Tuesday, August 23, 2016

“Finance as Warfare”, Michael Hudson’s new book

https://rwer.wordpress.com/2015/07/02/finance-as-warfare-michael-hudsons-new-book/


To simple people it is indubitable that the nearest cause of the enslavement of one class of men by another is money. They know that it is possible to cause more trouble with a rouble than with a club; it is only political economy that does not want to know it.
— Leo Tolstoy, What Shall We Do Then? (1886)


The financial sector has the same objective as military conquest: to gain control of land and basic infrastructure and collect tribute to. And update von Clausewitz, finance has become war by other means. It is not necessary to conquer a country or even to own its land, natural resources and infrastructure, if its economic surplus can be taken financially. What formerly took blood and arms is now obtained by debt leverage.

The creditor’s objective is to obtain wealth by indebting populations and even governments, and forcing them to pay by relinquishing their property or its income. Direct ownership is not necessary. Fully as powerful as military force, debt pressure saves the cost of having to mount an invasion and suffer casualties. Who needs an expensive occupation against unwilling hosts when you can obtain assets willingly by financial means – as long as debt-strapped nations permit bankers and bondholders to dictate their laws and control their planning and politics?

The creditor’s objective is to obtain wealth by indebting populations and even governments, and forcing them to pay by relinquishing their property or its income. Direct ownership is not necessary. Fully as powerful as military force, debt pressure saves the cost of having to mount an invasion and suffer casualties. Who needs an expensive occupation against unwilling hosts when you can obtain assets willingly by financial means – as long as debt-strapped nations permit bankers and bondholders to dictate their laws and control their planning and politics?

Such financial conquest is less overtly brutal than warfare waged with guns and missiles, but its demographic effect is as lethal. For debt-strapped Greece and Latvia, creditor-imposed austerity has caused falling marriage rates, family formation and birth rates, shortening life spans, and rising suicide rates and emigration

4 comments:

Gary Hart said...

I haven't had time to read this book yet but plan to in the near future. I am trying to read everything I can that MH writes.

Matt Franko said...

All gold standard analysis....

"The creditor’s objective is to obtain wealth by indebting populations and even governments,"

"as long as debt-strapped nations"

These phrases are NOT helpful...

So what is he advocating elimination of govt bond accounts? which we all know are for interest rate management by the govt? who regulates/controls rates then?

Why do the top end of MMT town people put up with this guy?

Kaivey said...

Paul Craig Roberts agrees with. He says that the government needn't issue bonds because it can create the money it needs at the treasury. Neil Wilson summed it up pretty well.

Ralph Musgrave said...

For those who don't want to read an entire book, there's an article by Hudson here:

http://evonomics.com/how-financial-parasites-and-debt-bondage/

Don't know whether it covers the same topics as the book, though.