In September, Real Progressives had a webinar with Michael Hudson. It gave our volunteers the opportunity to ask him about his book, The Destiny of Civilization: Finance Capitalism, Industrial Capitalism, or Socialism. This week’s podcast brings you the audio of that event.
Although his book looks at three economic philosophies, the Q & A focused on contrasting the dynamics of finance capitalism and industrial capitalism. Michael makes the case that in its early days industrial capitalism promoted investment in public infrastructure and basic services, allowing industry to invest in development.
Finance capitalism basically sought to break away and consume all of the public infrastructure. Most financial fortunes are made by privatizing the public domain – natural resources and public utilities yield fortunes in economic rent without private investment. This has led to the US, for example, turning over its economic planning to the financial sector.
“The objective of finance capitalism, contrary to what's taught in the textbooks, is to make economies high cost, to raise the cost every year.”
When asked about debt deflation, Michael explains that the increase in consumer debt leaves less and less money to be spent on consumption.
“Right now, you're having the debt-ridden American economy being squeezed. More and more money is paid, not only for debt, but also for other overhead, like healthcare and various monopoly services that are not available to buy goods and services. Debt deflation is when the growth of debt exceeds the rate of growth of the economy. And that's true of every economy.”
Since 1945, every recovery in the US and the other western economies has been accompanied by rising levels of debt, making each recovery slower.
Michael talks about the current global political economy, oil prices, debt jubilees, monetary hegemony, and the US political parties. When asked for solutions, his answers might be troubling to some. It’s worth hearing him out.
Michael Hudson is an American economist, Distinguished Research Professor of Economics at the University of Missouri–Kansas City and a research associate at the Levy Economics Institute at Bard College. He is a former Wall Street analyst, political consultant, commentator and journalist.
