Michael Hudson – Life and Thought 20180507

Michael Hudson – Life and Thought 20180507


I was born in Minneapolis, which is the only
city in the world that was a Trotskyist city. During the 1930s it was a center of Trotskyism
and my parents worked with Leon Trotsky in Mexico. When I was 3 years old my father was put in
jail under the Smith Act as a political prisoner for having the works of Lenin and Marx on
his shelves and for being one of the leaders of the Minneapolis general strikes from 1934
to 1936. So I grew up knowing many members of the Russian
Revolution, members of the Central Committee when Lenin was in power. When my father got out of jail we moved to
Chicago and where he got a job editing Traffic World and Traffic Supply News. He had graduated from the University of Minnesota
with a Master of Business in 1929 and the depression came. He had wanted to go to Latin America to become
a millionaire and when the Depression came he thought that capitalism wasn’t fair and
that’s what made him a Trotskyist and he became editor of the Northwest Organizer which was
the labor newspaper. So when I grew up I had the old German Communist
Party members, Americans, they would all come to the house and tell me the stories of the
revolution so that when I grew up I was supposed, expected to lead a revolution if conditions
were right. So down through my teens we discussed what
are the right revolutionary conditions. But I was not that interested at the time
in politics, I was fascinated with physics, with chemistry and more and more with music. When I went to the University of Chicago which
was a grade school and high school for gifted children. My father had the highest IQ in the federal
penitentiary system, I’m told, and so they thought his kid must be smart and they gave
me a test and put me in a very good school. My formative year was really the tenth grade
I think when I was 14 years old. We had a right wing teacher Curtis Edgett
in social science. He kept calling me a commie. He had a sign over his blackboard in the room,
“Give them all with the Rosenberg’s got.” The Rosenbergs were the Stalinist spies, but
when I asked, “What do you mean – the Communists?” he said, “No, I mean the
Jews.” Well, he would call me a Stalinist, a communist. But we also had a Stalinist classmate, Danny
Landau. He called me a fascist, because I was a Trotskyist. So in the high school I was the reasonable
voice in the middle. “It’s the only time in my life I had been
in the middle. My friends and I would come into the classroom,
my fellow students would carry the works of Lenin and put them on our adjoining desks,
to quote from. When my father was in jail, one of the things
he did was to compile a dictionary of all the things Lenin and Trotsky had said about
various subjects. I would raise my hand and the other professor
would say where did Lenin say that and I’d say in volume 6 page 322 and my student yes
yes here it is. I like being hated by the right wing because
it made me a lot of friends and so while the Stalinist called me a fascist and the fascists
called me a communist I recruited many members into the socialist youth groups in Chicago. My parents had worked with Leon Trotsky in
Mexico as did many Minneapolis people, so I was very happy being in an adversarial position
and somehow being in an adversarial position never hurt at all. My interest was music at that time and I studied
piano and basically studied to be a conductor. When I graduated in 1959 from the University
of Chicago where my degree was in Germanic philology and history of culture but while
I was there I was also studying full-time music primarily the series of Heinrich Schenker
the German music theorist. In 1960 when Leon Trotsky’s widow Natalia
died, the executor of his estate Max Schachtman assigned me the copyrights, saying that since
I was Trotsky’s godson, I should do a publishing company. So I wrote. I’d had a correspondence with György Lukács,
the Hungarian literary critic and he gave me his copyrights and I came to New York,
thinking that I would start a publishing company while I studied conducting with Dimitri Mitropoulos,
who was the conductor of the New York Philharmonic. Well I couldn’t get anybody to publish these
or other works. Lukács insisted that I have a student of
his, Arthur Kahn, do the translation of his work. It was an awful translation. I wanted to edit it and he wouldn’t let any
editing be done, so I sort of gave up doing that. Then, an event happened that changed my life. My best friend growing up was Gavin MacFadyen. You may know him as a famous documentary film
maker and founder in London of the Centre for Investigative Journalism. He had introduced me to Terence McCarthy who
was an Irish communist and was the translator of Marx’s Theories of Surplus Value. In one evening we talked about changes in
the water level in America. The sunspot cycle and the water level would
go up and down, causing a crop failure that would lead to an autumnal drain of money from
the stock and bond market, causing a periodic financial crisis. To me, that was so beautiful, so aesthetic,
that I decided on the spot to become an economist and Terence said that he would become my mentor
if I would read all of the bibliography of Marx’s Theories of Surplus Value. So that’s how I came to meet most of the
rare economics book dealers in New York City. I ended up working for Augustus Kelley part
time as an editor and writing introductions to some of the reprints of economic classics
that he published. In exchange for writing introductions, he
would give me books. I had a very large library of books, including
many American protectionist writers, many economists that are missing from the normal
history of economic thought. Meanwhile, I had to go and make a living. I got to New York with only $15 in my pocket
and in 1959 $15, you know, I could buy a little bit. I spent maybe a little bit in a dirty hotel
in Greenwich Village. Then I took a walk and there was a folk music
bar and I thought, “oh nice folk music, let me go in.” I went into the bar to listen to a guitar. Somebody came up to me and said, “Ah, Huck
Hudson.” When I grew up my name was Huck because my
father’s favorite book was Mark Twain’s Huckleberry Finn. It was John Herold, who had stayed at my house
in Chicago when he was going to the University of Wisconsin and visiting my friend Gavin. He had become a folk singer. He offered to let me stay with him until I
could get a job and find a place to rent. So I moved out of the hotel into his house
after just one night, and got a job as a French typist for Wonder Bread. That was when I went to an employment agency,
and the only thing I could do that most other people couldn’t do was to type fast and in
French and German. So I did that for a little bit and then I
decided to enroll in an economics course and get a master’s degree at New York University. The advantage of New York University was the
teachers were all part-time, they didn’t want my mind, all they wanted was my money. That was fine with me. I got to keep my mind and not be brainwashed. They said, “Do you have any background
in economics?” I said, “No, my background’s in music and
cultural history. My mentor at Chicago in cultural history was
Eugen Jolles, and he introduced me to the work of Spengler and Egon Friedell, Nietzsche
and other writers. So that was my literary background.” I registered at NYU and got a job with the Savings Banks Trust Company, which was the
one commercial bank that all the savings banks put their own reserves in. There were 135 savings banks in New York and
there are none anymore, they’ve all been cannibalized, they’ve been bought out by the commercial
banks. But my job was to trace the savings in New
York, how it grew exponentially and compare this to how it was lent out for mortgages. The chart of these deposits was like a heartbeat. The deposits in savings banks would grow every
quarter when the dividends were paid. So I saw basically that people left their
savings in the bank to grow automatically, exponentially by interest. I saw that this recycling of interest-bearing
debt was pushed back into the housing market to bid up housing prices. Real estate is something that is not taught
in any course in the United States economics. 80 percent of bank loans in America, England
and much of Europe are real estate loans, but in the textbooks that students learn economics
from, it is as if banks lend money to industry. Banks don’t lend a penny to industry to invest
in capital goods and hire people. They lend money to buy out industry, to take
it over, to cannibalize it and to strip assets, but not to create capital. They lend it as mortgages, they basically
lend against assets, against homes, commercial real estate, stocks or bonds or some assets. So that I realized that in the textbooks,
picture of how finance works were completely different from what I was taught at NYU. I had to take a money and banking course taught
by an ideological Greek professor Stephen Rousseas, who had never worked in a bank in
his life — none of my professors had ever worked in a bank, everything they know from
the textbooks — and he had an article by a man who subsequently became a friend of
mine, Hyman Minsky, who thought that the business cycle could be explained by savings banks
putting their reserves in the commercial banking system that would be lent out to the economy. I said, “Look, what you called a commercial
banking system is one bank, the bank I work for and we don’t make any loans at all to
the economy. We buy bonds.” So I got a C-plus in the course, he said I
didn’t understand textbook economics. I realized that there was an absolute contradiction
between how the real economy worked and what was in the textbooks. After I worked for the Savings Banks Trust
for three years, in December 1964, I finished all my coursework and went to work as a balance
of payments economist for the Chase Manhattan Bank. That was the most formative employment I ever
had, because the balance of payments is also a topic that is not taught in any university. I taught it at the New School later, but universities
don’t teach about the balance of payments. It’s all a simplistic monetary theory. What I had to do, after I finished my coursework,
was writing the dissertation. Terence McCarthy suggested I write on concepts
of productivity, because there are many different — what is productive, what’s unproductive. There was a professor at the New York University,
Solomon Fabricant, as in the word “fabricate”. He was the head of the National Bureau of
Economic Research. I went into his office he said, “The first
thing I want you to do, I want you to join the CIA. I’m recruiting.” He showed me a copy of the CIA’s first published
report in America, when the CIA first went public. It was on Russia’s gold stock, saying that
it didn’t have enough native gold in its rivers or mines to be credit-worthy. I looked at it and said, “You must know
that this is all a lie. I work for the Chase Manhattan Bank. Our customer is Anaconda Copper Co. Anaconda
has bought gold bars from the Soviet Union and the gold bars are not made from gold they
pan out of the river. They’re made as an electrolytic by-product
of copper refining. What you should do is forecast the copper
output of Russia, when you electrolytically refine copper, gold and silver fall to the
bottom and it’s the residue that is responsible for most of the gold stock, not only of Russia
but for other copper producers such as Chile.” He said, “well okay you’re not good at joining
the CIA”. I couldn’t believe he didn’t know about my
background, but that didn’t matter. I told him I wanted to write my dissertation
about concepts of productivity, as I was interested in classical economics. As a Marxist I’d seen how Marxism grew out
of classical economics, grew out of the economics of the French Physiocrats, Adam Smith, John
Stuart Mill and so forth. The concept of circular flow was always critical
to me, the concept of economics is a systems and systems analysis, which was just becoming
popular in the 1960s. Fabricant said, “These theories are worthless. If these theories would have been relevant,
then they would have been successful and remained in the textbooks. If a theory is no longer held it’s because
it’s died out in a Darwinian struggle for existence and is irrelevant.” So I talked to a professor who had become
a friend, a former communist who was a business cycle professor, Gerhart Bry. He was a refugee from Germany. We had a discussion about some of the books
that I was buying from other book dealers and I wrote my dissertation on Erasmus Peshine
Smith, who wrote the Manual of Political Economy that became the Republican Party doctrine
in 1853. I decided to write about the American
protectionists with Prof. Bry and had no problem at all getting the PhD
until I had my orals. And again, NYU didn’t have anyone teaching
money and banking on a full-time basis at Washington Square which is the center of NYU. So I thought there’s a money and banking professor
uptown, Walter Haines, who wrote a textbook. He must know about banking. I passed all the orals of all the professors
I’d studied with, economic history, third world development, but the money and banking
man said I knew nothing about banking, that my idea of how banking worked was not at all
what was in the textbooks and I had to retake the orals after reading about a fictitious
world. So I became aware of the fact that academic
economics is very fictitious. It has nothing to do about the real world. It was really a parallel universe theory,
to say that if the world worked this way, then the existing distribution of income would
be fair, everybody would get what they deserve, there’s no income that’s unearned, everything
is fair, and you have to accept the world the way it is. And I never accepted the way the world as
it was, because of the way I grew up. As I mentioned, when I grew up in Chicago
I thought that the years of World War Two were when everybody was drafted into jail
because everybody who would be at the house was in jail during the war for trying to lead
strikes or being political or being left-wing, and only later did I realize there was actual
fighting going on and they weren’t just putting in people who read Marx and radical leadership
there. I worked at Chase Manhattan until 1967, then
finally I had to quit to finish the dissertation. I spent a year on that. At Chase I had become the specialist in the
oil industry’s balance of payments. When the Vietnam War began and escalated,
President Johnson in January 1965, right after I joined the bank in December 1964, passed
the voluntary – in reality, compulsory – foreign investment rules blocking American companies
from investing more than 5% of the growth of the previous year’s investment. The oil industry objected to that. They came to David Rockefeller and said we’ve
got to convince the government that we’re ripping off other countries so fast, we’re
able to exploit them so rapidly, that it really helps the US balance of payments to let us
continue investing more abroad. Can you help us show this statistically? So David Rockefeller asked me to do a study
of the balance of payments of the oil industry. Rockefeller said, “We don’t want to have Chase’s
oil and gas department do it, because they would be thought of as lobbyists. Nobody knows who you are, so you’re neutral. We want to know what the real facts are, and
if they’re what we think they are, we’ll publish what you write; if we don’t like it we’ll
keep it to ourselves, but please just give us the facts.” He said, “You can ask the oil companies
all the questions you want. They will fill out the forms you design for
a statistical accounting format. We’ll give you a year to write it all up.” To me this was wonderful. Oil was the key sector internationally. It turned out I found out that the average
dollar that actually was invested abroad by oil companies was recaptured by the US economy
within 18 months. The payback period was that fast. The report that I wrote was put on the desk of every senator and every representative in the United States and I was celebrated
for being the economist of the oil industry. So this taught me everything about the balance
of payments which, as I said, is a topic that’s not taught in any university. So I finished that, finished the dissertation,
and then I developed a methodology for the overall US balance of payments. Most of the balance of payment statistics
were changed when they designed the gross national product accounts. The accounts now treat exports and imports
as if they were paid for fully for cash. So if you make a million dollars worth of
grain exports, you are assumed to bring a million dollars into the economy. And if you export a million dollars of arms,
of military, it all comes back. What I found out is that only a portion actually
of exports actually comes back. And imports have an even lower balance-of-payment
costs as compared to their nominal valuation. For instance, all of America’s oil imports
are from American oil companies, so if you pay a hundred dollars for oil, maybe thirty
dollars of that is profit, thirty dollars is compensation to American management, thirty
dollars is the use of American exports to physical equipment, oil drilling equipment
and others to produce the oil. The closest people that I worked with for
the study were at the Standard Oil Company, which was always very close to the Rockefellers,
as you know. So I went over the statistics and I said,
“In the balance of payments, I can’t find where Standard Oil makes the profit. Does it make the profit by producing oil at
the production end? Or does it make it selling it at the gas stations,
at the retail sales end?” The treasurer of Standard Oil said, “Ah I
can tell you where we make them. We make them right here in my office.” I asked how. “What countries could I find this in? I don’t find it in Europe, I don’t find it
in Asia, I don’t find it in Latin America or Africa.” He said, “Ah, do you see at the very end of
the geography headings for international earnings, there’s something called international?” I said, “Yes that always confused me. Where is it? I thought all these foreign countries were
international.” He explained that “international” means
countries that are not really countries. They’re Liberia and Panama, countries that
only use the US dollar, not their own currency. So the oil industry doesn’t have a currency
risk. They are flags of convenience and they don’t
have any income tax. He explained to me that Standard Oil sold
its oil at a very low price from the Near East to Liberia or Panama or Lagos, or wherever
they have a flag of convenience and no income tax. Then they would sell it at a very high price
to its refineries in Europe and America, at such a high price that these “downstream”
affiliates don’t make any income. So there’s no tax to pay. For all US oil investment in Europe, there’s
no tax to pay because the oil companies’ accountants price it so high, and pay so little
per barrel to third world countries such as Saudi Arabia, that they only get a royalty. Standard Oil and other U.S. oil companies
– and also mining companies – don’t earn an income there, because they sell it so low,
all the profits are reported to be taken in Liberia or Panama. These are non-countries. That gave me the clue about what people these
days talk about money laundering. In the last few months that I worked for Chase
Manhattan in 1967, I was going up to my office on the ninth floor and a man got on the elevator
and said, “I was just coming to your office, Michael. Here is a report. I’m from the State Department (I assumed that
this meant CIA). “We want to calculate how much money the
US could get if we set up bank branches and became the bank for all the criminal capital
in the world.” He said, “We figured out we can finance, (and
he said this in an elevator), we can finance the Vietnam War with all the drug money coming
into America, all of the criminal money. Can you make a calculation of how much that
might be?” So I spent three months figuring out how much
money goes to Switzerland, from drug dealings, what’s the dollar volume of drug dealings. They helped me with all sorts of statistics
on that, and said, “We can become the criminal capital of the world and it’ll finance the
dollar and this will enable us to afford the spending to defeat communism in Vietnam and
elsewhere. If we don’t do that, the bomb throwers will
come to New York.” So I became a specialist in money laundering! Nothing could have better prepared me to understand
how the global economy works! I had all the statistics, I had the help of
the government people explaining to me how the CIA worked with drug dealing and other
criminals and kidnappers to raise the money so it would be off the balance sheet funding
and Congress didn’t have to approve it when they would kill people and sponsor revolutions. They were completely open with me about this. I realized they’d never done a security check
on me. So I wanted to do a study of the balance of
payments of the whole United States. I went to work for Arthur Andersen, which
was at that time was one of the Big Five accounting firms in the United States. Later it was convicted of fraud when it got
involved in the Enron scandal and was closed down. But I was working before the other people
went to jail, before they closed down Arthur Andersen. So I spent a year applying my balance of payments
analysis to the US balance of payments. When I finally finished, I found that the
entire US balance of payments deficit in the 1960s, since the Vietnam War, the entire balance
of payments deficit was military spending abroad. The private sector’s trade and investment
was exactly in balance; tourism, trade and investment were exactly in balance. All the deficit was military. So I turned in my statistics. My boss Mr. Barsanti, came in to me three
days later and he said, “I’m afraid we have to fire you.” I asked, “What happened?” He said, “Well, we sent it to Robert McNamara.” (who was the Secretary of Defense and then
became an even more dangerous person with the World Bank, which probably is more dangerous
to the world than the American military. But that’s another story). Mr. Barsanti said that McNamara said that
Arthur Andersen would never get another government contract if it published my report. In all of the Pentagon Papers that later came
out of McNamara’s regime, there’s no discussion at all of the balance-of-payments cost of
the Vietnam War. This is what was driving America off gold. At Chase Manhattan from 1964 until I left,
every Friday the Federal Reserve would come out with its goal, its weekly statistics. We could trace the gold stock. Everybody was talking about General de Gaulle
cashing in the gold, because Vietnam was a French colony and the American soldiers and
army would have to use French banks, the dollars would go to France and de Gaulle would cash
it in for gold. Well, Germany actually was cashing in more
gold than de Gaulle, but they didn’t make speeches about it. So I could see that the war spending was going
to drive America off gold. There were three people, known as the Columbia
Group, saying the Vietnam War was going to destroy the American monetary system as we
know it. The group was composed of Terence McCarthy,
my mentor; Seymour Melman, a professor at Columbia University’s School of Industrial
Engineering where Terence also taught; and myself. We would basically go around the New York
City giving speeches. My first article that I wrote for publish
was at Ramparts Magazine, called “The Sieve of Gold,” about how the Vietnam War was
going to force America off gold, which it did, of course, in 1971 when President Nixon
in August stopped the gold. Meanwhile, I took my balance of payments study
to New York University’s Business School and they said, “Oh this is great! We’ll publish it.” So I was able to immediately get it published. That led me to be invited to give a lecture
at the Graduate Faculty of the New School for Social Research in New York. At the time I was analyzing the Vietnam War,
I had to analyze copper prices. Every soldier in Vietnam used one ton of copper
per year, I think that it’s as if they were fighting each other with ingots of copper. So I was forecasting copper prices by looking
at the troop build-up, one ton of copper per army person, and forecasting that the price
of copper would go up. So I was known for a while as Mr. Copper. As I said, Anaconda was Chase’s main client,
and Kennecott was the client of Citibank, and they’re a group of commodity people in
Wall Street that just love copper. I love copper and when one head of the group
said, “Aluminum is a shit metal,” I felt the same way that copper is nice. By 1968 the largest item of theft in the United
States was copper, people were stripping the copper drainpipes off churches, as well as
the wires that go into houses. Thieves would pull every copper scrap as prices
were going up, so I became aware of the recycling phenomenon and the degree to which the sources
of metal were not just mining the earth but the recycling of various things. I ended up working for a while for Continental
Oil as their economist, and then while I was doing it, they bought the Baghdad copper company
at my recommendation because I could see the war was going to go on for a while. They also got into real estate. Well then they moved up to Connecticut and
I decided to become a professor at the New School, because I never had a course in trade
theory and the only way to learn about a topic is to teach it. So I gave the course in trade theory, and
then was hired as a full-time faculty member in 1970 and taught national income analysis,
using Marx’s Theories of Surplus Value as my textbook. This infuriated the department head, Robert
Heilbroner, whose idea of Marx was what he had for breakfast and how he felt later, and
did he really have an affair with his maid. There was not much economic analysis, and
he was furious that I would teach a national income course. He said, “You’re a Wall Street thug! You know only one third of the economics students
are from business, one third are foreign students from the UN, and one third sort of radicals
who are left-wing.” He just assumed that I was there for the business
school students. I never once discussed politics at the New
School. I realized that Heilbroner’s idea of Marxism
was Stalinism, as a very crude idea. He brought in a Stalinist, Steve Hymer, ostensibly
to teach trade theory, and I said, “That’s fine, I’ll teach monetary theory and banking
theory. Hymer was a proselytizer for LSD. He would tell the students to take LSD and
then listen to his course. About a year after he joined, he went to the
American Economic Association meeting in Montreal, had students take LSD and stand on their head. On the way back to New York he drove his car
into a truck and his group died. It’s really dangerous to take LSD when you’re
driving. The foreign students were coming into my office
and saying, “Is this man CIA? Why would he want us to take LSD unless he
wants to, you know, deport us or arrest us or make us into a spy?” So I was the guy they would come to and that
made Heilbroner think all the more that I must be a Wall Street plant. Finally, the dollar went off gold in 1971. I took a number of articles that I’d written
and wrote my first book, Super Imperialism: The Economic Strategy of American Empire. It came out in September, 1972. Well just at that time I was invited almost
every year to give a lecture at the annual meeting of Drexel Burnham. Like Arthur Andersen, they also were deemed
a criminal enterprise whose leaders ended up having to go to jail for fraud. They joked that I was their token Shabbat
goyim. My friend Andre Sharon there also was a protege
of Terence McCarthy said, “We’re going to have an annual meeting, we’re going to introduce
you to Herman Kahn,” who was a brilliant military theorist. Andre said, “He’s going to talk to you,
he talks very fast, he’s a brilliant guy. After he hears you speak, he’s going to offer
you a job. You probably can’t understand what he’s saying,
but just say yes. You’ve got to get out of academia, you don’t
belong there.” So I gave the speech about the oil industry
and how America was exploiting the world and how going off gold meant that there was only
one thing that foreign countries could do with their balance-of-payments surpluses. These dollars were being thrown off by the
US balance-of-payments deficit for military spending. Foreign central banks henceforth would have
to buy Treasury bonds. So the military would spend dollars abroad,
pump the dollars into the European and Asian economies, which then would lend the money
back to the United States government by buying bonds, to finance the war and their own military
encirclement. After I told that to the Wall Street meeting,
Herman Kahn said, “This is brilliant. We’ve run rings around the British imperialists. This is a great story. Leave academia, I will triple your salary
if you’ll come to work for me.” I said, “Well, I was hoping my students
will go on and spread my ideas.” He said, “Look, you’re hoping that someday
one of your students will be a senator, may be president. You join the Hudson Institute.” (It was named after the river not after me,
but my ancestor discovered the river). He added, “I’ll take you to the White House
next month. It doesn’t matter who’s president. Wouldn’t you rather wait until somebody becomes
elected president, and then you become their advisor, instead of hoping that one of your
students from the New School might get elected?” So I immediately joined the Hudson Institute,
and was paid the same salary he was. I was the number two man and we disagreed
on everything. He was a right-winger, a Zionist and I was
a left-winger. We had the big study that the Institute did,
the corporate environment study, telling corporations what’s happening in the world. It ended up I got most of the clients. One day right after my book came out in September,
I was buying Tibetan art at that time, and Chinese art, I was a specialist in Asian art
as a hobby, and I got a call. I woke up in the morning and I had written
a note about the $3,500 that I owed art dealers, and I wondered what I was going to do. I got a call from I think the Royal Bank of
Canada saying, “We’ve just made 20 million dollars by reading your book and the last
paragraph on how prices were going to go up. What do you charge to come and give a lecture
for us?” I said, “Oh, $3,500”, and they said okay. So I thought this was wonderful. They organized my lecture through a stock
brokerage company, Molson Rousseau, in Montreal. Everybody who came to listen to me would have
to generate stock trading fees of $3,500 and they would give me the envelope with cash. Everybody loved it, so they invited me back
two months later. Apparently they did not know that I worked
at the Hudson Institute at that time. (I worked at home most of each month.) They called Herman Kahn and asked him. They just told him, “The last person we paid
is $3,500.” He said, “Well you know I’m a famous author,
you have to pay me $4,000.” So they paid him $4,000. That went over very nicely. Then I got a call: “People really like this
series we’re doing. Will you come back again?” I said, “What are you going to pay?” They said, $3,500.” I said, “Well, I understand you paid Herman
Kahn $4,000. I’ll have to charge $4,500.” “Okay, we’ll get more people.” They came, I gave the speech. Then they called Herman the next month. He said, “I understand you’re paying Michael
$4,500. I’m his boss. You’ll have to pay me $5,000.” We ultimately got them up to $6,500 and they
said, “I think you guys are playing a game with us.” And so $6,500 a month supplemented my $45,000
a year from the Hudson Institute. I went all around the world with Herman. We went to Korea, Japan and France, basically
talking about the balance of payments. Herman weighed over 400 pounds. One day, we were in France, we were packing
at the hotel, and he asked me to hand him his pants from the closet. As far as my arms would reach, it wasn’t big
enough for what went around his waist. One day after we came back, we had to go to
the White House for a meeting on oil and the balance of payments. And who should be the Undersecretary of the
Treasury but my old mentor from Standard Oil who had explained to me how offshore banking
centers worked. He explained to Herman and me that he told
the Saudi Arabians, “You can charge whatever you want for oil.” This was right after America quadrupled the
price of grain to finance the Vietnam War in 1972-73, and OPEC
responded by quadrupling the price of oil. The Undersecretary of the Treasury explained
to me that they could charge whatever they wanted for oil. He knew that the higher they charged, the
more the American companies would be able to charge on domestic oil. But the Saudis had to recycle all of their
dollars into the United States, into Treasury bonds or the stock market. “You can’t buy American companies, you can
only buy stocks or bonds, and you have to price your oil in dollars. If you don’t, we’ll consider that an act
of war.” So here I was right in the middle of understanding
how imperialism really worked. This was not what is in most textbooks. Most don’t talk about the balance of payments,
but the key to financial imperialism is the balance of payments. The United States fights to prevent other
countries from going back to the gold standard, because at the time America went off gold
in August 1971, every American dollar bill was backed 25% by gold at $35 an ounce. Well, finally there was no more surplus gold,
and that’s what forced America off gold. Its price immediately went way up. As an American citizen, I wasn’t allowed to
buy gold. So I knew it was coming but I couldn’t make
any money off it. Instead I bought Tibetan and Indian art, Asian
art primarily. To make a long story short, I became a financial
advisor to the Canadian government as a result of the stock brokerage work in Montreal. They said, “We need somebody who knows the
American stock and bond market”. I was at that time the highest paid economist
per diem in the United States for financial analysis. So I got a call saying, “They’re going to
want to hire you but there’s only one way in which they can tell how intelligent you
are. Do you know about wine?” When I grew up at the University of Chicago,
the university paid its professors so badly that to make more money, their ideal was to
be a wine steward at the Pump Room, which was the fancy restaurant in Chicago. It was featured in the Blues Brothers comedy
with John Belushi. Anyway, I took a sommelier course, got a license,
and brought two bottles, one Richebourg and one La Tâche that I bought in the remainder
carton at an uptown store. I gave them to my host in Ottawa and the government
guys said, “That’s the guy we want.” So I wrote a study that Canada didn’t have
to borrow money abroad for the provinces to invest domestically. They could create their own money. Basically, what I wrote was the first example
of what’s now called Modern Monetary Theory, that governments can create their own money,
their own credit. They don’t need a foreign-currency backing
for it, and so all basically the same circular flow analysis that I’d developed from my history
of thought. a Physiocratic analysis. One of the top investment analysts for the
Royal Bank decided to become the head of personnel. He said he thought that it’s a personality
problem that economists can’t understand how the world works, that there’s a particular
kind of dumb person that becomes an economist. It’s a kind of autism, of thinking abstractly
without a sense of economic reality. So he got me an appointment with the Secretary
of State of Canada. In Canada the Secretary of State is in charge
of education, films and culture. So I became Canada’s cultural adviser, which
is what I thought was fine all along, and I wrote a report. Around that time I also was an economic adviser
to the United Nations Institute for Training and
Research, UNITAR, writing their reports on North/South debt, the foreign debt of third
world countries, denominated in dollars, and how this was deranging their economies. They had a meeting in Mexico financed by the
Mexican president and I was invited down there. I gave a report saying that there was no way
that the third-world debts can be paid. My first job I worked on at Chase Manhattan
was to estimate how much export revenue Argentina, Brazil and Chile could make. The idea was that all of their export earnings
could enable them to pay interest on money borrowed from US banks. The idea was that the entire trade surplus
should be pledged as debt service to the American banks. My job was to think how much that was, and
what should Chase’s share be. So, at the Mexican UNITAR conference, I said
that these debts cannot be paid, therefore they should not be paid, they should be canceled. There was quite a stir over that. Well at the end of the conference they had
the rapporteurs summarizing the papers. The US rapporteur said that Dr. Hudson has
given a report saying that third-world countries should export more in order to pay their debts. I stood up slowly and said, “I must insist
that the President of Mexico offer a public explanation, apology to me and the conference. This rapporteur has inverted and reversed
everything I said. I believe he has a covert purpose. I’m pulling out the American delegation and
I’m pulling out the Canadian delegation too. We cannot be a part of this travesty.” Then I walked out, wondering what’s gonna
happen! The Russian delegate came out laughing and
said, “Ah! You’ve dominated the whole conference. You’ve made chaos out of it. You’ve embarrassed the CIA. This is fantastic. Here’s my card in New York.” Later that evening I was told, “You know,
they’re looking for you to beat you up.” Well as it happened an old girlfriend of mine
was in a group who were in Mexico for an art exhibition. They were surrealist artists from Amherst,
and they were also doing a surrealist ballet. So I went to the ballet with them and they
said, “Look! The thugs are there.” So I hid out with them on the stage in their
ballet. The goons were looking in the audience and
I was on the stage and we were all just surrealistic. Nobody knew how to dance or anything, it was
all just surrealistic. And they, you know, the goons all went home. I learned that if they can’t find you, they
usually give up and leave you alone. I went back to New York, but I realized that
the debt issue was so controversial – the idea that debt couldn’t be paid. I spent about a year and I’d got through medieval
period, Europe, World War One, and then even Greece and Rome. But then I found — it was about 1980, 1981,
at that time I sold my house on the Lower Side and moved into a loft near Wall Street
which was very low price there at that time, (I bought it for $20,000. Later I sold it for $580,000 but that’s another
story), it shows you the real estate in New York, but at that time nobody wanted to live
in lofts, and I wanted a big loft because I had a big library at that time and a lot
of art that I wanted to keep. So basically I stopped working. I realized that in the Bible there was the
Jubilee Year and there were references to Sumer and Babylonia and that there was a background
of the biblical debt cancellations, almost the same word for deror in Hebrew is andurarum
in Babylonian. I found that there was all this material and
that had never been written in anywhere outside of the field of assyriology. There was no economic history of the ancient
Near East, no economic history of Sumer and Babylonia. It was all about religion and some culture,
Gilgamesh and all that, but not what I was most interested in, which was the debt cancellations. So I wrote a draft of what I could find by
1984. And one of my friends was the Ice Age archaeologist
Alex Marshak. Although he lived in New York, he was connected
to Harvard’s Peabody Museum. He showed it to the head of the Peabody, Karl
Lamberg-Karlovsky, who told me, “This is great! Nobody else is working on it.” He appointed me a fellow of the Peabody Museum
in Babylonian economic archeology. I thought, “This is wonderful, this is really
what I want to do.” So I spent the next maybe three years writing
the first draft of what became the book that’s being published in a few months, “… and
forgive them their debts”: Credit and Redemption from Bronze Age Finance to the Jubilee Year. I submitted it to the University of California
Press. They sent it to scholars to referee, who said
that it was impossible that debts could be cancelled. Their argument was that if debts were cancelled,
who would lend money? That’s what Rabbi Hillel argued in the Judaic
tradition. I said, “Most debts were not the result of
loans. Most debts were when the crops would fail
and the cultivators could not pay the palace for the fees they’d run up, the rental fees
for the land, the fees for the water, for the draught animals, or the beer lady for
the beer that they’d drunk. So every ruler, when they would take the throne
in Sumer and Babylonia, for a thousand years, would start their rule by cancelling the debts
with a clean slate, an amnesty. It’s the same amnesty of the kind that Egypt’s
Rosetta Stone commemorates. Everybody knows that the Rosetta Stone has
trilingual inscriptions of Greek, Egyptian and Coptic. But few know that it’s a fiscal
debt cancellation. That’s what we call cognitive dissonance,
people can’t imagine that the debts were cancelled. I realized that this was very controversial,
and so my Harvard colleague, Karl Lamberg-Karlovsky, suggested that we hold a series of meetings,
and asked me to organize them. He said that we would hold a colloquium for
each controversial chapter of my book. We decided to have a meeting every two years,
and invite every major specialist from early Sumer, the Neo-Sumerian period, Babylonia,
other Near Eastern realms, and Egypt. Their role was to collect everything they
had on whatever the meetings’ topic would be. Since I was in New York, I worked with the
leading Hebraic linguist Baruch Levine at NYU. I needed someone who was respected in the
linguistic field to invite people, because most Sumerologists, readers of cuneiform,
stayed away from economics, because the mainstream economic idea of how society developed is
as if Margaret Thatcher would have created civilization. How would she have done it, or Milton Friedman,
or what we call vulgar Marxists who think that it was the idea that seemed plausible
to Engels when he wrote The Origin of the Family, Private Property and the State. That’s not how early history actually occurred. So the Sumerologists wouldn’t talk to economists. But because I was now an archaeologist with
Harvard in the anthropology department, they agreed to come to the conference. The first meeting, in 1994, was on privatization
in the ancient Near East and classical antiquity. Harvard published that. Two years later, we moved on to the second
volume, which was on land use and real estate ownership: How did property ownership come
into being. Then, we had planned from the very beginning
for the third colloquium volume. That was on debt and economic renewal in the
ancient Near East. I asked for everything that people could find
about debt cancellations. We found that these occurred all the way through
the first millennium. Herodotus talked about debt cancellations
in Babylonia. It was a tradition remaining in the Near East
for new rulers taking the throne to cancel agrarian debts, to start their reign with
the economy in balance. Already in Hammurabi’s time 1750 BC, scribes
would calculate the growth of compound interest, and at that time it was 20% interest. This growth diagram is the same exponential
chart that I’d drawn up in the savings banks in the 1960s to trace the growth of American
debt. So they were quite aware of the fact that
debts couldn’t be paid and that, if you insisted on them be paid, you would have debtors
falling into bondage. So they freed the bond servants, or for debtors
had sold their means of self-support, the land, they returned the land that had been
sold under economic distress. The word “distress” means the collateral
that you’ve pledged to a creditor. It’s an Irish term basically. So we published that volume. By that time I’d got the people Baruch and
Karl and I had invited – the leaders of their fields – agreeing with my interpretation. We then followed it up with another meeting
at the British Museum on the origins of money and accounting, and the idea that money was
created not for barter, not for trade in goods and services, but to denominate debts. If a cultivator owed a debt, how did he get
money? So we did the history of money. Then, the one thing we hadn’t done finally
was the origins of labor and what it was paid. That took ten years to complete, and we found
that the origins of labor was organized basically in the palace economy, the palaces and temples. The main use of such organized labor from
the Neolithic and Bronze Age to classical antiquity was to fight in the army and to
work as corvée labor to build public infrastructure. So how do you get a supply of labor? You assign it land tenure. Land rights were created to assign families
enough to support themselves so that they could perform corvée labor and fight in the
army. So taxes came first, then came land tenure,
based on what labor you had to supply. Attempts to substitute someone to work on
the corvée became the basis for paying labor. So all of the payments came from what today
would be called the public sector. That’s not really a very good term. It was really the palatial sector, the palace
and the temples, as opposed to the community-based family on the land. So we had a new analysis of the origins of
property, not just individuals grabbing, as Engels had thought. Property was created by the public sector,
by the palaces, as assignment of land as needed. How much land area is needed in order to supply
the labor for the public infrastructure, corvée work and service in the army? This was the reverse of what’s taught in economic
textbooks today, which is, as I said, how Margaret Thatcher and right-wingers and Donald
Trump would have designed an economy if they went back in a time machine. So after organizing and editing these five
volumes, I’m now writing my own popular version, starting with a history of debt. Then will come Temples of Enterprise, a series
of books on classical antiquity. I’m now following up with Greece and Rome. Throughout early Greece and Rome, the main
fight was between creditors and debtors. Creditors ended up grabbing the land. The same fight occurred all the way down through
the Byzantine Empire. The most divisive tension throughout history,
from 3rd-millennium Sumer to 2nd-millennium Babylonia to the 9th and 10th century in the
Byzantine Empire is between the palace wanting to collect taxes and have labor for the army,
and creditors wanting this land and labor for themselves. This way of getting the economic surplus is
not the way that Marx described it as being obtained under capitalism, by employing labor
to produce goods to sell at a profit. It was by debt and taking interest in ultimately
foreclosing in land, which was the real objective. In the 9th century there was a big fight against strong royal power. It was sort of like Donald Trump and the Tea
Party Republicans are fighting against the state, like the privatization in the Soviet
Union fighting against the state. The Byzantine emperor invited general Bardas
to a big meal. The general said, “There’s only one thing
that you should do if you want to end the warfare. You have to tax the wealthy families so that
they don’t have any surplus at all. You have to give them so much burden that
they can’t fight against you. You have to prevent the polarization of wealth,
because if you let the private sector make an enormous amount of wealth, they’re going
to try to fight against you and keep all the wealth for themselves that you and the palace
are now getting.” This idea was expressed all the way back in
the 7th century 6th century BC with Thrasybulus and Periander of Corinth. When Thrasybulus took Periander’s herald to
a field of grain and said, “Here’s what you should do.” The land was a field of grain and he took
a scythe and he cut off the tops, to make all the grain of equal height. So Periander went back and exiled the wealthy
families, seized their property. There was probably a bit of fighting there,
and that is basically the fight throughout history. So that’s what I’ve been working on for the
last 20 years. Question: How did you take up the interest
in Chinese economy? Hudson: As Samir Amin said at the meeting
yesterday, China is the economy that is trying to be the exception to the Western economic
model. That model is forcing a choice between civilization
and barbarism. The West is moving rapidly into economic barbarism
and militarism. As you can see, the austerity program of the
Euro is destroying the economy there. The United States is cutting taxes on the
rich, while indebting the working class very highly. The one country that is independent and not
taking the advice of the World Bank and the International Monetary Fund is China. So we’re hoping to do what we can to make
the Chinese economy successfully resistant. What that means is how is China going to handle
its real estate, how is it going to handle its debt, how is it going to handle its tax
system. What I’m trying to do is what David Harvey
was trying to do in the speech he gave yesterday: getting Chinese Marxists to read volume 2
and especially volume 3 of Capital, where Marx discusses the dynamics of finance. Marxism is much more than volume 1 of Capital. You have to read volumes 2 and 3, and especially
the elaboration that Marx wrote in the drafts that he left for volumes 2 and 3, his Theories
of Surplus Value where he discusses the history of economic thought leading up to him. You realize how Marx was the last great economist
in the classical tradition. He showed that capitalism itself is revolutionary,
capitalism itself is driving forward, and of course he expected it to lead toward socialism,
as indeed it seemed to be doing in the nineteenth century. But it’s not working out that way. Everything changed in World War One. Afterward you had an anti-classical economics,
which really was an anti-Marxist economics. The fight for marginalist theory, for Austrian
theory, the fight for junk economics that we have today, is basically a fight against
Marxism, because Marx showed the logical conclusion to which the Physiocrats, Adam Smith, John
Stuart Mill, Ricardo and Malthus, the conclusion it was all leading was the synthesis that
he made. It was later developed by people like Thorstein
Veblen and Simon Patten in the United States. So I’m hoping that I can contribute what I
can to help China’s economy to avoid the financialization process and dynamic that is destroying the
West.

100 comments

  1. Excellent talk. Prof. Hudson is a Jewel and a treasure for economic history, thought and process – thank you for posting.

  2. At 41min 47 secs Michael talks about when the US went off the gold standard and says it was 1991. He meant 1971. Even geniuses make the occasional mistake

  3. I think at ~17:20 where he summarized the philosophy of the mainstream academic paradigm of economics where they argue "If the world worked this way…. "– I think that does sum up pretty well the ideological flaw of so-called freemarket economics. Hayek seems to be in some sort of fantasy land in his mind when he wrote 'The Road to Serfdom". In the real world, when there isn't a strong central government with good regulations governing commerce, it is inevitable that monopolies form, workers and the environment are exploited, consumers are harmed, wealth becomes concentrated — that's the real world and to the degree that Hayek's principles are followed that's the world we are living in currently and it's only getting worse as the principle of freemarket economics are followed by the powers that be.

  4. https://www.amazon.com/s/ref=nb_sb_ss_i_2_14?url=search-alias%3Dstripbooks&field-keywords=michael+hudson+books&sprefix=Michael+hudson%2Caps%2C242&crid=2ORZQEBWCZMVI Here is a link to many of Dr.Hudson's writings!

  5. A truly brilliant mind…pity he is not mentioned more often in the mainstream media..because they are terrified of him,..educating the public

  6. The fundamental reason that debts cannot be paid is because of the interest charges. Michael also avoids exposing the fact that there is no lending and borrowing in the existing fraudulent monetary system. As such all private and public debts must be repudiated not as charity or favor but because they are a fraud. If the true nature of the terms and condition of the so called contract is disclosed and no interest is charged then the contract is lawful and the money must be returned at a mutually agreed time in the future. There is no borrowing and lending its an exchange of two types of money.
    The banks cannot lend their depositor's money the banks exchange their customers alleged borrower's promissory notes which is money into a form of money which is recognized in commerce. As such there cannot be any borrowing and lending and only service charges apply. The USA and Canada Constitutions are clear that banks must be 100% publicly owned and not privately owned by 1% of the wealthy crooks. Banks cannot be in the private sector for several reasons; one. is that the private banks defraud everyone not only destroying the economy of most nations but have acquired so much wealth that they have committed crimes of epic proportion they own the governments and this is the reasons of wars of aggressions, because wars are great business for the crooked bankers. The banks finance politicians and most nations are one huge criminal organization this spells the end of the economy enslavement of all the people, wars of aggression. The Banksters and their puppet governments which are not governments but for profit private corporation for the exclusive benefits of the banksters, Military industrial complex, pharmaceutical, oil, chemical. And if this is not sufficient they are in the process of extermination about 90% of the population, by using Genetically Modified Food, nano viruses, vaccinations, chemtrails, prescription drugs, contaminated air, soil and land, microwave radiation by cell phones, and much more. The US dollar issued by the FRB is fake and its not a dollar pursuant to the US constitution. Trump and all his predecessors are the real terrorist the are threat to national security and they have violated their sworn oath of office and to the Bible. When a government officials violates their oath they abdicate their right to hold office as such Trump and all his predecessors excluding Kennedy have never been the legitimate Presidents. Trump is not the president of the people. Organize initiate referendums and recall all the traitors politicians all ex presidents except Kennedy and most congressman and senate have committed High Treason and Sedition. Create your own Common Law Court of Justice akin to the Grand Jury composed with people who are knowledgeable of the facts stated herein. charge the politicians and use the Bible as a guide. if they have robbed they must make restitution, if they killed they must be killed. Most ex Presidents have committed High Treason and Sedition and most of you knows the penalty for this crimes. Go and get them. the Bible also calls for no interest charges and debt repudiation every seven years and all Presidents, congressmen and Senate have sworn on the Holy Bible meaning they agreed to govern according to God's Laws. You be the judge ; have they governed according to God's Laws? thous shalt not kill and killing is the best they have done by bombing cities and killing million of children and adults. People of America and all other nations if you don't stop this insanity you have blood in your hands, if you don't oppose you condone.
    Trump and most of his processors and their friends are psychopaths and pathological liars. I am ashamed to belong to mankind. We the people are also responsible for what is happening because we stayed silent. We allowed the genocide of Palestinians and people of other nations.

  7. The word Capital is often miss-used. We don't have a capitalism economic system in the US or Western Nations, we have a subversive despotic socialism slowly moving towards subversive despotic dictatorship. We are already there. All forms of government need capital. Capital is not money its the human energy, the sun, soil , water, food, minerals and man's energy. Money measures the value of capital, or energy. Money is a means of exchange and a unit of accounting. Here is the Trick; those in power puppets of the Banking Cartel have convinced most people that capitalism is the same as free enterprise and is not working and this is the reason that most ignorant people are brainwashed to believe that communism is the answer. The most ideal form of government is pure communism as the communism of China. The communism imposed by the Bolsheviks in Russia in the 1900 is subversive and despotic and genocidal. The Bolsheviks attempted to impose their form of communism in all Europe. and Hitler almost stopped them. Now the US is a dictatorial subversive system of government and it will fail as it did in the communism Russia. The Bolsheviks communism is fake and deceiving they pretend to fight injustice only to attract support from the disenchanted and gain total control of the government and take over all the wealth and enslave the people. The US has been imposing the subversive and despotic communism on all the Western nations to usurp all their wealth for the exclusive benefits of the banksters that have never lend one cent to anyone. Thanks to China and Russia and. others who oppose the American hegemony ; China, Russia Iran, Syria and others keep up the good work and don't give in to the diabolical US mad men. Most Nato which is the creation of the CIA, The CIA have bribed the Nato's leaders to support the mad men of US so called government. the US is the puppet of the International Banksters Rotten people who hate every man, woman and child to the point they want us all killed and they are doing a good job. Income taxes are not allocated to reduce the outstanding fake debts of nations they are profits for the banksters. – The loot is divided between the US inc. Queen, Vatican, World Bank, IMF. Trump and his predecessors specialize only in intimidating in bombing and destroying nations who don't agree to be robbed. Dear Trump thanks for waking the people of the world to your deception, the only. problem is that most Americans and the rest of the world is against. you, they figured out your despotic subversive plan. You and your mad men friends Banksters are finished, finito,. kaput. Capish?

  8. Michael thanks very much for your information, you should explain that what was known as Capitalism was supposed to be free enterprise. . So you should explain that USA began as a free enterprise for a while but it gradually evolved into subversive Communism and most people are deceived to believe that free enterprise is not working. so that they support communist. T

    The subversive Communists were already brainwashing students in the USA. at the early stage if you recall Ronald Reagen was involved when many communists were charged and your father was one of those. – This is the trick. used by the Communists financed by Internationals Banksters have deceived everyone to believe that capitalism which was really communism did not work – these subversive banksters want to own the whole world and succeeding making the people think that free- enterprise is not working. People believe that free enterprise is capitalism. And Capitalism (free enterprise which was really soft communism) was fomented not to work precisely to convince the masses that capitalism doesn't work to make the people believe that communism was the answer. The Communism in Soviet Union back in 1900 was financed by the Bankers. and many fall for this deception and believe that communism is the answer please explain this. Tin order for the subversive communism to succeed they must deceive the people that free enterprise erroneously known as capitalism doesn't work.

  9. If he lived in Russia under Lenin, his family will be killed immediately rather his son can continue a good education. Basically he is only theory rather any experience life at any special communist country as china, Russia or Cambodia so on. Real Life is so complicated than theory dear professor. Monopoly capitalist is Terrible but still much better than any form of communist or radical socialist. The key is keep balance between capitalist and socialist. But in case of capitalist regime, the elite class can change or revise to keep balance, but in any communist or monopoly party, elite class has absolute power and they will never let any alternative ideal survive, look wHat a real situation in Cambodia, china or others communist country

  10. Analyze reality of social is easy, but a solution which can keep balance and solve issue is more important than just critics current social unfair. Find any country which transform to communist country that they don't destroy all freedom value , traditional value and create a terrible chaos

  11. If he spend 10 years at North Korea as average folk and continue prefer to columnist regime, maybe we can listen to him but he doesn't any.

  12. The steps towards the salvation of the western world will be bitter for the elite but ultimately they will be better off than under the alternative.

  13. Lol 15:00
    "Ok, you are not good at joining the CIA" putting this in a resume beats any kind of qualifications on any day : )

  14. I had no idea that Michael Hudson was Leon Trotsky's godson and knew Max Schachtman (in later years to become a renegade from revolutionary Marxism), Terence McCarthy, and György Lukácz. A pleasant surprise because I've absolutely adored Michael Hudson for a few years now (only now having found this interview), and I was for many years active in the Trotskyist movement and have known several Minneapolis Trotskyists, including Joe Hansen, a 1938 Minneapolis Teamster organizer, who was an (as it turned out unsuccessful) bodyguard for Trotsky in Mexico. There's a conspiracy theory having verisimilitude that one of Stalin's henchmen (in this case a woman) had infiltrated the SWP and played a role in the assassination. One of my friends who was a fellow-traveller of our movement was a concert pianist, so I wonder now whether he'd ever met Michael Hudson. I was also pleasantly surprised to find out his early interest in Germanic languages and philology, which I've had a lifelong interest in because of an early interest of mine in German Romanticism (which was one of the things that led me to Marxism). What a brilliant mind! Would that I'd had the intellectual brilliance and mental discipline of Michael Hudson! We're so lucky to have him. He's my favorite Marxist economist. For a time I too wanted to be an economist and gave my bourgeois economics instructors pure hell. Bourgeois economics is trash: exactly what Michael Hudson says about it, and I'd add that Vilfredo Pareto (a founder of Neo-Classical economics) was an honorary member of Mussolini's Gran Consiglio del Fascismo and Mussolini called him "the founder of fascism". Michael Hudson has me wondering how many of the current financial economists know what he does and keep their mouths shut. In many ways, my life has been a junior version (you could almost say "infantile version") of Michael Hudson's life experience.

  15. Thank you very much for presenting this intensely valuable survey of history from Prof. Hudson. I am going to post this video on the ResearchGate page that has been established to enable independent activists and informal community groups to become aware of the background records on the 17 Sustainable Development Goals for 2030. https://www.researchgate.net/project/Building-a-world-network-for-the-17-SDGs-for-2030

  16. Extraordinary Life and Thought, indeed, and for those Unrewarded Geniuses out there….. well, take Inspiration! Peace!

  17. For what it is worth …

    A fairly recent chapter in Michael Hudson's life story is his relationship with economists and others who look to the principles and analysis of Henry George for guidance. This relationship is best described as very strained, and strained from the very beginning.

    I cannot remember when I first met Michael. It probably occurred in 1993 or early 1994. At the time I was serving as President of the Board of Trustees of the Henry George School of Social Science in New York City. One of the other board members, Si Winters, brought Michael to the school with the object of having him perform research to determine what portion of the nation's income was rent (and, therefore, unearned by individuals or private entities). The relationship did not work out well. Michael assumed the Henry George School was going to provide a high level of support to him, which the school was neither staffed nor equipped to provide.

    Despite the problems, during the time he was under contract with the school, he completed a short book titled "The Lost Tradition of Biblical Debt Cancellations," published by the Social Science Forum of the Henry George School. Michael also wrote several papers that appeared in the school's newsletter. In 1997 he delivered the paper titled "Quantifying Rent: Tax Reform and the Barriers to Research" at the conference of the International Union for Land Value Taxation and Free Trade, held in Brighton, England that year.

    Although Michael's association with the Henry George School ended around this time, he had established a working relationship with a number of leading figures in the Georgist community, particularly Fred Harrison, at the time editor of the London-based periodical "Land & Liberty." In 1996, Fred brought together a diverse group of "Western experts" to offer advice on privatization to the Russians. This trip was the result of several years of work with various Russian political figures and members of the scientific community. Michael and I were part of this team who travelled to Moscow to deliver our views to the Russian Duma. My record of this trip was later printed in the Henry George School's organ, "Henry George News."

    Michael's view of how the world works is, as he states, much closer to that of Karl Marx than to that of Henry George. As did Marx, Michael acknowledges that rents rightfully belong to society. However, he sees Marx's labor theory of value as a sort of means test for the establishment of rules for wealth and income distribution. To Henry George, the cause of the maldistribution of wealth is monopoly and the monopoly of nature, particularly. George argued the case for a labor and capital goods theory of property. His theory of value was based on "labor saved" as this applied to the production of goods used as capital goods (i.e., to produce additional wealth).

    The failure of neoclassical economics to describe the real world has resurrected and broaden interest in both Marx and George. Both deserve to be studied and included in any serious analysis of economic theory and the public policy options that will best solve the serious problems of continued widespread poverty, the expansion of monopoly privilege, and the boom-to-bust character of the world's economy.

    Edward J. Dodson, Director
    The School of Cooperative Individualism

  18. I first heard of Hudson by listening to Richard Wolff's podcast. And I first heard of Richard Wolff when he was on Thom Hartman's radio show. And that was just by chance. Pretty much the same with David Harvey. Then a week or so ago I came across an article in Counter Punch. I think I saw a reference on twitter. The writer said that Hudson was the best economist in the United States (maybe the world). He said all you would need to know about the economy is to read Hudson's book Kill the Host. So among other things I am kind of reading and listening to I have started reading that. I have never had a clue about economic theory as that never interested me that much. But since listening to Wolff and his guests I certainly have a much deeper understanding of the subject and about Marx. People are so afraid when they hear is name. I don't think I could work my way through Capital but people like Wolff, Hudson, and Harvey, make economics much more understandable. It is too bad that the majority of people are so unaware of the people I mentioned. If they know the names of any economists, it is probably Krugman, Stieglist, (spelling) and go back to Freidman.

  19. that's funny – my dad was offered a job at the Hudson Institute – he turned it down since he wanted to stay in Minneapolis (where Michael Hudson is from!). small world.

  20. That's also how the Inca empire worked – to own land to raise a family you have to provide labor in the military and pay taxes in grain.

  21. I have Read all the Comments below. I may be wrong, but I hear or see no Kritik of Prof. Hudson. As an Author and Academician, and mindful of my limited knowledge, I may only say Shame on those American Publishers who held up, then refused to publish his work. Sure, he is a bit eccentric….. for example, Prof. Hudson likes Loooong Prefaces. But his Publishers want loooong explanations of how his work can be appropriated and commodified by those targetted audiences that commit up front CASH…. ya know…..those who wish to make money. Sad. But true. I wish I might meet Prof. Hudson some day. Like Alan Gewirth. Like Bernard Lonergan. Like so many under-appreciated Thinkers who have been Discriminated against by Mainstream Economics or Whatever Discipline, but certainly by POWER. Thank you Prof. Hudson. You are special….. only a few will understand that. Your work in ancient Economics is deeply appreciated by a Harvard University Graduate that lived very very close to the Peabody Museum and listened carefully to Acadian Cuneiform being read aloud in the basement of Andover-Harvard Divinity School Library Peace, Prof. Gregory J. Walters (Harvard University, M.Div. 1982) God Bless You, Michael Hudson, and Give Back for you have Received so much, and your intellectual Cup now runneth over!

  22. 24:16 When I'm asked what I understood from watching this video…

    No. Seriously, I recently discovered Michael Hudson through the Keiser Report, and I'm learning a lot!

  23. Where oh Where oh Where is the CLINTON BUSH PELOSI BIDEN OBAMA Special Counsel ??????? https://americalooted.wordpress.com/clinton-obama-bush-the-cia-and-slushy-funds-clandestine-crimes-war-inc/

  24. I sincerely find all lectures with Michael Hudson to be worthwhile and important to understanding the dilemmas we as human being now face with our current economic systems.

  25. This oral bio is beyond amazing! When he described a prof who insisted his students take LSD before listening to his lectures, I had to PAUSE and do a few deep tokes. AMAZING! I just LOVE Michael Hudson!

  26. This is my favourite video of Michael Hudson. He is by far one of the best economists of this century. This is not just really informative, it is ridiculously funny. Read his books if you want t learn what is going on in the world. I write about his work in my own book Hijacked, info on this on my site ABurgoyne.com THere are other resources there, help yourself.

  27. the fact the Rosetta Stone is a debt cancellation is utterly mind blowing that isn't more well known.

  28. I'm afraid that this is a never ending war, as there will always be infinitely greedy and power hungry humans, Michael talks about China's model and the layers of management of the Chinese system, it is obviously currently doing very well with regards to growth and distribution. We have to do something to resolve the gross inequity across the rest of the world, but the problem is the western population have deep seated beliefs that "our way" is best, that's going to be hard to change that, and move to something better, and of course the Oligarchs wont like that one bit!

  29. That is also one of the meanings of Muslim related to the Hebrew Meshulam, Mushlam in Aramaic – your debt to God being paid or forgiven

  30. The Observable Universe is basically QM-Time Principle circularity, from which bio-logical chemistry is superimposed on the physical-mathematical, metastable modulation modules of "leaky" uncertainty and instability, which is the natural occurring environment of probability in potential possibility that tends to appear to be Parasitism. Mutual, Commensal and Obligate, parasitism can be traced down through the general ecology of the biological processes, to energy and mineral elemental cycles to the temporal superposition logic of Time Timing in Eternity-now.

    So the "economic ecology" explained by Michael, that developed, matured, and then became so successful that it has evolved further than the original reliance on human and animal labour to create potential possibilities for resources by expanding the available use of energy, has not lost the basic nature of parasitism, and is constantly shifting proportions and balances unpredictably, ..as trying to predict the future has always been proven to be.

    Human history is about competition, families and tribes and nations that sometimes merge and otherwise conflict.
    If this is recognized as natural biological processes, then one point of view is that group organization is a balance between governance for common good and unreasonable selfish, or "criminal" advantages. Personal choice is restricted to local environments.
    "Not only is the Universe more complex than we think, it's more complicated than we CAN think". But listening to Michael is something of a temporary relief from the natural confusion.

  31. Fantastico! Like reading Rostovtzeff's 'Social and Economic History of the Roman Empire.' Will listen to again
    and again until every idea is absorbed.

  32. absolutly fantastic and for ones, it makes even sense, exactly what we need right now, respect

  33. 12:50 thats what i say often, economics is wrong and am from engineering, economics is a pseudo cience, more like psychology, because it uses mathematics to explain human behaviour. Economics books are for morons. Those formulas, interests, bonds and shit capitalists invented? its pseudo science taken as true religion, its just a system that can be changed at will, for the worse or better.

  34. this guy would do himself an immense favour if he would just SLOW DOWN. He rushes at his story and constantly has to ummh and aah because he's mentally ahead of his words. His delivery reminds me of Elmer Fudd.

  35. Why this Sir get 25k views and Jordan Peterson, that is an infantile in economics and tell stories about pinocchio get millions?
    Stupid system rewarding bad music and gender studies, sorry, philosophy people.

  36. The mind talks the body knows see yourself in others. I am the other you. You are the other me. Love always, only love remains. Such a easy philosophy of action, and yet self sabotage is our path, suicide our destiny, welcome to extinction.

  37. You over complicated problem of USA. Redistribution of income annually and accumulated (wealth) is not adequate to educate and support
    middle class and poor and afforrdably priced government controlled health care. Government is by bought puppets of a greedy rich
    small group of capitalists that do not allow sufficiently progressive taxation post Reagan and still it remains so in his top marginal range and with lowered capital gains since Clinton at 30%. I am 8th generation USA PhD farmer and PhD chemical engineer and also poet/musician and don't need your Russian city wisdom as problems are clear to me explained in my college text by Paul Samuelson, We count government deficits in part as growth of GDP and real growth since Reagan is 1.6% no more. Fuck you smarty pants.Obama is champ 10 trillion in the red agreed. USA economists should be exiled to Siberia in ther underwear LOL Poor Tom

  38. Since the presentation had been published from Columbia university I try to keep up with MMT related presentations, articles, and interview. China did not really take part of this process up until now. So, this is absolute shocking for me. But, it will be an even bigger shock to China critics. Suddenly China not so much just an "ugly country ruled by communists, that publish fake gdp statistics " and yet the builder of high speed rail, and consumer manufacturing.. and so on… By other critics China is ruled by feudalistic rulers, and the most efficient capitalists…. Mr Hudson offers a 3th possible explanation: Societies progresses, making changes almost always, and the question is rather this:
    (1)Who captures the benefit of that actives: CORPORATE BIG WIGS / NATIONAL POLITICAL LEADERS / LOCAL GOVERNMENT LEADERS / BANKS (FIRE istitutes)…. or GLOBALISTS.
    (2) Who Integrate ? (Producers, Administrators, Entrepreneurs, and Military might) (PAEI)
    (3) What kind of narrative is the best to communicate, and what is the best model deep inside ?:
    Feudalism (charismatic leader, diktator) Capitalism (voter based democracy) or Socialism related redistribution should be emphasized…
    (4) Population age structure, loyalty, credit, and national debt.. all related to migration need to be considered…too.. (The importance of Time and Compound Interests, and optimum rate of savings, investment…
    Michael Hudson is an unbelievable Treasure of North America…
    Good job by China to tap into this treasure …

  39. Clearly economics is not a science of nature, and not even a social science, rather the art of leadership, play with numbers, on spreadsheets. I am Sorry for the sad fact that fellow Hungarian George LUKÁCS was such an obnoxious person… Cheers from Hungary.

  40. Michael has provided a stunning summary of economics intertwined with his own extraordinary personal biography. I can't help however to wince at his current mission to prevent the financialization of the Chinese economy. It seems that China has emulated the worst types of asset inflation and sandbagging of the real economy by the Predator Class… but maybe Michael will uncover some insights that paint a different picture.

  41. After learning MMT and reading Nomi Prins' "All the President's Bankers" this is a really good supplemental. It's pretty shocking to discover how our world really works. Here, Hudson is giving us stories we'll not hear anywhere else.

  42. you are a smart guy but you walk around a fat lazy 400 lb. slob that eat like pig ,farts while he dreams , will eat the leftover ,if he's not there @ dinner ,if he his there no leftover ,will never ever get up ,lazy glouteni ,person with body odor ,always HUNGRY ,can ner wipe his ass good or impossible because the fat arm and waist line ,piss on himself . I would call that that not a smart move

  43. michael hudson should put his life in a memoir, it would be very interesting and an historical document in itself.

  44. If you've read Koch's The Structure of Scientific Revolutions, ideas only die out when the old status quo dies out. The younger generation who know the old ideas aren't fit for purpose slowly take over the institutions, defy the old orthodoxy and become the new orthodoxy until someone comes up with a new revolutionary idea that hardly anyone accepts and the cycle carries on. It is still Darwinian but it's more generational due to cognitive dissonance causing the old guard to cling onto their existing worldview instead of taking the brave step of admitting they were wrong.

  45. i love him going onstage and pretending to be in a dancer in a surrealist ballet to avoid thugs beating him up for pulling his delegation from an economics summit after accusing them of being cia plants lol

  46. I am sure that next time socialism is tried it won't end in starvation and genocide like every other time and people like Lenin, Marx and Trotsky will be vindicated.

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