Hudson, Michael. The Bubble and Beyond. Fictitious Capital, Debt Deflation and Global Crisis. Desden: Islet, 2012.
The problem is that credit is debt and paying debt service to bankers and bondholders (and various grades of loan sharks) leaves less income available to spend on goods and services. So debt deflation is today's major problem, not inflation.
p.4
The question is whether finance will promote economic growth and rising living standards, or create unproductive credit and use government to enforce creditor claims by imposing austerity reducing large swaths of the world population to debt peonage.
p.5
German fear that central bank credit creation is dangerously hyper-inflationary fails to recognize that all hyperinflations have resulted from balance-of-payment deficits. Never in history has hyperinflation resulted from goverments monetizing domestic spending.
p.6
Economic statistics as currently reported are fucked up because:
Interest is treated as "profit" earned by producing the bankers' product: the debt taken on by borrowers. Treating the banks' privilege of debt creation as tangible industrial investment conflates money and credit as a "factor of production," so that interest, penalties and fees appear as part of the production process, not external to it.
p.8
As financial charges rise to absorb more corporate cash flow, real estate rents and wages, debt-burdened economies find themselves priced out of world markets. International trade competition now reflects financial, insurance and real estate (FIRE) charges more than the prince of bread and other basic commodities.
p.10
The economic tragedy of our time is the decoupling of banking, the stock market and the rest of the financial sector from the funding of new capital formation.
p.66
For over a century, the neoclassical (that is, anti-classical) counter-revolution has insisted that all economic activity is productive. This philosophical approach understandibly is preferred by the most unproductive sectors, and by the recipients of what the classical economists called unearned income (or "economic rent"), wishing to claim that their wealth and revenue is as justifiably earned as all other forms.
This was not the view of the Saint-Simonians, who pointed to the extent to which wealth was inherited rather than created by its owners. I was not the view of Adam Smith, who described landlords as loving to reap where they had not sown. It was not the view of Ricardo and subsequent rent theorists who showed that rent was a "free ride," an element of price that found no counterpart in cost defrayed by the rent recipient.
If industry has not broken from the Chicago School's financial philosophy, it is because the goals of today's industrial corporations have become increasingly financial in character. Manufacturing companies are now being run by financial rather that industrial engineers. Wall Street controls "Main Street" not the other way around. It is the essence of today's "postindustrial" economy that finance capitalism has absorbed industrial capitalism and subordinated its drives for profits with a drive to obtain financial returns, including capital gains (that is, asset-price gains) from channeling credit into securities and real estate markets. Thus, contra Marx, the dynamics of finance capital have diverted from those of industrial capital to the point of stifling industrial potential and raising the specter of plunging the industrial epoch back into the ancient usury problem that nineteeth-century observers believed was becoming a thing of the past.
p.67
The reality is that bank credit today has no cost of production beyond a modest administrative overhead. Interest rates have no determinate foundation in the "real" economy's production and consumption functions, although they intrude into that system's circular flow by siphoning off debt service, late fees — and publuc bailouts when the financial system becomes too "decoupled" from the "real" economy. Such financial charges cannot be assigned to labor or other "real" costs of production. The administered prices for interest and underwriting fees are akin to economic rent, out of which the financial sector's bloated salaries and bonuses are paid. Utilitarian economics does not apply to looting.
p.125
After the Great War's aftermath derailed the path of development toward which the Progressive Era seemed to have been heading. The vested financial and property interests mounted an ideological counter-attack, and a major arena was economic theory. The new theory's political aim — its value system, price theory, monetary theory and the tax policy this theorizing implied —reflected the shift in alliances between finance capital, real estate and industry. Instead of continuing to oppose the landed interest, the 20th century's democratization of property ownership — on credit — led to a symbiosis of finance, insurance and real estate (FIRE). To the extent that finance interfaces with industry, it has been to financialize industrial companies, not to industrialize the financial system as seemed to be occurring in the late 19th century from Germany and Cental Europe to Japan. And to the extent that finance interfaces with governement, it is first of all to finance the public construction of capital infrastructure, and then to force its sell-off — at prices far below the original cost — to buyers on credit, permitting them to factor in a proliferation of financial charges into the access fees they extract from the population. The result is the opposite direction of evolution from which 19th-century economic Darwinians expected. Instead of lowering a nation's cost structure to make it more internationally competitive, fianacialization increases prices across the board.
As noted above, the definition of "free markets" has been turned upside down. Instead of freeing markets from rent-seeking, taxing groundrent and keeping major infrastructure monopolies in the public domain, economies were deregulated to "free" fianace to load industry and governement with debts, turning profits and disposable peronal income into interest charges. Taxes has been shifted off real estate and finance onto labor and industry, while the post 1980 New Enclosure movement has increasingly privatized the public domain. And to cap matters, under the slogan of "free markets" as the antithesis to "the Road to Serfdom" (defined for all practical purposes as public regulation of the FIRE sector) planning has been centralized in the financial centers, from Wall Street to the City of London, the Paris Bourse and Frankfurt.
p.199
Friday, December 11, 2015
Wednesday, December 2, 2015
Emmanuel Todd — Après l'empire
Todd, Emmanuel. Après l'empire. Essai sur la décomposition du système américain. Paris: Gallimard, 2002.
Emmanuel Todd is this clever French anthropologist/demographer/historian whose main research interest is the nature and origin of family systems around the world. His expertise on this topic allows him to formulate surprising and insightful interpretations of current events in the political and economic spheres — which he does sporadically, by writing short analytical/polemical pamphlets about stuff like America's problematic engagement with the world, the disfunctional mire of the Euro, the rise of inequality in France and other liberal democracies, and middle-class France's emerging ideology of islamophobia. He is a prominent public intellectual in France, and is usually invited to talk about his ideas on television and radio, despite holding thoughtful and articulate center-left positions which one would expect should be altogether unpalatable to the by and large moronic/hysterical/neoliberal mainstream French media. One reason he is able to have a public voice in the media is that he is very far from a radical leftist and can more or less harmlessly be used as "the voice from the left"; the other is both rhetorical and anthropological: on these "debate talk shows" he has the pleasant but slightly overbearing manner that anybody who is familiar with pugilistic French-style intellectual dinner conversation will instantly recognise, as he holds court, and gently, humorously, earnestly buldozes any inopportune opposition with his abundant good-natured conversational loquaciousness.
In this book his thesis is that America's erratic, blustering foreign policy (in 2002) can be explained by the fact that far from becoming a hegemonic imperial power, America's relative power in the world is receeding dramatically, and that it is engaging in theatrical military posturing (in Afghanistan, in Irak, etc) in order to disguise the fact that it doesn't have the might required to impose it's imperium by force on the whole planet — especially in the context of the ressurgeance of Russia as a major regional military power. Todd points out that the US economy is basically unproductive: it is largely de-industrialized and relies on the toxic alchemy of stock market, debt and imports rather than on the production of real goods... explaining its massive trade defficit and dependency on the rest of the world. So far they have gotten away with it because capital from all over the world pours into the American stock market and government bonds, figuring that this is the "safest" place to put it. But America's position is fragile and it is very dependent on Europe, Japan (and now China...) — partners it doesn't have either the soft or the hard power to constrain. In fact it is treating these essential partners badly — unlike a real perenial empire, like the Roman one, which always tend, after the period of conquest, to treat the conquered rather like normal citizens — extensions of itself. Todd argues that the US in the 90s to another course, on the contary succumbing to exclusionary/racial impulses always latent in Anglo-Saxon culture to some extent. They thus fucked up their chance to be the arbiters of the post-cold war world and, because of laziness, lack of foresight and anthropological tendency to question universalism/egalitarian stance have condemned themselves to a dangerous and unstable role as a quasi-imperial power that does not have the might of it's pretentions in the twenty-first century world...
His argument has similarities to Yanis Varoufakis's idea of America as a "global minotaur" that plays the part of recycler of industrial surplus from all over the world: a universal consumer, or provider of demand in the depressed demand context of the globalized neoliberal world (where the systematically compressed wages tend to be insufficient and cannot insure the necessary consumption of the world industrial output...) But for Varoufakis this was some sort of machiavelical plan hatched in the seventies by the American central bankers to deal with the collapse of the system put in place right after the war (America recycling its surpluses and solidifying its position in the world by massively investing in Germany and Japan... By the early senventies, there are no more American surpluses.). For Todd, more plausibly, it is merely the opportunistic and haphazard contigent reactions of a not very lucid or insightful political class and economic elite.
À travers l'histoire, les formations impériales véritables on toujours présenté deux charactéristiques, liées l'une à l'autre par des rapports fonctionnels:
— l'empire naît de la contrainte militaire, et cette contrainte permet l'extraction d'un tribut qui nourrit le centre;
— le centre finit par traiter les peuples conquis comme des citoyens ordinaires et les citoyens ordinaires comme des peuple conquis. La dynamique du pouvoir mène au développement d'un égalitarisme universaliste, dont l'origine n'est pas la liberté de tous mais l'oppression de tous. Cet universalisme né du despotisme se développe en sentiment de responsabilité vis-à-vis de tous les sujets, dans un espace politique où n'existent plus de différences essentielles entre le peuple conquérant et les peuples conquis.
p.115-116
Le rapport au monde des Ango-Saxons est mouvant. Ils ont dans la tête un frontière anthropologique, qui faut défaut aux peuples universalistes et les rapproche des peuples différentialistes, mais cette frontière peut se déplacer. Dans le sens de l'extension ou du rétrécissement. Il y a nous et les autres, mais parmi les autres certains sont comme nous et d'autres différents. Parmi les différents, certains peuvent être reclassés comme semblables. Parmi les semblables, certains peuvent peuvent être reclassés comme différents. Mais, toujours, il y a une limite séparant l'humain complet de l'autre, "there is some place where you must draw the line". L'espace mental des Anglais peut être réduit au minimum, à eux-même, mais il peut s'étendre à tous les Britanniques, et il est certainement aujourd'hui en course d'extension à l'ensemble des Européens.
L'histoire des États-Unis peut être lue comme un essai sur ce thème d'une fluctuation de la limite, avec un élargissement continu du groupe central de l'indépendance à 1965, suivi d'un rétrécissement tendanciel de 1965 à nos jours.
p.152
(Irish and Italian and Jews and to some extent Asians can be included, but by defining "the unassimilable other" as Hispanics (Mexican/Indian roots) and especially Blacks, drawing the line.)
Le libre échange, on l'a vu, induit à l'échelle planétaire des difficultés de croissance et il est désormais un frein à la prospérité du monde. À court terme, il fait vivre l'Amérique selon un mécanisme franchement baroque : la déficience de la demande qu'il engendre donne aux États-Unis le rôle de "consommateur indispensable", tandis que la montée des inégalités, autre conséquence du système, permet le gonflement des profits qui alimentent ces même États-Unis en argent frais, nécessaire au financement de la consommation.
p.176
La société américaine est en revanche le produit récent d'une expérience coloniale très réussie mais non testés par le temps: elle s'est développée en trois siècles par l'importation sur un sol doté de ressources minérales immenses, très productif sur le plan agricole parce que vierge, d'une population déjà alphabétisée. L'Amérique n'a vraisemblablement pas compsi que sa réussite résulte d'un processus d'exploitation et de dépense sans contrepartie de richesses qu'elle n'avait pas créées.
La bonne compréhension qu'ont les Européens, les Japonais ou n'importe quel d'Eurasie de la nécessité d'un équilibre écologique ou d'un équilibre de la balance commerciale est le produit d'une longue histoire paysanne. Dès le Moyen Âge, Européens, Japonais, Chinois et Indiens, par exemple, ont dû lutter contre l'épuisement des sols, constater dans les faits la rareté des ressources naturelles. Aux États-Unis, une population libéré du passé a découvert une nature en apparence inépuisable. LÉconomie a cessé d'y être la discipline qui étudie l'allocation optimale des ressources rares, pour y devenir la religion d'un dynamisme qui se désintéresse de la notion d'équilibre. Le refus par les États-Unis du protocole de Kyoto, tout comme la doctrine O'Neill sur le caractère bénin du déficit commercial résultent en partie d'une tradition culturelle. L'Amérique s'est toujours développée en épuisant ses sols, en gaspillant son pétrole, en cherchant à l'extérieur les hommes dont elle avait besoin pour travailler.
p.248-249
Emmanuel Todd is this clever French anthropologist/demographer/historian whose main research interest is the nature and origin of family systems around the world. His expertise on this topic allows him to formulate surprising and insightful interpretations of current events in the political and economic spheres — which he does sporadically, by writing short analytical/polemical pamphlets about stuff like America's problematic engagement with the world, the disfunctional mire of the Euro, the rise of inequality in France and other liberal democracies, and middle-class France's emerging ideology of islamophobia. He is a prominent public intellectual in France, and is usually invited to talk about his ideas on television and radio, despite holding thoughtful and articulate center-left positions which one would expect should be altogether unpalatable to the by and large moronic/hysterical/neoliberal mainstream French media. One reason he is able to have a public voice in the media is that he is very far from a radical leftist and can more or less harmlessly be used as "the voice from the left"; the other is both rhetorical and anthropological: on these "debate talk shows" he has the pleasant but slightly overbearing manner that anybody who is familiar with pugilistic French-style intellectual dinner conversation will instantly recognise, as he holds court, and gently, humorously, earnestly buldozes any inopportune opposition with his abundant good-natured conversational loquaciousness.
In this book his thesis is that America's erratic, blustering foreign policy (in 2002) can be explained by the fact that far from becoming a hegemonic imperial power, America's relative power in the world is receeding dramatically, and that it is engaging in theatrical military posturing (in Afghanistan, in Irak, etc) in order to disguise the fact that it doesn't have the might required to impose it's imperium by force on the whole planet — especially in the context of the ressurgeance of Russia as a major regional military power. Todd points out that the US economy is basically unproductive: it is largely de-industrialized and relies on the toxic alchemy of stock market, debt and imports rather than on the production of real goods... explaining its massive trade defficit and dependency on the rest of the world. So far they have gotten away with it because capital from all over the world pours into the American stock market and government bonds, figuring that this is the "safest" place to put it. But America's position is fragile and it is very dependent on Europe, Japan (and now China...) — partners it doesn't have either the soft or the hard power to constrain. In fact it is treating these essential partners badly — unlike a real perenial empire, like the Roman one, which always tend, after the period of conquest, to treat the conquered rather like normal citizens — extensions of itself. Todd argues that the US in the 90s to another course, on the contary succumbing to exclusionary/racial impulses always latent in Anglo-Saxon culture to some extent. They thus fucked up their chance to be the arbiters of the post-cold war world and, because of laziness, lack of foresight and anthropological tendency to question universalism/egalitarian stance have condemned themselves to a dangerous and unstable role as a quasi-imperial power that does not have the might of it's pretentions in the twenty-first century world...
His argument has similarities to Yanis Varoufakis's idea of America as a "global minotaur" that plays the part of recycler of industrial surplus from all over the world: a universal consumer, or provider of demand in the depressed demand context of the globalized neoliberal world (where the systematically compressed wages tend to be insufficient and cannot insure the necessary consumption of the world industrial output...) But for Varoufakis this was some sort of machiavelical plan hatched in the seventies by the American central bankers to deal with the collapse of the system put in place right after the war (America recycling its surpluses and solidifying its position in the world by massively investing in Germany and Japan... By the early senventies, there are no more American surpluses.). For Todd, more plausibly, it is merely the opportunistic and haphazard contigent reactions of a not very lucid or insightful political class and economic elite.
À travers l'histoire, les formations impériales véritables on toujours présenté deux charactéristiques, liées l'une à l'autre par des rapports fonctionnels:
— l'empire naît de la contrainte militaire, et cette contrainte permet l'extraction d'un tribut qui nourrit le centre;
— le centre finit par traiter les peuples conquis comme des citoyens ordinaires et les citoyens ordinaires comme des peuple conquis. La dynamique du pouvoir mène au développement d'un égalitarisme universaliste, dont l'origine n'est pas la liberté de tous mais l'oppression de tous. Cet universalisme né du despotisme se développe en sentiment de responsabilité vis-à-vis de tous les sujets, dans un espace politique où n'existent plus de différences essentielles entre le peuple conquérant et les peuples conquis.
p.115-116
Le rapport au monde des Ango-Saxons est mouvant. Ils ont dans la tête un frontière anthropologique, qui faut défaut aux peuples universalistes et les rapproche des peuples différentialistes, mais cette frontière peut se déplacer. Dans le sens de l'extension ou du rétrécissement. Il y a nous et les autres, mais parmi les autres certains sont comme nous et d'autres différents. Parmi les différents, certains peuvent être reclassés comme semblables. Parmi les semblables, certains peuvent peuvent être reclassés comme différents. Mais, toujours, il y a une limite séparant l'humain complet de l'autre, "there is some place where you must draw the line". L'espace mental des Anglais peut être réduit au minimum, à eux-même, mais il peut s'étendre à tous les Britanniques, et il est certainement aujourd'hui en course d'extension à l'ensemble des Européens.
L'histoire des États-Unis peut être lue comme un essai sur ce thème d'une fluctuation de la limite, avec un élargissement continu du groupe central de l'indépendance à 1965, suivi d'un rétrécissement tendanciel de 1965 à nos jours.
p.152
(Irish and Italian and Jews and to some extent Asians can be included, but by defining "the unassimilable other" as Hispanics (Mexican/Indian roots) and especially Blacks, drawing the line.)
Le libre échange, on l'a vu, induit à l'échelle planétaire des difficultés de croissance et il est désormais un frein à la prospérité du monde. À court terme, il fait vivre l'Amérique selon un mécanisme franchement baroque : la déficience de la demande qu'il engendre donne aux États-Unis le rôle de "consommateur indispensable", tandis que la montée des inégalités, autre conséquence du système, permet le gonflement des profits qui alimentent ces même États-Unis en argent frais, nécessaire au financement de la consommation.
p.176
La société américaine est en revanche le produit récent d'une expérience coloniale très réussie mais non testés par le temps: elle s'est développée en trois siècles par l'importation sur un sol doté de ressources minérales immenses, très productif sur le plan agricole parce que vierge, d'une population déjà alphabétisée. L'Amérique n'a vraisemblablement pas compsi que sa réussite résulte d'un processus d'exploitation et de dépense sans contrepartie de richesses qu'elle n'avait pas créées.
La bonne compréhension qu'ont les Européens, les Japonais ou n'importe quel d'Eurasie de la nécessité d'un équilibre écologique ou d'un équilibre de la balance commerciale est le produit d'une longue histoire paysanne. Dès le Moyen Âge, Européens, Japonais, Chinois et Indiens, par exemple, ont dû lutter contre l'épuisement des sols, constater dans les faits la rareté des ressources naturelles. Aux États-Unis, une population libéré du passé a découvert une nature en apparence inépuisable. LÉconomie a cessé d'y être la discipline qui étudie l'allocation optimale des ressources rares, pour y devenir la religion d'un dynamisme qui se désintéresse de la notion d'équilibre. Le refus par les États-Unis du protocole de Kyoto, tout comme la doctrine O'Neill sur le caractère bénin du déficit commercial résultent en partie d'une tradition culturelle. L'Amérique s'est toujours développée en épuisant ses sols, en gaspillant son pétrole, en cherchant à l'extérieur les hommes dont elle avait besoin pour travailler.
p.248-249
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