Tag Archives: Michael Hudson

Michael Hudson – Euphemise to Conceal

Link to parts of an interview with Michael Hudson, discussing his book J Is for Junk Economics: A Guide to Reality in an Age of Deception:

“Euphemise to Conceal”

“Alluring Infrastructure Income”

“Focus on Capital Gains”

“Why Deficits Hurt Banking Profits”

“Retirement. What Social Obligation?”

Bonus links: Pierre Bourdieu, Language and Symbolic Power and Raymond Williams, Keywords: A Vocabulary of Culture and Society and “Social Chauvinism” (a critique easily leveled at Hudson’s admiration for protectionism)

Michael Hudson – The Land Belongs to God

Link to an interview with Michael Hudson (and others):

“The Land Belongs to God”

This interview summarizes some of Hudson’s most important work.  And yet, it also highlights a blind spot in it: his claim that others’ interpretations of ancient history are colored by ideology, as if his is not also.  Instead, philosophy teaches, “In an event, things not only change, what changes is the very parameter by which we measure the facts of change, i.e., a turning point changes the entire field within which facts appear.”  Hudson is fighting an ideological war — for the good side, mind you — but tries to portray himself as one of the select few pursuing “objective” scientific economic/historical research rather than another partisan.  Robespierre would have categorized that as treasonous.  Hudson should be more of a Leninist and just accept that he pursues power.

Steve Keen & Michael Hudson – Keen, Hudson Unpick Historical Path to Global Recovery

Link to a discussion between economists Steve Keen and Michael Hudson:

“Keen, Hudson Unpick Historical Path to Global Recovery”


Selected excerpts:

Michael Hudson: “America did something that has relevance for America for today. After the North won the Civil War, they thought how are we going to teach protectionist, non-Ricardian, non- Malthusian economics. And they say, most of the economic courses were taught at prestige universities, and most universities in America were founded by religious orders to train the priesthood. And the political economy course was taught in the seniorly years, you know, the final one, and it’s all, markets are great.

“So the solution was that you can’t reform these academics. They’re hopelessly tunnel visioned. So America founded state colleges with a different faculty, new people teaching rational, protectionist economics, and the business schools. And the first business school professor was Simon Patten at the University of Pennsylvania, the Wharton School, which was funded by industrial protectionists. And so you had in America this whole body of theory that now has been whitewashed out of textbooks into a kind of Orwellian memory hole.”


Steve Keen: “Whereas the top universities are reproducing the religion [neo-classical economics]. And the thing is this is quite a successful strategy when you’re fighting an ideological war. But it’s not a successful strategy when you’re trying to manage a capitalist economy. And, unfortunately, they’re trying to do both at once. And, of course, what that leads to is the debt deflation episode we’re seeing now. Because according to the theories of this high priesthood, such things can’t happen.


Michael Hudson: “When the graduates, who learn what you and I are talking about money, graduate, they can’t get jobs, because jobs are conditional upon being able to publish in prestigious economic reviews, and they’re all controlled by University of Chicago and by neoliberals.

“And the genius of Chicago free market theory is you can’t have a free market Chicago style unless you have a totalitarian state that will prevent any alternative to the theory. When they went to Chile, Harberger is said to have sat in a hotel room saying, here are the professors you have to kill. Pinochet and the American embassy said, here are the labor leaders you have to kill. And here are the intellectuals you have to kill.

“You cannot have a free market neoliberal style unless you are willing to either kill or exile or suppress or censor any alternative to your theory, because the theory doesn’t work. It’s fiction. It’s junk economics.”


Steve Keen: “So what they’ve had by the purge they’ve managed to achieve – not quite as drastically as Chile, thank god – but the purge they managed to achieve in intellectual economics to make them just that the sole mainstream and knock out any alternative arguments meant that they took over economic policy as well as economic theory. And pushing it forward led them to the financial crisis that they could not see coming, because they didn’t even include the variables that cause the financial system in their models.


“Now what you’re seeing 10 years after the crisis is, finally, some awareness coming through that our models are completely at variance with the real world.


Missing from this discussion, which labels Keen and Hudson’s opponents as ideologues, is that Keen and Hudson are also ideologues.  Philosophy tells us that there is no “reality” free from ideology.  What these two should be saying is that their ideology is more scientific, and it benefits a wide proportion of the population.  Hudson says, “You know, every economic theory begins with a conclusion and they work back from the conclusion is what kind of logic is going to lead to this.”  But that is nearly a definition of “legal realism” in jurisprudence — in other words, it is not some special method that applies to certain (neo-classical) economists, it is the way most people work in any situation, including Keen and Hudson!  There is a partial acknowledgement of this when Hudson says, “And all of the reformers, including you and me, look at the – we have a picture of the overall economy, because we’re showing how something whether it’s bad or good will affect the overall economy. The anti-reformers have something in common – a methodology.”

Michael Hudson – Review of Welcome to the Poisoned Chalice

Link to a review by Michael Hudson of James K Galbraith‘s book Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe (2016):

“Review of James Galbraith, Welcome to the Poisoned Chalice (2016)”

Select quote:

“At first glance the repeated ‘failure’ of austerity prescriptions to ‘help economies recover’ seems to be insanity – defined as doing the same thing again and again, hoping that the result may be different. But what if the financial planners are not insane? What if they simply seek professional success by rationalizing politics favored by the vested interests that employ them, headed by the IMF, central bankers and the policy think tanks and business schools they sponsor? The effects of pro-creditor policies have become so constant over so many decades that it now must be seen as deliberate, not a mistake that can be fixed by pointing out a more realistic body of economics (which already was available in the 1920s).”

This is reminiscent of a quote frequently attributed to Donald Berwick (among others): “Every system is perfectly designed to get the results it gets.”  In the economic context, this notion is also explored further in Economists and the Powerful (2012).

Michael Hudson – Killing the Host

Killing the Host: How Financial Parasites and Debt Destroy the Global Economy

Michael HudsonKilling the Host: How Financial Parasites and Debt Destroy the Global Economy (ISLET/CounterPunch 2015)

First off, it must be said that Michael Hudson offers one of the most astute conclusions about the cause of recent financial troubles in the United States (post-2007).  The crux of his book Killing the Host is to explore the coded language used to push a particular political agenda under the guise of “objective” economic theories.  The most compelling sections of the book are the play-by-play histories of actions by politicians and financial technocrats.  He details how a pervasive attitude of “there is no alternative” (TINA) covers up pro-banking, pro-finance, anti-labor, anti-democratic policies.  He points to others who have reached the same conclusion, and some data (albeit a minimal amount of data) that policies alleged by their backers to produce one result actually achieve another.  Hudson is at his sharpest when he calls out the peddlers of these theories as frauds, and occasionally as simply “useful idiots”.

The scariest aspects of the entire narrative is how much power is concentrated in the hands of so few.  It is sort of common for progressives to criticize the prospects for voting to impact progressive causes.  Howard ZinnEmma Goldman, Jean-Paul Sartre and others have made various claims to that effect.  Yet Hudson’s book gives lie to that.  For example, in the most gripping sections of the book, he reveals the enormous power that President Obama and his Treasury guy Tim Geithner (plus a handful of other close operatives) wielded after the 2007-08 U.S. financial crash.  The entire economy and that of generations to come was wrecked by these few actors.  Wait, read that last sentence again.

Unfortunately, this ends up being the least of Hudson’s recent books.  Many of the chapters are brief summaries of things Hudson has written about elsewhere.  The first part of the book discussing the history of classical economics is mostly subject matter covered in his Trade, Development and Foreign Debt.  He also repeats his discussions of the role of debt (and “debt deflation”) that are explained more fully in The Bubble and Beyond.  Later in the book he really extends himself to the limits of economics as such, but does not venture far enough to support his normative claims, which always seem intentionally withheld.  Much of Hudson’s argument is that the financial industry has concealed or obfuscated accurate information about its actions and has captured regulatory apparatuses to prevent oversight and accountability.  But doesn’t that call for an analysis based in political science, or perhaps sociology?  When he talks about regulatory capture, the thing is he doesn’t really provide much evidence.  He could cite the work of, say, Thomas Ferguson, to explain the “right turn” in politics in the neoliberal era, or any number of other non-economic scholars.  The problem for the book is that Hudson will write a chapter detailing economic issues, or perhaps histories of political dealings.  Then the chapter concludes with explanations that are not explored in the preceding chapter.  That approach is repeated throughout the book.  For example, chapter 9 makes the comment, “Television news shows and the printed press tend to treat debt and prospects of defaults as a downer story that loses audience interest compared to the success stories of financial celebrities.”  This seems plausible, but why?  It highlights the crux of the problem with this book, in that it pushes the questions of financial exploitation to essentially political decisions made outside the realm of economics as such.  Hudson tends to drop one-liners to explain why journalists offer no bulwark against this, without really bothering to support those theories.  Why exactly do journalists side with the financial industry rather than provide useful information for readers?  People like Robert McChesney, Edward S. Herman and Noam Chomsky have offered theories.  But readers of Killing Host are left guessing as to which theory or evidence Hudson bases his conclusions on — the evidence he gathers in each chapter tends to stop well short of the broader and more interesting conclusions.  So time and again the deepest questions are simply outside his scope of expertise — or rely on a kind of “preaching to the choir” attitude that presupposes that readers agree with him on the (unstated) ideological level.

In chapter 25 Hudson rails against U.S. district Judge Thomas Griesa regarding Argentina’s sovereign debt crisis.  The issue is whether a minority group of bondholders of sovereign debt can be bound by an agreement of a supermajority.  This is one of the low points of the book.  Hudson doesn’t cite primary authority, mostly secondary sources from the financial press.  This hints that he perhaps is misinterpreting the legal rulings (or relying on journalists who misinterpret the rulings).  But in any event, he strongly implies a kind of sinister judicial intervention into geopolitics that is preposterous — and backed by no evidence, other than a cursory discussion of how Judge Griesa reached a conclusion he and some others disagree with.  Not to defend Griesa’s ruling necessarily, but Hudson offers little more than ad hominem attacks and normative policy gripes, while feigning to be just delivering the facts.

Another example is in chapter 2, where he writes, “Thomas Aquinas (1225-74) wrote that bankers and tradesmen should earn enough to support their families in a manner appropriate for their station, including enough to give to charity and pay taxes.”  (Hudson provides no cite to attribute that position to anything particular in Aquinas’ writings).  Isn’t the entire question, though, what is bankers’ proper “station”?  The political question at hand is that the finance sector clearly thinks its station is orders of magnitude above that of other occupations and economic sectors.  Hudson thinks otherwise.  But why?  The answer, of course, comes from Hudson’s ideology.  As much as he rails against bankers and their political allies as ideologues, Hudson is one too!  Of course, his position is one that is based much more on equality and fair dealing.  But he mostly takes those points as self-evident.

The piece that is largely missing from Killing the Host is the sort of stuff that sociologist Luc Boltanski has written about extensively and explicitly.  And one can raise the same concerns that people have raised about Boltanski’s analysis: “Is it really possible to move beyond the particular cities and worlds to see them from without from a kind of objectivist no-where perspective as the authors try to do?”  Replace “cities and worlds” with “economic doctrines” and read “authors” in the singular, and this is precisely the theoretical difficulty presented by Killing the Host.  Hudson repeatedly lambasts bankers/financiers as if they are amoral frauds, but bankers and financiers don’t see themselves that way at all.  The key is the way Hudson implicitly defines what constitutes public good.  The problem is that we only get that implicitly, not explicitly in the book.

Hudson is sort of a crypto-socialist.  He has an awareness of socialist theory, but writes as if it can be applied in an analysis without an endorsement of socialist ends.  One online reviewer said, “There is a leaning towards socialist values that I do not condone . . . .”  It is of course irrelevant what that reviewer does or does not condone, but Prof. Hudson ultimately is preaching to the choir when he makes no real argument as to why socialist perspectives offer more than right-wing neo-feudal ones.

Consider this argument from 1919:

“Bourgeois democracy is democracy of pompous phrases, solemn words, exuberant promises and the high-sounding slogans of freedom and equality. But, in fact, it screens the non-freedom and inferiority of women, the non-freedom and inferiority of the toilers and exploited.”

That was a quote from Lenin.  It is a form of the same argument Hudson makes.  So is Hudson a Leninist?  The introduction suggests that maybe he is.  On the other hand, further into the book he alternates between talking favorably about economic policies that make nations “competitive” and criticizing disproportionate power and inequalities.  This comes closer to socialist nationalism, and maybe the moderate socialism or civic nationalism of John Stuart Mill.  Which is it then?  He presents many of these concepts in a way that is never resolved in the book.  Lenin, of course, said that there must be a global socialist revolution to achieve radical egalitarianism across borders.  That is a resolution.  But fostering national competitiveness like in the protectionist school of economics simply privileges some inequalities (so long as they are cross-border) over others.

Furthermore, Hudson’s overarching metaphor about financial “parasites” who are “killing the host” ends up being completely incongruous with his most incisive economic critiques.  Consider this critique:

“for a populist, the cause of the troubles is ultimately never the system as such but the intruder who corrupted it (financial manipulators, not necessarily capitalists, and so on); not a fatal flaw inscribed into the structure as such but an element that doesn’t play its role within the structure properly. For a Marxist, on the contrary (as for a Freudian), the pathological (deviating misbehavior of some elements) is the symptom of the normal, an indicator of what is wrong in the very structure that is threatened with ‘pathological’ outbursts. For Marx, economic crises are the key to understanding the ‘normal’ functioning of capitalism; for Freud, the pathological phenomena such as hysterical outbursts provide the key to the constitution (and hidden antagonisms that sustain the functioning) of a ‘normal’ subject.” In Defense of Lost Causes (2008) (p. 279).

Doesn’t Hudson offer what looks like a socialist/Marxist critique of the overall economic system as such (capitalism), but then abandon that critique in the end to rail against the corrupting financial intruders?  Hudson seems like yet another writer unwilling to follow his analysis through, instead softening and undermining it to avoid appearing like an advocate of socialist/communist policies.

In chapter 13 he provides a valuable history of the TARP bailout program following the 2007-08 financial crash.  However, when discussing the government refusal to turn Fannie Mae and Freddie Mac into public companies, he says, “This was euphemized as saving the economy from ‘socialism.'”  The ironic quotes are Hudson’s, and they are the crux of the problem.  Wouldn’t public ownership precisely be socialism?  In other words, this is no euphemism.  Hudson is advocating socialist solutions, but he doesn’t want to come out and admit it.  In complete contrast, take Slavoj Žižek‘s Trouble in Paradise: From the End of History to the End of Capitalism.  Žižek concludes the book by saying that meaningful change will require that communism be the goal.  How is that for a direct and bold statement! 

So long as Hudson dodges the questions of political ideology, his arguments will seem just as ideologically limited as those of the finance sector he criticizes.  Though, in fairness, he is arguing for policies that would favor a larger segment of the world’s population than the policies of neoliberalism.  He tries to defend Enlightenment-era rationalism against a counter-enlightenment view that has come to dominate.  Hudson takes an explicitly broader view than most economists, but not that much broader.  He likes to refer to the viability of a “mixed economy”.  However, the precise balance of the so-called “mixed” economy he endorses is not spelled out in any meaningful way — it simply somewhere in the vast middle ground between the most extreme ends of a spectrum.  Such vagueness is troubling.

So, while it is worth repeating that Hudson is one of the economists most worth reading today, Killing the Host is a hastily argued work with sections of profound impact and others that are scarcely more than drivel in the mold of the “academic aristocrat” tradition.  A primary limitation is the book’s oscillation between theory and observation, without those two being closely matched — there is theory offered without supporting factual observations and observations that seem offered in support of theories not outlined in the book.  If the book was reduced to the just the historical/journalistic sections on the chicanery of Tim Geithner and the TARP bailouts, this book would have been better.  As it stands, this is kind of minor footnote at best among Hudson’s books.  Read his magnificent Super Imperialism (a modern classic), or even Trade, Development and Foreign Debt (quite a bit drier) or The Bubble and Beyond (good if sloppy) instead.