The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism Paperback – 2 May 2022
by Michael Hudson (Author)
4.8 4.8 out of 5 stars 114 ratings
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This book is based on the lecture series on finance capitalism Michael Hudson presented for the Global University for Sustainability. The book explains why the U.S. and other Western economies have lost their former momentum: A narrow rentier class has gained control and become the new central planner, using its power to drain income from increasingly indebted and high-cost labor and industry. The American disease of de-industrialization has resulted from the costs of industrial production being inflated by the economic rents extracted by this class under the system of financialized monopoly capitalism that now prevails throughout the West.
The book explains why the U.S.-China conflict cannot simply be regarded as market competition between two industrial rivals. It is a broader conflict between different political economic systems - not only between capitalism and socialism as such, but between the logic of an industrial economy and that of a financialized rentier economy increasingly dependent on foreign subsidy and exploitation as its own domestic economy shrivels. Professor Hudson endeavors to revive classical political economy in order to reverse the neoclassical counter-revolution.
354 pages
2 May 2022
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Super Imperialism. The Economic Strategy of American Empire. Third Edition
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J IS FOR JUNK ECONOMICS: A GUIDE TO REALITY IN AN AGE OF DECEPTION
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Total Price:$116.60
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Product details
Publisher : ISLET (2 May 2022)
Language : English
Paperback : 354 pages
4.8 4.8 out of 5 stars 114 ratings
======
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MAC
5.0 out of 5 stars Hudson's Best Book Yet
Reviewed in the United Kingdom on 19 November 2022
Verified Purchase
In my view, this is Michael Hudson's best book.
Partly summing up nicely much of his other work from trade to finance, part potted history of his country's (the USA) economic transgressions, part warning to us about the future and manifesto for change, I feel that it also his best edited and easy to read book too. It is a brilliant and comprehensive summary of his critical career and the issues that have been addling us this last 40 or so years.
I think that Hudson is one of contemporary capitalism's best critics ever. He is able to utilise Marxist analysis without becoming self-conscious about it and make it seem credible and relevant today with authority. Why? Because he has actually worked in those private sectors that are creating the problems that societies seemingly everywhere are facing. Gamekeeper turned poacher. Sure - why not?
Even his forays into the middle-class relationship with labour are worth noting. Instead of coming across as superficial identity politics, his questions and analysis here are well thought through and plausible, at least to me. If people are that focussed on becoming rich, that they see work as just transitionary factor, then is it any wonder that labour/work is still undervalued every day.
Critics will not like him for giving prominent Russians like Putin and Lavrov the opportunity to remind the U.S. and the West what they look like through their eyes in his book. Hudson seems unapologetic about this (his book seems to have gone to print as the events in Ukraine were unfolding) and one worries about the fact that he does not mention Russian government criminality at all. But then again, why should he? Hudson is quite sure - and goes to great lengths to remind us - who the Russians have been emulating. Why - the U.S. and the West of course! Except that the Russians - being far more straight forward - don't dress up what they do as 'freedom' and 'democracy'. They've all lived through enough lies during the Soviet era.
The fact though that behind the scenes, the Wests financial system has enabled Russia to be what it is today could have been made more explicit by Hudson or acknowledged even slightly though this is implied by his authoritative account of how criminality masquerading as legitimate business is at the heart of Western markets.
China is also included in Hudson's analysis and here one can find more empathy perhaps as the country is used as a lens by which to compare and contrast with the U.S. and the West. China is not portrayed as a threat but as a possible answer and way forward. All China does is threaten Western neo-liberal hegemony. Whilst that hegemony has been creating tent cities for its people in the U.S and Europe, China has been lifting more people out of poverty. I rest my case.
A criticism I've read about the book is that Hudson repeats himself. I think Hudson uses tautology to just keep bringing us back to the main points which culminate into one big point, the one big issue being that in plain sight of everyone, the top 1% of the global financial elite are absolutely determined to make sure that they get all Government produced money for themselves and prevent national and social investments that benefit everyone, from being made.
He will not thank me for saying this, but this could actually be the only Michael Hudson book you might ever need!
An excellent read and highly recommended - a fantastic piece of work that is actually a fantastic intellectual endowment to future generations to not to make the same mistakes that we have if they can.
Bravo Michael, bravo!
Read less
7 people found this helpfulReport
Jerin T Shaji
5.0 out of 5 stars Destiny of civilizationReviewed in Canada on 30 September 2023
Verified Purchase
A very important book for someone who needs to understand role of rentier class in a capitalist economy.
Report
MacKJ
5.0 out of 5 stars Destinies and Cold WarsReviewed in the United Kingdom on 7 December 2022
Verified Purchase
Michael Hudson is unusual, an economist who actually understands economics, and one of the few who predicted the 2008 global financial crash. The neoliberal revolution in the West has given primacy to finance and rent seeking (turning economic surplus into debt and appropriating it as interest) with the complicity of politicians, notably the 'left', of all shades. This turns the classical economics, of Smith, Marx, Ricardo and John Stuart Mill, on its head. The classical free market was one free of predators, shakedown artists and rent seekers. Banking and credit, utilities and infrastructure should be run for public benefit, and interest charges kept low, all to reduce the costs of doing business. In this way, industrial capitalism, based on the production of goods and services, can evolve towards socialism. However, western democracies have evolved into financial oligarchies. This danger was recognised long ago by Aristotle. The US financial elite have launched new cold wars against countries which don't accept neoliberalism, to impose financial racketeering supported by violence, sanctions, 'austerity' and privatisation of public assets, and financed by counterfeiting - issuing dollar IOUs. Hudson draws on his extensive knowledge of antiquity and ancient wisdoms such as periodic debt cancellation. Controversial it may be - China's socialist model may have performed astonishingly but it's not a democracy by any stretch, but it is an indispensable guide to understanding the global economy and why the dominance of the US dollar may be ending.
4 people found this helpfulReport
もっちゃん
5.0 out of 5 stars 新自由主義経済＆アメリカの病理を剔抉Reviewed in Japan on 17 June 2023
Verified Purchase
まだ最後まで読み切っていないが、新自由主義に毒されたアメリカ経済が不治の病に冒されていることは、読書半ばで理解できた。父親がトロツキーと懇意だったという家庭環境の中で育った著者の国際経済を見る目は鋭い。日本ではボロクソに扱われている中国社会主義経済に高い評価を与える著者に我が意を得たり。
One person found this helpfulReport
Translate review to English
Dmitry Jr
5.0 out of 5 stars The book you need to read in order to better understand economicsReviewed in the United States on 11 August 2022
Verified Purchase
In this fantastic book, Michael Hudson explains that the New Cold War is not about competing economic forces vying for markets but a war of economic ideologies between socialism and finance capitalism. Using his experience in the financial world and economic data, Hudson demonstrates what finance capitalism really is: the extraction of rent from lands deemed valuable. Through this action, people (the 1%) who simply own the land get rich while the people who work on the land (the 99%) get poorer. Socialism (the economic system in China) and old fashioned capitalism (Hudson calls it industrial capitalism) are the exact opposite system, in that the people who get rich are those who work on the land and curb the power of the landlords so they do not get influential power, although the socialists take it a step further and provide basic social services towards the workers, who in turn provide greater innovation and productivity towards the economy instead of being “enserfed” to the land (what finance capitalism wants).
This book looks to the past to explain the problems of today, and Hudson does a really good job at explaining that todays’ conflict is nothing new: it has always been a war between landlords and productive people (or a government for the people and pro-debt cancellation). I just wish I read a book like this in my classes. For those who plan to teach, definitely check this book out, tell it to your classroom, and spread the word!
17 people found this helpfulReport
Verified Purchase
In my view, this is Michael Hudson's best book.
Partly summing up nicely much of his other work from trade to finance, part potted history of his country's (the USA) economic transgressions, part warning to us about the future and manifesto for change, I feel that it also his best edited and easy to read book too. It is a brilliant and comprehensive summary of his critical career and the issues that have been addling us this last 40 or so years.
I think that Hudson is one of contemporary capitalism's best critics ever. He is able to utilise Marxist analysis without becoming self-conscious about it and make it seem credible and relevant today with authority. Why? Because he has actually worked in those private sectors that are creating the problems that societies seemingly everywhere are facing. Gamekeeper turned poacher. Sure - why not?
Even his forays into the middle-class relationship with labour are worth noting. Instead of coming across as superficial identity politics, his questions and analysis here are well thought through and plausible, at least to me. If people are that focussed on becoming rich, that they see work as just transitionary factor, then is it any wonder that labour/work is still undervalued every day.
Critics will not like him for giving prominent Russians like Putin and Lavrov the opportunity to remind the U.S. and the West what they look like through their eyes in his book. Hudson seems unapologetic about this (his book seems to have gone to print as the events in Ukraine were unfolding) and one worries about the fact that he does not mention Russian government criminality at all. But then again, why should he? Hudson is quite sure - and goes to great lengths to remind us - who the Russians have been emulating. Why - the U.S. and the West of course! Except that the Russians - being far more straight forward - don't dress up what they do as 'freedom' and 'democracy'. They've all lived through enough lies during the Soviet era.
The fact though that behind the scenes, the Wests financial system has enabled Russia to be what it is today could have been made more explicit by Hudson or acknowledged even slightly though this is implied by his authoritative account of how criminality masquerading as legitimate business is at the heart of Western markets.
China is also included in Hudson's analysis and here one can find more empathy perhaps as the country is used as a lens by which to compare and contrast with the U.S. and the West. China is not portrayed as a threat but as a possible answer and way forward. All China does is threaten Western neo-liberal hegemony. Whilst that hegemony has been creating tent cities for its people in the U.S and Europe, China has been lifting more people out of poverty. I rest my case.
A criticism I've read about the book is that Hudson repeats himself. I think Hudson uses tautology to just keep bringing us back to the main points which culminate into one big point, the one big issue being that in plain sight of everyone, the top 1% of the global financial elite are absolutely determined to make sure that they get all Government produced money for themselves and prevent national and social investments that benefit everyone, from being made.
He will not thank me for saying this, but this could actually be the only Michael Hudson book you might ever need!
An excellent read and highly recommended - a fantastic piece of work that is actually a fantastic intellectual endowment to future generations to not to make the same mistakes that we have if they can.
Bravo Michael, bravo!
Read less
7 people found this helpfulReport
Jerin T Shaji
5.0 out of 5 stars Destiny of civilizationReviewed in Canada on 30 September 2023
Verified Purchase
A very important book for someone who needs to understand role of rentier class in a capitalist economy.
Report
MacKJ
5.0 out of 5 stars Destinies and Cold WarsReviewed in the United Kingdom on 7 December 2022
Verified Purchase
Michael Hudson is unusual, an economist who actually understands economics, and one of the few who predicted the 2008 global financial crash. The neoliberal revolution in the West has given primacy to finance and rent seeking (turning economic surplus into debt and appropriating it as interest) with the complicity of politicians, notably the 'left', of all shades. This turns the classical economics, of Smith, Marx, Ricardo and John Stuart Mill, on its head. The classical free market was one free of predators, shakedown artists and rent seekers. Banking and credit, utilities and infrastructure should be run for public benefit, and interest charges kept low, all to reduce the costs of doing business. In this way, industrial capitalism, based on the production of goods and services, can evolve towards socialism. However, western democracies have evolved into financial oligarchies. This danger was recognised long ago by Aristotle. The US financial elite have launched new cold wars against countries which don't accept neoliberalism, to impose financial racketeering supported by violence, sanctions, 'austerity' and privatisation of public assets, and financed by counterfeiting - issuing dollar IOUs. Hudson draws on his extensive knowledge of antiquity and ancient wisdoms such as periodic debt cancellation. Controversial it may be - China's socialist model may have performed astonishingly but it's not a democracy by any stretch, but it is an indispensable guide to understanding the global economy and why the dominance of the US dollar may be ending.
4 people found this helpfulReport
もっちゃん
5.0 out of 5 stars 新自由主義経済＆アメリカの病理を剔抉Reviewed in Japan on 17 June 2023
Verified Purchase
まだ最後まで読み切っていないが、新自由主義に毒されたアメリカ経済が不治の病に冒されていることは、読書半ばで理解できた。父親がトロツキーと懇意だったという家庭環境の中で育った著者の国際経済を見る目は鋭い。日本ではボロクソに扱われている中国社会主義経済に高い評価を与える著者に我が意を得たり。
One person found this helpfulReport
Translate review to English
Dmitry Jr
5.0 out of 5 stars The book you need to read in order to better understand economicsReviewed in the United States on 11 August 2022
Verified Purchase
In this fantastic book, Michael Hudson explains that the New Cold War is not about competing economic forces vying for markets but a war of economic ideologies between socialism and finance capitalism. Using his experience in the financial world and economic data, Hudson demonstrates what finance capitalism really is: the extraction of rent from lands deemed valuable. Through this action, people (the 1%) who simply own the land get rich while the people who work on the land (the 99%) get poorer. Socialism (the economic system in China) and old fashioned capitalism (Hudson calls it industrial capitalism) are the exact opposite system, in that the people who get rich are those who work on the land and curb the power of the landlords so they do not get influential power, although the socialists take it a step further and provide basic social services towards the workers, who in turn provide greater innovation and productivity towards the economy instead of being “enserfed” to the land (what finance capitalism wants).
This book looks to the past to explain the problems of today, and Hudson does a really good job at explaining that todays’ conflict is nothing new: it has always been a war between landlords and productive people (or a government for the people and pro-debt cancellation). I just wish I read a book like this in my classes. For those who plan to teach, definitely check this book out, tell it to your classroom, and spread the word!
17 people found this helpfulReport
===
Dinky
5.0 out of 5 stars Everyone should read this book
Reviewed in Canada on 14 June 2023
Verified Purchase
Hudson explains in simple terms what the actual problem with the economy is. No tin foil hat stuff either, sound reasoning and examples.
Report
Muse
3.0 out of 5 stars Poor formatting in eBook
Reviewed in the United Kingdom on 23 August 2022
Verified Purchase
A book is not only as good as its content matter (being written about), it is also the grammar and layout of paragraphs and sentences (& font size, etc.)
The eBook is a mess when coming across lengthy footnotes being intermingling with the main content of the eBook. Some of the print is smaller than the rest in the intermingling. One has to swipe back-&-forth to find continuity in the footnotes and the main content. Kind of confusing at times, and one gets the sense of what it is like being a proof-reader for the author.
At the beginning of the book the author admits the eBook version having been compiled in a rush, yet it should have been subsequently corrected and updated to Amazon's Kindle readers as they do with the software for Kindles.
Come on Amazon, get your platform authors to improve their books' text, sentence format, and grammar content, and have the books updated to the customers' Kindle books.
_________________
One person found this helpful
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H. Keeton
5.0 out of 5 stars WHAT'S NOT WORKING FOR YOU...AND FOR ALL WORKING-PEOPLE....."FINANCE-CAPITALISM"....
Reviewed in the United States on 8 April 2023
Verified Purchase
THIS IS A BOOK FOR WORKING PEOPLE. THOSE IN THE FINANCE-WORLD, WHO FEED-OFF OF US WORKING-FOLKS, WILL NOT LIKE THIS BOOK. IT REVEALS EXACTLY WHAT'S WRONG WITH WESTERN-STYLE ECONOMICS...
4 people found this helpful
Report
Michael Murphey
5.0 out of 5 stars Touchstone
Reviewed in Canada on 17 April 2023
Verified Purchase
Although a little light on delving into class conflict, this should be a first year economics text...the shift in the West from productivity investment to rent extraction hastens our demise.
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Amazon Customer
5.0 out of 5 stars A most readable book revealing the unbridled greed of ruthless 'western' imperialism.
Reviewed in the United States on 18 September 2022
Verified Purchase
This book should be prescribed reading in all secondary & tertiary education courses. It opens one's eyes to the harsh reality of our corrupted 'leaders' conscious inhumanity to fellow human beings. Unbridles greed is destroying life as we know it on the Earth.
Hudson's accrued experience of real world macroeconomic reality is set out in a such a no nonsense way in this book that every reader can understand why the world is in such a mess.
Greed and evil conquers all -- until it collapses enslaved civilian society into a hollowed out hell.
10 people found this helpful
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===
Greg LaMotta
4.0 out of 5 stars Explains how finance capitalism is weakening the United States
Reviewed in the United States on 28 July 2022
Verified Purchase
Explains how finance capitalism has replaced industrial capitalism as the most important aspect of the U.S. economy. This has shifted the main focus of the economy towards speculation rather than production. In contrast, China is getting stronger because it is pursuing a policy of socialist industrialization. The one weakness of the book is that it is a compilation of lectures which makes it somewhat repetitive.
6 people found this helpful
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David E. Stewart
5.0 out of 5 stars Essential reading
Reviewed in the United States on 3 June 2022
Verified Purchase
This marvelous book is essential reading for anyone who wishes to understand the past, the present, and the possibilities for the future. While reading, an understanding develops which cuts through the intentional obfuscation of those who wish to exploit and control. This book pulls no punches, and each observation, conclusion, and recommendation rests on the explaining and clarifying of events, resulting in the Reader emerging with increased understanding and the ability to express this knowledge. Highly recommended.
13 people found this helpful
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Axel Jung
5.0 out of 5 stars MUST READ - a real eye-opener.
Reviewed in Germany on 11 July 2022
Verified Purchase
Good summary of Michael Hudson's thinking. This book will change the way how you see and understand the world.
Absolutely recommended reading.
Report
====
The Destiny of Civilization: Finance Capitalism, Industrial Capitalism or Socialism
Michael Hudson
4.58
48 ratings12 reviews
This book is based on the lecture series on finance capitalism Michael Hudson presented for the Global University for Sustainability. The book explains why the U.S. and other Western economies have lost their former momentum: A narrow rentier class has gained control and become the new central planner, using its power to drain income from increasingly indebted and high-cost labor and industry. The American disease of de-industrialization has resulted from the costs of industrial production being inflated by the economic rents extracted by this class under the system of financialized monopoly capitalism that now prevails throughout the West. The book explains why the U.S.-China conflict cannot simply be regarded as market competition between two industrial rivals. It is a broader conflict between different political economic systems - not only between capitalism and socialism as such, but between the logic of an industrial economy and that of a financialized rentier economy increasingly dependent on foreign subsidy and exploitation as its own domestic economy shrivels. Professor Hudson endeavors to revive classical political economy in order to reverse the neoclassical counter-revolution.
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Finance
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354 pages, Hardcover
Published May 2, 2022
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Michael Hudson
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Michael Hudson is an American economist, Professor of Economics at the University of Missouri–Kansas City and a researcher at the Levy Economics Institute at Bard College, former Wall Street analyst, political consultant, commentator and journalist. He is a contributor to The Hudson Report, a weekly economic and financial news podcast produced by Left Out.
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Sean O'Donoghue
24 reviews
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June 25, 2022
I had never heard of Prof Hudson until a couple of months ago, when his Super Imperialism The Origin and Fundamentals of US World Dominance came my way. It blew my mind and I am currently reading The Destiny of civilisation. Its the most important book on political economy that I've ever read...(I'm not an expert) ..in that it throws light on how the .001% are leeching the surplus created by productivity...the manufacture of widgets and creation of services....by rentierism / the financialisation of the economy . For example In March 2021 the average UK house price was 65 times higher than the average house price in 1970, whereas average wages are only 35.8 times higher. This has come about because of asset inflation...which Piketty brought to public notice a few years back...assets, such as land, housing, shares, etc increase far faster than wages, so those who have wealth have greater wealth bestowed on them.
Getting my head around the issues raised by Hudson needs a degree of mental gymnastics. He points out that economic history has mostly been removed from the academic curriculum, so that we are mostly blind as to the road we've travelled to today's economic consensus. Prof Hudson equates today's rentiers, the .001% (he refers to the 1%) with the landed gentry and church of pre-revolutionary France, where all surplus created by the peasantry was sequestered as taxation for so that the upper class and clerics could indulge in what was then the equivelent of today's private jets and yachts. That was the status quo prior to 1789 but the Physiocracy undermined the supporting scaffolding, before the whole shebang collapsed with the revolution. Hudson is a modern day physiocrat and we need to get his work more widely read. If anyone would be interested in setting up an zoom discussion group on the issues he raises, how we are all being screwed by the .001 %, please get in touch with me seanonwye@gmail.com
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Phil
1,799 reviews
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March 8, 2023
This book began as a series of lectures Hudson delivered in China in 2020 on the political economy of globalization and the logic guiding China, Russia and other countries to break free of U.S. Dollar Diplomacy and it shows. The Destiny of Civilization reads like a kludged together set of overlapping lectures, needlessly repetitive at times and in dire need of a good editor. That stated, the ideas and economic analyses presented here are first rate, eye-opening and well worth the effort of slogging your way through.
Hudson views the economic world through the lens of classical political economy, otherwise known as classical economics, as pioneered by Adam Smith, Ricardo and Marx. The classical economic perspective views the economy as comprised of classes; historically, landlords, workers and industrial capitalists. Hudson's main 'update' to this framework is the addition of finance capital(ists). Landlords were perhaps most famously denounced by Ricardo as 'rent seekers', or 'rentiers', who add nothing to the production process yet serve to siphon off 'rents' simply due to their ownership of land. In fact, Ricardo invented the idea of Comparative Advantage as a theoretical construct to get England to rescind its tariffs on agricultural goods, thus lowering food prices and with it, labor costs. It seems the rising cost of farming, and hence food, was seen as being due to landlords raising their rents on land; importing food, however, would offset this. Why this digression? The point the classical economists made is that if you want economic expansion and more 'stuff', one bottleneck were the rentiers like landlords who exist as parasites, extracting rents, making business more expensive, hurting both industrial capitalists and laborers.
What Hudson does here is expand this framework to take into account financial capital, who also serve as rentiers on the productive life of society. This can become dangerous when finance capital assumes the 'commanding heights' of an economy, reducing the quality of life for both productive business and labor, ensnaring them in ever expanding debt rather than growing economies. Hudson gives many history lessons here, going back thousands of years to explore how societies have dealt with the ever-present tendency of finance capital to insert itself like a blood-thirsty tick on the productive economic life of societies. His main point here is if finance capital is not somehow checked, the pattern is clear-- ever expanding debt for the masses and less and less production as more and more of societies wealth is siphoned off to these financial rentiers. In modern economic lingo, this is known as 'financialization'.
The next step in Hudson's arguments concern how finance capital came to dominate U.S. domestic and foreign policy, at least since the 1980s, leading to the deindustrialization of the U.S. and yes, a workforce deeper and deeper in debt as living standards continue to fall; this all the while when finance capital gets a bigger and bigger slice of the pie every year. The U.S., along with its 'proxy' IFIs (e.g., international financial institutions, such as the IMF and World Bank among others) have utilized the 'Washington Consensus' as policy gospel since the 1980s, forcing beleaguered economies around the world to open their capital markets to financial rentiers and tying them into the U.S. Dollar Hegemony. For years, Russia (USSR) resisted this, but after 'shock therapy' in the 1990s, it too opened up to financialization. Today, China leads the way in a path foreseen by classical economists as the best path toward economic growth. By making banking a public utility, the Chinese government has effectively checked the financial rentiers, and by making substantial investments into infrastructure, expanding public services and such, increased the productivity of its labor force while also reducing the real costs of productive enterprise.
Hudson paints a stark picture of the world, with only three real options for policy. 1. Industrial Capitalism, where finance is checked (state-controlled or a heavily regulated banking sector) and business benefit from a publicly trained, productive workforce, 'socialized' healthcare along with other public goods (free transportation for example). In this economic environment, both industrial capital and labor thrive, raising the living standards of the bulk of the population (can you say the U.S. New Deal?). 2. Financial capitalism, our present system, where rentiers direct government policy to enrich themselves even further. Privatize public goods, making them bottlenecks/monopolies as a vehicle for rent extraction. Expand easy credit rather than raise wages, driving the workforce deeper into debt. Business focuses not on long-term economic expansion, but short-term 'profits', usually involving finance. 3. Socialism. Here, China is pointed out, although Hudson claims fairly persuasively that most industrial capitalist nations were moving in that direction in the early/mid 20th century, with expanding welfare states, until the 'neoliberal' turn in the 1980s.
Really, Hudson packs in a wealth of ideas here! He sometimes paints with too broad a brush and often simplifies complex historical events as basically a contest among rentiers and productive members of society (even the fall of the Roman empire!). Yet, he will get you to look at the global world and public policy through a new lens, and for that, this is well worth reading. 4 stars!!
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Randall Wallace
552 reviews
429 followers
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December 20, 2022
Machiavelli’s “The Prince” described three ways for victors to act upon the vanquished: One, ruin them. Two, Occupy them. Three, make an oligarchy loyal to you. Machiavelli preferred the Rome vs. Carthage ‘ruin them’ plan - option one. That’s just what the US did in Iraq and Libya. But these days it’s simpler just go for the money – financial warfare is less messy and bloody. Deny them credit, raw materials or tech instead; it’s easier, and it’s in the US public outrage blind spot.
The US and Israel are big fans of the second option – occupy those who have what you want – to better take land or resources – 750 US military bases assure that runs smoothly. Take over their infrastructure, land, resources, banking and public utilities – and siphon the money (economic rent, profits, and interest) out. Remember when Trump said, “that he wanted to seize Iraq’s and Syria’s oil as reparations for the cost of destroying their society”? Charming man. Don’t forget equal-opportunity Hillary wanted the US to “make Libya turn over its vast oil reserves to fund its Cold War spending.” What a delightful mélange of clearly bi-partisan Mafia-thug extortion.
But let’s face it, the US loves all three options, as the US has a long-ass sordid history of ruling sovereign nations through their corrupt local oligarchs – whether doing the Batista Rumba or basic Latin America Two-Step. Brzezinski called these sell-out elites “vassals” (rhymes with assholes), greasing the way for “privatizing and financializing the subject country’s economy.” According to Michael, Britain and Western Europe were reduced by the US to vassalage in the 1940’s. The next logical big step was to isolate Russia and China and keep them from getting together, which is basically today’s Cold War 2.0.
What Neoliberal ideology does is invert the classical idea of a “free market” from one free from economic rent to one free for the rentier classes to extract rent and achieve dominance. Their business plan is to reduce “most of the planet to debt and trade dependency.” This is “an inherently anti-democratic power grab by the One Percent.” And for Christians, this is “a vast cultural change from the early Christian banning of usury.” What you think is “a libertarian ideology of minimal government turns out to be a capture of government by increasingly centralized financial interests.” “Today’s New Cold War is a fight to impose rentier-based finance capitalism on the entire world.” Foreign countries finance US military spending because they are forced to “keep their central-bank savings in the form of loans to the US Treasury.” A neat trick.
The reason the United States is de-industrializing (I’ve long wondered why, before this book) is because the financial sector lives in the short-term. To do this, rentiers need to bring the government under the control of the neoliberal agenda, “instead of promoting wealth creation by employing labor to produce goods and services.” Note that the “countries with the twelve highest per capita GDP are not industrial economies but tax havens.” When COVID hit the Fed didn’t revive employment or help wage earners who lost their jobs, instead it pumped $3 trillion into the bond market to “save the wealthiest classes from losing value for their stocks and bonds.” Now the top 1% of Americans possess more wealth than the entire middle class. And US centered finance capitalism is fighting to stop other countries resistance “to finance capital’s takeover of their economies.” Think of this fight as Cold War 2.0, led by the US, IMF and World Bank. To do it, it is “euphemized as democracy and free markets – and even as peace instead of warfare. But it is the kind of Roman-style peace that turns its victimized economies into a desert.”
The aims of Industrial Capitalism (IC) are wildly different from the aims of Finance Capitalism (FC): IC makes profits by producing products. FC extracts economic rent and interest. IC minimizes the cost of living and prices. FC adds land and monopoly rent to prices. IC favors industry and labor. FC gives its favoritism to FIRE (Finance, Insurance and Real Estate sectors). IC avoids military spending and wars that require running into foreign debt while FC uses international organizations like NATO or the IMF to force neoliberal policy. IC uses industrial engineering to raise productivity by research and development and new capital investment, while FC uses financial engineering to raise asset prices through stock buybacks and higher dividend payout. IC is in it for the long term while FC focuses on short-term “hit and run objectives, mainly by buying and selling assets.” IC wants banking as a public utility, while FC wants to privatize banking and credit and take control of regulation. As you see, FC is antithetical to real democracy – it screws labor and the 99%. This is why Biden and other neoliberals in power won’t give you free health care. Bernie and most Americans of course want public healthcare “but President Biden supports the Obamacare program sponsored by the pharmaceuticals and healthcare monopolies.” Thanks to Citizen’s United, the Donor Class led by Wall Street now controls electoral power.
Move past today’s bi-partisan permanent war to see that “today’s mode of subjugation is more financial than military.” “The Soviet Union did not understand this in 1991 when Russia and other countries let US advisors impose neoliberal ‘shock therapy’.” Think of the US as “backing dictators and client oligarchies against democratic land reformers and pro-labor leaders”. China and Russia aren’t foisting this kind of neoliberal financial warfare on others like the US is, and so they must be demonized; liberals believe the neoliberal anti-Russia & China dictatorship propaganda, but progressives see through it because they fact check before first throwing darts at today’s mainstream media approved villains.
History buffs know this is rather like the final century of the Roman Republic when its oligarchy accumulated “fortunes not by increasing productivity and prosperity at home, but by stripping other regions.” Those to lazy to read history are condemned to see it repeated. In the words of Roman opponent Caligalus in 87 AD (only requoted by historian Tacitus), “They make a desolation and dare call it peace.” Did you know that (proto-finance capital fan) Brutus, who stabbed Julius Caesar, personally charged 42% interest? Rome hated the idea of kings because they had the power to annul creditor claims; that’s a big reason Caesar was killed - what if he cancelled debt and redistributed the land?
The IMF, World Bank and UN: Our lovely country “refused to join the League of Nations after WWI and agreed to join the UN only on the condition that it have veto power.” Playground Alert: Some child doesn’t play fair with others! Our little Bully pulled the same trick with the World Bank and IMF, getting veto power with them, and then sullenly refusing to join the World Court w/o total immunity for all future US crimes. Since 1945, the US has blocked any World Bank or IMF policy that is deemed counter to US interests. IMF austerity programs mostly devalue “labor and its living standards.” With its UN veto power, the US faced zero fallout from blatant Agent orange poisoning in Vietnam, carcinogenic poisoning in Columbia, and of course total immunity from breaking all international laws. And US veto power clearly “makes the IMF, World Bank, and US AID unreformable.” “The World Bank’s policies include opposing land reform, and it organizes loans mainly to create infrastructure linked largely to exports, not to create domestic self-sufficiency. The aim is to lock in foreign dependency on US farm exports and other essentials.” The US demanded Britain help in creating the World Bank as a vehicle “to open up trade and financial markets to US exporters, and enable US investors to buy control of foreign natural resources and industry.”
“The IMF finances US allies and withholds credit from recalcitrant countries.” “The IMF’s notorious ‘conditionalities’ for its loans oppose labor and pro-consumer policies as threatening to impair profits of US and other foreign investors.” “The reality is that austerity shrinks the economy and drives it even deeper into foreign dependency.” The motto of the IMF is “To pay your debts, you have to engage in a vicious class war against labor.” Countries basically pay the same for raw materials the one variable left is labor costs, so to maximize profit, you have to prevent unionization and any other kind of fairness. Austerity “deters domestic capital investment” and leaves the debtor country without the ability to break even. The joys of intentionally keeping other countries on “a never-ending treadmill of poverty”, Jesus would be so proud. “Some 750 US military bases protect this financial underdevelopment policy. NATO and SEATO were created as military arms against nations seeking to manage their own economies independent of US financial and military control.”
Michael Hudson bluntly writes, “The main purveyor of military confrontation, violence and global rule-breaking for decades has been the United States.” Michael Ledeen explained, “Every ten years or so, the United States needs to pick up some small crappy little country and throw it against the wall, just to show the world we mean business.” Winston Churchill and Clement Attlee urged Truman to remove Mossadegh (Iran) but Truman saw him as anti-communist. When Eisenhower’s team came in, they said yes, because they “viewed nationalists as virtual communists inasmuch as they shared a common advocacy of domestic control of natural resources. Control of oil and mineral resources was and remains a basic element of US foreign policy.
If you are willing to rim the ass of the US, like Saudi Arabia and Kuwait do, you can keep your own government but if you care more about your own people, like Venezuela, Iraq, or Libya, expect to pay for any degree of nationalism. To shaft fellow taxpayers, Apple “pretends to make its worldwide profits in low-tax Ireland.” The US coup in Guatemala in 1954 happened because its President was giving peasants land – the horror – and therefore seen as anti-American. Guatemala merely trying to be self-sufficient in food was seen as a crime, Latin American countries were supposed to remain plantations for US companies (like the odious United Fruit Company). “Food dependency facilitates US economic control of a country and can be used as a weapon.” With non-aligned leaders, the US liked “using ethnic divisions to create ethnic or race wars and what CIA jargon calls ‘color revolutions’.”
In Indonesia, Sukarno broke free from the Dutch Empire, and was using China (instead of the US) to help his commercial and finance sectors and even convened the Bandung Conference in 1955. The US thus had to take him out and murder a half a million citizens of Indonesia in 1965-6. What the US calls the free market wasn’t free but is Chicago’s warped view of “free’. In Chile, “the US State Department organized Operation Condor to assassinate more than 60,000 labor leaders, progressive academics, land reformers, and Liberation Theology Catholics, installing a new legacy of Latin American dictatorships.” In 2009 “Hillary Clinton sponsored the overthrow of Honduras’s president Manuel Zelaya” for the crime of land reform. By now, you can guess the “US policy seeks to block land reform and oppose agricultural self-sufficiency” and remove all obstacles to privatization. The US, as you can see, hates nationalism as much as they did Communism (as Noam also points out in his books too). To translate our scumbag US leaders speeches into English, ‘democracy’ only means ‘pro-American’, and ‘autocracy’ means any leader not giving the US whatever it wants.
The Cold War was won not militarily but through creating “financial and trade dependency.” You resist us, you are an adversary. Clinton’s Admin turned Nuremberg Principles on their head by saying the US “no longer felt itself bound by the UN Charter prohibiting the threat or use of military force.” US as rogue state. If a country doesn’t allow the US to neo-liberalize it, or color revolution it, and has nuclear weapons, “the most the US can do is seek to isolate it.” The Washington Consensus is “limited to political leaders who accept the logic of neo-liberal finance capitalism”. Classical economists fought to cut rentier costs but today’s neoliberals through libertarian neoliberalism fight to maximize them. High finance has allied with “predatory rent seekers.”
In the US, today’s rentier oligarchy is centered in the FIRE sector; the FIRE sector (Finance, Insurance and Real Estate) costs dominate GDP growth. We aren’t told that “real growth is fastest where the rentier element of GDP is lowest and least privatized” or that bank profits soar because 80% of bank loans are for real estate mortgages.” Think of the rentier sectors of mortgages, student debt, credit cards and automobile loans. We have a shrinking economy except for the 1% that extracts debt service and other rentier income from their bank, bonds, and stock ownership. Think of the FIRE sector as a form of rentier overhead which should NOT be part of GDP. Interest charges and financial fees are unearned and are rentier income. These rents are transfer payments and not a product.
Historically it’s been the question of “whether government or private individuals will get the land’s ‘free’ rent, because land and its rent were originally a public utility. New rulers back then annulled debt – clean slate. After 1066, William the Conqueror did his Domesday Book to determine how much rent he could get. Nobles forced King John to sign the Magna Carta to privatize land rent. Kings then waged wars “to conquer foreign rent-yielding land. That clearly left less revenue for investing in industrial capital formation.” Today’s rentier oligarchy has usurped “the dominant role that the landed gentry occupied in the past. Its problem is the shifting of economic planning from elected governments to Wall Street. Landlords on Second Avenue in NYC received a windfall when the new Second Avenue Subway increased land values dramatically – the Subway cost only $3 billion while the land value increased $6 billion – lucky landlords. Classical economic theory has been inverted otherwise we’d be taxing rentier income – it espoused a market “free from economic rent, and hence, from a rentier class.”
When Rome “stripped its provinces and enserfed its own population” we got the Dark Ages. This is exactly what Washington Consensus finance capitalism is doing today. Dark Ages II, here we come. Adam Smith was taken by the French Physiocrats who opposed France’s rentier overhead because the French landlord class and royal estate had “appropriated almost all of France’s economic surplus.” When Adam returned to Britain, he wanted it to tax land, not labor or industrial capital. Adam wrote in the Wealth of nations that “Landlords love to reap what they have not sown.” At the time of the Norman conquest land tax contributed 19/20 of Britain’s revenues, now it’s only 1/25. Landlords as monopolists.
Many Americans pay to creditors and other rentiers for access to basic needs – call it debt peonage to the rentier class. Adam Smith wrote, “The rate of profit is always highest in countries going fastest to ruin.” Collapses in property values lead developers to gentrify low-income neighborhoods. Unlike today’s rentier economies, real economies don’t grow exponentially through compound interest, which forces debt that will grow to exceed the real economies ability to pay. To remove the 1% today you need only invoke a post-1945 debt cancellation. Frederick Hayek’s road leads to a totalitarian oligarchic Pinochet-type Chicago School dystopia that threatens “a Dark Age like that following Rome’s collapse.” The motto of Britain and the US to the world has been, “Do as we say, not as we have done to grow rich.”
Mainstream economic theory doesn’t discuss stealing other countries resource rents through gunboat “diplomacy” like the US removal of Mossadegh in Iran in 1953, or blatant oil grabs in Iraq, Syria, and Libya. Mainstream economic theory doesn’t explain why the UK and US became successful, nor does it explain why China has overtaken US industry for four decades. Think of the real answer as state capitalism or industrial socialism, and it works. “Public subsidy was the doctrine of industrial capitalism.” Industrial capitalism requires long term planning while today it’s all about “short term gains by financial engineering, not by creating new means of production.” And so, the US by “becoming more extractive than productive”, is “increasingly left to rely only on its rentier and monetary power” which dramatically aids, you guessed it, the 1%.
Copper prices soared during the Vietnam War because “each US servicemember used about a ton of the metal each year to saturate the air with bullets.” Allende was removed as Chilean president when he said he’d sell copper to whoever, like a real businessman would, w/o allegiance to the US first. Pinochet was installed only after “the army’s Commander in Chief, Rene Schneider, was assassinated for opposing military overthrow of a democratically elected leader.” We know NATO and the US invaded and destroyed Libya when Qaddafi sought independence from the Dollar Bloc, but did you know its gold reserves then “disappeared”? The US wants to “shift planning and resource allocation away from governments to the world’s financial centers” (Wall St, London, etc.). The US has a long history of overthrowing democratically elected leaders like in Ukraine in 2014, or Mossadegh in Iran in 1953. The TPP was hijacked by the Obama Administration and turned into a “legal philosophy to block public regulation of health, the environment, worker and consumer protection and any other public interest that might interfere with corporate profit grabbing and rent extraction.” Removing all public regulation.
Goodreads limits book review lengths, so the last half of this review is in comment section. This is one of the greatest books I've EVER read. Continue reading below:
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Ken MacIntyre
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December 8, 2022
Destinies and Cold Wars
Michael Hudson is unusual, an economist who actually understands economics, and one of the few who predicted the 2008 global financial crash. The neoliberal revolution in the West has given primacy to finance and rent seeking (turning economic surplus into debt and appropriating it as interest) with the complicity of politicians, notably the 'left', of all shades. This turns the classical economics, of Smith, Marx, Ricardo and John Stuart Mill, on its head. The classical free market was one free of predators, shakedown artists and rent seekers. Banking and credit, utilities and infrastructure should be run for public benefit, and interest charges kept low, all to reduce the costs of doing business. In this way, industrial capitalism, based on the production of goods and services, can evolve towards socialism. However, western democracies have evolved into financial oligarchies. This danger was recognised long ago by Aristotle. The US financial elite have launched new cold wars against countries which don't accept neoliberalism, to impose financial racketeering supported by violence, sanctions, 'austerity' and privatisation of public assets, and financed by counterfeiting - issuing dollar IOUs. Hudson draws on his extensive knowledge of antiquity and ancient wisdoms such as periodic debt cancellation. Controversial it may be - China's socialist model may have performed astonishingly but it's not a democracy by any stretch, but it is an indispensable guide to understanding the global economy and why the dominance of the US dollar may be ending.
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Lievendr
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November 18, 2022
This books shows the genius of M. Hudson, explaining the fundamental challenges of our time in a surprisingly clear and simple manner. Only a master can write such a book. I believe it is even better than Superimperialism as it gives you an even better understanding of the fundamental issues at stake in society today. And believe me, you won’t get this from any other book.
Yet, I also want to share three criticisms:
1. The book contains surprisingly few figures and concrete examples that demonstrate his case. Very often, you have to believe that what he says is true. I still believe that what he writes is true as I see him as a very sincere person, but opponents could easily exploit this weakness.
2. Where is climate change in all this? This issue is not mentioned even once! I believe I can somehow imagine what Hudson would have said on climate change, but I would have preferred to hear/read it explicitly from the master himself.
3. My most important critique is maybe the surprisingly uncritical view on the authoritarian regimes in china, iran and russia. You cannot put these regimes on a piëdestal (especially china) without being critical on their authoritarian character one single time! Granted, Hudson forces you to look to china from a different and much more positive angle, while western media today became extremely anti-china, and he shows convincingly the merits of china’s anti-rent seeking policies. But come on… in the west, after all, you still can speak your mind without being jailed. He could have pointed this out.
Also, the book gets at times quite repetitive on its central thesis, but I still liked reading these repetitions.
Yet, even with these criticisms the book still merits a 5-star review and even more. I’m an ardent reader of books on political economy by Graeber, Varoufakis, Keen, Mazzucato, Kelton and others, but no other book improved my understanding so much as this one. I mean, I��ve read for example many pages on the ‘theory of value’ written by Keen and Varoufakis, but its thanks to Hudson that I now really get it. So a big thanks to Mr Hudson for this masterpiece, I hope he can continue to write such books for a very long time.
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John Davie
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August 24, 2022
If you are a vociferous reader of Professor Hudson like I am there is really no need to read this book. It is largely a summary of his collected works for the Chinese audience. Nonetheless it is still useful for those unacquainted with Professor Hudson’s work and looking for a place to start.
The book is derived from a series of lectures delivered I think at Peking University. You can definitely tell that this is the case as it is quite repetitive.
The United States and it’s clients are now in a terminal decline. Much now depends on whether China can continue on its current trajectory. China faces a number of serious issues. In many places house prices are rising rapidly and mortgages are an increasing burden for young people. Taxes are focused on income and VAT and largely fail to capture the gains in asset price value that result from public investment. The uneven development that has lifted a billion Chinese out of poverty also has the potential to give birth to a new rentier elite and cause social tensions.
Fortunately China is well positioned to deal with these problems. Banking remains firmly under the control of the state, operated as a public utility. China has the ability and demonstrated its capability to support its real economy through exercising this power. Xi Jinping （习近平）and the CPC have a deliberate policy to ameliorate uneven development. Taxes are also being actively reduced that fall on business. More is necessary to reduce the burden of tax that wage earners carry.
I am optimistic. The CPC is the most popular party in world history. It has transparent and deliberate strategies to forge forward and is well on the way to creating a prosperous Modern Socialist Country.
The real threat is from the United States. China poses no military threat. But it’s mode of development and active engagement with the global south threatens the neo-colonial system on which waning western prosperity is founded. Unfortunately it is not unlikely that the United States, knowing that it cannot defeat China in a conventional conflict in China’s own backyard, would rather use its 10000 nuclear weapons to wipe out organised human life on earth.
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Jari Havela
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September 10, 2022
A refreshing old school hardcore commie (the Real Socialism hasn't been tried) with all the traditional stuff.
He has a point though, and a strong one. Predatory financial capitalism is a deadly disease and must be destroyed.
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Jon
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April 1, 2023
Hudson is not only the most interesting political economist alive today, he is also the most informative. His economics is a practice of historicism (in a similar vein to Karl Polanyi), ranging from from the palace cultures of ancient Mesopotamia to our era (which in a certain respect Hudson has played a part).
In this book Hudson's argument hinges on the differences between the classical economic outlook of Adam Smith, David Riccardo, Thomas Malthus and Karl Marx, and the neoclassical economics of our age. And the particular difference he focuses on the most is rent.
Today, rent is something you pay in order to utilize a resource which you don't own, such as an apartment. To classical economists rent was a word that meant something a bit more general : what you pay in order to settle a debt you owe, particularly to a feudal lord. And it was in this sense that the classical economists thought paying rent was a holdover from the feudal age, which they were in the process of overturning at the time, and they saw as a drag on the productive economy (i.e. nascent industrial capitalism). They thought this rent, this feudal holdover, was best eliminated from the economy so that shared prosperity could flourish. It was also at this time that socialism became a fairly prominent force, and this only sharpened the argument.
This dynamic drove the development of industrial capitalism until WWI, where its paradigm began to be eclipsed by financial growth. The neoclassical school came into dominance, and quantity replaced quality: it didn't matter whether a profit was productive or not (in other words, was the profit from a good produced in a positive social context or simply interest on a previously owned asset), just that there was a profit.
A positive quality of Hudson's is that he doesn't leave it at describing this historical outcome, he offers a way to correct the path. What he advocates is an remedy to our more or less fixed economic trajectory is a mixed economy, citing it as the most historically successful system for sharing prosperity widely. Though a reformist outlook, it's nonetheless most likely true.
One last impression of this work: the invention of interest and money have a lot in common, and they were among the most consequential inventions of history. They may have been practical measures at the time, but the degree to which they have shaped human history could never have been dreamed up in that era. We are dominated by these inventions, and, as Hudson reminds us, should not let them eat us alive, as they are currently doing.
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YHC
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October 28, 2023
industrial capitalism vs. Finance Capitalism. leads to very different outcome. We are seeing the detachment of US dollars from the other group (BRICS). You wonder why, because Finance capitalism leads to recession over and over, all the financial crisis repeated over and over due to the fading of industrial frustration. Putting money of speculation, stock market but not really building anything for real is fooling people's trust/ confidence of investment environment.
I hope China and other BRICS countries have the wisdom to avoid what happened now in US and Europe.
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C
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November 1, 2023
Extremely insightful contemporary analysis. If you want to understand today's economic differences between the US and China this is the go-to text (published 2022). I doubt he'll read this but thank you to Michael Hudson for personally granting me permission to record his work in audiobook form. You can listen to those recordings on my YouTube channel. Prof. Hudson is a very down-to-earth and approachable person who responded to me right away, despite my lacking any professional connections etc.
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