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‘Days of Revolt’: Chris Hedges, Michael Hudson Discuss How We Got to Junk Economics (Video)
‘Days of Revolt’: Chris Hedges, Michael Hudson Discuss How We Got to Junk Economics (Video)
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In this episode of teleSUR’s “Days of Revolt,” Chris Hedges interviews Michael Hudson on the history of classical economics and explores Marx’s interpretation of capitalism as exploitation.
Hudson is a professor of economics at the University of Missouri-Kansas City and author of “Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.” Before becoming a professor, Hudson worked for many years on Wall Street.
“The essence of classical economics was to reform industrial capitalism, to streamline it, and to free the European economies from the legacy of feudalism,” Hudson said. “The legacy of feudalism was landlords extracting land-rent, and living as a class that took income without producing anything.”
Wall Street and the big-banking system have inverted classical economics. America is now over $19 trillion in debt, and the Congressional Budget Office projects that the debt will rise to $26.3 trillion by 2020. How did we get to this point?
“So we’ve turned the postwar economy that made America prosperous and rich inside out,” Hudson explained. “Somehow most people believed they could get rich by going into debt to borrow assets that were going to rise in price. But you can’t get rich, ultimately, by going into debt. In the end, the creditors always win. That’s why every society since Sumer and Babylonia has had to either cancel the debts, or you come to a society like Rome that didn’t cancel the debts, and then you have a dark age. Everything collapses.”
Watch Part I of the interview, posted by The Real News, below.
Why Economics Matters
Why Economics Matters
This article is a selection from a June 19 presentation at a lunchtime meeting of the Grassroot Institute in Honolulu at the Pacific Club. The talk was part of the Mises Institute’s Private Seminar series for lay audiences. To schedule your own Private Seminar with a Mises Institute speaker, please contact Kristy Holmes at the Mises Institute.
First let me say that what we today call “Austrian economics” flows from the great legacy of classical economics, with the very important modification economists now call the “marginal revolution.” Austrian economics is also a term that describes a healthy and vibrant (though often oppositional) modern school of economic thought. It originated with intellectual giants like Carl Menger and Ludwig von Mises, names I’m sure many of you are familiar with. These economists were from Austria, hence the term.
There was a landmark conference at South Royalton, Vermont in 1974, attended by the likes of Murray Rothbard and Milton Friedman, that revitalized the Austrian movement and helped it regain prominence in the latter part of the twentieth century. Milton Friedman was in attendance, and that’s when he famously remarked that “There is only good economics and bad economics.”
And of course that’s true. Schools of thought should not be rigid, or dogmatic, or too narrowly defined. But classifying various economists and theories into groups or family trees does indeed help us make sense of economics. It helps us understand how we arrived at a time and place where Ben Bernanke, Paul Krugman, Thomas Piketty, and Christine Lagarde are viewed as modern mainstream thinkers rather than the radicals they are when compared to the whole history of the field.
Image courtesy of Peter Cresswell.
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