Thank you.
Citation: David Gordon Memorial Lecture. Michael Hudson on the problem that #bitcoin solves
https://michael-hudson.com/wp-content/uploads/2021/07/04866134211011770.pdf
Today, the finance, insurance, and real estate (FIRE) sector has regained control of government, creating neo-rentier economies. The aim of this postindustrial finance capitalism is the opposite of industrial capitalism as known to nineteenth-century economists: it seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, and banking and infrastructure monopolies add to the cost of living and doing business. Labor is increasingly exploited by bank debt, student debt, and credit card debt while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation. Today’s new Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain. In Western economies, such privatizations have reversed the drive of industrial capitalism. In addition to monopoly prices for privatized services, financial managers are cannibalizing industry by leveraging debt and high- dividend payouts to increase stock prices.
Read Michael Hudson.
Today, the finance, insurance, and real estate (FIRE) sector has regained control of government, creating neo-rentier economies. The aim of this postindustrial finance capitalism is the opposite of industrial capitalism as known to nineteenth-century economists: it seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, and banking and infrastructure monopolies add to the cost of living and doing business. Labor is increasingly exploited by bank debt, student debt, and credit card debt while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation. Today’s new Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain. In Western economies, such privatizations have reversed the drive of industrial capitalism. In addition to monopoly prices for privatized services, financial managers are cannibalizing industry by leveraging debt and high- dividend payouts to increase stock prices.
Read Michael Hudson.
Today, the finance, insurance, and real estate (FIRE) sector has regained control of government, creating neo-rentier economies. The aim of this postindustrial finance capitalism is the opposite of industrial capitalism as known to nineteenth-century economists: it seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, and banking and infrastructure monopolies add to the cost of living and doing business. Labor is increasingly exploited by bank debt, student debt, and credit card debt while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation. Today’s new Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain. In Western economies, such privatizations have reversed the drive of industrial capitalism. In addition to monopoly prices for privatized services, financial managers are cannibalizing industry by leveraging debt and high- dividend payouts to increase stock prices.
Read Michael Hudson.
There is no left-right conflict inherent in the system.
There is only top-bottom conflict, and a dialogue controlled by the top with a purpose of fomenting resentment between the suffering masses below.
"The man who has no tincture of philosophy goes through life imprisoned in the prejudices derived from common sense, from the habitual beliefs of his age or his nation, and from convictions which have grown up in his mind without the co-operation or consent of his deliberate reason.”
~Bertrand Russell 1872 –1970
1.7 trillion earmarked for student debt.
To educate our youth, how much of their working lives are we giving to the banking system? Our population may not be born into slavery, but they certainly graduate into it.
Absolutely. To imagine exponential growth within a finite ecosphere is delusional. For an economist to push policies based on the myth of indefinite compounding and growth is to neglect the lessons of every other scientific discipline about the limitations of expansion, resource consumption, and harmony within an ecosystem. Endless expansion serves only the parasitic class on top. Herman Daly wrote about Steady State Economics wherein he advocated for a system that values improved quality of life and sustainability over endless growth.
Bitcoin pushes back on this fiat growth mindset, and encourages a world where people are incentivized not to consume.
#bitcoinplebs
@bitcoinplebs
When the value of a man’s house goes from 185k to 325k in two years, is that growth? The government says it is.
But to get that growth, the man has to sell that house, and pay 20% capital gains on that growth. Then if he wants a similar standard of living, he has to pay $325 for another house.
That growth does not increase his purchasing power. It does, however, greatly increase the power of banks to lend on that property, to obligate more of a man’s future earnings to paying for that property, and to extract more of his earnings in the form of insurance and taxes.
There is growth that serves man, and there is fictitious growth that serves his master.
I also recommend this:
https://michael-hudson.com/wp-content/uploads/2021/07/04866134211011770.pdf
The book that most clearly elucidates the transition from industrial capitalism to financial capitalism is perhaps Michael Hudson’s “Killing the Host.” I recommend this to every Bitcoiner.
It is important because the FIRE industries (finance, insurance, real estate) wish us to believe that they play an important role in the economy, while in fact they play a parasitic role that eviscerates the real industrial economy and leaves the majority of the laboring public working ever harder for a dollar that is worth ever less, while the minority levies ever increasing rents and interests upon them.
The most common reason is not to reduce cost, it is to satiate the desires of the electorate. And the electorate are not members of the public; they are controlling members of corporations that sponsor elections and put people in office…for the sole purpose of winning those contracts
I’m not arguing against profits at all. I am stating that the cost of a public service as provided by government is (labor + admin + materials). The cost of a public service as contracted out to a government contractor is (labor + admin + materials + profit). Contractors wish us to ignore the added cost to public services
Manufacturing is shrinking as a percentage of US GDP, but total production is near an all-time high:
https://www.macrotrends.net/countries/USA/united-states/manufacturing-output
And financial services are not even close to half of US GDP. See table 3:
https://www.bea.gov/sites/default/files/2022-12/gdp3q22_3rd.xlsx
It’s the percent that is important. Looking at that chart you sent, manufacturing as a percentage of GDP has dropped from 16-10%. Total growth is irrelevant: growth from 1,400 billion to 2,400 billion between 1998 and 2021 is less than even the inflation numbers published as CPI, which we all know drastically underestimate real inflation. “Growth” that matches or lags inflation is not growth at all. If purchasing power has not grown, growth is fictitious.
When the government does something, there is no profit margin built into the cost. When a project is privatized using the largely contrived argument of “efficiency,” contractors neglect to remind consumers that they plan to skim off 20+% in profits. The very nature of privatization is to add a middle man between public funds and public services. Of course there are inefficiencies in any government, but there is a systematic increase in the cost of public services when a profit must be extracted by an intermediary.
We don’t. We do not have an industrialized economy anymore. GDP used to be a reasonable measure of goods and real services. Now the majority of GDP is financial services: accounting based on fictitious production, capital gains, leveraged buyouts, premiums, and buybacks. The great difference between the US economy and the competing economies in Russia, China, India, and Brazil, is that these other countries kept a steady course toward developing an industrialized economy. The US is a zombie economy, wherein more than half of the S+P companies flaunt paper gains. This serves a small minority of US citizens at the expense of the vast majority of laborers.
America has the highest cost of production in the world. This has nothing to do with a lack of technology. This is because all the extra costs that are born by governments in other countries are paid for by labor and employees here in America. To dismantle the government is to dismantle the basic means of subsidizing public services and manufacturing. No wonder industry has been driven abroad. No wonder it’s impossible to encourage industry here.
And why #Bitcoin? Bitcoin makes it much harder for the FIRE (finance, insurance, real estate) sectors to dismantle public services and to privatize them at a great profit to themselves.
#michaelhudson