{"id":28754,"date":"2021-01-26T15:10:35","date_gmt":"2021-01-26T20:10:35","guid":{"rendered":"https:\/\/ssgreenberg.name\/PoliticsBlog\/?p=28754"},"modified":"2021-05-15T22:20:46","modified_gmt":"2021-05-16T02:20:46","slug":"michael-hudson-finance-capitalism-vs-industrial-capitalism-the-rentier-resurgence-and-takeover","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2021\/01\/26\/michael-hudson-finance-capitalism-vs-industrial-capitalism-the-rentier-resurgence-and-takeover\/","title":{"rendered":"Michael Hudson: Finance Capitalism vs. Industrial Capitalism \u2013 The Rentier Resurgence and Takeover"},"content":{"rendered":"

Naked Capitalism <\/em>has posted the article Michael Hudson: Finance Capitalism vs. Industrial Capitalism \u2013 The Rentier Resurgence and Takeover<\/a>. Here is the original article on Michael Hudson’s Web site<\/a>.<\/p>\n

This explains so much of what I have been trying to explain by this whole blog that I have been writing for 15 years. It goes way beyond the mechanics of Modern Money Theory. This is a long article, so I have tried to extract some of key points. Even that makes a long post.<\/p>\n

\nThe economy as a whole has suffered. Debt-fueled housing costs in the United States are so high that if all Americans were given their physical consumer goods for free \u2013 their food, clothing and so forth \u2013 they still could not compete with workers in China or most other countries. That is a major reason why the U.S. economy is de-industrializing. So this policy of \u201ccreating wealth\u201d by financialization undercuts the logic of industrial capitalism.
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\nAnother reason for deindustrialization is the rising cost of living stemming from conversion of public infrastructure into privatized monopolies. As the United States and Germany overtook British industrial capitalism, a major key to industrial advantage was recognized to be public investment in roads, railroads and other transportation, education, public health, communications and other basic infrastructure. Simon Patten, the first professor of economics at America\u2019s first business school, the Wharton School at the University of Pennsylvania, defined public infrastructure as a \u201cfourth factor of production,\u201d in addition to labor, capital and land. But unlike capital, Patten explained, its aim was not to make a profit. It was to minimize the cost of living and doing business by providing low-price basic services to make the private sector more competitive.
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\nUnder a regime of \u201cburdenless taxation\u201d the return on public investment does not take the form of profit but aims at lowering the economy\u2019s overall price structure to \u201cpromote general prosperity.\u201d This means that governments should operate natural monopolies directly, or at least regulate them. \u201cParks, sewers and schools improve the health and intelligence of all classes of producers, and thus enable them to produce more cheaply, and to compete more successfully in other markets.\u201dPatten concluded: \u201cIf the courts, post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity of society they should not be conducted by the State.\u201d But this prosperity for the overall economy was not obtained by treating public enterprises as what today is called a profit center.
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\nFor a century, public investment helped the United States pursue an Economy of High Wages policy, providing education, food and health standards to make its labor more productive and thus able to undersell low-wage \u201cpauper\u201d labor. The aim was to create a positive feedback between rising wages and increasing labor productivity.<\/p>\n

That is in sharp contrast to today\u2019s business plan of finance capitalism \u2013 to cut wages, and also cut back long-term capital investment, research and development while privatizing public infrastructure. The neoliberal onslaught by Ronald Reagan in the United States and Margaret Thatcher in Britain in the 1980s was backed by IMF demands that debtor economies balance their budgets by selling off such public enterprises and cutting back social spending. Infrastructure services were privatized as natural monopolies, sharply raising the cost structure of such economies, but creating enormous financial underwriting commissions and stock-market gains for Wall Street and London.
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\n Even if China and other Asian countries didn\u2019t exist, there is no way that America can regain its export markets or even its internal market with its current debt overhead and its privatized and financialized education, health care, transportation and other basic infrastructure.\n<\/p><\/blockquote>\n

\nJanuary 26, 2020<\/p>\n

Found this article \u201cCreating Wealth\u201d through Debt: The West\u2019s Finance-Capitalist Road<\/a> – Michael Hudson, Peking University, School of Marxist Studies, May 5-6, 2018. This is what can be taught in Chinese Universities by USA scholars that cannot be taught in the USA.<\/p>\n","protected":false},"excerpt":{"rendered":"

Naked Capitalism has posted the article Michael Hudson: Finance Capitalism vs. Industrial Capitalism \u2013 The Rentier Resurgence and Takeover. Here is the original article on Michael Hudson’s Web site. This explains so much of what I have been trying to explain by this whole blog that I have been writing for 15 years. It goes […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-28754","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28754","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=28754"}],"version-history":[{"count":4,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28754\/revisions"}],"predecessor-version":[{"id":28904,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/28754\/revisions\/28904"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=28754"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=28754"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=28754"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}