Michael Hudson on the Economy and the Road to Serfdom
.I hadn’t heard of Michael Hudson before, but I found what he had to say in this interview rather interesting. He gives explanations that sound plausible to me for a number of apparent oddities in the world economic system, for example his first answer about why the US can sustain such a huge deficit.
The most important part of the interview, is probably this, after being asked about the current problems in the housing market:
[T]he financial model has been a great success from the vantage point of the top of the economic pyramid looking down? The economy has polarized to the point where the wealthiest 10% now own 85% of the nation’s wealth. Never before have the bottom 90% been so highly indebted, so dependent on the wealthy. From their point of view, their power has exceeded that of any time in which economic statistics have been kept.
That’s rather interesting data, that the bottom 90% have never been indebted to the extent that they are now. Given how things have been going (particularly the steady rise in inequality), it seems that Hudson is quite justified in following that up with:
[W]hat they’re trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions. They’re not trying to make the economy more equal, and they’re not trying to share power. Their greed is (as Aristotle noted) infinite. So what you find to be a violation of traditional values is a re-assertion of pre-industrial, feudal values. The economy is being set back on the road to debt peonage. The Road to Serfdom is not government sponsorship of economic progress and rising living standards; it’s the dismantling of government, the dissolution of regulatory agencies, to create a new feudal-type elite.
This just seems like common sense to me—the rich and powerful are trying to become more rich and more powerful. Power isn’t quite a zero-sum game, but clearly diminishing the power of others increases your own in comparison, and I don’t see why it would be at all controversial that the powerful are trying to gain more power. Unless you believe that because of their sense of civic responsibility, the powerful are acting against their own interests and working for the greater good.
02 Sep 2008 at 05:08
I think it’s worth clarifying that while politics may be zero sum game, econoimcs is not. Advances in processes, institiutional behaviours and technology all allow for a person to have a higher standard of living without someone else having a lower standard of living. Deficit and national debt questions are more political than economic.
http://everydayecon.wordpress.com/2006/10/11/economics-is-not-a-zero-sum-game/