerging and monopolizing control of land and wealth, making itself into a hereditary aristocracy, a rentierclass living off land rents, interest and monopoly privileges that reduce the population at large to austerity.

The unipolar U.S.-centered order hoping to “end history” reflected a basic economic and political dynamic that has been a characteristic of Western civilization ever since classical Greece and Rome set off along a different track from the Near Eastern matrix in the first millennium BC.

To save themselves from being swept into the whirlpool of economic destruction now engulfing the West, countries in the world’s rapidly growing Eurasian core are developing new economic institutions based on an alternative social and economic philosophy. With China being the largest and fastest growing economy in the region, its socialist policies are likely to be influential in shaping this emerging non-Western financial and trading system.

Instead of the West’s privatization of basic economic infrastructure to create private fortunes through monopoly rent extraction, China keeps this in public hands. Its great advantage over the West is that it treats money and credit as a public utility, to be allocated by government instead of letting private banks create credit, with debt mounting up without expanding production to raise living standards. China also is keeping health and education, transportation and communications in public hands, to be provided as basic human rights.

China’s socialist policy is in many ways a return to basic ideas of resilience that characterized most civilization before classical Greece and Rome. It has created a state strong enough to resist the emergence of a financial oligarchy gaining control of the land and rent-yielding assets. In contrast, today’s Western economies are repeating preciselythat oligarchic drive that polarized and destroyed the economies of classical Greece and Rome, with the United States serving as the modern analogue for Rome.


[1]Reality Check: Falsehoods in US Perceptions of China, June 19, 2022.


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  1. Steve H.

    Inclining, as I am, to some threescore, I remember when multinational corporations were perceived as oppressors. Smedley Butler was a revelation in showing the continuity of the policy.

    Turchin discusses modelling the accumulation of wealth in the hands of the few, and Hudson here shows mechanisms (‘regulatory agencies have been captured and taxing power has been made regressive’). But the focus on oligarchs is a bit ‘There are individual men and women and there are families’ while missing the inhuman grind of corporate institutions.

    1. Kurtismayfield

      If you read the US Constitution, there is not one mention of a corporation. Jefferson despised the “Aristocracy of corporations” and wanted a Republic ruled by men. There are reasons for this; after the founders dealings with the Dutch East India Company they had little trust for them. I feel that the pendulum bill swing back as they continue to accumulate power.

      1. Mark

        Hudson did not dwell on America’s colonial times to the early 20th century. Even before Jefferson’s time, by seizing the lands from the indigenous peoples, the leaders used grants of land to settlers and military service to fuel the agrarian economy of the Colonies, and later the U.S. more broadly. To a considerable extent the recipients of these grants, homesteads, or whatever, ranged from the self sufficient agrarian families to the slave owning richest individuals. The growing population also spurred economic activity more broadly.

        It wasn’t until the mid/late 1800’s early 1900’s that these government provided land opportunities waned, overtaken by our industrialization. But still, the ownership of these land grants served multiple generations of families, some still holding these lands today.

        The American myth of economic self sufficiency and bootstraps, etc. were largely birthed through these grants. From Hudson’s post it seems that lengthy periods of similar acts (but without the genocide) also had a more beneficial effect on those societies as well.

      2. Allan

        We can hope, and I’ll add that incorporation can be abolished provided that we have the courage to envision it, to plan for it, and to impose it. No one should be empowered under alleged law to exploit the public by socializing the risks and costs of commerce while privatizing most of the benefits. After abolition, every go-getter will be free to do its business as a sole proprietor or as a partner in a partnership with unlimited liability. Those who seek limited liability can pay a premium to an insurance company in exchange for laying off risk on others. (Good luck with that.) Even then, there won’t be any statutory obstruction to 100% joint and several liability of owners for their conduct and that of their employees.

        Now, when I read the USA’s Constitution, I find something much less flattering to the memory of the founding fathers than most American patriots care to see. It begins with soaring populism, but fewer than 1/2 of the populace participated. Many resisted the new imperialist scripture due to a prudent fear that it would produce an ugly despotism, just as it did even with the bill of ten afterthoughts. The blatant lie about “We the People” also insinuates that everyone, even children, has authority to set up a complicated government. Within the main body of the text we find the means for the monopolization of money and credit by a powerful government, which has led to the massive government indebtedness and reckless expansion of private credit decried by Hudson in his speech. Near the end of the Con as published in September 1787, the clause of Article VII pretends to state the “supreme Law of the Land” on the topics of ratification and establishment before its own “Ratification” and “Establishment”. In short, the Constitution presupposes its own lawfulness before it is law. No apologist has ever explained how A7 became the source of law which it pretends to be.

        The Declaration of Independence, the first constitution of the USA, gives another demonstration that sophistry was a founding habit of the USA. Nobody has ever presented a single scrap of evidence for “unalienable Rights” or a “Creator” to endow these rights. The ringleaders of the secession from the Kingdom of Great Britain may have boasted sanctimoniously about their moral rectitude, but even as they signed the document they were waging a brutal civil war just as if their enemies had no rights at all.

        Nevertheless, most people, even the poor, are content to go along with the USA’s system provided that they obtain some of the loot derived from it. It feels so good, but reality is not fooled by excuses we contrive in defense of dishonesty and delusion, which are always attempts to live in defiance of reality. When this house of cards becomes too unstable to bear the weight of corruption, no American will have wealth inequality or a lack of debt forgiveness to blame. Instead, widespread low character will explain the rise and fall of the USA.

    2. Kana

      Corporations are run by individuals and families of great wealth, an aristocracy of wealth so to speak gained control over America since over 100 years ago. Sociologists have studied how political power in America works behind the scenes for many years, and Michael Hudson is exactly correct. See War of the Worlds: The New Class for details.

      1. rob

        I like tosee references to carroll Quigley’s Tradgedy and hope.
        It is one of the best books ever…..

        And while it is a long book, there may be something I am forgetting… the characterization of any “cowboys”… is a scam.
        He spoke of the radical right, which was mischaracterizing his description of elite control as a “conspiracy”.The control is organic. When you as a community have most of the chips, how would you NOT end up in control, almost all of the time?
        the radical right at the time were groups like the john birch society;of which fred koch was influential. , fred… father of the brothers (who copied the establishment patterns and created their own academia,think tanks, foundations, etc.)… and now we have ALEC, and the supreme court packing federalist society… and so many others
        But anyone who says, nixon was not “in on it”/// and the teaparty is a successor to this fight against elite control. or that trump is not in that elite…
        is taking truths, and spreading lies..

    3. Pete

      Steve, you’re last point was never lacking for me. In the modern world, by what mechanism does the oligarchy function if NOT via corporations as well as government. It was clear from the text.

  2. PlutoniumKun

    I suppose you could counter argue that a system that has lasted 2,000 years is pretty resilient. Rapacious land owning and finance based capitalism has had a hell of a good run. I’m more inclined to think its inbuilt ruin is the hubris of the people in charge, not necessarily the system itself, which has shown the capacity to reinvent itself repeatedly over the centuries. The particular tragedy though is that it will probably destroy the carrying capacity of the planet before it destroys itself, or is replaced by alternatives.

    1. Louis Fyne

      Dunno if the Romans count: slave-based labor, plebs had a defacto basic income, the wine-bread ration and free Netflix—byproduct of imperial expansion course.

      currency-based modern capitalism didn’t really kick into high gear until after the Spanish conquests.

    2. The Historian

      I tend to agree with you. I’ve always wondered if there is a genetic component to greed – sort of like with alcoholism. You can get as many alcoholics into treatment that you can but there will always be more – it is a never-ending battle. But alcoholics mostly hurt themselves and their families whereas those who are addicted to money hurt societies. Perhaps if we are to survive, we need a 12-step program for the greedy?

    3. Martin Oline

      The system that lasted 2,000 years has really had about 200 years under a finite system. Less than that if you consider that Africa was being explored until 1870 and was still being cruelly exploited less than 100 years ago. It’s had few years surviving in a closed world without new colonies to exploit.
      I believe Prof. Hudson is correct that the next 20 years will be the crucial period for the choice between civilization or barbarism.

      1. JTMcPhee

        So Africa is not being cruelly exploited in the last 100 years? Maybe Africans who read here might weigh in on this. The Niger delta and diamond mining and a lot of other extractive industries and dependent agriculture come to mind, just from bits I pick up from time to time and not any deep study. Extractive capitalism sure seems to survive in the post-colonial corrupt “governments” one reads about, and of course the US military-security slimeballs are all over the African continent, making the world safe for extraction and overthrowing any governments that inconveniently won’t go along (with pockets lined with fractions of the looted wealth) to get along/stay alive.

    4. digi_owl

      It lasted that long by being on an expansionary warpath across Europe.

      This is “amusingly” similar to how so much of US myth and thinking comes from when it’s cavalry was rampaging across the land, chasing away natives and making room for settlers. After all, the American dream is based on being able to claim a pre-measured plot of prairie after having tended it for a number of years.

      1. hunkerdown

        Which is the Calvinist ideal of saving up one’s wages as an apprentice to buy one’s own workshop and home, but painted-up.

    5. Carolinian

      I think the above is, as always, a smart and convincing critique of capitalism but a sketchier defense of kingship and strong government. Perhaps the conservative, oligarchic rejoinder would be, not so much that greed is good but that greed is inevitable. Or to put it another way the love of power (money as its proxy) is inevitable. If humans were creatures of pure reason then socialism would rule the world but sadly we are not.

      And so Rome came to dominate the ancient world and the US our modern one. Only when disaster strikes and conditions become catastrophic do those perky aristocrats admit that they need society to prop them up. In ancient times the threat of enemy nations and invaders may have done the same for their creditor aristocrats. War, as the libertarians say, is the health of the state.

      1. Hayek's Heelbiter

        Curious as to why the French Solution is never mentioned in these discussions.
        Is it too terrifying to contemplate?

        1. jsn

          Too terrifying?

          Really too optimistic, don’t want to get my hopes up.

          Who else has pulled it off?

          1. Mike

            I would take a gander that egalitarian societies, the fair nature of things would have been forced… exhile or murder maybe. Try being greedy in a small tribe of hunter/gatherers? I think they would get weeded out quickly. It seems in fact that there would have been selective pressures to promote people who were good at working in teams, and not greedy. The bands who were efficiently cooperating from within would be able to out compete those with roving bands of greedy people. Or maybe that is too simple of an analysis, i dont know.

            I like the phrase that goes something like; Neolithic instincts, medieval institutions and modern problems.

            1. sharonsj

              In “Secrets of the Talking Jaguar,” Martin Prechtel marries into a small Mayan village. He describes a community tradition where, once a year, the entire village celebrates because the well-to-do successful members give gifts to the less fortunate. In return, the well-off are thanked and blessed and feted. This ends when missionaries show up and literally say to the rich, “Are you crazy? You should be keeping everything you earn.” The entire balance is upset and the result is a few rich people and a lot of suffering poor people.

              We never learn and probably won’t, unless there’s another French “solution.”

              1. chuck roast

                Sounds like a Potlatch. Also destroyed by the missionaries. Polanyi’s Trade and Markets in the Early Empires changed my life.

            2. Carolinian

              This is Graeber’s idea but even today poor people show a lot more solidarity than upper class people and Americans, to a very great extent, are not poor. Which is to say hunter-gatherer societies may not have much relevance.

              Of course the way things are going we may get real poor real fast but maybe not fast enough to save the planet.

        2. jsn

          When Zhou Enlai was asked what he thought of the French Revolution he replied, “Too early to say.”

    6. hk

      I think the change is not in “rapacious land owning and finance based capitalism,” but one that’s coupled with “gains from trade” across great distances. If you are a landowner oppressing your serfs who are also your neighbors, you have some reasons to restrain yourself. If you see and interact with them daily, then some form of human nature will militate against perfectly systematic oppression; you do have to guard against the potential physical threats they pose against you if you push them too far, and so forth. But if you are oppressing people remotely 1000s of miles away? Admittedly, this was already a factor centuries before, with absentee ownerships (arguments, similar to what I’m raising, have been made about why they should be worse, but I don’t think I’ve seen any systematic analysis suggesting actual lowering of social stability under absentee ownership and systematic exploitation for the market.)

      1. WLS

        I don’t think proximity has ever been a bulwark against exploitation throughout history — all that is needed is an ubermenschen/untermenschen mentality; the idea of ‘persons’ (adult free males — ‘citizens’) and the rest chattels, etc. Whether it was the Spartans & the helots, or the plantation owner & the slaves, proximity has always seemed quite efficacious in asserting control over society by a segment within it.

        Maybe, if you have access to Netflix you can watch “Sweet Country”, a film set in post-WWI ‘frontier’ Australia — to get the feel for the truly oppressive proximity of a colonial settler society.

    7. Kouros

      The system didn’t really last 2,000 years. There was a tenuous upper hand of the kings for quite some time and then there were periods of inter-regnum. However, that started to unravel with the English Revolution won by Cromwell and his ilk, and finalized with the Glorious Revolution. Now, Queenie is just the tool of the oligarchy. Were some disclosures lately showing for how long and how many laws Queenie has interfered with to protect and grow her holdings…

  3. Samuel Conner

    I think there is a spurious “begin italics” tag in the middle of the heading “Rome’s Legacy and the West’s Financial Imperialism”

    I wonder what the long-term implications might be of the “municipal finance” model in China. As I understand it, land is sold by city authorities to developers who, it seems to me, become rentiers by building/owning/operating infrastructure.

    1. ex-PFC Chuck

      The problem is in this heading: “Rome’s Legacy and the West’s Financial Imperialism.” It’s about 1/3 of the way through the post, and the italics begin between the t and the h in “the.”
      In the previous transcrpts of other writings by Hudson I’ve noticed there is usually no space immediately following italicized words such as “rentier.”

      1. John Zelnicker

        It’s not just Hudson’s posts. I see it frequently.

        Writers seem to forget that they need to put a space after the “close italics” tag.

  4. thoughtfulperson

    I suspect current turmoil in currency markets, particularly the multi-year lows seen today in western affiliated non-oil exporting countries, reflect the change that is occurring.

    Meanwhile in Asia, China India and Russia’s currencies are not at a low point at all.

    1. SocalJimObjects

      “Meanwhile in Asia, China India and Russia’s currencies are not at a low point at all.”

      The Indian Rupee has lost 5% since the Fed started hiking interest rates?

      “Its great advantage over the West is that it treats money and credit as a public utility, to be allocated by government instead of letting private banks create credit, with debt mounting up without expanding production to raise living standards.”

      So those Ghost Cities and Wealth Products aren’t big problems? Also wasn’t this just yesterday’s news? https://www.theguardian.com/world/2022/jul/11/china-violent-clashes-at-protest-over-frozen-rural-bank-accounts

      1. nippersdad

        Won’t it be nice to have some spare cities in mothballs when ocean levels rise and people have to move off of the coasts? It has never seemed like a bad idea to me.

        1. SocalJimObjects

          That’s some nice science fiction. If their planning is so perfect, why bother building the coastal cities like Shanghai knowing that you will take a huge loss on them?

          1. John Zelnicker

            Jim – Because those cities were originally built centuries ago when climate change wasn’t a thing and they were the best places to build for trade. Gotta have ports.

            Besides, who said they were perfect.

            1. SocalJimObjects

              I have been to Shanghai. I wasn’t implying that people from centuries ago should have known better. Shanghai has the biggest and most modern port in the world, not to mention tons of NEW modern buildings. Those were all mostly built this century.

      2. praxis

        They are problems as so far China enforces creditor protection on the underutilized infrastructure. If China lets the creditors pound sand, the misappropriated economic claims dissolve, and China is simply left with a bunch of extra infrastructure. It will eventually be re-rated to some price with utility.

        1. SocalJimObjects

          Someone will take a loss and that loss will have to be dealt with. See Evergreen and other builders who are now in trouble.

          1. chuck roast

            The “tell” will be if the PRC bankrupts the foreign Evergreen lenders and finds a way to save the locals

            1. SocalJimObjects

              Save the locals. I posted a link from the Guardian in my original post. People had to protest just to get their bank deposits back, and not a few will actually lose money. Those protestors were also beaten by the police. We are talking about bank deposits here not a loan to some company.

      3. rob

        the article in the link, is a good example of the problem of having an authoritarian govt. In this case a communist dictatorship; but it could just as well be some neoliberal wet dream, anywhere else in the future(or now?)

        I think the case of corruption cited is just that. A case of corruption. It seems dr Hudson’s description still fits. A central gov’t coming to the task of cleaning up the mess. from their “people’s bank”/public central bank.. this was a case of bad actors hijacking a part of the system, for themselves.
        This isn’t like the federal reserve, where the crooks, RUN the whole system. All the time. good times and bad… and we owe them the debt, they charge us as a nation… and we have them and their prodigy in the wall street periphery, milking us till kingdom come.
        There is a difference…

        But as far as the link, I remember the first time I saw that story, what jumped out at me was how the authoritarianism in the system played out. Before people could go to protest… the “public health” system kicked in and their freedom to move around was curtailed because of a change in “terror level”…. i mean covid….?

        This is exactly the danger with a system of something like Central bank digital currency. When anyone runs afoul of officialdom, they have their right to anything revoked… tyranny through technology…

        Cause after all, the chinese, like the americans and british are fascists at heart..
        and remember when that earthquake hit somewhere in china, and the school collapsed on those children. And it was found that the local officials sold the steel that was supposed to be in the building, on the black market… which is what made those kids more vulnerable…
        when the parents spoke out about that… they too were beaten, for making waves.
        communist dictatorships…. will always be dictatorships. that means corruption doesn’t exist.. the party is always right.
        And since this paper was released in china, I would guess Dr Hudson, wouldn’t really be allowed to “tell it the way it really is”. So we just read that between the lines.

  5. Bartley

    Dear Mr. Hudson,
    Thank you for your contributions to such important issues. I am sure many people find food for thought in your articles, as do I.
    Since you sometimes answer the comments on NC, I am hoping you’ll shed some light on things:

    1. I do share your view of the state of the “Western World” today. However, having been fortunate enough to witness the shift from a quasi-socialist, one-party system (GDR-German Democratic Republic) to what we call a democracy now, I must admit I have serious doubts about your characterisation of China and India as societies that will bring the corruption of power (through wealth or political status) under control by “putting (their own) people first”. For one, India is the country that declared a significant part of their own society literally as untouchable and since centuries had a high social, economical and power divide. In other words, a country that basically enslaved a part of their own populace. What, in your opinion, indicates these historical dynamics can be overcome by tomorrows India? Especially in a rather populated world with increasingly scarce resources to exploit and share.

    China on the other hand used to be every bit as hierarchical, if probably a bit more centralistic and bureaucratic. Again: What, in your opinion, indicates these historical dynamics can be overcome by tomorrow’s China? Especially in a rather populated world with increasingly scarce resources to exploit and share (I do not believe in the technocratic solution to all our problems).

    As I understand it, both countries have not been quite as colonialist as the West during the past 500 years but in today’s world there is little choice, than to venture out and scavenge for resources not currently found in ones home country. Now, in favour of your national resiliency argument: sharing, instead of scavenging would be the ideal solution here but having worked in the commodities (metals and minerals) sector, I have witnessed somewhat closely the butchering of Russia’s commodities sector and China’s behaviour in various African countries. I could not see as much of a difference, as would have liked. India seems to be a bit less grabby, as of yet.

    However both countries have incredibly wealthy ruling classes and I cannot see how they will cope, if their respective populations lose faith in the narrative that their children will be better off in the future. Or if the elites have to return their budget of physical energy expenditure to an ecologically sustainable level. They are, per capita, even further from balance than the vast majority of the western citizens.

    So they will probably encounter the same problem as we do now: money buys power enables concentration of wealth. Especially in a world with ever more scarce resources.

    2. How exactly would you envision erasing global/national/private debt and the obviously connected issue of re-distribution of all physical wealth? The hard assets, like houses, industrial facilities and land are as concentrated as the financialized assets and while governments may be able to erase debt in the books, accounts and balance sheets, the majority of people in many societies will not own a house and a plot of land to survive on their own merit; if they even wanted that. So even if their financial debts were nullified, in a society based on the division of labour, the vast majority will have to work for basic necessities they cannot provide by themselves. And so the concentration game begins anew, maybe just slower and with less debt because in 7 years debt will be erased again…

    3. How do we ensure that entrepreneurial minds will keep coming up with solutions to serious problems facing humanity?

    Again, thank you for your work. I square it with David Graeber’s latest book and feel, I can get a glimpse of aa world beyond. Alas I see no peaceful way to get there.


  6. The Rev Kev

    I suppose that when old Joe made student debt undischarged in bankruptcy, that in a way it was a sign of what is to come. To a future time when no debts can be eliminated through bankruptcy. Based on this article, it would be a logical development. You could consider the mass homelessness also a sign of what is to come. They may not own anything, but I do not see them being happy about it. Not being trite to say that now I know how a German citizen would feel in the late 1930s. Thing is, for most people it may have been going well but you just know that it will not end well – and not helped by knowing that you are one of the baddies.

    1. digi_owl

      I think i recently read that UK wanted to institute 50 year mortgages, that were transferable across generations.

  7. rob

    So, is this the “wimper” we are going out with… rather than a bang?

    The western model is built on the strength of corruption,nepotism,and greed…… while being outplayed by a communist dictatorship…. both seem to have “soul crushing” as their main source of power.

    Again dr. Hudson points out that the US has let “private” banks take over their credit creation.
    Isn’t that a HUGE point?

    In the US, our central bank, the fed…. enshrines our corporate benevolence with the federal reserve act… Our last 100 years, have seen this “hand of wall street”(and the families that control it);make our history for us. We, only get a mention(maybe), for the movements we create and act to counter this control from the top.
    But now as the world burns,
    When will people see that there are things to be done?
    Since they came up with the original chicago plan in 1939, there has been an effort to break free of the grip of wall street. But now with reform meaning “mmt” and other things that mean NO reform… It seems like fewer and fewer people can even IMAGINE anything else.

    That is the real reason we are so screwed.

  8. Louis Fyne

    i am as religoous as a potato but, IMO, the West past the terminal decline event horizon when the “Powers that Be” lost their religiosity and moral compass.

    The opposite of religious isn’t secular humanism.

    in the “Analects”, Confucius said something along the lines of “being afraid of the law and punishment doesn`t create a moral person.”

    In the West, there is no moral compass outside of religion. (sorry secular humanists, your voices are drowned out by nihilist consumerism). compare-contrast with secular Confucianism in East Asia and the Orthodox Church in Russia.

    Not too familiar with Marcus Aurelius…maybe someone needs to reboot secular Aurelianism. oh wait, imperial, white man who owned slaves. nevermind.

    1. BillS

      I think you mean Stoicism. Marcus Aurelius was taught by the slave Epictetus. The Christians absorbed a lot of the Stoic philosophy and the Roman stoics admired the Christians’ courage in the face of death in the arena.


      The Renaissance in Europe resulted in a rediscovery of Stoicism in the works of Justus Lipsius. The work of the Sceptic Michel de Montaigne is suffused with Stoicism.

      1. David in Santa Cruz

        Yes, Epictetus/Stoicism is an important philosophical thread countering Roman oligarchy (it failed, except as a warning to future generations). I think that classical civilization suffered the same moral struggles that ours does.

        But Hudson’s description of the system of rentier oligarchy that has captured the United States social order and which is attempting to insert its blood-sucker into the rest of the world is as accurate as it is chilling.

        1. BillS

          I agree wholeheartedly with you David. There are many parallels between the Roman oligarchy and our own. However, Stoicism did not really have much to say about wealth (it is viewed as a so-called “preferred indifferent”). Traditional Christianity, OTOH, makes no bones about how it views wealth (altho’ in practice, prelates, cardinals, etc could be very rich men).

          After reading Dr. Hudson’s essay, the big questions of our time remain, however. What shall we do about the present state of affairs (if anything)? Should we emulate Russia and China? (I see many here expressing admiration for the governing styles of Putin and Xi. I am not so sure I would want to emulate these systems.) Should we go a different route? What kind of system should we build to rein in the oligarchs (who since the days of Plato were always seen as a threat to the political order – leading to Tyranny) and destroy rentier capitalism? What form will this change take (democratic reform or violent rebellion)? What might a more humane economic system look like? Can/will religion play a role in a more humane society? Should we welcome it? (I ask this as a non-religious person.) As an individual, how do I prepare in order to maximize the chances of survival for me and my family (and neighbors) when the change inevitably comes? At the end of the day, having food on the table, water in the cistern, your family close and a roof over your head are what really is gonna matter when the SHTF.

          1. John Smith

            I don’t think the Chinese or the Russian models can be adopted by the West – those models are built around the Eastern values and culture (obedience, and direct transition from feudalism to socialism). There’s an easier period to take into account: the US before Reagan – actually, before opposing OPEC and making oil so expensive and so volatile because of a foreign policy.

            Keynesian economics were working fine. The US had a near socialist system with taxes as far as 80%! Those taxes instead of adding to useless elite wealth (whether legal or transferred to tax havens – useless because it’s not being invested in industry, the latter having been transferred to cheap labor countries) can be redistributed by the State as the main component of capitalism: wealth redistribution through social projects, infrastructure maintenance and building, etc. The model is adopted in Nordic countries and seems to work – democratic socialism.

            But then again, all this discussion is about human nature, about the conflict between individualism and collectivism: this is a no-brainer, you can’t debate it, you’re either one or the other, or in-between, there is no good, no bad, it just is. The political art is all about finding the right dosage of each.

    2. PlutoniumKun

      I’m inclined to agree with you on this. For all its many faults, religion did impose some form of ethical framework on the rich. Even the 19th Century robber barons put far more money into public goods (eg Carnagie Libraries) than their modern equivalents.

      1. Louis Fyne

        I don’t see the West aspiring to anything close to the western analogues of Confucian ideas in the zeitgeist….even at church (my local mainline Protestant churches have been taken over by Twitter advocacy, IMO).

        Five behaviors of the gentleman most central to the [Confucian] Analects are benevolence (ren 仁), righteousness (yi 義), ritual propriety (li 禮), wisdom (zhi 智), and trustworthiness (xin 信).

      2. MichaelSF

        But didn’t Carnegie build the libraries after a long career of looting? It seems like a “buy your way into heaven” kind of move. Maybe Bezos/Musk/Gates will do some real philanthropy a year or so before they figure they are actually going to die, but will it offset the decades of rapine before them?

    3. The Historian

      It is interesting that all of the major religions that I’ve studied (Christianity, Islam, LDS, black churches, etc.) all started out as an ‘alternate system’ to the prevailing powers. All of them were founded by the dispossessed. It is only when they began to get power that they changed from representing the views of the dispossessed to representing the views of the elite.

      1. hk

        Add Confucianism and Buddhism to the same mixture. The brand of Confucianism that came to dominate Imperial China or old Korea (or for that matter, the modern ones, too, South and North) or the Buddhism in Tibet, Burma/Myanmar, and Thailand are nothing like what Westerns imagine these religions to be. (And, of course, the kind of Christianity that many East Asian converts in 16th-18th centuries thought they were getting into was nothing like how it was actually practiced in the West either).

        1. Oh

          Several Buddhist groups in Japan and the US appear to be modeled after the Christian religions in so far as money is concerned and are usually a cult. They take advantage of their non profit tax status.

      2. PlutoniumKun

        If you read Endo Shusaku’s amazing book ‘Silence’, it has a fascinating insight into why Christianity was seen as so radical and dangerous in Japan (and other Asian countries). Stripped to its original meaning, it was extremely threatening to Shinto/Buddhism/Confucianism in their more imperial forms. Ironically of course Buddhism and Hinduism was later seen in the west as the more egalitarian belief system. In China, Catholicism is seen by many Chinese as a more radical alternative to atheism or Americanized religions (most other Christian churches in Asian having become very right wing and pro-US).

    4. Mike

      I absolutely agree with you but its almost as if instead of religion having disappeared solely, capitalism/free market/economic theory acts as the new religion. The course set by our capitalist forefathers instead decided our course of life rather than the church as it did prior. I am not religious mind you but I do feel the “next thing” would have to be something to replace free market thinking.

  9. Amfortas the hippie

    “What did not seem likely 2500 years ago was that a warlord aristocracy would conquer the Western world. In creating what became the Roman Empire, an oligarchy took control of the land and, in due course, the political system. It abolished royal or civic authority, shifted the fiscal burden onto the lower classes, and ran the population and industry into debt.”

    warlord aristocracy
    i have seen the same, in embryonic form, even at the small scale of my county petri dish.
    …as well as just about every jawb i’ve ever had.
    it’s in the dna, now.

    i’m anomalous as a bossman(when i can afford to be one for a time), in that i don’t want slaves, or vast power over others.
    and i’m also anomalous, in that i avoid debt like the plague.
    even the working poor/precariat i know out here all have credit cards(i’ve never had one)
    it’s just how its done.

    thanks, agin, Perfesser, for tying all this up with a bow.
    such already cracked nuts are perfect for sending to people, so that we can talk about such things later.

    1. William Beyer

      Although he rambles as (perhaps less than) usual, Hudson does indeed tie it up with a bow. Lucky Lindy’s daddy, Charles August Lindbergh, tied it up as well in his 1917 book, “Why is Your Country at War?” The only way the American system wins is at the point of a gun.

      1. The Rev Kev

        Not really rambling as he has a lot of ground to cover. Consider yourself lucky that you were not alive in the 1850s and listening to the Lincoln–Douglas debates-

        ‘Each debate lasted about three hours; one candidate spoke for 60 minutes, followed by a 90-minute response and a final 30-minute rejoinder by the first candidate. The candidates alternated speaking first. As the incumbent, Douglas spoke first in four of the debates. They were held outdoors, weather permitting, from about 2 to 5 p.m. There were fields full of listeners.’

        And that was common. Everybody knows Lincoln’s Gettysburg Address but the guy that spoke before him and who was quite renowned – Edward Everett – spoke for two solid hours. These days we just have sound bytes.

        1. flora

          People came from miles to listen to the debates. The debates were reported/reprinted in the local and national newspapers.

          What’s happened to our attention spans and critical thinking skills today? Oh, right… FB and Twit etc. Now we have 30 second TV ads. / heh

  10. eg

    Hudson’s logic is clear and his grasp of the history appears sound. My only question, in the spirit of Michels’ “iron law of oligarchy,” would be the extent to which those regional powers struggling to disentangle themselves from the West’s US-led “Dollar Diplomacy” neo-colonialism are or are not themselves oligarchies?

    As always, “quis custodiet ipsos custodes” …

  11. Mikel

    “It was only a decade ago that Senator John McCain and President Barack Obama characterized Russia as merely a gas station with atom bombs. That could now just as well be said of the United States, basing its world economic power on control of the West’s oil trade, while its main export surpluses are agricultural crops and arms…”

    Entertainment/media exports are important to US power and a major export. Whether covert or overt, it helps to shape belief systems, particularly because of the appeal to youth.

    1. digi_owl

      I still recall people joking about how some that got hassled by police would yell about their “miranda rights”, thanks to the abundance of US tv shows.

      Internet and US centered “social” media has just made the situation worse…

    2. Gene Poole

      Yep, the deadly seriousness of “light entertainment” has been greatly underestimated, as has the pervasiveness of the “free-market” message in all the media, including education, including higher education, and of course religion.

  12. CCRome

    It is not entirely true that there was no remission of debts in Western history. In Roman times Catiline organized a failed putsch for that, and the Emperors Caesar and Trajan enacted dilations and remission of debts. For the Middle Ages there are many cases. Debts were canceled in Padua, a rich merchant town in Northern Italy. The French King Philippe Le Beau confiscated the goods of the Templars, who were acting as a bank, and there are many cases of rulers who, unable to pay their debts, confiscated the banks.

    1. WJ

      I think Hudson chooses a historical scope that is too large to be supported, in detail, by his argument as presented here. (I have not read his long book on the subject of ancient near-eastern debt relief.)

      The opposition between “the West” and the rest of the world is cast so starkly that it covers over important social and cultural developments in the *history* of Europe that are arguably just as explanatory of our current predicament as Hudson’s model.

      Consider just two examples: the transformation of “avarice” from a vice into the implied, and then the explicit engine fueling the emergent commercial republics of the 18th century, and the financial history of the late 19th-early 20th century as recounted by Karl Polyani. These events represented real shifts in cultural, social, and political reality in the West that are arguably flattened by Hudson’s narrative, which posits that the “West” since the time of the Roman Republic (at least) has subscribed to a more-or-less unchanging economic model.

      I am sympathetic with Hudson’s critique of financial capitalism, and I think that his analysis of the current global conflict is pretty convincing. But I think his historical categories are overbroad, even totalizing, and I am not sold on their explanatory sufficiency.

    2. Michael Hudson

      Trajan did indeed cancel BACK TAXES — those owed mainly by the wealthiest Roman landowners. What sounds great at first sight turns out to be a giveaway to the wealthiest Romans.
      Caesar did have a bankruptcy law, but it applied only to landowners among the elite. There was hope that he would do what Cataline failed to do and cancel the debts — but he didn’t.
      I discuss that in my forthcoming Collapse of Antiquity, out this September. (The index is being prepared now.)

      1. ex-PFC Chuck

        I’ve been eagerly anticipating The Collapse of Antiquity since reading And Forgive Them Their Debts. Good to know it’s on a definite release schedule. Thank you for all the work you’ve done over the years.

  13. flora

    hmmm. I’m a fan of Prof. Hudson’s economic analyses and writing. This is a clear explanation of where and why he thinks the West took a wrong turn.

    However, (you knew there’d be a ‘however’ here), I think this article is a bit too deterministic. The West can still surprise. T’s election was a surprise and Brexit was a surprise, and both happened for roughly the same reasons, imo. They were both public rejection of the growing globalists and oligarchic nature of political control. How well or not they worked isn’t the point of my argument. I won’t throw in the towel on the West just yet.

    Without meaning offense, but only as an example of what I mean, I was never a fan of Neville Chamberlain’s diplomatic reasoning. I understand how he was pushed to it by the newspapers and big industries of the time for “reasonable reasons”. Even so…

    Shorter, I’m not ready to give up on the West. My 2 cents.

    1. Louis Fyne

      the West is totally fixable….

      get rid of culture wars (preferably via federalism), tax capital gains as ordinary income when it exceeds a minimum of 10x median annual wage, hike estate taxes for estates > 1000x annual median wage.

      swap out the elite. while you can’t mandate ethics/morals, everyone in DC has to go. can’t do worse than who is there right now. can’t serve more than 12 years on Capitol Hill, make presidents all one-termers.

      totally reasonable and incremental changes. not holding my breath though.

      1. DJ's Locker

        Good suggestions, although taxing capital gains is a bit difficult in some cases, at least until they are realized.

        It seems to me that a fairer tax system needs to focus more on taxing the main instruments of generational capital accumulation: real estate and trusts/corporations. Get that right and the future benefits of technology and productivity can be spread around better and will not immediately be capitalized into higher real estate prices, which constantly puts new generations and renters at a great disadvantage. It’s a bit late now, but better late than never.

    2. jsn

      Yes, it’s imminently fixable.

      Problem is, everything that looks like a problem to you and me is a profit center for some Oligarch who’ll spend whatever it takes on whatever it takes (politics as it actually functions today, and don’t kid yourself, it functions really well for the Oligarchs for whom it functions) to prevent the profit center being threatened.

      This is why transformational Obama propped up the Oligarchs. This is why transformational Trump propped up the Oligarchs. This is why bring back the adults Biden propped up the Oligarchs. Change will not come from within this politics, maybe it will eventually surface through the union drives and State Democrat Parties…one can hope.

    3. Joe Renter

      IMO the surprise will be more than most imagined. More of a spiritual reset that encompasses all aspects of collective societies. This will be messy and of course resisted by those who are in power. Years in the making for this transition. Dawning of the age of Aquarius.

      1. Gene Poole

        In fact, the Western system as described by Dr. Hudson has as one of its vital functions that of keeping us humans from evolving towards a true collective consciousness – homo sapiens (homo delens as I prefer to call us) being the first species capable of influencing its own evolution. What we are evolving towards is a collective consciousness that will not tolerate one individual suffering for the benefit of another individual. What the current focus on “freedom” does, as Dr. Hudson so well explains, is to ensure that the wealthiest and most cunning individuals benefit at the expense of the greater community. The “that’s just human nature” argument against socialism is an example of this anti-evolutionary discourse.

  14. fresno dan

    Oligarchy and debt are the defining characteristics of Western economies. America’s foreign military spending and nearly constant wars have left its own Treasury deeply indebted to foreign governments and their central banks. The United States is thus following the same path by which Spain’s imperialism left the Habsburg dynasty in debt to European bankers, and Britain’s participation in two world wars in hope of maintaining its dominant world position left it in debt and ended its former industrial advantage. America’s rising foreign debt has been sustained by its “key currency” privilege of issuing its own dollar-debt under the “dollar standard” without other countries having any reasonable expectation of ever being paid – except in yet more “paper dollars.”
    It was only a decade ago that Senator John McCain and President Barack Obama characterized Russia as merely a gas station with atom bombs. That could now just as well be said of the United States, basing its world economic power on control of the West’s oil trade, while its main export surpluses are agricultural crops and arms. …. he United States is now attempting to live mainly off financial gains (interest, profits on foreign investment and central bank credit creation to inflate capital gains) instead of creating wealth through its own labor and industry. Its Western allies seek to do the same. They euphemize this U.S.-dominated system as “globalization,” but it is simply a financial form of colonialism – backed with the usual military threat of force and covert “regime change” to prevent countries from withdrawing from the system.
    Rising debt destroys economies when it is not being used to finance new capital investment in means of production. Most Western credit today is created to inflate stock, bond and real estate prices, not to restore industrial ability. As a result of this debt-without-production approach, the U.S. domestic economy has been overwhelmed by debt owed to its own financial oligarchy. Despite America’s economy’s free lunch in the form of the continued run-up of its official debt to foreign central banks – with no visible prospect of either its international or domestic debt being paid – its debt continues to expand and the economy has become even more debt-leveraged. America has polarized with extreme wealth concentrated at the top while most of the economy is driven deeply into debt.
    When the banks were bailed out in the Great Recession, the idea was that collapsing real estate prices would collapse the economy. Money (debt) was created to bail out the bankers, but logically, it would have made more sense to bail out the home (debt) owners. But that wasn’t done, and it is obvious that the whole scheme was to keep, and even make richer, the already wealthy. People who were nothing but grifters. Isn’t it obvious that every single thing undertaken by the recent US government has been to advance the interests of the wealthy?

    1. flora

      It does seem like we’ve been pushed back to the 1890’s Gilded Age economics. Astor, Gould, Rockefeller, Morgan, etc. No wonder Wall St fears populism. (See Thomas Frank’s book “The People, NO”.) / ;)

      1. Louis Fyne

        If you’re the editorial board of the NYT and you don’t like the results of an election, it’s populism.

        If you do like the results, it’s ‘the will of the people’ and a shining example of the peaceful transition of power

      2. Mike

        And Unfortunatley capital eventually won out over labor after the gilded age… destruction legally and culturally of unions, criminalization of every day life, expansive marketing campaigns, success of business lobbying, war drafts and finally insert plenty of NC articles talking about forces against labor. Labor won for only a short time after the gilded age.

        1. flora

          Labor unions seem to be making a comeback. Something about “no final victory, no final defeat, just the same battle over and over again…”

    2. Tom Pfotzer

      All good points, FresnoDan.

      I emphasize your distinction concerning debt: it’s not the use of debt that’s the big problem. It’s what the debt is used _for_.

      How many of you could pay cash for your house or car? Would you prefer to walk until you have saved enough to buy your car? Of course not; some debt has great utility.

      We have an allocation problem. Allocation, allocation, allocation. Where do we allocate our resources? That is the key question. Not “who allocates” or “why allocates” or even “how allocates”. Don’t care, don’t care, and don’t care.

      It’s “what are resources allocated to?”.


      How to fix that allocation problem?

      Well, I hope by now it’s abundantly clear that the people who are currently doing the allocating… are _not_, most definitely _not_ going to change what gets allocated to whom.

      They’ve worked for generations to gain power over our resources, and they will die, taking us with them, and for spite squash the planet before they give that away. Do you doubt me?

      Just a few short weeks ago we were wondering if we were going to get nuked so the NeoCons (spearhead for the resource allocators) could get control of Russia.

      Do you still think that if we ask nicely enough, they will change?


      Now what?

      Well, there are some interesting questions that we might ask ourselves, like:

      Are there any other ways to influence resource allocation? … and …

      How would that get done?

      When we look at Russia, and discover that they’re no longer a gas station with nukes, we’re shocked to note that somehow, in spite of fierce repression from the West, they’ve somehow made smart allocation decisions.

      What can we learn from Russia about resource allocation? Is there a way to adapt what Russia did to our conditions / situation?

      1. digi_owl

        I would prefer to see reliable and easily accessible public transport most days.

        Apparently Germany just enacted a 3 month 9 euro public transport pass, and has seen a massive reduction in traffic congestion as a result.

        And people used to save up for cars and even houses in the past, when far more of the profits went to wages rather than dividends or buybacks.

      2. Janie

        What can we learn from Russia? We will learn, adapt, adopt nothing from Russia. NIH, not invented here, rules. Look at what we could learn about health care systems in allied countries, but we don’t and we won’t.

        1. Tom Pfotzer

          Janie: may I offer a minor, but crucial, edit?

          What if we change “We will learn, adapt, adopt nothing from Russia.”


          “Our current leaders will learn, adapt, adopt nothing from Russia.”

          And then add:

          “but I don’t have to be as stupid as my current set of leaders. I have the power to adapt”.

          Some of the adaptations that Russia applied included:

          Invest in education. Figure out how to get for yourself whatever it is someone’s denying you. Build teams (trading and defense agreements with other “outsiders”). Build allies, and earn their trust. Invest in, and believe in yourself; nobody’s gonna do it for you.

          Those are few of the lessons Russia learned the hard way, after getting stepped on for decades. And they did the hard work, they stayed focused, they endured.

    3. Oh

      Let’s give credit where credit’s due – Thanks Obama!
      I agree that the homeowners should have been bailed. At the same time the banks should have been nationalized with the former directors sent on a one way trip to a desolate atoll in the Pacific.

      1. Cabe

        I have thought before of punishing all of the neocon & neoliberal traitors by exiling them to a Pacific island and even picked one for the purpose: Jarvis Island.

  15. JTMcPhee

    I wonder if Dr. Hudson has a prescription for establishment of a government structure that mirrors the versions that in ancient times performed the creditor function in service to a healthier social structure, and enforced the necessary Jubilees to cut off the process of debt peonage and oligarchic rule?

    Not sure that Putin and Xi have it right yet, though the attraction of the other paths they are following is telling. Where does the power to regulate to serve the general welfare come from, and how can it be insulated from just another looter’s paradise takeover?

    Corruption is seductive, getting away with it even more so, and the knowledge that one is poking decency and commensalism in the eye with the pointy end of a sh!t-coated stick even more so. And there are always enablers happy to accept the serial bribes that lead to oligarchy/kleptocracy.

    So what is the medicine for this kind of melancholy? “ For the poor you always have with you, and you are able to do them good whenever you desire; but not always do you have Me.” Mark 14:7.

    1. Amfortas the hippie

      re: precriptions:
      aside from a movement to publicly shame the shameless…likely impossible due to the amoralist anti-humanism so evident among that sect….all i can think of is a method taken from some….errr…less than Nice historical regimes: like pillories, guillotines and the like.
      but that would rely on a widespread agreement among the hoi polloi that rabid rentseeking and hyperwealth were obscene in the extreme, and deserved such treatment.
      if that were the case, would we have the parasite problem we have now?
      if it were widely accepted that hyperwealth was akin to shitting on the floor or eating babies in public, would we be in this situation at all?
      instead, “we” laud them…worship them, even.
      as “we’ve” been trained to do(see:80’s daytime tv show”lifestyles of the rich and famous”)
      “They” ain’t gonna give up their wealth and especially Power because we make a good case for alternatives.
      they’ll hang on tooth and claw, jackboot and pogrom, and burn down the world before that happens.
      ergo…”there will be blood”…and that sucks…but we have a planet and our species to save…and what choices have they left us?
      the masses will only shoulder so much penury, suffering and needless death ere they lash out…hence the rampant mindfuckery to confuse and obfuscate and hide the actually blameworthy….trot out one scapegoat after another to take the blame and to pay for the sins.
      why go to so much trouble…over 50+ years…to utterly hide what’s happening in those well appointed rooms?
      “they” know full well who’s to blame, i reckon…at least as much as a lizard knows when the sun gets too high and its time to seek shade.
      i do not look forward to the Burning Times…seems rather unnecessary, to me…but for all the rich bastids who think they deserve the whole world.

      1. Kouros

        Here is depressing thought:

        On May 5, 278 BC, after the King of Chu ignored his warnings about official corruption, State Minister Qu Yuan[1] drowned himself in the Miluo River in protest and, ever since, Dragon Boats renew their search for his body.

        Great Confucians like the The Hongwu Emperor[2] fought corruption tirelessly:

        “Had I thoroughly eradicated corrupt officials in addition to those already imprisoned I would have been dealing with two thousand men from just two prefectures, men with no useful occupation who used my prestige to oppress people. No-one outside government knew how wicked they were, so everyone said my punishments were harsh, for they saw only the severity of the law and didn’t know that these villains had used the government’s good name to engage in evil practices. In the morning I punished a few and, by evening, others had committed the same crimes. I punished those in the evening and next morning there were more violations!

        Although the corpses of the first had not been removed others were already lined up to follow in their path, day and night! The harsher the punishment, the more violations.

        I didn’t know what to do, but I couldn’t rest. If I was lenient the law became ineffectual, order deteriorated, people thought me weak and engaged in still more evil practices. If I punished them, others regarded me as a tyrant. How could anyone lead a peaceful life in such circumstances? Really, my situation was dreadful.”

        Same with the oligarchy.

        However, it likely matters what spirit one cultivates in the polity:

        “Far from being expected to demonstrate personal charisma or the ability to outdo rivals, those who aspired to a role on the Council of Tlaxcala did so in a spirit of self-deprecation—even shame—and were required to subordinate themselves to the people of the city. To ensure this was no mere show, each was subject to trials, starting with mandatory exposure to public abuse, regarded as the proper reward of ambition, and then—with one’s ego in tatters—a long period of seclusion, where the incumbent politician suffered ordeals of fasting, sleep deprivation, bloodletting, and a strict regime of moral instruction. The initiation ended with a “coming out” of the newly constituted public servant amid feasting and celebration. Clearly, taking up office in this indigenous democracy required personality traits very different from those we take for granted in modern electoral politics.”

        There are alternatives…

        1. Tom Pfotzer

          “it likely matters what spirit one cultivates in the polity”.

          Great post.

          While the ordeals process to shape up the leaders sounds great, I don’t think that’s the ordinal priority.

          I wonder if there was / might come to be a similar ordeals-based regimen to shape us up to be good citizens?

          This sounds a bit like the ordeals that some (native) Indian and some religions require their adherents to subject themselves to in order to be affirmed as a bona fide citizen / member of the group.

        2. hk

          Zhu Yuanzhang, a cold-blooded manipulative backstabbing bastard if there were one, and one good enough to rise from humble beginning through banditry to the founder of a dynasty. Not sure if I would call him a tireless fighter of corruption. But I imagine he went through enough muck in the last days of the Mongolian Empire in China to see what collapse of authority (including the ability to rein in corrupt officials and maintain public trust) did…..

    2. GramSci

      I’m an unabashed advocate of a maximum wage. If (USian) income tax rates were set (and kept!) where FDR wanted them (~ $400k/yr max income in 2022 dollars) far fewer resources would be allocated to private pockets. The objective is to limit wealth so that no individual can suborn elected officials. This must be understood and taught in schools.

      The US came very close to this ideal, but then FDR died, Truman bombed Nagasaki (even less defensible than Hiroshima), and the empire became drunk with power.

  16. juno mas

    Thanks to All for the great discussion.

    And a special thank you to Michael Hudson for his work illuminating the roots of “Western” financial control. Made my Day!

  17. Mike

    And Unfortunatley capital eventually won out over labor after the gilded age… destruction legally and culturally of unions, criminalization of every day life, expansive marketing campaigns, success of business lobbying, war drafts and finally insert plenty of NC articles talking about forces against labor. Labor won for only a short time after the gilded age.

  18. juliania

    I think Michael Hudson is correct that when a state becomes an oligarchy seeking word domination they do it through the debt mechanism – he’s much to be praised for pointing out to us how this happens, and how today the problem has reached gigantic proportions crying out for the kind of solution that was employed in early history when states were ruled by wiser folk.

    What I don’t see is how this applies in particular to western states because of a weak construct of government. For other constructs of government, even socialism, have decayed soon after attempting to ‘rule the world’ in unipolar fashion. The key is not how the system is run; it is who runs it. The manner in which riches are rapidly accumulated by corporations or individuals so bent will differ in every state that attempts such a wresting of power – it happened in the Soviet Union also, and in China when ‘the world’ was the vastness of their own stretch of conquered lands.

    The emphasis on the sovereignty of the people was there very strongly when the Constution of the US came to be. And as has been mentioned, finance and the power of corporate entities seems not to have been adequately addressed. But for some who would turf out that Constitution and build another, who is wise enough to do better these days? It was always centered on ‘we, the people; and became what it idealized at significant moments down through the years as traditions and mores refined. Sure, let’s improve it; but also remember that out of its proper application, brief though the times of that may have been, came the United Nations. Even Putin respects international law as it was composed when the UN was born. And Constitutional scholars emphasized that important link back then.

    So should we, We have good traditions in the US. They have been trampled by the power hungry and the undisciplined but they are not dead. Just as Russia and China have looked back to the goodness, each in its own national heritage, so should we. So should we.

  19. Susan the other

    We haven’t had democracy at the national level for 50 years. Why do we support the fantasy? Let’s start over. Support state and local government and ignore national government completely. It would probably be enough to simply stop communicating with them. That also means we would defund the military without ceremony because without the people the military has no mandate. We could annul all trade agreements. All military alliances. The Fed. State governments could all swing into action and begin to solve their problems; form alliances to benefit themselves with other states. Let us simply ignore the federal government and its institutions. Don’t vote. It’s a useless fantasy.

    1. Tom Pfotzer

      STO, this is another one of those posts that just makes me want to hug you.

      Ya, I know: EEEeeeeewwwww!

      But there it is anyway.


  20. JTMcPhee

    I wonder why there is no discussion of Islamic banking and finance in this treatment. Sharia-compliant financial principals, if not real-world practice, militate against any kind of interest charging in investment transactions. Also, as I recall it, there is more mutual acceptance of risk and of an involvement of the parties in working toward the success of the enterprise, and debt forgiveness is a significant element of the idealized economic structure. Some discussion here: https://www.jubileeusa.org/islamic_perspectives_on_poverty_debt

    Casual search indicates that maybe the diseases of Western Warlord Capitalism have been picked up by the extant Islamic finance structures, so as with so many elements of spiritual practices that ought to be sacrosanct in healthy communities, the subtle twisting by “high finance” jesuits has crafted excuses and work-arounds to preserve the “brand” while totally perverting the message.

    Looks like the froth of derivatives and leveraging would not be countenanced under Islamic principles, which nominally apply to a fifth of the world’s population: https://corporatefinanceinstitute.com/resources/knowledge/finance/islamic-finance/

    But there appears to be a healthy and well-developed interest in and awareness of the horrors of debt peonage and wisdom and utility of Jubilee-style debt forgiveness. https://www.jubileeusa.org/faith/islamic-resources/islam-and-jubilee.html

    Maybe something could be made of this?

    1. hk

      Religious teachings against “usury” has long existed in Christianity, too, and had often been invoked to punish bankers who got too uppity in the Middle Ages. In practice, though, quasi-legal excuses were always invented to justify banking as somehow “not really usury,” not really too different from the way Islamic banking works, as I understand it. Of course, it was likely true that punishment meted out to wayward bankers was hardly uniformly applied–means for kings to shake down bankers was the common purpose. But this is also something to be weary of today: when political leaders claim that they are fighting “financial capitalists,” they almost certainly are not doing it for “the people.”

  21. olde mate

    I see Hudson active in the comments so I just have to add in case he sees it – you’re a living legend and many non-academic people I know here in Australia are discussing your work! I know a plumber getting through super imperialism at the rate of two or so pages a day, don’t think he’s ever read another book

    I know it’s old now, but your explanation of how countries which export more than they import end up funding the US military is epic, it finally answers the question of how the US gets away with a $600 trillion deficit while also spending more on their military than the next 199 countries combined

    it’s pretty brutal to learn that in some pretty important ways your civilization is likely the inferior one but I say keep letting it rip!!

  22. dean 1000

    I really like tike articles & comments on this website. There is a lawful solution for the problems Mr. Hudson points out.
    The prospect of violent revolution scares a peacenik like me. If we are persistent enough and skillful enough to use the ballot rather than the bullet and the IED a ‘more perfect union” is in sight, sans the sweat and violence of revolution.
    Congress was given the option of coining money and regulating its value, or farming that task out to a cabal of bankers, to the ninja turtles, or to a Martian.

    Would it go toward a more perfect union to abolish or merely suspend the congressional Option? I don’t know. I’m sure the voters would know. It could be an advisory question or a constitutional amendment on the 2022 ballot if your congressional representatives are willing.

    The men who ratified the constitution and gave it legal effect demanded the 10th amendment as they knew that the amendment procedures of article 5 were unwieldy and the super majority requirements insured that the few would rule the many. Given what happened at the first constitutional convention the safest, most democratic, and constitutional way to amend the constitution is for the voters to do it one amendment at a time via the 10th amendment.

  23. Bill Malcolm

    The rise and inevitable fall of the Usurious States of America is what this article explains to the Chinese, and to any Westerner not cross-eyed enough to see the reality.

    Pretty straightforward description of how being an unscrupulous creditor lender with hired strongmen to back up the scam with menaces and to occasionally beat up the more loudmouth non-payers of interest and principal, is the way to a rich and easy life for yourself. When the grubby credit borrowers default, then you seize their property and dare them to stop you. The problem is, it’s a pyramid scheme and eventually you run out of people/countries to prey on. Then the whole house of cards collapses, which is about where we are now. The principal loan shark of the current world is now reduced to eating its own spawn, systematically reducing the great mass of Americans to penurious serf status. And this small fry ruination is because larger expansion is no longer possible, both through the depletion of natural resources plus, let’s face it, and to put it into terms the average dough-head understands, from them damn Commies running Rooshia and China. Those godless heathen human rights abusers are saying, eff off and go away to the grand and glorious USA. And they have their own competent hired guns to face the hired guns of Usury Central and its tributaries, so it’s a standoff.

    No wonder Biden is hobbling around the world trying to shore up allies, who might be wondering: “Should I hitch my wagon to a more athletic horse?” Biden’s oligarchs are forcing him from a trot to a canter and the poor old warhorse is having trouble staying the course. Anything to beat back them there Commies, and bribes galore to any country “leader” who might help him in his quest for oligarchal salvation. But Sri Lanka has bit the dust of complete debt ruination, and it’s just the first of the dominoes to fall. There is existential risk to the oligarchs running the US government that the gravy train is threatened with derailment into a deep gorge, and soon. Awk!!! Unacceptable!

    This is all broad brush stroke commentary on my part, but I see that a lot of other comments here immediately prevaricate into nitpicking detail of Hudson’s obviouly correct overall thesis. No sir, these commentators cannot absorb the truth, so twist and turn bringing up senseless arguments about the “wonderful” US constitution and beside-the-point gratuitous objections to the central theme Hudson lays out.

    Well, I suppose if I saw my personal future life of ease threatened, I’d try to make up excuses myself. Because the commentariat here is generally well-educated and not about to worry where their next meal and a damn good bottle of wine is coming from, it’s “well, but what about this and what about that?” and “not all ancient Chinese rulers were as wise as Hudson says” — highly defensive reactions meant to obscure the prof’s main argument so they don’t have to dwell on its implications, because they’re frightening. Disappointing in the intellectual sense but understandable, as most people exhibit the selfish survival gene when the chips are down. Also, prevarication obviates the need to actually do anything for now, much like the world as a whole approaches the destruction of the environment and does bugger all about it, damnable socialists included.

    Three quarters of a century it has taken me to really understand that I’ve been living in an elaborate scam, where greed drives the system including making up nonsense about how glorious our way of life and government is, which is broadcast daily to a hypnotized audience to the point where most are hopelesly brainwashed, and many squawk “free markets solve everything” while saluting the Mango Mussolini as savior from their woes.

    If you’re brave enough to face the personal intellectual music, you can fill in for yourself all the details Hudson brushes over in a necessarily short speech. Unless of course, you prefer to lie to yourself and make up invalid excuses to “explain” away the nagging reality and thus continue to live in your own personal dream world. I believe this latter course of inaction is commonly called hope.

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