In this second round of conversation, Professor Michael Hudson and Pepe Escobar discuss the emerging economic world order which they define not so much as a conflict between nations, but a rivalry between two competing models of the economy. The finance capital driven model of the West with a domination of the FIRE sector, versus the mixed economy model represented by China and Russia which seeks to rein in rent seeking, combined with public banking and state funded infrastructure to support market compliant industrial development. In Professor Hudson’s view, this model was advocated by classical economists, from Mill, Ricardo, to Henry George; and is largely responsible for the West’s past successes.
This could be the best two hours you have watched in in a lifetime.
Alanna: So Michael, what about one city that it’s desperate that could be educated, that there is an alternative with clarity about a land value tax system and a public bank. For instance, the city of Baltimore that desperately needs a new economy. Can you give us some hope that we could focus on a city level and begin building a template for how cities and like Sao Paulo where Pepe is born, from the cities that desperately need change? Michael, can you give us some sort of template?
We know the federal government is hopeless for us now for we, the people. Texas is having a vote to form the Republic of Texas, to secede. There are other growing secessionist movements in the United States. Could we imagine that there could be an implosion away from centralized control to a regional and city level. Michael, give us some hope.
Michael Hudson: I can’t give you hope. I am all in favor of public banking and I’m on Ellen Brown’s board of directors for her group. However, supposing you had a public bank in Baltimore and the public bank said, we want to provide credit for Baltimore people to be able to afford homes. They would still have to out create enough credit and enough debt to outbid what commercial banks are lending other people that want to buy houses there. So, you can’t have an Island of efficiency and public banking in a system that basically is still financialized. The problem is systemic.