Michael Hudson has put up his and Dirk Bezemer's recent paper on rentierism at his place, if you haven't read it yet. It's short.
ABSTRACT
Current macroeconomics ignores the roles that rent, debt and the financial sector play in shaping our economy. We discuss the Classical view on rents and policy responses to the rentier sector in the 19th century. The finance, insurance & real estate sector is today’s incarnation of the rentier sector. This paper shows how financial flows can be conceptually and statistically studied separately from (but interacting with) the real sector. We discuss finance’s interaction with government and with the international economy.Michael Hudson
Incorporating the Rentier Sectors into a Financial Model
Michael Hudson, Visting Professor, UMKC, and Dirk Bezemer, Associate Professor, University of Groningen
Glad to see MMT allies bringing economic rent to attention. It is not only central to the problems we face, in many ways it is the problem as the fat underbelly of modern capitalism, filled with parasites, that is resulting in many diseased conditions, just as happens in human physiology.
Only way through the woods is through the tax code. Put Pigouvian taxes on activities you want to discourage and use the revenue to cut taxes on activities-- work, sales, investment (that is, business equipment and property improvements)-- you want to encourage.
ReplyDeleteWe already have sin taxes on alcohol and tobacco, we could also levy excise taxes on carbon, congestion, downtown parking, pollution, flash trading, corporate subsidies given by state/local govts, imports in excess of exports, excess compensation and, to Tom's point, excess profits (strip a monopoly of its monopoly pricing and its not nearly as harmful).
Holy cr@p.
ReplyDeleteThese guys are nailing it.
Currently re-reading first year econ textbook. Global flows of capital are like forces of nature.
The rentiers have planted themselves in the centre of mainstream economics, yet are completely hidden from view.
They are like absent gods, only partly visible through the trace of their presence - in the natural cyclical seasons of global capital flow.
I think, as I put it in my comment linking to Art Shipman's unit labor costs, wages could not have caused the inflation over the last 50 years. The inflation can be imputed to FIRE sector profits, and not to wage labor!!!!!
ReplyDeleteAnother lie by neo-liberal economists based on not knowing the econometric and statistical basis of what they were analyzing
Or maybe they don't want to know. If one integrates economics with finance, certain things become evident, so it is safer to just rule those moves out iaw the masters' wishes.
ReplyDeleteMainstream economists explanation of the GFC that originated in the US is hilarious. Since their models obviate this occurring they attribute it to a shock sparked by Democratic politicians mandating that banks extend loans to a bunch of deadbeats who reneged on payments just when a significant portion of the workforce decided they preferred leisure due to overly generous benefits provided by government under Democratic control, which they claim they warned against in recommending less government intervention in the economy for greater efficiency.