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FINANCE AS WARFARE

Michael Hudson

 

College Publications, World Economics Association, {short description of image}2015, 151 pgs., diagrams, paperback

 
 

Reviewer comment:
The Author is basically a Marxist but with very different ideas and theories.This is a very important study of the reality of the finance industry today - and its direct role in one of the central struggles thoughout human history - that between creditors and debtors. I have not found another author who describes the current real financial situation in such stark terms. He describes the 20th - 21st century as a time when 'financial capitalism' has pushed 'industrial capitalism' aside. The author has published articles and books about this and organized seminars and meetings.
This explains why in the Forbes annual magazine issues that list the world's billionaires and the 400 most wealthy Americans with the sources of their wealth the majority of the Americans obtained this via financial manipulation, hedge funds, private investment, and similar activities. It also appears in the Fortune Magazine April/May 2021 issue in their very clever graphic article 'Painting a Picture of Corporate Misdeds' in which the financial/insurance industry had by far more fines from regulators than any of the other 8 categories. He seems to approve of the economic/political structure of ancient societies such as in Mesopotamia (ignoring Karl Wittfogel's description of them as' oriental despotisms'). He considers the change that took place in ancient Greece and Rome to private property protected by law to be bad.

 
 

Chapter 1 - Finance as warfare:
Dr. Hudson makes his point clear: "The financial sector has the same objective as military conquest to gain control of land and basic infrastructure and collect tribute."
Further: "The creditor's objective is to obtain wealth by indebting populations and even governments, and forcing them to pay by relinquishing their property or income."

The rest of the book elaborates on this theme. The sections are titled:
"The financial warfare to gain the land and/or its rent":
"Rome's financial war against government protection of debtor rights": (This is not the account found in history books)
"War as the catalyst for national debts":
"War debts as the mother of royal monopolies"
"Avoiding war's financial cost leads to classical liberalism"
"Financial avoidance of public taxes and duties"
"The role of debt in the war against labor"
"Financial appropriation of labor's disposable personal income" (This stems from the 'labor theory' of value)
"Financializing education"
"From finance capitalism to neofeudalism"( in this section he correctly notes "Without contributing to production, rentier income is overwhelmingly responsible for the wealthiest 1% obtaining 73% of the U.S. income growth since the 2008 crash, while the 99% have seen their net worth decline." I point out each year that th eevidence of this is in the annual Forbes magazine list of the 400 wealthiest Americans, But an estimated 30% of Americans - also do NOT contribute to production but live on government supplied credit)"
"The financial fight to reverse classical tax and economic reforms" (He favors that government should receive the rental income of land and natural resources and receive high taxes. BUT that was the core situation of the ancient "oriental despotisms' - taxes are tribute and this is a result of lack of private ownership of land and assets.
"The destructive character of financial conquest" He believes that:"Roman historians clamed their epoch's collapse on creditors reducing the population to debt bondage and outright slaveery." NO, the slaves in Roman society were foreigners. The population included many living off the government 'welfare' grain subsidies.

 
 

Chapter 2 - Piketty vs. the classical economic reformers:
Dr. Hudson approves of pPketty's work allthough it has been found faullty by many other economists. He writes: "Thomas Piketty has done a great service in collating the data of many countries to quantify the ebb and flow of their distributrion of wealth and income"
"Limiting Picketty's reform proposals to what anti-reform statistics reveal"
"Why is inequality increasing" False leads that Picketty avoids, but does not controvert"
"The 1980 rurning point in wealth and income distribution"
"1. Interest rates and easier credit terms promoting debt leveraging (pyramiding)"
"2 Privatization and rent seeking"
"3 The tax shift off wealth and capital gains onto wages and consumer spending" But the Constitution prohibited taxtion of wealth from the start and also income which was put on wages by the 13th Amendment to finance government welfare and VAT taxes are directly on consumer spending..
"Financing budget deficits via bondholders instead of government money creation"
"Debt deflation" "Ideological support for the 1%'s conquest of the 99%"

 
 

Chapter 3 - Incorporating the rentier sectors into a financial model with Dirk Bezemer "Abstract" "1 Introduction"
"2 Finance is not the economy"
"3 Towards a model of financialized economies"
"4 The FIRE sector, rents, and the progressive response" (In this section Dr. Hudson discussed Henry George whose economic theories he studied.
"5. How the FIRE sector operates"
"6. Effects on the environment, demography and the economy"
"Conclusion"

 
 

Chapter 4 - From the Bubble economy to debt deflation and privatization

 
 

Chapter 5 - How economic theory came to ignore the role of debt

 
 

Chapter 6 - The use and abuse of mathematical economics

 
 

Chapter 7 - U.S. 'quantittive easing' is fracturing the global economy

 
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Michael Hudson - ... and forgive them their debts

 
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Kaufman, Henry - Tectonic Shifts in Financial Markets

 
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Michael Hudson -Privatization in the Ancient Near East and Classical World

 
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Michael Hudson

 
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Michael Hudson

 
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