The Road from Industrial Capitalism to Finance Capitalism and Debt Peonage
Essays on Fictitious Capital, Debt Deflation and the Global Crisis by Michael Hudson
This summary of my economic theory traces how industrial capitalism has turned into finance capitalism. (emphasis added). The finance, insurance and real estate (FIRE) sector has emerged to create “balance sheet wealth” not by new tangible investment and employment, but financially in the form of debt leveraging and rent-extraction. This rentier overhead is overpowering the economy’s ability to produce a large enough surplus to carry its debts. As in a radioactive decay process, we are passing through a short-lived and unstable phase of “casino capitalism,” which now threatens to settle into leaden austerity and debt deflation.
This situation confronts society with a choice either to write down debts to a level that can be paid (or indeed, to write them off altogether with a Clean Slate), or to permit creditors to foreclose, concentrating property in their own hands (including whatever assets are in the public domain to be privatized) and imposing a combination of financial and fiscal austerity on the population. This scenario will produce a shrinking debt-ridden and tax-ridden economy.
Continue here ... http://michael-hudson.com/2012/08/overview-the-bubble-and-beyond/
Note: I have purchased and received the book. It is not inexpensive, since it is print-on-demand, but I highly recommend it. Tom Christoffel
Essays on Fictitious Capital, Debt Deflation and the Global Crisis by Michael Hudson
Preface
Summary
and Analytic Table of Contents
Introduction:
Today’s Financial Crisis and Economic Theory
Preface
Summary
and Analytic Table of Contents
Introduction:
Today’s Financial Crisis and Economic Theory
I.
Fictitious Capital and Economic Fictions
1. Two Traditions of Financial Doctrine
2. The Magic of Compound Interest:
Mathematics at the Root of the Crisis
3. How Ricardo’s Value Theory Ignored the
Role of Debt
4. The Industrialization of Finance and the
Financialization of Industry
5. The Use and Abuse of Mathematical
Economics
6. The Financial Character of Today’s Crisis
II.
From Inflated Debts to Debt Deflation
7. Property is Worth Whatever a Bank Will
Lend Against It
8. The Real Estate Bubble at the Core of
Today’s Debt-leveraged Economy
9. Junk-Bonding Industry
10. Privatizing Social Security to Rescue Wall
Street
11. Saving, Asset-Price Inflation, and Debt
Deflation
12. Saving our Way into Debt Peonage
III:
The Global Crisis
13. Trade and Payments in a Financialized
Economy
14. U.S. Quantitative Easing fractures the
Global Economy
15. America’s Monetary Imperialism: Dollar
Debt Reserves without Constraint
16. The Dollar Glut Finances America’s
Military Build-up
17. De-dollarizing the Global Economy
18. Incorporating the Rentier Sectors into a
Financial Model
IV:
The Need for a Clean Slate
19. From Democracy to Oligarchy: National
Economies at the Crossroads
20. Scenarios for Recovery
This situation confronts society with a choice either to write down debts to a level that can be paid (or indeed, to write them off altogether with a Clean Slate), or to permit creditors to foreclose, concentrating property in their own hands (including whatever assets are in the public domain to be privatized) and imposing a combination of financial and fiscal austerity on the population. This scenario will produce a shrinking debt-ridden and tax-ridden economy.
Continue here ... http://michael-hudson.com/2012/08/overview-the-bubble-and-beyond/
Note: I have purchased and received the book. It is not inexpensive, since it is print-on-demand, but I highly recommend it. Tom Christoffel
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