Trade Advantage Replaced by Rent Extraction

I was interviewed on the Renegade Economists radio/ podcast entitled Crony Competition on the road to Unearned Income: Prof Michael Hudson gives a wrap on the economics of 2013 as we discuss Detroit, Iceland, Madoff, Marx and Blackstone Capital. Why Comparative Advantage was replaced by Rent Extraction - with Prof Michael Hudson by Renegadeeconomists on Mixcloud Karl Fitzgerald: Our favourite guest, the man that Max Keiser from www.MaxKeiser.com described as the world’s greatest living economist, yes, Professor Michael Hudson is here to give us a wrap on 2013 and the economic forces that have surrounded us for centuries. How have you actually seen 2013? What’s played out for you in terms of the big trends? Michael Hudson: Oh, the same shrinkage that you’ve seen ...

J is for Jubilee, K for Kleptocrats

Part J in The Insiders Economic Dictionary Jubilee Year: In Judaic Law (Leviticus 25) a Clean Slate to be proclaimed every 50 years annulling personal and agrarian debts, liberating bond-servants to rejoin their families, and returning lands that had been alienated under economic duress. Long thought to have been merely a literary religious ideal, the policy has now been traced back to royal proclamations issued as a matter of course in Sumer and Babylonia in the third and second millennia BC. (See Bronze Age.) Read more. Junk bonds: High-interest bonds, developed in the 1980s primarily by Michael Milken at Drexel Burnham to finance corporate takeovers. Mr. Milken was sent to jail for securities fraud and Drexel was disbanded as a result of ...

I is for Ideology

Ideology: A set of assumptions so appealing that one looks at their abstract logic rather than at how the world actually works. (See Insanity.) Ignorance: Socrates said that ignorance was the source of evil, because nobody knowingly commits evil. But by pursuing their own narrow interests, the financial and property sector destroy the social unit, which is the essence of evil as viewed from an evolutionary vantage point. Thomas Hobbes wrote in Leviathan (1651) that “Ignorance of remote causes disposeth men to attribute all events to the causes immediate and instrumental: for these are all the causes they perceive.” Corporate practice has become a combination of the Ken Lay “Enron” defense of executive ignorance (“We didn’t know what was going on”) and ...

H is for Half-Life

Part H in The Insiders Economic Dictionary Half-life: In physics, the time it takes for half the mass of a radioactive element to decay into the next-lower isotope or element, typically ending in a stable and inert element such as lead. By extension, the time it takes for an economic theory or ideology to lose half its influence, e.g. as Marxist value theory, Henry George’s Single Tax, Keynesian income theory, Chicago School monetarism, or most recently, neoliberalism. In international relations, the time it takes for an industrial creditor nation to dissipate half of its economic advantage and free lunch. Have-nots: People who have debts instead of wealth. Hubris: A Greek term meaning overgrowth or proliferation, an addiction to power involving abusive behavior toward ...

G is for Groundrent

Part G to The Insider’s Economic Dictionary. Gains from Trade: A euphemism for trade dependency resulting from the specialization of production between food-surplus nations and food-deficit countries, and the parallel polarization between high-technology and low-wage producers. Originally coined by free-trade advocates, the term is now used primarily by the agriculturally protectionist economies of North America and Western Europe. Under Ricardian trade theory, the gains from trade are measured by the amount of labor and related costs to importers of producing similar products at home. Left out of account are foregone improvements in agricultural and industrial productivity. Gains-from-trade theorizing thus encourages passivity and reinforces existing production patterns, economic polarization and debt dependency. (See Colonialism, Washington Consensus and World Bank.) General Theory: The title ...

Extra Economist

Please click on the following link to hear my latest radio interview. In Extraenvironmentalist #67 we discuss the implications of the bursting global credit bubble with economist and historian Michael Hudson. Our conversation covers many of the themes in Hudson’s new book, The Bubble and Beyond which covers the process of quantitative easing, neofeudalism and more. Partial Transcript Justin Ritchie: “There’s a lot of people on the left and the right who are becoming increasingly critical of Quantitative Easing and the question we have is how does it work? What does it mean that the US Federal Reserve is buying these $85 billion dollars each month of assets even though they are talking about tapering now?” Michael Hudson: “Quantitative Easing only has to ...

Global Property Ponzi Policy

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I appear at the 12 minute mark. Max Keiser focuses on the global property ponzi game. The UK housing policy 'Help to Buy' - a 15% underwriting of loans under £600,000 is a technique to re-inflate land prices. A 15% rise will bail out the bad loans UK banks have made. Meanwhile the tax dodging continues globally as property speculation is ignored.

F is for FIRE sector

Part F in The Insider's Economic Dictionary Factoid: A hypothesis, rumor or story so consonant with peoples’ preconceptions that it is accepted as a fact or working assumption, even though it often is made up a priori. Among the most notorious examples are the ideas of diminishing returns, equilibrium, that privatized ownership is inherently more efficient than public management, and that trickle-down economics works. (See Junk Science.) Factor of production: Labor and capital are the two basic factors of production, creating value. Many classical economists also treated land as a factor of production, but it is rather a property right. It is needed for production, like air, but as a legal right it becomes an institutional opportunity to charge rent, via a ...