https://www.nakedcapitalism.com/2020/04/finance-capitalism-vs-industrial-capitalism-how-financial-parasites-and-debt-bondage-are-destroying-us.html
It seemed to be working that way, leading up to World War I. But that war I came like a meteor, knocking the West’s economic development path out of orbit. The rentierclass, the landlords and predatory banking class, made a resurgence. Instead of the government reflecting the interests of industry and the people in the form of rising wages to produce a rising circular flow and demand for industrial products, a positive feedback between industrial production and labor, you had the financial rentiersector – what I call the FIRE sector, Finance, Insurance and Real Estate – hijack the economy and bring about the permanent depression that we’re in now.
This is my main point: We are in a permanent depression. There can be no recovery without wiping out the debt overhead (euphemized as “wealth”). As long as you leave the 1% with the lion’s share of wealth (creditor claims) and property ownership, the economy cannot recover. Without realizing that, there cannot be a class consciousness regarding today’s world.
Marx talked about the class consciousness of labor vis-a-vis its employers. That took place within the production and consumption sector. But today’s class consciousness of wage earners has to see that industrial companies have been turned into financial companies. They’ve been financialized. A relevant class consciousness must realize that it’s up to socialists to do what industrial capitalism failed to do – namely, to free society from the rentiersector, from the landlord class, the monopolists and financial creditor class. Without freeing society from them, you’re going to have a neofeudal economy. As Rosa Luxemburg said, it’s either socialism or barbarism. Barbarism is a permanent depression. All the classical economists warned against the landlord class, banks and the monopolists continuing to run society into the ground.
Jim Vrettos: The state has become a functionary of the financial sector. It hasn’t withered away in the sense as Marx would have thought.
Michael Hudson: It has not evolved in the way he anticipated. Marx thought that at least the state might be for state capitalism. He worried it would go hand in hand with heavy industry and squeeze labor. The question was, would a state capitalism see its interest in supporting labor’s living standards or not? But as it turns out, the financial sector is much more brutal than the industrial sector that Marx envisioned as evolving toward socialism. Finance conquers the entire economy, industry along with labor
Jim Vrettos: We’re about out of time, but I have to ask, are there any examples that you can maybe point to – Denmark, Finland or anything that we can point to as a model that might be something we could emulate to a certain extent?
Michael Hudson: Certainly a social democracy helps, and Denmark and Finland never let themselves be financialized in the first place. They never let the 1% grab the control of the economy to the extent that has occurred in the United States and much of Europe. So the problem is, how do you get rid of a parasitic blister on society? That can only be done by cutting off the blister. Denmark and Finland have not had to deal with this problem, because they’ve remained more balanced.
What do you do when society has lost its balance? You have to think about structural reform. That’s radical by definition. Structural reform is called an externality – exogenous, extraneous to what economists talk about. If you’re talking about where the economy should go, mainstream economists are talking in a narrow policy tunnel that means “Be passive and do nothing, be quiet like a frog boiling in water.”
More insight by Hudson;https://www.nakedcapitalism.com/2020/04/max-blumenthal-and-ben-norton-with-michael-hudson-how-the-us-makes-countries-pay-for-its-wars-economics-of-american-imperialism.html
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