Radical imagination and the intellectual edifice — Jim Vrettos interviews Michael Hudson

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Radical imagination and the intellectual edifice
Jim Vrettos interviews Michael Hudson | 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 Guest Professor at Peking University

Our Neo-Feudal System Is on the Verge of Collapse — Michael Hudson

Transcript of Michael Hudson in conversation with Ellen Brown and Walt McRee.

Neo-feudalism masquerading as "capitalism and democracy."

The Unz Review
Our Neo-Feudal System Is on the Verge of Collapse

Michael Hudson | 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 Guest Professor at Peking University

See also

Reminiscence of the Future
Any Silver Linings?
Andrei Martyanov

Brad DeLong — The Melting Away of North Atlantic Social Democracy

The social democratic economy model the major North Atlantic economies followed as recently as a single generation ago had five salient features.

•  First, that labor was important relative to ownership of wealth as a source of income. 
• Next, enterprise and savings were important relative to inheritance as a source of accumulated wealth. 
• Opportunity, while constrained by race and gender, was not that constrained by class—there was upward mobility. 
• Economic growth—both numbers of workers and the productivity of the average worker—was relatively rapid, with each generation clearly larger and more productive than its predecessor. 
• And finally, politics were relatively democratic, in that while the rich spoke with a louder voice, their concerns did not drown out the economic interests of others.

And Thomas Piketty’s central claim is that all five of these once-salient features of our social democracy are vanishing. We are, he believes, on a long-run historical trajectory to return us to a situation more like the nineteenth century, in which ownership of capital is more important relative to labor as a source of income; inheritance dominates enterprise and savings as a source of wealth; opportunity is tightly constrained by class of birth; economic growth is slow (both because of declining technological invention andbirth rates on the one hand, and because established wealth, which is hostile to the creative destruction that drives economic growth, possesses a bigger voice in shaping the political economy), and politics is dominated by plutocrats.

Capital in the Twenty-First Century has struck a chord—hence its 2.2 million copies. 

And it has excited a fierce debate, with more and more people finding it worth arguing about both for the reasons that it struck a chord and because of the fact that it has struck a chord.…

TPM
The Melting Away of North Atlantic Social Democracy
J. Bradford DeLong

Harold Stone — A Brief History of Austerity

In 1973 the price of oil quadrupled. This was disastrous for poorer countries, whose economies were built on exporting raw materials to wealthier countries. Expensive oil affected consumption in these wealthy countries, which meant reduced demand for poorer countries’ materials. With these exports falling and the cost of imports ballooning with the new price of oil, these countries (predominantly African but also South Asian, Latin American and Caribbean) inescapably ran up national deficits.

Hazardously in debt, these countries turned to the world’s financial institutions for help, and these institutions (the IMF and the World Bank) responded by offering loans accompanied by strict, harsh, stern conditions. These conditions were called Structural Adjustment Programmes and demanded the following:

• financial deregulation;
• the removal of subsidies (including basic food subsidies);
• the removal of protective import controls and other “trade barriers”;
• the introduction of fees-for-service in education and healthcare;
• currency devaluation;
• the privatisation of state enterprises such as hospitals, schools, public transport, electricity, power stations, water supply, sanitation, and other essential infrastructure.

Flying in the face of national sovereignty, these poverty-inducing demands were politely referred to as austerity measures. The message was clear then, and is clear now – shrink the state and maximise the market. This type of thinking (see also Thatcherism, Reaganomics, the Chicago Boys) has its intellectual origins in people like Milton Friedman, Friedrich Hayek and Ayn Rand, and is commonly referred to as neoliberalism.

Neoliberalism is perhaps the most extreme form of capitalism ever realised, only a few philosophical steps away from anarcho-capitalism (wherein courts and the legal system would ideally be privatised). Because it is an ideology, nobody is sure exactly how shrunken the ideal neoliberal state would be. Increasingly a relic of its 19-20th century stateliness, there is the prospect that followed to its logical conclusion, neoliberalism will leave us with some form of privatised feudalism.…

The London Economic
A Brief History of Austerity
Harold Stone

J. Hawk — Lords and Vassals: A quick update on America's Empire

I frequently see comments under my posts arguing that the EU is basically a feudal fiefdom of the United States. That's fine as far as it goes, however, once you introduce that idea, you should also examine its implications. Because the lord-vassal relationship is not and has never been one of unconditional obedience. It is rather a social contract with mutual duties and responsibilities. The vassal's loyalty is conditional on a variety of services, starting with protection and ending with opportunities for enrichment. If you, as the lord, fail to organize one or both, your vassals will leave you. Therefore a strategy that targets the lord's capacity for delivering rewards to the vassals happens to strike at that realm's Achilles heel.

America's relationship with its "allies" can in fact be characterized as a collection of feudal relationships, with the nature of the relationship being very much dependent on the power of the vassals. There are in fact several categories of vassals. Category I includes countries like UK and Israel which actually enjoy a pretty privileged relationship. Thus, for example, UK intel services are practically an extension of the NSA (on equal rights), the US doesn't read the British PM's emails, and it does not set up CIA "black sites" on its soil. Category II: Germany, France, Italy, etc. Hold intel services at arms length, read leaders' email, but no black sites. Category III: Poland, Ukraine, lots and lots of others. Treat like dirt, spy on leaders, set up black sites. There's also a Category IV (which, frankly, Ukraine is on the brink of joining), where the US basically takes sides in a civil war raging on that country's territory. But in any event, it's clear that the more powerful vassals can establish lines that the lord can't cross.… 

Fort Russ
Lords and Vassals: A quick update on America's Empire

J. Hawk

Don Quijones — Nato Summit Is Glaring Proof Of Demise Of Representative Government

A “ring of steel” some 12 miles long and costing over 110 million dollars was erected to protect the political representatives of some of the world’s freest and most democratic nations as they freely exchanged ideas and thoughts on how to preserve the West’s global domination at the barrel of a gun.…
The reason why Western political leaders feel the need for such heavy-duty protection from the people they’re charged with representing is quite simple: they no longer even pretend to represent them. Instead they have become little more than a protection racket for the world’s largest corporations and richest individuals. As the full scale of the betrayal slowly dawns on the people of the West, public rage is inevitably rising.….

Neoliberal capitalism and participatory democracy are antithetical. Capitalism prioritizes of the interests owners of the means of production, financial and actual over the interests and needs of society and the environment. This sets — money and machines ahead of people and the planet. Neoliberal capitalism is naturally oligarchic and anti-democratic, favoring representative democracy that can be captured by money and power to participatory democracy and genuine popular sovereignty.

Now, you can call such a system of governance whatever you want (I myself prefer the term “inverted totalitarianism), but one thing it is decidedly not is democracy.

Raging Bull-shit
Nato Summit Is Glaring Proof Of Demise Of Representative Government
Don Quijones

Volatility — Corporatism and Globalization: The Context of the TTIP and TPP

Perhaps the best way to prove the tyrannical intentions of the globalizers is to start with their own words. If we look at the manifestoes and comments issued by the various business consortiums, industry groups, and individual corporations, we find the unvarying demand that all government action be subordinated to the corporate profit prerogative, and that no other value be allowed to interfere with this.

This is why I call corporations and their intent totalitarian. My definition of this term: A powerful person or entity is relentless in pursuit of an imperative, at every moment wants to enforce the domination of that imperative to the fullest extent possible, and refuses to recognize the right of any other value to exist at all. A totalitarian may or may not be willing to “tolerate” the existence of something purely extraneous. But where there’s any conflict between the corporate domination imperative and any other value, it’s taken for granted there can be no compromise. The non-corporate value must submit, if necessary to the point of its own extinction. As the historical record makes clear, this is true of all human values – health, happiness, prosperity, culture, tradition, religion, morality, simple human decency and fairness. None of these can coexist with corporations. In the long run these must all go extinct, if corporatism continues to exist.

Volatility
Corporatism and Globalization: The Context of the TTIP and TPP
Russ

Here is a comment I left elsewhere on a related matter that fits here:

The underlying problem is not economic per se but actually political, resulting from capture on a vast scale by an elite determined to carve the pie in its favor. This involves institutional capture, intellectual capture, regulatory capture, and even state capture.

Unemployment, boom-bust cycles, imperfect competition, and the rest of the pimples on the face of neoclassical economic theory in its application, including contemporary mainstream so-called Keynesianism, result from not only flawed theory but also neoliberal policies that are rationalized by academia in the pay of the elite to dupe the rubes and deliver the goods to the top.

The essences of neoliberal "capitalism" is crony capitalism, and its political counterpart is the corporate state masquerading as the market state. Just as the excess of socialism is totalitarian communism; so too, the excess of capitalism is totalitarian fascism.

Don Quijones — Rent-A-Cop: The Rise of the Mercenary Police State

Alternate title: The Rise of Neo-Feudalism and Neo-Fascism.

Raging Bull-shit
Rent-A-Cop: The Rise of the Mercenary Police State
Don Quijones

Peter Radford — When is a contract a contract?

It used to be comforting to think that the saying “one rule for the rich, another for the poor” was just that: a saying. We could all pretend that America was a land of equal laws, even though we all knew deep down that rich folk can always get away with stuff we can’t.

Now, in these years of crisis, we are exposed to the ugly truth far too frequently. Big business and rich people have one set of laws. The rest of us another. In their laws a contract is inviolate. To break it you have to have extreme extenuating circumstances and/or a well paid lawyer. In our laws a contract is a suggestion. To break it you have to be a creditor who has friends amongst the elite and/or a well paid lawyer.

Real-World Economics Review Blog
When is a contract a contract?
Peter Radford

Joel Kotkin — California’s New Feudalism Benefits A Few At The Expense Of The Multitude

As late as the 80s, California was democratic in a fundamental sense, a place for outsiders and, increasingly, immigrants—roughly 60 percent of the population was considered middle class. Now, instead of a land of opportunity, California has become increasingly feudal. According to recent census estimates, the state suffers some of the highest levels of inequality in the country. By some estimates, the state’s level of inequality compares with that of such global models as the Dominican Republic, Gambia, and the Republic of the Congo.

At the same time, the Golden State now suffers the highest level of poverty in the country—23.5 percent compared to 16 percent nationally—worse than long-term hard luck cases like Mississippi. It is also now home to roughly one-third of the nation’s welfare recipients, almost three times its proportion of the nation’s population.

This is concerning in that California has tended to be prophetic of developing cultural change in the United States. The state is now becoming divided into have and have-not's on a scale not seen prior to WWII and the rise of the middle class....

Some of these trends can be found nationwide, but they have become pronounced and are metastasizing more quickly in the Golden State. As late as the 80s, the state was about as egalitarian as the rest of the country. Now, for the first time in decades, the middle class is a minority, according to the Public Policy Institute of California.

New Geography
California’s New Feudalism Benefits A Few At The Expense Of The Multitude
Joel Kotkin | professor of urban development, currently a fellow at Chapman University in Orange, CA and the Legatum Institute, a London-based think tank

What is particularly interesting is that this is happening in a predominantly liberal state the power structure of which is solidly under Democratic control. Those thinking that a national win by "liberal" Democrats will change things for the better should read this article and rethink their position.

America has a serious structural problem arising from many contributing factors. Without recognizing the problem and addressing it comprehensively, the future for most Americans looks bleak.

There is no man on a white horse on the horizon.

While it is true that Joel Kotkin is affiliated with the political right, his analysis in this post is not overly biased in my view.

Michael Hudson — The Bubble Economy as a 2 part play for Privatisation

In place of a new bubble, financial elites are demanding privatization sell-offs from debt-strapped governments. Pressure is being brought to bear on Detroit to sell off its most valuable paintings and statues from its art museums. The idea is to sell their artworks for tycoons to buy as trophies, with the money being used to pay bondholders.

The same dynamic is occurring in Europe. The European Union and European Central Bank are demanding that Greece sell off its prime tourist land, ports, transport systems and other assets in the public domain – perhaps even the Parthenon. So we are seeing a neo-rentier grab for basic infrastructure as part of the overall asset stripping.

This is a different kind of inflation than one finds from strictly financial bubbles. It is creating a new neo-feudal rentier class eager to buy roads to turn into toll roads, to buy parking-meter rights (as in Chicago’s notorious deal), to buy prisons, schools and other basic infrastructure. The aim is to build financial charges and tollbooth rents into the prices charged for access to these essential, hitherto public services. Prices are rising not because costs and wages are rising, but because of monopoly rents and other rent-extraction activities.

This post-bubble environment of debt-strapped austerity is empowering the financial sector to become an oligarchy much like landlords in the 19th century. It is making its gains not by lending money – as the economy is now “loaned up” – but by direct ownership and charging economic rent. So we are in the “economic collapse” stage of the financialized bubble economy. Coping with this legacy and financial power grab will be the great political fight for the remainder of the 21st century.

Michael Hudson
The Bubble Economy as a 2 part play for Privatisation

Pepe Escobar — Elite Enrichment and Police Repression: The Sparks That Lead to the Turkish Rebellion

The plan to destroy one of Istanbul's last green spaces is part of a globally tested neoliberal plan to clear the way for economic enrichment at the top.

AlterNet
Elite Enrichment and Police Repression: The Sparks That Lead to the Turkish Rebellion
Pepe Escobar | Asia Time

Dennis Marker — Teaching People to Hate Their Own Govt. Is at the Core of the Project to Destroy the Middle Class

The following is an excerpt from Dennis Marker's new book15 Steps to Corporate Feudalism , published this year. In the text below, Marker shares one of the steps he sees as central to the destruction of the middle class since Ronald Reagan took over.
Your goal for this step is to figure out how to teach the middle class to hate their own government using a strategy that takes into consideration the political climate of the United States of thirty years ago.

Teaching the middle class to hate their government was an essential part of the plan to implement Corporate Feudalism. A middle class cannot exist without a strong government. This is because only a government has the power to stand up to the giant corporations of today’s world, or the powerful individuals and private armies of earlier times. It is the government that enforces the laws to protect the middle class from those who would like to become their economic rulers. That is why prior to the Industrial Revolution and the creation of the middle class all economies were run according to some version of the feudal system. If you want to put an end to the middle class and replace it with a feudal republic, you would need to change people’s perception of their government.

AlterNet
Teaching People to Hate Their Own Govt. Is at the Core of the Project to Destroy the Middle Class
Dennis Marker