Michael Hudson

Michael Hudson

   

Books

michael-hudson.com/    Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City and author of J is for Junk Economics (2017), Killing the Host (2015), The Bubble and Beyond (2012), Super-Imperialism: The Economic Strategy of American Empire (1968 & 2003), Trade, Development and Foreign Debt (1992 & 2009) and of The Myth of Aid (1971), amongst many others.

ISLET engages in research regarding domestic and international finance, national income and balance-sheet accounting with regard to real estate, and the economic history of the ancient Near East.


michael-hudson.com  2002/ The New Economic Archaeology of Debt – Introduction to Debt and Economic Renewal in the Ancient Near East (ed. with Marc Van De Mieroop) (CDL Press, Baltimore, 2002)

…”Economists, anthropologists and assyriologists have discussed the origins of debt and the setting of interest rates from such different perspectives that there has been remarkably little overlap or mutual discussion. Indeed, when economic theorists have ventured to speculate on the origins of debt, they usually have based their reasoning on a priori market-oriented principles rather than looking at the historical record. One of the aims of this colloquium is therefore to establish a more historically grounded basis for tracing the course of commercial and agrarian debt in Bronze Age Mesopotamia, and the logic that underlay the Clean Slates that annulled agrarian and personal debts (while leaving commercial debts intact)…

…Theories based on owners lending out the means of production, or tool-makers abstaining from consumption, certainly are not much help in explaining interest rates for antiquity’s rural usury and long-distance trade credit…

…The papers presented in this volume show how many types of transaction in Mesopotamia were treated as debts but did not involve prior loans of money. Marc Van De Mieroop points out that such records may reflect “any arrangement between two parties that entailed a delivery at a later date.” When a craftsman was given materials to make into a finished product, for instance, he gave his customer a tablet recording his obligation…

…As far as economic theory is concerned, Mesopotamian debt does not confirm modern ideas about the power of market supply and demand to determine prices and interest rates, to say nothing of the adjustment processes that are assumed automatically to ensure economic balance and stability. Market-oriented theorists find the idea that administered interest rates and prices might remain unchanged over decades, centuries and even millennia theoretically impossible. Such “socialist” practices are held to be inherently unstable and hence transitory in the face of shifting supply and demand.

This ideological bias has blocked a more widespread understanding of how Mesopotamia coped with its economic needs. Most disturbing to modern ideology is the fact that public rather than private enterprise was the early crucible of capital accumulation and corporate commercial innovation. Yet in retrospect one can see how matters had to be this way… “…


Debt and Power

…”…to answer your question, too much debt is when it can’t be paid – that is, can’t be paid without transferring property to creditors, reducing consumer spending and home ownership rates, and plunging the economy into austerity in which only the wealthy financial class is affluent.

What happens when a debt can’t be paid? Well, either you default and lose your property as creditors foreclose on your home or drive you into bankruptcy, or – if you’re a corporation – they drive you under and a corporate raider takes you over. Or else, you write down the debt.”…

 

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michael-hudson.com/  2015 The Paradox of Financialized Industrialization

…”… Irving Fisher coined the term debt deflation in 1933. He described it as occurring when debt service (interest and amortization) to pay banks and bondholders diverts income from being spent on consumer goods and new business investment.[5] Governments use their tax revenues to pay bondholders, cutting back public spending and infrastructure investment, education, health and other social welfare.

No observer of Marx’s epoch was so pessimistic as to expect finance capital to overpower industrial capitalism, engulfing economies as the world is seeing today. Discussing the 1857 financial crisis, Marx showed how unthinkable anything like the 2008-09 Bush-Obama bailout of financial speculators seemed to be in his day. “The entire artificial system of forced expansion of the reproduction process cannot, of course, be remedied by having some bank, like the Bank of England, give to all the swindlers the deficient capital by means of its paper and having it buy up all the depreciated commodities at their old nominal values.”[6]

Marx wrote this reductio ad absurdum not dreaming that it would become the Federal Reserve’s policy in autumn 2008. The U.S. Treasury paid off all of A.I.G.’s gambles and other counterparty “casino capitalist” losses at taxpayer expense, followed by the Federal Reserve buying junk mortgage packages at par. …”…